Good morning, investors. Sports betting stocks took a hit yesterday after short selling firm Hindenburg Research announced a short position in DraftKings. Today's Featured Stock Story Best Stocks to Buy in 11 Different Sectors2021 has been a year marked by shifting investment themes.
Investors have gone into special-purpose acquisition companies, or SPACs, electric vehicle stocks, economic reopening plays, cryptocurrencies and more.
That's all well and good, but this move to chase the latest new thing sometimes loses sight of the bigger picture. Ideally, an investor should build a diversified portfolio with exposure across a wide variety of industries and assets.
While there will always be a hot trade, it's important to hold a solid core portfolio that can withstand all sorts of economic conditions.
Analysts tend to divide up the market into 11 unique sectors. Here is a leading pick for each of these sectors that will make any portfolio more diversified and resistant to market shocks:
1. Communications Services: Facebook (ticker: FB) The company is becoming every bit as much of a digital communications monopoly as AT&T ever was with telephones back in the day. As if that weren't enough, Facebook has a huge upside option in virtual and augmented reality as well.
2. Consumer Discretionary: Home Depot (HD). Home Depot trades for just 21 times forward earnings and has grown earnings at 17% per year over the past five years. Those earnings should continue to rise given current economic conditions, offering a favorable outlook for the stock over the rest of the year.
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Nasdaq14,072 (-0.71%)
S&P 5004,246.59 (-0.2%)
* Market data as of Tuesday's close
Here's what you missed in the markets yesterday.
It's time to add health care exposure. Rotating into the health care sector right now makes sense, says Shawn Cruz, senior manager of trader strategy at TD Ameritrade. It has the "potential for additional upside in the space and has not run quite as far as industrial and tech," he says, as well as "the potential to benefit from elective surgeries and other treatments." Consider these six exchange-traded funds for your portfolio. Spending jumps for restaurant and bars. Stocks finished lower on Tuesday following a weak reading for May retail sales. Although economists expected a decline of 0.6%, a report from the Commerce Department showed instead a 1.3% decline in May.
It wasn’t all bad, though; while Americans spent less on automobiles, electronics and several other categories, they spent more on restaurants and bars, indicating a shift in behavior that could benefit the services industry.
Commentary from the Federal Reserve Wednesday afternoon will likely occupy much of the market’s focus.
The Dow Jones Industrial Average fell 94 points, or 0.3%, to finish at 34,299.
DraftKings targeted by short seller. Popular fantasy sports betting website DraftKings (DKNG) lost as much as 12% in intraday trading Tuesday, finishing with a loss of 4.2%.
Hindenburg Research, a well-known short selling firm that rang alarm bells about Lordstown Motors Corp. (RIDE) and Nikola Corp. (NKLA), announced it had taken a short position in DKNG, betting against the stock.
Specifically, Hindenburg alleges SBTech, a company DraftKings merged with in the deal that brought it public in a SPAC, has shady ties to illegal black market operations, and Hindenburg estimates 50% of SBTech’s revenue could be from gambling in areas where it’s banned.
DraftKings dismissed the report, claiming that Hindenburg is biased due to its short position.
Other sports betting stocks fell in sympathy with DKNG, and one of the largest ETFs for the category – Roundhill Sports Betting & iGaming ETF (BETZ) – fell 2.5% on the day as well. Best Buy expanding into new categories. The well-known electronics retailer Best Buy Co. (BBY) is starting to sell outdoor products, capitalizing on an area of spending that’s been red hot for several months.
Best Buy notably navigated through the Great Recession and potentially devastating competition with Amazon.com (AMZN) while rivals like Circuit City failed. The company remains comfortably profitable in a large part due to its ability to adapt, and it has been an impressive player in the field of e-commerce. So while it may sound odd, its decision to begin selling items like grills, outdoor lighting, outdoor heaters and even products like luggage to capitalize on the growing demand for travel makes sense.
- Caught Our Eye written by John Divine Today's earnings reports. Companies expected to report today include Lennar Corp. (LEN) and The Honest Company (HNST). Explore Stock and Fund Rankings Top Information Technology Services StocksData as of April 18, 2025 |
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