Big Tech: Apple and Microsoft

Current Events:

  • The European Commission is cracking down on Big Tech, targeting Apple and Microsoft under the Digital Markets Act (DMA).
  • Apple could face a fine of up to $38.3 billion for anti-competitive practices, and has delayed some AI features in Europe due to DMA regulations.
  • Microsoft is being investigated for bundling its Teams app with its Office suite.

Stock Impact:

  • Apple: The potential fines and regulatory scrutiny may lead to short-term stock volatility. However, Apple’s strong market position and brand loyalty might mitigate long-term impacts.
  • Microsoft: Similar to Apple, regulatory issues might cause some stock turbulence. The company’s diverse portfolio and strong financials offer some buffer against these challenges.

Action:

  • Hold or Reduce Exposure: Given the regulatory risks, consider holding your position or slightly reducing exposure to manage risk, particularly if your portfolio is heavily weighted towards these stocks.

Weight-loss Drug Market: Novo Nordisk and Eli Lilly

Current Events:

  • Novo Nordisk is investing $4.1 billion in a new facility in North Carolina and has secured approval to sell Wegovy in China.
  • Eli Lilly is investing $5.3 billion in a new facility in Indiana and has raised its annual sales forecast by $2 billion.

Stock Impact:

  • Novo Nordisk: Significant investment and market expansion (particularly in China) indicate strong growth potential.
  • Eli Lilly: Similar growth trajectory with substantial investment in production and increased sales forecasts.

Action:

  • Buy or Hold: Both companies show strong growth prospects and expanding market opportunities. Increasing your exposure or holding these stocks could be beneficial, particularly given the booming demand for weight-loss drugs.

Electric Vehicles: Rivian

Current Events:

  • Rivian’s stock surged by over 35% after securing a multibillion-dollar deal with Volkswagen (VW), including a strategic investment and software collaboration.

Stock Impact:

  • Rivian: This partnership with VW provides significant financial backing and market confidence, potentially overcoming previous manufacturing and financial hurdles.

Action:

  • Buy or Hold: The deal with VW positions Rivian well for future growth. Consider buying or holding if you have confidence in the EV market.

Other Notable Stocks: Caterpillar and Carnival Corporation

Caterpillar:

  • Norway’s largest private pension fund divested from Caterpillar due to concerns over human rights issues, causing a nearly 6% drop in stock value over the past month.

Action:

  • Sell or Hold with Caution: The divestment and associated ethical concerns might continue to impact the stock negatively. Consider reducing exposure or holding with caution.

Carnival Corporation:

  • Reported a significant surge in net income and record revenues, leading to a 17% stock gain over the past month.

Action:

  • Buy or Hold: Strong financial performance and improved forecasts suggest a positive outlook. Consider buying or holding your position.

Summary Recommendations:

  1. Apple and Microsoft: Hold or slightly reduce exposure due to regulatory risks.
  2. Novo Nordisk and Eli Lilly: Buy or hold, given strong growth prospects in the weight-loss drug market.
  3. Rivian: Buy or hold, leveraging the positive impact of the VW deal.
  4. Caterpillar: Sell or hold with caution due to ethical concerns and recent stock decline.
  5. Carnival Corporation: Buy or hold, supported by strong financial performance and positive future outlook.