The Walt Disney Company has launched a new unit, the Office of Technology Enablement, to oversee its integration of artificial intelligence (AI) and mixed reality (XR) across its diverse business areas, including film, television, and theme parks. This new division will be led by Jamie Voris, former Chief Technology Officer (CTO) of Disney's film studio and the driving force behind the development of Disney’s app for Apple’s Vision Pro mixed reality headset. Voris will report to Disney Entertainment Co-Chairman Alan Bergman.

 

Disney aims to harness fast-evolving technologies like AI and XR to enhance consumer experiences, drive creativity, and innovate within its business operations. Bergman emphasized that the creation of this unit underscores Disney’s commitment to exploring both the potential benefits and risks associated with these technologies. Unlike traditional centralized approaches, the Office of Technology Enablement will serve as a coordinating body, ensuring that various AI and XR initiatives align with Disney’s broader strategic goals without directly controlling individual projects.

 

The Office of Technology Enablement launches with a core leadership team and plans to expand to around 100 employees, according to a source close to the matter. The move follows Disney’s earlier decision to form a dedicated task force to investigate how AI might be applied throughout its entertainment empire. Disney is also actively pursuing expertise in augmented reality (AR), virtual reality (VR), and mixed reality (MR), each of which offers unique opportunities for innovation. AR overlays digital elements onto the physical world, VR immerses users in entirely simulated environments, and MR combines aspects of both, creating immersive, interactive experiences that blend physical and digital realms.

 

Several Disney divisions are already exploring applications for these technologies. Notably, Kyle Laughlin, a longtime Disney executive with experience in AR, VR, and AI, returned to the company in March as Senior Vice President of Research and Development for Walt Disney Imagineering, the creative team behind Disney’s theme park attractions. Laughlin’s return, after a brief departure to lead Amazon’s Alexa Gadgets division, highlights Disney’s focus on infusing cutting-edge technology into its renowned theme park experiences.

 

Disney’s interest in leveraging AI and XR also aligns with broader trends in the technology market, as companies like Meta and Snap have introduced a new generation of sleeker, lightweight AR glasses that offer a stylish alternative to bulkier VR headsets. Seven sources familiar with Disney’s strategy confirmed that the company is quietly building a team to explore how best to utilize these emerging technologies to create unique, immersive experiences in its theme parks and consumer products.

 

The augmented and virtual reality market has shown significant growth, with market research firm IDC reporting that approximately 1.7 million AR and VR headsets have been sold this year. Meta currently dominates the market with a 60.5% share but faces increasing competition from companies like Sony, Apple, and ByteDance. Additionally, Google has signaled intentions to reenter the AR/VR space, indicating that competition within the market is likely to intensify.

 

Disney’s focus on advanced technologies extends beyond hardware, encompassing AI applications as well. With AI-driven tools increasingly being integrated into creative workflows, Disney is actively examining how machine learning and other AI innovations can support its storytelling, animation, and interactive experiences. The new Office of Technology Enablement is tasked with coordinating these efforts, helping Disney not only to create innovative content but also to streamline operations across its multifaceted entertainment ecosystem.

 

As Disney leverages technology to enhance its offerings, the company is positioning itself at the forefront of a technological revolution that promises to reshape the entertainment landscape. With AI and mixed reality as central components of its future strategy, Disney is preparing to lead the way in delivering next-generation experiences to audiences around the world, both within its iconic theme parks and through digital platforms that bring Disney magic directly into consumers' homes.

In a significant shift that reflects the evolving dynamics of the semiconductor industry, Intel is set to be replaced by Nvidia on the Dow Jones Industrial Average (DJIA), bringing an end to Intel’s 25-year presence on the blue-chip index. This change, announced by S&P Dow Jones Indices on Friday, signals the impact of Nvidia’s rise in the booming artificial intelligence (AI) market and the challenges faced by Intel as it struggles to adapt to new industry demands. Alongside Nvidia, paint manufacturer Sherwin-Williams will join the DJIA, taking the place of Dow Inc., further reshaping the 30-member index.

 

Intel's removal from the DJIA marks a setback for the once-dominant chipmaker, which has seen its stock value fall dramatically this year, down 54% year-to-date. The decline has made Intel the worst-performing company on the DJIA, with the lowest share price on the price-weighted index. Following the announcement, Intel’s shares dropped 1.6% in extended trading, while Nvidia’s stock gained 2.2%, reflecting investors’ optimism about Nvidia's future as it joins the Dow.

 

Intel's downfall can be attributed to a series of strategic missteps that have allowed competitors, particularly Taiwan Semiconductor Manufacturing Company (TSMC), to surpass it in the global semiconductor market. Once a leader in chip manufacturing, Intel has lost its technological edge over TSMC, which has taken a commanding position in producing advanced chips. Intel also missed the opportunity to invest in generative AI early on, passing up a potential stake in ChatGPT-owner OpenAI, a decision that has since proven costly as AI demand surged.

 

For Nvidia, however, the story is quite different. The company has emerged as a leader in the AI chip market, with its graphics processing units (GPUs) now widely recognized as essential for AI data centers and machine learning applications. Once known primarily for its role in producing high-performance GPUs for gaming, Nvidia has successfully expanded its influence to become a key player in powering the global AI industry. This expansion has fueled a seven-fold increase in Nvidia’s stock over the past two years, propelling its valuation to a staggering $3.32 trillion. As of 2024, Nvidia stands as the world’s second-most valuable company, underscoring its importance in the technology sector.

 

In addition to Nvidia’s AI-driven success, the company's recent 10-for-1 stock split in June made its shares more accessible to retail investors. This move not only broadened Nvidia’s shareholder base but also helped pave the way for its inclusion in the DJIA, which traditionally favors companies with a higher price-per-share. Nvidia's entry into the DJIA is thus both a recognition of its technological achievements and a testament to its widespread appeal among investors, particularly those looking to capitalize on the AI revolution.

 

Intel’s removal from the DJIA could have broader implications for the company’s stock. Being excluded from the DJIA means Intel will no longer be part of the exchange-traded funds (ETFs) that track the index, which could potentially put additional downward pressure on its share price. Losing its place on the DJIA also presents a reputational setback for Intel, as it works to regain investor confidence amidst a challenging restructuring process.

 

“Losing the status of Dow Jones inclusion would be another reputational blow for Intel, as it grapples with a painful transformation and loss of confidence,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. She also noted that Intel’s exclusion from index-tracking ETFs could affect its stock performance, as fewer investors will now have exposure to Intel through these funds.

 

Once a Silicon Valley icon, Intel played a pioneering role in the chip industry, starting with memory chips before shifting to processors that powered the personal computer revolution. In the 1990s, Intel's "Intel Inside" campaign turned its chips into premium products and made the brand a household name. However, Intel’s struggles over the past decade have been evident in its financial performance. The company’s revenue in 2023 stood at $54 billion, nearly a third lower than in 2021 when Pat Gelsinger took over as CEO. Despite some recent positive projections for its PC and server businesses, Intel is expected to report its first annual net loss this year since 1986. Intel’s market value, now below $100 billion for the first time in three decades, pales in comparison to Nvidia’s massive valuation.

 

As Nvidia steps into Intel's former role on the DJIA, its influence in the semiconductor industry is expected to grow further. Nvidia’s dominance in the AI chip market has placed it at the forefront of the sector, with its chips often viewed as irreplaceable for high-performance computing and AI applications. Nvidia’s technology advantage, along with the high cost of replacing its AI chips, makes it difficult for rivals to compete in this space. Many experts consider Nvidia’s stock a barometer for the broader AI market, reflecting investor sentiment about the sector's long-term growth prospects.

 

U.S. stocks climbed on Friday, led by a surge in Amazon shares after the company reported robust earnings. Meanwhile, 10-year Treasury yields reached a four-month high as investors hesitated to buy bonds ahead of Tuesday's U.S. presidential election.

 

Initially, Treasury yields dropped following October's U.S. employment report, which showed minimal job growth due to industrial actions and hurricanes. However, the unemployment rate remained steady at 4.1%, indicating a stable labor market.

 

After the U.S. market closed, S&P Dow Jones Indices announced that Nvidia would replace Intel in the Dow Jones Industrial Average. Nvidia's shares rose 1.9% in after-hours trading, while Intel dropped 1.4%.

 

With four days until Election Day, polls show a tight race between Republican Donald Trump and Democratic Vice President Kamala Harris. Some analysts predict that U.S. fiscal conditions may worsen regardless of the election outcome.

 

The benchmark 10-year yield increased by 7.7 basis points to 4.361%, the highest since July, after a significant 48 basis point rise in October.

 

On Wall Street, Amazon shares surged 6.2% after forecasting strong holiday quarter results. This gain helped counterbalance a 1.2% drop in Apple shares following the company's conservative growth outlook. “We’ve seen mixed results from Big Tech, but it wasn't as bad as expected,” said Rick Meckler of Cherry Lane Investments.

 

The Dow rose 288.73 points (0.69%) to 42,052.19, the S&P 500 gained 23.35 points (0.41%) to 5,728.80, and the Nasdaq rose 144.77 points (0.80%) to 18,239.92. However, the S&P 500 finished the week down 1.4%.

 

Globally, the MSCI index rose 0.34%, while Europe’s STOXX 600 had its best day in five weeks, boosted by bank stocks.

 

The dollar strengthened against the euro and other major currencies after the U.S. jobs report. The euro fell 0.40% to $1.084, while the dollar index gained 0.36%. Against the yen, the dollar rose 0.60% to 152.94 ahead of Japan’s long weekend.

 

Bitcoin saw a modest rise of 0.57%, trading at $69,531.

 

In commodities, oil prices rose amid reports that Iran was preparing a retaliatory strike on Israel from Iraq. Brent crude futures gained 29 cents to $73.10 per barrel, and WTI crude rose 23 cents to $69.49. Gold edged down, pressured by the stronger dollar.

A stock market signal closely followed by Wall Street pros suggests Kamala Harris will win the Presidential election next week, but commentators warn that the historically accurate signal could fail this time.

 

History shows that when the S&P 500 has been higher in the three months leading up to the election, the incumbent party has won 80% of the time.

 

On the flipside, when the S&P 500 has been lower in the three months leading up to the election, the opposing party has won the election 89% of the time.

 

It's been a highly accurate signal in every election since 1928, and assuming the index doesn't erase its 8% gain since August in a day, commentators have said there's a good chance Kamala Harris will win.

 

Yet, market experts speaking with Business Insider note that the backdrop for both the market and the political landscape is highly unique, mirroring one of the only years that the signal has failed to point to the outcome of the vote.

 

Sam Stovall of CFRA Research said there are some uncanny similarities between today's election cycle and 1968, a year when the stock market election signal failed.

 

In 1968, former President Lyndon Johnson chose not to run for reelection and was replaced at the top of the ticket by Vice President Hubert Humphrey. Similarly, President Joe Biden dropped out and was replaced by his Vice President.

 

Also in 1968, the Federal Reserve cut interest rates between July 31 and October 31, which ultimately did not help the incumbent party. The Fed cut interest rates by 50 basis points last month for the first time since 2020.

 

Stovall said the final similarity is that Democrats in 1968 faced a restless populace clamoring for change. Back then, the issue was the unpopular Vietnam War. Now, rising prices and immigration issues could hurt Democrats' chances.

 

"Therefore, like 1968, the market's advance may be a reflection of 'replacement relief' not 'reelection," Stovall told Business Insider.

 

Others on Wall Street say the market in 2024 has distinct factors driving the gains — notably, artificial intelligence — that preclude it from hinting at political outcomes.

 

"We do not think that the market is a good predictor of the election outcome as the market has become more concentrated and the AI boom is distorting equity returns," Jay Hatfield, CEO at Infrastructure Capital Advisors told Business Insider.

 

What's more, there may be more accurate indicators than the moves of the broader S&P 500, and those indicators have been pointing to a Trump victory.

 

Assets tied to the "Trump trade" have gained in recent months, with bitcoin, shares of Trump Media and Technology Group, and the dollar all rallying on an expected boost from a second Trump presidency. Billionaire investor Stanley Druckenmiller told Bloomberg last month that the market is "very convinced Trump is going to win."

 

A notable miss for the signal in recent history is the 2020 election. That year, the S&P 500 rose 2.3% leading up to the November vote, suggesting a Trump win, but Biden ultimately won.

Election Day is fast approaching, and no matter who wins, you'll probably see changes to your tax bill in 2025.

 

In the fourth installment of BI's five-part series in the final stretch before the election, Business Insider is looking at the ways each candidate's policies could affect how much you pay in taxes. (Read part one about investments, part two about costs, and part three about housing.)

 

Each of the three sections below represents a key segment of the taxpaying population: low- and middle-income earners, high-income earners, and businesses. BI will unpack how a Trump or Harris presidency is expected to affect all three groups.

 

Under Trump's proposal, lower- and middle-income Americans could see some tax reductions, especially if they're trying to pay off a car or have a job that relies primarily on tips. Trump has proposed extending his slew of tax cuts from the Tax Cuts and Jobs Act of 2017 — also known as the "Trump tax cut." He's also seeking to eliminate taxes on tips, overtime, and Social Security benefits, as well as making car interest payments tax deductible.

 

Based on an analysis from the left-leaning Institute on Taxation and Economic Policy, keeping the income-tax cuts from the TCJA alone could mean a tax reduction of just over $1,000 for the middle 20% of Americans.

 

But another part of Trump's tax policy — his plan to levy universal tariffs on all US imports — could end up undercutting this positive impact. Economic analyses have found that those tariffs could offset the tax benefits and then some for lower-earning Americans.

 

Factoring in the cost of tariffs, Trump's tax package could result in higher tax bills for everyone but the top 5%, the Institute on Taxation and Economic Policy found.

 

"A lot of those tariffs do end up harming lower-income families and taxpayers who buy goods from abroad," Garrett Watson, a senior policy analyst at the right-leaning Tax Foundation, said.

 

Harris has proposed an expanded earned-income tax credit aimed at lower-income earners, and she wants to restore and expand upon a more generous child tax credit, similar to the one implemented under Biden's pandemic-relief bill in 2021. The Tax Policy Center estimates that Harris' proposals could bring down household taxes by an average of $750 — with the lowest-income earners seeing their after-tax incomes grow the most.

 

Harris' and Trump's proposals share some key similarities: Both have proposed some version of eliminating taxes on tips. While Harris hasn't outlined specifically what she'd preserve from the TCJA, she's maintained Biden's promise not to raise taxes on those making below $400,000. The Trump campaign has also shown interest in bolstering the child tax credit.

 

If Trump makes all the TCJA's income-tax provisions permanent, middle-income Americans would get a tax break of about $1,000, while the top 0.1% of earners would see a cut of nearly $280,000, a Tax Policy Center analysis found.

 

Another boon for wealthy Americans would be an extension of the break in estate taxes. The TCJA doubled the amount of inherited wealth that could be considered tax-exempt, from around $5.5 million in 2017 to around $11.2 million in 2018.

 

Trump has floated lifting the $10,000 cap on the State and Local Tax deduction, known as SALT, from his 2017 tax bill. SALT mostly impacts affluent taxpayers in blue states with high local taxes, and a repeal of the cap would restore a tax break mostly enjoyed by higher earners in places like California, New Jersey, and New York, said Benjamin Page, a senior fellow at the Urban-Brookings Tax Policy Center.

 

Harris' tax proposals target higher earners to help offset costs — if the TCJA were to expire for taxpayers making over $400,000, the top marginal rate would increase from 37% to 39.6%. She also supports two measures that have gained traction during the Biden administration: targeting ultrawealthy investors' capital gains and imposing a minimum income tax on billionaires.

 

"Unlike the Trump campaign, the other shoe for the Harris-Walz campaign comes on the high end," Ernie Tedeschi, the director of economics at the Yale Budget Lab and the former chief economist at the White House Council of Economic Advisers, said.

 

Harris has proposed bumping the tax on capital gains for Americans making $1 million or more from 20% to 28%. That would mean a higher tax rate on the money wealthy Americans make when they sell off assets like real estate or stocks — a key source of income for more affluent taxpayers.

 

Harris also supports a minimum income tax for billionaires, a proposal Biden has touted. She hasn't released specifics on what that would look like.

 

Harris wants to bump up the corporate tax rate from 21% to 28%, while Trump has proposed lowering it from 21% to 15% for firms that make their products in the US.

 

Harris has proposed some specific breaks for small businesses. Her key proposals include beefing up the startup deduction for new businesses from $5,000 to $50,000, creating a standard deduction for small businesses, and incentivizing local governments to ease up red tape, such as doing away with barriers to licensing and making it easier to recognize credentials across states.

 

"Many startups may be able to deduct the cost of those startup expenses more quickly and more fully, which could encourage, at least on that margin, a little bit more startup activity," Watson said.

 

Meanwhile, Tedeschi said Trump's tariffs could weigh on small businesses. Importers might have to choose between raising prices or absorbing the cost through lower margins.

 

But Tedeschi said both candidates' proposals to eliminate taxes on tips could ultimately be a boon for small businesses.

 

"The employer's going to be able to pay a little bit less for those jobs, given the demand for them," he said. "The tipped workers are probably going to end up fine because again, their tips are tax-free."

 

Trump's proposal to eliminate taxes on overtime pay could also benefit small businesses by allowing them to reconfigure how they schedule and pay workers.

 

One question mark for both campaigns is a TCJA provision that allows some business owners to deduct their business income from their taxable income. Democrats in Congress are hoping to preserve the deduction for business owners making under $400,000 but change it for those above that threshold, a Senate Finance Committee aide told BI.

Tech giants' earnings results, as well as those of other large names, are influencing the stock market.

 

However, a hit or a miss in a single quarter shouldn't form the basis for a long-term investment thesis.

 

Top Wall Street analysts closely follow the key details of a company's quarterly results. However, they establish their recommendations based on that company's ability to navigate short-term headwinds and deliver attractive returns over the long term through strong execution.

 

Bearing that in mind, here are three stocks favored by the Street's top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

 

This week's first stock pick is financial services technology company Fiserv (FI). The company recently impressed investors with its upbeat third-quarter results, with adjusted earnings per share rising 17% year-over-year on organic revenue growth of 15%.

 

On Oct. 29, Tigress Financial analyst Ivan Feinseth boosted his price target for FI stock to $244 from $190 and reiterated a buy rating. The analyst expects the company to continue to gain from the ongoing transition to digital payments and growing adoption of digital transaction solutions.

 

Feinseth noted the robust Q3 revenue growth, fueled by Fiserv's integrated financial services solutions and solid customer relationships. He stated that the company is expanding its customer base and grabbing market share, thanks to the scalability of its financial product distribution platform and continued innovation.

 

The analyst also highlighted Fiserv's other strategic initiatives, such as expanding its Clover portfolio, offering services to enterprise merchants, extending more real-time payments, expanding into new verticals and markets, as well as partnering with major clients.

 

Feinseth ranks No. 183 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, delivering an average return of 13.8%. 

 

We now move to Boot Barn (BOOT), a retailer of western and work-related footwear, apparel and accessories. The company reported better-than-expected results for the second quarter of fiscal 2025. Also, Boot Barn raised its full-year guidance.

 

Despite the beat-and-raise quarter, BOOT stock plunged as investors reacted unfavorably to the company's announcement about the planned departure of CEO Jim Conroy in November. Conroy will assume the role of CEO at off-price retailer Ross Stores.

 

Following the print, Baird analyst Jonathan Komp upgraded his rating for Boot Barn stock to buy from hold, while maintaining the price target at $167. The analyst thinks that the post-earnings pullback in the stock offers a more compelling risk/reward setup. He is surprised by the market's reaction to the CEO's departure, given the strength of the remaining management team.

 

Komp highlighted that Boot Barn is on track to maintain more than 15% annual growth in its store count for the third consecutive year in fiscal 2025 with its plan to open 60 new stores. He also noted the robust momentum in the company's comparable store sales across all regions and categories.

 

"We remain confident in BOOT's ability to deliver attractive relative earnings growth supported by compelling unit expansion opportunity," said Komp.

 

Komp ranks No. 424 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 54% of the time, delivering an average return of 13.5%. 

 

Finally, let's look at this week's third stock, restaurant chain Chipotle (CMG). The company recently reported better-than-anticipated adjusted earnings for the third quarter but lagged sales expectations despite a 3.3% rise in traffic amid a tough business backdrop.

 

Following the mixed results, Stifel analyst Chris O'Cull reaffirmed a buy rating on CMG stock with a price target of $70. The analyst noted that Chipotle's comparable restaurant sales growth of 6% was almost in line with the Wall Street's mean estimate of 6.2%. He added that the company experienced accelerated transaction growth in September and into the fourth quarter, indicating Q4 comps estimate of about 5.5%.

 

O'Cull added that the Q4 comps expectations imply full-year comps in the 7.5% range. In particular, he expects Chipotle's Q4 top line to gain from the company's smoked brisket offering, which has fueled incremental transactions and spending by existing customers and helped win new customers.

 

The analyst highlighted the company's focus on enhancing its throughput, an indicator of how fast a restaurant can execute an order. He noted Chipotle's aim to drive its throughput back into the mid-30s (serving over 30 entrées per 15 minutes) range from the mid-20s today. The analyst thinks that the company can improve its throughput, given its multiple initiatives, including equipment upgrades, enhanced operational procedures and transformational technology.

 

O'Cull ranks No. 415 among more than 9,100 analysts tracked by TipRanks. His ratings have been successful 59% of the time, delivering an average return of 12.6%. 

Robinhood said Monday that it's rolling out margin investing — the ability for investors to borrow cash to augment their trades — in the U.K.

 

The U.S. online investment platform said that the option would allow users in the U.K. to leverage their existing asset holdings as collateral to purchase additional securities.

 

The launch of margin trading follows the recent approval of the product, after Robinhood held conversations with Britain's financial regulator, the Financial Conduct Authority (FCA).

 

Margin trading is a rarity in the U.K., where regulators see it as more controversial because of the risks involved to users. Some platforms in the country limit margin trading for only high-net-worth individuals or businesses. Other firms that offer margin investing in the U.K. include Interactive Brokers, IG and CMC Markets.

 

The rollout comes after Robinhood debuted a securities lending product in the U.K. in September, allowing consumers to earn passive income on stocks they own, as part of the company's latest bid to grow its market share abroad.

 

The stock trading app touted "competitive" interest rates with its margin loans offering. Rates offered by the platform range from 6.25% for margin loans of up to $50,000 to 5.2% for loans of $50 million and above.

 

Jordan Sinclair, president of Robinhood U.K., said that many customers feel they can't access more advanced products like margin trading in Britain, as they're typically reserved for a select few professional traders investing with the likes of heavyweight banks JPMorgan Chase, Goldman Sachs, Morgan Stanley and UBS.

 

"There's so many barriers to entry," Sinclair told CNBC in an interview. "Ultimately, that's what we want to break down all those stigmas and barriers to just basic investing tools."

 

He added, "For the right customer this is a great way to diversify and expand their portfolio."

 

Investing on borrowed cash can be a risky trading strategy. In the case of margin trading, investors can use borrowed money to increase the size of their trades.

 

Say you wanted to make a $10,000 investment in Tesla. Usually, you'd have to fork out $10,000 of your own cash to buy that stock. But by using a margin account, you can "leverage" your trade. With 10x leverage, you'd only need to have $1,000 upfront to make the trade, instead of $10,000.

 

That can be a lucrative strategy for professional traders, who can make even larger returns than on usual trades, if the value of the purchased asset rises significantly.

 

It's a riskier path for retail traders. If the value of the asset you're buying on borrowed cash drops significantly, your losses will be dramatic, too.

 

Robinhood announced it was launching in the U.K last November, opening up its app to Brits in March. At the time of launch, Robinhood was unable to offer U.K. users the option of margin trading, pending discussions with the FCA.

 

"I think with the regulator, it was just about getting them comfortable with our approach, giving them a history of our product in the U.S., what we've developed, and the eligibility," Robinhood's Sinclair told CNBC.

 

Sinclair said that Robinhood implemented robust guardrails to ensure that customers don't invest more cash than they can afford to lose when margin investing.

 

The platform requires users seeking to trade on margin to have a minimum of $2,000 of cash deposited in their accounts. Customers also have to opt in to use the product — they're not just automatically enrolled for a margin account.

 

"There are eligibility criteria. There is a way to review appropriateness of this product for the right customer," Sinclair added. "Fundamentally, that's a really important part of this product. We recognize it isn't for the novice investor that's just getting started on our customer."

 

Robinhood says that its customers' uninvested cash is protected to the tune of $2.5 million with the U.S.' Federal Deposit Insurance Corporation, which the firm says adds another layer of protection for users.

A number of Wall Street forecasters have been warning of a stock bubble as the market climbs to a series of fresh highs in 2024 — and investors worried about such a scenario should be putting their money in a handful of assets to protect themselves from the eventual bursting.

 

That's according to David Rosenberg, a top economist and the founder of Rosenberg Research, who's been warning of a potential craash in stocks for months. In the past, he's warned of a 39% correction to stocks, among the more extreme predictions on Wall Street, where most investors are feeling optimistic about a soft landing amid a robust economy and easing interest rates.

 

"Watching the market these days is like watching a clown blowing up a balloon (or Chuck Prince dancing the ballroom), knowing the inevitable," Rosenberg said in a note to clients on Friday. "When this mega-bubble pops, it will be spectacular."

 

Investors need to exercise caution and avoid following the "herd mentality," Rosenberg said, pointing to the fervor for mega-cap tech stocks. Instead, he said, investors should focus on stocks with strong business models, strong growth, and good prices, and add some "insurance" to their portfolios.

 

Below are his top investment ideas for to prepare for the potential bursting of a market bubble.

 

Healthcare and consumer staples

 

Investors should gear their investments towards what people will always need in the future. In particular, Rosenberg recommended that investors pay attention to options in the healtcare and consumer staples sectors.

 

"Focus on where people are going to focus on what they need, not what they want," Rosenberg wrote. "Anything related to e- commerce, cloud services, and wiring up your home to become your new office has been in a budding secular growth phase."

 

Utilities

 

Utility stocks also look promising. Other forecasters have predicted huge upside for utility firms, due to the growing need for power and data centers stemming from the AI boom.

 

"Utilities, as we have been saying for a long time, are as close to a 'no brainer' as there is, given their yield attributes and their being re-rated for 'defensive growth' owing to enhanced earnings visibility through the strong and secular outlook for US power needs," Rosenberg said.

 

Aerospace, Defense

 

Aerospace and defense stocks could also be a buy, he added, given rising geopolitical tensions around the world.

 

"Aerospace/defense has been a long-standing bull call for us for several years, and the best hedge against an increasingly troubled world where military budgets are expanding everywhere — and not at all sensitive to who comes to power on November 5th."

 

Big tech

 

While some areas of tech are exhibiting bubble characteristics, investors could still seize on opportunities in some large-cap tech names, given the prevalence of work-from-home, cloud services, and remote work, Rosenberg said. Still, investors should wait to scoop up tech names at better prices, he said.

 

"I'd prefer to pick these plays up at better prices than we have today because this last melt-up has eaten enough into future expected returns to keep us cautious for now. But we would be an avid buyer on any significant pullback."

 

Safe bets

 

Investors should look to put a "dose of insurance" in their portfolios. That means gold — the "truest store of value," Rosenberg says, — as well as government bonds.

 

"The beautiful thing about gold is that it is not a liability that a central bank can simply have forgiven or a currency that can simply be printed by government fiat," he said of the precious metal. "I also favor the Treasury market because it commands just about the highest yield of any major industrial country – and with the great liquidity attributes."

 

Real estate investment trusts could also be good ways to hedge risk, Rosenberg said. That particularly applies to REITs tied to the industrial and healthcare sectors.

 

"In any event, we all have to become increasingly thematic and thoughtful in our decision-making and more selective than normal because the stock market, and financial assets in general, have become nothing more than a momentum casino," he added.

 

Most forecasters on Wall Street still expect a strong performance from equities into year-end and 2025. Goldman Sachs, UBS, BMO, and Deutsche Bank have raised their year-end price targets for the S&P 500 in recent weeks, with new forecasts ranging from 5,750 to 6,400.

Cryptocurrency bitcoin hit a three-month high in early Asia trading on Monday and the dollar looked set to extend its gains in markets counting down to the U.S. presidential election in two weeks.

 

Election polls show rising odds of former President Donald Trump winning the Nov. 5 election and are boosting the dollar, since his proposed tariff and tax policies are seen as likely to keep U.S. interest rates high and undermine currencies of trading partners.

 

Currency moves in major markets last week were driven by the European Central Bank's dovish rate cut and strong U.S. data that pushed out expectations for how fast U.S. rates can fall, particularly if Trump wins the presidency.

 

The yen was down 0.1% at 149.32 per dollar, staying on the stronger side of 150 per dollar, having breached that level briefly last week for the first time since early August.

 

The dollar index measure against major rivals was at 103.45. It fell 0.3% on Friday as risk appetite picked up broadly across markets after China announced more details of its broad stimulus package, but logged 0.55% gains for the week. The euro stood flat at $1.0866 and sterling was also flat around $1.3045.

 

Bitcoin got a lift from Trump's improving prospects since his administration is seen as taking a softer line on cryptocurrency regulation. It was last up 0.8% at $69,400 BTC=, and has risen 18% since Oct. 10.

 

With no major economic events due this week, market focus will be on corporate earnings and U.S. election risk, and possibly a rise in costs to hedge dollar and other portfolio risks, Chris Weston, head of research at Australian online broker Pepperstone, said in a note.

 

"With just 15 days to go until the U.S. election, traders need to decide if now is the right time to start placing election trades with greater conviction," Weston said.

 

The clearest way to express the Trump tariff risk was to be long dollars versus the euro, Swiss franc and Mexican peso, he said.

 

Brad Bechtel, global head of FX at Jefferies, also noted that rising real interest rates were helping the dollar along, particularly against those three currencies.

 

"We expect this trend to continue straight into the election and if Trump wins, likely well after the election as well," Bechtel wrote.

 

Last week, the yen fell 0.3%, the euro 0.6%, sterling was flat and the dollar index climbed 0.55%. The Mexican peso fell 3%.

 

The euro is down more than 3% in three weeks and has fallen through its 200-day moving average, and is parked near a 2-1/2 month low.

Oil prices steadied in early trading on Monday, following a more than 7% drop last week on worries about demand in China, the world's top oil importer, and an easing of concerns about potential supply disruptions in the Middle East.

 

Brent crude futures rose 8 cents, or 0.11%, to $73.14 a barrel by 0120 GMT. U.S. West Texas Intermediate crude futures gained 10 cents, or 0.14% to $69.32 a barrel.

 

Brent had settled down more than 7% lower last week, while WTI lost around 8%.

 

That marked the contracts' biggest weekly declines since Sept. 2, on slowing economic growth in China and falling risk premiums in the Middle East. U.S. President Joe Biden said on Friday there was an opportunity to "deal with Israel and Iran in a way that ends the conflict for a while".

 

The conflict in the Middle East however intensified over the weekend as Israel on Sunday said it was preparing to attack sites in the Lebanese capital of Beirut linked to Hezbollah's financial operations.

 

China on Monday morning cut benchmark lending rates as anticipated, part of a broader package of stimulus measures to revive the economy.

 

Data on Friday had shown that China's economy grew at the slowest pace since early 2023 in the third quarter, fueling growing concerns about oil demand.

 

On the supply side, last week, U.S. energy firms cut the number of oil and natural gas rigs operating for the fourth time in five weeks, according to a closely watched report by energy services firm Baker Hughes on Friday. The rig count dropped by one to 585.

Gold rose to a fresh high on Monday, extending its blazing rally amid uncertainties surrounding the U.S. election, simmering Middle East tensions and rate cuts by major central banks, while silver scaled a near 12-year peak.

 

Spot gold was up 0.4% at $2,731.79 per ounce, as of 0331 GMT, after hitting an all-time high of $2,732.73 earlier. U.S. gold futures were 0.6% higher at $2,746.80.

 

Helped by bullion's rally, spot silver rose 1.3% to $34.08 per ounce, its highest since late 2012.

 

"The current market environment consists of interest rates moving south combined with heightened geopolitical risks — a scenario which suits gold on both fronts," said Tim Waterer, chief market analyst at KCM Trade.

 

Investors also digested news that China cut its benchmark lending rates following reductions to other policy rates last month as part of a package of stimulus measures to revive the economy.

 

Gold demand in top consumer China has taken a hit amid high prices and an economic slowdown.

 

Elsewhere, traders are pricing in a 99% chance of a U.S. Federal Reserve interest rate cut in November. The European Central Bank cut interest rates by a quarter point last week.

 

Lower rates generally enhance gold's allure, as bullion yields no interest. Gold is also considered a safe investment during times of economic and political turmoil.

 

The 2024 U.S. presidential race between former President Donald Trump and Vice President Kamala Harris is neck and neck in the seven battleground states that will decide the Nov. 5 election.

 

In the Middle East, hundreds of Beirut residents fled their homes late Sunday, with multiple explosions heard, as Israel prepared to attack sites linked to the financial operations of Hezbollah group.

 

For gold, "$2,800 looks to be a viable year-end target... There will be temptation to lock in some profits, which could slow the immediate upside," Waterer said.

 

He, however, said he expected buyers would be waiting on the sidelines for better entry points should any pullback occur.

 

Platinum rose 0.7% to $1,020.95 per ounce, its highest since mid-July. Palladium gained 0.8% to $1,087.87.

European markets were mixed on Monday as investors awaited key corporate earnings and monitored elevated Middle East tensions.

 

The pan-European Stoxx 600 traded flat at around 9:30 a.m. London time, with sectors and major bourses pointing in opposite directions. Oil and gas stocks led the gains, up 1.1%, while insurance stocks dipped 0.5%.

 

Regional markets had ended last week on a high note after the European Central Bank announced its third interest rate cut of the year. The ECB on Thursday lowered the deposit rate by another 25 basis points as inflation risks in the European Union are seen to be easing faster than anticipated.

 

German software company SAP will report its highly anticipated third-quarter earnings on Monday evening. The results come shortly after a report from the Dutch semiconductor firm ASML last week triggered a rout in tech market stocks.

 

Elsewhere, Asia-Pacific markets were mixed on Monday as traders assessed China's loan prime rate announcement, with focus also on Japan's general election at the end of the week.

 

Stateside, stock futures ticked higher after the Dow Jones Industrial Average and S&P 500 notched their best weekly win streaks of 2024.

 

Shares of Danish shipping group Moller-Maersk rose 3% on Monday morning.

 

It comes shortly after the company said it had stopped all booking acceptance to and from crisis-stricken Haiti "effective immediately" in light of the ongoing political situation.

— Sam Meredith

 

Dutch coffee and tea group JDE Peet's rose to the top of the European benchmark on Monday morning.

 

Shares of JDE Peet's jumped 14% after the company announced the appointment of Rafael Oliveira as its chief executive officer and investment holding company JAB said it would acquire Mondelez's 86 million shares in the firm.

 

Meanwhile, Swiss inspection services firm SGS fell 2.6% after RBC cut its target price for the stock, Reuters reported.

— Sam Meredith

 

European markets opened slightly lower on Monday.

 

The pan-European Stoxx 600 traded down 0.1% shortly after the opening bell, with most sectors in negative territory.

— Sam Meredith

 

The fundamental backdrop is "quite good" for gold prices at the moment, according to one analyst, with the yellow metal thought to be on track to hit $3,000 per ounce over the coming months.

 

Spot gold prices traded 0.3% higher at $2,727.26 per ounce at around 7:50 a.m. London time, paring gains after hitting a fresh all-time high of $2,732.73 earlier in the session.

 

Asking prices for British homes rose only marginally in October as more properties came onto the market, according a survey on Monday that also suggested some buyers were waiting for clarity on tax changes in the new government's upcoming budget.

 

Asking prices rose by just 0.3% in October, well below their average for a 1.3% monthly increase for the month, property website Rightmove said.

 

The number of homes available for sale was 12% higher than the same time period last year, and was the highest per real estate agent since 2014.

 

Overall activity in the property market remained strong, with buyer demand rising.

 

Prices were 1.0% higher than a year earlier.

— Reuters

 

China's stimulus measures need to tackle structural problems in its crisis-hit property sector to restore confidence in the world's second-largest economy, according to one strategist.

 

It comes as optimism over a raft of economic measures implemented by Beijing since late September appears to have faded in recent days.

 

"I think the fundamental point is, for all of the measures that have been taken, I think where the disappointment at least for an observer comes in is measures for the property market," Daniel Morris, chief market strategist at BNP Paribas Asset Management, told CNBC's "Squawk Box Europe" on Monday.

 

"The fundamental issue, or one of many fundamental issues, is that you can cut interest rates, but people aren't necessarily going to react if confidence isn't there [and] confidence isn't there because of weakness in the property market," Morris said.

 

"And so, you need to start with that fundamental issue before you get the chain effect that you want," he added.

— Sam Meredith

 

European markets are expected to open in mixed territory Monday.

 

The U.K.'s FTSE 100 index is expected to open 17 points higher at 8,373, Germany's DAX down 12 points at 19,644, France's CAC up 1 point at 7,611 and Italy's FTSE MIB up 55 points at 35,087, according to data from IG.

 

Bitcoin surged to its highest level in three months after election polls showed higher odds of winning for Republican presidential nominee Donald Trump.

 

The cryptocurrency surged to a high of $69,487 on Monday, its highest level since July.

 

Wall Street analysts have raised their bets on three stocks ahead of their quarterly earnings reports over the past week.

 

One of the stocks, a Big Tech AI firm, has rallied 64% this year, with analysts predicting more momentum ahead.

 

As investors attempt to navigate volatile global markets, Morgan Stanley is reiterating its recommendation to buy dividend stocks.