Wall Street analysts' favorite stocks for 2022 include Alaska Air, Caesars and Lithia Motors - MarketWatch

As the coronavirus pandemic has stretched out, investors have continued to pour money into stocks, in part because the alternatives have been dismal. Why bother with 10-year U.S. Treasury bonds that yield a paltry 1.52% when the S&P 500 index has a dividend yield of 1.30% to go along with its growth potential?

Things may change in 2022 as the Federal Reserve winds down its bond purchases that have kept long-term interest rates low. Then again, U.S. stocks have continued to rise since the Fed announced its policy changes on Dec. 15.

With U.S. bond yields already so much higher than they are in the rest of the developed world, foreign investors may continue to buy U.S. bonds and keep yields at historically low levels. And that might make for a continued flow of money into U.S. stocks.

Below are lists of stocks among the benchmark S&P 500 SPX, the S&P 400 Mid Cap Index MID and the S&P Small Cap 600 Index SML that are rated “buy” or the equivalent by at least three out of four of Wall Street analysts polled by FactSet that are expected to rise the most over the next year. Those lists are followed by a summary of analysts’ opinions of all 30 stocks in the Dow Jones Industrial Average DJIA.

Large-cap favorites

Among the S&P 500, 93 stocks are rated a “buy” or the equivalent by at least 75% of analysts working for brokerage firms. Here are the 20 the analysts expect to rise the most over the next year, based on consensus price targets:

Company	Ticker	Industry	Closing price – Dec. 30	Consensus price target	Implied 12-month upside potential	Share “buy” ratings	Total return – 2021 through Dec. 30
Alaska Air Group Inc.	ALK	Airlines	$51.94	$77.71	50%	93%	0%
Caesars Entertainment Inc.	CZR	Casinos/ Gaming	$92.99	$137.36	48%	94%	25%
Generac Holdings Inc.	GNRC	Electrical Products	$352.96	$514.11	46%	77%	55%
PayPal Holdings Inc.	PYPL	Data Processing Services	$191.88	$273.65	43%	84%	-18%
T-Mobile US Inc.	TMUS	Wireless Telecommunications	$116.51	$165.51	42%	81%	-14%
News Corp. Class A	NWSA	Publishing: Newspapers	$22.50	$31.91	42%	88%	26%
Global Payments Inc.	GPN	Data Processing Services	$136.29	$188.41	38%	85%	-36%
Southwest Airlines Co.	LUV	Airlines	$42.72	$57.32	34%	78%	-8%
Schlumberger NV	SLB	Oilfield Services/ Equipment	$29.82	$39.58	33%	85%	39%
Salesforce.com Inc.	CRM	Software	$255.33	$331.46	30%	86%	15%
Bath & Body Works Inc.	BBWI	Apparel, Footwear Retail	$69.70	$90.21	29%	86%	133%
Electronic Arts Inc.	EA	Recreational Products	$134.46	$173.78	29%	77%	-6%
Phillips 66	PSX	Oil Refining/ Marketing	$72.45	$93.50	29%	79%	8%
Medtronic PLC	MDT	Medical Specialties	$104.47	$134.52	29%	85%	-9%
Teleflex Inc.	TFX	Medical Specialties	$330.89	$424.11	28%	75%	-19%
General Motors Co.	GM	Motor Vehicles	$58.13	$74.45	28%	84%	40%
Pioneer Natural Resources Co.	PXD	Oil & Gas Production	$181.28	$231.61	28%	86%	66%
Synchrony Financial	SYF	Finance, Rental, Leasing	$46.26	$58.74	27%	77%	36%
Comcast Corp. Class A	CMCSA	Cable, Satellite TV	$50.59	$64.08	27%	79%	-2%
EOG Resources Inc.	EOG	Oil & Gas Production	$89.18	$112.94	27%	79%	89%
Source: FactSet

You can click the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

Alaska Air Group Inc. ALK tops the list of analysts’ favorite large-cap stocks for 2022. The shares were flat for 2021, as investors were understandably disappointed that the travel industry’s recovery was stalled by new waves of coronavirus infections. Other travel and hospitality-related recovery plays on the list include Caesars Entertainment Inc. CZR and Southwest Airlines Co. LUV.

There are four oil-related stocks on the list, three of which rose significantly during 2021. West Texas Crude oil CL00 was up 59% for 2021 through Dec. 30 based on forward-month contracts, while the S&P 500 energy sector returned 54%.

Other stocks on the list that performed very well during 2021 and are expected to do so again in 2022 include Generac Holdings Inc. GNRC, Bath & Body Works Inc. BBWI and General Motors Co. GM.

Midcap stocks expected to show the biggest gains

The lists of “favorite” stocks are confined to those covered by at least five analysts. Among components of the S&P 400 Mid Cap Index, that leaves 92 stocks with at least 75% “buy” ratings. Here at the 20 expected to rise the most over the next year:

Company	Ticker	Industry	Closing price – Dec. 30	Consensus price target	Implied 12-month upside potential	Share “buy” ratings	Total return – 2021 through Dec. 30
Sunrun Inc.	RUN	Alternative Power Generation	$34.01	$72.61	113%	77%	-51%
Digital Turbine Inc.	APPS	Software	$62.84	$104.00	65%	100%	11%
Jazz Pharmaceuticals Public Ltd. Co.	JAZZ	Pharmaceuticals	$128.26	$200.89	57%	90%	-22%
Lithia Motors Inc.	LAD	Specialty Stores	$297.17	$460.31	55%	80%	2%
Cerence Inc.	CRNC	Software	$77.59	$119.42	54%	100%	-23%
Callaway Golf Co.	ELY	Recreational Products	$27.63	$41.50	50%	77%	15%
Ziff Davis Inc.	ZD	Internet Software, Services	$111.37	$166.88	50%	100%	31%
Victoria’s Secret & Co.	VSCO	Apparel, Footwear Retail	$55.46	$82.73	49%	82%	N/A
LiveRamp Holdings Inc.	RAMP	Data Processing Services	$49.07	$73.18	49%	82%	-33%
PROG Holdings Inc.	PRG	Finance, Rental, Leasing	$44.84	$66.29	48%	75%	-17%
MillerKnoll Inc.	MLKN	Office Equipment, Supplies	$38.98	$57.60	48%	80%	17%
ChampionX Corp.	CHX	Chemicals: Specialty	$20.01	$29.00	45%	80%	31%
Darling Ingredients Inc.	DAR	Agricultural Commodities, Milling	$67.87	$96.79	43%	100%	18%
Axon Enterprise Inc.	AXON	Aerospace & Defense	$156.07	$222.40	43%	91%	27%
EQT Corp.	EQT	Oil & Gas Production	$22.04	$31.30	42%	75%	73%
IAA Inc.	IAA	Specialty Stores	$50.43	$70.88	41%	90%	-22%
HealthEquity Inc.	HQY	Investment Managers	$43.86	$61.50	40%	75%	-37%
Azenta Inc.	AZTA	Electronic Production Equipment	$103.18	$144.60	40%	83%	53%
Vontier Corp	VNT	Transportation	$30.89	$42.82	39%	77%	-7%
SailPoint Technologies Holdings Inc.	SAIL	Software	$48.85	$67.67	39%	93%	-8%
Source: FactSet

Small-cap favorites for 2022

Among the S&P Small Cap 600, 101 stocks covered by at least five analysts have at least 75% “buy” ratings. Analysts expect these 20 of the favored stocks to rise the most over the next 12 months:

Company	Ticker	Industry	Closing price – Dec. 30	Consensus price target	Implied 12-month upside potential	Share “buy” ratings	Total return – 2021 through Dec. 30
UniQure NV	QURE	Biotechnology	$20.87	$63.78	206%	89%	-42%
Tactile Systems Technology Inc.	TCMD	Medical Specialties	$19.23	$52.25	172%	100%	-57%
Zynex Inc.	ZYXI	Medical Specialties	$10.23	$22.20	117%	80%	-24%
Cara Therapeutics Inc.	CARA	Biotechnology	$12.34	$26.25	113%	75%	-18%
LendingTree Inc.	TREE	Finance, Rental, Leasing	$121.91	$238.75	96%	100%	-55%
Joint Corp	JYNT	Hospital, Nursing Management	$64.62	$126.00	95%	83%	146%
Talos Energy Inc.	TALO	Oil & Gas Production	$10.07	$19.00	89%	100%	22%
Renewable Energy Group Inc.	REGI	Chemicals	$42.78	$79.86	87%	80%	-40%
LivePerson Inc.	LPSN	Internet Software, Services	$36.59	$64.31	76%	79%	-41%
BioLife Solutions Inc.	BLFS	Medical Specialties	$37.44	$63.43	69%	78%	-6%
OptimizeRx Corp.	OPRX	Data Processing Services	$61.14	$103.00	68%	100%	96%
Cutera Inc.	CUTR	Medical Specialties	$39.26	$63.40	61%	100%	63%
Select Medical Holdings Corp.	SEM	Hospital, Nursing Management	$29.82	$47.40	59%	80%	9%
Hibbett Inc.	HIBB	Specialty Stores	$72.00	$112.17	56%	83%	57%
Palomar Holdings Inc.	PLMR	Property/ Casualty Insurance	$63.76	$99.14	55%	78%	-28%
Coherus BioSciences Inc.	CHRS	Biotechnology	$16.74	$25.43	52%	86%	-4%
Celsius Holdings Inc.	CELH	Beverages: Non-Alcoholic	$73.52	$110.21	50%	75%	46%
James River Group Holdings Ltd.	JRVR	Property/ Casualty Insurance	$28.14	$41.86	49%	75%	-41%
NeoGenomics Inc.	NEO	Medical/ Nursing Services	$34.15	$50.18	47%	92%	-37%
Vericel Corp.	VCEL	Medical Specialties	$40.11	$58.46	46%	100%	30%
Source: FactSet

All 30 components of the Dow Jones Industrial Average

Here they are, ranked by how much analysts expect them to rise over the next year:

Company	Ticker	Industry	Closing price – Dec. 30	Consensus price target	Implied 12-month upside potential	Share “buy” ratings	Total return – 2021 through Dec. 30
Salesforce.com Inc.	CRM	Software	$255.33	$331.46	30%	86%	15%
Boeing Co.	BA	Aerospace & Defense	$202.71	$259.61	28%	73%	-5%
Visa Inc. Class A	V	Finance, Rental, Leasing	$217.87	$272.62	25%	92%	0%
Walt Disney Co.	DIS	Cable, Satellite TV	$155.93	$193.29	24%	70%	-14%
Merck & Co. Inc.	MRK	Pharmaceuticals	$77.14	$92.70	20%	60%	2%
Goldman Sachs Group Inc.	GS	Investment Banks, Brokers	$385.52	$458.97	19%	67%	49%
Walmart Inc.	WMT	Food Retail	$143.17	$169.92	19%	80%	1%
Dow Inc.	DOW	Chemicals	$56.78	$66.62	17%	36%	7%
American Express Co.	AXP	Finance, Rental, Leasing	$164.16	$191.35	17%	46%	37%
Honeywell International Inc.	HON	Industrial Conglomerates	$207.11	$238.27	15%	48%	-1%
Caterpillar Inc.	CAT	Trucks, Construction, Farm Machinery	$206.08	$235.57	14%	52%	16%
Verizon Communications Inc.	VZ	Telecommunications	$52.25	$59.57	14%	27%	-7%
JPMorgan Chase & Co.	JPM	Major Banks	$158.48	$179.70	13%	61%	28%
Chevron Corp.	CVX	Integrated Oil	$117.43	$130.74	11%	67%	46%
Nike Inc. Class B	NKE	Apparel, Footwear	$167.49	$185.89	11%	77%	19%
Microsoft Corp.	MSFT	Software	$339.32	$370.51	9%	90%	54%
3M Co.	MMM	Industrial Conglomerates	$177.64	$192.06	8%	14%	5%
Coca-Cola Co.	KO	Beverages: Non-Alcoholic	$58.78	$62.67	7%	61%	11%
Johnson & Johnson	JNJ	Pharmaceuticals	$172.31	$183.71	7%	50%	12%
Intel Corp.	INTC	Semiconductors	$51.74	$54.91	6%	27%	7%
International Business Machines Corp.	IBM	Information Technology Services	$133.91	$142.07	6%	28%	17%
Amgen Inc.	AMGN	Biotechnology	$226.47	$238.09	5%	31%	2%
Travelers Companies Inc.	TRV	Multi-Line Insurance	$156.81	$164.06	5%	26%	14%
McDonald’s Corp.	MCD	Restaurants	$267.21	$276.06	3%	70%	27%
Home Depot Inc.	HD	Home Improvement Chains	$409.94	$416.83	2%	65%	58%
Walgreens Boots Alliance Inc.	WBA	Drugstore Chains	$51.99	$52.80	2%	5%	35%
UnitedHealth Group Inc.	UNH	Managed Health Care	$504.43	$504.20	0%	86%	46%
Apple Inc.	AAPL	Telecommunications Equipment	$178.20	$175.81	-1%	79%	35%
Cisco Systems Inc.	CSCO	Information Technology Services	$63.62	$62.69	-1%	54%	46%
Procter & Gamble Co.	PG	Household, Personal Care	$162.77	$156.67	-4%	54%	20%
Source: FactSet

Four Dow components are expected to be flat or down in 2022: UnitedHealth Group Inc. UNH, Apple Inc. AAPL, Cisco Systems Inc. CSCO and Procter & Gamble Co. PG.

Don’t miss: These are the best-performing S&P 500 and Nasdaq-100 stocks of 2021

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Wall Street analysts' favorite stocks for 2022 include Alaska Air, Caesars and Lithia Motors - MarketWatch
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Hong Kong's flagship airline says strict new quarantine rules could cause 'dramatic' supply chain disruptions - CNN

Hong Kong (CNN Business)Hong Kong's flagship airline warned Friday that strict new quarantine measures in the city could lead to "dramatic disruptions" to local supply chains, as the company is forced to curb some passenger and cargo flights.

Cathay Pacific's note of caution came as the Hong Kong government announced that, from Saturday, all cargo air crew based in the city who have stayed overseas will need to spend seven days in hotel quarantine when they return. That's up from the current three-day requirement.

The measure marks an escalation from what are already some of the world's most stringent and isolating restrictions, as Hong Kong attempts to stamp out any trace of the coronavirus. The city, along with mainland China, is one of the last places in Asia still adopting a "zero Covid" strategy. And most people coming into the city are forced to quarantine in a hotel for up to three weeks upon arrival, even if they are inoculated.

"We are wary that any further tightening of aircrew quarantine arrangements would lead to reductions in flight frequencies to protect the well-being of our crew members and the overall safety of our operations," said Andy Wong, general manager of Cathay Pacific's corporate affairs division, in a statement.

He added that such actions would cause "dramatic disruptions to supply chains in the short-term" and undermine Hong Kong International Airport as a "leading cargo hub."

Strict quarantine rules have already been taking a toll on pilots at the carrier.

Like staff at many airlines, all Cathay flight crew are fully vaccinated. But Cathay pilots told CNN Business weeks ago that the airline had adopted strict policies for those traveling to countries designated as "high risk," such as the United States, India and the United Kingdom. Pilots headed to those places typically fly out for several weeks and still have to quarantine in hotels again in Hong Kong.

"Low risk" and cargo flights have been more lenient in the past, but Friday's announcement suggests the city sees a need for a tightening as the threat of the Omicron coronavirus variant grows. Hong Kong just reported its first two local cases of the variant, which health authorities said Thursday were likely linked to a Cathay crew member.

In recent days, there had already been signs that Hong Kong was looking to crack down even more than it already does.

Cathay Pacific said Thursday that it would scrap an unspecified number of passenger flights because of a "tightening" of rules. It added that the city's restrictions continue to "constrain our ability to operate flights as planned."

The company said in that statement that the flights would be canceled immediately and effective until "tentatively the first quarter of 2022," adding that it intends to "operate a skeleton passenger flight schedule in January."

In another statement Friday, Cathay said it would suspend long haul cargo flights into the city for a week, adding that it would be "working with customers to mitigate the disruption as much as possible."

The Hong Kong Transport and Housing Bureau told CNN Business it has been "been closely communicating with the aviation industry with a view to maintaining smooth air cargo services into and out of Hong Kong and addressing the basic daily needs of society, while safeguarding public health."

Hong Kong's strict rules have resulted in significant disruption to airlines, as any commercial airline that arrives in the city with Covid-positive passengers, or which fails to comply with containment measures, can be temporarily banned from operating passenger flights.

The Hong Kong government has suspended some international routes in the city from major airlines including Qatar, Emirates, Korean Air, Turkish Airlines, Cebu Pacific Air and Finnair. Certain passenger flights from cities like New York, Los Angeles, Toronto, London, Dubai, Manila and elsewhere have also been banned in recent days after people on those flights tested positive.

The Hong Kong government has said it will review temporary bans on flight routes in early January.

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Hong Kong's flagship airline says strict new quarantine rules could cause 'dramatic' supply chain disruptions - CNN
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European stocks on track for second best year since 2009, up 22% - CNBC

LONDON – European indexes fell on Friday, the last trading session of 2021, but were on track to log gains of 22% for the year.

The U.K.'s FTSE 100 fell 0.3% on Friday, Germany's DAX was up by 0.2% and France's CAC slipped 0.4%.

Markets will close at lunchtime on Friday owing to New Year's Eve celebrations. The Swiss SMI and Italy's FTSE MIB will be shut all day.

However, the FTSE and the DAX are on track to see gains of 15% for this year, while the French CAC is close to a 30% gain. The pan-European Euro Stoxx will likely see a gain of 22% for the year with banks and tech stocks outperforming, both with rallies of 34%.

Market players have spent weeks juggling concerns over new Covid restrictions and tighter central bank policy, with early studies suggesting the omicron strain of the virus is milder than previous variants like delta. New studies in South Africa and the U.K. last week suggested omicron carries a reduced risk of hospitalization and severe illness.

All sectors are set to end the year higher, although hard-hit travel stocks will only end 2021 with a rise of 4%.

On Wall Street, stock futures were mildly lower on Friday morning ahead of the final trading day of 2021. In Asia, Hong Kong stocks led gains among major markets on Friday, with Chinese tech stocks in the city soaring.

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JetBlue, Alaska Airlines and Others Cancel More Flights - The New York Times

Airlines have been preparing for the holiday season for months, reviewing plans and readying reserves of workers. But that wasn’t enough to mitigate the effects of the fast-spreading Omicron coronavirus and of heavy snow and strong winds in the West.

The impact continued to be felt on Thursday, with more than 1,200 cancellations of flights to, from or within the United States by afternoon, according to the air travel data site FlightAware. The site also showed more than 640 cancellations for Friday.

The continued disruption comes as the country is averaging more than 260,000 new coronavirus cases a day, greater than the peak levels from last winter. Infection rates are especially high in parts of the Northeast and Midwest. Caseloads have continued to increase rapidly as the Omicron variant spreads, though deaths and hospitalizations have remained relatively steady.

The surge has disrupted far more than air travel. New York City has slowed to a crawl as the virus thins the ranks of subway workers and emergency personnel. Cincinnati declared a state of emergency on Wednesday to help the city deal with labor shortages within the city’s Fire Department amid a spike in coronavirus cases that coincided with scheduled holiday vacations. Many cities have canceled or limited New Year’s celebrations. More broadly, the pandemic has caused months of havoc in supply chains.

The air carriers hit hard on Thursday included JetBlue, with 17 percent of its total flights canceled. JetBlue said Wednesday that it was reducing its schedule through Jan. 13. In a statement, the airline said it had “seen a surge” in sick calls because of the Omicron variant, hampering its ability to staff its flights suitably even though it started the holidays with more workers than at any point since the pandemic began.

“We expect the number of Covid cases in the Northeast — where most of our crew members are based — to continue to surge for the next week or two,” the company said. “This means there is a high likelihood of additional cancellations until case counts start to come down.”

Alaska Airlines, whose primary hub is Seattle-Tacoma International Airport, canceled 14 percent of its flights. Relentless snowfall and record low temperatures in the Pacific Northwest grounded planes last week, and it snowed again in Seattle on Thursday.

Looking to relieve its staffing squeeze, the airline industry pushed for the Centers for Disease Control and Prevention to shorten its recommended isolation period for Americans infected with Covid-19. The agency had previously recommended that infected patients isolate for 10 days after a positive test. But on Monday, it reduced that period to five days for those without symptoms and those without fevers whose other symptoms were resolving.

Delta Air Lines was one of the first companies to adapt to the updated guidance. Its new policy, dated Tuesday, provides five days of paid leave for vaccinated workers who test positive for the coronavirus to isolate, according to an internal communication to company leaders obtained by The New York Times.

The policy encourages, but does not require, a Covid test to go back to work — going a step further than the C.D.C. guidance, which does not include a recommendation for additional testing — and Delta is offering two additional days of paid time off for workers who test positive on Day 5. But the airline’s protocols make no mention of whether returning employees should have improving symptoms, as suggested by the C.D.C.

Megabus, a long-distance bus operator, said Thursday that it is offering free rides on routes in the U.S. and Canada to travelers whose flights are canceled between Dec. 27 and Jan. 7.

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JetBlue, Alaska Airlines and Others Cancel More Flights - The New York Times
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Tesla recalls almost half a million electric cars over safety issues - Reuters

Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China January 7, 2020. REUTERS/Aly Song

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SAN FRANCISCO, Dec 30 (Reuters) - Tesla Inc (TSLA.O) is recalling more than 475,000 of its Model 3 and Model S electric cars to address rearview camera and trunk issues that increase the risk of crashing, the U.S. road safety regulator said on Thursday.

Tesla shares fell as much as 3% in the morning but rebounded and were last trading slightly higher around $1,088.76. The federal regulator has been discussing another camera issue with the automaker, while probing the electric vehicle manufacturer's driver assistant system and other issues.

The model years affected in the recall range from 2014 to 2021, and the total number of recalled vehicles is almost equivalent to the half a million vehicles Tesla delivered last year.

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The U.S. electric vehicle manufacturer is recalling 356,309 2017-2020 Model 3 vehicles to address rearview camera issues and 119,009 Model S vehicles due to front hood problems, the National Highway Traffic Safety Administration (NHTSA) said.

Tesla could not be reached for comment.

For Model 3 sedans, "the rearview camera cable harness may be damaged by the opening and closing of the trunk lid, preventing the rearview camera image from displaying," the NHTSA said.

Tesla identified 2,301 warranty claims and 601 field reports regarding the issue for U.S. vehicles.

For Model S vehicles, front hood latch problems may lead a trunk to open "without warning and obstruct the driver’s visibility, increasing the risk of a crash," Tesla said.

Tesla said it was not aware of any crashes, injuries or deaths related to the issues cited in the recall of Model 3 and Model S cars, the NHTSA said.

This month, the NHTSA said it was discussing with Tesla (TSLA.O) over sideview camera issues in some vehicles. L1N2SU2EA

CNBC had reported that Tesla was replacing defective repeater cameras in the front fenders some U.S.-made vehicles without recalling the parts.

The NHTSA has been investigating 580,000 Tesla vehicles over the automaker's decision to allow games to be played on car screens while they are in motion. read more

Tesla has subsequently agreed to stop allowing video games to be played on vehicle screens while its cars are moving, according to the NHTSA. read more

Under pressure from NHTSA, Tesla in February agreed to recall 135,000 vehicles with touch-screen displays that could fail and raise the risk of a crash. read more

In August, the NHTSA opened a formal safety probe into Tesla Inc's driver assistance system Autopilot after a series of crashes involving Tesla models and emergency vehicles. read more

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Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru; Additional reporting by David Shepardson in Washington; Editing by David Clarke, Anil D'Silva, Alistair Bell and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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My 2 Best Cryptocurrencies to Buy in 2022 - The Motley Fool

Ethereum (CRYPTO:ETH) and Polkadot (CRYPTO:DOT) are programmable blockchains, architected to support smart contracts (i.e. self-executing software). In turn, that type of technology forms the heart of decentralized finance (DeFi) applications, tools that make financial services more efficient by eliminating intermediaries like banks.

Not surprisingly, that value proposition has translated into rapid growth. DeFi investments have skyrocketed over 1,300% to $248 billion in the past year, and that massive uptick in adoption has not gone unnoticed. Institutional investors are increasingly interested in cryptocurrency. And in terms of programmable blockchains, Ethereum and Polkadot are the two most popular digital assets among crypto hedge funds.

That fact alone is a compelling investment thesis. But both Ethereum and Polkadot are also undergoing upgrades that could supercharge adoption in 2022 -- and beyond. Here's what you should know.

Image source: Getty Images.

1. Ethereum

Ethereum was the world's first programmable blockchain, and it remains the most popular. Today, there are approximately 2,900 decentralized applications (dApps) deployed on the platform, and $155 billion invested in DeFi products. Put another way, Ethereum accounts for the vast majority of all dApps and 63% of all DeFi investments. 

That popularity creates a virtuous cycle. Users tend to migrate toward the platform that offers the most variety, and developers tend to build dApps for the most utilized blockchains. However, Ethereum's popularity has also exposed a serious problem: It lacks scalability. In fact, Ethereum can handle just 30 transactions per second (TPS), while credit card processor Visa can theoretically process 24,000 TPS. And as the Ethereum network has become more congested, transaction speeds have slowed, causing delays and skyrocketing transaction fees.

Fortunately, the Ethereum 2.0 upgrade aims to solve that problem. Next year, the blockchain will transition from energy-intensive proof of work consensus to eco-friendly proof of stake, making the platform more sustainable. In 2023, side chains will be added to the core blockchain, dividing the network load more efficiently. And with a few more tweaks, Ethereum 2.0 could boost throughput to 100,000 TPS, preparing the platform for mainstream adoption.

That's why Ethereum looks like a smart buy right now. Assuming dApps and DeFi products on the blockchain continue to gain traction, demand for the underlying ETH token should rise, because users are required to pay transaction fees with the blockchain's native cryptocurrency. In turn, rising demand for ETH should translate into higher token prices.

2. Polkadot

Gavin Wood was a co-founder of Ethereum, and he actually invented Solidity, the programming language used to build smart contracts on the Ethereum blockchain. However, Wood eventually left the project to pursue his own vision. In 2017 he founded the Web3 Foundation, a nonprofit institution dedicated to building a decentralized internet. Under his leadership, the Web3 Foundation launched Polkadot in May 2020.

From the beginning, Polkadot was built to be scalable and interoperable with external networks, two qualities made possible by its unique architecture. Specifically, a single central chain (i.e. relay chain) uses proof of stake consensus to secure the entire network, while numerous programmable side chains (i.e. parachains) support a diverse ecosystem of dApps. Additionally, bridges -- a special type of parachain -- allow Polkadot to share data and assets with other blockchains.

In November, Polkadot auctioned the first parachain slots to developers, and in December, the first five parachains were attached to the relay chain. Going forward, Polkadot will continue to auction parachain slots for the foreseeable future, aiming to build an ecosystem of 100 parachains. At that time, Wood believes Polkadot could achieve speeds of 1 million TPS.

Notably, the Moonbeam parachain was among the first group to be onboarded. That's particularly important because Moonbeam is a bridge that allows Ethereum dApps to run on Polkadot. That catalyst could spark tremendous growth in the ecosystem in the coming months as developers rush to take advantage of Polkadot's interoperability.

From there, the investment thesis mirrors that of Ethereum. As more consumers use dApps and DeFi products on the Polkadot blockchain, demand for the DOT token should rise, sending its price higher. That's why this cryptocurrency looks like a smart buy right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Dow Jones Rallies As Jobless Claims Drop; Tesla Stock Skids On Recall - Investor's Business Daily

The Dow Jones Industrial Average rallied 165 points early Thursday after this week's jobless claims report, as the stock market sought to add to Wednesday's record highs. Early losses positioned Tesla stock to extend its losing streak. And five top stocks held in new buy zones after recent breakouts.

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Among the Dow Jones leaders, Apple (AAPL) rose 0.1% Thursday, while Microsoft (MSFT) lost 0.1% in today's stock market. Also among the Dow 30, Home Depot (HD) continues to rebound from support, while Nike (NKE) regained a key level.

Electric-vehicle leader Tesla (TSLA) traded down around 2% Thursday. Its rival, Rivian (RIVN), was up 0.3%. Lucid Group (LCID) rose around 1%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were higher Thursday morning ahead of their December sales reports, expected over the weekend.

Among Thursday's top stocks to buy and watch, Applied Materials (AMAT), ArcBest (ARCB), Fortinet (FTNT), Huntsman (HUN) and Icon (ICLR) are in or near new buy zones. Following last week's bullish market signal, investors have the green light to purchase new breakouts.

Icon, Microsoft and Tesla are IBD Leaderboard stocks. Fortinet was featured in this week's Stocks Near A Buy Zone column. Applied Materials is an IBD SwingTrader stocks. Huntsman was Wednesday's IBD Stock Of The Day.

Dow Jones Today: Jobless Claims

After the stock market open Thursday, the Dow Jones Industrial Average rose 0.3%, while the S&P 500 moved up 0.1%. The tech-heavy Nasdaq composite gained 0.2%.

Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.1% Thursday, while the SPDR S&P 500 ETF (SPY) traded up 0.15%.

Elsewhere, the 10-year Treasury yield fell to around 1.53% Thursday morning, following a leap to above 1.54% Wednesday. The 10-year Treasury yield settled Wednesday at its highest level since Nov. 24. U.S. benchmark oil slipped 0.5%, threatening to snap its six-day advance.

Early Thursday, the Labor Department said that first-time claims for unemployment assistance fell to 198,000 last week from the previous week's 205,000, topping Econoday estimates for 205,000 initial claims.

U.S. markets will operate on a normal schedule Thursday and Friday, ahead of the New Year.

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Stock Market Rally

The stock market posted mixed action Wednesday, as the Dow Jones Industrial Average hit a new high, while the S&P 500 set a new closing high. The Nasdaq fell for a second straight session, but losses were mild.

Following some strong action last week, the market outlook is back in a "confirmed uptrend." This gives investors a green light to buy top-rated growth stocks breaking out past correct buy points.

Wednesday's The Big Picture commented: "But the market advance is showing signs of slowing. While the Dow and the S&P 500 marked new high closes, neither index finished at session highs. Index moves the past two days were mild. The Nasdaq Wednesday quickly headed south and spent most of the session underwater before trimming its losses."

For daily stock market commentary, check out IBD's The Big Picture.

Dow Jones Stocks To Watch: Home Depot, Nike

Home Depot stock rallied 1.1% Wednesday, rising for a seventh straight day, as the home improvement chain continues to rebound from its 50-day support level. Amid the current win streak, Home Depot is again the No.1 Dow Jones performer in 2021, up 54.7% year to date through Wednesday's close. (The No. 2 Dow Jones stock is now Microsoft with a 53.7% advance.) HD shares were up 0.4% Thursday.

Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares regained their 50-day line following Wednesday's 1.4% advance, but have to decisively move above that resistance level. It has a year-to-date gain of 19.3%. Nike shares were up 0.2% Thursday.

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Four Top Growth Stocks To Watch In The Current Stock Market Rally

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Stocks To Buy And Watch: Applied Materials, ArcBest, Fortinet

IBD SwingTrader stock Applied Materials ended just above a 159.10 buy point in a flat base following Wednesday's 0.8% gain. Shares are in the 5% buy area that runs up to 167.06. AMAT shares dropped 1% Thursday.

Trucker ArcBest rose 1.2% Wednesday, adding to Monday's breakout gains past a 116.89 buy point in a shallow consolidation. The buy range ends at 122.73, so the stock is nearly extended. The stock edged higher early Thursday.

Cybersecurity leader Fortinet remains in the 5% buy area above a 355.45 buy point in a consolidation after Wednesday's 0.2% rise. The buy area tops out at 373.22. Bullishly, the stock's relative strength line hit a new high Monday on the breakout, confirming the stock as a market leader. The RS line measures a stock's price performance vs. the S&P 500. Fortinet shares were up 0.4% Thursday.

IBD Leaderboard stock Icon is still in buy range past a 301.82 buy point in a consolidation, according to IBD MarketSmith chart analysis, in the wake of last week's breakout move. The 5% buy area runs to 316.91. Per Leaderboard commentary, Icon also cleared resistance around 290, which served as an early entry. The stock was up 1% in early morning trade Thursday.

Wednesday's IBD Stock Of The Day, Huntsman, broke out past a 34.57 flat-base entry during Wednesday's 4.4% advance. Shares closed squarely in the 5% buy range that goes up to 36.30. HUN stock shows a 91 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Huntsman stock rose 0.1% Thursday.

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Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

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EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian

Li Auto continues to work on the early stages of a new base, after triggering the 7%-8% loss-cutting sell rule below a cup-with-handle base's 34.93 buy point. Shares are below their 50-day line after finding support around the long-term 200-day moving average. The stock was up 1.7% Thursday.

Xpeng Motors activated a round-trip sell signal from a 48.08 buy point during early December's sharp sell-off. XPEV shares continue to see resistance around the key 50-day moving average. Wait for the stock to form a new base, which would offer a fresh entry. Shares rose 1.2% Thursday.

Lucid Motors shares rallied 1.5% Thursday, looking to rebound from Wednesday's slight loss. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are trying to retake their 50-day line, but are having trouble getting back above that level.

Recent initial public offering Rivian was up 0.2% Thursday, pausing after Wednesday's 3.4% decline. RIVN shares closed Wednesday about 45% off their post-IPO highs. Continue to wait for an IPO base to form before considering a purchase. Recent sharp losses are a significant setback in the stock's basing process and there is no new buy point in sight.

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Five Best Dow Jones Stocks To Watch Now

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Tesla Stock

Tesla stock dropped around 2% Thursday, threatening to extend a two-day losing streak. Early Thursday, Tesla issued a recall of 356,309 vehicles. A rearview camera cable harness is at risk of damage from opening and closing the trunk lid, the National Highway Traffic Safety Administration said.

On Monday, Tesla shares briefly topped a downward-sloping trendline buy point around 1,115 before closing beneath it. Getting above Tuesday's intraday high could serve as a trigger, although forming a handle would be the most constructive chart action at this point. Meanwhile, a double-bottom base with a 1,202.05 buy point continues to take shape.

Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Wednesday about 13% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple stock ended Wednesday up less than 0.1% and just off all-time highs. The stock is about 17% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis, and close to the 20%-25% profit-taking level. AAPL shares rose 0.1% Thursday.

Software leader Microsoft decisively regained its 50-day line last week, placing the top Dow Jones stock in a new buy area. Meanwhile, MSFT shares are forming a flat base with a 349.77 buy point with an early entry at 343.89. Shares moved down 0.1% Thursday, on pace to fall from Wednesday's 0.2% gain.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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Dow Jones Rallies As Jobless Claims Drop; Tesla Stock Skids On Recall - Investor's Business Daily
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