Target CEO Optimistic Heading Into Holidays; Is Apple's Upgrade Justified?
The S&P 500 ETF (SPY) - Get Report is up 1.1% despite the 0.75% decline in oil prices. Oil is one factor for investors to consider when deciding whether to buy stocks. Another hot topic? Interest rates.
On CNBC's "Fast Money Halftime" show, Stephen Weiss, founder and managing partner of Short Hills Capital Partners, said a hike of 25 basis points is "absolutely meaningless." However, the pace at which the Fed raises rates will be important. Either way, investors shouldn't alter their investment approach at this point.
Michael Block, chief strategist at Rhino Trading Partners, went as far as to say he thinks the Fed could postpone the rate hike another year. The Fed doesn't want to make a mistake, and so far, most investors have assumed a rate hike would come far sooner than it has.
Patrick O'Shaughnessy, portfolio manager of O'Shaughnessy Asset Management, added that investing based on interest rate forecasts has been quite misleading over the past few years. Investors should stick to value stocks over growth stocks, he said, as value stocks tend to do well during a rising-rate environment.
Turning to individual stocks, Jon Najarian, co-founder of Optionmonster.com and Trademonster.com, said he agrees with analysts at Goldman Sachs who put Apple (AAPL) - Get Report on their conviction buy list. TheStreet's Jim Cramer had similar feelings earlier in the day as well.
The analysts were bullish on Apple's potential for recurring revenue. Najarian explained that the recurring sales from Apple Pay, Apple TV and iTunes should help benefit the stock. Investors should stay long, he said.
Weiss acknowledged the benefit of recurring revenue. Even though the stock has a low valuation, Apple needs a catalyst to take shares higher, he said. Right now, it doesn't have one, he commented.
Block added that even the analysts noted there will likely be better buying opportunities for Apple stock in the next few months.
Exxon Mobil (XOM) - Get Report is also in the news, after analysts at Raymond James downgraded the stock to underperform from market perform. The company's leverage to oil prices isn't that high, so a recovery in the commodity price likely won't benefit Exxon as much as it will other companies.
Jon Najarian said he was a buyer of Exxon at $68 per share, but not near $80. Pete Najarian, co-founder of Optionmonster.com and Trademonster.com, added that the company has a "fortress" balance sheet, and for that reason, he still likes the stock.
The investors turned to Target (TGT) - Get Report , whose stock is down 5% after its earnings report.
Brian Cornell, CEO of Target, said the company saw strong traffic growth in the third quarter. He expects that to continue into the fourth quarter during the ever-important holiday season.
"We feel really good about our plans for the holidays," he said, adding that the company's e-commerce and in-store strategies should pay off. The company is planning a "10 Days of Deals" sale, which will last from Nov. 22 through Dec. 1.
Although apparel sales came in at 3% growth last quarter, below management expectations, it still outpaced most of Target's peers, Cornell reminded investors.
The company's e-commerce sales of 20% also outpaced that of the total U.S. e-commerce market, which grew 8.6%, Cornell said. Consistent, steady growth is the goal, he said.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.