Wall Street was generally calmer in 2014 than in previous years, but that doesn’t mean the stock market was devoid of drama.
Big selloffs in biotechnology and social media stocks had strategists predicting doom in the spring, and the plunge in oil prices has clouded the outlook for the coming year. It was a year when Cynk Technology, a development-stage company with no revenue, was briefly worth $6 billion. With that in mind, Reuters asked Wall Street strategists a few questions on odd things to watch for in 2015.
The Apple
Shares of Apple Inc, the most valuable publicly traded US company, will finish higher for a sixth straight year. With a current market value of about $663 billion, if one were to pick a company that would be the first to hit $1 trillion in value, Apple’s a safe choice – but not next year, investors said. The iWatch, its latest product, may not be enough to propel the stock further.
“I don’t really see this company as having another blockbuster category of products. The watch doesn’t feel like a great idea. I’m kind of out of the Apple mystique thing,” said Kim Forrest, vice president and senior analyst at Fort Pitt Capital Group in Pittsburgh.
NASDAQ 5000
With its gains on Friday, the Nasdaq Composite Index sits just about 200 points shy of the vaunted 5,000 level, which it has not seen in nearly 15 years – and its all-time intraday high of 5,132.52 reached on March 10, 2000, isn’t far off.
“I think Nasdaq will test and probably achieve higher highs than we did in 2000 because I think we’re in a secular bull market that has another eight to 10 years left to run,” said Jeffrey Saut, managing director at Raymond James & Associates.
Biotech Trouble?
Investors worry that biotech stocks will have a tougher start to the year after pharmacy benefits manager Express Scripts dealt a blow to Gilead Sciences Inc on Dec. 22 when it dropped coverage of Gilead’s hepatitis C treatment.
Biotechs were all over the place in 2014. They were at the forefront of the selloff in momentum favorites in the spring, and hit another rough patch in December on the Gilead news.
“I think biotech is pretty expensive as an asset class,” said Raymond James’ Saut. “But over the next three to five years the big breakthroughs are going to come from the biotech complex.”
