Investors are chasing performance as Treasury yields decline and stocks rally, Wolfe Research found – and a basket of stocks is poised to build upon these gains through mid-December. Optimism surrounding October’s cooler-than-expected consumer price index led to the 10-year Treasury yield sliding below the 4.5% level on Tuesday, while the S & P 500 rose to its best day since April. “From a near-term perspective, our sense is that there’s probably more room for short covering in treasuries,” said Wolfe’s chief investment strategist Chris Senyek in a Wednesday note. “However, the short-term technical picture for stocks is mixed, with relative strength suggesting the market is in ‘overbought’ territory at the same time several momentum indicators are pointing to additional gains between now and year end.” To that effect, Wolfe’s performance chasing basket has gained 21% since Oct. 26, said Senyek. He expects the basket to continue its outperformance streak through mid-December. Wolfe’s basket includes the top 10 performing stocks within the 1,000 companies with the largest market cap. Those top 10 names have historically outperformed by 330 basis points on average through Nov. 15, dating back to 2005, the firm said. Here are some of the names on the list, and where analysts see them going from here. Information technology company Super Micro Computer has soared more than 200% year to date. Four-fifths of analysts covering the stock rate it a buy, according to LSEG. The consensus price target implies shares could rise about 26% from current levels. Chipmaker Nvidia has been one of the leading names in 2023, with shares jumping 234% in 2023 on artificial intelligence enthusiasm. That comes after shares fell 50% in 2022. The semiconductor company is having a successful November run ahead of its earnings report later this month. Analysts are remaining bullish on the company, forecasting nearly 29% additional upside, according to LSEG. Fifty-one of the 53 analysts covering Nvidia rate it a buy or a strong buy. Citi said in a Wednesday note that it’s staying bullish on the stock heading into earnings, citing the company’s new AI hardware roadmap. NVDA YTD mountain Nvidia shares in 2023 Online sports betting company DraftKings also made the list. Shares are up 223% this year. The company received a couple of bullish reports from Wall Street firms in the wake of its recent investor day event. Morgan Stanley reiterated DraftKings as overweight on Wednesday, pointing to growth in customers and spend per customer across all states. “Continued upside to guidance & consensus with flexibility to reinvest keep us [overweight],” wrote analyst Ed Young. DKNG YTD mountain DraftKings shares —CNBC’s Michael Bloom contributed to this report.
