Stocks to watch under a Biden presidency

Good morning. It’s official: Janet Yellen has been confirmed as the next Treasury Secretary, a familiar face for investors. Alas, U.S. futures are under pressure this morning ahead of a big earnings day. Microsoft, Visa and Johnson & Johnson all report in the coming hours.

In today’s essay, I’m trying something different. A wealth management pro joins us to share five stocks to watch under the Biden presidency.

But first, let’s see what’s moving the markets.

Markets update

Asia

• The major Asia indexes are awash in red in afternoon trading with Hong Kong’s Hang Seng down 2.5%, giving up Monday’s gains. Yesterday’s darling, Tencent Holdings, is the big loser today.
• Asian investors are spooked by fresh warnings of a giant asset bubble forming after China’s central bank on Tuesday pulled billions in cash from the banking system.
• A bravery award to Greater Bay Airlines—the Hong Kong-based budget firm just proclaimed it’s ready to launch its budget airline business, the unlikeliest of pandemic startups.

Europe

• The European bourses were flat out of the gates with the Stoxx Europe 600 down 0.03% at the open, before climbing.
• Swiss bank UBS is planning an uncommon move in Europe these days: a major share-buyback after reporting a huge bottom-line beat. The stock was up 3.9% on the news.
• With fresh lockdowns looming across the continent, there’s a showdown brewing between the European Union and drugmaker AstraZeneca over promised shipments of COVID vaccines. To recap: the EU is well behind the U.S. and U.K. in vaccine distribution and now it faces unforeseen supply shortfalls.

U.S.

• U.S. futures point to a weak open. That’s after the S&P 500 and Nasdaq closed in record territory on Monday.
• The big action yesterday was in the “shorted stocks” bin. Day traders are almost certainly playing with fire as they bid up some of the misfits of the market—including GameStop, AMC Entertainment and Bed Bath & Beyond—in an effort to sink hedge funds and activist shorts. Trading in GameStop, for one, had to be halted nine times yesterday. Alas, GME shares are up nearly 16% this morning in pre-market trading.
• All this speculative trading by the retail army is spooking the investment pros. BTIG’s Julian Emanuel tells CNBC such volatility could be a sign a 10-15% market pullback is in the cards.
• More stimulus is unlikely before March, Senate Majority Leader Chuck Schumer says. The futures market this morning is unimpressed with that timing.

Elsewhere

• Gold is down, trading around $1,850/ounce.
• The dollar is up as equities falter.
• Crude is up, with Brent trading around $56/barrel.
• As of 9 a.m. Rome time, Bitcoin was down nearly 6%, at $31,300. That’s after a fresh call for Bitcoin 50K.

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Turning a blue wave into a green one

It’s a new year, and so I’d like to try something different in this space every now and then. As such, I plan to feature the smart thinking of some investment pros whose markets analysis has caught my eye.

And that brings me to Bryan Lee, chief investment officer at California-based Blue Zone Wealth Advisors. Lee shares some suggestions for your portfolio in this essay, which I’ve edited slightly for brevity:

5 Stocks That Could Thrive Under A Biden Presidency

Determining which companies offer the best investment promise under a Biden presidency is a current priority for all of us hoping to reap profits, to invest for retirement, to enjoy the future we know will eventually bring the opportunity to socialize, travel, and freely enjoy our favorite pastimes once more. Let’s take a look at five of the stocks that could be most likely to thrive under Joe Biden as America’s chief executive. 

APD

Air Products & Chemicals will help power the green economy with its large presence in hydrogen domestically and globally. Growth, profitability and stability are three reasons to invest in air products. 

APD provides reliable syngas supply to customers. This allows the production of high-value products from low-value feedstock. The company maintains gasification projects around the globe, reaping highly secure returns via carefully selected customers and stellar project execution. Gasification, carbon capture and hydrogen are in demand as America, and the world, go green.

Two top reasons APD shows promise in the global market are the desire by countries with massive coal reserves to reduce imported oil dependence and the focus of natural gas rich countries: converting this resource to liquid fuel or other valuable chemicals. Additionally, in order to remain profitable, refineries must pursue efficiency by converting low-value heavy residues to usable products. 

Hydrogen powered vehicles are seeing an exponential increase in interest. APD is taking the lead in hydrogen fueling infrastructure and hydrogen energy services and equipment. Biden presidency priorities, already declared by the administration, are green energy and the promotion of industry practices like these that will lessen pollution and reduce climate change.

TMO 

Vaccine rollout will continue to be a priority well into 2021. Future science research and development to mute or stem the current, and any future global pandemics, will be the focus throughout the Biden presidency. Increased funding will be fueled to companies based on pharma and biotech research for some years to come. TMO specializes in services to top researchers. Thermo Fisher Scientific is definitely a stock to watch, according to many investment specialists.

OKTA

The company gained notoriety for its focus on cybersecurity for the Biden administration following the SolarWinds hack. The company specializes in identity management and access to the cloud. The cloud security business is booming as more and more Americans work from home. That spells success for those in the business of protecting information stored and transferred in this manner. OKTA has become a dominant vendor in the field; it’s a currently promising choice for investors.

CRM

A provider of the software the government is using for management of patient data on the vaccine front, CRM is gaining attention and a well-deserved reputation for leading the way in customer relationship management. CRM systems help companies efficiently manage customer data; an unquestionably essential function for any business today.

CRM from Salesforce supports sales management covers all the bases. The system delivers insights necessary for effective planning and integrates with social media. It helps varied company teams communicate efficiently, stay on the same page. Cloud-based CRM systems offer complete mobility and access to apps. CRM is in the spotlight and could be a good bet for investors in 2021 and potentially through the next four years.

BABA

Alibaba Group aims to make it easier to do business anywhere.  The perception of looser rules and reduction of tariffs on China economy and the expectation of generally better relations with China promises to make BABA stock a good bet for a rise during the Biden presidency.

The company serves as a specialist in providing technology, infrastructure and marketing methods to help merchants, brands and other businesses utilize the power of new technology to engage with users and customers around the world, enabling them to operate and interact in a more efficient way. Globalization is necessary in today’s economy. As more companies seek worldwide markets, BABA stock should rise significantly.

—Bryan Lee

Note: Do you have exclusive markets research or forward-looking analysis that you’d like me to feature here in this section? (Extra points if you’ve designed a chart or table to illustrate your ideas). If so, email me with the subject line: “Bull Sheet guest essay.”

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Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

CAPE fear. Concerned about asset bubbles? Then Robert Shiller is one to pay close attention to. Years ago, the Nobel laureate economist devised the Cyclically-adjusted price-earnings ratio, or CAPE, to gauge whether stock prices are out of whack. Shiller has a new metric to value stocks now. Here's what it says.

You call this a bubble? Citi applies Shiller's CAPE metric to global equities, and believes there's still plenty more room for growth, based on historical trends. For example, "the NASDAQ now trades on a CAPE of 58x compared to 113x in 2000, and Japan’s 83x in 1990," the strategist say, as cited by The Market Ear blog.

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Market candy

Quote of the day

The kind of craziness we’re seeing right now is not atypical of the kind of craziness you tend to see when we’re ready for a little bit of a downturn.

That's what Randy Frederick, vice president of trading and derivatives at Charles Schwab, tells Fortune's Anne Sraders. He joins a number of Wall Street pros who warn a correction may be coming for some parts of the markets. Here's how investors should play it.