Canadian investors remain cautious about the market, and rightly so. The Federal Reserve in the United States continues to state that until inflation reaches 2%, interest rates won’t be cut. And it’s unlikely that the Bank of Canada will cut its own interest rates until the Fed does so as well.
With that in mind, it remains a relatively volatile place to invest in the markets. This is why right now, I would look at two industries and stocks to match that I would avoid for now. But don’t worry! I’ll then follow that up with one strong stock that’s bound to get stronger.
Image source: Getty Images
Tech stocks
Not all tech stocks are created equal, but those involved with retail are certainly likely to continue struggling. Companies in the e-commerce sector aren’t likely to improve by the leaps and bounds we saw in years past and are, therefore, best to avoid in 2024 for now.
Lightspeed Commerce (TSX: LSPD) stock has been struggling over the last few years, trying to move its share price past the $20 mark. Despite improving financials, the company has seen subscriber volume drop. And that’s been worrisome for investors.
Most recently, chief executive officer Dax DaSilva cut employees and is putting more effort towards a profit. Furthermore, he stated that Lightspeed stock wasn’t closed off to the idea of going private. So, until the dust settles and improvements are made, I would stay away from Lightspeed stock.
Oil and gas
Now, it’s true that oil and gas prices are rising at the pump. Yet this all comes from geopolitical tensions continuing around the world — not just in the Middle East but in Russia as well. This has put a strain on oil and gas, leading to a rise in the price of Brent crude oil, rising above US$90 recently per barrel as of last Friday.
However, I would still stay away from oil and gas stocks, even with these higher prices. That’s because this industry has proven that it continues to be quite volatile. And volatility is something we cannot afford this year. Though above them all, I would continue to avoid Enbridge (TSX: ENB).
Enbridge stock may have the stability of pipelines producing recurring revenue. But it simply cannot get past the fact that the world is transitioning to clean energy. Furthermore, environmental and social regulations are making it incredibly difficult to upgrade or create new pipelines. With the future uncertain, it’s no wonder shares have remained under $50 for years now. So, even with that 7.58% dividend yield, I’d avoid it for now.
Material winner!
With all that being said, I would consider one area of materials to be a huge winner in 2024 but far beyond as well. And that’s because of copper. Copper stocks have received attention as they passed the 14-month high last week per metric ton. This comes from supply shortages around the world.
Yet the rise in copper price and shortage has merely brought attention to the fact we need copper. This is why Lundin Mining (TSX: LUN) has done so well. Shares have surged from the copper producer, seeing record copper production during its most recent earnings.
Beyond that, Lundin is opening more mines that should bring in even more record-high production in 2024. So, while 2024 already looks great, and 2023 was great as well, Lundin stock is one company I would continue to invest in for 2024 and beyond.
