A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Central banks around the world have started to signal pulling back on stimulus as inflation has proven to be more sticky than first thought. The expectation is to pull back accommodations by 15B a month and up it to 20B a month. Some interest rate pressures could occur. Supply chain issues is certainly an issue on a company basis but not on a broad market. Earnings have been pretty good. There have been upgrades and underlying support is good.
COMMENT
Market. We are starting to see the inflationary pressures across commodities and across the labour front. It is going to be a concern for the federal reserve. The inflation we have seen could definitely persist into 2022. The problem the market will have with this will be patience. He is starting to become more defensive. He thinks we are looking at an overdue pullback in the markets. It will not be significant, though.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Peak tax loss selling tends to be in the third week of November. This is also the best time for buyers that are looking for a contrarian play. Inflation is also a fear so investors should look at companies with pricing power. Consumer discretionary, utilities and health care should be areas of interest. Unlock Premium - Try 5i Free
COMMENT
Supply chain issues. There were questions about whether inflation was transitory or not. This is an extraordinary period with lots of supply chain issues. We won't know the impact of inflation for some time. The central bank is hawkish. If the Feds become more hawkish, it will affect investor sentiment further.
COMMENT
Stagflation. Weak economic growth with higher prices could happen like in the 70s. No one knows for sure. The Fed will err on the side of caution and disinflation. The Fed will not be too hawkish in his opinion. Technology is disinflationary and a global workforce enabled by tech is also disinflationary. This will end up being transitory but we will not know for an uncomfortable amount of time.
COMMENT
Portfolio strategy. Still in a low interest rate environment. There are a lot of dividend stocks that are working and returning value to investors. Small cap, material, energy and oil are doing well. Lots of names in the US that are pricy. These are the names he is staying away from. In the Canadian and US tech, there are some opportunities. Toggle back and forth where you want to buy. There is opportunity in the big cap tech in the US.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Commodity prices should continue to be elevated from higher inflation and ongoing economic recovery. Things should settle down once inflation normalizes. Oil, gas and copper probably has some room to run. Unlock Premium - Try 5i Free
COMMENT
Markets. Right now, the market has the bit in its teeth. Q3 earnings are excellent. Market's reaching up toward his target of 4.5x book value of 5250. Not an unwarranted target, as that was the precise peak of the stock market in 2000. It may rise as we get more balance sheets in, as numbers are affected by growth in the balance sheets. As the market gets higher, people are getting complacent, especially looking into 2022. That might be one concerning sign. But right now, that's not the case.
COMMENT
Canaries in the coal mine. He looks at particular sectors and stocks as his personal canaries. For example, FANG stocks, the leaders since 2009. If they break, it will be all over. AMZN might be the stock to signal the end. In the whole Covid selloff, AMZN barely budged. It warrants attention, as it represents poor value, even if it's holding in.
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