A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Energy stocks and the recovery. Energy stocks have been the last to get some mojo. The XOP is still flirting with the downtrend line. If the rest of the commodities keep going, the energy stocks should participate. XOM is a pretty good, conservative way to be there. CLR and PXD also look good. Or buy the XOP, which reduces business risk.
COMMENT
Semiconductors and the recovery. Semis are the basic building block of the modern economy. The most economically sensitive area. The group has gone through a correction. Highly doubts the rally is over. Huge shortage of chips. TER, LRCX, and AMAT all look attractive. Demand will be quite strong going forward.
COMMENT
Agriculture and the recovery. Agriculture is one of the big themes he's pursuing. He's been using MOO, which has been making relative strength new highs. Agriculture has recently been breaking out to new highs. SMG would fit in here. Technically, a good time to buy. Looks very, very good through $220. Also owns NTR. Doesn't own CF, but he could. This group is one you want to have your eye on.
COMMENT
Where to put profits taken from tech right now? Tech has been the golden goose for a long time. Many of the stocks are over-owned. But people have been using them as a piggy bank the last couple of months. There's limited downside risk to large cap tech right now. But they do have challengers for new money. Financials are charging, and just made its first new high since 2007. Also industrials and basic materials. He'd buy MSFT, as it's held in the best. You might look at a semi stock like LRCX. Consider another group, such as financials or industrials, as these have a little more upside.
COMMENT
Are the tech stocks finally rolling over? Not so sure. When the NASDAQ was getting into correction territory, it looked as though tech would go down, but tech had a big bounce yesterday. Recent moves reflect the rotation in the market. People are favouring stocks more levered to a reopening economy. He's finding a lot of value in tech recently, which hasn't been true for a while.
COMMENT
What about the cyclicals such as materials, chemicals, and transport, which traditionally benefit from an economic uptick? He has exposure to these areas, as well as to Canadian real estate. Fundamentals will improve. Hitting fresh all-time highs is a good sign. But how much has already been priced in? When some of the more rate-sensitives sell off, he's seeing some good opportunities, such as in utilities and renewables.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Although the market rotation was quite violent, it is normal market action following big gains. Markets tend to be fine with higher interest rates when there is growth. Having both value and growth stocks is the preferred strategy. Unlock Premium - Try 5i Free
COMMENT
$1.9 trillion stimulus relief passes into law. Consumers may splurge after saving so much and now with this stimulus. Travel has been completely shut down, so this is a big area for spending. The airlines are priced in, so no comeback here. This rotation continues as tech high-flyers are really not bouncing back, though sort of yesterday. Even with stimulus, today's interest rates didn't move, so she's surprised by the reaction to stimulus. We knew the reopening trade was going to happen. This could be Buy The Rumour and Sell The News.
COMMENT
He doesn't get too fussed with the markets on any given day, but how long will recovery take to kick in and how long will it last? A lot of people remain unemployed and businesses closed. The bounce-back won't be sharp as people expect. Longer-term, utilities offer solid dividend growth, based on contracted revenues; utilities remains safe as well as financials. Nice to see the banks return to former levels.
COMMENT
Today's 4% rally in tech Bond yields had to decline today after a massive February surge. It's very likely the 10-year treausury yield consolidates around 1.5%. After so much optimism from vaccine news, this is a pause before we go another leg lower. Tech will lose steam as rates creep higher. Be cautious as they approach 1.75%. The second half of the year will be challenging, since the recovery is already baked into stocks.
N/A
Market. He looks for companies in the markets that have really well established businesses and competitive positioning. Value stocks have been outperforming Growth recently. This reversal was expected, but he is not doing anything differently. It is difficult to find attractively priced securities. Hong Kong and the UK have pockets of value. He also likes those that raced up at the start of the pandemic and are selling off now.
COMMENT
Inflation. There was an expectation that the Fed would talk about twisting the yield curve or supporting yield. The weakness we are seeing in equities over the last week so far, due to the stress from bond yields, is not upsetting the Feds. The March 17 meeting is a big focus. Investors expect talks about more liquidity to account for the stimulus. The debt needs to be paid, but the economy can't afford more yield. They might twist the yield curve and monetize the debt.
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