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A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Auto makers. Auto makers caught up in supply chain headwinds. Not helped by the war and China's zero-Covid policy. Valuations are decent, but poor price momentum makes them volatile. Value buyers who buy now may be buying at even lower levels in the not too distant future. Wait for the trend to turn before buying.
COMMENT
Agriculture, energy, and materials continuing to do well? With Fed raising rates, commodity- and inflation-centric part of the economy is usually late cycle. You could argue we're either late mid-cycle or early late-cycle. It's usually another 6-18 months before we tip into recession. If Fed is extremely aggressive, then these cyclical stocks won't work in that environment. His Top Picks today are not defensive. They're meant to position for stagflation and to tap into the direct beneficiaries of a commodity inflation cycle.
COMMENT
Russia-Ukraine volatility added to rate uncertainty. Just when it looks like things are getting back to normal, it gets weirder. There will be a peaceful settlement. If the situation escalates, then we all have bigger issues. Tech and pandemic stocks that did well through 2020-21 have recently had a big correction, and now we're seeing a bounce back. He's had a lot in cash. The market is taking Russia-Ukraine and rising interest rates more or less in stride. If that continues, we're looking at higher markets by the end of the year, so he's looking to deploy some cash.
COMMENT
How long will supply chain issues and commodity prices disrupt the market?(A Commentary)
Mar 30, 2022How long will supply chain issues and commodity prices disrupt the market? We must accept that the world is never going back to what it was. We saw peak globalization, for the foreseeable future and possibly for this generation, in 2019. Globalization has lifted millions out of poverty. Now we're going to see a return to nationalization and perhaps mercantilism, where more gets produced domestically within trading blocs. It will mean higher commodity prices and inflation. More domestic production, and less on just in time, and there are companies that can benefit from that.
COMMENT
Homebuilder space ideas. He owns TCN, a Canadian stock with most properties in the US south. Also HD, which is less home renovation and more toward the industrial building side. There's a bit of a supply crunch in the US. MLM is another name you could consider. More people will need places to live, especially with immigration from areas of the world in such turmoil.
COMMENT
S&P hitting 5000 this year? Yes, it's possible the S&P can top 5,000 if the macro news is out of the way and we see strong earnings growth. People are making more and spending more money as more goods come in and this will raise prices--this is the cycle. This can be a dangerous cycle, but strong companies can outperform.
COMMENT
Sectors to buy now? Dividends indicate quality. He started 2022 with energy is his top sector, though it may take a pause for a little while. Financials depend on rates on the longer end. Without a doubt, the Fed is focused on the front end of the curve which is very steep. Technology got hit so hard, so it became attractive and now he's buying it.
COMMENT
The U.S. presidential cycle We're not in a bear market now. 2022 is exactly what happened in 2016--look at the chart. On March 30, 2016, the S&P advanced by that year's end. The problem is that Q2 in 2016 went sideways. Year 2, Q2 of a 16-month presidential cycle is the weakest quarter (going back to 1950). Also, April is the strongest quarter for treasuries. We're entering earnings season. He wants the Nasdaq 100 accelerate with strong momentum above its 200-day moving average.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Markets are slightly less volatile, but this could change quickly. Consistent buying strategy will provide a good average price. Market decline is not always a bad thing, if you are buying in one. ETFs could also be a good way to fill in the gap adn stay diversified. Unlock Premium - Try 5i Free
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COMMENT
He has little faith in the Russian-Ukrainian peace talks, because they have failed before. meanwhile, there are ongoing worries about labour shortages, inflation and rising rates. It's a murky time. Stay conservative and pick your spots. He is diversified by holding recession-resistent businesses. He expects the economy to slow as central banks tame inflation. However, market liquidity remains high despite volatility. He owns Pet Valu, Jameson Wellness and Parklawn because they're steady, recession-proof businesses.
COMMENT
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Inflation could be positive for energy, agriculture and metals. However, rate rises increase the possibility of recession. Demand for metals could then fall sharply. There is also US dollar risk since they are all priced in USD. The sectors are still cheap. Unlock Premium - Try 5i Free
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