Market Commentary — Page 386

Market Commentary

COMMENT

Is tapering wise? No. He's a deflationist. Inflation is transitory. Lots of stuff going on in the price of oil and other commodities. There's scarcity and bottlenecks. Biggest fear is deflation, not inflation, and this will play out in 2022.

COMMENT

Any particular names and sectors? He's a value manager, and that's hard these days. He's done very well, especially in the US with his long-term holds. Tries to find pockets of value in industries. Even though valuations seem crazy, you try to find value in the market. He's not trying to beat the index. His firm owes a fiduciary duty to clients and hopes that their choices are reflected in the rates of return.

COMMENT

Choices for you portfolio. What you should be looking for are names with these characteristics: S&P 500, USD, upside in their model price, value, good quality, and nice dividend.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There is a growth to value shift right now. The industrial sector can grow nicely when there is economic recovery. It is generally priced well still. Investors could be overweight in this sector right now. It also has some pricing power that will offset inflation concerns. Unlock Premium - Try 5i Free

COMMENT

Should today's sell-off hit MSFT tech stocks as well as Peloton tech stocks? You have to distinguish between those two classes, but the sell-off open a buying opportunity. Investors will seek profitable growth as the economy slows down. Today's hawkish Fed comments will grow more out of step with reality as the year unfolds. The Fed should have already hiked rates sooner. Buy value and cyclicals, like financials and energy. Stay there until the market digests this. In the second half of 2022, the market will start to slow and there may be opportunities to buy the better tech names.

COMMENT

The U.S. 10-year yield rising Unlikely the 10-year will reach 2.25% to 2.5% in the next 6-12 months is unlikely, because the market is still digesting the really low terminal federal funds rate.

COMMENT

Fed's hawkish comments today sink stocks The Fed has done some things very well, like Powell convincing markets that the Fed won't crush the market. But Powell has poorly called the economy, like keeping its foot on the gas pedal as the economy was reopening and soaring. Now, as supply chain issue arise and ISM numbers dip globally, NOW they want to raise rates at the wrong time. So, now the market will price in how aggressive the Fed will be and whether they will induce a recession. Today's trade was a repositioning, but it wasn't disorderly. Be short bonds and avoid high-PE stocks, and buy boring defensives until things settle.

COMMENT

Hawkish Fed today and Omicron The Fed is saying about Omicron: damn the torpedoes and full speed ahead. The markets have and should look beyond the variants. It may not be pleasant for the market, but what the Fed is doing is what needs to be done.

COMMENT

The U.S. 10-year yield rising? 2% this year is possible. Also, the 2-year yield has quadrupled; there's something wrong with this. These should be the most liquid market around, but they're trading like biotechs. Explain that. The bond market is really volatile, and it's a matter of time before that volatility enters the stock market.

COMMENT

Reduce the balance sheet or raise rates? And which is worse? The market is digesting this choice. Value should outperform this year. The whole market--value and growth--will move lower. We saw that today. Value isn't big enough of the index to lift the market. Who knows what will happen with Covid and the markets in the next six months. He thinks we'll be talking about something completely different in a week after the markets digesting today's Fed news very quickly.

COMMENT

Do tech stocks end the year higher, meaning the Nasdaq 100? No. What kind of tech? The top names can be higher, and the bottom lower. He owns value stocks, so he wants to the 10-year above 2%, though he predicts it'll end 2022 at 1.5-1.6%. Inflation is still transitory.

COMMENT

Macro environment for 2022. 2021 saw runaway inflation, interest rates ticking up, labour and supply issues. Yet the stock market still went up because earnings grew tremendously. Expectation is that it will continue in 2022, if not as buoyant. He's expecting a good year for earnings, but who knows what the market will do.

COMMENT

Stick with equities? We saw some great pressure going into the end of the year, especially with high growth, speculative names. Quality, profitable business that continue to increase profits and grow dividends every year are doing fine and will probably continue to do well. People will probably swear off the Zooms of the world for a while and go with what's working, which is businesses with real earnings and reasonable valuations. You have to be bullish on stocks. You don't really have any other choice. Staying optimistic on stocks works, year in year out.

COMMENT

Central banks raising rates, dialling back quantitative easing. Interest rates will go up, bond buying is tapering. Everyone knows this, and the market's already reflected on that. He's more concerned with what we don't know. Back in 2020, interest rates were cut by 1.5% and this has to be recouped. So interest rates have to increase by 1.5% as we eventually get back to normal. Before the pandemic, markets weren't that concerned about a rise in rates. So any increase would just take us back to where we were pre-Covid.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The TSX is in a good position according to 5i. Valuations are in line with historical averages and is cheap relative to other markets. Discretionary and financials could do well with consumers being in good shape. Unlock Premium - Try 5i Free

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A Comment -- General Comments From an Expert (A Commentary)

Is tapering wise?(A Commentary)

Any particular names and sectors?(A Commentary)

Choices for you portfolio.(A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research.(A Commentary)

Should today's sell-off hit MSFT tech stocks as well as Peloton tech stocks?(A Commentary)

The U.S. 10-year yield rising(A Commentary)

Fed's hawkish comments today sink stocks(A Commentary)

Hawkish Fed today and Omicron(A Commentary)

The U.S. 10-year yield rising?(A Commentary)

A Comment -- General Comments From an Expert(A Commentary)

Do tech stocks end the year higher, meaning the Nasdaq 100?(A Commentary)

Macro environment for 2022.(A Commentary)

Stick with equities?(A Commentary)

Central banks raising rates, dialling back quantitative easing.(A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research.(A Commentary)

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