Market Commentary — Page 419

Market Commentary

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The rate rise is the same thing that occurred in February. Rates rise in a stronger economy. Markets will adjust to the new reality. Earnings are strong and the stimulus from the pandemic is mostly over. The recession is over according to 5i. Unlock Premium - Try 5i Free

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COMMENT

Natural gas in this market If the price of natural gas stabilizes or decreases, then FAANG stocks will stop falling and maybe bond yields will come down. This happened 4:30-10:30 am EST today. Nat gas has been rallying in the US for no reason--the US has so much of it. So how and why did it fall yesterday? One reason is that there aren't enough pipelines to move it, so some of it is left in the ground. Some even burn excess supply instead of find storage space.

COMMENT

Educational Segment. Inflation on the shorter term horizon is going up but the longer term number is relatively low. However, longer term expectations are now rising. If prices become unanchored, people will go buy today instead of in the future. There has been no meaningful change in terms of inflation in 5 years. This is why the Feds think it is transitory. If inflation goes up, PFIX could offer a hedge to inflation, as well as IVOL.

COMMENT

Energy prices. The energy price melt up is probably transitory. There has been underinvestment in replenishing due to the greening of the world. The demand side is not curtailed as fast as the green side wants to see. The demand for energy is still relatively high. Depletion will come into play. Since we have not reinvested in the past, there could be meaningful upside pressure on prices.

COMMENT

Stagflation. There are many trends are pointing to stagflation. Productivity and population are the two key factors. Productivity may go up thanks to technology even though the work force may shrink slightly. There are many signs of stagflation coming. Bond yields are breaking out, and with the yield curve's behaviour, we are seeing that the bond market will push back. Equity risk premium will rise and we will get some compression in PE.

N/A

Market. There are sector dynamics going into office space. Post-pandemic you would expect numbers to increase but he is trying to estimate what percentage of workers will stay working from home. The office sector is one to continue to avoid as we are too far from the bottom. Office vacancies are the highest since the '90s. XRE-T collapsed at the start of COVID but has not got back to where it was pre-pandemic. It has a mix of winners, post-pandemic, retail, and office. These later sectors SHOULD suffer post-pandemic. You should not look at one ETF overall.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The 10-year US treasury rate did rise. Rates are moving up as the economy gets stronger. The concern is the speed and expectation rather than the fact of rising rates. Companies can continue to do well, even with higher rates. Higher risk, expensive stocks may be affected. Unlock Premium - Try 5i Free

COMMENT

Nothing is on sale in this market since last November when stocks jumped sharply. Good value is hard to find. Stocks will go higher, a far cry from March 2020. Today, we're seeing a 2% dip--a retail investor shouldn't chase it. A 10% dip gets his attention, but at 15% he starts buying. He likes Canadian and American banks, because interest rates will slowly increase and raise the net interest margins for the banks. Also, the banks have a lot of capital held over from the pandemic. Third, the economic recovery is a tailwind. His covered calls in US banks is up 50%, surprising even him. The job outlook looks positive, because the end of government supports will force those to find work.

COMMENT

An ETF for bond exposure? There is no exchange for bonds, so they can suffer swift losses. In March 2020, there were liquidity issues, so he sold all of his. Bonds recovered quickly though. Bond ETFs: look at the "yield to maturity" in the fact sheet to find the real maturity.

COMMENT

Pretty gratifying to see the calls coming into fruition about limited oil supply globally. There is still some bearish overtone. People do not want to believe due to the severity of the downturn. They are just getting over this trauma. All the gains are from specialist and retail. Generalist and institutions have been missing. Now seeing a surge in interest from Europeans even. Cannot resist the performance for much longer. Year end performance will be strong. The backdrop is very bullish for oil. Energy stocks today are cheaper today than January of this year. The party has just started.

COMMENT

Have been waging conversations about reintroduction of meaningful bold action for generalist investors to come back to energy stocks. Companies should maximize free cashflow and introduce dividends with meaningful share buybacks. Average company is trading at 2.7x cashflow right now.

COMMENT

Natural gas versus oil. There has been consolidation of the natural gas producers so there is supply discipline. Demand, the summer has been hot. In Europe, there are energy shortages. Outlook in LNG is good. We may see some seasonal sell off. The winter, if cold, will push natural gas higher. How long will current prices last and when will the supply response come? Gas to oil switch in the UK is coming.

COMMENT

The market this week Flat is the new down. There isn't negative news, and Evergrande on Monday was merely an excuse to sell. The market won't pull back dramatically. She expects to buy stocks she missed earlier at a cheaper price soon. The market will be flat for a while. Remember that markets are up nearly 20% YTD and 30% in 2019 and 18% in 2020. All these gains are making investors a little nervous. So, they are stepping out and moving a little more money into cash, not not bonds (no income). The market is bifurcated between stocks trading around 30x and other around 13x.

COMMENT

Market outlook He expects another rollover coming. He's buying this week's dip, but he's cautious. Tapering will begin at some point, but he sees signs that the pandemic is ending. This means the Fed won't need to continue its pandemic supports. No, he doesn't expect the sky to fall next week or month. He holds a barbell portfolio, but favours upside short-term. Momentum is still there.

COMMENT

This week's market Monday's sell-off was quickly bought by investors. Investors think accomodative policy will continue though it was slightly hawkish this week. There are no real alternatives to stocks. At least short-term, stocks will trend higher. Watch for job numbers in coming weeks; he expects the Fed to start tapering in December. Earnings will also be a catalyst for stocks to rise.

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

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

Natural gas in this market(A Commentary)

Educational Segment. (A Commentary)

Energy prices.(A Commentary)

Stagflation.(A Commentary)

Market. (A Commentary)

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

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

An ETF for bond exposure?(A Commentary)

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

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

Natural gas versus oil.(A Commentary)

The market this week(A Commentary)

Market outlook(A Commentary)

This week's market(A Commentary)

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