A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Intraday reversals (like today) happen all the time, so avoid buying when the futures are up and selling when they go down. The stock market is not a casino....FAANG stocks don't thrive only during lockdowns and are not meant to be sold in signs of recovery....Treasury secretary Janet Yellen in testimony today embraced globalism which will help stocks like Apple.
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Market. For 2021 the most important question is with the resurgence of the virus, will the economy open up and recover in the back half of the year, or will the economy weaken and go into a double dip recession. She thinks not. Interest rates will be near zero for a couple of years. The stock market is not the economy and it has chosen to look through the economic weakness because the governments have stepped in and provided financial assistance to the people who need it. It is important to chase returns. You have to be very aware of price valuations before you get it to a stock.
Christine PooleUnknown
COMMENT
Option expiry day for JPM was on Friday and we saw reaction following bank earnings. We may see Feds talk about raising rates. We will see a flattening yield curve and reactions to bank stocks that are close to ATH. We have had a massive move since November with the vaccine news. There will be a correction.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
It's not necessarily a big week for earnings. The big tech names won't report until next week. It will give us an idea of earnings and growth. There will be a risk to not see the same performance as last year in big tech. There may be some market disappointment.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Keystone XL. They are in risk mitigation mode. Canada needs more capacity to distribute the product to Asia, not necessarily to the US. Does not know how this will play out. The news is still meaningful for Canada and the relationship with the Biden administration.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. Today's topic is on equity risk premium, or the multiple the market is willing to accept. Analysis on liquidity has been about the central bank and Fed put. How much debt do they have to use to fund the programs. In 2021, we will be short 4 trillion to fund all the spending this year. This will come from sucking liquidity out of the market. When there is more supply than demand, equity risk premium go down and yields go up. A challenge for financial markets.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Momentum has been good and continues to rise. As prices rise, new investors enter. The stocks could be added to indices that then repeat the cycle. However, investors must understand what they own since volatility can be quite high. Focus on choosing companies with good fundamentals and management to weather the volatility and pick winners. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
A lot of people are still working from home. Without the fiscal stimulus the market would not be hitting all time highs. There is a disconnect between the economy and the stock market. For the time being it is still positive but you have to watch for hazards. A hazard is the extremely low interest rates. Markets have clearly outperformed because of the push for equities.
Darren SissonsUnknown
COMMENT
Tech stocks. If you look in the US, he struggles with Amazon's valuation. He is currently looking for tech exposure outside of the US. Looking at semiconductors in Asia, such as Samsung. Use your money wisely and look at areas of the world that has been traded less. There are lots of opportunities.
Darren SissonsUnknown
COMMENT
Consumer stocks. Added Louis Vuitton recently in the international portfolio. They recently acquired Tiffany. Other consumer names have had a nice run as well. An interesting space. Everyday staples have also done very well. Many of these companies are bond proxies.
Darren SissonsUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There are many new investors entering the market. However, collectively the money is not likely to impair the whole market. Furthermore the bubble looks to be confined to EV, cryptos and SPACs. 5i does not anticipate a 30%+ decline like last year. Hold enough cash to sleep at night. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
How will the pandemic change your investing style? Not likely to change his strategy. These disruptions happen. It's been hard on people, but there have been pandemics before, and there will be again. Currency, interest rates, and commodity prices all go up and down. Choose companies that have resilience, with a business model that can survive adversity. He selects quality companies. Investors will have to spend more time doing due diligence.
COMMENT
Science is telling us there may be a worse virus to come. The 1918 influenza epidemic had an impact on the economy. Influenza in the 1950s and again in the 1968 recession both affected economic activity. Businesses need to be able to adapt. For example, a media company's business model is more resilient since people can work from home. This allows these businesses to take market share. There are always concerns: SARS, Covid, terrorism, recessions.
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