A Comment -- General Comments From an Expert (A Commentary)
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Copper. It is not that simple to get exposure to a pure copper player. HGA-T was graphed as an example of one. Mining companies are traditionally not good stewards of capital. It is not easy to find sustainable companies that are good stewards of capital. TECK.B-T could be considered, at a third copper. FCX-N is another go-to name but it has had a massive run. He is looking at it.
COMMENT
REITs vs. Banks. Both have done well this year but for different reasons. Interest rates going up has helped banks, but for REITs it is not helpful. They are coming up from such low levels that it really doesn't affect them. Retail and office are still very uncertain. He prefers industrial REITs e.g. WIR.UN-T. He is looking more seriously at seniors real estate as they were hurt so badly during the pandemic.
COMMENT
Cyber security. The pipeline shut down due to a breach underscores the importance of cyber security. It is critical infrastructure, serving the whole East Coast, that was vulnerable and it will be even more important going forward.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Job numbers. Starting to see upward pressure on wages. The economic data and estimates used do not account for the dynamics of covid. As we re-open, the job picture will continue to get better. Inflation is often talked about in hand with employment and wage pressure. Paying people to stay at home is also hurting a bit on job growth.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
$1.3T of new bond supply. There is a deficit of $600B in new bonds. We did not have this last quarter. Now we have $600B being sucked out of liquidity. Liquidity has boosted markets and it can deflate markets when it changes currents. There will be some challenges in the next few quarters.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. Commodities are very cyclical. It depends on the cycle and which commodity. Looking at PICK, which is an ETF that gives you exposure to base metals and mining, it has seen a major move up close to previous highs. Looking at individual commodities, you can see that the copper story could be a fundamental shift that is different from previous cycles. Other commodities like corn and soy could see a new base price but right now we are in a spike market. A lot of the commodity spike is supply driven. Crude oil is the opposite of copper. As we electrify, this sector is at the start of a longer term secular downturn.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
This is no market for young investors--tech stocks slid today. Confusing and terrifying for them. This is a market for grizzled veterans. Nasdaq stocks are sources of funds and they got hammered today. Instead, the remaining bull markets are mines, oil, infrastructure, homebuilders, transports, raw materials, consumer products, agriculture, chemicals, drugs, and banks. These are driven by current demand, such as homebuilders, which extends to home furnishing and mortgages (i.e. Best Buy). Other examples in these sectors: Pepsi, Freeport-McMoran, The Gap, Dow.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. People are worrying about interest rates and inflation. The growth rotation is fairly ugly with maybe 5% more in decline if 5i were to guess. Having a balanced portfolio with all sectors, including growth and value will help. Insurance, metals, materials and industrials tend to do well in higher interest rate environments. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Market Outlook. We are seeing a divergence between what the indices are doing and what the average stock is doing. The major indices are dominated by a number of stocks. The stocks that moved that market off of the bottom, which were growth and tech, have been going sideways for the most part. You also have cyclical, resources and financial stocks are doing much better. However, since they only make up a small part of the index, we are now seeing this show in the composites.
Norman LevineUnknown
COMMENT
Copper. Outlook of copper is very good. China is coming out of covid earlier than others and the demand is high. The renewable market requires copper too. There is also a supply issue due to the low historic price of copper. It will take quite a while for supply to catch up. Likes the mining stocks like RioTinto.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There’s some inflationary pressure hampering renewables. There is also market rotation out. Rising commodities prices are putting pressure on all sectors. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Tech stocks wobbling. Issues with valuation, especially on the software side, and this migrated into the semiconductor side. Some of the SaaS stocks are second-guessing themselves. Twilio's earnings last night are an example. The cloud side is doing well, and semis have recovered nicely. Earnings from the big mega-caps last week have made people wonder if it can get any better than that, and so they're taking profits. Next quarter is in July, and the concern is about comparables to the last quarter and to last year.
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