Market Commentary — Page 514

Market Commentary

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The biggest takeaway from the OPEC meeting was the Saudis implementing penalties for those who are cheating. The market's lack of confidence for normalization of oil demand is driving the price. Supply is down more than demand loss. In a year or two, there may be a supply crisis.

COMMENT

The jet fuel market is down around 25%. The demand for raw materials are rising. 60% of Europeans surveyed no longer consider mass transit, and used car demand is rising. Although demand is changing, the supply side is what will change permanently.

COMMENT

The current rash of tech IPOs Red hot tech IPOs are killing us, because investors are piling into them, but selling off the tech stocks and pressuring overall markets. New stock is overloading demand. Unity today soared 31% in its IPO today, for example. Some buyers dropped Salesforce and FAANG names, hence the decline in those tech stocks.

COMMENT

Billy Kawasaki’s Insights - Picks from 5i Research. The announcement from the Federal Reserve stating that interest rates are to stay low for a while will likely be positive for gold and stocks. Q2 results were pretty good and it should remain strong when the world reopens. The "anything is better than cash" mentality from low interest rates is likely to stay for a while. Unlock Premium - Try 5i Free

COMMENT

Perspective on market volatility. The US election, the virus, and global trade tensions all contribute to uncertainty in the markets. Make sure your portfolio is really prepared. Gold, oil, stocks, and bonds will all respond differently to various outcomes.

COMMENT

Strategy on oil. Two dynamics at work, inflation and growth, and those dynamics cross and you get 4 regimes. Different asset classes respond differently to the different regimes. Oil does well in rising inflation or accelerating growth. We've had a significant increase in liquidity to fight the pandemic. If suddenly there's a vaccine, commodity prices could take off and overwhelm the opportunity for the economy to grow. So, have a balanced portfolio across the 4 regimes. Make sure it hasn't been thrown out of whack by the disinflationary boom where large tech stocks have come to dominate the market indices.

COMMENT

Fixed income ETFs. Potential for inflation. Investors should have a solid holding in sovereign bonds. You can add some US bonds like HTD or TLT. If rates fall, something in your portfolio will go up. TIPS in the US are inflation-protected bonds and a nice addition, as they'll respond positively when inflation goes up. XRB, ZRR and XBB in Canada. He'd skew more to the sovereign bonds.

COMMENT

A Canadian silver ETF? HUZ is the Horizons ETF and which tracks the commodity, not silver stocks. HZU is the betapro 2x exposure to silver. These ETFs are very dangerous. They're for trading, not for buy and hold. He's not aware of a silver miner-based ETF in Canada. You could take a look at Sprott's suite of products including PSLV.

COMMENT

Artificially inflated market? January started quite strong. Then Covid was just in China, but it spread and brought the market down by about 35%. Governments stepped up and moved a ton of stimulus into the market. So now we're up 61% from the March lows. A bit of wind has come out of our sails, but we're up from where we started at the beginning of the year. Not out of the woods. No vaccine, no clear communication on long-term stimulus, threat of a Canadian election, and the US election. Valuations are quite high. Plus, certain pockets have rampant speculation. Next 6-18 months are going to be critical for preserving capital. You should be happy if you're even or a little bit up on the year.

COMMENT

Considerations for preserving capital. 1) Forward returns are a function of what you pay. 2) Use time to your advantage and hold for a long time, rather than trading. 3) Have some cash on the sidelines to take advantage of opportunities. Always have a wish list at the ready for market downturns.

COMMENT

How do you choose a company to invest in? There are 7,000 publicly traded companies in the world, and their firm runs 20 different screens. The most important is free cash flow growth. With that, you can invest in R&D, do acquisitions, pay down debt, buy back shares, or pay a dividend.

COMMENT

What happens to my stocks when the company is bought out? There are two scenarios. One is that you get shares of the acquiring company instead. This way is often used if the purchasing company's stock is overvalued. The second way is that you get straight cash, the method used often when the purchasing company's stock is undervalued.

COMMENT

Billy Kawasaki’s Insights - Picks from 5i Research. The upcoming throne speech should not affect how people manage their portfolio since it would just be a guess on what might happen. Infrastructure companies should benefit from increased spending on large scale projects. Tax rates and rules are not expected to change. Unlock Premium - Try 5i Free

COMMENT

Big financial research institutions drive markets; the Fed doesn't as it appeared today after Powell's comments. These big companies hold morning meetings to pitch certain stocks as buys and hold and occasionally sells. Covid changed the way the US does business. E-commerce has soared. FedEx, for example, has soared on delivery packages because of e-commerce spikes. But this is a zero-sum gain for those thriving sectors. A FedEx exec said in an investors' call because spending has shifted from the service industry into other sectors like goods. Is the US turning into a manufacturing economy or the service industry is in a downturn (temporarily)?

COMMENT

Why did the Nasdaq sell off today? It sold because investors sold their FANG stocks and bought the IPO, Snowflake, which turned out to be the most successful software IPO in Wall Street history. Problem is, we're facing a flurry of tech IPOs this fall and we will see more of this sudden tech selling. (The only big tech name that didn't get hit today was Salesforce.) The buying is healthy for these tech IPOs, but unhealthy for tech stocks as a whole. Beware.

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Summer Sale

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

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

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

The current rash of tech IPOs(A Commentary)

Billy Kawasaki’s Insights - Picks from 5i Research. (A Commentary)

Perspective on market volatility. (A Commentary)

Strategy on oil.(A Commentary)

Fixed income ETFs.(A Commentary)

A Canadian silver ETF?(A Commentary)

Artificially inflated market?(A Commentary)

Considerations for preserving capital.(A Commentary)

How do you choose a company to invest in?(A Commentary)

What happens to my stocks when the company is bought out?(A Commentary)

Billy Kawasaki’s Insights - Picks from 5i Research. (A Commentary)

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

Why did the Nasdaq sell off today?(A Commentary)

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