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COMMENT
Today's hot inflation number Hikes will happen between March and September, she predicts. Then, inflation will decline. Housing is key, so if housing continues to be strong, inflation could extend longer than expected. Past rate hikes show that the S&P tends to be positive 12 months after those hikes and the market continues growing. There will be choppiness to come, but won't fall back to January lows and eventually CPI will fall back to 3% that the economy can support.
BUY
Inflation-protection trades: energy (and materials). Both cyclical sectors are positively correlated to inflation. She also likes Martin Marietta given its heavy business in residential and non-res construction and a tailwind from Dems and Republicans to fix bridges and ports during supply-chain issues. Financials: JPM she likes, though they had a disappointing recent earnings, they do have a multi-faceted business. For more cyclicals, consider EM, namely IEMG.
integrated oils
BUY
Inflation-protection trades: energy (and materials). Both cyclical sectors are positively correlated to inflation. She also likes Martin Marietta given its heavy business in residential and non-res construction and a tailwind from Dems and Republicans to fix bridges and ports during supply-chain issues. Financials: JPM she likes, though they had a disappointing recent earnings, they do have a multi-faceted business. For more cyclicals, consider EM, namely IEMG.
INDUSTRIAL PRODUCTS
BUY
Inflation-protection trades: energy (and materials). Both cyclical sectors are positively correlated to inflation. She also likes Martin Marietta given its heavy business in residential and non-res construction and a tailwind from Dems and Republicans to fix bridges and ports during supply-chain issues. Financials: JPM she likes, though they had a disappointing recent earnings, they do have a multi-faceted business. For more cyclicals, consider EM, namely IEMG.
Financial Services
BUY
Inflation-protection trades: energy (and materials). Both cyclical sectors are positively correlated to inflation. She also likes Martin Marietta given its heavy business in residential and non-res construction and a tailwind from Dems and Republicans to fix bridges and ports during supply-chain issues. Financials: JPM she likes, though they had a disappointing recent earnings, they do have a multi-faceted business. For more cyclicals, consider EM, namely IEMG.
E.T.F.'s
BUY
Shares are popping today on strong earnings. You own this for the brand, and theme parks monetize that brand. For Disney+, you need new content, but not the parks. In fact, the parks have a lot of pricing power and will fund the content for Disney+. She needs to hear their strategy for ESPN.
entertainment services
COMMENT
Today's hot inflation number The market has already adjusted to the Fed's aggressive rate hikes to come, so the market is shrugging off today's hot inflation number. For markets to really fall, there needs to be an entirely different catalyst. There is one more CPI announcement before the March 15 Fed meeting when rates are expected to rise, probably by 0.25% and not 0.5%. Even then, markets may not dive on that March hike, because it's been baked in already. Also, profits are growing. The market is likely to rip higher on March 16 after that meeting and expected hike.
BUY
An inflation-protection trade: Energy is the obvious play. Kinder Morgan is a laggard in energy, though not directly tied to oil prices, but will benefit during this rally. Also likes Cleveland-Cliffs which reports tomorrow. Down from highs, but still very high and lifted by high steel prices. Upside here as the economy expands. Alaska Air. Costs are up, but airline are good at passing on costs to customers. People will come out of hibernation to fly, so demand is up.
pipelines
BUY
An inflation-protection trade: Energy is the obvious play. Kinder Morgan is a laggard in energy, though not directly tied to oil prices, but will benefit during this rally. Also likes Cleveland-Cliffs which reports tomorrow. Down from highs, but still very high and lifted by high steel prices. Upside here as the economy expands. Alaska Air. Costs are up, but airline are good at passing on costs to customers. People will come out of hibernation to fly, so demand is up.
steel
BUY
An inflation-protection trade: Energy is the obvious play. Kinder Morgan is a laggard in energy, though not directly tied to oil prices, but will benefit during this rally. Also likes Cleveland-Cliffs which reports tomorrow. Down from highs, but still very high and lifted by high steel prices. Upside here as the economy expands. Alaska Air. Costs are up, but airline are good at passing on costs to customers. People will come out of hibernation to fly, so demand is up.
Transportation
COMMENT
Today's hot inflation number The Fed is still behind the curve in raising interest rates, though have done a great job in setting the table amid hot inflation. The markets are betting on a 50% chance of a 0.5% hike in March, but he thinks it'll be 0.25%. He think we're 2-3 months away from peak inflation and will remain elevated beyond the Fed's expectations. Supply disruption has been a bigger cause of inflation than demand. Today's tepid market response is a sign of market densensitization.
BUY
An inflation-protection trade: he likes and owns JPM, but recommends also MS. He likes financials for their cyclical exposure. Thought MS is trading at all-time highs, they execute very well on all fronts. It trades at a slight premium, but deserves it. It's the best among banks. INFL holds stocks that will benefit from rising prices: small/mid-caps, 40% financials, 40% energy and 20% commodity names.
investment companies
funds
