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COMMENT
Interest rates will go up, perhaps by 75 points. Positive is that employment is strong in the US and Canada. The indices are trading at historic averages after entering a bear market (in the US). She's looking for earnings revisions going down. The US consumer is still spending--so far so good. During Covid, consumers accumulated savings. Now, we're seeing people travel, which is positive. This could allow the US Fed engineer a soft landing.
Unknown
DON'T BUY
They reported a few weeks ago and noted a shift in spending from household goods into travel/social. WMT will have to discount some of these goods. The poorer consumer is feeling the impact from higher food and energy prices. Retail stocks have pulled back recently. She's not inclined to buy WMT and prefers Dollar Tree which enjoys more consumer demand.
department stores
PAST TOP PICK
(A Top Pick Jun 16/21, Down 2%) Apple remains a core tech holding, though she trimmed shares around $178 earlier this year. She is adding more shares now in this pullback. Apple has a customer base of 1 billion phone users and offers many services to them like music, fitness and TV. These offers high margins and recurring revenues. Apple is innovative and will continue to add new services and products.
electrical / electronic
PAST TOP PICK
(A Top Pick Jun 16/21, Up 7%) A core bank holding. Banks have pulled back recently but have held up well vs. the whole market and vs. US banks. The sector is well-capitalized. TD has announced it will buy First Horizon to expand TD's southern US presence and is a good use of their capital. TD has been increasing their dividend, now around 4%. TD is a long-term hold and this pullback is a buying opportunity.
banks
PAST TOP PICK
(A Top Pick Jun 16/21, Down 4%) Still owns it. Now below $300 you can add/buy. Home prices are rising over time and the home inventory is getting older. US homes are getting older, so need renovation. Also, HD has focused on their pro customer to easily buy online. Pros sales were strong last quarter. HD bought a maintenance and repair company to do maintenance for hotels and the commercial market--a new growth area.
specialty stores
BUY
It's had a tough year so far. During Covid, their theme parks and cruise ships were closed, but they launched Disney+ which did well. Going forward, an overhang is that the parks in China remain closed due to Covid. Disney is under-earning their earnings power. Their content should get released more regularly. This morning, Disney bid for the broadcast and digital rights to cricket league in India, a franchise that has grown tremendously, but she feels the price is too high. She remains confident in Disney, that the Chinese parks will reopen, Disney+ will improve and so should theatrical box office tallies.
entertainment services
BUY
Shares will be driven by oil's price. She prefers the pipeline stocks because they pay good dividends and are less volatile than oil stocks. If you're bullish oil, you can buy CPG.
oil / gas