Today, The Weekly Buzzing Stocks by Billy Kawasaki and The Panic-Proof Portfolio (Stockchase Research) commented about whether DRX-T, BDI-T, FLEX-Q, EQX-T, NVDA-Q, FSLR-Q, LLY-N are stocks to buy or sell.
Seeing heightened volatility in September. If you go back to 1950 during election years, September and October are negative on average; the win ratio is 50% for each month, so we're going to see those ups and downs. Especially with the election coming up, and economic data pouring in, that might change the trajectory of what the Fed might do. All those things are playing into what's happening with the markets.
On the positive side we're seeing double-digit corporate earnings growth, which is the most important thing. Next year forecast at double digits as well. We just need to get past these next few weeks, or couple of months, of volatility.
It's certainly another factor that plays into his analysis. But if you look back to the macro picture, whenever you have the beginning of a rate cycle, 12 months later the markets are up quite significantly by double digits, presuming a recession does not occur.
Right now his base case is for a soft landing. Lots of data points to that, inflation down to 2.5%, US unemployment down to 4.2%. Adding to that, US money market assets are up to $6.3T USD, lots of cash on the sidelines that can be used.
As to age of the bull market, we're really only about 5 innings in, so we're mid-way through the average bull market. Still room to run. Brace for volatility into the US elections. After that, the focus will shift back to the fundamentals of corporate earnings, interest rates, and economic data.
Technically, great that it's broken above the 200-day MA, but that's still trending lower. Stock's gapped up. On his watchlist. Concerns about China, its second-largest market.
Investors should be cautious about the new-CEO effect. They need to execute. Stock moving higher is a hope for execution. Not cheap at this point, 2.9x PEG.