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Good Monday morning everyone.
I will get right to it…
Not much has changed in the last week. Growth stocks are out of favor and defensive stocks are in favor. Interest rates continue to rise.
As always, Ivanhoff and I tour the markets and dive into the tickers that matter in all these trends. You can watch/listen here on Youtube and I have embedded the show below:
Here are Ivanhoff’s thoughts:
Most of the first quarter was all about rising interest rates and inflation expectations. As a result, oil & gas, coal, uranium, metal, potash, and other basic material stocks have outperformed substantially year-to-date. There is a new major market theme that emerged in the past couple of weeks. Now, the market is not worried only about inflation. It has begun to discount a potential recession later in the year. Look at the best performers the past two weeks – so many came from defensive sectors like healthcare, utilities, REITs, and consumer staples (discount stores, auto parts stores, farms).
186 stocks went down 10% or more last week. Tech stocks (semis, cloud, Internet), financials and US Treasuries were hit the worst. Anything cyclical and related to growth is under pressure. Tech is looking heavy and on the brink of breaking down. QQQ managed to finish right on its 50dma. If it cannot bounce above 353 on Monday, it is likely to test 340 soon.
34 stocks went up 10% or more for the week. The winners – oil & gas names, discount stores, uranium, potash stocks – typical stagflation move. The next earnings season and CPI report are right around the corner. Maybe, the market has begun to price strong earnings in energy stocks and inflation that is likely to remain elevated for the foreseeable future. If the same trends remain, we should see a continuation higher in many of the energy names that started to break out last week
As for me…
I am not thrilled to be so defensive, but look at these charts that stand out to me below (remember that for me I don’t rotate around I am focused on my 8 to 80 names and growth ideas):
Nasdaq is still very heavy
I think as glum as everyone is, more glum is ahead. There are goofd reasons to be glum…higher prices, war, bad leadership and of course mostly lower stock prices. We are not glum enough.
Blackrock’s treasury fund down most since 2008.
Elsewhere….
Charlie does his new ‘This Week in Charts‘ which is great.
That’s all I’ve got today.
Have a great week.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.
