Rates down, stocks up (again)
Sep 29, 2021Good morning!
We’ve been talking about this for several years but especially lately. People – including some of the biggest names in the business - are finally beginning to catch on. Rates up, markets down. Rates down, markets up.
Today’s markets are liquidity driven.
The sooner investors understand this the faster they can get down to the business of making money.
Here’s my playbook.
1 – Stock futures rebound as 10-year Treasuries retreat
No doubt. Chairman Powell spooked markets yesterday when he testified that inflation looms larger and longer than anticipated. Excuse me for being blunt, but no ____! Seems to me that the question everybody ought to be asking is why he took so long to come to this conclusion and why the Fed’s models are so desperately broken!!??
Mega tech and growth names benefiting from lower rates (and more concentrated liquidity-driven trade) will come roaring back. Today, anyway.
You know what to do!
2 – “The last time we got prepared, it cost us $100 million”
That’s what CEO Jamie Dimon said yesterday when he warned that a US default (on outstanding debt) would have catastrophic consequences and that JPMorgan was running simulations to prepare for that. I agree. He’s the smartest guy in Wall Street, which is why you want to pay very, very close attention to what he says.
Come to think of it, I think you should pay more attention to what Dimon says than Powell or even Yellen at this point. Dimon understands real money … neither Powell nor Yellen do.
3 – The best dog exerciser ever or a real home security device?
Amazon just announced a suite of hardware products ranging from serious Fitbit competitors, Fire TVs, a couple new Echos, and even a robotic Alexa. But the real showstopper for me was the “flying patrol drone.” It looks like a small quadcopter and is intended to fly along preprogrammed flight paths and to “patrol” the house while you’re away.
Bryce, our Dutch Shepard, is going to have a field day and our favourite contractors are going to have an annuity repairing all the wall damage!
Read more
4 – Oil rally a long way from over
Brent recently topped $80 a barrel and the oil rally is a long way from over. Companies are less willing to add drilling capacity given the Biden administration’s energy policies and the desire to make higher margins. I think ConocoPhillips, which just purchased a slew of Texas oil assets from Royal Dutch Shell is a great place to start. It pays nearly 3% (yield).
That said, I like another major integrated oil player even better. It has bigger reserves, the best breakthrough energy portfolio out there and pays nearly double the dividend. Get the stock now.
5 – Crazy desperate to cash in on the IPO market
Here’s one for you. Ozy Media co-founder Samir Rao allegedly impersonated Alex Piper, a YouTube executive during fundraising talks with Goldman Sachs. The FBI is investigating, and unsurprisingly, Goldman passed on the deal.
Bottom Line
Many people think they can’t make it in the markets because they’re run by exceptional people.
Not true.
The markets are run by people who see profits exceptionally.
My job is to help you do that!
Thanks for reading along and for making the 5 with Fitz a great place to be.
As always, make it a GREAT day!
Keith :-)
PS: Anybody can buy stocks but knowing how, why and when is critical to success especially with markets as volatile as they are right now. That’s why I’m holding a special seminar this Friday on volatility and sharing three key charts I use every day to capitalize on chaos. It is FREE for One Bar Ahead™ subscribers. Subscribe now
