Displaying items by tag: stocks
The market has been blindsided this week, with big losses. However, the 13th was great news for investors, as the market finally showed some resilience, rising considerably despite some more worrying inflation data (PPI). The 1%+ gains on the 13th are a distinct sign: investors are still willing to buy the dip.
FINSUM: Investors still seem to believe in the fundamental direction of earnings and the economy. Our opinion is that this bout of inflation is temporary, but even if it isn’t, it is a good sign that investors can see beyond the inflation numbers right now.
It was an awful day for markets, with all three big indexes getting hammered, including a Nasdaq loss of 2.7% (the Russell 2000 lost over 3%). The reality is that things are likely to get worse. The inflation reading which spooked the market confirmed the worst fears of investors: that the economy may be heating up so much that the Fed will be forced to taper its support early. Every piece of data is now likely to be understood from this fearful perspective in coming weeks, which means volatility is probably going to stay quite high.
FINSUM: The market is irrationally afraid of inflation right now and has become very disconnected from fundamentals. Earnings are doing quite well and the fundamental direction of most companies is strong, including tech stocks, which are getting battered.
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It is no secret that oil and gas stocks have great dividends. What makes the sector special right now is that the sector is also looking like a good investment for capital appreciation because of the rise of the “commodities super cycle”. With all that in mind, check out these three names for good income: Marathon Petroleum (MPC) or its MLP, MLPX, Energy Transfer (ET), and Antero Resources (AR). All three opportunities currently offer double digit yields.
FINSUM: Oil is definitely in recovery mode, so the combination of value and income is compelling.
Most investors had their eyes on growth, particularly in the rebound of the pandemic, but things are starting to look good for value stocks. Investors at Columbia Threadneedle Investments said that stimulus from the Fed and Government put investors' value metrics on pause, but as the economy continues to normalize and rates rise, value stocks will be the beneficiaries. Companies like Citizens Financial Group Inc., United Community Banks Inc., and Sunstone Hotel Investor Inc. are all small-cap value companies that Tugman of Columbia Thread Needle finds attractive. P/E ratios are better for small and mid-cap value stocks, and are trading at heavy discounts compared to the broad S&P.
FINSUM: As life returns to normal stocks might do the same, which would be a return of value investing and attractive price-to-earnings ratios.