FINSUM + Magnifi: JP Morgan Warns of Big Tech Correction
April 29, 2021
For anyone who has enjoyed the big rally in tech shares after the rough February through March period, JP Morgan has bad news for you. The bank says that while the reflation and “reopening” trade has paused for the last month, it is poised to resume. This would rotate capital out of growth and quality into cyclicals and value, which could pose big trouble for FAANGs and other tech funds. According to the bank, “With U.S. and Europe cases now declining, the fast pace of vaccination and seasonal tailwinds (Northern Hemisphere), we believe that the reopening and reflation trade will resume with a move that will be bigger than we saw early this year... As the COVID-19 recovery takes place, reopening, reflation and inflation themes, and value likely will significantly outperform growth and defensives”.
FINSUM + Magnifi: BofA Says the Market is Flashing a Big Warning Sign
April 6, 2021
Bank of America’s Sell-side indicator that tracks equity allocation increased to 59.4%. It's the
third month in a row on the rise. This puts it within one percentage point from the bearish sell
sign and its highest level since 2007. This would be contrarian as investors are bullish on stocks
as both S&P 500 and Dow Jones are trading at or near all-time highs. Investors should be
cautious because stimulus and a strong economy are already priced into the market. But
investors looking to hedge might be wise to hold off or look for cyclical or value funds, rather
than a full-blown exit. Although volatility should be expected to resume nonetheless in the
second half of the year as the economy settles back to normal.
Defensive Investing in a Pandemic
None of us have ever lived through anything like this before. The COVID-19 pandemic has touched every corner of the globe, sickening nearly 45 million and killing more than a million worldwide. It truly is the defining story of our time and a great human tragedy.
Yet, as we all work to protect those most at risk and get through this together, savvy investors are finding novel ways to, not profit off the pandemic, but uncover new opportunities as a result of COVID-19. This is being driven by everything from increased spending on sweatpants and leisure wear, to reduced gasoline sales as commutes faded into memory, to new opportunities for the grocery sector thanks to at-home food prep. These trends and others have formed the foundation of new defensive investment plays.Read more