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: This is the Best S&P 500 “Buy” Sign Since Before the Pandemic
(February 2021)
January and early February offered some rough times for investors. The two-week meme stock debacle had most investors’ hearts skip a beat and fear the entire market was in a bubble. However, applying some cold, rational logic to market movements yields a very nice picture. The reality is that VIX Index, Wall Street’s so-called fear gauge, just fell below 20. To put that in perspective, it is the first time that has happened since February 2020 (yes, BEFORE the pandemic). This means fear is leaving the market and could set the stage for more buying. According to one Wall Street strategist, “This is a positive divergence. Stocks churning but VIX falling. This suggests that ‘fear’ is receding from the market”.Read more
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