ER is the new key
With even the most optimistic market watchers expecting muted returns this year, where should investors seek refuge?
Invest in emerging market equities, including China. While the Chinese central bank is not particularly accommodative, it still “is in a very different place” than the Fed. And last year’s underperformance means allocations in emerging markets are now fairly light. Stick with Energy and financials in the very near term, amid persistent inflationary pressures. In the second half of this year, start to see some of the supply constraints ease and market expectations for Fed rate hikes subside, and in that case do expect markets to rotate back into technology and longer-term growth areas that will continue to be driven by innovation and continue to show pricing power. Some market segments like materials, industrials, energy, and banks perform better during rising inflation expectations and higher interest rates. But the key is to invest in companies with resilient earnings. Companies need to demonstrate that they can maintain margins that can be resilient in the face of higher input costs.
$MultiPlan(MPLN.US$ had a new institutional investor buy in Friday. They have ER to report Thursday. So institutional investor may have some inside information.
Invest in emerging market equities, including China. While the Chinese central bank is not particularly accommodative, it still “is in a very different place” than the Fed. And last year’s underperformance means allocations in emerging markets are now fairly light. Stick with Energy and financials in the very near term, amid persistent inflationary pressures. In the second half of this year, start to see some of the supply constraints ease and market expectations for Fed rate hikes subside, and in that case do expect markets to rotate back into technology and longer-term growth areas that will continue to be driven by innovation and continue to show pricing power. Some market segments like materials, industrials, energy, and banks perform better during rising inflation expectations and higher interest rates. But the key is to invest in companies with resilient earnings. Companies need to demonstrate that they can maintain margins that can be resilient in the face of higher input costs.
$MultiPlan(MPLN.US$ had a new institutional investor buy in Friday. They have ER to report Thursday. So institutional investor may have some inside information.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
DominicFam : Does this mean a buy?