There isn’t fear in the tape, which is a problem. Set that aside for the moment, there are several investment themes worth pursuing here in light of recent news.
Here is my checklist.
1. China is accelerating. This is bullish for commodities and companies who do business in China.
2. If Macron wins, the ECB gets to rig their markets some more.
3.Trump playing ball with establishment means he will get stuff done, such as lower corporate tax rate and infrastructure bill.
4. Weak dollar is great for American exporters.
5. Rising bond yields infers inflation. If we do not get it, rising yields is a net negative.
6. Oil is basing out around $50, ahead of Saudi Aramco IPO. I like my chances for a breakout ahead of it.
7. War
Investable themes
China-centric plays, such as CLF, CAT, FLS, YUMC, BABA, JD, CTRP. There are plenty more.
European banks: CS, DB
Steel/materials: X, ATI
Weak dollar winners: GM, F, PG, LNG
Oil: CLR, OAS, CXO
War/nation building: KBR, CSL, RTN, OA, ESLT, just to name a few.
In the event of war, I’d expect to see the knee-jerk reaction to the downside, quickly digested, followed by monies being allocated ‘to the winners.’ Without war, the Trump agenda and booming Chinese economy come into play. There are several ways to win here. I don’t want to sound to overzealous after a giant move higher, but this move will not stop until all options are exhausted. There is a good chance we’re going to see a massive market rally over the next 12 months.
The post Volatility Sinks to New Lows, Dollar Ravaged, Stocks Fly: What’s Next? appeared first on Trading with The Fly.
April 26, 2017 at 12:53AM
from Dr. Fly
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