The world has changed dramatically in 2022. It transitioned from Covid+Inflation concerns to War plus hyperinflation concerns. Geopolitics has now taken center stage. And the new stories are driving up the stock prices.
1. Crude Oil price is near $100. It means investor interest in the following themes:
- Oil and Gas stocks
- Clean Energy stocks like CLNE, PLUG, and GEVO [I recommended these names a few weeks back and continue to hold]
2. Russia Ukraine Conflict means sanctions on the Russian economy and its productive industries. Russia is a major producer of Steel and due to sanctions, this supply will go offline leading to a steel supply shortage. Hence there is massive investor interest in Steel stocks. I recommended NUE on Friday and even today stocks like CLF look attractive.
3. The new warfare has entered cyberspace. And there is enormous anxiety around securing digital space. This is driving interest in Cybersecurity stocks. Palo Alto Networks is surging vertically along with Crowdstrike CRWD.
4. Geopolitics now dominates investors’ mind space and countries will rush in to secure raw material and agriculture supplies. No wonder Shipping stocks continue to do well be it ZIM, DAC, SBLK
5. People have forgotten that the pandemic is over. Most of the countries have lifted restrictions and Home Away stocks were expected to do well but the Russia Ukraine war is driving up oil prices. It is also leading to shut down of airspace. There is chaos and confusion and this is leading to a sell-off in these stocks. Hence, this theme seems to have derailed.
6. The Scared money is buying Gold and Silver. No wonder Gold. Silver and Silver mining ETF is doing extremely well. I am glad we positioned in those names ahead of the move.
7. European nations have shown enormous unity and seem to be taking on Russia. And one direct fallout of the conflict is the need to spend on the military. No wonder defense stocks like Lockheed Martin, Raytheon have been making a bullish move for a week now.
8. Most of the European countries which were heavily reliant on Russian Gas are now thinking about Nuclear Power plants. No wonder Uranium mining companies, which I recommended 10 days back are surging higher.
9. Hundred dollars Oil and Energy independence will accelerate Renewable energy adoption. This will help companies like Enphase Energy, and other solar energy players
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
Trade Sheet:
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
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