“No one should be offended by data.”
The inflation report is out and it’s ugly but the US market staged a bullish comeback on the premise that the Inflation has peaked. But is that true? We will find out soon. The market meanwhile will continue to do what it is doing i.e. making everyone nervous.
The Big Picture – S&P 500
S&P 500 started the day strong but now the market is coming off. It needs to be seen whether the market would sustain the gains or succumb to selling pressure. There is palpable fear and you can feel it in the 52-week high list. The stocks making the highs are Walmart, J&J, Costco, and Coca Cola
Will the Fear money chase Walmart?
US Inflation for the month of March has come at 8.5%. Everybody is worried about inflation and one company that is expected to do well in such an environment is Walmart. It’s a play on offering low-cost value to consumers and in an inflationary environment, that’s what consumers look for. The stock has broken out above 152 levels and hence has the potential to do well. The other factor that might work for the stock is the investment environment, where everyone is scared and looking for safe stock.
I would be a buyer in the stock with a stop loss below 148.
There is a bullish theme also. Most of the discount or value retail stores seem to be getting bullish interest be it Dollar Store, Dollar General, Burlington, Ross, or TJ Maxx.
Large Cap Portfolio: 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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