“History provides a crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.”
Wholesale prices rose 1.4% in March and 11.2% from a year ago, higher than expected. Inflation is a serious problem now. But what surprised the equity market was – Bond market reaction. US 10 Year Bond yield slipped back to 2.67%. Overall, the S&P 500 is now up 0.95%.
Home Away Demand not impacted by Inflation
More than 6.5 million people passed through TSA checkpoints last weekend, just about 500,000 shy of the 2019 figure.
Every Airline and Hotel companies now confirming what you can see. There is unprecedented demand for travel and the companies are able to pass on every cost increase without impacting demand. No wonder today Airline, Hotel, Cruise, Casino stocks are running away. AWAY ETF is up 2.87% and looks like a buy. I am adding it to the portfolio.
Momentum in Cybersecurity firms
There are two stocks in the portfolio: Crowdstrike CRWD and Cloudflare NET. Geopolitics has changed and there is enormous interest in Cybersecurity companies. A huge number of M&As seem to be happening. Just a few days back, a private equity firm Thoma Bravo acquired SailPoint Technology Holdings SAIL for $6.9 billion. Google last month acquired Mandiant MNDT for $5.4 billion in an all-cash deal.
Palo Alto Networks PANW continues to exhibit strength
In a market where nothing seems to be working, this theme looks strong and every stock of the sector seems to be doing well. Keep an eye on stocks like Zscaler ZS, SentinelOne S, and Fortinet FTNT. I am hesitant to recommend anything new but continue riding NET and CRWD.
What’s happening with AT&T
AT&T is now a pure-play Telecom company that is trading at attractive valuations with decent dividend yield. AT& stock made a big Gap up move on this but today, the stock is down on news of a dividend cut. The company announced that it would pay a dividend of $1.1/share now. At the current market, the dividend yield is super attractive at 5.6%
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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