In hisDaily Market Notes report to investors, while commenting on the fear of stagflation, Louis Navellier wrote:
Rising Fear Of Stagflation
Interest rates are spiking this morning.
Commodity inflation, punctuated by $6 gasoline, is spiking interest rates and raising fears of stagflation, even concerns of an eventual recession. This is even more pronounced in Europe than in the US. The 2-year yield is up to 2.24, up from only 0.13 a year ago. The 10-year yield is 2.45%, up 11 basis points on the day.
Q4 2021 hedge fund letters, conferences and more
Mortgage rates are well past 4% and on top of rising prices, a home buyer is looking at a monthly payment 20% higher for the same house than a year ago. Homebuilder stocks are understandably being downgraded.
There is no apparent resolution to the Ukrainian situation on the table yet which is forcing more adjustments to the impact of sanctions on Russia, in particular energy, as crude remains above $110, and natural gas is back to its October high.
Investor Bias
Marijuana stocks jumped today on new legislation to legalize it nationally.
Investor bias remains toward larger safer stocks with the biggest, Apple (NASDAQ:AAPL) on a 15% run-up off the recent bottom and the Dow more stable than indexes with smaller companies.
Pricing Power
The focus going forward will be with companies demonstrating pricing power in the next round of earnings as inflation and resulting higher interest rates will remain the biggest concern.
Companies in the commodity and food-related businesses should be best positioned, as well as the energy complex at current crude prices which also supports electric vehicle-related names; Tesla is up $300 from the recent bottom to $1,000.
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