In hisDaily Market Notes report to investors, while commenting on a possible bear trap, Louis Navellier wrote:
Q4 2021 hedge fund letters, conferences and more
Risk-On Rotation
The market is moving sideways, digesting recent gains.
The S&P has now risen 11% since March 15th, up 9 of the last 11 days. Interestingly, it has closed at or near the highs for day 9 of the last 11 days. We’ve seen a risk-on rotation with consumer discretionary up 17%, and technology up 16%, highlighted by ARK Innovation (NYMARKET:ARKK), a more aggressive take on new tech companies, up 33%. More conservative sectors such as consumer staples up only 6%.
Q4 2021 hedge fund letters, conferences and more
Greener In The US
Earnings trends remain strong, with 2nd half forecasts up double digits since the first of the year. Inside the numbers, energy companies have seen earnings estimates soar +225% while some of the reopening sectors like airlines, casinos, hotels, and retailers have seen some of the strong optimism cool off a bit.
The major concerns that the market is still wrestling with include cost pressures, especially food & energy, the hawkish Fed, and the uncertainty of Ukraine and the Russian sanctions, all of which are expected to result in slower growth than would otherwise be expected.
The good news for US investors is that most of the issues are hitting other parts of the world harder than the US; e.g. gasoline in parts of Europe now costs $10 a gallon.
Bear Trap?
Despite concerns that the rally we've seen is a possible Bear Trap, earnings and fund flows should continue to support the stock market as we head into the seasonally strong month of April with the VIX below 20.
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