By Louis Navellier. Originally published at ValueWalk.
In his Daily Market Notes report to investors, while commenting on the rising mortgage rates, Louis Navellier wrote:
The markets are off this morning as the existing hot buttons reassert themselves.
Ukraine is not cooling off; more sanctions are on the way as Biden travels to a NATO summit in Europe. Fed-speak is more hawkish as global rates rise and money flows out of fixed income. Rising mortgage rates are hitting home builders on top of higher construction costs.
Q4 2021 hedge fund letters, conferences and more
Crude oil is grinding higher with Brent now $120, fueling inflation concerns. Commodities across the board are higher today. Interest rates have pulled back modestly but only after a strong run higher so far this week. Concerns are rising on Covid hot spots around the globe, especially in China and Germany as reopening relaxations of masks and other rules run into the new more contagious variant.
Large Stock Inflows
All that said, stocks are increasingly seen as the best asset class in an inflationary environment where rising rates make fixed-income less attractive and stagflation fears are bringing wider credit spreads.
Stocks, particularly US stocks, are not seeing reductions in earnings estimates that some have anticipated and no one is seeing a US recession on the table, though the rear of one is palpable. New money will flow into stocks on top of flows out of fixed income while cash still pays next to nothing. Banks have now gone positive on the year on the strength of higher rates despite the current flat yield curve.
Buy Food And Commodities
Opportunities exist in companies in food and commodities with pricing power like General Mills (NYSE:GIS) which reported this morning with a top line meet and a bottom line beat along with an improved outlook. The stock is up 4.5% on the news.
Coffee Beans
Internet shutdowns caused an economic cost of $1.21 billion in Russia since the invasion of Ukraine. Despite the shutdowns only having gone on for a few weeks (543 hours as of March 22), the large number of people affected (113 million) caused the high price tag. Source: Statista. See the full story here.
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