Today we had a cold plunge into reality, CPI came in hot and stocks corrected, and even thought it probably was a bit over the board, if the market turns sour its never wrong to have a runaway plan. From my perspective the market will keep running, earnings strength has been great overall and this last inflation print is not that bad, next I would like to share my views on some industries and my forecast for the future, feel free to argue in the comment section.
**ENERGY (OIL) :**
Okay, lets start with the energy market, volatility has been large since 2020, great profits have been made since then. Global mayhem on oil and gas producing countries has generated great buying opportunities on futures, and companies of the sector in general have grown largely in profits, still the market has been very wary in pricing them for several reasons, but mainly because of over the board positive predictions on switching the economy towards green energy. During the economic boom of the last decade this could be seen as possible, but the switch is cost heavy and the money right now is not there. As off right now crude oil is on the rise, the march 2024 contract goes for 77.83$ during the last month it has risen 7%, tensions in the middle east are high and it can cause a sharp rise in prices, I would not be surprised if it reaches 90$ in the recent future.
Personally im positive on the oil market and currently hold positions in Petrobras (PBR) and Chevron (CVX) recent earnings on both companies have been great, currently I don’t plan in selling those positions.
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**TECH:**
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The TECH ride has been wild for the last few months, micro chips companies have been rising with a strength that has yet to be broken, NVDA leads the rise 64% positive in the last 6 months, but id like to remark the META Phoenix rising to beat the shit out of any bear that dared shorting it.
Personally I have mostly sold out of the large names of the sector already fearing they might be a bit overbought, but still hold two highly speculative positions. SoFi which I acquired pretty recently and RKLB which I have been holding for a while now. Sincerely I like both of the businesses, but they are stupidly speculative and if anything goes wrong they dump heavily as any small stock would.
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**BANKING AND FINANCE:**
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Today we got smacked down in this sector, I sincerely don’t care for the CPI print, rates will inevitably come down, and when this happens the banking sector will boom, I was great at timing the top of the interest rate hike and at that time bought into Citigroup ( C ), BANK OF AMERICA ( BAC ) and TLT ( ETF for treasury bonds with maturity over 20 years) .
My outlook for the sector is good, Bonds will get great capital gains as interest rates come down, specially longer durations which where severely punished during the banking Schism of 2022-2023, I will probably mantain those 3 positions for a few years until rates drop low enough.
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**PHARMA:**
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The dear child of 2020 has been dropped from the top of the skyrise, the patent cliff is coming for companies like pfizer and the sector in general seems to have no bottom, personally I don’t own anything here, but if Mr Market keeps beating the shit out of the sector it will inevitably generate good opportunities.
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**Media/Streamers:**
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Controversial and Volatile sector to say the least, somehow Netflix seems to be winning the streamer wars (for some reason everyone is addicted to Suits 4 years later. Go figure) behind Netflix we have Disney coming out of heavy losses from 2023, but still in the race and a bit further behind we get WBD and PARA that are just trying to survive at this point. As long as the consumer remains strong PARA and WBD might be able to keep their heads out of the water.
Personally im holding WBD for about a year and a half now, it has not really done anything, some times im up, some times im down. At the moment it just seemed like a great value play that had been beaten a bit too much by the market to pass up. Hell, it still looks like it to me, but im definitely biased.
Still, outside of DC their movies last year where great and their gaming sector is growing pretty fucking fast. MAX numbers are a bit disappointing since they have published award winning series behind one another but still have managed to get marginal growth. For me, the value there is still there for the taking, but thread with caution, debt levels are still not nice at all.
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**CONCLUSIONS:**
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Well, those are my views for today, I sincerely think there is no reason for the market to correct sharply , but we should be wary of some drunk valuations being thrown around by Mr Market. What is your outlook on the industries I mentioned above? And where do you think we will find the market 6 months from now?
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