Place residence

These 3 equity sectors could be the place to be even if the market “turns bearish at the end of the world”.

By Barbara Kollmeyer

Critical information for the US trading day

Stocks are trying again to try a post-Powell pick-me-up so far didn’t go well on Tuesday. It is that caution is in order, with the sermons of certain large banks.

On Tuesday, Goldman Sachs warned of a sticky housing slump that will flatten prices and Credit Suisse told investors to trim their stock holdings ahead of what they see as tough months ahead.

No doubt some could look even closer down the road, as larger institutional traders could potentially return from vacation to assess the market after this blow from the Fed.

Our call of the day says that as the bulls and bears clash, the best way forward for investors is to stop fighting the Fed, stop fighting the trends, and let the markets lead. . It comes from Mark Ritchie II, chief investment officer of RTM Capital Advisors and son of the legendary investor of the same name.

In an interview with Real Vision published on Monday, Ritchie discusses the return of these big players, saying that “if institutions really start popping up and selling in droves,” markets are about to see a new low or a new test. .

As a contrarian, he says the best setup for him would see markets continue to pull back, retest lows “and everyone will be bearish at the end of the world.” But he wants investors to keep an open mind here, as we could also see a strong rally from the lows, or a longer secular range where markets don’t see new highs.

That’s why it’s important to lead the market, he says.

Everybody’ likes to look at, well, what was the hot stock last time around, or what was beaten the most. And I say you want to look at the other side. The market is smarter than all of us ..let the market tell you where the strength is and see if it holds up,” Ritchie said.

This means that for investors who have gone long in certain areas and find that these positions work, “you are potentially trying to stick with them.”

“So even if this market pulls back, and even if we hit new lows, you want to see … what areas are opposing that market pull,” he says. Currently, he is focusing on biotechnology, some semiconductors and solar, in the area of ​​green energy. He said these sectors should be of interest to anyone looking to put capital to work ahead of where markets may be bottoming or may be bottoming.

If these groups “turn around and fall apart, that would tell me there’s no leadership in this market,” he said. “Let’s say it’s the area of ​​green energy. If it pulls back only moderately, the market makes new lows, and it gradually makes lower highs, that’s bullish.”

Ritchie says leadership remains his biggest concern for the markets. “Leadership goes, get out of the dodge. I’m much more interested now than I even said in March, because it looks like we’ve had some leadership.”

He also watches for a potential “dollar wrecking ball” as further major moves in the greenback – up 13% year-to-date – “will likely coincide with downward moves in equities” and “ will potentially break things in the world.”

Ritchie’s full interview is available here.

The steps

Stocks head south as bond selling resumes and the dollar eases slightly. Crude prices fall more than 4%, overwhelmed by economic worries, while bitcoin holds just above $20,000.

The buzz

Twitter (TWTR) is down and Tesla (TSLA) stock is up premarket after the electric vehicle maker’s CEO Elon Musk sent a letter to the social media company, adding more reasons for which he wants to give up his contract of 44 billion dollars.

Baidu (K3SD.SG) stock is up on bullish earnings and revenue from the Chinese search engine.

Bed, Bath & Beyond (BBBY) stock is up 40%, marking a three-day streak since announcing a pending “strategic update”.

The Big Lots (BIG) stock rises after a weaker-than-expected loss in the second quarter.

Advanced Micro Devices (AMD) has released the world’s fastest gaming card.

Consumer confidence is up for the first time in four months due to lower gasoline prices, while job vacancies climbed to 11.2 million, showing a still strong labor market . Home prices have slowed according to the latest S&P Case-Shiller survey.

Richmond Fed Chairman Tom Barkin said Tuesday that recession is “obviously a risk” in the process of bringing inflation under control. New York President John Williams is scheduled to speak at 11 a.m. Eastern Time.

Minneapolis Federal Reserve Chairman Neel Kashkari said he was happy to see the market reaction to Powell’s speech in Jackson Hole. “People now understand the seriousness of our commitment to bringing inflation down to 2%.”

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Table

Tesla stock could be on the verge of a “significantly lower price” if it breaks the $280 region and the critical head-and-shoulder neckline, said Michael Kramer, the founder of Mott Capital. Management.

Here is his chart and full blog post

Stock tickers

These were the most searched tickers on MarketWatch as of 6 a.m. EST.

Ticker  Security name 
BBBY    Bed Bath & Beyond 
TSLA    Tesla 
GME     GameStop 
AMC     AMC Entertainment 
APE     AMC Entertainment preferred shares 
AVCT    American Virtual Cloud Technologies 
BBY     Best Buy 
AAPL    Apple 
NIO     NIO 
TWTR    Twitter 

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Drink tea, live longer

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-Barbara Kollmeyer

 

(END) Dow Jones Newswire

08-30-22 1027ET

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