Consumers and institutions spending >$40 trillion per year is the largest addressable market opportunity there is. Within the primary thematic, there are a few mega-trends that offer investors significant investment opportunities.
Consumers and institutions spending >$40 trillion per year is the largest addressable market opportunity there is. Within the primary thematic, there are a few mega-trends that offer investors significant investment opportunities.
Interestingly, both the technology and consumer discretionary indices have the highest beat rates versus the S&P 500 on a calendar year basis as well. Technology indices have outperformed the S&P 500 index 19 of the 32 years since the data began or roughly 59% of the time. Consumer Discretionary stocks via the index has outperformed the S&P 500 20 of the 32 years with a roughly 63% beat rate.
The year 2022 has started off painfully with equities selling off amid slowing growth prospects, Federal Reserve hinting at rate hikes, persistent inflation, and looming COVID dislocations. Even though US growth rates for 2021 were the highest since 1984, the broader equity market continues to sell off with the S&P 500 Index approaching correction territory (YTD). In tangent, the broader bond market continues to feel the convexity pains of increasing interest rates while commodity prices hit some of the highest levels since 2014. Market volatility remains at the forefront as markets continue to quest for equilibrium.
A Potemkin economy has lured the Fed, economists, and Wall Street analysts into a potentially dangerous assumption of economic normalcy. However, with a review of how we got here, we can better understand the costs and consequences of monetary interventions.
What if the Fed can't hike rates? It's an interesting question and one we delved into in Part 1 – "Fed Won't Hike Rates As Much As Expected."
With the January FOMC meeting now behind us, we have much better visibility about the Fed's intentions.
One of our fundamental theses for the decade ahead is that the world is at the outset of a massive energy transition away from fossil fuels in favor of renewables. That is the reason we focus on commodities like copper and nickel, both of which are widely used metals for which demand will increase due to their import to renewable energy technologies.
One of our fundamental theses for the decade ahead is that the world is at the outset of a massive energy transition away from fossil fuels in favor of renewables. That is the reason we focus on commodities like copper and nickel, both of which are widely used metals for which demand will increase due to their import to renewable energy technologies.
For months, investors have been scaling what feels like an endless wall of worry. Each concern that gets resolved seems to spawn new uncertainties, yet the market has continued its relentless climb higher.
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