March 4, 2022, 2:58 pm EST
Watch out Next Week
As we all know the intensity of the war is reshaping the global direction of the economy, politics, and military operations. The damage is already done and it could the beginning of the troubles for 2022 and beyond.
We are pessimistic about its development even the war may finish in a short period of time. The refugees of Ukraine, the collapsing economy of Russia, and a potential shortage of commodities (energy, agriculture) are the coming waves of trouble.
The investment opportunities also appear with this background as we can see clearly from the market reactions where institutional investors rotate money from one place to the others. Here is a brief summary:
- Basic Material: steel, iron, aluminum, copper (AA, CENX, CLF, STLD, VALE)
- Precious Metal: gold and silver (AEM, AU, NEM, RGLD, PAAS)
- Agriculture: fertilizer, pesticide, wheat, corn (MOS, CF, NTR)
- Energy: crude oil, natural gas, nuclear, alternative (CVE, XOM, MRO, COP, IMO, APA)
- Defense Industry: jets, tanks, bomb, radar, laser, space (NOC, LHX, LMT, GD, HII, LDOS, KTOS)
- Food: supermarket, packaged food (KR, SFM, GO)
- Transport: railroad, cargo shipping (UNP, CSX, CP)
The new leadership goes beyond what people know the most (FB, GOOGL, MSFT, TSLA, NVDA, AAPL, AMZN). If you check the performance of emerging industries versus the popular names, you will understand the big migration of money changing from one place to the other.
Technically, all major indexes are in big trouble as they are blocked by moving averages (20 DMA). New local lows may come next week that further confirm the downward spiral for a full-grown bear market.