In today’s briefing:
- Don’t Fight The (Hawkish) Fed
- Don’t Overstay the Party
Don’t Fight The (Hawkish) Fed
- Inflation is running hot. As a consequence, the Fed made its hawkish pivot and signaled that it is on pace to end its QE program by March 2022.
- FANG+ stocks are the new defensive positioning under such a scenario. In a growth-starved world, investors will bid up the prices of cash generative growth companies.
- The expected large-cap growth leadership should begin to fade when inflation pressures start to abate in the latter part of 2022.
Don’t Overstay the Party
- Don’t get overly complacent about the party that the bulls are throwing. Sufficient warning signs are appearing that it’s time to edge toward the exit.
- Investment-Oriented accounts should begin to de-risk their portfolios by reducing their equity weights and lowering the beta of their equity portfolios.
- Short-Term traders may want to stay at the bulls’ party a little longer and wait for a sell signal to turn bearish.
Before it’s here, it’s on Smartkarma
