Seems like it’s been close to two years since we’ve heard some genuinely good news, but that’s exactly what we got Friday. What’s even better is I have some winter 2021 stocks to watch as this market picks up steam.
Nonfarm payrolls came in at 531,000 — well above market expectations of a 420,000 gain.
The market shouldn’t have been surprised, however… The data has been telling us that all along.
COVID-19 cases peaked in September…
Source: Bloomberg
Retail activity picked up slightly in October, as shown by Google mobility data…
Source: Google, Our World in Data
People started to travel again, as shown by TSA traveler throughput…
Source: TSA, Bloomberg
The news that Pfizer’s oral antiviral medication is 90% effective in treating COVID-19 almost felt like an early Christmas present.
And with Bloomberg once again putting the infrastructure bill front and center in its coverage, I’m positively giddy.
Source: Bloomberg
If that passes, it should provide support for both our latest infrastructure plays, copper producer Freeport-McMoRan Inc. (NYSE: FCX) and our Energy Crisis stocks.
And frankly, other than perhaps a 2% to 3% pullback around options expiry in two weeks, I’m starting to suspect this little market run may have enough juice to continue through the holidays.
Winter 2021 Stocks to Watch
With that in mind, there have been several opportunities this week to buy both natural gas and coal, as each one searches for a seasonal bottom.
This is normal price action for this time of year, which is why I’ve suggested establishing positions gradually. It’s a marathon, not a sprint.
Weather, like volatility, happens slowly at first… And then it happens all at once.
Our job is to be there with our catcher’s mitt when the “all at once” happens.
Interestingly, the winter 2021 watchlist of stocks to watch aren’t energy names, however.
In fact, they aren’t even green!
Source: Fortune Research, Bloomberg
Gold and Treasury bonds absolutely ripped Friday because interest rates — with which they are negatively correlated — fell.
Source: Fortune Research, Bloomberg
That is a BIG higher low on a chart move that’s trending upward… Those moves don’t last.
If interest rates are still down in this area when I sit down at the desk on Monday, you can bet we will be buying the heck out of the Proshares Ultrashort Gold ETF (NYSEArca: GLL) and the Proshares UItraShort 20+ Year Treasury ETF (NYSEArca: TBT).
I can’t wait… catch you all next week.
All the best,
Matt Warder
Fortune Research
