Q: Hello 5i Team
Today we went from one extreme to another in the market.Do you think today’s market reversal is a signal to start buying some depressed stocks or should we take a wait and see approach?
Thanks
Today we went from one extreme to another in the market.Do you think today’s market reversal is a signal to start buying some depressed stocks or should we take a wait and see approach?
Thanks
5i Research Answer:
Before all the tariff talk, the US economy was strong, earnings were good, and inflation was nearly fully under control. The tariff flip flops caused uncertainty and surely set up future inflation. IF we were confident that tariffs are completely dead, we would be aggressive buyers. BUT... a 90 day pause is not quite an 'all clear' signal. We do think the rally continues a bit--there is a lot of ground to make up. But there is plenty of uncertainty still, and one Tweet could end this party just as quickly. So, we would be OK buying, but for now would continue on a slow accumulation pace and not all at once.