Chris Forte’s “Thoughts to Start the Day” – S&P

Posted on July 14, 2022 by Scott Shuda

Do you have an irrepressibly optimistic friend? Is his name Brian Belski? The BMO Chief Investment Strategist has been even more bullish than usual.

“Stocks lead earnings which lead the economy. The stock market has already told you we’re in a bear market. Are we in a recession, maybe not, it’s a mute point. By the time the economy recesses the stock market will be up if you look back at other post recession periods.

We think earnings will surprise to the upside. Earnings and employment tell us the signs of a recession are mute, The three C’s. . . Consumer is strong, Credit is strong and Capacity is no where near over-capacity. So we are bullish.

We think the earnings will come from the Financials, Healthcare, Communications Services, Energy, and Technology. The stable part of Tech is where the earnings surprises will come from.

There is a lot of negativity and investors are way too “macro oriented” and not enough “Stock Market oriented” which has done its job by taking out the froth. I believe the secular bull market is very much in play, and this cyclical bear market has supplied a great generational opportunity to buy stocks.

Lastly, we have a 15-20% rally coming due to pent up negativity. I think the market will recover from this negativity, it’s not as bad as everyone says it is. When things go up they go up a little too far and the same on the way down. The recovery will be saucer shaped, not V shaped so you have to be a stock picker.”
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QUICKIES
*“Jim Lebenthal, Cerity Partners: I look at Financials as cyclical. What will drive Financials is loan demand, which is coming from the industrials, the materials, and the energy companies that will be feeding into this on-shoring and infrastructure spending.
*Oppenheimer says Digital Turbine (APPS) could be “in play” as an acquisition target because Unity(U) announced it is merging with ironSource (IS) in a $4.4B deal.
*Breakout Investor Ashleigh Day posts two articles on the Feed. The first mentions Aehr Test Systems (AEHR) in “Semiconductors Used in Variety of Applications Drives Wafer-level Test and Burn-in Market.” The second is an investor presentation for QuickLogic (QUIK).
*Ashleigh also states, “AEHR gave a talk at the annual CEO summit today…stock is outpacing semis and market, perhaps related or anticipation of earnings.” AEHR ended the day up 8%.
*Billionaire investor Leon Cooperman writes, “I’d rather be in a common stock than I would be in a bond any day of the week, given the relative price of bonds versus equities.” Cooperman goes onto explain that inflation is running at nearly triple the rate of bond returns, resulting in a negative real yield. “It makes no sense, and that makes everything in the stock market look attractive.” – Tipranks
*Scott Shuda points out QIPT has risen from $4.40 to $5.32 over the last 8 trading days and is above the 200 dma. QIPT is a home healthcare company.
*Rory McIlroy enters as the betting favorite of the 2022 Open Championship at the Old Course at St. Andrews


I’ll always remember the day I broke ninety. I had a few beers in the clubhouse and was so excited I forgot to play the back nine. – BRUCE LANSKY
Good luck to all – Chris

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