It’s the “J Powell Show”
Aug 26, 2021Good morning!
The news cycle is quiet, save the things we’ve been talking about for weeks now.
Futures have pulled back slightly ahead of economic data this morning but really, they’ve pulled back ahead of how J. Powell may react to the data.
Here’s my playbook.
1 – Down to Powell
We will get GDP and jobless data today and then things will start moving ahead of the bell. Traders have to be on the gas but are likely to have a muted response ahead of Fed Chair J. Powell’s remarks from the virtual Jackson Hole confab tomorrow.
2 – Big tech is unstoppable
President Biden met with several key big tech and banking execs with an emphasis on cybersecurity. Not surprisingly, reports are flying the morning that those firms will spend billions to “raise the bar” and help make our country a safer place.
I agree and, as I mentioned yesterday, know which companies to buy starting with the presidential invite list.
3 – Amazon is about to “pull an Apple”
Covid variants are raising concerns about another lockdown and more shipping delays. Amazon, unbelievably, came into this week under pressure. I think anybody selling is missing the point.
I did some buying.
Amazon is moving into department stores, medicine, finance, shipping centres, and plans to hire hundreds of thousands of people. The company’s Q2 presentation clearly spelt out the desire to optimize free cash flow.
The invest in growth at all costs model is changing and very few people see it coming.
CEO Andy Jassy is a great choice under the circumstances the way Tim Cook was for Apple when he took over for the legendary Steve Jobs.
4 – Paediatric Covid hospitalizations rise; you know what to buy
Reports show that paediatric hospitalizations have risen to the highest levels since the US started tracking paediatric cases a year ago. Current data suggest the delta variant does not appear to create more severe disease but there is no doubt in my mind that it will prompt even more aggressive vaccine development.
Pfizer (PFE) … you know what to do.
5 – Financials are just a few months away from a new rate cycle
JPMorgan is the biggest bargain of all the financials to my way of thinking. The company is well-run, very focused on digital money and a new rate cycle will be terrific for all the groundwork it’s put in place. The company is going to be a key player in the president’s cyber security initiatives. And I think it’ll become a major player in the post-LIBOR world and one that cuts interbank risk, too.
Bottom Line
People try to invest like everybody else then wonder why they aren’t achieving the results they want.
I say redefine the game.
You got this – I promise!
As always, make it a GREAT day.
Keith
