Lift off for Boeing - Your Money - March 12th 2021

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Well now I have seen everything. It’s déjà vu all over again. I thought Bitcoins were about as far out there as any investor would contemplate. I was wrong. There is something new in the digital world called NFT’s which stand for Non-Fungible Tokens. A “fungible asset” is something that can be readily converted to legal tender aka money.  Well thanks to internet and the mechanics behind virtual currencies, apparently anyone can now create and sell digital version of itself for cash. A digital-only piece of artwork sold for $69 million dollars through Christie’s Auction house. No question it is an interesting piece of art that you can easily look up on the internet but somebody ( I am guessing a group of wealthy millennials) decided that you could charge money for bragging rights of original ownership). I would explain in more detail but I am getting a headache just thinking about the absurdity of it all.

Which brings me to this week’s financial markets action. After a brief downward spiral from February’s lofty peaks, high flying tech stocks and day trading favorites, once again soared leaving logic and value in the forgotten corner. The momentum traders, many of whom must be computers, decided the 12.5% slide in the Nasdaq index was enough and started buying again. In truth the selloff was directly related to spiking bond yields which acts as a sell signal once it broaches 1.60% for ten year bonds. One must remember the sky high growth multiples are predicated on near zero interest rates and it begs the question of just how long can the Federal Reserve keep short term interest rates down when longer term yields rise up? And with the $1.9 TRILLION stimulus Bill getting passed this week, it is just a matter of time before an avalanche of cash finds its way into other assets including stocks and real estate. Did I mention this looks like 1999 all over again? Time will Tell.

In the meantime, coming up next week, US  investors will have to contend with US Retail Sales, Industrial Production on Tuesday, Housing Starts on Wednesday, plus a statement from the Federal Reserve and the Jobless Claims on Thursday. In Canada investors will get inflation data on Wednesday and Retail sales on Friday. As well, earnings season continues with over 200 US companies reporting, including Nike and Fedex and 48 in Canada led by Westshore Terminals, AG Growth, Power Corp and Hexo for all you cannabis enthusiasts.

As for the price of oil, it seems to be benefitting from the recent sector rotation back into cyclicals, but with crude getting close to $70 a barrel, it may run into some overhead resistance. Still the energy stocks had a decent week but fell behind the early week run up in technology stocks led by Blackberry which also appears to be back in the spotlight of the day traders.

Happy Trading and Stay safe

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Steve Bokor

Steve Bokor

Portfolio Manager