Jennifer Radman's Top Picks: December 6, 2021
BNN Bloomberg
Top picks from Jennifer Radman, head of investments and senior portfolio manager, Caldwell Investment Management
Jennifer Radman, head of investments and senior portfolio manager, Caldwell Investment Management FOCUS: North American large cap stocks
MARKET OUTLOOK:
Market volatility has spiked recently as investors digest how central banks will navigate the cross-currents of strong economies and rising inflation against the ongoing uncertainty and disruption from a changing COVID-19 environment.
These cross currents are happening at a time when the S&P 500 Index sits over 30 per cent higher than its pre-COVID highs. From our perspective as bottom-up investors, markets over the last year+ have felt like a series of macro-driven trades, with narratives and investor positioning shifting rapidly under a ‘shoot-first, questions later’ mindset.
Companies that benefited from the initial COVID-19 economy are now facing tough earnings comparisons. On the flip-side, companies that were badly hurt by the COVID-19 economy have seen their share prices sharply recover in anticipation of stimulus-supported recoveries in their earnings.
Structural winners reflect premium valuations while structural losers risk being value traps. Without ongoing central bank stimulus and in the face of rising interest rates, markets lose a powerful tailwind.
