Kim Bolton's Top Picks: October 20, 2021
BNN Bloomberg
Top picks from Kim Bolton, president and portfolio manager of Black Swan Dexteritas
MARKET OUTLOOK: After hitting a record in the first week of September, global equity indices retreated more than 5 per cent and then regained some ground in early October. The reasons for the September slump – a fast increase in global interest rates as inflation fears festered, uncertainty around the U.S. debt ceiling issue, plus hawkish global central bank rhetoric and actions – were also the reasons for the October rally.
Come October, the markets now had more stable interest rates, the U.S. Federal Reserve indicated they would be slow and steady with their taper and late 2022 rate hike; and at least we won’t have headlines about the U.S. debt ceiling for a few more weeks.
Stock markets turned their attention away from macro issues to micro issues in mid-October with the arrival of the Q3 earnings season. The first inning of the earnings season belonged to the banks which provided strong metrics on spending and lending in the economy.
As other factors continue to bite businesses and consumers alike, it will be crucial to see how supply chain disruptions, inflation, higher energy costs and labour shortages affect other sectors of the global economy. This quarter’s earnings reports and company specific guidance will provide the ammunition for the remainder of 2021’s stock market direction.
In this environment, we have positioned the BSD Global Tech Hedge Fund with the expectation of more market volatility: the Fund is 95 per cent invested across a couple dozen tech vendors and tech end-users, with a 42 per cent short equity indices hedge on the invested stock portfolio, that will incrementally grow with a ‘laddered’ Nasdaq put option position if the market deteriorates. TOP PICKS:
Monday.com (MNDY NASD) Monday.com is an Israeli company specializing in the development of software applications and work management tools. The company provides a cloud-based visual work operating system that consists of modular building blocks used to create work management tools for marketing, project management, software development, CRM, business development, consulting, and other fields.
