Now that we’ve had a few trading days in this new year, we can make some observations. Admittedly, it is very early, but stock markets are still in good shape. Volatility may be increasing, but there still seems to be plenty of money on the sidelines that comes in on even short-term setbacks. Some of the very depressed stocks in December are recovering in January. This is probably a result of year-end tax selling.
It is still too early to determine if investors are making a shift from yesterday’s to today’s new leaders. So far, the previous leaders are continuing to show strength. However, leadership has broadened including many names from more sectors. Some industrial, healthcare, and financial stocks are making impressive gains.
The Bull has forecasted that there would be a shift to more value oriented and cyclically sensitive companies. Many of these are comparatively cheap with excellent prospects. This trend started in August of last year. We expect it will continue and even gain momentum. Supporting the prospects for these companies is improving economic activity both here and in many other parts of the world. Obviously, anything can change, we are at the beginning of the earnings reporting season for 2019 results. These and company commentary as to their expectations will tell us more. Stay steady, my friends!
The Lonely Bull