Opportunity in food and energy stocks

Buy food and energy stocks

I highly recommend buying energy and fertilizer stocks. They pulled back and consolidated today and they’ve been very strong for the last several days. So if you haven’t bought the food and energy stocks, today is the day to buy it. 

This is quarter-end window dressing season, and a lot of stocks are doing very well, especially the inflation plays such as domestic energy producers, domestic and international fertilizer companies, and shipping stocks as the shippers are profiting from all the supply chain bottlenecks. I also have plenty of steel stocks despite news of the Ukrainian situation is messing up the steel market.

Since we have stagflation, food and energy prices are going to remain high. So let's go ahead and profit from it. The main thing is at the end of this quarter, we're going to be locked and loaded for another round of record earnings.

It's surprising that sales and earnings are accelerating. I thought we'd be decelerating now because of more difficult year-over-year comparisons but that's not the case. There is an oasis out there and a silver lining critical path that you can follow.

It's an exciting time for the stock market. Stocks are clearly a great inflation hedge. I know that many believe that real estate is a good inflation hedge too but you see the Feds trying to raise rates and existing home sales are now down year-over-year so the stocks are going to be the best inflation hedge.

Fed infighting

There's all this infighting now on the Fed because St. Louis Fed President James Bullard is demanding we do twelve rate increases this year and get the federal funds rate to 3%. But the Fed does everything based on a committee, a consensus. The Fed also follows market rates, and market rates are going higher.

The two-year Treasury yield crossed above 2% yesterday, and there's hardly any difference between the five-year, ten-year, and thirty-year Treasury yields. The yield curve is very flat and if the Fed actually inverts the yield curve, they're going to hurt the economy. They're going to hurt banks, which they regulate. And that's what happens before you go into recession.

We're watching all this very carefully right now and I think the Fed is still going to move in baby steps.

Coffee beans

Unsafe water killed around 485,000 people in 2020 - more than disasters and conflicts which killed 8,200 and 87,400 people respectively. 772 million people around the world still lack even basic access to safe water, especially in Africa.