If you read mainstream financial media Wednesday, you’re probably feeling uncertain about the old 401k.
Between negative speculations about the delta variant, cryptocurrency regulation or the jobs report miss… It’s almost like the bulls are on vacation.
Source: Bloomberg
Well, except for Robinhood.
But if you look at individual stock market performance — and you have some semblance of macroeconomic awareness — you can start to see a pattern and find the bullish sectors of 2021.
Source: Finviz
Looks like a sea of red, right?
Well, first notice how small the red squares are.
Then notice how the biggest squares aren’t red at all… They’re either brown (down a little), or they’re green.
Now look at how the smaller green squares are located in a few particular areas…
Technology…
Real estate…
Health care…
Non-banking financials…
Utilities…
That’s not an accident. Those are the company sectors and sizes that have generally fared best over the course of history when the U.S. economy has entered into a quarter-long stagflationary period.
Source: Fortune Research
And if we’ve said it once, we’ve said it a thousand times: If you want to beat inflation, you have to own the things that inflate.
The Bullish Sectors of 2021
While in months past, it has been copper, oil, silver, or even steel and iron ore grabbing the headlines — it’s been large cap stocks that have taken center stage in July and August.
And the commodity that’s been performing best?
Power.
Source: Bloomberg
When power prices go up, the companies that sell power — i.e. utilities — make more money.
And the easiest way to play utilities, the Utilities Select Sector SPDR Fund (NYSEArca: XLU), has very quietly put in a solid performance over the past five months.
Source: Bloomberg
Over the course of the next few weeks, we’re going to take a close look at the Utilities sector to see what companies are best positioned to capitalize on that change in power prices.
Because the companies in the most bullish sectors of 2021 — like Utilities — have a statistically significant chance of outperforming the broader market over the rest of the year.
Even in a sea of red, there’s always a bull market somewhere.
You just have to know where to look.
All the best,
Matt Warder
P.S. What I’m about to share is top secret … So please, don’t share it with anyone else.
Most people don’t know this, but there’s a secret calendar that reveals the exact dates certain stocks on Wall Street are going to go up every single year.
I’m serious. This mysterious calendar has spotted a new stock every single week that, once triggered, pops like clockwork.
It’s so accurate, anyone could set their clock to it and watch their trades shoot to the moon — regardless of what’s going on in the rest of the stock market.
