I realize I might be tempting fate here. The stock market gods are spiteful. They like to reward hubris with a sound smiting.
But I’m going to say it anyway: the stock market has a fantastic outlook.
Commodities like copper and silver are rallying. That’s good for the asset, but also for the miners. The outlook for growth in the electricity generation and transmission market means utilities are now momentum/growth stocks as they sign supply agreements. Power generation like natural gas, solar, and even nuclear are rallying…
Tons of new data centers are in the works, which will help construction. New AI servers are getting bought. Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN) and Meta (NASDAQ: META) each have CAPEX numbers in the mid-$30 billion range.
Microsoft and Apple are adding AI functionality to their new laptops. Throw AI into iPhones and we could see a supercycle for laptops and smartphones that we haven’t seen in at least 6 years.
It’s an AI market. The AI boom has spread to every corner of the S&P 500. That is not a bad thing…
It has been a long time since we enjoyed a rising tide bull market that lifted all ships. Maybe the housing boom in 2003-2005.
Simply put, U.S. corporations are sitting on a ton of cash. Typically they just do share buybacks to improve valuations and get incremental stock price gains. Now they have something to spend money on and are investing in future growth.
Again, this is not a bad thing.
The Rising Tide
The stock market tends to be bullish.
Savita Subramanian, Bank of America’s head of US Equity and Quantitative strategy, is one of the best analysts on Wall Street.
She recently shared her research going back 300 quarters. Out of the last 300 quarters, she found that “20 were recessionary, 13 were stagflationary, and 90% of the time things were OK…”
In other words, don’t be afraid to make hay when the sun is shining. Because it’s usually sunny out. Now, in particular…
On March 10, I wrote about a couple of stocks that would benefit from new Biden administration tariffs on China. First Solar (NASDAQ: FSLR) was trading for $195 a share when I wrote that First Solar would be a big winner from tariffs on Chinese solar panels.
First Solar shares are up $55 over the last few days—nearly 30%.
This move is not an outlier. There are a lot of companies out there who are selling more of whatever it is they sell.
Enphase (NASDAQ: ENPH) makes microinverters that convert the sunlight that solar panels capture into electricity. The stock was a former market darling. It was over $180 a year ago…
Yesterday, the stock broke over $120, up around ~10%. Because if First Solar is going to sell more solar panels, Enphase will sell more microinverters.
If you peg the start date from last March, right after the mini-bank crisis, this bull market is 14 months old. If you calculate it from November when Fed Chair Powell promised interest cuts this year, then the bull market is only 6 months old.
The good people at Bespoke Investments say the average bull market lasts around 3 years.
There is room for stocks to run, and keep running. It is time to make hay (and money).
Godspeed,
Briton Ryle
Chief Investment Strategist
Outsider Club
X/Twitter: https://twitter.com/BritonRyle
You May Also Like:
If you haven’t checked out Hammer’s favorite trade:
https://www.outsiderclub.com/the-best-silver-trade-hands-down/
Here are some utility stocks we like:
https://www.outsiderclub.com/buy-electricity-stocks-now/
If there’s one sector that’s missing out on the bull market, it’s this one:
https://www.outsiderclub.com/ev-sales-growth-is-gone/
