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How to invest in energy and metals as tech stocks crash - YouTube
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today we consider the ongoing market
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volatility it's been one of those weeks
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they
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happen unfortunately
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there seems to be a perfect storm of
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negative news stories and markets have
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got the jitters
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first there's the mounting conflict on
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the russia ukraine border the
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implications of which are tremendous
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never mind the potential imminent war it
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has also revealed just how vulnerable
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the divided west now is
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then there is the triple threat
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emanating from the federal reserve as it
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faces the challenge of inflation which
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is now very real and present even if you
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use the central bank definitions
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asset price inflation has been rampant
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for decades now it has spread into
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consumer prices
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so why do i say triple threat from the
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fed here is why
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one there is a likelihood that interest
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rates go up
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then there is the tapering that is the
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fed reducing the amount of money it
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prints to buy financial assets thirdly
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there's so-called quantitative
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tightening qt
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whereby the fed actually sells off some
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of the nine trillion dollars in assets
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it currently holds
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whether the fed will follow through with
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this triple threat remains to be seen
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the federal reserve didn't raise
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interest rates on wednesday they delayed
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again but said such a move will soon be
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appropriate whatever that means march
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seems likely
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tighter policy will be needed to control
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inflation jerome powell has said but how
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tight
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can the fed go not very is the answer
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wall street is addicted to stimulus
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goldman sachs has argued that the fed
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will need to hike four times this year
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while the respected market historian
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russell napier estimates that one and a
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half percent
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is as much as the economy can take
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currently we stand at zero
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add to this perfect storm the unwinding
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of one of the most incredible bull
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markets we've ever seen in history the
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tech bubble or bull market of the last
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10 years your choice of word will depend
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on whether you were invested or not
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and you can see why it's been such a
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gruesome week
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the big names in the nasdaq propped up
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the index in the latter part of last
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year while the non-mega caps were in
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decline but in 2022
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even the once seemingly impervious big
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names like amazon facebook apple
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microsoft alphabet google have taken a
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battering
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and of course in the land of bitcoin
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another crypto winter is upon us though
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i'm impressed by the way bitcoin's been
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steadily rallying this week times like
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this however can be very instructive
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what holds up best
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will be the place to be when the
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inevitable rebound comes and what was
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holding up best are metals and energy at
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least until powell made his speech on
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wednesday
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usually when you get these periodic pops
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of the everything bubble you would
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expect them to sell off and harshly too
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they sold off a bit but nothing like
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what we've seen in tech
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and why is this bad news for powell
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because the rising prices of metals and
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energy especially energy
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lead to a very apparent rise in the cost
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of living and will likely make their
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presence felt in the forthcoming
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consumer price inflation data putting
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more pressure on powell to tighten
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both brent and wti crude remain around
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85 dollars a barrel seven years high
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the same goes for heating oil and
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gasoline natural gas always seems to do
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its own thing but it's making a low
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after its october to december sell-off
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they've been strong turning to the
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metals in the base category the uptrends
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in lead iron or zinc aluminium they're
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all intact nickel to an extent to some
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have been more volatile than others
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nicholas specially but the broader trend
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is upwards they took a bit of a
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hammering
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after powell's announcement copper is
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still in consolidation mode after its
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bonanza 2020 in the first half of 2021
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but it's holding up near its multi-year
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highs platinum and palladium especially
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are going strong and so were the
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perennial disappointers and
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precious metals until powell spoke and
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then gold and silver got hammered
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but the short of it is this it looks
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like base metals and energy are going to
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have a pretty good
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2022 they are the place to be and the
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simplest way to play this is to own a
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company i've touted many times before
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and contin to continue to talk bhp group
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uh ticker symbol bhp on the lsc which is
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diverse
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fired across the energy and metal sec
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sectors
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or you might consider blackrock world
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mining trust that's brwm
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or the blackrock energy and resources
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income trust
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b-e-r-i all the i-shares oil gas and
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exploration production etf
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spog all on the lse these are all low
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risk ways to play the ongoing bull
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markets in metals and energy
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thanks very much for watching please
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subscribe to the channel i'll be back
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with another video very soon until then
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goodbye
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and
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good for you huh
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