They usually refer to this time of year as the “summer doldrums”, when market interest and volumes dry up; but this isn’t your average year and this isn’t your average market. There is so much going on out there right now that it’s hard to even know where to start, but below I’ve touched on a decent handful of stories with the hopes of maybe shining a little light on some less-travelled corners of the market.
It’s good hunting season in the markets as overall global liquidity is outweighing economic fears. One thing that I’ll say that I’m hearing and seeing a lot of is a lot of pent up demand for products and services. Everything is on back-order, prices are firm or rising, many businesses are stretched to their limits, and just try to buy a sheet of plexiglass or a wood 2×12 right now… or maybe a home appliance. Backlogs are stacking up. All of that economic activity that just didn’t happen/isn’t happening in Q1/Q2/Q3 is going to mean that business are going to be running flat out to catch up and that’s going to last for a while. I’ll call it “deferred demand”. Whenever coronavirus fears officially fade into the background (novel threats only remain novel for so long), the consumer seems to be lining up to pull on industry in a major way. It’s going to be interesting to watch and should be good for a lot the “stuff stocks” that I’ve followed through the years. Remember gold, energy, fertilizer, natural gas, copper, nickel, uranium, and lithium (to name a few)? You know, those pesky materials and energy sectors? They’re baaaa-aack…