Pelosky: We’re In A New Bull Market for Equities

Your Real Vision Daily Briefing for June 10, 2020

Ash Bennington joins Jay Pelosky, CIO and co-founder of TPW Investment Management, to unpack his contrarian & bullish thesis on the economy & markets.

  • The S&P clearing the 3,000 threshold two weeks ago may have been the start of a new bull market for equities.
  • The big plays for 2020 won’t be in tech, but in commodities, as well as in value stocks and cyclicals.
  • Pockets of opportunity exist outside of the U.S., particularly in European equities and banks.

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Pelosky argued that although there’s negative bearish sentiment out there, there’s also tremendous liquidity around the world that will find its home in financial assets. He thinks we entered a new bull market for equities when the S&P cleared the 3,000 level two weeks ago.

But according to Pelosky, the big plays for 2020 won’t be in tech, but in commodities, as well as in value stocks and cyclicals.

“The flagship of this new bull market will be leadership away from tech, growth, and the U.S. dollar to other parts of world, to the cyclical, to the value segments, and to the commodity space,” he said. “That’s the area of opportunity.”

One pocket of opportunity Pelosky likes is European financials. With banks selling at 27% below fair value, he said the value is clear. He also pointed to European equities being completely under-owned and trading at significant discount to the U.S. as evidence that there’s tremendous room there. Europe’s Green Deal and joint recovery program are also reasons Pelosky is bullish on European financials.