Weekly Briefing 12/27/20 - The Forecast

Weekly Briefing 12/27/20

Weekly Briefing 12/27/20

As 2021 approaches, we want to examine some of our favorite sectors for the upcoming year. We expect commodities to outperform the US stock markets, although they will also gain through most of the year. We look for the US government to finally push their infrastructure initiative forward and pass a multi-trillion dollar package sometime in February. Smart money has been sniffing this out since late September and has already started positioning for 2021. These sectors have seen market leading advances since the fall of 2020 and we expect them to continue into the first half of 2021 with some lasting the entire year.

US concrete is one of our favorite stocks in this space and we expect an explosive move as a long consolidation period ended in the fall of 2020.

The steel sector exploded in early fall 2020 with many big US steel stocks doubling in value. We are watching a few laggards that have not broken out yet and will add some of them to our model portfolio in the days ahead.

Oil services, oil producers, and crude to a lesser of extent are expected to see strong rallies in the first half of 2021 as an end to the pandemic triggers capital flows into energy.

The entire metals complex is set to soar with a weaker dollar forecast for the first half of 2021. Silver will be the largest percentage gainer followed by platinum and gold. Both industrial use and monetary triggers will cause this great rise.

Supply chain interruptions from the Covid pandemic will trigger large gains and price moves in many food commodities. The grains should be a big beneficiary of this crisis.

Stocks are set to have a choppy advance into June 2021 with the Dow capable of seeing 36,000 this year.


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