On today’s episode of Free Lunch, Ryan McQueeney is joined by Zacks Strategists Tracey Ryniec and Kevin Cook to discuss recent stock market selloffs and inflation concerns. The value and technical experts offer fresh perspectives on buying the dip, reading the charts, and interpreting the latest CPI read.
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Free Lunch is presented by Zacks Investment Research. It is streamed live, four times per week, and features breaking news and analysis from Zacks strategists. Free Lunch is available on YouTube, Facebook Live, Twitter, Ustream, and more.
U.S. stocks witnessed their worst day in eight months on Wednesday, and selling continued into early trading Thursday. The Dow has plummeted, the broader S&P 500 has suffered, and the tech-heavy Nasdaq has been hit the hardest. Investors seem to be pulling out of profitable trades and taking time to sit on the sidelines amid extended stretches of rising bond yields and inflation concerns.
To discuss this, Ryan McQueeney sits down with Zacks Strategists Tracey Ryniec and Kevin Cook. Tracey is Zacks’ resident value guru and edits our Insider Trader and Value Investor portfolios, while Kevin handles—among other things—the TAZR, or Technical Analysis & Zacks Rank, service.
Tracey and Kevin offer their unique perspectives on what has occurred this week. For instance, Tracey explained that the valuation picture has become more attractive for FANG stocks like Amazon AMZN and trendy momentum stocks such as Square SQ.
Kevin suggested that he saw this type of selling coming and actually showed a trade involving the Direxion Daily Small Cap Bear 3X TZA, which he executed in the TAZR portfolio.
Both strategists also discussed the impact recent volatility has had on Chinese tech giants like Alibaba BABA. Tracey and Kevin agree that, although a rebound could come, China’s economy is in the midst of a significant transition and likely will remain challenged by a number of headwinds.
There is also some speculation as to whether this week’s selling sets investors up for a profitable earnings season, as Q3 reporting is really kicking off in the coming days. The first batch of reports to watch comes tomorrow from the big banks, including JPMorgan JPM.
The group also chatted about September’s Consumer Price Index data. Wall Street got the latest read of the CPI on Thursday morning, with results coming in cooler than expected. The September CPI advanced just 0.1%, down from the 0.2% increase it notched in August. Over the past 12 months, the CPI increased 2.3%, slower than the trailing 12-month read of +2.7% seen in the previous report.
How does inflation factor into this equation? Has the Fed been transparent with Wall Street about its rate hike schedule? Find out the answers to these questions, and more, only on today’s special edition of Free Lunch!
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