A wise man once said... "Woooah, we're halfway there." Now that we've closed the book on the first half of the year, it's time to revisit Chief Trends Strategist Matthew Carr's and Engineering Strategist David Fessler's annual predictions. They each made five bold claims in January... back when the infamous "2020" could still be seen in the rearview, the COVID-19 vaccines were brand-new, and 2021 was full of promise and potential. So let's take a look and see how these predictions have fared in the ever-changing, unpredictable landscape of 2021. Matthew Carr- Cannabis Grows Like a Weed: In 2021, I think we will see the inklings of major changes at the federal level - like the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, Secure and Fair Enforcement (SAFE) Banking Act, or Strengthening the Tenth Amendment Through Entrusting States (STATES) Act passing. And I think as many as five more states will legalize cannabis markets this year! I'm watching Connecticut, New Mexico, New York, Pennsylvania, Rhode Island and Virginia.
Sure enough, four of the six states Matthew mentioned have already legalized cannabis markets so far this year. New York's legalization laws took effect in March. And last week, legalization laws took effect in Connecticut, New Mexico and Virginia. With these new laws in place, an estimated 145 million Americans now live in a jurisdiction where cannabis is legal statewide. This state-by-state momentum is adding fuel to the case for federal legalization. Not to mention that the king of American e-commerce, Amazon (Nasdaq: AMZN), publicly stated in June that it will actively support efforts for federal legalization and stop testing its employees for cannabis. - Travel and Leisure Stocks Recover: 2020 was a devastating year for airline, cruise ship, restaurant, movie theater, theme park and travel stocks. As I've already covered in this issue, bankruptcies abounded in these sectors. But in my opinion, these are must-haves for 2021. There is pent-up consumer demand for travel... and being anywhere besides home.
Travel. Is. Back. Matthew's airline stocks to watch for 2021 are all up between 10% and 35% so far this year. And the leisure and entertainment stocks are up between 15% and 25%... with one exception. On December 8, 2020, Matthew said of AMC Entertainment Holdings (NYSE: AMC), "I don't think this is the final nail in the [coffin]... We can't call time of death yet." Boy was that fortuitous! The meme stock is up 2,350% year to date. - The Energy Bull Is Back... for Now: In 2021, expect U.S. crude to retake $60 per barrel - a level not seen since the early days of 2020. Pre-pandemic consumption won't return this year. But I think we'll have a multiyear rally - albeit a bumpy one - in energy. This sector was the worst performer in 2020 by a considerable margin. Time to go discount shopping!
As I write this, the price of West Texas Intermediate crude is $73.43, just as Matthew predicted. Oil use has rebounded as normal activities have resumed and businesses have reopened. This economy has also been a boon for Big Oil names, like Exxon Mobil (NYSE: XOM) and ConocoPhillips (NYSE: COP). - The Stock Market Rally Continues: It's a new year, and there's a new leader at the helm of the U.S. The first year in the modern U.S. presidential cycle that I created is one of the best years for stocks. We've enjoyed double-digit gains on the Dow [Jones Industrial Average] in the first year of six of the last eight presidential cycles. However, we did see two losses in 2001 and 2005. Those are important to note because of the similar economic backdrops. But I think we'll see another year of gains for U.S. stocks, with small caps leading the charge.
The broader indexes are on a roll and sporting gains between 13% and 15% year to date. The Dow is on track to deliver a double-digit gain in this first year of the presidential cycle. The weighted Russell 2000 small cap index is still neck and neck with the S&P 500 Index. So we'll have to wait and see which index emerges victorious. - Bitcoin Tops $30,000: The reward halving that happens every four years triggers a multiyear bull market. In last year's forecast issue, I predicted Bitcoin would have an explosive 2020. Since then, the cryptocurrency has more than doubled and set new all-time highs. But there's still room for this bull to run. I think $30,000 is a feasible target, with potentially a lot more in store. (Writer's Note: I made this prediction when Bitcoin's price was at $20,000. Since the new year began, Bitcoin's price has already surpassed $30,000, so my estimate was far too conservative!)
This prediction came true about 364 days early when it crossed the $30,000 mark on January 2. But, as Matthew admitted, his estimate was far too conservative. Four months later, Bitcoin said, "Tag, you're it!" to $65,000 before retreating to that $30,000 level. So I guess Matthew was more on the nose than we originally thought... | 
No comments:
Post a Comment
Keep a civil tongue.