This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking with Ryan Detrick, chief market strategist at LPL Financial.
Among the topics covered:
Appearing on Alpha Trader right in the middle of the March 2020 panic, Detrick cooly explained that the market had more than priced in an earnings disaster, making stocks a buy. Fast-forward 17 months, and we’re in the middle of what might be one of the best earnings seasons ever. So yes, things are a bit perky right now, but the major structural bull market remains intact, says Detrick, expecting stocks to continue to outperform bonds over the next 6-12 month timeframe

The bond bears may have thrown in the towel, but Detrick sees yields creeping higher throughout the rest of the year alongside a still-growing economy and rising inflation expectations. He thinks 1.75% on the 10-year Treasury (vs. the current 1.18%) isn’t out of the question

As to whether we’re entering a new 70s-style period of galloping inflation, Detrick isn’t so sure. He notes the continuation of many of the same factors that have held inflation in check - technology and the Amazonization of the economy, to name two - for the last decade. That doesn’t mean we won’t continue with some strong inflation prints for the next year or two as the economy continues to emerge from the 2020 recession

Turning to favored areas, Detrick and team continue to modestly favor value vs. growth for the rest of 2021. And that leads to favoring cyclical sectors like financials, industrials, and materials.

Links of interest:
This earnings season is an upside record-breaker

Detrick’s March 10, 2020 appearance on Alpha Trader

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