Episode 379: The Three Sectors Investors Are Flocking to Today

On this week's Stansberry Investor Hour, Dan and Corey welcome Pete Carmasino back to the show. Pete is chief market strategist at our corporate affiliate Chaikin Analytics. He's also editor of the Chaikin PowerTactics and Chaikin PowerTrader newsletters. With more than 25 years of experience in the financial-services industry, Pete joins the podcast to share some of his wisdom on sector rotations, pullbacks, and the housing market.

Pete kicks off the show by talking about the Federal Reserve cutting interest rates, unemployment ticking higher, and the difficulty bond managers are having with timing the market. He also shares his thoughts on the Sahm Rule indicator, which says we're currently in a recession. Pete believes that Fed Chair Jerome Powell will only do a 25-basis-point rate cut, but that ultimately Japan will be the deciding factor in Powell's decision. This leads to a conversation about sector rotation and which sectors are outperforming today...

I think we have to be cognizant that rates are going to drive volatility and returns. And that's driving sector rotation right now. We're starting to see tech and semis and things of that nature take a breather. And what's rallying? Utilities, [consumer] stapes, REITs [real estate investment trusts]. I mean, it's not a secret. It's out there. Everybody can see it if you just look at a performance chart.

Next, Pete gives pointers on how to find investing opportunities within market rotations and pullbacks. He explains that a lot of the sectors that are thriving today serve as bond proxies, and a lot of the individual stocks that investors are flocking to are safe havens that pay high dividends. After, Pete talks about the trend in oil and gas prices over the past two years and how it has been influenced by the White House's efforts to refill the Strategic Petroleum Reserve.

[The White House] told the world, "We're going to buy between $67 and $72." Well guess what? Oil has rarely got below $67, and when it has been above $72, it's not above there very long. But it is trading there, at the bottom of that range, right now... It's the seventh time since they made that announcement that it has got back to $67.

Finally, Pete shares why he believes the housing market is on its way to reaching an "equilibrium" between buyers and sellers. He says housing prices can stay high (benefiting sellers) while interest-rate cuts will lower mortgages (benefiting buyers). Pete also cites increases to the lifetime gift/estate tax exemption as a reason for the influx of competitive all-cash housing transactions...

You have a certain amount of money you can give to someone who receives it tax exempt. And there's a lifetime limit on that. That limit in 2024 was $13.61 million... So if Mom and Dad have accumulated a lot of assets and they want to see their kids use it, [they give them money]... You're seeing people come in, boom, cash down, no negotiations, close in three weeks.

Click here or on the image below to watch the video interview with Pete right now. For the full audio episode, click here.

(Additional past episodes are located here.)

The transcript is coming soon.