Stocks mixed but on track to post weekly gains

Yahoo Finance's Kristin Myers and Victoria Greene, founding partner at G Squared Private Wealth, discuss the latest market catalysts.

Video Transcript

KRISTIN MYERS: Taking a look again at market action. Again, the Dow remains in the red. So let's chat more market moves with Victoria Greene, chief investment officer at G Squared Private Wealth.

So Victoria, I want to start on this market action that we have going on right now. We've been seeing lately that we see these record highs, and then that rally sort of stalls out, or takes a bit of a pause. I'm curious to know if you think that given the current environment that we're in right now, if markets are really searching for a specific catalyst to send them higher? And what might that catalyst be right now?


VICTORIA GREENE: Well, certainly everybody's waiting on stimulus to get through and see what that looks like. People certainly would like some checks in the mail, it'd be a nice little pick up here in first quarter if we could get that out. I think if you had that pass through as well continue to increase the number of vaccines to people, both of those are great things.

Look, earnings came in great. They were super strong with like, I think, 80% reporting. It was an aggregate beat of almost 17% above estimates. I mean, we're looking at a pretty bright future. I think some of this stalling out is a little consolidation and then we can continue to move on up.

KRISTIN MYERS: Well, if we don't get that next catalyst, for example you mentioned stimulus, I'm wondering if you think that a pullback or perhaps even a correction might be due for the markets up ahead? We've had a lot of analysts say that they do believe that given that there's so much run up in some of these stocks that we could be seeing some sort of a correction coming up.

VICTORIA GREENE: It certainly could happen. We kind of look a little longer term. We don't necessarily say, is this going to be a good month or a bad month? We say, are we expecting 2021 to end up higher than where we are now? And we're certainly bullish on 2021.

Absolutely, you could see a correction, especially if stimulus falls apart, somehow if inflation takes off, and the Fed starts to get antsy. You certainly have those bear risk always lurking, but we look at that and we say do the bears outweigh the bulls? And right now, I think you have a high probability you're going to see some of those catalysts. And we are definitely buyers of the dip, versus sellers of anything we see right now.

I also think you've got a solid recovery play. People are going to get back to work. People are going to start spending a little money as they get more employed. Travel is going to pick back up. I know it's not perfect. I'm not saying the world is perfect and great, but I do think the world's going to get better from where it is now. And typically, the markets are forward looking and a leading indicator, and that leads me to believe even if we see this small correction or pullback, I really would buy it.

KRISTIN MYERS: So then looking out on 2021, a lot of folks have said tech probably is not going to be the market leader this year. What are you looking at as the market leader for 2021? What sectors right now are of greatest interest to you?

VICTORIA GREENE: Well, I know it's slightly unpopular, but we do like energy. We tend to think they're extremely reasonably valued. We've seen some great support both from OPEC holding the line a little bit nicer for us here in America and then we've seen companies that are just performing well. They've had good capital discipline. Certainly, there's a little regulatory risk there, but they've got good cash flows.

And we think energy is a very nice undervalued part of the market, as well as we want cyclicals in this early stage. We still think we're in the early stage of recovery, so industrials, energy, financials, those are all great places that maybe you're paying a little less multiple than you'd be paying for, say, a tech stock right now. And I think that's where you want to look at this market. Look a little bit more value. Don't go chasing things that have performed so well it's going to be difficult for them to continue to outperform going forward.

KRISTIN MYERS: And as everyone can see there a moment ago, energy is up about 1% right now leading the market. We have crude right now up about 2 and 1/4 of a percentage point. I wanted to quickly ask you-- I have about a minute left with you here, Victoria. I did want to ask you about Disney earnings. They really smashed a lot of those expectations around their subscriber growth for Disney Plus. I'm wondering if you think that Disney longer term is going to be able to maintain that growth? And that's been a huge question for a lot of companies after 2020, pulling forward a lot of growth for so many companies. Can they maintain that? And do you think just looking at that space that consolidation is coming?

VICTORIA GREENE: It is. [LAUGHS] Well, I think somebody is going to reinvent cable with putting together all of these streaming companies that are coming out. Now you've got Discovery Plus, and all of these different platforms, and somebody is going to honestly end up bundling them back at some point in the next decade. But yes, there's more competition there.

However, Disney Plus subscriber growth is so much faster than Netflix's right now. I think they're gaining market share. Don't forget, Disney also has Hulu in their portfolio. It's often overlooked, but they really do control Hulu as well. They've got great content.

And if you look at what they're direct to consumer-- possibly to the detriment of movie theaters, Disney is fairly smart with their positioning. If they release more on their streaming systems versus in the theater they may be able to continue to grow at an increased rate. And look, they smashed expectations. So I think that, honestly, it would be more Netflix I'd be worried about than Disney Plus, because I think they suddenly have a lot more competitors. And for a while there they were the only dominant player really in the streaming space and now you've got a lot more competition.

KRISTIN MYERS: It's so funny you say that. I have so many of these platforms now. I'm thinking to myself, I might as well go back out there and buy a cable package all over again. Victoria Greene, chief investment officer at G Squared Private Wealth, thanks so much for joining us today.