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Stocks ripped higher on Monday with no clear catalyst and relatively light volume. After three straight weeks of declines for the major indexes, the most likely reason for the improvement in sentiment was just gloom fatigue.
Meanwhile, over at the Federal Reserve, there were some new comments out from San Francisco President John Williams. In a Q&A session late on Friday, he said that two or three rate hikes this year makes sense, noting stronger labor indicators and dissipating temporary headwinds, like the stronger U.S. dollar. He argued that delaying hikes this year would mean more aggressive hikes in 2017.
Elsewhere, Richmond Fed President Jeffery Lacker said he believes that the case for hiking in June is “pretty strong.” In an interview Lacker stated that there are good arguments for raising rates next month. He cited inflation moving towards the Fed’s 2% target and tightening labor markets.
The market did not really respond to these hawkish views on Monday, but there could be a delayed reaction later in the week.
With all the macro data and micro developments sloshing around, Monday was a session that just as easily could have resulted in losses. And that is the trouble with the current market environment overall: There’s been a whole bunch of these 1% up days and 1% down days…but, net-net, the market has gone nowhere over the past year and a half
Regardless of the broad market’s dull demeanor, we have found plenty of ways to prosper by playing the smaller rebounds and advances.
CoreSite Realty (COR) owns and operates data centers around the United States from its headquarters in Denver. It is one of the handful of real estate trusts that, essentially, houses “the cloud” that everyone is excited about these days. Shares have done very well this year, but are still relatively cheap, at about 15x forward earnings. Plus, it is just a $2.3 billion company in an industry whose leaders are more like $15 billion in size. And it pays a 2.8% dividend yield.
Buy COR on this pullback at $76.50 or better.
Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader’s Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments.