Volatility

An impossible market to read!!

Usually, midterm years are volatile in the presidential cycle. 2026 has confirmed this to the fullest. We got continuous sector rotation. In February and March, we had a correction. Energy stocks were the only thing that worked. Last month, semiconductors were the new oil, SMH was uo 30%. What sector the market will rotate to this month is impossible to say.

For those who don’t like sharp market moves, the 6 months after the midterm election are normally the strongest in the presidential cycle. No one can guarantee that a democratic Congress will make the President more in touch with reality, but many look forward to the day when there are more checks on his actions. However, before we get there, the chance of getting a new correction is high. Disregarding the closure of the Strait for a minute, and the possibility of a recession, we also get a new Fed chair this spring. The market tends to test the resolve of the new chair. Something that very well can lead to more volatility in and of itself.

Ok, let’s stop the chit-chat and get on with some earnings commentary. I concentrate on my own portfolio companies.

AbbVie

I have owned ABBV for 6 years now and have an annualised return of 29%. Dividends constitute nearly 30% of my total return, so there is a lot to like here from an investor perspective.

I am still bullish on the name. First-quarter earnings were good. Revenues grew over 12% tear-over-ttear (YOY), driven mainly by strong performance from the immunology and hepatitis portfolios. The only thing that disappointed me was weaker growth than I’d have expected in oncology. However, ABBV will soon get approval for several of its new oncology products internationally. So, based only on this, sales of cancer drugs should improve slowly but surely. I have a $245 fair value estimate and see good upside from here.

Amgen

AMGN was one of my three picks for 2025. The stock is up 18% (including dividends) since I recommended it. Back then, AMGN had 10 drugs growing sales in double digits YOY. Now it has 16. Overall revenues grew 6% YOY this quarter, slowing down from the double-digit growth in the last two quarters. Naturally, AMGN also has drugs going off-patent. Most notable is Prolia, the go-to Osteoporosis drug. Nevertheless, Evinity is a good replacement in the same category, especially useful for patients with high fracture risk.

AMGN’s broad portfolio with no make-or-break medicines makes it an attractive investment in my eyes. I have a fair value estimate above $400, so the upside is considerable here also.

Amazon

So far, Apple and Alphabet have been the winners in the Mag 7 earnings season. However, AMZN wasn’t all that bad either, with strong revenue and earnings growth. Still, capital expenditure was the most eye-catching part of the earnings report. The cash burn is nearly eradicating all the free cash flow. Hopefully, the return on all the investments will be strong, but I find it a bit worrisome that so much of AWS’s revenue stems from Anthropic’s model training. One day, the incremental gain garnered from this training will be so low that the load will slow down. Obviously, the thinking is that inference will fill the vacuum in due course. We have to see if this thesis will come true

When you read the AMZN report, you almost get dizzy from all the initiatives the company is pursuing. I don’t fully understand how you can run this company as a CEO or as a member of the board. You must be good to delegate.

Storebrand

Let’s end with some Nordic names. STB is an asset manager based in Norway. I bought the stock in 2018 and have an annualized return of 24% in the name. Obviously, this has been nice eide. Undoubtedly, it is awesome being an asset manager when the market goes up, and the market has been in an upward trend since the Great Financial Recession in 2008-2009. STB reported strong results for the first quarter of 2026. The company buys back a ton of shares and increases its dividend payouts at a brisk pace. The dividends went up by almost 15% this year. Only a real downturn can stop this company in its tracks, and who believes that when Norwegian companies produce almost everything that isn’t slipping out from the Straits of Hormuz. A strong economy equals more retirement savings, and STB stands to gain.

Kesko

Kesko is a Finnish retailer with involvement in groceries, home improvement, and car dealerships. I bought the stock in 2011 and have an annualized return of 22% in the name. This hides the fact that the stock hasn’t done anything since the home improvement craze and the blowout top reached during the pandemic. Now, the home improvement business seems to have bottomed out, and the company is slowly accelerating the revenue growth again. Only Norway (Byggmakker) showed lower sales this quarter. Finland, Sweden, Denmark, Poland, and the Baltics increased sales in the high single digits. The guidance is steadily improving. However, the company says that the war and potentially higher inflation could throw a wrench into the turnaround, making consumers pull back yet again. That said, the burgeoning home improvement recovery is coming from an extremely low base, and therefore, it is hard to imagine the sector falling much further.

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The information in this blog is for educational purposes only, not financial advice. Investing in stocks carries risks; past performance doesn’t guarantee future results. Conduct thorough research and seek advice from financial professionals before investing.

The author is a retail investor, not a licensed advisor. Due to changing market conditions, content accuracy isn’t guaranteed. All investments have risks, including the potential loss of principal. Assess your risk tolerance and goals before investing; diversification is key to managing risk.

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