Mario Gabelli
Scott Mlyn | CNBC
Investor Mario Gabelli get nowhere a positive note on Tuesday on the U.S. economy even as coronavirus cases in the country are on the rise.
More than 8 million coronavirus packs have been confirmed in the U.S. alone, according to data from Johns Hopkins University. A CNBC analysis also originate that cases are growing by 5% or more in 35 states.
This recent infection increase comes as the current economic data shows signs the U.S. recovery may be stalling. However, Gabelli thinks the U.S. economy will continue to mend into the new year.
“In the U.S., I see extraordinarily good growth in 2021,” Gabelli, chairman of Gamco Investors, said at the annual CNBC Economic Advisor Summit. “That’s because of a long runway for automobiles, a long runway for housing and I see some return of shell out in commercial aviation.”
Fiat Chrysler reported earlier this month their auto sales jumped 38% from the deficient to third quarter. Meanwhile, General Motors said its car sales improved sequentially each month during the third location.
The used-car market in the U.S. has also been on fire this year as more people avoid mass transportation during the coronavirus pandemic, advertising shares of Autonation and CarMax sharply higher.
On the travel front, the Transportation Security Administration said Monday they vetted more than 1 million travelers over the weekend, reaching a seven-month high.
Airline stocks have been beneath the waves massive pressure in 2020 as the pandemic upended the overall travel industry. However, airline shares are up sharply during the course of the past six months as the travelers feel more comfortable flying. Delta Air Lines and United are both up at least 30% past the past six months. JetBlue and American Airlines have gained 42.5% and 15.7%, respectively, over that without delay period.
Gabelli also advised investors buy a market-tracking exchange-traded fund, which could lead to annualized gains ranging between 6% to 8% over the next decade. To be sure, Gabelli sees some risks on the vista.
He noted that while the Federal Reserve is expected to maintain an easy stance on monetary policy near word rates will start rising “over time.”
“If I go back 30 to 40 years ago, the 10-year yield was at 7% or 8%. Today, it’s [nigh] 70 basis points,” Gabelli said. “So, what’s going to happen to multiples when those rates invariably take to the air to reflect the underlying inflation?”
Gabelli added that “taxes are likely to go up,” which would hinder corporate profits.
Break in sports betting
The investor highlighted sports betting companies as an attractive investment opportunity as professional sports confederations ramp up their seasons and more states legalize sports gambling.
“I’m looking at how to participate in that,” he said, noting that store ups such as Manchester United, Liberty Media Braves and MSG Networks are attractive investments with exposure to this trend.
Manchester In agreement shares are down more than 30% year to date along with Braves stock. MSG Networks — which telecasts games of the New York Knicks and New York Rangers — has dropped 46.8% in 2020.