Stocks: Understanding UK COVID data ‘is critical before being able to make real calls': Strategist

Wheelhouse Chief Investment Officer Ann Berry joins Yahoo Finance Live to discuss UK COVID data as stocks are on a high.

Video Transcript

EMILY MCCORMICK: We're sticking with the topics of the markets now with our next guest, Ann Berry, who is Wheelhouse chief investment officer. And Ann, thank you so much for joining us. You just heard Ines at the last part of her segment there talking about the travel stocks and the pop that we're seeing today in those industries. What are your expectations for this group of stocks going forward? And is the worst point for these in the past now that we have this new news with Pfizer out and its booster neutralizing the omicron variant?

ANN BERRY: Well, at the moment, I just find this very confusing because on the one hand, we've got the travel stocks and the reopening trades performing extremely well today in response to the Pfizer news that the booster seems to provide pretty good protection against the latest variant. On the other hand, you've got the stay-at-home stocks rebounding as well, which you'd expect to see happening if there was concern over whether the new variant could be treated effectively or not.

So I think when we unpack this a little bit more, there's a couple of things I'm looking at. I'm extremely focused right now on what's going on in the United Kingdom and what's going on in Europe. Boris Johnson, the prime minister, has just come out and said that he's looking ahead at plan B actions to try and get people back at home and wearing masks indoors.

And one thing I've sort of observed is that the US has fairly consistently been about four weeks behind mainland Europe and the UK when it's come to the severity of strains of COVID. And I think understanding what happens in the UK and elsewhere overseas in the next couple of weeks is critical before being able to make real calls on whether travel is going to continue to rally or whether we're going to see the stay-at-home stocks be relevant again.

ADAM SHAPIRO: Hi, Ann. It's good to see you again. A hospital administrator who lives in my building was talking in the elevator about the fact that no matter how severe here in the United States, we just wouldn't lock down again. This individual saying that in New York City. So as an investor, you've just advised the volatility we witnessed, especially because Europe is about four weeks ahead of us, but knowing that the appetite to lockdown in the United States just doesn't exist, how does an investor position for what could be coming our way and the fact that we probably wouldn't lockdown?

ANN BERRY: That's a great question, Adam. I think it's about having the patience and the intestinal fortitude to get through some of the bumps that are coming. So in full disclosure, I personally invested in American Airlines and in Delta. Both of those have done very well today. I think that will continue to be the case because I'm in agreement with your neighbor. I don't see the US shutting down. I don't think that there's appetite either for regulators or the individual to spend more time at home again.

I do think also other experiential stocks are going to get the benefit of this. So I'm looking at things like Live Nation. I'm looking at experiential retail concepts, where we're seeing very positive signs of activity and growth again, at least in the private sector. And I expect that to continue through into retail traffic, particularly in the early part of next year, as people get back out there in droves again.

EMILY MCCORMICK: And Ann, switching gears here just to look at the cryptocurrency market, of course, I know you were also watching the House Financial Services Committee hearing on crypto this afternoon here. One of the things you noted was that you anticipate that regulation is inevitable. And a desire for adoption does remind you of the kind of Uber demand-led growth that we saw in the ride hailing space. Can you talk a little bit more about that analogy and what investors should expect if that holds in the cryptocurrency space?

ANN BERRY: Sure, well, to take a step back into the history of Uber, this is one where there was huge consumer uptake. I think the regulatory framework was a little bit behind the growth and consumer demand for Uber. And essentially, what happened is municipalities had to adopt their position on rideshare because consumers were demanding access to what was such a transformational technology and a transformational service relative to the availability of public transportation. So you had consumer behavior, consumer demand, forcing changes in rules and regulations to accommodate this.

Crypto reminds me of that a little bit. And I just want to delineate a little bit here. I think the currency element of cryptocurrency is overused. I think there are tokens and memes out there I don't put in the currency bucket. But when I look at things like Bitcoin or Ethereum on your chart, and those really have been the at-scale forerunners of what crypto assets can look like, again, I think there's been such demand, particularly over the last 24 months, by consumers who want to hold this, now by institutions who want to offer the ability to hold it to some of the more sophisticated investors.

And I think as a result, we've got regulators standing here, going, well, we've got to accommodate this. How do we do it to protect the consumer? But I don't think they would be doing this of their own choice and of their own druthers if they could have avoided it. So it's really interesting demand-led regulatory change that reminds me of the rideshare environment.

ADAM SHAPIRO: Ann, I think some of us who are a bit older tend to misunderstand the Metaverse. But then you get something like this deal with Ralph Lauren and Roblox. And it sure feels like it's the 1990s when the internet was taking center stage, that the potential for growth is huge, selling avatar clothing in a game. Ralph Lauren's the head of something. Who else might be following? Because I think investors would want to get ahead of this.

ANN BERRY: I think that's right, and I put myself in that fossil bucket, Adam. You know, I remember exactly the kinds of trends you are referring to that we saw in the 1990s, but which the average user of Roblox won't remember because that really is a very Gen Z heavy platform. I think we're seeing already a lot in the entertainment industry, whether it's the music industry, whether it's the entertainment industry, have been moving very quickly into these Metaverse-related endeavors.

I think the fact that fashion is moving in there is extremely interesting. And real estate, I think, is another asset where are we going to start seeing some of the bigger companies look at trying to figure out how to replicate hospitality offerings or residential type offerings in the Metaverse, in the same way that we're seeing fashion use the Metaverse as a way to increase brand awareness for their in real life activities.

So I think at the moment, a lot of it's about marketing. And I think a lot at the moment is about experimentation. I think that Ralph Lauren's going to learn a ton from this Roblox partnership and seeing how the younger eyeballs really translate that awareness in that Roblox space into their real life purchasing habits.