Another week. The rally continues for U.S. stocks, and I think that it can go further if the S&P 500 breaks through technical resistance at 3,000. (We closed today at 2,930.) The tech-heavy NASDAQ 100 (QQQ) now is +7% for the year. The broader S&P has bounced +31% off its March 23 low, but it’s still -9% in 2020. Of course, the COVID tragedy and the expected euphoria from rebounding from it have whipsawed the market, unlike anything we’ve ever seen. I chose “expected euphoria” carefully. Stocks have priced in a quick and strong V-shaped economic recovery this fall. Our explosive rally in equities has proven it. This consensus view better be right, or there’ll be hell to pay with securities prices.
This week, I started investing for a new client. She’s older, so she’s sensitive to taking too much market risk. However, she’s also cool with owning Amazon (AMZN) and a few other beneficiaries of the transition from the analog to the digital world. Yes, I bought AMZN and a few other tech favorites, but the bulk of what I invested in for her wasn’t tech companies but perhaps steadier firms outside the sector that have been and will be leaders during and after COVID. They included health care titans like Johnson & Johnson (JNJ), Bristol-Myers Squibb (BMY), and Baxter International (BAX). I also added retailers like Costco (COST), Walmart (WMT), and Dollar General (DG). Today’s “haves” in retail seems to be those that cater to the price-sensitive customer, and, better yet, they successfully sell online. The rest of this sector could be gutted.
As you know and by now are bored hearing or reading, I’m all about digitizing portfolios by only owning stakes in companies that won’t just survive COVID but will thrive after it. Even for this tech guy, there are plenty of stocks to consider that make the cut that isn’t headquartered in Silicon Valley. However, I do insist on one thing for these candidates: Each must be the innovator and must leverage technology better than its peers. If you want to see how the tech markets were doing a few weeks ago, check out: A Recent Look At Technology Companies And The Stock Market By Paul Meeks.
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Investment Committee Member Paul Meeks was on CNBC’s Squawk on the Street to discuss his broad take on equity markets and government impact on certain stocks. Watch here!
Paul Meeks was in a Barron’s article regarding Arm’s IPO price and gives his thoughts on the nature of the valuation. Read here for details!
Paul Meeks was featured in a CNBC article explaining why he may buy certain tech stocks after the hype has ran its course. Read the article for details!