“For the first time in a long time, this is a stock selection market.”
Quint Tatro
investment director, Joule Financial
Some investors may want to take advantage of the fall in technology, Delano Saporu, CEO and chief adviser of New Street Advisors Group, told CNBC’s “Trading Nation.”
If yields continue to rise despite the Fed’s relatively weak position, technology stocks will face “short-term pressures as the market tries to figure out what’s coming,” Saporu said. “In the long run, I think he will.”
His best options in the group were Microsoft and Apple, the two most important weights in the S&P technology sector.
“In the long run, we will be in a good position,” he said. “So if you’re a long-term investor, this is an opportunity to get a lower valuation and I think in the long run, we’ll see that technology games will increase.”
Saporu was also looking at stocks that could see “the tailwinds of accumulated demand” (indicated that the airline plays Delta and United Airlines in a previous email to CNBC) and the video game and virtual reality industries.
“I want to see … what about cryptocurrency games” and non-expendable tokens, the digital collectibles commonly known as NFT, as video game and virtual reality companies seek to include them in their strategies. ” said Saporu.
This market environment has become a particularly good environment for stock selectors, Quint Tatro, investment director at Joule Financial, said in the same interview with “Trading Nation.”
“For the first time in a long time, this is a stock selection market,” he said, adding that while Big Tech could remain under pressure as rates rise, “there an incredible opportunity to locate other sectors and actions “.
“We would really be sellers of Apple and Microsoft,” Tatro said. “Those … we still see them as home plays, and we would be buyers of Facebook specifically, but also of Google as a reopening and advertising play, as small businesses want to regenerate that growth and really share these shop windows “.
While often linked to technology, Facebook and Google Alphabet are the top two weights in the S&P communications services industry.
Tatro also had his eyes set on a less visible craft.
“I think investors need to look for a little-known sector that we’ve really lost sight of until recently, and that’s the stuff,” he said.
Stocks of materials have increased by around 6% over the last month and just over 8% so far.
“Specifically, I think industrial metals are very, very interesting here,” Tatro said. “We really like some of the steel works: Commercial Metals, CMC and Reliance Steel. These are names that have exceptional rising profits here in the coming years, especially with … the kind of reflection and history of the overall growth back on track, and they have exceptional balance sheets and sell at a real value ”.
Disclosure: New Street Advisors Group, Joule Financial, Delano Saporu and Quint Tatro have shares in Apple and Microsoft. Joule Financial and Quint Tatro have shares of Alphabet, Facebook, Commercial Metals and Reliance Steel.
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