Market bull John Stoltzfus sees investment opportunities across the board as earnings season kicks into high gear.
Stoltzfus, chief investment strategist at Oppenheimer Asset Management, considers trading activity a lot more sensible than critics think — particularly when it comes to 2020’s big winner.
“We see technology as ubiquitous. It serves both the business community as well as the consumer in their private lives,” he told CNBC’s “Trading Nation” on Wednesday. “It is extremely dynamic right now.”
Stoltzfus highlights tech’s role in the battle against Covid-19 as an example.
“Just think all that happened related to the creation of vaccines that without modern technology would not have been capable in warp-speed time,” said Stoltzfus.
He doubts rising interest rates will dramatically alter tech’s upward momentum this year. Stoltzfus expects the Federal Reserve’s easy-money policies, globalization and business competition will help keep rates at historical lows.
“It [tech] is a counter-inflationary trend that is embraced both by business as well as shoppers,” said Stoltzfus, who has worked on Wall Street for almost four decades.
As tech investors were licking their wounds in early March, Stoltzfus told “Trading Nation” the rollover was a major buying opportunity. Since that appearance, the tech-heavy Nasdaq is up more than 4%.
Stoltzfus acknowledges tech is vulnerable to temporary pullbacks. He cites investor appetite to rebalance portfolios frequently. But he believes tech will be resilient due to the bullish backdrop and demand that justifies higher valuations.
“Investors are willing to pay more for each dollar of projected growth going forward because interest rates are still so close to record lows,” he added. “Analysts have been ramping up their expectations in terms of projected earnings, and they’ve been doing it on good fundamental reasons.”
Despite his optimism surrounding tech, Stoltzfus believes it’s crucial for long-term investors to be diversified and have a clear time horizon and the ability to be patient.
“It pays to be diversified, owning both value and growth stocks,” said Stoltzfus. “Earnings are improving. Revenues are ticking higher. We have been proponents of a broad diversified approach to equities since September of last year.”
In addition to tech, his favorite S&P 500 groups include consumer discretionary, financials and industrials.
“Some of it has to do with the reopening of the economy,” Stoltzfus said. “Other just has to do with trends that are longer-term both cyclical as well as secular in nature.”
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Source: Finance - cnbc.com
