It’s been an unsettling stretch for tech investors, but the Nasdaq looks on track to escape with a weekly loss of less than 1%.
And our call of the day provides some tech support.
The recent slump for Silicon Valley titans and other growth stocks is “temporary and primarily driven by technical/quant flows,” say J.P. Morgan’s U.S. equity strategists.
It’s time to keep betting on the Facebooks and Apples of the world, because we’re in an environment where growth opportunities are scarce and expectations are becoming less great — and that means investors are willing to pay up for such stocks, the strategists say. Their graphic below underscores that point.
The J.P. Morgan team almost scoffs at worries that too much of the S&P 500’s year-to-date gain has come from the FAAMA stocks (or you could say FAMGA, or go with the equation FAANG – Netflix + Microsoft …).
“While equity leadership has been narrowing into growth stocks, history suggests it is not at extreme levels and not far from historic norms,” says the team, led by Dubravko Lakos-Bujas. That echoes takes here and there that say don’t fret about our top-heavy rally.
But then the strategists throw the worrywarts a bone. “It is understandable that some investors may be reluctant to add exposure to mega-cap tech,” they write.
So they’ve come up with a whole bunch of FAAMA-like stocks to consider buying instead. The table below shows their 50 high-growth stock picks from the S&P 500. It’s got the FAAMA names, but also 45 other stocks, such as Martin Marietta Materials MLM, -0.65% , Ulta Beauty ULTA, -0.69% , TransDigm TDG, +0.27% and Becton Dickinson BDX, -0.35% .
Go here for a larger version of the table.
Key market gauges
Futures for the Dow YMU7, +0.10% , S&P 500 ESU7, +0.14% and Nasdaq-100 NQU7, +0.18% are slightly higher. The Dow DJIA, -0.07% and S&P SPX, -0.22% are on pace for weekly gains of 0.4% and less than 0.1%, respectively, as of yesterday’s close, while the Nasdaq Composite COMP, -0.47% has lost 0.7%.
See the Market Snapshot column for the latest action.
“You will see some very, very bad May numbers for a lot of firms.” — Schonfeld Strategic Advisors’s Andrew Fishman talks about how it’s been a dismal year so far for so-called quant funds.
He’s quoted in a Wall Street Journal report on the tough times for investors that use statistical models, rather than human research and intuition, to find attractive trades.
The reaction to the messaging-app company’s woes has ranged from “more pain ahead” …
I said it before and I’m saying it again: SHORT $SNAP. It will eventually trade at $8-11. (Not a financial advice, just a confident opinion)
— Jihad Kawas (@JihadKawas) June 16, 2017
… to schadenfreude:
Almost 4,000 — That is how many additional U.S. troops will be sent to Afghanistan, as the Pentagon tries to break a stalemate in a war that has now passed to a third U.S. commander in chief. More here from the AP.
Cuba Not So Libre: President Trump today is expected to scale back some of the Obama administration’s changes to U.S.-Cuba policy.
It’s quadruple witching day. Here’s why this may not be as scary as it sounds.
On the economic front, a reading on housing starts is on tap before the open. A report in consumer sentiment is due once trading is underway.
Check out: MarketWatch’s Economic Calendar
Fire follow-up: U.S. bans the plastic cladding that was on that London tower.
Russia says its warplanes may have killed ISIS leader al-Baghdadi
Is Rick Pitino sounding contrite as an NCAA probe wraps up? Not exactly.
College student detained in North Korea has profound brain damage
Vice President Mike Pence has lawyered up for the ongoing Russia probe.
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