“For the first time in a long time, it’s a stock market.”
Quint Tatro
Chief Investment Officer, Joule Financial
Some investors may want to take advantage of the decline in technology, Delano Saporu, CEO and chief adviser at New Street Advisors Group, told CNBC’s “Trading Nation” on Wednesday.
If yields continue to rise despite the Fed’s relatively dull stance, technology stocks will ‘experience short-term pressure if the market tries to figure out what’s next’, Saporu said. “Long-term, I think it will.”
His best picks in the group were Microsoft and Apple, the two biggest weights in the S&P technology sector.
“In the long run, we’ll be in a good position,” he said. “So if you’re a long-term investor, it’s an opportunity to get into lower valuations, and I think long-term, we’ll see the technology rise higher.”
Saporu also watched stocks that could see a “wind of pent-up demand” – it tagged airline Delta and United Airlines in an earlier email to CNBC – and the video games and virtual reality industries.
“I want to see … what happens to maybe cryptocurrency gaming” and infallible signs, the digital collectibles commonly known as NFTs, as video game and virtual reality companies want to fold them into their strategies, Saporu said.
Joule Financial’s chief investment officer, Quint Tatro, said in the same ‘Trading Nation’ interview that this market environment has become a particularly good relationship for stock voters.
“For the first time in a long time, it’s a stock market,” he said, adding that while Big Tech may remain under pressure as rates rise, “there is an incredible opportunity to determine other sectors and stocks.”
“We would actually sell Apple and Microsoft,” Tatro said. ‘Those … we still consider homecoming, and we would be a buyer of specifically Facebook, but also Google as a kind of reopening play and a play on advertising, as small businesses really want to restore growth and really stock those store windows. ‘
Although it is regularly merged with technology, Facebook and Google parent Alphabet are the two biggest weights in the S&P communications services sector.
Tatro also had its eye on a less conspicuous trade.
“I really think investors need to explore an unfamiliar sector that we have lost sight of until recently, and that is the material,” he said.
Shares for materials have risen by about 6% in the past month and so far by just over 8%.
“I think specifically the industrial metals are very, very interesting here,” Tatro said. “We really like some of the steel games: Commercial Metals, CMC, as well as Reliance Steel. These are names that will have extraordinary upside in the coming years, especially with … the kind of reflection and global growth story back on track, and they has extraordinary balance sheets and sales at fair value. ‘
Disclosure: New Street Advisors Group, Joule Financial, Delano Saporu and Quint Tatro own shares of Apple and Microsoft. Joule Financial and Quint Tatro own shares in Alphabet, Facebook, Commercial Metals and Reliance Steel.
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