Big Tech, Healthcare Against Reopening: Julian Emanuel from BTIG
Some battling big tech names could make a comeback this month.
BTIG’s Julian Emanuel is targeting a corner of the market that does not correlate directly with economically sensitive deals at the beginning of the second quarter.
“The games that have benefited from the past few months – the reopening value, small caps – may actually pause because they’ve been running so far,” the company’s chief stocks and derivatives strategist told CNBC’s Trading Nation last week.
Emanuel urged investors to nibble on selected FAANG stocks in early March, made up of Facebook, Apple, Amazon, Netflix and Google (Alphabet) as well as other mega-cap tech stocks.
“This was a very lonely phone call a few weeks ago that FAANG looks very interesting to us with a large cap,” said Emanuel. “Secular producers were tossed aside in the first quarter in favor of value.”
The benchmark’s tech-intensive Nasdaq gained a fraction of one percent last month. But it seems the index is roaring into April along with the broader S&P 500.
The Nasdaq closed last week up nearly 4% while the S&P 500 ended at record highs, surpassing the 4,000 level for the first time.
Emanuel also prefers health care. The Health Care Select Sector SPDR ETF, which is tracking the group, has been struggling for the past few months.
“It trades at such an historic discount on the S&P 500 that we believe there are many advantages to it,” he added.
Overall, Emanuel assumes that seasonal trends will work in favor of investors.
“Seasonality is a very underrated part of what drives the markets,” he said. “If you look at April … it’s the kind of keystone of the best six months in the markets that go back many, many years.”
At the same time, he encourages patience and caution because the market gains came so quickly.
“Capital wisely used, especially in areas such as healthcare and choice [large cap] Tech, really have advantages, “said Emanuel.” You have to think long term and not expect a profit once you start a position. “
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