Cyclical stocks may be racing higher, but tech is still expected to be a long-term winner

first_img“You can see why people go crazy over them. I think there will be more juice for them in 2021,” he added. “In 2020 alone, the performance gap 70%. If the market is up 10% in the next year, the stocks at the epicenter could be up 80%. There’s that much juice in them … It’s stocks like Six Flags, it’s what you think was hit hardest in social distancing.” But Lee stresses that tech is still core and important to hold. “The revenue growth is going to be superior to the overall market,” he said. “I think it’s got legs. I think more money comes from the sidelines, so I’m not selling growth or tech.”He also expects the market to keep rising into the end of the year, and his S&P 500 target of 3,250 is too low with the market now trading above 3,600. “My target makes no sense because we’re in the fourth quarter, and there’s a Santa rally coming,” he said.‘Lousy fourth quarter’The S&P was up 0.7% Monday afternoon, and the Dow rose more than 1%. The small cap Russell 2000 jumped another 1.8%, heading to another record close. But the Nasdaq lagged, up just 0.4%.Lee said there are concerns that will worry investors, and the rapidly spreading virus will continue to hobble the economy even as the market can rally.“I think it’s going to be a lousy fourth quarter and I think that’s what everyone is bracing for,” he said. “Nobody thought the vaccine was going to change the fourth quarter, but now we won’t have to think the fourth quarter is what the next six quarters will look like. Stocks do bottom nine months before the economy. If the vaccine is going to be in the summer, then all the cyclicals should be rallying now.”Sam Stovall, chief investment strategist at CFRA, said he downgraded technology to market weight last week but he’s still positive on the group even with the vaccine trade. “It still won’t really be opening up the economy until late second quarter, third quarter next year. We still have a long way to go to experience a weaker economy. Let’s not be too quick to give up on that growth that’s served us well,” he said.The big internet names, such as Facebook, may not gain at the same pace they did previously, but within the technology trade there are sub-sectors that have good momentum. They include tech hardware, systems software, semiconductors, applications software and semiconductor equipment, he said.Some parts of tech are a cyclical trade like semiconductors and semiconductor equipment. Semiconductors were up 1.6% Monday.“What all of this means is the leadership of the market is broadening out,” said Art Hogan, chief market strategist at National Securities. “You want to have both. You just want to rebalance.” FANG may be lagging, but don’t count technology stocks out.Positive news on vaccines has spurred buying in cyclical stocks that should do well when the economy is running at full speed again. Last week, tech stocks, and high-flying FANG names, sold off after Pfizer’s positive vaccine news drove investors into many of the stocks that have been lagging since the economic shutdowns last March.Moderna’s positive vaccine news sparked the same reaction Monday, with FANG names — Facebook, Amazon, Netflix and Google-parent Alphabet — all trading flat to lower but tech gained about a half percent. Facebook and Alphabet are in the communication services sector and that sector was also up just slightly, compared to a 6.3% gain in energy; a 3.4% jump in airlines and a 2% increase in industrials.- Advertisement – Traders work the floor of the New York Stock Exchange.NYSE “The money is coming from the sidelines so that money goes into stocks and it’s going to push everything higher, especially if growth and tech is 75% of the market,” said Tom Lee, founder of Fundstrat. “People are taking cash off the sidelines and buying market exposure. It’s going to lift all boats.”Netflix and Facebook are considered stay-at-home stock plays that should benefit if the economy is shut down or people opt to stay at home to avoid the virus.“I think the active equity manager made a lot of money on stay-at-home stocks. Now, there’s tailwinds for the cyclical trade,” said Lee. He said those companies at the epicenter, like airlines or hotels, have cut costs and should see a topline recovery.- Advertisement –center_img – Advertisement – – Advertisement –last_img read more

Five keys to a Clippers’ series victory over Thunder

first_imgCoach Doc Rivers said all along the team needs NBA Sixth-Man of the Year award winner Crawford to be playing well in the playoffs in order for his team to be really successful. Nursing a strained left calf, Crawford had been in a shooting slump for a while. But he’s finding his stroke again, and without his 22 points on 7 of 12 shooting — 3 of 6 from 3-point range — the Clippers would have been hard-pressed to be in a position to win Saturday’s game. The Clippers will need him to be all he can be in this series, for sure.Clippers must keep tabs on Russell WestbrookThunder guard Westbrook was criticized at times during his team’s seven-game series victory over Memphis. He forced things, some said. For example, he had 30 points, 13 assists and 10 rebounds in Game 5. But he had to take 31 shots — making only 10 — to get his points and his team lost 100-99 in overtime at home. However, Westbrook is also that ultra-explosive player who can take over a given game. He’s averaging 25.6 points, a team-high 9.7 rebounds and 8.0 assists in seven playoff games.Blake Griffin needs to get busy on the boardsWithout Griffin doing all that he does, the Clippers will be in trouble. It’s interesting to see that he has averaged only 6.3 rebounds in seven games against the Warriors after averaging 9.5 during the regular season. The Thunder averaged 44.7 rebounds during the regular season while allowing opponents a 40.9 average, giving them the best differential ratio in the league at 3.8. OKC averaged 48.1 rebounds against Memphis in their seven-game series, and allowed 42.7, an even better differential of 5.4. The Clippers were out-rebounded by Golden State in their seven-game series; the Warriors averaged 42.7 rebounds to 41.1 for the Clippers. Five Keys to Victory for the Clippers:Chris Paul must remain healthy enough to keep playing wellAll one had to do was watch what Paul did in Saturday’s Game 7 victory over Golden State to understand his worth to this team. Playing with a sore right hamstring, Paul scored 22 points, doled out 14 assists, made four steals and had just two turnovers in 42 minutes. He practically willed his team to victory. His mannerisms down the stretch had “greatness” written all over them. If he can weather the injuries — he also has a sore left thumb — and continue to play at a high level, that right there gives his team a chance.Jamal Crawford must continue to shine Have to make things tough for KDNo matter what the Clippers do, OKC’s Kevin Durant is going to get his points. But the way Rivers sees it, his players must make it as difficult as possible and that will give them a chance to at least keep Durant from really going off. “He’s going to score, we know that,” Rivers said. “But we don’t want him to get easy scores. We want to make it as difficult as possible.” The Clippers found out just how lethal Durant can be when he exploded for 42 points during a 125-117 Thunder victory on Feb. 23 at OKC. Durant also had 10 assists in that game. center_img Newsroom GuidelinesNews TipsContact UsReport an Errorlast_img read more