The stock market is starting to show signs of a “leadership rotation,” meaning that some previously overlooked sectors hold promising investment opportunities, including some notably “old economy” stocks, according to one market strategist. Larry Tentarelli, founder and chief technical strategist of Blue Chip Daily Trend Report , believes the wider market's trend is still bullish despite this week's pullback, but sees a shift in market leadership from technology into sectors trading at cheaper valuations. The strategist highlighted the industrial and energy sectors, which he said should benefit from reports of a robust American economy. “I think [there] will be a bullish rotation, and some of the Magnificent Seven stocks won't outperform like they did last year. Meanwhile, some of the cheaper sectors could perform better,” Tentarelli said. He noted he is still holding artificial intelligence stocks — just not as much. Within industrials, Tentarelli highlighted General Electric . Earlier this week, General Electric spun off its aerospace and energy segments into separate companies, having already spun out GE Healthcare in early 2023. Construction equipment manufacturer Caterpilla r is another strong industrial name, according to Tentarelli. The stock is also already outperforming the S & P 500 this year, up nearly 29% year to date. As a group, industrials have gained 10.3% this year, or a little less than 1% above the S & P 500. After a rocky 2023, energy has established itself as one of the S & P 500's top outperformers in 2024. The sector has gained 17.4% in 2024, second best in the S & P 500 behind only communication services stocks. Among energy stocks, Tentarelli favors refiners. Phillips 66 was one of his picks, up 29% this year and currently trading at a below-market 12 times forward earnings. Valero , another oil refiner named by Tentarelli, has rallied 41.5% in 2024 and reached a new 52-week high on Friday. “One of the nice things about both of those sectors is the valuations are very reasonable,” said Tentarelli. Banking is another group with notable names trading cheaply, said Tentarelli. His top choices are JPMorgan and TD , which sell for 12 times and eight times forward earnings, respectively. “Last year, investors really congregated in the Magnificent Seven, and the market was scared of a recession. I think investors are now seeing that there's so many opportunities in these other sectors at very low valuations,” the strategist said.
News Related-
Leon Cooperman says it's a stock picker's market. Here are his new favorite bets
Billionaire investor Leon Cooperman thinks that it's a stock picker's market and only individual names will offer value for investors as the overall market struggles. A new filing just revealed his top selections. The chair and CEO of Omega Advisors held about $167 million worth of Energy Transfer at the ...
See Details: Leon Cooperman says it's a stock picker's market. Here are his new favorite bets -
These bond funds are among the top performers in 2023 – Here’s what investors should do next
It's been a good year for yield-chasing investors willing to take some risk in fixed income. The Federal Reserve's rate hikes since March 2022 have had the pleasant side effect of lifting yields on interest-bearing assets ranging from Treasury bills to money market funds. The lowly 1-year certificate of deposit ...
See Details: These bond funds are among the top performers in 2023 – Here’s what investors should do next -
Goldman's hedge fund VIP portfolio is up 31% this year. These are the stocks on the list
Hedge funds' favorite stocks have crushed the broader market in 2023, returning 31%, thanks to mega-cap technology companies, according to Goldman Sachs. The Wall Street bank analyzed the holdings of 735 hedge funds with $2.4 trillion of both long and short equity positions at the start of the fourth quarter, ...
See Details: Goldman's hedge fund VIP portfolio is up 31% this year. These are the stocks on the list -
A bearish options bet against this coffee stock showing some fatigue
Identifying underperforming stocks is becoming a challenge, with the broader market approaching new highs. Starbucks (SBUX) looks like it could be an interesting stock to bet against. While the stock saw an impressive 18% surge post an earnings beat at the start of the month, it's displaying indications of fatigue, ...
See Details: A bearish options bet against this coffee stock showing some fatigue