There are better places to put money to work than consumer-related stocks, Bank of America Merrill Lynch Head Of U.S. Equity & Quantitative Strategy Savita Subramanian said Wednesday.
"Energy is one of the most-hated sectors," she said. "In fact, one reason that we love it is that it is the most underweighted sector in the average mutual fund's portfolio. So, it's another sector that benefits from an economic recovery. It's done nothing for a while, or it's done bad things for a while. So, I think it's time to start thinking about these sectors that could be better cyclical bang for your buck than the consumer sector, which is already expensive, trading at peak margins, starting to miss on earnings.
"I mean, things are not looking great for the consumer sectors."
"We're not changing our target," she said. "Five percent sell-offs happen pretty frequently in a year. We haven't had one in a long time. It's felt like we were getting to a point where the market was complacent. So, I don't see this as that big a deal. No reason to change our target. In fact, I think that if anything, this should be used as a buying opportunity for equities."
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