David Bianco, U.S. Equities Strategist for UBS, told CNBC’s “Squawk on the Street” that the S&P 500 offers investors a solid play on the strong global economy.
“The S&P 500 has material exposure to the global economy,” Bianco said Wednesday. “I’m often reminding clients that the global economy and business spending are more important to S&P 500 earnings than consumer discretionary spending.”
He likes consumer staples such as Coca-Cola and Proctor & Gamble, but said he’s over-weighted in industrials, technology and energy stocks, especially oil field services.
“I still believe the best play on the global economy in the S&P 500 is capital goods,” Bianco said. “Names like GE, Textron and even Federal Express are plays on the global economy.” GE is the parent of CNBC.
Bianco said the U.S. economy is slowing, but many emerging markets, including China, are growing internally.
“We expect that to continue,” he said.
Bianco said investors shouldn’t fret about a weaker dollar because it would make U.S. companies more competitive overseas.
“A weaker dollar would be positive to their earnings from a currency translation standpoint,” Bianco said. “It would be particularly beneficial for capital goods companies because it would make them more competitive with their German and Japanese competitors.”