Starbucks stock retreated in heavy volume after a report suggested the coffee chain's growth may be losing some steam.» Read More
Pharmaceuticals are priced at a bargain, said Mike Burnick, Weiss Capital Management director of research.
“They were out of favor over the last three or four years, even before the current market slowdown, which has made them even cheaper,” he said.
Burnick recommends GlaxoSmithKline — which beat earnings estimates Wednesday — Novartis and Johnson & Johnson .
“It’s [Johnson & Johnson] considered the Rolls-Royce of the industry,” he said. “That’s the bluest of the blue chips.”
Dan Gross, senior editor and columnist at Newsweek, has identified a new economic indicator: that a country’s number of Starbucks stores inversely correlates with its economic health—the more Starbucks stores, the greater the financial crisis.
Jeffrey Grundlach's bond fund is up 3.01 percent year-to-date. (Yes, you read correctly.) The chief investment officer of TCW offered his outlook and strategy to CNBC.
Grundlach said he'd shielded his 5-star TCW Total Return Bond Fund from one of the market's most lethal bullets:
"The first real key to success in 2008 has been, for the first half, staying away from the lowest-quality mortgage debt," the CIO said. He followed that up with a decision to "stay away from corporate credit and non-dollar bonds."
But the market tide has turned, he said:
"Secretly and quietly, the lowest-quality mortgages are actually the top-performing assets right now in the fixed-income market."
How is that possible? Grundlach explains that ratings agencies have "priced in some very, very steep problems in the mortgage market." Pricing of debt is now "much more attractive" — relative to sliding equities and commodities.
How He's Buying
So what types of debt is the strategist buying?
"Just a couple of days ago, we made a move toward high-yield and investment-grade corporate. ...The menu of opportunities continues to grow."
He cautioned bond investors that they are not going to make a lot of money in the near-term, but "it's not justified to get out."
Ideas: Top 5 Funds
Want to invest like Grundlach? Morningstar provided CNBC with a list of its five top-performing (non-government) fixed income funds:
- Capstone Church Bond
- Target Intermediate-Term Bond
- Virtus Intermediate Govt Bond I
- PIMCO Extended Duration
- Manor Bond
Disclosure information was not available for Grundlach or his firm.
Defense technology and defense information technology are two areas investors want to be in right now, according to Alex Hamilton, senior managing director at Jesup & Lamont.
“One main reason we like to invest there is, obviously, there’s no credit crunch in defense,” he told CNBC.
His other main reason is a cyber-security inititiative being pushed by the Pentagon.
“It’s a multi-billion dollar, multi-year initiative to protect computers, protect bank accounts (and) protect the Pentagon’s computers," he said.
Hamilton’s favorite names in the sector are SAIC , Caci International and ManTech.
For investors wondering how the fast-approaching presidential election could affect this sector, Hamilton says defense spending likely to remain strong regardless of who wins.
More from CNBC.com:
Disclosure in formation was not available for Hamilton or his firm.
Dan Genter, CIO at RNC Genter Capital Management, told CNBC that it is a good time for investors to put their money into the energy and financial sectors.
In an economic downturn, it’s time to take a long-term perspective, said Michael Cuggino, Permanent Portfolio Funds president.
“The economic slowdown we have right now, the economic crises, are all symptoms of a larger disease and that’s confidence,” Cuggino told CNBC's Erin Burnett. “When confidence comes back, all the aches and pains associated with that issue in the marketplace and transacting business will go away rather quickly.”
Pharmaceutical stocks were winners today on the earnings front, and CNBC guests say they can be winners on the portfolio front as well.
Robert Hazlett, pharmaceuticals analyst at BMO Capital Markets, says the sector is a good bet for the very near term. (Catch his full comments in the video)
This year the S&P Industrial Index fared even worse than the S&P 500, but Eli Lustgarten, senior vice president of Longbow Research, sees opportunities in this beaten-down sector.
“If you want to make the bet that the economy will stabilize sometime over the next year and will begin to grow in 2010, then Caterpillar , like most other industrials, are on sale," he said. (See his full comments in the video)
Construction companies such as CRH, Berkeley Group and Vinci are good long-term buys at current valuations, following government intervention to backstop the global banking sector, analysts told CNBC.com.
Mid-cap stocks will be the next market movers, says Ron Sloan, senior portfolio manager at Aim Mid Cap Core Equity.