Stocks pulled off a gain Tuesday after a see-saw session in which techs and industrials gained, while energy and bank stocks were weak. Rob Morgan, chief investment strategist at Fulcrum Securities, and Alec Young, equity strategist at Standard & Poor’s, shared their market strategies.
“We like technology—it’s a sector where the earnings estimates continue to rise,” Morgan told CNBC.
“Technically, the sector’s been good, although this quarter’s been somewhat lackluster. But we were overweight technology.”
Morgan said he is bullish on the markets and noted that March, April and May are the “best” seasonal months for stocks.
However, he is weary of the industrial sector.
“They have had a nice run, but their earnings visibility looking through the rest of the year is a little bit suspect given the elevated P/Es,” he said. “Take GE* for instance, when you look at quarters down the road, they’ve some tall hurdles to reach.”
In the meantime, Young said he likes both technology and industrials.
“We’ve been overweight all year,” he said of the industrials. “One of the issues that’s helping the cyclicals—whether it’s retailers, discretionary, semiconductor names or some of the industrials—is that all of the negatives that are negatively known are priced into the names, and when they do report, they’re exceeding modest expectations.”
Young is underweight the defensives sector including consumer staples, utilities and telecom.
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No immediate information was available for Morgan or Young.
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