A shift in the stock market was observed as it opened: Value stocks are seen gaining more popularity, while fast-growth industries are noticing stagnation.
Oppenheimer Asset Management’s John Stoltzfus, warns the public that despite the shift it wouldn’t mean the winners will automatically become losers.
The market bull sees technology as a vital part of the economic fight to function amid the Coronavirus shutdowns.
“It’s so central to the secular movement that’s taking place,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Wednesday. “Technology is very much what the automobile industry was in the early 20th century.”
“There’s a very modest trim occurring,” he said. “The sector has gotten perhaps a little ahead of itself.”
The tech giant Nasdaq has rallied only 42%, this being the lowest the company had fallen since March. The S&P 500 isn’t far behind with a 39% gain.
Despite profit-taking risks, Stoltzfus believes the market is in the early phase of a historic recovery.
“We are certainly from all appearances transitioning towards a post-Covid-19 environment in which we will move towards a recovery process,” Stoltzfus said. “We expect to get back to a sustainable recovery over a relatively short period of time compared to what many might think.”
The expert warned the public in February that the stock market would suffer heavily as Coronavirus concerns were spreading. Stoltzfus speculates it’s a signal the market’s performance will broaden going forward.
“Since fixed income doesn’t have much to offer, taking a look at what might be next for equities and that’s [the] more value-oriented space of the equity market,” Stoltzfus said.
Subscribe today to get exclusive content across the globe and exciting offers from our sponsors.
