It’s been a tough week for stocks.
However, some market analysts, including CNBC’s Jim Cramer, had their sights set elsewhere in the market, watching both opportunities and possible catalysts for the decline.
Here’s what three of them said Thursday:
JoAnne Feeney, portfolio manager and partner at Advisors Capital Management, pointed to the information technology space:
“The one thing we really recognize about this market is the IT sector and the market as a whole have been driven higher by just a handful of stocks. Our clients are expressing that same fear: Has IT come too fast too far? Has the market come too fast too far? The key thing is to look specifically at the stocks that still offer value and that still have room to run. That can be in semiconductors — we like a few of those a fair bit — but also cybersecurity, digital payments. But a handful of them in the semiconductor space, … Broadcom, Qualcomm, NXP — Broadcom is right in the middle of the online tailwinds that we’re seeing because of Covid. They’ve diversified into software and they’re right in the middle of the iPhone 12 supercycle. And in addition, they offer good income for clients, and some of our clients are really thinking about income right now given how much the stock market has gone up.”
Damien Conover, director of health-care equity research and equity strategy for Morningstar, was keeping an eye on pharmaceutical stocks:
“What’s being implied by the current drug stock prices [is it] seems to us that too much concern is being placed on the election. And what we think is likely to happen is that we’ll see some modest reform within Medicare Part D’s design, and what I mean by that is when seniors pay for drugs, they tend to pay a lot for the very expensive drugs because they’re on the hook for very high costs. But with Part D redesigned, that will likely remove that hook. And with whoever gets into office, whether it’s a complete sweep by the Democrats or a split group, we think it’s likely to see that sort of change, and that sort of change is modest, and it’s something that I think the drug companies can adapt to. And once the market gets more comfortable with that sort of modest change, I think we’ll see stock prices increase.”
“I want to warn people that if you follow what they’re doing and you sell our stocks because of what’s happening right now in France, that’s going to prove to be something that you might regret. I was negative going into the bank period because they never, ever do what people want. They always seem to disappoint. And … it’s gotten to the point now where even the good ones, where Morgan Stanley, where Goldman Sachs — which beat by, I don’t know, 80% — [are] ignored. And now … we’re worried about Madrid Covid and Paris Covid. Doesn’t make sense to me.”