Jobs Up. Interest Rates Up. Stocks Up? Part II
In what seems to be a potential new market phase; one that should be supported by real signs our economy is gaining momentum and an improving Europe we like most sectors, some better than others, and some not so much.
What we like the most:
- Technology with rational price to earnings (P/E) multiples.
- Healthcare-including select pharma, biotech, devices and providers. Mergers and acquisitions should continue here.
- Mid Cap U.S. This sector should benefit from a re-energized U.S. consumer, without suffering the currency headwinds that large cap multi-nationals face.
What we also like:
- U.S. Industrials. Really solid fundamentals here in a re-inventing manufacturing sector.
- Banks-small, mid and large cap. As bank spreads improve so will profits. Continued M&A in small-mid caps.
What we’re cautious about:
- Interest sensitive-bonds, bond substitutes, utilities, and high dividend stocks.
- Energy-although we think we buy into the idea that supply demand will balance at higher prices we want a little more time to pass before we get interested.