XLY Jun 2025 125.000 put
- Yahoo Finance Video
Rate cuts will fuel an 'upswing' for these sectors: Strategist
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) have pulled back from their all-time highs, with the Dow snapping its four-day winning streak. Citi US equity strategist Drew Pettit joins Market Domination Overtime to discuss the latest movement and what investors can expect in the second half of the year. Pettit believes the Federal Reserve's interest rate cut is behind the most recent market action. He explains, "I think the Fed, and honestly heading into the Fed decision, interest rates across the curve coming down gave people more confidence to look through some potential softness in the labor market, maybe a little bit of softness in earnings macro data, even the housing data today, out the other side to say, 'Hey, the Fed isn't going to be as far behind the curve. That's OK. I can start positioning for the recovery.' And we've seen not just the secular stories work, but we've seen some of the cyclical stories start to work, at least since the mid-July interim peak." As the third quarter earnings season looms ahead, he believes the market has not reached its peak. He notes that growth stocks can "probably survive any type of weakness," while cyclicals will finally get a boost from falling interest rates. Pettit adds, "We actually think we're on an upswing for some of the parts of the market that really haven't gotten much love over the past couple of years." While tech stocks have gotten a lot of love over the last year, he expects some pressure ahead: "The growth side of the market has had really strong growth. So it becomes the problem of, let's call it, the law of large numbers. You're growing really fast. It's hard to keep that up forever. But when growth stocks see their sales decelerate, there's been points in the past where that has actually pressured their earnings." However, he believes many Tech players will be able to handle topline deceleration. Thus, Pettit encourages investors to be cautious with tech moving forward. He encourages them instead to get into overlooked areas of the market like cyclicals, consumer goods (XLP, XLY), and financials (XLF). For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime. This post was written by Melanie Riehl
- Yahoo Finance Video
Why there's 'upside' in the S&P 500 as the Fed lowers rates
The Federal Reserve kicked off its highly anticipated interest rate easing cycle last week with a 50-basis-point cut. Summit Place Financial Advisors founder and president Liz Miller joins Wealth! to break down how investors can best position their portfolios in a lower-rate environment. "So far this year, we saw the early part of the year really led by, we know, the mega-cap techs and they've held up fine. But what we're going to see now, and we've even started to see in the last week or two, is that some of these other sectors that are more interest-rate sensitive are going to start doing better, like housing and rentals (XLRE) and financials (XLF) and consumer goods (XLP, XLY) that really were struggling in the market the first part of this year," Miller tells Yahoo Finance. With the S&P 500 (^GSPC) at all-time highs, Miller notes that it is largely skewed by mega-cap tech stocks. "When we look at other sectors, they aren't making all-time highs. And our last high in the market was really December 2021," she adds. Thus, she believes that there is a lot of upside in the index as the Federal Reserve continues to cut lower interest rates. As China looks to recover its weak economy through a series of stimulus measures, Miller expects the nation's growth to impact US investments: "What's really needed is to get consumers in China to regain their confidence and start spending again. We look at luxury goods as sort of one of the easy views on what's China spending. We own a lot of multinationals, from Apple (AAPL) to Nike (NKE), that all do better when China is doing better. So we see this in small ways in a lot of US investments too." Miller views Nike as one of her top retail picks following the leadership shake-up. She calls the company "one of the most valuable brands in the world," and with the stock's decline over the last few years, investors can get it at a discount. She expects to see a "turnaround story" in Nike's fundamentals, and hopes to see new leadership return the company to its competitive position. For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Melanie Riehl
- Yahoo Finance Video
Patience 'could be a virtue' in current market: Strategist
After last week's tech-heavy sell-off, many investors took the opportunity to buy the dip. Slatestone Wealth chief market strategist Kenny Polcari joins Catalysts to discuss the current state of the equity market (^DJI, ^IXIC, ^GSPC) and how investors can best position their portfolios heading into 2025. "I think you have to take a broader look at where we think the market's going over the next six or seven weeks, just because we're in that seasonally weak time in the market, August through October. I think that the August lows of 5,116 [for the S&P 500] are likely going to be tested again, which means that as a long-term investor, you just need to be a little bit cautious," Polcari tells Yahoo Finance. He points to Nvidia (NVDA) as a buying opportunity since shares are down about 25% since its June high. He does not expect the stock to rally back up to its high, but rather, he sees it as "on sale" for long-term investors. "Now, if you're worried about further downside for the broader market and you think it's going to get dragged with it, well then just sit back a little bit and wait. I think, you know, for most of the clients, that's the conversation I'm having, just about being patient, because patience, in this case, could be a virtue," he adds. Polcari argues, "We're at the very infancy stages of AI. I think Nvidia sits at the nexus of this tech revolution that's happening." He expects more volatility in the stock as the AI race continues. However, in the long term, he views Nvidia as "a core name and a core portfolio." As the consumer discretionary sector (XLY) leads the market's charge for a rebound in Tuesday's trading session, Polcari is more bullish on consumer staples (XLP): "I think we're already seeing consumers run into problems. We're seeing people live on credit cards, and discretionary is just that — it's discretionary spending. Those are wants versus needs. So I would be cautious on that sector at the moment, and I'd be more focused on the staples sector. While it's boring... I think it plays nicely in an environment where you think it's going to be a little bit of a pressure on the broader market and on the consumer." For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Melanie Riehl
