There Is A Rotation Out Of Growth And Into Cyclicals: Here Are Some Stocks To Watch

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Featured Guest(s): Marc Chaikin, Founder of Chaikin Analytics

Transcript

00:00 It's all about the bond market.

00:01 And it looks like the bond vigilante's got it right,

00:04 at least in the short term.

00:06 We've had rates above 4% since July 31st.

00:09 And that really is the blueprint

00:13 for what the stock market's been doing.

00:14 So the bond market was basically saying it's not over

00:19 and the economy is too strong for the Fed to ease or pause.

00:24 And based on parsing of yesterday's Fed minutes,

00:29 maybe they're right.

00:30 I'm still suspicious,

00:31 but everybody's been looking at that 425 level,

00:34 which they've been banging up against

00:36 on the 10-year treasury.

00:39 And as long as that's the case,

00:40 you're gonna be fading rallies here

00:44 into the end of the month and early September.

00:47 - Is there a market here

00:48 like that turns it around eventually here though?

00:52 Like if you're a long-term investor,

00:54 and let's put on Marc Chaykin's long-term investing hat.

00:57 I mean, we all wanted a correction.

00:59 We're getting one in here right now.

01:00 Should we start nibbling here into some stocks?

01:03 Like, what are you looking at?

01:04 There's gotta be some stocks you like here right now

01:06 on this pullback.

01:07 - I do.

01:08 There's a rotation going on out of growth into cyclicals.

01:13 It makes sense with the interest rates moving up

01:16 that you get a contraction in the P/E ratios.

01:19 And you also had a lot of profit taking on good,

01:24 bad, and not so good earnings.

01:26 So even the mega tech stocks like Microsoft and Apple

01:31 were sort of the canaries in the coal mine

01:33 breaking their 50-day averages before the Q's did.

01:38 So I like this shift into cyclicals,

01:41 particularly energy and industrials.

01:44 And they're coming up strong on the power gauge.

01:46 They have, in terms of energy,

01:48 they've been coming up strong for the past two months.

01:52 One by one, stocks like EOG, EQT, PSX,

01:57 even PXD came up bullish two days ago.

02:02 And then in the industrial sector,

02:04 there's some big names that you can buy.

02:06 My favorite, well, it's industrial and healthcare, I think.

02:09 Healthcare is a hybrid.

02:11 When you wanna talk defensive, you can say they're defensive.

02:14 But when you wanna talk growth, cyclicals, they're cyclical.

02:18 So Eli Lilly spiked up on earnings.

02:21 The story with their weight loss drug

02:23 helping stroke victims and preventing other problems

02:28 is a powerful story for a big name brand like that.

02:32 But FedEx is a possible buy on a pullback.

02:37 Some of the aerospace stocks like Textron, Caterpillar.

02:41 So if it is a stronger economy than people anticipated,

02:46 maybe there's no landing.

02:51 We've been talking hard landing, soft landing.

02:52 There may not be a landing.

There Is A Rotation Out Of Growth And Into Cyclicals: Here Are Some Stocks To Watch

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