Here are some rewarding actions to compensate if the tech rally is on its last legs, says fund manager


Stocks are bracing for a fight Thursday, with no good news on the COVID-19 front and vaccine optimism nearly depleted, for now.

And this nascent value trade – the purchase of hard-hit companies that would benefit from better economic conditions – is also showing signs of investor oscillation as technology returns. True, value trading has been tough for a decade against these powerful growth stocks.

It could be different this time around, Citibank chief US equity strategist Tobias Levkovich told clients in a note. For example, he noted imbalanced weights in the S&P 500 SPX,
+ 0,76%
(35% are currently in the tech industry) have never suffered in the past. And investors may need an increase in income from dividend-paying stocks, which “tend to reside in the value camp,” he said.Exploiting this last point is our call of the day by Ben Kirby, co-chief investment officer and portfolio manager for Thornburg Investment Income Builder Fund TIBIX, who said investors will need dividend-paying stocks as a year approaches when tech returns may be less stellar .

Kirby noted that penetration rates for tech companies are already high due to the pandemic. “So a lot of the technology spending has picked up steam during the COVID era, and we think that’s pushing forward a lot of that demand that would have taken two or three years to materialize,” Kirby told MarketWatch in a brief. recent interview. Hence a less rosy 2021 for this sector.

So what is he betting on for 2021? For starters, he likes international stocks, which he says often offer better dividends, such as European telecoms Orange ORAN,
and Vodafone VOD,
+ 0,64%
that offer high single-digit dividends.

The portfolio’s US offerings include JPMorgan JPM,
down around 17% year-to-date, but still paying dividends, and Home Depot HD,
+ 0,79%,
which is a play on an “extremely strong” housing story that will last a long time, he said. And he owns a few tech stocks, but only where dividends are possible – Taiwan Semiconductor TSM,
+ 3,67%,
Broadcom AVGO,
+ 3,52%,
and Qualcomm QCOM;
+ 5,41%.

Lis: What a COVID-19 vaccine would mean for mortgage rates and the housing market

Kirby said it would also not hurt investors from acquiring energy stocks. “Fifteen years ago, it was the biggest and now it’s 2 or 3% of the market, so it’s a small sector that has become quite hated. In terms of playing against the grain, the world is going to be using oil for a very long time, ”he said. And these companies – his fund owns Total TOT,
– pay dividends, of course.

The steps

ES00 futures contracts,

lean towards the south outside of NQ00 technologies,
+ 0,17%,
that show teeth. European SXXP Equities,
are generally lower. And Asian markets collapsed from the Nikkei 225 NIK,
+ 0,67%.
Oil is stable, while the International Energy Agency has reduced its demand outlook for 2020 more than expected.

The buzz

Weekly and continuous jobless claims are ahead, as are consumer prices.

The first batch of data from advanced stage testing of its COVID-19 vaccine is ready for analysis, said biotech Moderna MRNA,
+ 8,40%.
New York has joined a handful of states that have put in place new restrictions to stem record rates of infection and hospitalization in the second wave of the United States.

Benefit for Chinese technology giant Tencent TME,
+ 2,40%
jumped 89% in the third quarter.

Disney entertainment giant DIS,
will report after market close (see overview), as well as Cisco CSCO,
+ 1,57%,
and analysts are not optimistic about the results of the computer networking equipment group. Palantir PLTR software and data set,
+ 14,00%
The first round of profits since going public is also ahead.

Two days after tech giant Microsoft MSFT,
+ 2,62%
released their latest Xbox, Sony SNE,
+ 2,53%
The PlayStation 5 game console will hit shelves on Thursday.

Federal Reserve Chairman Jerome Powell will take part in a panel at the European Central Bank’s Central Bank Forum at 11:45 a.m. EST, alongside top bankers such as Christine Lagarde, the president of the central bank of the euro zone.


How are consumers feeling these days? KeyBanc Capital Markets analysts surveyed 1,000 Americans between October 14 and October 26. Here’s the answer to a question they asked:

Random readings

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