Need to Know: How to thrive in a 'fairly, but fully valued' stock market
If this equity market rally is going to keep grinding higher, then it needs a boost from one crucial category of stocks. Right?
There are elements of that argument in our call of the day, which comes from David Bianco, chief investment officer and strategist at DWS Investment Management . He urges investors to move past what will likely be an uninspiring quarter or two of earnings, and start thinking about how to preserve their investment gains in a market that has already risen strongly this year.
And while Bianco doesn’t think a 5% drop for the S&P 500 is likely this summer, he said they are trimming back some of their equity risk until the index moves back into a tight range they expect will dominate this summer — 2,750 to 2,950. Past the summer, he’s looking at two big autumn events to provide some momentum — a U.S. fiscal 2020 budget deal and the possibility of U.K. legislation that may deliver an orderly Brexit.
To get back to that level, the S&P will need some heavy lifting from its five FAANG stocks, that is the acronym given to the stock market’s big tech names — Facebook, Apple, Amazon, Netflix and Alphabet . That group’s market cap has also recovered some last ground from last year’s rout, but remains some $330 billion away from a 2018 high of $3.6 trillion.Earnings Among tech and internet companies, Twitter TWTR, -0.
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