Clarfeld, who is managing director and portfolio manager at ClearBridge Investments, is not alone in his perplexity. Dozens of companies have suspended management amid an increasingly uncertain economic environment.
Meanwhile, economic indicators have been mixed in recent weeks. Consumer spending, the driving force behind the US economy, rose by more than 8% in May, although spending levels are still far compared to pre-crisis levels. Accordingly, some investors are giving less weight to profits in the near future, at least until economic indicators begin to consistently return to healthier levels.
Stucky recommends that investors look at the home improvement segment, with a particular eye on companies that are well positioned in terms of having the right e-commerce infrastructure. Investors seeking exposure to this market segment may consider the Invesco Dynamic Building & Construction ETF (PKB). He owns 30 companies listed in the United States that offer construction and engineering services for building and renovating properties.
Clarfeld said he expects utilities to perform strongly in the coming months. He added: “I think most utilities – every one we have – have repeated their guidelines for the year, despite Covid-19. Interest rates have dropped dramatically, so everyone else is equal, making things like utilities and their dividends more attractive. Clarfeld specifically recommends four household stocks that ClearBridge Investments owns: NextEra Energy (NEE), Edison International (EIX), WEC Energy Group (WEC) and Public Service Enterprise Group (PEG). In addition, investors looking for a broad exposure to utilities can view the SPDR Utilities Select Sector ETF (XLU), which tracks relevant companies in the S&P 500.
Gayed said it expects the energy and materials sectors to perform well this quarter. He added: “Just as the Fed can manipulate financial markets, oil producers can manipulate. And if that’s the case, I think a lot of these petroleum products and the materials sector probably have some surprises. ” Gayed also said the infrastructure bill in the coming months could also be an incentive for material stocks. For interested traders, the Material Selection SPF (XLB) is the largest and most traded fund.
Junior Trader Damyan Dimitrov