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Final week was a giant one for tech earnings, however it ended on a whimper as a collection of disappointments left market watchers questioning the power of the tech rally. The week kicked off with constructive earnings surprises from the likes of Meta and Superior Micro Units , however ended with misses and adverse outlooks from tech giants Alphabet , Apple and Amazon that paint a worrying image of client weak spot and renewed fears of an financial slowdown. Buyers had been fast to react. Shares in Alphabet fell 2.8% and Amazon’s shares fell 8.4% on the identical day. The Nasdaq Composite shed 1.6%. Solely Apple reversed early losses to shut the session 2.4% larger. However market veteran Kenny Polcari, chief market strategist at SlateStone Wealth, remains to be bullish on Huge Tech. “We added Huge Tech on weak spot, like Apple and Amazon, these shares are getting arbitrarily dislocated. Apple did find yourself closing the day on Friday larger even after their report, which simply suggests to you that individuals are nonetheless placing cash into Huge Tech,” Polcari informed CNBC’s “Avenue Indicators Asia” on Monday. Outdoors of the tech giants, his prime choose within the semiconductor area is Nvidia . “Semis is one other sector that has completely taken off this 12 months. It is up double-digits as a result of it had gotten so clobbered in 2022. So, I do suppose there’s [an] alternative for certain, however I do not suppose you may go all in on Huge Tech simply but,” he mentioned. Nvidia can also be a play on synthetic intelligence, in response to Polcari. It’s one in every of two broad themes he likes in tech, the opposite being cybersecurity. “I believe you actually should contemplate the position that synthetic intelligence goes to play however hasn’t performed to this point. It has made this quantum leap nearly in a single day. I believe that places it proper smack within the entrance and middle of peoples’ portfolios,” he mentioned. STPN – ‘Stuff that folks want’ However tech is not Polcari’s solely technique to play the market. Actually, his total positioning is basically defensive, along with his most popular sectors being what he calls STPN, or “stuff that folks want.” “The majority of the portfolio goes to be obese in client staples and healthcare, utilities and vitality, after which you are going to create alpha across the edge with among the names which have gotten actually crushed up,” he mentioned. He believes the market has “gotten forward of itself,” and now seems to be “a bit overbought.” “The market is betting that the Federal Reserve can pull off a comfortable touchdown — one thing I don’t suppose they’ll do, however I simply suppose will probably be an extended, extra sluggish recession and never a goldilocks kind of soppy recession,” Polcari mentioned. He believes vitality will proceed to outperform this 12 months, with a full China opening set to ship international demand larger. In opposition to this backdrop, he likes oil giants reminiscent of ExxonMobil , Chevron , Schlumberger , and Halliburton
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