Fundstrat analyst Mark Newton says the US stock market is poised to outperform semiconductors and memory, warning that the technology has reached “its game” after an 18% rally in eight weeks and should stabilize in the summer.
Speaking recently, Newton to be known finance, industrials, consumer discretionary, and healthcare as sectors best positioned to play as technology cools down. He also noted that the XHS Healthcare Services ETF recently rose sharply, calling it an encouraging sign that the expansion is underway.
“I’m optimistic that we can start expanding. I think the technology should be connected sometime in June and/or July. Hard to see 18% in 8 weeks just continuing at that pace. It’s doubtful, and we need to push each other.”
Newton said the market as a whole is not up, but many investors have been cautious about changes in leadership at the Federal Reserve and international tensions. He also said that investors who do not have enough exposure to semiconductor and memory names have struggled to match the S&P 500.
Newton said he is not bullish and expects a technical confluence between July and October to create a buying opportunity in mid-term elections.
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