Five S&P sectors hit new highs.Traders flag top groups to watch


It’s a sector showdown.

Five S&P 500 sectors — real estate investment trusts, financials, consumer discretionary, materials and industrials — notched new highs on Thursday, following within the broader market’s tracks after robust earnings experiences from Apple and Facebook.

The communications services sector additionally made main strides, hitting its highest stage because it was transformed from the telecommunications sector in late 2018.

As the financial reopening picks up, actual property shares might see much more upside, mentioned John Petrides, portfolio supervisor at Tocqueville Asset Management.

“I would go with REITs as my favorite here for the income play … as more tenants are coming back and being able to pay their rents,” he advised CNBC’s “Trading Nation” on Thursday. “REITs were one of the worst-performing sectors last year and it’s come out of the gate strong.”

Health care, which made its current excessive final week, additionally displays “great value,” Petrides mentioned.

“Companies in health care throw off a tremendous amount of cash flow, pay a dividend in a low-yield environment, [their] valuations are relatively very attractive and they have strong balance sheets,” he mentioned. “And, clearly, now we have the nice accelerator of Covid, and well being care’s one of many large beneficiaries of that.”

Three of Thursday’s winners stood out to Nancy Tengler, chief funding officer of Laffer Tengler Investments.

“We’re overweight materials, we’re overweight communications services and we’re overweight financials,” she mentioned in the identical “Trading Nation” interview. “But my pick would be communications services.”

With banks “getting smoked by the bond market” on mortgage demand, “that’s not where I would be focused,” Tengler mentioned.

“We nonetheless like names like Google and Facebook,” she mentioned, noting that Facebook shares have “done almost nothing for the last six months” whereas the corporate grows gross sales at 48% on a 26 occasions price-to-earnings a number of.

“Then I’d throw within the combine Disney, Roku and Comcast. Those are our overweights and fairly important holdings for us,” Tengler mentioned. “They are also part of the reopening trade and we don’t think they’d run as fast as some of the other more traditional sectors.”

Disclosure: Tengler and Laffer Tengler Investments personal shares of Google, Facebook, Disney, Roku and Comcast. Comcast is the proprietor of NBCUniversal, mother or father firm of CNBC.

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