Last Wednesday, the U.S. Federal Reserve’s surprising 50-basis-point interest rate cut jolted market watchers. Kenny Polcari, chief market strategist at SlateStone Wealth, told CNBC’s “Street Signs Asia” that the cut, made just weeks before a chaotic presidential election, left many questioning its implications. Federal Reserve Chair Jerome Powell stated that the move does not indicate an elevated risk of recession, citing solid growth, falling inflation, and a robust labor market.
In response to this rate cut, Polcari revealed his investment strategy. He continues to favor stocks over fixed income, steering clear of tech in favor of sectors like utilities, energy, consumer staples, financials, and basic materials—sectors he believes will perform well even if the economy slows.
Polcari highlighted Energy Transfer, a midstream energy services firm, as a “perfect stock” for the current environment, praising its 7.99% dividend yield. Energy Transfer shares have surged about 17.4% this year, and analysts’ consensus gives it nearly 19% potential upside with a $19.25 price target.
Another favored stock is Amgen, a biopharmaceutical company, which is up over 17% year-to-date. Polcari is optimistic about its new product pipeline, including a monthly GLP-1 drug and a weight loss pill currently under FDA trials. Analysts’ average price target for Amgen is $325.33, though it has a slight downside.
Despite his tech sector caution, Polcari considers ASML, a maker of high-tech chip-manufacturing machines, to be a bargain. Down about 20-25%, ASML is likened to Nvidia in its central role in the tech arena. With its shares up 5.1% year-to-date, analysts foresee a 46.2% upside, pegging the average price target at €1,057.52 ($1,170).
Polcari’s insights suggest strategic sector choices can navigate the uncertain market landscape effectively.
— CNBC’s Sean Conlon contributed to this report.
Original Story https://www.cnbc.com/2024/09/23/strategist-here-are-3-stocks-to-buy-after-the-feds-crisis-level-cut.html
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