Summary List PlacementFor Victoria Fernandez, the stars are aligning for a continued bull market through 2021.
“We’ll have stronger economic fundamentals, the reopening excitement, we have some of the political tensions declining here in the US and in regard to Brexit,” the Crossmark Global Investments chief market strategist told Business Insider on December 17.
Tuesday’s news that President Donald Trump was requesting that Congress increase direct individual payments from $600 to $2,000 in the second COVID-19 relief bill — which will seemingly delay when that relief would have arrived — was no exception.
Fernandez says it’s in fact a win-win scenario for markets.
“No deal is probably not an option anymore. Instead you have the current deal which provides assistance to individuals or you get an even bigger deal, if not immediately, in about 3-4 weeks when the new administration takes office,” she said in an emailed statement on December 23.
“Markets could be looking at this as a positive in the longer run to gain a larger deal as Republicans are pressured to agree to larger numbers than they were originally comfortable with.
“This provides even more tailwinds for the markets combined with Fed liquidity and elevated savings rates which will probably come feed through to higher spending next year,” she added.
Fernandez’s optimism heading into next year isn’t exactly unique on Wall Street today — most see considerable upside for the S&P 500 over the next 12 months.
But Fernandez’s excitement about growth stocks may be seen by some as a bit more contrarian, as investors begin to crowd into value and cyclical stocks ahead of an impending economic recovery.
While she has upped her exposure to cyclical and value stocks — Walmart (WMT) is one name she’s added, for example — she said she’s more bullish on growth, especially in the longer-term.
“We see it as more of a momentum trade, and we’re not going to trade purely on momentum,” Fernandez said. “But it makes sense to us with a vaccine coming out, we should be able to start some reopenings, hopefully we don’t have as many lockdowns, so that cyclical component makes sense.
“However, going forward, where do we think the trends are going to be? We don’t see the long-term trend as being cyclical, we see long-term trends being on the growth side,” she added.
Which growth sector to be in — and 2 stocks Fernandez recently added
Within growth, Fernandez said she recommends investors look toward firms involved in digitization as norms change following the pandemic.
“We would be adding in that ‘growthier’ area of servicing internet companies that have to do with shopping, with healthcare, with people working from home,” she said. “And not just the end-name companies from the consumer side, but also looking at the companies that have to provide the infrastructure for all of this new internet-based consumption that we’re doing.”
Fernandez said two names she most recently took up positions in are semiconductor manufacturer Broadcom (AVGO) and financial services firm Visa (V).
Given her bullish outlook, Fernandez added that investors should use any pullbacks to add to positions or step into names that may be too expensive at the moment.SEE ALSO: Charles Schwab’s chief investment strategist warns ‘extreme’ investor sentiment is putting the market at risk of a pullback — and shares 4 trades to drive returns in 2021
Join the conversation about this story » NOW WATCH: Why these Gucci clothes are racist
Read More
