Final week was an enormous one for tech earnings, nevertheless it ended on a whimper as a sequence of disappointments left market watchers questioning the power of the tech rally. The week kicked off with optimistic earnings surprises from the likes of Meta and Superior Micro Gadgets , however ended with misses and unfavorable outlooks from tech giants Alphabet , Apple and Amazon that paint a worrying image of shopper weak spot and renewed fears of an financial slowdown. Traders have 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% increased. However market veteran Kenny Polcari, chief market strategist at SlateStone Wealth, continues to be bullish on Large Tech. “We added Large Tech on weak spot, like Apple and Amazon, these shares are getting arbitrarily dislocated. Apple did find yourself closing the day on Friday increased even after their report, which simply suggests to you that persons are nonetheless placing cash into Large 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 positive, however I do not suppose you possibly can go all in on Large Tech simply but,” he mentioned. Nvidia can also be a play on synthetic intelligence, in response to Polcari. It’s certainly one of two broad themes he likes in tech, the opposite being cybersecurity. “I believe you actually should think about the position that synthetic intelligence goes to play however hasn’t performed to date. It has made this quantum leap virtually 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. In truth, his total positioning is basically defensive, along with his most well-liked sectors being what he calls STPN, or “stuff that folks want.” “The majority of the portfolio goes to be chubby in shopper staples and healthcare, utilities and power, after which you are going to create alpha across the edge with a number of the names which have gotten actually overwhelmed 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 tender touchdown — one thing I don’t suppose they will do, however I simply suppose it will likely be an extended, extra sluggish recession and never a goldilocks sort of soppy recession,” Polcari mentioned. He believes power will proceed to outperform this 12 months, with a full China opening set to ship international demand increased. Towards this backdrop, he likes oil giants equivalent to ExxonMobil , Chevron , Schlumberger , and Halliburton
