Buying Opportunities In Wall Street During Uncertainty
“Periods of uncertainty are actually great buying opportunities. Once the uncertainty abates, companies are very adaptive,” DeSpirito told BI.
Right now, DeSpirito said he is “seeing opportunities in healthcare services, medical devices, aerospace, and defense companies.”
“In healthcare, I’m finding a lot more opportunity in services than I am in large-cap pharma. Large cap pharma has a lot of issues around where they locate their intellectual property,” DeSpirito added. “A number of them have large patent expirations that are upcoming.”
DeSpirito emphasized that the market is overly focused on risk, overlooking longer-term opportunities. He remains confident that “kinks in trade policy will be ironed out soon.”
“In addition to greater certainty around trade, you’ll also get deregulation, which will be a positive for the market and when you think about tariffs as a source of revenue, that revenue source will create more flexibility on the policy side,” DeSpirito said.
“Sell America” Narrative Is Overdone
Jonathan Curtis, chief investment officer at Franklin Equity Group, challenged the trend of moving investments outside the US due to tariff fears.
Curtis said the “sell America” narrative is overblown.
Instead of shifting to international stocks, Curtis argued investors should be “doubling down on US leaders like the Magnificent Seven,” especially since many Big Tech stocks are down “roughly 20% from all-time highs,” creating a good opportunity for those looking to add positions “in high-quality companies for cheap.”
“This productivity gain that we’re going to get from artificial intelligence is going to be profound and those companies, many of them Mag 7, hold the keys to that,” Curtis said during a Franklin Templeton conference on April 22.
Curtis also remained bullish on defensive sectors like healthcare, pointing to steady demand across economic cycles and innovations like GLP-1 medications and AI driving growth.
“Those businesses are as good as they were over the long term prior to Inauguration Day, and those companies are incredibly well-positioned for what’s about to come,” Curtis said of the Magnificent Seven.
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Consumer Behavior Defies Recession Worries
Jeff Schulze, head of economic and market strategy at ClearBridge Investments, argued that recession fears on Wall Street are overstated.
“It’s easy to buy into a doomsday recession narrative, but Schulze doesn’t see much evidence to back it up.” He noted that “there’s been a lot of talk about how consumer sentiment is at historic lows, but actions are more important than sentiment itself.”
“In this cycle in particular, it’s more important to watch what people do rather than what they say, because when you look at the University of Michigan’s consumer sentiment survey, it’s been low and declining, yet consumption has been fairly broad-based over the last couple of years,” Schulze said at the same Franklin Templeton conference on April 22.
Despite low sentiment readings, Schulze pointed out that US consumers are in solid financial health.
“Household debt levels are low, and many homeowners locked in low mortgage rates, insulating them from their biggest monthly expense,” according to Schulze.
“This is a great opportunity to be dollar-cost averaging into the weakness that we’ve seen,” Schulze “wall street” said. “A lot of negativity has been priced in a short period of time for US equities, and I don’t see any structural excesses in the economy that would cause a deep recession.”
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