B. Riley FBR's Arthur Hogan predicts the current bull run in the stock market can rage a lot longer if the U.S. can resolve its global trade spats.
Hogan recently gave CNBC his three winning picks to get investors through the next 16 months.
- Technology: "I think technology will significantly outperform and probably be the lead sector in the S&P 500," the investment firm's chief market strategist said.
- Health care: Hogan said health care will become the second largest sector in the S&P on September 28. That's when some of technology's biggest stocks such as Facebook, Netflix and Alphabet officially become part of the newly minted Communication Services sector, CNBC.com reported. He suggested the shift could make health care look more attractive.
- Financials: "I think financials will finally catch a leg because of rising interest rates on the long end of the curve. We are going to see some spread, and I think that is something that the financials have been waiting for," he added. "So, the fundamentals behind the financials are very solid. And, I think they have rock solid balance sheets, and I think they are undervalued," he said.
Hogan did suggest investors should avoid one particular financial segment.
"I'd be afraid of anything that looks like a bond," said Hogan.
Meanwhile, Wall Street’s longest ever bull run should slow its charge to end the year around current levels as global trade tensions linger and earnings growth weakens, factors that will also limit gains in 2019, a recent Reuters poll found.
By year-end 2019 the benchmark S&P 500 will reach 3,100, up around 6.6 percent from the end-2018 forecast, according to the median forecast from 55 strategists polled by Reuters in the last two weeks. The S&P 500 gained 10.76 points, or 0.37 percent, to end Tuesday at 2,887.89
“While the path of least resistance certainly feels higher short-term, we wouldn’t be surprised to see the S&P 500 finish the year at or around current levels,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York.
Material from Bloomberg and Reuters were used in this report.
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