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Feb. 20, 2018, 8:31 a.m. EST

BlackRock says it’s time to give U.S. stocks more love — try these sectors

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By Victor Reklaitis, MarketWatch


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BlackRock is a fan of U.S. stocks as the Pyeongchang Games keep rolling.

As the short week for traders kicks off, a big question is whether the mighty mid-month rally for stocks looks like a fake-out or not.

Morgan Stanley strategists say the real-deal selloff for U.S. stocks isn’t going to hit quite yet . They view this year’s second quarter as more likely to bring a big serving of selling — a “main course,” rather than just an “appetizer.”

The world’s largest asset manager — BlackRock — also is weighing in, providing our bullish call of the day .

“We have upgraded our tactical view of U.S. equities to overweight from neutral,” says the company’s global chief investment strategist, Richard Turnill.

“The reason: Impending fiscal stimulus is supercharging U.S. earnings growth expectations.”

Aren’t the tax cuts and latest budget already priced in? Not according to Turnill.

“We believe the coming positive effects of new U.S. tax and spending plans are still underappreciated by markets,” he writes in a note dated Monday .

Don’t stocks /zigman2/quotes/209901640/composite SPY -0.64% look pricey?

“Earnings growth matters more than valuations over shorter time horizons at this stage of the bull market,” Turnill says.

BlackRock, which manages $6 trillion in investor money, especially likes American tech /zigman2/quotes/207444675/composite XLK -1.09% and financial stocks /zigman2/quotes/209660484/composite XLF -0.89% , as well as momentum /zigman2/quotes/201303785/composite MTUM +0.09% and value plays /zigman2/quotes/209486178/composite VTV -0.94%  . It also has downgraded European equities /zigman2/quotes/200270338/composite VGK +0.96%  to neutral from overweight.

Key market gauges

A seventh-straight up day for the Dow and S&P doesn’t look in the cards, as futures for blue chips and the 500 are slumping. Nasdaq-100 futures are also lower, after the Dow /zigman2/quotes/210598065/realtime DJIA -0.80% and S&P /zigman2/quotes/210599714/realtime SPX -0.61% jumped 4.3% last week, while the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.24% climbed 5.3% for the week.

It’s been mostly losses for Asia, mixed action for Europe /zigman2/quotes/210599654/delayed XX:SXXP -1.37% ,and the 10-year Treasury yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -1.43% has been above 2.92% today. Goldand Brent crude are lower, while WTI crude and the dollar index /zigman2/quotes/210598269/delayed DXY -0.96% are higher. Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +2.61% has been holding above $11,000.

See the Market Snapshot column for the latest action.

The chart

Time for some tech?

If — like BlackRock — you’re bullish on tech and financials, then here are a couple of potentially useful charts.

They lay out stocks from those two sectors that look promising, based on their recent price patterns, and they come from Jonathan Krinsky, chief market technician at MKM Partners.

The chart above suggests considering tech names Citrix /zigman2/quotes/206700852/composite CTXS -0.24%  , Garmin /zigman2/quotes/203929352/composite GRMN -0.15%  , Blackbaud /zigman2/quotes/205432589/composite BLKB +3.17%  and Ultimate Software  , while the buy ideas in the chart below are M&T Bank /zigman2/quotes/207957637/composite MTB -1.85%  , PNC Financial /zigman2/quotes/203416310/composite PNC -0.81%  , Regions Financial /zigman2/quotes/202396577/composite RF +0.40%  and Zions Bancorp /zigman2/quotes/207521274/composite ZION -1.80% .

MKM suggests these bank stocks could deliver gains.
/zigman2/quotes/209901640/composite
US : U.S.: NYSE Arca
$ 389.37
-2.49 -0.64%
Volume: 79.81M
May 19, 2022 3:42p
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/zigman2/quotes/207444675/composite
US : U.S.: NYSE Arca
$ 130.78
-1.44 -1.09%
Volume: 8.60M
May 19, 2022 3:42p
loading...
/zigman2/quotes/209660484/composite
US : U.S.: NYSE Arca
$ 32.91
-0.30 -0.89%
Volume: 59.10M
May 19, 2022 3:42p
loading...
/zigman2/quotes/201303785/composite
US : U.S.: Cboe BZX
$ 137.36
+0.12 +0.09%
Volume: 1.20M
May 19, 2022 3:41p
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/zigman2/quotes/209486178/composite
US : U.S.: NYSE Arca
$ 136.73
-1.30 -0.94%
Volume: 2.86M
May 19, 2022 3:42p
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/zigman2/quotes/200270338/composite
US : U.S.: NYSE Arca
$ 57.00
+0.54 +0.96%
Volume: 5.78M
May 19, 2022 3:42p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,238.47
-251.60 -0.80%
Volume: 419.88M
May 19, 2022 3:42p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,899.68
-24.00 -0.61%
Volume: 2.15B
May 19, 2022 3:42p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
11,390.29
-27.86 -0.24%
Volume: 3.68M
May 19, 2022 3:42p
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/zigman2/quotes/210599654/delayed
XX : STOXX
427.99
-5.96 -1.37%
Volume: 0.00
May 19, 2022 5:50p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
2.85
-0.04 -1.43%
Volume: 0.00
May 19, 2022 3:42p
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/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
102.82
-0.99 -0.96%
Volume: 0.00
May 19, 2022 3:32p
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/zigman2/quotes/31322028/realtime
US : CoinDesk
29,967.34
+761.96 +2.61%
Volume: 0.00
May 19, 2022 3:41p
loading...
/zigman2/quotes/206700852/composite
US : U.S.: Nasdaq
$ 99.44
-0.24 -0.24%
Volume: 494,318
May 19, 2022 3:41p
P/E Ratio
45.39
Dividend Yield
1.49%
Market Cap
$12.62 billion
Rev. per Employee
$336,778
loading...
/zigman2/quotes/203929352/composite
US : U.S.: NYSE
$ 101.05
-0.15 -0.15%
Volume: 668,765
May 19, 2022 3:42p
P/E Ratio
18.29
Dividend Yield
2.64%
Market Cap
$19.54 billion
Rev. per Employee
$271,825
loading...
/zigman2/quotes/205432589/composite
US : U.S.: Nasdaq
$ 59.52
+1.83 +3.17%
Volume: 348,996
May 19, 2022 3:41p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$3.05 billion
Rev. per Employee
$268,242
loading...
/zigman2/quotes/207957637/composite
US : U.S.: NYSE
$ 162.63
-3.07 -1.85%
Volume: 847,798
May 19, 2022 3:42p
P/E Ratio
12.50
Dividend Yield
2.93%
Market Cap
$29.73 billion
Rev. per Employee
$336,013
loading...
/zigman2/quotes/203416310/composite
US : U.S.: NYSE
$ 154.67
-1.27 -0.81%
Volume: 1.29M
May 19, 2022 3:42p
P/E Ratio
13.12
Dividend Yield
3.87%
Market Cap
$64.49 billion
Rev. per Employee
$330,445
loading...
/zigman2/quotes/202396577/composite
US : U.S.: NYSE
$ 20.01
+0.08 +0.40%
Volume: 6.30M
May 19, 2022 3:42p
P/E Ratio
8.33
Dividend Yield
3.39%
Market Cap
$18.62 billion
Rev. per Employee
$335,830
loading...
/zigman2/quotes/207521274/composite
US : U.S.: Nasdaq
$ 52.05
-0.95 -1.80%
Volume: 1.59M
May 19, 2022 3:42p
P/E Ratio
8.48
Dividend Yield
2.92%
Market Cap
$8.02 billion
Rev. per Employee
$302,839
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