By Shawn Langlois, MarketWatch
While President Trump says the U.S. is “locked and loaded” and investors sift through the aftermath of the weekend attack that disrupted Saudi Arabia’s crude output, the Wall Street vet who ran Merrill Lynch’s giant tech fund during the dot-com days issued a warning for those looking to hitch their ride to the tech sector.
A near-term correction is “inevitable,” warns Paul Meeks, portfolio manager at Independent Solutions Wealth Management, in our call of the day .
We’re already seeing red ink spilled all over the premarket, but Meeks’s forecast focuses on the lingering uncertainty of the trade war.
“My typical tech company is deeply embedded in a supply chain between the two nations,” he told CNBC . “We’ve also started to see a decline in the economic growth rate particularly abroad, less drastic here in the states. But a lot of people don’t realize that tech products and services, whether that be sold to the enterprise or sold to the consumer, you know typically are cyclical.”
Hence, Meeks is calling for a near-term drop on the tech-heavy Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.40% of 10%, which he says should give investors a chance to sniff out some deals. “I always have my eye on my favorite tech names, and I look for opportunities to buy them on dips,” he explained.
But those deals don’t include tech juggernaut Apple /zigman2/quotes/202934861/composite AAPL +0.39% , as he believes a secular slump in smartphones will weigh heavily.
“I would like to shift out of those names in this kind of environment and try to find some deals in software,” he said. “The one that I like the most particularly as I exit Apple and increase in the software space is Salesforce.com.”
Meeks says Salesforce.com’s /zigman2/quotes/200515854/composite CRM -0.54% software business “is growing faster and is much more profitable than anything that Apple is doing.”
No brainer pick for the chart of the day: Crude prices /zigman2/quotes/211629951/delayed CL.1 -0.13% went vertical at the open: Here’s what a double-digit jump looks like in the oil pits:
As oil goes nuts, sellers are flocking to safer assets. The Dow /zigman2/quotes/210598065/realtime DJIA +0.09% , S&P /zigman2/quotes/210599714/realtime SPX +0.28% and Nasdaq /zigman2/quotes/210598365/realtime COMP +0.40% are all down midmorning. Gold /zigman2/quotes/210039486/delayed GCZ19 -0.21% is capitalizing on the uncertainty with a move higher and the Japanese /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0543% yen is also catching a bid.
Europe stocks /zigman2/quotes/210599654/delayed XX:SXXP -0.10% aren’t doing much better, while Asia markets /zigman2/quotes/211618636/realtime XX:ADOW +0.15% ended with losses. The dollar /zigman2/quotes/210598269/delayed DXY +0.02% is heading lower.