By Shawn Langlois, MarketWatch
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‘The market is utterly underestimating how much of a shock the coronavirus is going to be to the economy. And I think for the next 12 months, the U.S. consumer is only going to spend his money or her money on [nondiscretionary] goods. So, within that basket, I think you have to let Apple go.’
That is Boris Schlossberg of BK Asset Management, explaining to CNBC why Apple /zigman2/quotes/202934861/composite AAPL +0.49% has no place in an investor’s portfolio amid the coronavirus pandemic. “Anything that is discretionary I think will be absolutely not spent a penny on for at least a year,” he added.
Instead, he said investors should take a look at adding companies poised to benefit in the coming months, such as Procter & Gamble /zigman2/quotes/202894679/composite PG -0.37% and Johnson & Johnson /zigman2/quotes/201724570/composite JNJ -0.72% .
Why P&G? Well, Jefferies just upgraded the Charmin-maker, hailing the company as “among the best in staples to weather near-term macro headwinds.”
And as for Johnson & Johnson, the stock is gaining ground after the company said it had identified a lead candidate in its efforts to develop a COVID-19 vaccine. J&J said it plans to begin Phase 1 clinical trials of the vaccine candidate in humans in September, and the investigational vaccine may be ready for emergency use authorization from the FDA by early 2021.
Schlossberg also said he’d pick PepsiCo /zigman2/quotes/208744353/composite PEP -0.06% over Disney /zigman2/quotes/203410047/composite DIS -1.79% and, perhaps more obviously, over Royal Caribbean /zigman2/quotes/204169771/composite RC +1.14% , for the same reasons.
Watch the full interview:
Apple shares followed the broader market nicely higher on Monday, up more than 2% at last check while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.31% , S&P 500 /zigman2/quotes/210599714/realtime SPX -0.23% and tech-heavy Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.09% all gained ground.