Big Tech, health-care and high-yield stocks are dip-buying targets

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A dizzying start to August, which saw U.S. stocks whiplashed by economic jitters, lackluster earnings and the unwinding of the global yen carry trade, has left Wall Street searching for corners of the market that may have been unfairly punished.

Carmen Reinicke and Magdalena Del VallePedestrians are reflected in a puddle while passing in front of the New York Stock Exchange in New York, U.S., on Friday, May 19, 2017. --

Of course, there’s risk involved with trying to trade in an erratic market — stocks could take another leg lower, leading to future discounts, or rocket higher quickly, taking away the opportunity. For long-term investors, trading around volatility probably doesn’t make sense, according to Quincy Krosby, chief global strategist at LPL Financial LLC.

“We remain bullish on the space as the main reasons we are positive – AI and memory strength – remain intact,” analysts led by Christopher Danely wrote in a note Thursday. Harden also sees an upside growth story in the sector around weight-loss drugs. An example is Eli Lilly & Co., whose shares had taken a sharp leg down in the selloff. The stock surged on Thursday after the company reported earnings that beat estimates and raised its 2024 revenue forecast on sales of its obesity medicine.

“If you were underweight, this is a good opportunity to start adding,” Rhys Williams, chief strategist at Wayve Capital Management LLC, said.Worries about the macroeconomic backdrop often make stocks sensitive to interest rates, likes utilities, REITs and dividend payers, more attractive to investors.

 

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