Poor depth creates a buying opportunity, said Liz Ann Sonders of Charles Schwab
Liz Ann Sonders, chief investment strategist at Charles Schwab, thinks weakness in individual stocks creates buying opportunities.
The investment chief noted that this year’s resilience at the index level has masked the poor breadth beneath the surface. He notes, for example, that a larger share of constituents in the Nasdaq Composite is below its 200-day moving average than in the S&P 500. For investors, he expects this means the Nasdaq can outperform the S&P 500 on a relatively forward basis. .
It also shows that investors can find individual buying opportunities, he said, although he urged investors to focus on quality companies with strong balance sheets and cash flow.
“I think there are opportunities created at the individual stock level because of the weaker breadth for the average stock,” Sonders told CNBC’s “Closing Bell” on Tuesday.
“I think it’s important to keep the quality high,” he added.
-Sarah Min
Nvidia’s forward P/E, market cap could rise by the end of the year, said Eric Jackson of EMJ Capital
Nvidia is ready to continue the monster run, according to EMJ Capital Eric Jackson. Hedge fund managers see their price-to-earnings ratio moving closer to 70 and rising to $6 trillion in market cap at $250 a share by the end of the year.
“This is a highflier,” the company’s founder and president told CNBC’s “Closing Bell” on Tuesday, adding that the euphoria still hasn’t caught on. He sees euphoria reflected in “high” prices in the second half of 2024 as sales of Blackwell chips begin to arrive and the upcoming release of next-generation Rubin chips generates anticipation.
“Nobody caught him,” he continued. “It’s a year away from happening. They will take advantage of the lead they have.”
Shares of the chip maker rose about 6.8% during the trading session on Tuesday, and its forward P/E stood at 47.47. The stock is up 154.6% this year.
“We’re below the average for the last five years, so even though the stock has done well, it’s still cheap compared to what it sold for in the past,” he said.
– Sean Conlon
Stock futures were little changed
Stock futures were little changed on Tuesday, after the S&P 500 rebounded from a three-session slide.
Futures tied to the broad market index ticked down 0.06%. Nasdaq 100 futures retreated 0.02%, while Dow Jones Industrial Average futures fell 62 points, or 0.1%.
—Brian Evans
