Thursday’s explosive market rally—one day after the Fed announced a half-point interest rate cut—showed that there is probably a lot more room to run for the broader market. Some of the stocks and sectors that have been laggards could start to outperform the tech stocks with larger market capitalizations—such as the “Magnificent Seven”—that have been market darlings for the past few years.
“There should be a broadening of earnings growth beyond tech and a catching up for everything else,” said Andrew Krei, co-chief investment officer of Crescent Grove Advisors. “For healthcare, financials and industrials, year-over-year earnings growth is starting to look more favorable.”
Krei told Barron’s that these more cyclical sectors have been less loved by the market. That means the bar to beat earnings expectations is set pretty low.
Barron’s subscribers can read the article here. Full text is available at time of posting on MSN.