Poor breadth is creating buying opportunities, Charles Schwab’s Liz Ann Sonders says
Liz Ann Sonders, chief investment strategist at Charles Schwab, thinks weakness in individual stocks is creating buying opportunities.
The investment chief noted that resilience this year on the index level has disguised poor breadth below the surface. She noted, for example, that a greater share of constituents in the Nasdaq Composite are below their 200-day moving averages than in the S&P 500. For investors, she expects this means the Nasdaq can outperform the S&P 500 on a relative basis going forward.
It also suggests that investors can find individual buying opportunities, she said, though she urged investors to focus on quality companies with strong balance sheets and cash flow.
“I think there’s opportunities being created at the individual stock level because of how much weaker breadth has been for the average stock,” Sonders told CNBC’s “Closing Bell” on Tuesday.
“I think they should stay high quality,” she added.
— Sarah Min
Nvidia’s forward P/E, market cap could surge by year’s end, EMJ Capital’s Eric Jackson says
Nvidia is poised to continue its monster run, according to EMJ Capital’s Eric Jackson. The hedge fund manager sees its forward price-to-earnings ratio hitting close to 70 and rising to $6 trillion in market cap at $250 per share by year’s end.
“This is a highflier,” the firm’s founder and president told CNBC’s “Closing Bell” on Tuesday, adding that the euphoria still has not caught up yet. He sees euphoria being reflected in a “lofty” valuation in the second half of 2024 when sales from its Blackwell chip start to come in and the future release of its next-generation Rubin chips generates anticipation.
“Nobody’s catching up to them,” he continued. “It’s years away from that happening. They’re going to take advantage of that lead that they have.”
Shares of the chipmaker rose about 6.8% during Tuesday’s trading session, and its forward P/E was at 47.47. The stock is up 154.6% this year.
“We’re below the mean for the last five years, so even though the stock has done so well, it is still relatively cheap compared to where it’s traded in the past,” he said.
— Sean Conlon
Stock futures are little changed
Stock futures were little changed on Tuesday, following the S&P 500’s rebound from a three-session slide.
Futures tied to the broad market index ticked down 0.06%. Nasdaq 100 futures pulled back 0.02%, while Dow Jones Industrial Average futures slipped 62 points, or 0.1%.
— Brian Evans