Investors should focus on quality stocks, strategist says

While contending with September’s seasonal volatility, stocks (^DJI, ^IXIC, ^GSPC) slide further in Friday’s session in response to the August jobs data released this morning. While nonfarm payroll jobs growth came below economist expectations, the unemployment rate ticked down to 4.2%.
All of these factors are colliding with losses seen in the AI chip trade as semiconductor manufacturers Nvidia (NVDA) and Broadcom (AVGO) failed to wow Wall Street with their earnings beats.
John Hancock Investment Management co-chief investment strategist Emily Roland sits down with the Market Domination team to discuss which sectors investors can find more quality trades in while avoiding risk.
“The poster child for quality is mega-cap tech. We like that, but we do have a valuation issue there with the tech sector bumping up towards 30-times forward earnings,” Roland explains. “So we want to look at other areas of the market quality at a reasonable price, if you will. So looking at sectors like healthcare, which are trading at a 10% discount to the broad market…”
Roland weighs in on Big Tech stocks, the AI trade, and the bond market (^TYX, ^TNX, ^FVX) ahead of the Federal Reserve’s plans to cut interest rates.
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