Markets (^DJI, ^IXIC, ^GSPC) are trading mixed Thursday afternoon, recovering from a tech sell-off triggered by disappointing reports from the “Magnificent 7” companies. Savita Subramanian, BofA Securities Head of U.S. equity strategy & U.S. quantitative strategy at joins Market Domination to share her market outlook.
Subramanian says big tech won’t have an easy climb anymore. She explains, “We’re starting to see these companies price in much loftier expectations,” making it harder for mega-cap stocks. In 2023, tech companies focused on self-improvement – cutting costs, reducing workforce, and leveraging AI. But in 2024, they’re “in spend and grow mode,” investing heavily in AI to “keep up with the joneses.”
Subramanian advises investors to “focus on old school capex” instead of big tech. She tells Yahoo Finance, “I think it’s time to move from expensive crowded technology stocks to less expensive, less crowded industrials, machinery, metals and mining, oil even fossil fuels could benefit from a good old fashioned traditional manufacturing cap ex cycle and we haven’t had one for a long time.”
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