REFILE-LIVE MARKETS-Investors should focus on growth stocks as bond yields rise, says Raymond James' Orton
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INVESTORS SHOULD FOCUS ON GROWTH STOCKS AS BOND YIELDS RISE, SAYS RAYMOND JAMES' ORTON
The recent selloff in global bonds is raising concerns about the outlook for the U.S. stock market, despite the S&P 500’s relative resilience as the index logged its seventh consecutive week of gains last week.
Rising oil prices and tensions tied to the war with Iran have fueled inflation worries, pushing benchmark 10-year Treasury yields US10YT=RR to their highest level in more than a year. They were last up 2.4 basis points at 4.619%.
Against this backdrop, investors should focus on growth stocks—particularly those positioned to benefit from the artificial intelligence capital-spending boom, including sectors such as semiconductors, construction and engineering, and electrical equipment and machinery - according to Raymond James Chief Market Strategist Matt Orton.
"The reason that growth stocks have outperformed isn’t based on hope, it’s based on strong earnings results and forward guidance. But not all growth assets are created equally (many are simply long-duration bond proxies) – investors should be focused on those with genuine pricing power and secular earnings durability that will continue to outrun rates. And that continues to point to the infrastructure and model layers of the AI super-cycle," Orton says.
(Chibuike Oguh)
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