Tech plays to ride out bond yield spike, the value trade
(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors this morning are watching the continued sell-off being attributed to higher bond yields. Wedbush’s Dan Ives shares his picks during the tech volatility and David Zervos from Jefferies gives his take on the Fed and investor sentiment. Dan Ives on picks to navigate the tech turbulence Ives said tech can still move higher despite the spike in bond yields, sharing his top picks to buy on a pullback. Among them are Nvidia , Microsoft and Palantir . “It’s still going to be a headwind, but our playbook the last few years has been you use these opportunities to own the winners. … We are only half way though the tech bull market. I still believe tech stocks are up 25% this year,” Ives said. He added that he sees Microsoft and Oracle earnings as more vulnerable to the recent dollar rally. David Zervos’ ‘Word of the day:’ ‘Umich’ The University of Michigan Consumer Sentiment report on Friday, showing a steep increase in inflation expectations over the next year is another factor adding to the recent sell-off, according to David Zervos of Jefferies. “That piece of data got under the skin of the market on Friday,” said Zervos on “Worldwide Exchange”. “It’s generally revised down when we see a spike like that, but that’s got the market very nervous. … People don’t think inflation expectations are actually doing that, they see it as a reason the Fed is going to be more stubborn in terms of its rate moves in 2025.” WisdomTree and the value trade Jeremy Schwartz of WisdomTree thinks the current bond rate environment and uncertainty around the Federal Reserve and rate cuts. He said the WisdomTree US Value Fund trades at 13-times forward earnings and is a great way to play what he sees as a shift in investor sentiment. ‘What I love about this fund is they do a lot of dividends and buybacks,” Schwartz said on “Worldwide Exchange.” “The management they are voting with their feet and buying back their own stock in big numbers. We think that is good protection from the high valuation of the market.”
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