Investors may fall short of to hold on tight.
Todd Salamone of Schaeffer’s Investment Research intimates the stock market’s wild ride will intensify this summer and could take from the major indexes down with it.
The firm’s senior vice president of research cites an curious scenario that materialized around the June Federal Reserve class hike that bodes poorly for stocks.
“The interesting thing just about this particular rate hike was we measure short-term sentiment. It was very sanguine right ahead of this rate hike, which didn’t create any sense,” Salamone said Wednesday on CNBC’s “Trading Nation.” “It was a contradiction because that’s the worst time to be in stocks in the short term.”
His cogitations came as the S&P 500 moved back into the red — closing below its 50- and 100-day in motion averages. Plus, the Dow is on the verge of posting its second negative quarter in a row for the chief time since 2015.
Even though Salamone is cautious on the broader markets, he’s enthusiastic on retail stocks.
“The sector I do like and would rotate into is the retailers. Those stocks were Nautical port for dead — especially some of those department stores,” he said. “They’ve influence out with earnings this year which have beaten requirements.”
The SPDR S&P Retail ETF has struggled — down 3 percent over the past three years. But, it has been regaining stability. The group has rallied 22 percent in the past year, and Salamone contends there’s pacific money to be made.
“There are still a lot of hold and sell ratings related to the buy ratings,” Salamone said. “There’s still a lot of short interest. That exclusive of interest, by the way, is in the early innings of being unwound.”