A great rotation in the market is underway.
Cyclical recovery stocks such as Boeing have outperformed this week, while names that outperformed during the pandemic and subsequent lockdowns, such as Amazon, have fallen. Renewed hopes that the U.S. might turn the corner in the Covid crisis soon have buoyed markets.
Not so fast, says Mark Tepper, president of Strategic Wealth Partners: Some stay-at-home stocks that rocketed higher this year could still have legs.
“Investors are realizing … we’ve experienced some structural changes in our lives and in our economy and we’re never going to go back 100% to the way we were in 2019. So, I would actually be looking at this as a buy-the-dip opportunity on all the stocks that were working this year,” Tepper told CNBC’s “Trading Nation” on Tuesday.
Tepper is betting on one e-retail play that could continue to outperform.
“The company that I have the most conviction in right here, right now is Stamps.com, because e-commerce, that’s not going anywhere. And this is really our derivative play on e-commerce. It’s basically Amazon for your mom-and-pop small businesses, not just shipping but also warehouse solutions as well, so I think right now you’ve got to buy the dip,” said Tepper.
Stamps.com has rallied 121% this year, one of the top performers in the XRT retail ETF.
Todd Gordon, founder of TradingAnalysis.com, instead sees opportunity in the banking stocks.
“We’re seeing a move higher in yield — pretty impressive back up in yields — helping banks, especially regional banks, plus we’re seeing a higher regime in the VIX, and keep in mind we’re coming off like a decade low in like a 12/13/14 VIX, we’re settling in 20/25/30, and investors know they need help … from professional money managers,” Gordon said during the same “Trading Nation” segment.
In particular, Gordon is eyeing Morgan Stanley for a move higher — he noted that the break above its long-term trend line stretching back to 2000 looks promising.
“Interesting potential breakout here in Morgan, plus it’s yielding 2.5%, so I’ll just go there for now,” said Gordon.
Disclosure: Strategic Wealth Partners holds shares of Stamps.com.
