Some investors might be shopping for stocks, given the recent market pullback. In late July, both the S & P 500 and the Nasdaq dived to a low not seen since 2022 before rebounding. Global markets — including the U.S. — sharply sold off in early August before bouncing back. However, Matt Orton of Raymond James Investment Management cautioned that the path forward may be bumpy again. “While volatility has fallen nearly as fast as it spiked, that doesn’t mean the path forward won’t have some bumps,” the chief market strategist told CNBC’s ” Street Signs Asia ” on Monday. He said that from a seasonal perspective, markets are heading into “one of the weakest” periods, and Nvidia earnings this week could present another hurdle. “I continue to advise clients to use downside opportunistically and build better balance in portfolios,” Orton said, adding that there are still some attractive opportunities after the recent pullback. Areas to watch Here are three areas that he’s focused on now. Artificial intelligence 2.0: Spending on AI has been a strong theme, with companies maintaining or increasing their capital expenditure. Orton says he’s focusing on beneficiaries of such spending, like electrical equipment, electrical utilities and machinery in “actual construction,” which have become attractive after the recent sell-off. Aerospace and defense: Orton says he’s seeing more international demand in this area. “We’re seeing the sector inflect higher due a threat environment that is more belligerent than the recent past,” he said. He added that defense stocks tend to outperform in an election year. Global markets, luxury stocks: Orton says India is his most preferred emerging market, and believes in buying the dip in Japan stocks, which continue to have value, he said. He said luxury brands in Europe “look quite cheap” right now, with stock prices of markets leaders such as LVMH at an attractive entry point. Against that backdrop, Orton named three stock picks: data center infrastructure company Vertiv, defense stock Axon and India’s ICICI Bank. — CNBC’s Michael Bloom contributed to this report.
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