In a market filled with poor breadth, Charles Schwab’s Liz Ann Sonders sees a silver lining for investors. Sonders, the chief investment strategist at Charles Schwab, believes that the weakness in individual stocks is actually creating buying opportunities.
Despite the resilience seen on the index level this year, Sonders notes that there is poor breadth below the surface. She points out that a greater share of constituents in the Nasdaq Composite are below their 200-day moving averages compared to the S&P 500. This disparity leads Sonders to believe that the Nasdaq could outperform the S&P 500 going forward.
For investors looking to capitalize on these opportunities, Sonders advises focusing on quality companies with strong balance sheets and cash flow. She emphasizes the importance of staying high quality when selecting individual stocks.
“I think there’s opportunities being created at the individual stock level because of how much weaker breadth has been for the average stock,” Sonders told CNBC’s “Closing Bell” on Tuesday.
In a separate development, EMJ Capital’s Eric Jackson is bullish on Nvidia, predicting a surge in its forward P/E and market cap by year’s end. Jackson sees Nvidia’s forward P/E hitting close to 70 and its market cap rising to $6 trillion at $250 per share. He believes that Nvidia’s lead in the industry will continue to drive its success.
Meanwhile, stock futures were little changed on Tuesday following the S&P 500’s rebound from a three-session slide. Futures tied to the broad market index were down slightly, with Nasdaq 100 futures also pulling back. Dow Jones Industrial Average futures slipped 0.1%.
Overall, despite the challenges posed by poor breadth in the market, savvy investors like Sonders and Jackson see opportunities for growth and success in the current landscape.
