The benchmark S&P 500 index has recovered about 7.0% since the low of 4,300 on October 4th, and New Street Advisors’ Delano Saporu says November is expected to keep the momentum going.
Saporu defends his bullish call on CNBC’s ‘Squawk Box’
On CNBC’s “Squawk Box”, Saporu turned to the historical price action to bolster his thesis that the market will remain strong in November. He said:
Historically, the month after the market recovers from a correction is usually strong. And then, if you look at the S&P 500, since World War II, every time the benchmark hits a high in October, November sets up nicely for a rise around 3.2%.
Saporu also quoted the strength in futures as another indicator that the U.S. stock market will see more gains in November. Last week, Charles Schwab’s Jeff Kleintop said it might be time to switch from manufacturing stocks to services stocks.
Saporu still sees opportunity in the mega-cap technology names
In particular, Saporu sees opportunity in the mega-cap technology names. He is also positive on Apple and Amazon despite both reporting weaker than expected quarterly results last week.
The market didn’t respond positively to Apple and Amazon earnings as they had some headwinds. They’ve kind of come under pressure, and I think there’s a bit of opportunity in both the stocks.
Saporu expects eCommerce to make a comeback in the holiday season. He’s particularly “overweight” on the mega-cap names but said he was putting some of his money in the broader market as well.
The New Street Advisors’ analyst still likes Facebook but said he’d rather stay away from companies like Starbucks at the moment, which could struggle in an inflationary environment.
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