The U.S. Bureau of Labour Statistics’ non-farm employment data remained strong and well ahead of expectations in January, which could see the Fed turn even more hawkish moving forward. Still, Nancy Tengler is not turning her back to technology.
Tengler is bullish on the ‘cloud’ space
Tengler discourages pulling out of technology altogether but recommends being selective when picking stocks in this space. One subsector in particular that she’s bullish on is “cloud”. On CNBC’s “The Exchange”, she said:
This earnings season was a perfect example of what’s working, which is ‘cloud’. ServiceNow is growing at 26%, and they expect to continue that in 2022. Amazon cloud growth was 40%, Google 45%, Microsoft 40%. So, you should be in this space as we’re seeing these companies be rewarded.
On the other hand, the greatest surprise to the downside this earnings season came for Meta Platforms Inc that tanked more than 25% on disappointing results and dovish guidance.
Tengler recommends increasing exposure to energy
Conversely, the Laffer Tengler CIO sees exposure to cyclicals a good bet for the current environment. She recommends that investors turn to the energy sector for that. Tengler added:
You want to have cyclical exposure. So, we’ve been adding to energy in the last few months. Both of these sectors, technology and energy, are the most productive sectors in terms of revenue and earnings per employee. We want to be in the space where you can get leverage, and pricing power.
Earlier on Friday, Nuveen’s Saira Malik also advocated investing in companies with pricing power like Amazon, which increased charges for its Prime subscription service by $20, to go live on February 18th.
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