The global economy is headed for slower growth, which warrants sticking to the tech names, says Potomac Wealth Advisors’ Mark Avallone.
Avallone remains positive on the growth names
The tech-heavy Nasdaq Composite is still down nearly 25% which, as per Avallone, creates rare opportunities for the long-term investors to buy quality stocks at deep discounts. On a CNBC interview, he said:
The market will move quickly when it moves. We don’t know when it is, but we want to be ahead of the curve. That’s why we don’t want to abandon growth even though it’s out of vogue. When this market turns, that’s where the money will go.
The U.S. Gross Domestic Product (GDP) unexpectedly fell at an annualised pace of 1.40% in the first quarter of 2022. The IXIC has recovered nearly 7.0% since last week.
Avallone doesn’t see rate hikes as much of a threat
Higher interest rates are broadly dubbed a headwind for the growth names, but Avallone is convinced that much of it is already priced in. This morning on CNBC’s “Worldwide Exchange”, he noted:
Rates will tick up higher but the majority of the interest rate move has already happened. Eventually, these rates will slow the economy and global central banks will lose the nerve at some point and not keep moving rates dial up.
According to the President of Potomac Wealth Advisors, the housing market is already giving out signs of a slowdown. He expects the 10-year yield to peak a bit over 3.0%.
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