3 picks for the second half of 2014 and a summer stunner

The second half of the year starts today for the market, and investors are eyeing where exactly they can capture some returns. While the broader markets are up around 6% for 2014, it’s hard to say whether another 6% move is in the cards for let’s say the S&P 500 (^GSPC).

A 12% gain in 2014 would be welcomed by most everyone on the street, but most analysts would agree it might be too much to ask for a bull market already over five years old. Count market vet Mark Luschini of Janney in that group. Although he only sees the S&P 500 touching 2,000 by year end (about a 1% move from here), in the attached video he has three picks, plus one stunner for investors looking for a little alpha.

EMC Software (EMC)
“The theme here is one of business spending,” Luschini says. “Cap-Ex facing technology companies are going to be the beneficiaries of a [capital] spending cycle… EMC is a company involved in big data, data storage, cloud computing, and therefore we think again a central theme to be a beneficiary of that spend.”

Halliburton (HAL)
Luschini’s second play is an ancillary energy trade. “Big north American footprint, obviously the energy renaissance in the United States is a theme that many including us have embraced and as a consequence more drilling, more opportunity means more need for the services of a company like Halliburton that has done very, very well but still on a relative basis, is still attractively valued.”

Intel (INTC)
Janney’s Chief Investment Strategist is also betting on the world’s largest chip maker. In addition to getting a lift from the coming capital spending boom that Luschini predicts (since the company’s chips will be in most of the computer hardware sold), Intel is not overvalued from a stock perspective, and still yields an attractive dividend to boot.

Vanguard FTSE Europe ETF (VGK)
In a move that carries some risk, but maybe a high reward, Luschini’s betting on our friends across the pond. “We’ve liked Europe for some time… we’ve been advocating a position there in Europe as the story there didn’t need to be great, just stop being bad,” he says. “We think the policies of Mario Draghi to try to ignite further growth in the Euro-Zone will benefit a lot of companies across the Euro-area in the aggregate.” Luschini likes the ETF as a cheap way to get in on this trade.

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