U.S. stocks are striving for a second straight day of gains on Thursday. The climb is backed by this morning’s strong GDP revision showing the American economy grew at a faster 3.7% annual pace in the second quarter. The Commerce Department’s initial estimate was growth at a pace of 2.3%.
“If investors really focus on the fundamentals of the U.S. economy… I think they’ll be well-rewarded by buying at this point,” said John Traynor, chief investment officer at People's United Wealth Management.
The money manager is taking his own advice and went on a blue-chip buying spree. He added positions to Apple (AAPL), Disney (DIS) and Home Depot (HD) on the market’s sell-off. “Those are the names that we like and we thought in a nervous market, you want to stick with the best names that you have, so we were buying those companies and a few others on Monday,” said Traynor.
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Major U.S. markets are out of correction teritorry after the recent plunge including the Nasdaq Composite, which is back to positive territory for the year. “The fact that we really haven’t had a 10% correction in the last 46 months… have led to some complacency on the part of investors,” he said.
As investors take this newfound turbulence to reallocate their portfolios, Traynor, whose firm manages $5.8 billion in assets, advises to focus on the Fed’s symposium in Jackson Hole for next week’s direction. “Will the Fed continue with what we were assuming was a September increase or push that out? We believe that the odds are it will probably be pushed out,” said Traynor.
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