Earnings season is rolling on with the biggest names this week, but positive reports like Apple's could be overshadowed by something out of the market’s control. Peter Kenny of the Clearpool Group says in the attached video that the biggest risk to this market right now could be coming from abroad.
Geopolitical risks abound, and Kenny believes they’re not going away. With that in mind, here’s 3 picks to own right now that could insulate you from risk abroad.
Large Cap Technology
Kenny believes earnings season will continue to drive the appeal of this sector. Consumer appetite and discretionary spending in the space, Kenny says, coupled with an expanding global economy and refresh of old equipment should continue to drive top and bottom line growth for the biggest players in the sector.
The financials have been underperforming this year, but regionals could be a way to play this sector. According to Kenny they are insulated from direct exposure to geopolitical risks, tied to an improving economy, expanding GDP, and rising consumer confidence, and lastly consumer driven borrowing and spending should continue to provide for a constructive narrative and earnings growth for the regionals.
While closer to some geopolitical hotspots, Europe’s companies are actually in a very good spot Kenny notes. European equities are relatively undervalued in relation to U.S. stocks, and a weakening Euro helps export driven countries like Germany. In addition, Kenny observes that accommodative monetary policy by the ECB, and continued financial services and banking reform could provide for a stable and constructive environment for investment in Europe.
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- Peter Kenny