A day after looking like death warmed over, the stock market perked up Tuesday. In recent trading, the Dow was up 0.8% while the Nasdaq was up 1.5%.
The back and forth is classic trading range activity and a normal "summer chop," says Josh Brown, a financial advisor at Fusion Analytics and author of The Reformed Broker blog.
Although the U.S. debt ceiling debate is very atypical, Brown says he is not sweating the political theater and believes "they'll figure it out."
To be sure, he thinks the possibility of Congress blowing by the Aug. 2 deadline without a vote to raise the debt ceiling is a "big deal" and a big risk for financial markets. Citing a Pew poll, which shows 53% of Republican voters think missing the deadline would be no big deal, Brown half-jokingly credits the GOP for successfully "brain washing their base."
Still, he says it doesn't pay to bet on a worst-case scenario and is sticking with a "barbell" strategy for equities of quality dividend stocks on one side and momentum plays that are not dependent on a robust economy for growth.
In the former category, he mentions the S&P Dividend SPDR as a proxy for the best dividend paying stocks in the S&P 1500. In the latter category, he cites Apple as "the very definition of secular growth" that isn't dependent on a strong macro backdrop.
In the accompanying video, Brown cites some other, less closely followed companies with similar characteristics and strong price momentum.