The election is not as critical as stimulus, coronavirus vaccine: Analyst

Yahoo Finance's Alexis Christoforous and Keith Fitz-Gerald, Chief Investment Officer of Fitz-Gerald Group discuss what is most important to investors on election day.

Video Transcript

ALEXIS CHRISTOFOROUS: I want to stick with the markets now and bring in Keith Fitz-Gerald, chief investment officer at Fitz-Gerald Group. Keith, good to see you today. Look, we have back-to-back rallies on Wall Street. Today's Election Day. What does this tell you? I mean, is this more about investors just happy we might get some clarity and put the election behind us, or is this investors betting on who will win the White House?

KEITH FITZ-GERALD: I think it's more of the former than the latter, Alexis. The thing is, you know, you've got hope, you've got aspiration, and you've got positive vision. So between a vaccine, between clarity, between stimulus, that's a train that's leaving the station. And today's markets are forward looking. You can't wait for a pullback. You've got to be in when the train starts moving, and I think that's what's happening.

ALEXIS CHRISTOFOROUS: So right now, how are you positioning your clients' portfolios with what could be a contested election? We might not have any clarity. We probably won't by the end of tonight.

KEITH FITZ-GERALD: Well, as I'm telling them, you know, elections come and go, and everybody can abdicate responsibility to the headlines if they want. But the reality is, you control your money. So if you're looking for the best companies, not the rest of the companies, if you're looking for companies with savvy CEOs, if you're looking for companies that have clear path to profits, you know what? You're in luck because there are a lot of them out there. And I think that I'm looking tech. I'm looking at finance. Those are very exciting, appealing sectors to me-- and some names, in particular.

ALEXIS CHRISTOFOROUS: Yeah, I want to talk about some of those names, in particular. You brought some picks with you today. Let's run through them. In the telecom area, I think you like our parent company, Verizon. Tell us why.

KEITH FITZ-GERALD: Well, Verizon is interesting because, you know, here you've got a company that is moving into 5G space. They've got lots of consumers. They've obviously got their head in the game, and I like that. I don't think that there's many other players that can have that mix. So it's very, very simple. I don't like to worry about keeping things simple, stupid. I like to keep them stupid, simple, and Verizon is a winner to me.

ALEXIS CHRISTOFOROUS: All right, and then banks, so Jared was just talking about how they've been on a tear recently. Do you think that bank stocks would do better under one administration versus the other?

KEITH FITZ-GERALD: No, I think they'll do better under one CEO than the other, which is why I very clearly stick with Jamie Dimon at JPMorgan Chase. I think it's the best shop in the business. I think he is the most visionary financial executive out there, and they're clearly positioned to move this economy forward when we finally get it reopened. I also like Visa, which is not traditionally a banking stock, but both are critical to digital money.

ALEXIS CHRISTOFOROUS: Yeah, which is really the way we're going, right? As we're all doing more contactless payments during this pandemic. You have to think that that behavior is going to stick around post-pandemic. Two other picks you brought with you, Palantir and GoodRx. Let's go to Palantir first. What do you like there?

KEITH FITZ-GERALD: Very, very simple proposition-- it's big data. They've got huge business with every aspect of the Pentagon, with all of our military, with our government-- critical player when it comes to AI, when it comes to being more efficient in processing information. I think the stock is going to grow 30%, 40%, maybe even 50% in the next year or so. It won't be long before investors figure that out. And at $11 a share or so, that's a bargain, as far as I'm concerned.

ALEXIS CHRISTOFOROUS: OK. Also, this just crossing the wires a few minutes ago, the UK apparently in talks with Palantir over test-and-trace program. So I would imagine that just makes the company a little more attractive for you, Keith?

KEITH FITZ-GERALD: Absolutely. Because you know, you know, COVID is-- like it or not, as much as it's produced chaos around the world, it is also a monster investment opportunity because we will beat this thing. The question is how we do it, what we have to track, and what information we need to make that happen.

ALEXIS CHRISTOFOROUS: All right, and I also want to get to that last pick in the health care space, the prescription company-- prescription drug company-- GoodRx.

KEITH FITZ-GERALD: Exactly. This is another one of those things that COVID has brought dramatically to the forefront because not only has the disease itself forced us to rethink how we deliver prescriptions and interact with our doctors, but we finally now have changes in regulations and make all kinds of telemedicine, including fulfillment and prescription, a very real possibility going forward. I think that cuts the margins. I think it makes it dramatically more attractive. Lots and lots-- millions of users already, I think the model is going to grow.

ALEXIS CHRISTOFOROUS: You know, Keith, we've got the top White House coronavirus advisor Dr. Birx coming out and warning that the most deadly phase, as she called it, of this virus is yet to come. Do you think that the stock market-- the way it's rallying the past two days, are investors underestimating the next wave or the wave we're in now of COVID-19?

KEITH FITZ-GERALD: You know, that's a tough call. I mean, I was very specific about it the last time around, saying that the markets were not factoring this in right before the crash. I think that they are acutely aware of the possibility here, but I think the unknown-- the lockdowns, the stay-at-home orders-- those are the things that people are really thinking about now, not so much the virus itself. So are we going to get a sell-off? Yeah, I don't know. I think it's more and more about the hope and the aspiration looking forward than it is the technical capacity for a sell-off.

ALEXIS CHRISTOFOROUS: Back to the election for the moment-- you know, conventional wisdom says that Wall Street likes gridlock and a divided Congress and White House. But would gridlock be necessarily a good thing now? I mean, we need Washington to get things done. Namely, we need stimulus. At some point, we're going to need an infrastructure plan. So is gridlock in this instance, in this election, not a good thing?

KEITH FITZ-GERALD: I would submit no, it's not. And you know, here's why. This makes me hopping mad. We have Congress that has simply put away the steering wheel. They need to be in there doing their jobs. America is hurting. Americans need to go get back to work. There is so much more that they could be doing instead of squabbling with each other to help millions of people. It makes me furious that we have to deal with this, particularly coming into an election, particularly with the COVID situation. The question is about healing America. This is not a Democratic or Republican issue. This is an American issue.

ALEXIS CHRISTOFOROUS: You know, and at the end of the day, does it matter much who wins the White House, or does who's heading up the Federal Reserve matter even more? And Jay Powell is still going to be in there for a while, whoever takes over the White House. He's already committed to keeping interest rates as low as he can for as long as he can, and the Fed continues to support this economy.

KEITH FITZ-GERALD: That's a very savvy question. You know, my research shows that it's not so much the Fed or even the White House because you're talking about two four-year terms, eight years at most. It's really the 535 people in Congress that are the issue because they're the ones to stay there for 20, 30, 40, 50 years of policymaking. They're the ones that have the economic impact. So gridlock, probably not good-- do their jobs, would be excellent. Market takes off like a rocket when we, in fact, have that happen.

ALEXIS CHRISTOFOROUS: All right, Keith Fitz-Gerald of the Fitz-Gerald Group, good to see you.

KEITH FITZ-GERALD: Good to see you. Thank you.