Stocks slightly higher amid civil unrest across the nation
Chris Versace, Tematica Research CIO joins Yahoo Finance to discuss the markets' reaction to violent protests across the country, the latest on U.S., China relations, the retail industry and more around Monday's opening bell.
Video Transcript
ALEXIS CHRISTOFOROUS: Dow futures are kicking off the month of June lower as we see more violent protests throughout our country, as people protest the death of George Floyd. Also, investors weighing reports that China will halt purchases of US farm goods. Here's a look, now, at the opening bell at the New York Stock Exchange.
[CHEERING AND APPLAUSE]
[OPENING BELL DINGING]
And here, we have the month of June being kicked off on Wall Street. The Dow industrials going to start the day down about 50 points. Let's continue our markets discussion with Chris Versace, CIO at Tematica Research. We've also got Jared Blikre with us and Brian Sozzi. So Chris, for those who are just joining us, why isn't this market reacting more aggressively to the violent protests that we've been seeing the past few days in our country? You know, if you look at Wall Street, it doesn't seem to be reflecting what's going on right now on Main Street.
CHRIS VERSACE: Well, I think, you know, as we've gotten closer to the opening bell and certainly crossed over, we saw futures start to sag a little bit. And I think what we saw there, again, is the realization, the triangulation, if you will, of what is going on, and what's the economic impact, what's the company impact and balanced by what's the likely duration of these protests.
Is it likely to be something, you know, the length of the pandemic? Probably not. We're not talking months. We're not talking weeks-- hopefully, hopefully, we're just talking days. You know, it does come, however, at the end as we're trying to put the pandemic in the rear view. And it's likely to extend the pain that some companies feel as consumers, once again, hesitate to get back out and do what they do.
ALEXIS CHRISTOFOROUS: Chris, what's your take on big tech right now? We've seen the FANG stocks rally. We're talking about the NASDAQ being overvalued. Is there still a play to be had there, especially when you look at the rising tensions between the US and China? Is tech a place you want to be in the short term?
CHRIS VERSACE: So if we define tech as the FANG stocks, you are correct. They have run pretty hard. However, you know, tech is a pretty wide sector. And I think there's a number of compelling areas in there, even coming out of the pandemic. For example, cybersecurity data privacy. We've seen no slowdown in the announcement of new attacks in hacks. We even heard something about-- over the weekend-- about the Minneapolis police department being hacked as well.
So I think coming out of this, we can continue to see strong legs-- cybersecurity, data privacy. I think connectivity is going to continue to be big. You know, universities and the like are trying to grapple with what is the back-to-school season going to look like. It seems to me that we're going to see some continued mix of distance or online learning.
And then coming out of this race riots and stuff that we're seeing now, there's going to be a lot of technology solutions out there-- body cameras, for example, like Axon, their shares are moving higher. Other security options, like ADT, is also seeing their shares move higher. So I think we're going to see a rotation into some other sectors that, perhaps, people weren't thinking of during the heat of the pandemic, i.e. Netflix and Amazon.
BRIAN SOZZI: Chris, I know you follow the retail sector quite closely. And I'm sure you've seen the images over the weekend-- Target, Walmart, Family Dollar-- these stores being looted. This comes on top of them being shut down, for the most part, because of COVID. Do you want to go anywhere near the retail sector here?
CHRIS VERSACE: You know, Brian, let me answer that two ways. You know, in the short term, I probably going to sit on the sidelines. But you also know, having in our past conversations, I really like the retailers that have embraced digital commerce-- some have, more have than others. And we take a look at how target is pivoted its business. I think it's done a wonderful job-- Walmart the same way. You know, those are the kind of companies that I'll want to be looking at. I mentioned Costco earlier, but Costco as well.
So, you know, companies like The Buckle, for example-- those that are a little slow to do it I would just let them stay on the sidelines and really focus on those that are writing the consumer shift in how they shop.
BRIAN SOZZI: Wait-- Chris, you don't shop at The Buckle?
CHRIS VERSACE: I do not shop at The Buckle. No, I do not.
ALEXIS CHRISTOFOROUS: Hey, Chris, what about companies that are going to be part of getting the country back working-- mainly, getting us back in our offices, like the companies that are making the plexi glasses and other items that we're going to need in order to safeguard and keep clean the office building? And a lot of companies are actually pivoting to make those products. Are those places that investors should be looking right now for opportunity?
CHRIS VERSACE: So, you know, we talked earlier about how some technology names have run. You know, certains of those companies, like Clorox, for example, that, you know-- phenomenal runs. Still great dividend opportunities there too. But yes, I think a prior guest talked about the wildcard question of what will the fall bring. Will we have another outbreak? We'll have another flu season for sure. I wouldn't be surprised if these companies continue to be strong performers. I don't know about you, Alexis, but I don't plan on stop sanitizing anything anytime soon.
ALEXIS CHRISTOFOROUS: No, I'm with you. I already need more and more Clorox wipes. You know, you can't get enough of those-- that, and toilet paper. They are certainly a commodity.
CHRIS VERSACE: Yes.
ALEXIS CHRISTOFOROUS: All right, Chris Versace, CIO Tematica Research-- thanks for being with us this morning.
CHRIS VERSACE: Thank you.
