Wall Street is already looking beyond Big Tech’s quarterly results.
Despite this being a key earnings week for the group, Mike Kou, chief strategist at YieldMax, said: consumer essentials and any His name is high on his watch list, especially in the wake of the Iran war.
“The biggest impact on consumer checkbooks will be felt at the pump,” Kau, who is also a CNBC contributor, told CNBC’s “ETF Edge” this week.
Mr. Kau, who lives in California, cited the Golden State as an example, where the oil crisis is being felt most acutely.
The average price of unleaded gasoline in the state as of Wednesday was about $5.98 per gallon, according to AAA. That’s about 41% higher than the national average and just hit a new high this year.
Despite pressure from rising energy costs, Mr Kau will still hold consumer stocks.
“No matter how bad things get from a geopolitical perspective, you would expect diapers and toilet paper to continue to sell,” he said.
Mr Kau said the consumer discretionary aspect is also constructive, citing recent data reflecting consumer resilience. Retail sales increased for the sixth consecutive month in March, according to the latest data from CNBC/NRF Retail Monitor.
“This is one area where we really continue to see better results from the earnings and some of the bullish trends that we’ve seen,” he said. “I think people are looking into that area and thinking that maybe some of these things can be punished a little bit and there might be light at the end of the tunnel.”
Paisley Nardini of Simplify Asset Management also focuses on deals outside of Big Tech.
“Some of our core solutions are both long-term and short-term in these energy, oil and broader commodity markets,” the company’s head of multi-asset solutions said in the same interview.
on wednesday, WTI Crude Oil Futures Settled more than 7% higher, brent crude oil Stocks rose more than 6% on renewed concerns that Iran’s closure of the Strait of Hormuz could be prolonged.
