Attributed to New York analyst Tom Lee of Fundstrat, the best buys of 2017 are CRAP.
For the uninitiated, that’s Computers, Resources, American banks, and Phone carriers, sectors he believes are all levered to the investment recovery, inflation and deregulation expected over the next 12 months.
It certainly beats my attempt to create a new acronym this week.
The key driver for markets this year, says Lee and others, is the shift in focus from quantitative easing to corporate earnings, while inflation is likely to surprise on the upside.
The buzz around tech stocks – intertwined with the fortunes of the computing sector – is nothing new, particularly in the land where the FANGs call home.
Shares in Facebook, for example, have been on an especially strong run since the beginning of the year, and those retailers that suffered over the festive period will no doubt have accusatory fingers pointing the way of Amazon.
Could we see a repeat of the upward path for resources that we saw in the first half of 2016? As ever, it’s wise to be selective, though much could depend on the prospects for emerging markets, a significant bet for many UK wealth managers.
American banks? Well, the assumption is that a supposed return to favour for the value style should be good news for financials.
