Oppenheimer argued Monday that the S&P 500 (SP500) is poised for an upward move if you look at the macroeconomic similarities from 1987 to 1990. The key takeaway from the ’87-’90 road map was that the Fed’s first rate cut was proceeded the top of the market breadth within 4 months and the top of the S&P 500 Index within 12 months.
“Assuming the Fed cuts its policy rate in the coming months, this means a market top may not develop until 2025. For now, we believe a beta breakout supports a continuation of the upside,” Oppenheimer indicated in a note for investors.
Related to this outlook, Oppenheimer also pointed to infrastructure as a buying opportunity, highlighting the GlobalBATS: PAVING).
“Compared to the S&P 500, PAVE is emerging higher from a year-long consolidation range that we view as a resumption of long-term leadership. We view PAVE as an attractive source of beta and the breadth of bottom-up strength reinforces our belief,” the firm said.
Here are some other specific buying opportunities suggested by Oppenheimer:
- AECOM (ACM)
- Atkore Inc. (ATKR)
- Acuity Brands, Inc. (AYI)
- Carlisle Companies Incorporated (CSL)
- H&E Equipment Services (HEES)
- Nucor Corporation (NUE)
- Pentair plc (PNR)
- Reliability (RS)
- Steel Dynamics (STLD)
- Vertex Materials (SUM)
- Advanced Drainage Systems (WMS)
- Zurn Elkay Water Solutions Corporation (ZWS)
Additionally, Oppenheimer said that to hedge one’s beta exposure he recommends selling some high beta losing stocks. One name included was iShares US Medical Devices ETF (IHI). Other names listed were:
- AtriCure (ATRC)
- CONMED Corporation (CNMD)
- Inspiring Medical Systems (INSP)
- NovoCure Limited (NVCR)