JPMorgan Chase & Co strategist Marko Kolanovic pointed to the power distribution and real estate sectors after warning to stay away from equities.
Marko Kolanovic, a strategist at JPMorgan Chase & Co, said that while he has been warning clients to stay away from equities in general since last year, he now sees opportunities in electricity distribution and real estate stocks.
The bank’s chief market strategist emphasizes in a note that weakness in the electricity distribution sector is probably overdone. Kolanovic notes that the power distribution group, the second worst-performing sector in the S&P 500, up 3.5 percent this year, generates strong cash flow and has a near-record cheap price-earnings outlook.
Lower interest rates will help this sector, Kolanovic said, adding that in the opposite scenario, the typical low beta of the electricity distribution sector will come to the fore as the overall market weakens.
He also noted that real estate is also of interest, although its performance depends on the direction of bond yields.
