The S&P 500 hit an intraday record high of 7,844.52 on Tuesday and closed above 7,800 for the first time. That came a day after the 10-year Treasury yield topped 5.3%, its highest since 2002.
The S&P 500 slipped 0.3% in September, but its equal-weight version, which counts every stock equally, fell 4.8%. Large-cap tech gains masked the weakness underneath, according to Janus Henderson.
Can the S&P 500 Record High Spread to Beaten-Down Sectors?
On CNBC‘s Halftime Report, a panel of money managers debated whether the rally can spread beyond big tech.
Hightower Advisors’ Stephanie Link said industrials, financials, utilities and materials now offer value. The same Janus Henderson data show financials and materials each fell about 7% in September.
Link cited Tuesday’s 20-year nuclear power deal between Google and Constellation Energy, whose shares rose more than 12%. She expects better backlogs and orders for power and grid companies.
Link also sees the consumer holding up, and said lower rates and oil prices would make her more constructive.
Gilman Hill Asset Management’s Jenny Harrington said the selloff hit whole sectors regardless of each company’s interest-rate exposure. Her equity income strategy targets a yield of 5% or more.
Capital Wealth Planning’s Kevin Simpson said broadening depends on energy prices. Lower oil could ease inflation and pressure on the Fed.
Will More Fed Hikes Stall the Rally?
Mid-September brought the Fed’s first hike in more than three years, and officials signaled more would follow, CNBC reported.
Simpson, who remains defensive, argued one more hike in December could end the cycle if oil and inflation fall. In that case, 5.3% on the 10-year yield could prove the peak.
Requisite Capital Management’s Bryn Talkington said expectations of several more hikes would end any broadening.
Earnings season starts in earnest next week, Talkington said, and she expects tech and energy to dominate it. She estimated Nvidia and Micron will supply a third of S&P 500 earnings growth.
That concentration leaves the broadening case dependent on profit growth outside AI hardware.
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