Several mega-cap tech names outperformed the broader market on Thursday. Ritholtz Wealth Management Josh Brown has a new perspective on what could be drive the action.
“That’s going to be controversial: I think these are consumer goods. They happen to be digital,” Brown said on CNBC’s Fast Money Halftime Report Thursday afternoon.
What you should know: The consumer goods Sector represents a basket of names that sell products that consumers use every day, which typically includes things like household and personal products or food and beverages. A few names that come to mind are Procter and Gamble, Coca-Cola, and Walmart.
From last week: The 5 top consumer staples stocks that could lead to your biggest gains in March
But Brown doesn’t see why companies like it Amazon.com Inc AMZN And alphabet inc GOOD should not be included in the heap.
“Is there anything that is more important to you than Amazon? Like from an e-commerce perspective,” Brown said.
“Can you think of anything more important than Alphabet’s core business? 97% of their sales is some version of search. Do people search less in a recession? Probably not.”
He pointed out that regardless of the economic environment, consumers will use these products every day. In addition, both have huge amounts of cash, which makes them even more attractive.
“And in the end, I don’t think consumer behavior is really changing in terms of how time is spent digitally. With traditional methods, one has much greater concerns cyclical‘ said Brown.
“I know we don’t normally think of tech giants as either defensive or offensive, but I think they’re pretty defensive right now and that doesn’t really surprise me.”
AMZN, GOOG Price Action: At the time of publication, Amazon is up 4.11% to $100.15 and Alphabet is up 5.38% to $101.74 gas gas…
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