Veteran investor Michael O’Rourke is cautioning traders to back away from high-growth technology stocks as an eventual interest rate hike “plays really well” for banks.
“Growth stocks have been incredibly bullish. We’re starting to see some cracks emerge that there are probably better places to put your money,” O’Rourke, chief market strategist at JohnStrading, told Bloomberg TV’s Surveillance on Monday.
O’Rourke says a shift toward value stocks as interest rates tend to be higher may be necessary because the higher return premiums investors pay to keep high-growth companies untraceable. As far as where traders should dump their money, O’Rourke says energy and materials are particularly attractive.
“You’re seeing some investors buy commodities because they’re concerned about the scarcity we’re seeing right now, and that reduction in value is making this sector more attractive,” he said. “Whether it’s energy or material, I think you want to be in those places for a while.”
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