The recent market rally is expanding beyond tech stocks, with sectors like healthcare and financials showing promising opportunities.
Federated Hermes chief equity strategist Phil Orlando joins Market Domination to explain that for the past two years, the S&P 500 (^GSPC) was driven mainly by the "Magnificent Seven," but eventually, those stocks became overvalued.
Orlando forecasts a broadening rally, emphasizing value stocks and smaller-cap names that are now catching up.
"It's these value stocks and the smaller-cap names and the international names that have started to play catch up over the last couple of quarters. And we think that that trade has legs," Orlando says.
"The reality is that this is a long cycle game, and as the cycles are starting to play out from a sector standpoint, we felt that financial services (XLF), healthcare (XLV), and industrials (XLI) were the most left behind," he adds, noting their strong fundamentals.
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This post was written by Josh Lynch