The huge run up for shares of US giants, such as Facebook, Apple, Amazon, and the Alphabet-owned Google, as well as semiconductor stocks, may have peaked, according to the latest global outlook from Merrion Capital.
Its chief investment officer David Holohan, senior Irish equity analyst Darren McKinley, and chief economist Alan McQuaid conclude that the surge of over 16% this year in the tech-heavy Nasdaq index will likely lead to investments flowing out and into other US stocks that had a “weak performance”, such as in the energy sector.
At home, the broker has chosen the following as its stock picks for the third quarter: Bank of Ireland, Greencore, FBD, Kingspan, Kerry Group, Aryzta, Permanent TSB, and Paddy Power.
Potential crises in Europe have subsided, said Merrion, but Donald Trump’s tax- cutting plans in the US have become ensnarled.
“The French election passed without incident and Emmanuel Macron was duly elected president. In the UK, a strong performance by the Labour Party in the general election has resulted in a weakened Conservative government, while exit negotiations between the UK and the EU began in earnest,” said the broker. “In the US, the Trump administration continues to make very limited progress across a wide range of policy issues. The infrastructure stimulus that stoked investor interest during the early months of 2017 appears to have been delayed by at least a year, while near-term changes to the taxation regime are also looking more doubtful,” it said.
At $45 a barrel, Merrion feels oil has bottomed out.
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