Late Cycle Growth Opportunities? GAMCO Growth Fund’s Market Beating Howard Ward Looks to the FAANGs

Short term interests remain steady. The Federal Reserve decided to keep its benchmark federal funds rate at the same 2-1/4 to 2-1/2 percent range it had since January when it put its previous series of rate hikes on hold.

Two percent is of course the Fed’s target rate for inflation. Fed Chair Jerome Powell described the Fed’s view of price weakness as “transient” but said if it continued it would be “something we would be concerned about.”  

As far as the stock market is concerned growth is back in a big way and it continues to outdistance value.  Tech is providing the leadership. According to Strategas Research Partners the S&P 500 technology sector has risen 27% so far this year versus the market’s 17.5% gain.  And the famous FANGs are part of that tech dominance.  

Last year’s fourth quarter rout had decimated shares of the extended FAANG family.  Facebook, Amazon, Apple, Netflix and Google parent Alphabet all suffered significant declines. They have made up for much of that lost ground this year.  

FAANG stock fever seems to be increasing globally as well.  Owning  the tech giant group was considered to be the second most crowded trade, i.e. most popular, in the financial markets along with their Chinese equivalents, known as the BATS: Baidu, Alibaba and Tencent.  Of note, shorting European stocks was voted the most crowded trade.

The FAANGS will continue to flourish, even in a late cycle market says market-beating portfolio manager Howard Ward who owns them in his GAMCO Growth Fund. 

WEALTHTRACK #1546 broadcast on May 03, 2019.

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