The recent market pullback may have some investors scouting for stocks. In late July, both the S&P 500 and Nasdaq plunged to their lowest since 2022 but have since rebounded. Global markets, including the U.S., plunged in early August but have since rebounded. But Matt Orton of Raymond James Investment Management warned that the road ahead could be bumpy again. “Volatility came down almost as fast as it spiked up, but that doesn't mean the road ahead won't be bumpy,” he said on CNBC's “Street Signs Asia” on Monday. From a seasonal perspective, the market is heading for one of its “weakest” periods, and Nvidia's earnings report this week could be a new hurdle, he said. “I continue to advise my clients to be agile and take advantage of the dips and rebalance their portfolios,” Orton said, adding that there are some attractive opportunities after the recent pullback. Areas to Watch Below are the three areas he is currently focusing on: Artificial Intelligence 2.0: Spending on AI has been a strong theme as companies maintain or increase capital expenditures. Orton said he is focusing on the beneficiaries of such spending, such as electrical equipment, electrical installations, and machinery in “actual construction,” which have become attractive after recent offerings. Aerospace and Defense: Orton said he is seeing stronger international demand in this area. “A more aggressive threat environment than we've seen recently has pushed this sector to the upside,” he said. He added that defense stocks tend to outperform in election years. Global Markets, Luxury Stocks: Orton said he believes in buying on the dip, saying India is his most favored emerging market and Japanese stocks remain valuable. He said European luxury brands “look pretty cheap” right now and shares of market leaders such as LVMH are at attractive entry points. Against this backdrop, Orton listed three stock picks: data center infrastructure company Vertiv, defense stock Axon, and India's ICICI Bank. —CNBC's Michael Bloom contributed to this report.
