15 stocks to buy as history says the market will definitely stand firm: BMO

According to BMO, traders would like a similar result with a 14.5% gain in the first half, which is conservatively within the 82nd percentile. Important investment firms from Goldman Sachs to UBS, especially the latter, warned that stocks had little or no upside from wave levels.

Brian Belsky, head of BMO’s funding strategy, aimed to calm those concerns in a July 9 note. While the road ahead may be uneven, he is confident that US equities will not abandon the sector.

“We are now confident that, if more serious volatility occurs in the near term, it will occur at a higher index level than we previously anticipated,” Belsky wrote. “Therefore, the ultimate rally, which has historically averaged about 14.5%, will start at a higher base, which would suggest to us that stocks have plenty of room to run through the end of the year.”

History favors stocks in the second half

Over the past seven and a half decades, the S&P 500 has risen 10% to 15% at times. BMO found that on all 12 occasions shares rose between 1.5% and 22%. The standard second half return in such cases was 11% – the highest of any order.

“10-15% 1H gains appear to be the ‘sweet spot’ as this is the only range where the average 2H gains are in double digit territory,” Belsky wrote.

If history repeats itself, BMO’s goal of 5,600 at the end of the year — already one of the most important on the boulevard — may fall too short, Belsky said. The company’s bullish target of $6,000 will likely prove more accurate.

From any other vantage point, those goals seem perfect. The standard acquisition is 55% ready in the first two years of the bull market. If the S&P 500 is around BMO’s payout target by mid-October – which is 2 years after the extreme the market experienced ended – then it will be right around that average.

Don’t worry about pullbacks or high valuations

Even though U.S. stocks are likely headed higher, BMO is encouraging buyers to be prepared for volatility.

Chances are high, the S&P 500’s modest 5.5% decline in March and April won’t be the biggest shock of the year. Typically, the largest decline in the second year of a bull market is 9.4%, Belsky said, despite the fact that the selloff has been mild compared to four of the five such extremes.

This type of shade will pull the index into a negative moment 1/2, although it will simply stand there.

“We continue to believe that U.S. stocks will remain in a bull market, even if stocks retreat from current levels sometime between now and the end of the year,” Belsky wrote.

Another common concern among buyers is unusually high valuations in the markets.

Many witnesses have stated that the largest stocks in the S&P 500 have skewed the index’s earnings by more than one, although Belsky pointed out that the forward price-to-earnings (P/E) ratio for non-mega-cap companies Also neatly spread out, despite the fact that no longer through the final volume.

Belsky wrote, “Extended assessment remains a hot topic, but closer inspection suggests the level may not be as severe as is being advertised.”

15 stocks to buy as per market condition

BMO’s strategy for a sustained rally in the second half of the year revolves around stocks in the technology and financial sectors, including small- and mid-cap companies that have been long-time laggards.

Belsky echoed the sentiment expressed through Oppenheimer, writing, “SMID caps have risen sharply in months following similar relative oversold conditions over the past 20 years.”

Like its untouched York-based counterpart, BMO believes the most attractive choices among smaller stocks are growth-oriented ones. Belsky writes that those companies’ forward earnings growth rates are slightly lower than giant caps, despite the fact that they trade at interesting valuation discount rates of 36%.

As far as sectors are concerned, BMO is bullish on both the hugely popular tech sector and the less favored financial sector.

Tech stocks have consistently outperformed over the past 18 months due to enthusiasm about their fundamentals. Even though the gang is not economical and may even crash if the mega-cap titans get bailed out in the coming months, Belsky believes that the happiness of a lot of buyers is important.

“We believe it will be extremely unlikely for the largest stocks to continue this impressive performance,” Belsky wrote. “However, we also do not believe these stocks will fall and that other parts of the sector are ready to ‘pick up the slack’ as many of these ‘smaller’ stocks are likely to be beneficiaries of the same structural forces (i.e., AI) Who inspired the greatest people.”

Belsky commented that, in contrast, the financial sector is affordable but has been one of the most hated sectors in recent years. In his view, this counterintuitive sentiment is a buying option for adventurous buyers.

Belsky noted, “This remains one of our favorite contrarian opinions because our work continues to show that its fundamentals are underestimated by investors.”

Rather than passively investing through finance that oversees those teams, BMO recommends taking an active approach as the gap between winners and losers is habitually larger.

Below are the 15 stocks in BMO’s US SMID-Cap portfolio based on each’s ticker, market capitalization and sector, as well as the technology or financial sectors from the second quarter.

Notice that the top 3 companies ranked among them are: Dayforce, Rubrik, and Business Table. The other two are market-performance rated or unrated through BMO.