Investing.com – Wall Street climbed Friday, as cyclical sectors like financials and industrials plugged the gap left by falling tech stocks amid a slide in Apple on worries about slowing iPhone growth.
Investors upped their bets on cyclical stocks in financials and materials, which tend to outperform in a growing economy, on rising expectations that a prolong period of stimulus and faster pace of reopening will soon follow.
“Ultimately, if the Fed is dovish and monetary policy is easy, markets have a backstop. In other words, we must still buy the dip,” said Fundstrat Founder Tom Lee said in note Thursday.
Lee also backed “epicenter” stocks, or those impacted by the pandemic. These stocks “are going to be primary contributors to EPS growth in 2021, thus, we see better risk/reward.”
Tech moved off its lows of the day, but ended the week negative, led by weakness in the Fab 5. Facebook (NASDAQ:FB) Alphabet (NASDAQ:GOOGL) Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) ended the day lower.
Apple came under added pressure after JPMorgan raised concerns about slowing sales ahead of the tech giant’s 5G-enabled iPhone slated to launch later this year.
There was “a moderation in momentum” for the lower-end iPhone SE and a slow down in sales of the iPhone 11, JPMorgan (NYSE:JPM) analyst Samik Chatterjee said in a note, citing surveys from Wave7 Research.
Adding to worries over Apple’s growth, the company on Friday revised its App Store guidelines that will likely directly affect game streaming services ahead of a new iPhone software release later this month.
On the earnings front, Peloton Interactive (NASDAQ:PTON) fell more than 4% even as the company delivered better-than-expected guidance and swung to a profit in