Darrell Cronk

Cronk explicitly upgraded the technology sector, stating it pays no premium for double the earnings growth of the S&P (35% vs. 18%). The sector is seen as a "safe haven" with less cyclicality than in the past. Spending on AI is viewed as existential and the last area where companies will cut capital expenditures, providing fundamental support. The favorable risk/reward and growth profile, coupled with receding valuations, make the sector attractive for re-allocation. A broad global economic slowdown severe enough to force cuts in all corporate spending, including on technology.

The financial sector is undervalued relative to the S&P 500, down year-to-date, with pristine balance sheets, record M&A, and large IPOs coming. It offers attractive earnings growth at reasonable valuations.

Industrials have sold off since the Iran conflict began, but should benefit from underlying spending trends. The sector offers good earnings growth at reasonable prices.

Utilities are down over the last three months and offer value in a market where other sectors have run up. They provide a defensive tilt with good income potential.