Wall Street is looking to end the week on a high after Thursday’s rally, with the Dow Jones Industrial Average hitting a record above 50,000, while the S&P 500 is on course for its eighth straight week of gains despite bond market volatility. Asian markets are expected to rise, led by Japan’s Nikkei average, and major European stock exchanges are also expected to end the week on a strong note. Here are three investment strategies that can help you cut through the noise, heard from CNBC’s Singapore and London studios on Friday. Europe is undervalued Michael Field, chief equity strategist at Morningstar, currently sees European stocks rising about 5%. He cited defense as an attractive sector despite recent pressures, while sectors such as the consumer discretionary sector “are currently trading at perhaps a 20% to 25% discount to fair value estimates.” “Healthcare is trading at a significant discount as well, and even some of Europe’s tech companies are actually relatively attractive at the moment,” he added. Mr. Field also said that the recent weakness in the dollar is “unintentionally helping European companies,” adding that “there are still a lot of good opportunities in Europe” for U.S. investors seeking a diversified perspective. About Summer IPO Deals David Stubbs, chief investment strategist at Alphacore Wealth Advisory, believes European defense spending is “going to be a big trend for the next 10 to 15 years” as NATO leaders renew their condemnation of the industry’s lack of capacity. He believes this represents a buying opportunity “in the medium term.” “A lot of our liquid equity is passive,” Stubbs said, outlining his strategy ahead of a summer of big IPO activity in the US headlined by SpaceX. “We don’t particularly want to play a game of who’s in the index and who’s not. We want to capture the broader growth that passive allocation can bring. We want to take active equity risk and active management risk in the private and alternative markets that are at the core of our portfolio.” Emerging Market Initiatives Andrew Heiskell, an equity strategist at Wellington Management, said he was becoming increasingly bullish on emerging market stocks following the “very rapid change in fundamental performance” in emerging markets. “Market expansion across emerging markets is lifting growth prospects from a very depressed valuation base,” he said. Heiskell added that the investor’s exposure to emerging markets is underweight, but he is optimistic about the future outlook. “We went through a period in the early 2000s when emerging markets were the leaders in global equity markets. A lot of money went into emerging markets, and then over the last 10 to 15 years they’ve been very disappointed and very depressed because of poor performance. A lot of capital has gone to the sidelines, and we think it’s on the verge of coming back.”
