The Zhitong Finance App learned that Phil Camporeale (Phil Camporeale), chief investment strategist at J.P. Morgan Wealth Management, said that despite the recent increase in technology stock fluctuations, the current market is still in the early stages of “generational trading” centered on artificial intelligence.
In an interview, he characterized the recent pullback in semiconductors (SMH, SOXX, XSD) and technology stocks (XLK, VGT) as a normalization process rather than a sign of trend reversal.
Camporeale said: “We still believe we are in the early stages of a generational transaction. We're discussing AI investment themes for the next three to five years, or even ten to fifteen years, and their positive impact on productivity.”
He pointed out that investors who entered the semiconductor sector at the beginning of last year have returned three times the increase in the S&P 500 index over the same period, and such positions themselves have the motivation to settle profitably.
He stressed that market fluctuations in summer due to shrinking liquidity may not predict trends in the second half of the year — as evidenced by the significant outflow of retail capital last week.
Camporeale described the current market pattern as a “happy worry” — the profitability of the non-tech sector is catching up. According to the data, the valuation premium of the “Magnificent Seven” (Magnificent Seven) relative to the remaining 493 S&P constituents has narrowed from 30% to 10%, the lowest level in ten years.
“I think this has more to do with the remaining 493 stocks than the Big Seven themselves,” he explained.
Camporeale expressed particular interest in the financial sector (XLF, VFH, IYF) due to upward revisions in profit expectations, active stock repurchases, and continued improvement in capital market sentiment. He mentioned that J.P. Morgan Chase (JPM.US) and Goldman Sachs (GS.US) both emphasized the strong performance of the capital market in their recent earnings reports.
In terms of monetary policy, Camporeale believes that the market's previous 30% bet on the probability of the Fed's interest rate hike was “too high.” He cited weaker-than-expected inflation data, weak employment reports, and a fall in implicit market inflation indicators since the June 17 meeting as support for his views.
He concluded, “I think this is just an inevitable result of the gradual release of profitability in the non-tech sector under a resilient economy.”