How Does David Burrows' Market Outlook Influence His Top Stock Picks

Strategic Market Insights and Top Stock Picks by David Burrows for May 17, 2024

Editorial Team (ET)June 30, 2025

David Burrows, president and chief investment strategist at Barometer Capital Management, has shared his insights and top picks for May 17, 2024. Known for his sharp market acumen and strategic investment approach, Burrows provides a detailed market outlook and highlights three standout stocks poised for growth.

Market Outlook

Burrows and his team at Barometer Capital Management maintain a positive outlook on equities and commodities. They view these as essential for capitalizing on a reflating economy and safeguarding against the erosion of purchasing power in an inflationary environment. The firm is building portfolios that deliver dividend growth, helping investors counter rising living costs by investing in companies generating excess cash and possessing significant pricing power.

Interestingly, Barometer has very little exposure to fixed income or bond proxies, such as high-dividend telecom, staples, or REITs. This strategic choice aligns with their focus on sectors and assets that promise better returns in an inflationary context.

Given the pressure on consumers from high-interest rates, Barometer is steering clear of consumer discretionary companies. This sector's challenges make it less attractive compared to other opportunities in the market.

Recent Market Movements

In the past two months, utilities have shown renewed strength, driven by expectations of increased power demand from AI computing and data centers. This trend led Barometer to add Southern Company (SO) and NextEra Energy (NEE) to their portfolio.

Barometer's market breadth models, which assess market health, turned positive at the end of April following a 5.7% correction in the S&P 500 Index. This positive shift indicates a broadening market leadership, with not only the U.S. but also international markets like Japan, India, Latin America, and Europe showing favorable conditions.

Since December, Barometer has been underweight in the tech sector. Instead, they have significantly overweighted financials, industrials, energy, and materials. These sectors offer attractive valuations and are well-positioned to benefit from the current economic landscape. Despite the aggressive global tightening cycle, global economies remain resilient. Notably, China's stimulus efforts are providing a tailwind, boosting market confidence and growth prospects.

Investor Positioning

Burrows observes that many investors are positioned incorrectly, particularly outside the tech sector. There have been steady outflows from energy and materials, and underweights in industrials and financials, despite these sectors offering compelling valuations compared to tech, discretionary, and communications sectors.

Top Picks for May 17, 2024

David Burrows' top picks for May 17, 2024, include Freeport McMoran, Goldman Sachs, and Thompson Reuters. Each of these companies presents unique opportunities and strengths in the current market environment.

Freeport McMoran (FCX NYSE)

Freeport McMoran stands out for its leadership in both copper and gold. Barometer Capital Management has an 11% firm weight in materials, which is four times the SPX weight. Copper and gold are crucial commodities in the current market, and Freeport McMoran's well-managed operations and long-life assets make it a top pick.

Copper is essential for various industrial applications, while gold serves as a hedge against economic uncertainty. Freeport McMoran's strong position in both commodities makes it a robust choice for investors seeking stability and growth.

Goldman Sachs (GS NYSE)

Goldman Sachs is a pure play on the health of capital markets. The firm's performance is closely tied to trading activities, new issues, and mergers and acquisitions (M&A). As these areas improve, Goldman Sachs stands to benefit significantly.

Goldman Sachs' role in capital markets positions it well to capitalize on increased trading volumes and M&A activities. This makes it an attractive investment for those looking to gain from the financial sector's recovery and growth.

Thompson Reuters (TRI TSX)

Thompson Reuters is a clear beneficiary of AI use cases. The company is actively building and acquiring capabilities to leverage AI in its news applications and legal databases. This strategic focus positions Thompson Reuters at the forefront of technological advancements in its field.

Thompson Reuters' integration of AI enhances its ability to deliver accurate and timely information. In the legal sector, AI helps in researching documented precedents and creating legal documents, making Thompson Reuters an innovative leader in its industry.

Conclusion

David Burrows' insights and top picks for May 17, 2024, reflect a strategic approach to navigating the current market environment. By focusing on equities and commodities, emphasizing dividend growth, and carefully selecting sectors and companies, Barometer Capital Management aims to deliver strong returns for its investors. As the market continues to evolve, Burrows' expertise and strategic choices provide valuable guidance for investors seeking to capitalize on current trends and opportunities.

Bloomberg

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