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JJ Kinahan Talks Market's Reaction To Elections, Hot Sectors For The Year

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October 19, 2016 6:39 am
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"Everyone talks about the Presidential election because it’s sexy, but I think Wall Street right now is looking to see what will happen with the Congressional election, the House and the Senate," TD Ameritrade Chief Strategist JJ Kinahan recently told Benzinga.

Last week, the market saw volatility return, he added, pointing out that the CBOE Volatility Index (INDEXCBOE:VIX) was still around $16.5- on Monday.

"So, I don't think we're seeing people really going out and hedging themselves for a disaster one way or the other," Kinahan said.

It should be noted this interview was conducted on Monday, before the 6.17 percent tumble in the VIX seen on Tuesday.

Related Link: How Did The Big 4 Do In Q3?

Hot Sectors

Benzinga asked Kinahan about sectors he likes for the rest of the year.

"It's hard not to like the financial sector, especially after their earnings all came and showed that their fixed income trading activity is where a lot of them actually outperformed Wall Street expectations," he explained. "I have to continue to like them because we still haven't had a rate raise and they are the immediate beneficiaries of a rate raise, because for the first time in years, they can hopefully start to have a spread between what they are paying out and what they are taking in."

Kinahan also pointed out these financial businesses have been "really well run" and, for the most part, have managed to turn a profit by cutting expenses.

"And, you can only cut expenses so far. Even though many of the have huge amounts of employees, at the end of the day, they are fairly neat organization for how large they are," he added.

Another industry TD Ameritrade's chief strategist likes is that of "cloud-based and program-based companies, the salesforce.com, inc. (NYSE: CRM)’s and Oracle Corporation (NYSE: ORCL)'s of the world."

"There's built in demand," Kinahan said. "There’s a new infrastructure of the world, and so, people have to continue to upgrade."


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