
As the Dow crosses 43,000 and the S&P hits record highs, the stock market is booming. Yet, many people in hurricane-ravaged areas are still struggling. Jared Levy, Chief Market Strategist at Peak American Financial, shared his thoughts on the market and key sectors to watch as the fourth quarter kicks off.
While the devastation in Florida may impact GDP, Levy points out that rebuilding efforts can also boost economic activity. Companies like Home Depot, Lowe’s, and infrastructure suppliers are poised to benefit from the increased demand for repairs and rebuilding materials. Though natural disasters can be tragic, the recovery process often leads to economic stimulation, particularly for these types of businesses.
Levy also highlights the importance of keeping an eye on banks and infrastructure companies as the market progresses. He notes that while opinions on the state of the consumer vary, the overall sentiment is that consumers are still in relatively strong financial positions, despite some warnings from major players like Jamie Dimon.
For his trade of the day, Levy recommends United Healthcare (UNH). The largest insurer in the U.S., UNH is trading around $580 per share. With upcoming earnings reports and strong analyst support, Levy sees potential in the stock. The options market predicts a $30 move in the stock by mid-October, and Levy is trading the October 25th 570/560 put spread with a potential 55% return. For stock traders, he suggests buying the stock and selling a covered call to hedge the position slightly.
Levy remains optimistic about UNH, seeing it as a solid performer in the healthcare sector, at least until there are significant changes in the healthcare system.
With the market rallying and businesses involved in the recovery set for growth, Levy encourages traders to stay focused on these sectors and prepare for potential market shifts.
CLICK HERE to watch Jared Levy on Business First AM covering his United Healthcare trade.
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