Citi’s Drew Pettit: Stocks are seeing a ‘healthy reset,’ not cause for concern

[Reset Push Button]
atakan

Citigroup’s director of U.S. equity strategy Drew Pettit described recent market declines as a “healthy reset” rather than a reason for alarm.

In an interview with CNBC, Pettit emphasized that despite drops of about 1% on consecutive trading days, the market remains “up nicely on the year” with no signs of panic or turmoil.

Since stocks were coming off a “really high level,” a reset was expected, he said.

“Healthy expectations for growth still up into the right,” Pettit explained about current market sentiment. He suggested the market pullback stems primarily from reactions to rising interest rates, noting that markets “were priced for perfection” with expectations of good growth and lower rates supporting equity valuations.

In addition, he said was optimistic about the recent appeals court ruling [https://seekingalpha.com/news/4490613-federal-appeals-court-strikes-down-most-of-trumps-tariffs] on tariffs. “Tariffs going away is better for earnings expectations and margins. We think that wins out in the long run.”

Pharmaceuticals (PJP [https://seekingalpha.com/symbol/PJP]), (XPH [https://seekingalpha.com/symbol/XPH]), (PPH [https://seekingalpha.com/symbol/PPH]) and biotech (XBI [https://seekingalpha.com/symbol/XBI]), (BBH [https://seekingalpha.com/symbol/BBH]) were highlighted as sectors significantly impacted by existing tariffs. “Not a lot of price-ins to pharma, so any good news or alleviation of bad news could be good for the group.”

Beyond tariffs, Pettit identified several attractive investment areas, particularly in fintech (FINX [https://seekingalpha.com/symbol/FINX]), (ARKF [https://seekingalpha.com/symbol/ARKF]) and traditional finance companies leveraging technology.

“Outside of AI, there are some really interesting value areas in the market – some of the fintech names that fall into value. Even outside of the AI names, more of the traditional finance names that are finally delivering more of their products and services via tech platforms,” he said, mentioning companies like BlackRock (BLK [https://seekingalpha.com/symbol/BLK]), Capital One (COF [https://seekingalpha.com/symbol/COF]), and Equifax (EFX [https://seekingalpha.com/symbol/EFX]) as examples where “there’s a margin expansion opportunity.”

MORE ON THE MARKETS:

* AI Spending Is Masking Significant Economic Weakness [https://seekingalpha.com/article/4818625-ai-spending-masking-significant-economic-weakness]
* The National Housing Emergency [https://seekingalpha.com/article/4818618-the-national-housing-emergency]
* Don't Be The Last Bull To Leave The Party, A Recession Is Coming [https://seekingalpha.com/article/4818616-dont-be-the-last-bull-to-leave-the-party-a-recession-is-coming]
* Wall Street slides to start September as tariff news generates uncertainty [https://seekingalpha.com/news/4491211-wall-street-dow-sp500-nasdaq]
* S&P 500 poised for gains in September despite seasonal pattern – Oppenheimer [https://seekingalpha.com/news/4491283-s-and-p-500-poised-for-gains-in-september-despite-seasonal-pattern-oppenheimer]