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‘The market is utterly underestimating how much of a shock the coronavirus is going to be to the economy. And I think for the next 12 months, the U.S. consumer is only going to spend his money or her money on [nondiscretionary] goods. So, within that basket, I think you have to let Apple go.’
That is Boris Schlossberg of BK Asset Management, explaining to CNBC why Apple AAPL, +1.93% has no place in an investor’s portfolio amid the coronavirus pandemic. “Anything that is discretionary I think will be absolutely not spent a penny on for at least a year,” he added.
Instead, he said investors should take a look at adding companies poised to benefit in the coming months, such as Procter & Gamble PG, +2.70% and Johnson & Johnson JNJ, +6.35%.
Why P&G? Well, Jefferies just upgraded the Charmin-maker, hailing the company as “among the best in staples to weather near-term macro headwinds.”
And as for Johnson & Johnson, the stock is gaining ground after the company said it had identified a lead candidate in its efforts to develop a COVID-19 vaccine. J&J said it plans to begin Phase 1 clinical trials of the vaccine candidate in humans in September, and the investigational vaccine may be ready for emergency use authorization from the FDA by early 2021.
Read: These 16 companies are working on coronavirus treatments or vaccines
Schlossberg also said he’d pick PepsiCo PEP, +1.75% over Disney DIS, +0.36% and, perhaps more obviously, over Royal Caribbean RC, -6.34%, for the same reasons.
Watch the full interview:
Apple shares followed the broader market nicely higher on Monday, up more than 2% at last check while the Dow Jones Industrial Average DJIA, +1.72%, S&P 500 SPX, +2.23% and tech-heavy Nasdaq Composite COMP, +2.73% all gained ground.
