Dig a little, and you’ll get better stock than tech superstars, says Jefferies



More movements on US-China trade talks and hopes of continued virus are affecting markets more for Tuesday.

This is on the heels of the start of the week, marking a record for Dow industrialists and Nasdaq comps, finishing above 28,000 for the first time
+ 0.60%
And the S&P 500 SPX,
+ 1.00%.
It is hard to see technology giants, who keep astounding investors.

Our Phone of the day Jefferies’s equity strategist comes from Steven DeSunctis, who finds that investors have become fixated on big tech stocks such as FAANGs – Facebook FB.
+ 1.64%,
Apple AAPL,
+ 1.19%,
Amazon.com AMZN,
+ 0.69%,
Netflix nflx,
-0.71%,
And the alphabet-owned Google GOOGL,
+ 0.60%.

  "I don't really convince people that earnings growth and trending revisions have actually become widespread," DeSunctis tells MarketWatch.  “They still focus on the work-from-home theme and have the best balance sheet among stocks that have revenue growth.

  He said, "When income growth and revenue growth are difficult, you pay a huge premium for that, but if next year income growth and revenue growth starts to get better and wider, then you start saying that valuation Will matter. "  . 
  So as revenue growth continues to broaden, investors will see the rotation of shares in that positive light, away from big superstars, which may be less popular on the road due to valuations.  DeSunctis says he is getting more bullish on economic indicators, and that would be good for cyclical stocks, which improve along with the data.  He says that material stocks can begin to improve tech and health care.
  For starters, he is closely watching mergers and acquisitions.  "I think other companies are raising questions about why they are public, so we are starting to see early signs of M&A activity, as we saw in 1999 or 2000," he said.  Small-cap stocks, cyclical and price names. 
  He says that small domestic stocks have improved recently, but they are not as cheap as they are cheap.  Those names could improve with higher foreign revenues as the dollar weakened and Europe's economy strengthened.  This leads to a handful of names recently exposed in a note that have substantial exposure abroad. 
  They are sports retailer Foot Locker FL, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/204092533/composite" class="positive">+ 5.80%</bg-quote>
  , Financial Puriel Finn 'VIRT, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/204693277/composite" class="positive">+ 1.96%</bg-quote>
  And Bank of NY Mellon BK, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/200171276/composite" class="positive">+ 1.87%</bg-quote><span>,</span>
  Health Care Stock Bio-Rad Lab BIO, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/207953537/composite" class="negative">-1.30%</bg-quote>
  And Agilent Tech A, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/207081878/composite" class="negative">-0.71%</bg-quote><span>,</span>
  Industrialist Equifax EFX, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/208789454/composite" class="positive">+ 0.27%</bg-quote><span>,</span>
  Lincoln Electric LECO, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/200454581/composite" class="positive">+ 0.99%</bg-quote>
  And Parsons PSN, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/212182498/composite" class="positive">+ 3.17%</bg-quote><span>.</span>

  <h6>market</h6> Dow YM00, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210407078/delayed" class="positive">+ 0.64%</bg-quote><span>,</span>
  S&P ES00, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/209948968/delayed" class="positive">+ 0.42%</bg-quote>
  And Nasdaq NQ00, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210219788/delayed" class="negative">-0.07%</bg-quote>
  Futures on SXXP rising with European stocks, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210599654/delayed" class="positive">+ 0.65%</bg-quote><span>.</span>
  In Asia, markets mostly ended higher.
  <h6>The buzz</h6> Digital payment provider Ant Group filed a prospectus with the Hong Kong Stock Exchange on what is expected to be the world's largest initial public offering, with dual Hong Kong and Shanghai listings.
  China says Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Menuchin were involved in "constructive" trade talks, both of which the US noted "progress" on both sides.  This is a change from President Donald Trump, who said on Sunday that he would be open to China. 
  Impressed by iPhone maker Apple's share sharing, three big names, including oil major Exxon Mobil XOM, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/204455864/composite" class="positive">+ 2.95%</bg-quote><span>,</span>
  Are out of the Dow, to be replaced by the software group Salesforce CRM, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/200515854/composite" class="positive">+ 0.44%</bg-quote><span>,</span>
  Biotech Amgen AMGN, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/209157011/composite" class="negative">-0.87%</bg-quote>
  And honeywell honey 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/205583690/composite" class="positive">+ 1.18%</bg-quote>





    Honourable, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/205583690/composite" class="positive">+ 1.18%</bg-quote>
  In Seoul, 27 people were infected with COVID-19 in a Starbucks SBUX, 
    <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/207508890/composite" class="positive">+ 2.08%</bg-quote><span>,</span>
  But the four mask-wearing employees were spared.  And an infectious diseases expert says don't panic about the first reported re-infection of the virus.
  Case-chiller home prices, consumer confidence and new home sales are all on tap for Tuesday.
  Donald Trump Jr. addressed the Republican National Convention with a warning that Democratic challenger Joe Biden's "radical leftist policies will stop our economic recovery."
  <h6>Random reads</h6> <a target="_blank" href="https://news.google.com/__i/rss/rd/articles/h" class="icon none" rel="noopener noreferrer">Kenosha, Wisconsin, sees <a target="_blank" href="https://news.google.com/story/kenosha-police-fire-tear-gas-to-disperse-crowd-protesting-shooting-2020-08-24?mod=article_inline" class="icon none" rel="noopener noreferrer">Another night of protest over the police shooting of a black man.
  There is a great need for happiness.  Pumpkin spice lice are coming back.
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