6 Stocks I'm Buying Amid A Major Market Rotation

Group 1: State of American Consumers - The top 40% of income earners saved the majority of excess savings during the COVID-19 pandemic, while lower-income households saw significant increases in savings due to stimulus checks [4][5] - In 2022, higher-income households began to spend their accumulated savings, while lower-income consumers relied on wage growth to sustain spending [5][6] - Credit card debt has surged as many consumers shifted from saving to spending, leading to increased interest payments on non-mortgage consumer debt [5][6][8] - As of Q1 2024, credit card delinquencies reached their highest level since the Great Financial Crisis, indicating financial strain among lower-income consumers [8][6] Group 2: Market Trends and Investment Opportunities - A significant market rotation has occurred, with real estate outperforming big tech stocks recently, indicating a shift in investor sentiment [9][10] - The Nasdaq index has seen a decline in assets under management, while small-cap ETFs have experienced a substantial increase, suggesting a potential multi-year outperformance of average stocks [11][13] - Agree Realty (ADC) has shown strong performance, with a stock price increase of approximately 13% over the last month, attributed to its adaptability in a higher interest rate environment [15][17] - Cullen/Frost Bankers (CFR) has rebounded nearly 8% after reporting decent Q2 2024 earnings, highlighting its strong position in the Texas market despite current challenges [18][20] Group 3: Life Science Real Estate Market - The life science real estate sector is currently in a bear market, with elevated demand from previous years normalizing and record-high space deliveries [24][27] - Alexandria Real Estate Equities (ARE) reported solid leasing volume in 2024, maintaining performance in a challenging market, with a projected rebound in venture capital deployment for biotech firms [25][27] - Despite current challenges, the long-term outlook for the life sciences industry remains positive due to aging demographics and consistent demand for lab space [28][27] Group 4: Temp Staffing Industry - Robert Half Inc. (RHI) has seen a decline in revenue due to a weaker labor market, with total revenue down about 5% from the end of 2019 [29][31] - The company maintains a capital-light business model with zero debt, which has historically facilitated high returns on invested capital [33][35] - RHI's dividend yield has reached around its COVID-era high, indicating that the dividend remains secure despite current challenges [35][36]