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(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Traders heading into Monday’s session are looking into whether the market rally can continue to broaden beyond tech. Plus, the an industrial play that will benefit from potential Federal Reserve rate cuts. Worldwide Exchange pick: Transdigm Group (TDG) Sarat Sethi of DCLA sees Transdigm as a timely industrial play. Sethi is bullish on the maker of after-market airplane parts, seeing double-digit earnings growth in the next three-to-five years. He added that the stock’s 34 times price-to-forward earnings multiple is reasonable. Sethi also likes what he calls “select industrials” after Federal Reserve Chair Jerome Powell struck a dovish tone at his speech at Jackson Hole. Big Tech or broadening? Jimmy Lee of Wealth Consulting Group sees the market broadening continuing this week with cyclical sectors and homebuilders benefiting from the enthusiasm over potential Fed rate cuts. “I think we see a broadening that’s going to be a big big part of why the indexes should continue to go up,” Lee said. “We have been long cyclical sectors, you have seen it already in small cap stocks.” Lee added that he sees upside in homebuilders and mortgage companies such as Rocket and UWM . “If rates come down from the 7s to the 5s I think you see an incredible amount of activity that has been locked up in housing unlocked.” Tech trade outside megacaps Drew Pettit of Citi sees opportunity in two areas of tech outside of the AI names that dominate the major indices, fintech and wearable tech. “You should be looking at some themes like fintech, that doesn’t have perfection priced in, and wearable technology which gives you a lot of health care names outside of insurance and biotech,” said Pettit. “In both of those cases earnings estimates have held in there even though we have seen earnings estimates outside of growth actually come down.” There are no major ETFs focused on wearable technology, but the SNSR and THNQ ETFs both offer exposure to the space through companies like Garmin and DexCom . Fintech ETFs such as the Ark Fintech Innovation ETF (ARKF) and the iShares Fintech Active ETF( BPAY) have outperformed the market year to date. Countdown to Nvidia earnings Wedbush analyst Dan Ives sees a “risk on” environment for the tech trade after Jackson Hole and before Nvidia earnings after the bell on Wednesday. “You could have a broadening, but growth is going to continue to be concentrated in tech and the AI revolution. I believe the second, third, fourth derivatives of AI are going to continue to play out across chips, software as well as power and the grid,” Ives said. He also believes investors will shake off some of the headwinds for the tech trade including elevated valuation, a recent MIT report finding 95% of companies are not seeing a benefit from generative AI and Sam Altman comments that the AI trade may be a bubble. “I think that added some white knuckles, but I think the risk on trades here are perfect,” Ives said. On Friday, the iShares MSCI USA Momentum Factor ETF (MTUM) underperformed the market following the Jackson Hole speech, while the Invesco S & P 500 High Beta ETF (SPHB) doubled the performance by the S & P 500.
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