(Bloomberg) -- The US equities selloff has removed “a lot of the froth” from the market, making some technology and small-caps attractive again, according to Luke Barrs, global head of fundamental equity client portfolio management at Goldman Sachs Asset Management.
“What we’re looking at now is: can we buy some select tech names and the small-caps space, where we think the normalization of rates should be very helpful for what is still an undervalued asset class,” Barrs said in an interview on Bloomberg TV.
US stocks have slumped in the past month, with S&P 500 falling 4.6%, as investors worried about a recession ahead. Indexes have rebounded this week after data showed fewer workers applying for jobless benefits. Bank of America Corp. strategist Michael Hartnett said the market turbulence had not yet breached levels that would signal worries about a hard economic landing.
Read: BofA’s Hartnett Says Market Selloff Yet to Breach Key Levels
Barrs said they’re still trimming some positions in the large cloud-service providers, known as “hyperscalers,” because of their pricey stock valuations and increasing competition in the industry.
He added that the firm now expects three interest-rate cuts from the Federal Reserve through the end of the year.
--With assistance from Sagarika Jaisinghani.
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