Pandemic Recovery Stocks a Good Bet, Causeway’s Ketterer Says

(Bloomberg) -- It's still a good time to buy stocks that benefit from a pandemic recovery, such as airline and travel companies, according to Sarah Ketterer, chief executive officer of Causeway Capital Management.

Investments with upside that have been held down by the prolonged Covid-19 outbreak and Russia's invasion of Ukraine include Google parent Alphabet Inc. and Ryanair Holdings Plc, Europe's biggest discount airline, she said during an interview Friday with David Westin on Bloomberg Television's “Wall Street Week.”  

“Alphabet is interesting to us, because some of their ads are related to travel and leisure and we see that recovering,” Ketterer said. “These are opportunities for investors, because we can't assume that invasions last forever and this pandemic is thankfully dissipating.”

Stocks rallied this week, recovering some of the ground lost so far in 2022, while bonds flashed a key recession warning sign as rates of short-term Treasuries exceeded longer-term debt in what's known as a yield-curve inversion. 

Read more: Stock Rally That Nobody Saw Coming Is Refusing to Go Quietly

Bond yields surged as a strong jobs report bolstered the Federal Reserve's case to use aggressive interest rate hikes to attack inflation.

Liz Ann Sonders, chief investment strategist for Charles Schwab & Co., warned that earnings growth is likely to narrow as the Fed hits the economic brakes and labor and other costs rise.

“I think we're on the cusp of a more difficult period,” she said on “Wall Street Week.”

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