It may be time to 'head for the multiasset hills.' Getty Images Rising COVID-19 cases in the U.S. and Europe point to a subdued start to the day for markets on Tuesday, after Monday’s selloff. The threat of a second wave continues to dominate the headlines, with new lockdown measures coming into force in Spain, and the U.K. government set to order pubs and restaurants in England to close at 10 p.m. in a bid to contain the virus’ spread. After a 509-point decline on Monday, the Dow Jones Industrial Average DJIA, +0.49% was 0.2% up in early trading, YM00, +0.15% while the S&P 500 SPX, +0.92% and the Nasdaq COMP, +1.46% also made early gains. In our call of the day, Ben Kirby, portfolio manager at Thornburg Investment Management said we may have already seen the market highs this year and it was time for investors to “head for the multiasset hills.” “I hate to say it, but I’m telling investors that we may have already seen the highs for the year,” he said. Kirby preferred stocks over bonds and recommended maintaining an above-average level of cash, as expected higher volatility ahead of the election meant “buying opportunities will be bountiful.” He added that Thornburg was in a “healthy risk-off / profit-taking mood right now,” following the historic recent rally. When it comes to the sectors and stocks to play in the current market, Thornburg has plumped for high-yield, dividend-paying stocks. High-yielding stocks have generally outperformed the broader market for many decades, Kirby said, but have underperformed in 2020. “We think high-yield, dividend-paying stocks pose a huge opportunity for longer-term investors: quality, compounding companies with sustainable and growing dividends should be increasingly sought after in a world where income from bonds is so scarce,” Kirby added. He said the Thornburg Investment Income Builder Fund currently liked the global telecommunications sector, “a defensive sector with solid fundamentals, low valuation, high yield and has underperformed.” He particularly liked China Mobile CHL, -0.70%, Orange ORA, +1.15% and Deutsche Telekom DTE, -0.31%, while retailer Home Depot HD, +0.05% was “another great name” that plays into the work-from-home and stay-at-home theme, he added. The chart This chart from Howard Hook of EKS Associates shows that the top five companies in the S&P 500 SPX, +0.92% are up 34% year-to-date, while the bottom 495 companies are down 4% for the year. The S&P 500 price returns is up 2% in total. The top five companies are technology companies Microsoft MSFT, +2.22% and Apple AAPL, +1.28%, e-retailer Amazon AMZN, +5.11%, Google owner Alphabet GOOG, +2.22% and social media platform Facebook FB, +2.37%. The markets U.S. stocks made modest gains in early trading, with the S&P 500 0.4% up and the Nasdaq climbing 0.5%. European stocks nudged higher after their worst one-day performance in more than three months, as countries across the continent look to impose tighter restrictions to contain rising coronavirus cases. The pan-European Stoxx 600 SXXP, +0.20% was 0.6% up, while the German DAX DAX, +0.41% was 1% higher. The buzz Tesla TSLA, -5.46% Chief Executive Elon Musk tweeted late on Monday that its Battery Day product set to be announced on Tuesday “will not reach serious high-volume production until 2022.” The Battery Day and Tesla’s annual shareholder meeting are scheduled to be webcast from 4.30 p.m. Eastern. The British pound GBPUSD, -0.64% rose following reports that the European Union’s top negotiator, Michel Barnier, was heading to London for informal talks on trade. Travel operator Tui TUI, -0.84% launched a savings plan on Tuesday that could affect up to 8,000 jobs, as it aims to reduce its overhead cost base by 30%. The company said it was reducing its capacity for the winter 2020/21 season by a further 20% to around 40%, due to uncertainty over travel restrictions. Federal Reserve Chairman Jerome Powell told Congress it was up to them to provide support directly to troubled American businesses. Nike NKE, +3.02%, like all other apparel and shoe sellers, has been impacted by the coronavirus pandemic, but analysts say the company will continue to be a “winner” heading into its fiscal first-quarter earnings, scheduled for after hours on Tuesday. Random read Broke millennials turn to day trading to strike it rich in South Korea. Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.