Opportunities in health care, financials and energy: Investing expert

Opportunities in health care, financials and energy: Investing expert



I think the market is pretty happy about what Jerome Powell said the other day as well so I think there are a few factors one of them is that we have a very active Fed foot potentially rate cuts coming our way they would like to sustain the economic expansion at least support it so I think that's really what sort of helped the market in the near term and the g20 thing is hope is still on the table you know China is one third of the world's GDP the u.s. sp500 has 40% or more exposure to China you know we need to be able to sell components there they need to be able to sort of function without injecting liquidity and I think that a deal is beneficial to both sides and if we get one it probably could lead to a rally here David if the g20 ends in something less than comity not comedy comity is that going to be the banana peel that could cause the market to slip we don't need an agreement we have to agree to push the ball down the road and I think the market will look at that positively if there is a disagreement if we are going to immediately increase the tariffs and the language gets more inflammatory we do think the market would be prone to a pullback think about it the market had a great four month period when it looked like the talks were going well and there would be some agreement when those talks fell off when when President Trump started to talk about increasing the tariffs and talking about it what a great thing tariffs were you had the worst May that you've had in a very long time get back a lot of the gains the market is definitely going to react to those two tariffs and how we are with China so if there's good news we think the market can continue to do well bad news we do think the market sells off and it's very difficult to handicap what's actually going to happen Sylvia what about bond yields do you see signs that those are incredibly overbought fixed income in general that yields are too low I mean what signals do you read there yeah I think you know I think a lot of what's been happening in this market is that consumers have been on the fence in terms of whether or not they should stay in the market and they've fled to cash instruments to fixed income products and all sorts of defensive names it's not a surprise to me that defensives are doing well today because the market rallied for a couple of days g20 is still uncertain so maybe take a little off the table until we know that there's going to be an equity rally going forward you know I think that some of the flows will continue into those names but the yield isn't there so you're still better off at least looking at equity yield anymore you can't go to yield anymore so many of these countries and it's not just Germany I mean Slovakia Slovenia Malta that's on the world I mean it's maybe a great time to consider buying that house but you know David the other big story for the market is President Trump who took aim at the Fed again saying it's behaving like a quote stubborn child in refusing to cut interest rates the president tweeting the Fed doesn't know what it is doing and that the doll would be thousands of points higher and the GDP would be in the fours and fives as they say in college discuss well we think the Fed knows exactly what they're doing we think the president unfortunately is acting like the child in this particular case if you go back to candidate Trump in 2015 he was actually saying that rates were too low Janet Yellen was artificially depressing them and that she was artificially inflating the stock market the economy is actually in better shape today than it was back then so if you look at what he said back then that would argue that rates are actually fine or ultimately could drift higher so we think the Fed is doing fine what's clear about the feds meeting last week is they will be lowering rates whether it's next month or the month after that they're going to be dovish we don't expect them to change that dovish policy for six to twelve months and we think that's what the economy needs the Fed can't lower rates enough if we enter a trade war with China if we get out of that trade war with China we think rates are great and the economy and then ultimately a stock market can go higher Sophia your thoughts on the Fed and where rates are headed or where they should be I think it depends I think it depends on what happens in the next earnings season I think it depends on what happens with g20 I would think that if we get a good deal out of g20 and we see all the names rally again and earnings still looks stable as they did last quarter then maybe the Fed would be less likely to cut as many times as the market expects if we get no deal and we don't have any hope of essentially growth in GDP economic expansion and the consumer starts to see definable differences because of the China tariffs meaning goods are more expensive companies have to move out of China into Vietnam and there's a real cost born I would expect that rate cuts would have to essentially keep our market up you you

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