Liz Ann Sonders, Chief Investment Strategist for Charles Schwab, discusses the macro picture, behavior of asset classes, active management, Federal Reserve outlook, interpreting economic data, the yield curve and recession, the bond market vs. equity market, and lessons from the legendary late Marty Zweig.
Takeaways
* The current economic cycle is characterized by rolling recessions, with different sectors experiencing periods of growth and contraction.
* The relationship between bond yields and stock prices has historically been negative during inflationary periods and positive during periods of economic growth.
* Active management may become more important in the new era, as market conditions change and there is greater dispersion in how securities behave.
* The Federal Reserve is likely to be in pause mode with regards to rate hikes, but a significant loosening of monetary policy is not expected.
*Interpreting economic data can be challenging due to the presence of crosscurrents and conflicting indicators.
* The yield curve has historically been a reliable predictor of recessions, but the timing and duration of recessions can vary.* The bond market and equity market may have different perspectives on the current economic environment, with the bond market being more cautious.
* Lessons from Marty Zweig include the importance of understanding how monetary policy influences asset prices and the value of sentiment analysis.
Links:
2024 Outlook: https://www.schwab.com/learn/story/us-outlook-one-thing-leads-to-another
Twitter/X: https://twitter.com/LizAnnSonders
On Investing Podcast: https://podcasts.apple.com/us/podcast/on-investing/id1711806955?ls=1&mt=2
Timestamps: 00:00 Introduction and Macro Picture
03:55 A Different Environment
05:29 Behavior of Asset Classes, Opportunities
08:52 Active Management in the New Era
10:25 Federal Reserve Outlook
14:07 Interpreting Economic Data
19:03 Yield Curve and Recession
22:27 Bond Market vs. Equity Market
25:21 Lessons from Marty Zweig
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#170 Bob Elliott: The Biggest Risk For Equity Investors Is The Economy Remains Too Strong
#169 Carol Roth: The Stagflationary Economy Is Making A Resurgence
#168 The ‘Acid Capitalist’ Hugh Hendry On The Fed’s No-Win Situation, The Fragility Of Valuations, Gold As ‘The Alchemy Of Chaos,’ Buying Bitcoin, And The Dangerous Sign The Japanese Yen Is
#167 Michael Pento: If Rates Don't Come Down Across The Yield Curve Relatively Quickly, The Economy's In For Big Trouble
#166 Nancy Davis: 'Whatever They Say, The Opposite Happens' — Fed Meeting Reaction, Why Inflation Is Here To Stay, And The Opportunity For Investors
#165 Jim Bianco On Stickier Inflation, A 10-20% Chance Of A Rate Hike, And Why The 10-Year Treasury Yield Could Surge To 5-5.5%
#164 Chris Whalen On Higher Interest Rates, Illiquidity, And The Death Of Leverage
#163 Professor Scott Galloway: We're Turning Into Something That's Not Very American
#162 Keith Fitz-Gerald, Investor Who Nailed 2023 Market Rally, Says The Fed Doesn’t Matter — Investing In Optimism Does
#161 Michael Howell On Global Liquidity, A Re-entry Point For Risk Assets, Monetary Inflation, Gold, The US Dollar
#160 Bill Fleckenstein: The Fed Is Trapped And Unable To Fight Inflation
#159 Lyn Alden On Fiscal Dominance Macro Backdrop, Why The Rise In Gold Is Indicative Of Fiscal Problems, And Why Bitcoin Could Hit Six-Figures In This Cycle
#158 Larry McDonald: We’re Entering A Sustained Inflation Regime, Why Trillions Of Dollars Are Currently Misallocated, And The Opportunity Right Now In Hard Assets
#157 Dr. Gary Shilling On The Hidden Flaws In The Economy
#156 Tom McClellan On Why The Recession Is Still Coming And Why The Second Half Of 2024 Could Be Unpleasant For Stocks
#155 Meredith Whitney On The 'Bifurcated' Economy And Consumer, Why It Will 'Pay To Be Patient' For Young Homebuyers, And The Coming 'Silver Tsunami'
#154 Dr. Art Laffer: We Are In The Middle Of A Massive Redistribution Revolution And It's Destroying Growth
#153 Amy Nixon On Inflation Running Hot And Pivoting On The Deflationary Recession Call
#152 Brian Hirschmann: This Is Probably The Most Dangerous Time In US Financial History
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