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
#037 Axel Merk On The Fed's Sledgehammer Approach To The Economy
#036 Jim Rickards: We're Looking At A Global Recession
#035 Envestnet Co-CIO Dana D’Auria On Personalizing Portfolios
#034 Carson Block On Latest Shorts And The 'Mass Investing Delusion' Of ESG
#033 Jan Van Eck On Why Now Is The Time To Buy Bonds
#032 Scott Galloway: It's Never Been Easier To Become A Billionaire, But It’s Never Been Harder To Become A Millionaire
#031 Danielle DiMartino Booth On Recession, Housing, And Killing The Fed Put
#030 Vitaliy Katsenelson On The 'Dot-Com Bubble 2.0' Ushering In 'A Value Investor's Paradise'
#029 Steve Case On Peak Silicon Valley And The Rise Of The Rest
#028 Dr. Nomi Prins On How The Fed Created A ‘Permanent Distortion’
#027 Rick Rule: The Damage Will Be Severe But Survivable
#026 Brent Donnelly On Why It’s Starting To Feel Like 2001
#025 Alex Gurevich On Why Deflation — Not Inflation — Is The Real Concern
#024 "Convexity Maven" Harley Bassman On Repricing For Reality
#023 Nick Maggiulli On Why You Should ‘Just Keep Buying’
#022 Brent Johnson On The "Dollar Milkshake" Theory And Why A Currency Crisis Is Ahead
#021 Jim Rickards: We're Going To Wake Up This Winter With A Severe Recession
#020 Josh Brown: You Weren’t Supposed To See That
#019 Marty Chavez On How Software Ate Finance
#018 David Friedberg On Reimagining The World Through Decentralization
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