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What apple -- thank you so much.
So on the Dow the S&P 500 on -- for -- sixth weekly gain in RS something we haven't seen since January believe it or not of last year.
My next guest says -- -- cuts some by surprise but he advises.
Still be selective.
When picking stocks joining us there he is Mike -- UBS wealth management chief investment strategist Mike Acxiom.
-- moratorium so what's I think this rally in the east take caught people by surprise so why that happened.
I think first of all if you go back last two years -- kinda heavy summer walls and we caused.
Really significant selloffs and equity markets you know we have the soft patch.
We a series of events so lot of people kind of walked into the summer very fearful and I think probably overly conservative in the way -- positioned.
That was -- reflected in the valuation differences between the defense of the cyclical sectors so I think we're caught most people by surprise.
Is sort of the absence of malice and we had the summer the fact is we didn't have the big blow up.
And -- have a tsunami we we didn't have this this really protracted period with the economy was facing stress or Europe was blowing up.
So I think as we muddle through that and earnings are OK I think if we markets have done fairly well.
You -- quiet times on the geopolitical front.
It's August so people are away of course it's quiet volume we -- seeing evidence of the low volume.
Does that -- a little bit.
-- I -- be carefully because some Gillis said well there hasn't been confirmation because bonds -- below.
But I would argue Yvonne hello just because what you just said it is summer you don't a lot of people around markets look at chopping around here.
So I won't say that the lack of volume has failed to endorse throughout what I will say is that as we see people coming back most importantly.
Political leaders and legislators in Europe coming back from vacation heating up -- the political season leading up to presidential election United States.
We're likely to see more volatility because we'll start seeing more.
Positioning ahead of the election and more discussions about what the next step is -- is -- And I find it interesting you mention the cyclicals but you're also quick to say well -- the with a little defense of their so much -- that look like.
Well we are again we've got what we do we get -- -- the cyclical bias in our portfolios for the reasons just mentioned the fact is you have cyclicals trading as a steep discounts the -- But we want to be careful here this I think when you.
When you thought this traffic actually risk on risk off you can get whipsawed so we want to balance are cyclical exposure -- with some better price defenses for example.
We still have exposure in the consumer Staples we think that's better position.
The area -- rewarding -- is the deep defensive say on the Telecom utilities where people kind of crowd in looking for a parking place and looking for higher yields.
What the overall allocation you know high.
In -- -- and yelling equities you have to put in some fixed income narrowed what -- -- in the rates market especially since that interest rates have been inching up and last week yourself look at -- We're we're still not love with eight -- -- one point 8% yields on ten year treasuries either previously to own fixed income if you had a balanced portfolio you need to have some.
Diversification -- so what we tell people is.
On the fixed income side.
You wanna have some treasury exposure -- were underweight there.
We prefer to take our fixed income exposure to the credit -- so we're overweight high yield the rover investment grade were also are overweight emerging market debt as well.
Catalyst for the markets off the top of my head -- -- we have another fed meeting we also have the Fed chief Jackson Hole that's always headline generating obviously -- election.
What does this song mean how does it all net out for the S&P the end of the year wears fair value.
-- -- -- -- for values right around where we are now somewhere around 14100 -- -- -- north of that so I don't see the equity market continue to sustain the types of gains we've really gotten cents a really over the course last month and half.
That said is there a possibility that the equity market could surprise the upside from here it's still possible to sentiment is still relatively depressed.
There's some uncertainties that people are still concerned about that could.
Be resolved at least some of them over the course of the next 1012 weeks so I think there is some room for this -- to march -- But again -- would -- said from the beginning -- you have to be selective this is not a market that's gonna carry all sectors small stocks to -- -- position again with that mix of of defenses that we think are fairly priced with some of the beaten down cyclicals I write great information -- my -- very appreciate it -- weekend due to --
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