Stock, Nasdaq, S&P 500, Stock market, Dow Jones Industrial Average, S&P Global Ratings, Yield ‘very unlikely’ in the upcoming months: Strategist

We’Ve been talking a lot today, also about the hearings that went on yesterday surrounding the whole gamestop situation, and i want to ask you and take a step back for a moment, because so many retail investors have become so interested in this market. A combination of rising prices, stimulus checks, people may be working at home with more time to trade, but when it comes to participation in this market and getting into this market, is it too late for investors to get in here after this monster rally that we’ve already Had that’s absolutely that’s a fantastic question and probably the question we’re asked the most, and certainly there are a lot of people who thought the market was overvalued, have some cash on the sidelines and are wondering what to do and we’ve had a big discussion. In fact, we had a big strategic discussion on this yesterday and our answer is yes, you should actually enter the market at this time. Um. We are positive on the market over the next next, certainly through this year, but over the next few years, and i think that there’s, just not enough opportunity in cash, so entering the markets, would be both the equity markets and the fixed income markets. With an overweight to the equity markets, you know and stephen, as you guys think about um. You know your work at franklin, templeton and think about engaging different types of investors um. How what is it like engaging um? You know institutions now retail.

Now. How has that game kind of changed because it does seem um, as we sort of heard yesterday, that you know individuals have never been more sophisticated and never had more information? How? How are you guys thinking about those dynamics? Well, that’s great uh, a great question and i think the big change in the way that we see it is the um. The entire investment world is becoming more institutionalized. If you will, and big financial managers like us, have to treat all investors as if they’re institutions and with the sophistication of institutions and looking at them in the long term, so that means institutions now are looking at higher quality investment processes. They’Re, looking at esg real, meaningful, esg and they’re, looking at more sophisticated ways of delivering products, so that’s, true in the retail and that’s true in the institutional areas as well stephen, i just want to mention some data that we just got out a few minutes ago. The pmi, the market pmi data on manufacturing, which showed a reading in january of 58.8 that’s, the fastest growth for almost six years and the highest growth in prices, the fastest growth in prices going back to 2009., and this obviously speaks to the issues that we’ve been Talking about in terms of input cost rising, will we see potential feed through to inflation um? How are you thinking about inflation now, and, and are we going to see that the fed’s ham being forced a little bit more at some point, pmis were strong.

If you look at other countries, japan and europe also strong services, not so strong, but as soon as we come out of the pandemic, i think services will have a huge rebound. We had very good news this morning from pfizer about only needing one uh, one vaccine. Vaccination and also that you don’t need the deep cold refrigeration. That means vaccinations could move quicker, so we have some pent up demand and that pendulum demand is very likely uh to result in inflation. You’Ve just had this infrastructure week. What a perfect week for you to have that infrastructure week as we see the deep need for new infrastructure uh with the big winter freezes in texas and the south, and as you just had all your guests show. Commodity prices are up and infrastructure will also lead to inflation, so we’re going to see inflation. I think the question that we have internally is whether that’s a cyclical thing that that’s just an inflation coming out of this pandemic, which the markets can handle. I mean it’s expected or whether it’s going to be an endemic inflation uh, where we see persistent inflation for a period of time. The fed wants inflation. Fiscal spending is uh, supportive of inflation, so we’re likely to have low levels of inflation going forward. Stephen what’s, your probability for a correction in march. I think the probability is very, very low for a correction there’s, a lot of money on the sidelines and lots of stimulus, more positive news on the vaccinations um.

So i i think it’s unlikely to have a correction. Yeah, as you know, you have a lot of guests and it’s almost impossible to correct to uh to actually predict a correction. It wouldn’t be unlikely that we have some pullback in some stocks in the next few months, but that is not our prediction going forward. We see the markets being very positive. Stephen thanks for being with us today appreciate it. Stephen dover is chief market strategist at franklin, templeton and he’s.

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