Joining me now is Devon Drew and Chief investment Officer
at D F Partners. Devon. Thanks so much
for joining me down here on the floor of the
Stock Exchange. Welcome. Thank you so much for
having me a lot of green on the screen today
. Of course, our viewers, I'm sure like
to see that for their 41 K and other savings
. What do you make of the path forward for
this market? I really think it's the best of
both worlds situation. I think the financial markets are
actually pricing in recession but allowing rates to cool off
also allowing inflation to tame all while not negatively affecting
corporate earnings. So where do we go from here
? That's the big question, right? Inflation of
course, does remain high but seems to be coming
down a bit. It does. And I think
we'll get some good, some good job numbers.
Next week, we already saw unemployment tick up the
most. In three weeks, we saw, we
saw some good inflation numbers here today with a milder
number, right? So for goods and services up
to be a 30.3% is a good sign, right
? So I think that's telling investors that, you
know what we, what the fed has been doing
is actually working, right. Might be a little
more slow than what we, what we wanted,
but it is actually working. So I think that's
why we've seen this rally on risk on assets.
Like tech stocks. Are there certain sectors, maybe
technology or even stocks that you find attractive at these
levels? Right. So just given the recent banking
crisis, I really like Bank of America, you
know, you're looking at a looking at a stock
that is just up from its 52 week lows,
but was indiscriminately sold off during the banking crisis.
And you look at what is going to be a
catalyst for that. So, you know, they
just reached up to$55 billion in assets on their
financial planning app, right? So wealth management is
going to be a precursor for a bull run for
the stock and in terms of risks that persist,
of course, there are always risks out there.
What are the risks to the downside for investors that
they should be aware of? Well, on that
same, not with the banking crisis, you've seen
money flow out of out of the banks and into
money market, mutual funds, right? You've seen
billions of dollars flow into that. So if you
look at from a sector perspective, looking at financials
and looking at all the mid and smaller tier banks
that could potentially be under similar stresses as we see
from credit suisse and and First Republic the quarter to
the numbers. So the S and P up 7%
the Dow did eke out a gain just 4/10 of
a percent. We have seen that the Dow was
a little bit lower before today's gains and it looks
like the NASDAQ up a whopping 17%. So some
very healthy growth that we see in these growth names
. The fed is saying that rate cuts are not
its base case, but I think the stock market
is acting like that is going to happen. Yeah
, that's what it feels like. I mean,
I could, I could definitely see one more hike
of 25 basis points before things kind of kind of
level off. But I think the investors in the
market is saying, hey, listen, we think
we're at the end of this thing right now and
I think that's why you're seeing people buying a lot
of these risk on stocks because they're saying, hey
, the Fed is going to have to pause here
, right? And potentially cut in Q four or
Q one of 2024. It does kind of feel
like a roller coaster though, right? Since the
lows of the pandemic, it was a drip,
drip, drip and then kind of a dramatic fall
. Of course, the pandemic, lows rates are
cut to zero stocks rip and they continue to rip
for a long time for about a year and a
half and then we've fallen quite dramatically. How should
investors, what should investors know when they do want
to put their money to work in a market like
this? Right. So I think buying on the
dips, it has been a very popular situation,
but, you know, we're in a camp where
value is going to outperform growth and coming out of
coming out of a recession starting to look at more
of, you know, if we are, if
we are in a position where it's going to be
risk on, you still want to look on the
value side to get some high quality stocks, but
you can go down to capitalization. So start adding
some of those small cap names, some of those
names on the portfolio and rebalance more towards more towards
the value side because I think you could pick up
some stocks that once again have been getting indiscriminately bought
out here, sold off here recently and have some
good upside going forward. So, diversification is key
. That's what I'm gathering. DeVos. Absolutely.
Absolutely. Devon Drew Coo and Chief investment Officer of
DFD partners, Devon. Thank you.