Liz Ann Sonders, chief investment strategist at Charles Schwab, joins Jack Farley to share her data-driven investment outlook at a challenging time for global markets. Sonders argues that before the turmoil in the regional banking sector, the U.S. was already in a “rolling recession” where weakness rolled throughout different parts of the economy. Now, after the fall of Silicon Valley Bank (“SVB”) in early March, Sonders thinks an official recession (i.e. one declared as such by the National Bureau of Economic Research, or NBER), is more likely, and she says that she thinks a recession is “somewhat unavoidable.” 

Given these headwinds, Sonders’ investment outlook is that it could be a “bumpy ride” in the short-term. However, Sonders and Farley discuss the importance of a long-term outlook and how market timing very frequently underperforms buy-and-hold strategies. Filmed on April 4th, 2023.

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Some of Liz Ann Sonders’ recent research at Charles Schwab:

“Under Pressure: Fed Hikes in Face of Bank Turmoil”: https://www.schwab.com/learn/story/fomc-meeting

“2023 Quarterly Market Outlook: Fed on the Brink?” https://www.schwab.com/learn/story/quarterly-market-outlook

“Another One Bites the Dust: Banking Saga Continues”: https://www.schwab.com/learn/story/another-one-bites-dust-banking-saga-continues

“Caveat Emptor: Important Market Shifts Underway”: https://www.schwab.com/learn/story/caveat-emptor-important-market-shifts-underway

“The Price You Pay: A Look at Equity Valuations”: https://www.schwab.com/learn/story/price-you-pay-look-equity-valuations

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Timestamps:

(00:35) The Fed Has Broken Something

(03:09) Rate Cuts Might Be Further Away Than The Market Thinks

(05:58) Already In A "Rolling Recession"

(17:37) Have The Odds Of A Severe Recession (Rather Than Mild) Increased After The Collapse Of Silicon Valley Bank (SVB)?

(19:59) Investment Outlook For Stocks

(23:11) VanEck Ad

(23:59) Equity Valuations: Are Stocks Cheap or Expensive?

(33:37) Short-Term Outlook: "Some More Bumps In The Road"

(36:12) Time In The Market vs Timing The Market

(39:27) Liquidity and Gold

(41:28) Sectors And Factors Leading The Stock Market

(44:14) "Growth vs. Value" Is A False Choice

(49:59) International Developed Markets and Emerging Markets

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.