What Goes Up

Mimi Duff, senior client adviser at the $3 billion registered investment adviser GenTrust, joined this week’s “What Goes Up” podcast to discuss the outlook for markets, the economy and borrowing costs following the latest Federal Reserve interest-rate increase and a second-straight quarter of negative economic growth.

Duff also explains the rationale behind some of the more interesting investments her firm is excited about, including biotech and uranium exchange-traded funds. And she gives her thoughts on the bond market, and what areas of markets are attractive following this year’s selloff.

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While China’s stock market has been seen as a pariah by some global investors this year, Citigroup is taking a contrarian view, positing a bullish outlook for the nation’s equities even while favoring defensive stocks in the US. 

Shawn Snyder, head of investment strategy at Citi US Wealth Management, joined the “What Goes Up” podcast to discuss how the firm is sizing up investing opportunities amid an uncertain economic outlook. 

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Mark Zandi, who has been an economist for more than three decades, says he’s never seen so many people convinced that a recession is imminent. And while he believes the US economy can still avoid an economic downturn, sentiment is so poor that it poses its own risks. 

Zandi, the chief economist at Moody’s Analytics, joined the “What Goes Up” podcast to discuss his outlook after government data this week showed the highest level of inflation in almost 41 years. “I talk to CEOs, CFOs, investors, friends, family—to the person, they think we're going into recession. I've never seen anything like it,” Zandi says. “When sentiment is so fragile, it’s not going to take a whole lot to push us in.”

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During the day-trading craze that erupted amid the Covid-19 pandemic’s lockdowns, market professionals repeatedly warned a new flock of Reddit-reading, Robinhood-using retail investors that equity options were risky, and that bold bets in that market could end badly. It turns out their caution was spot on.

Day-traders managed to lose more than $1 billion during the bull market, with the bill climbing to $5 billion when the cost of doing business with market-makers is factored in, according to Svetlana Bryzgalova, Anna Pavlova and Taisiya Sikorskaya of the London Business School. The three researchers joined the “What Goes Up” podcast to talk about the findings of their study, and discuss what retail traders need to know about options trading.

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It’s a common motto among investors: Cash is trash. But Oksana Aronov, head of market strategy, alternative fixed income at J.P. Morgan Asset Management, says not so fast.

“I’ve been hearing about investors losing money sitting in cash, and that cash is trash for as long as I’ve been in this industry,” she said on this week’s episode of “What Goes Up.” “But the reality is that if you have been in cash for the last five years, you’ve essentially outperformed the Bloomberg Barclays aggregate index year to date, over one year, three years, and, depending on the day, yes, even five years.”

Aronov says that risks are currently skewed to the downside, and that she and her team prefer to have a lot of liquidity in their portfolio because “it serves as a free option, essentially, on any asset class in the world.” Opportunities will come by, perhaps in the coming months. “For us, this is still a capital-preservation part of the cycle, although I think we’re closer to the end of it than we were a couple months ago.”

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Fiona Cincotta, senior financial markets analyst at City Index in London, joined this week’s “What Goes Up” podcast to discuss what she expects in markets, especially as US investors brace for what some say is the increasing potential for recession.

“I think a ‘soft landing’ is optimistic—we’ll put it that way,” Cincotta says, adding that she puts the probability of a downturn in the near future at more than 50%. However, the still-hot American jobs market could ease the sting of any economic contraction. “It could be that the jobs market is actually the saving grace for the US economy,” she says.

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Anastasia Amoroso, the chief investment strategist at iCapital, joined the latest episode of “What Goes Up” to discuss the market volatility that followed the US Federal Reserve’s interest-rate hike and how hedge funds are attracting client interest again after years of languishing in the bull market. 

“In this environment, where nothing seems to be working, investors are looking for something that is—and right now that is in the hedge fund space,” she says. 

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It’s a market environment that Alanis Morissette could write a verse about. Any positive upcoming US economic data may very well receive a poor reaction in the stock market, since it could embolden the Federal Reserve to continue its aggressive campaign to tame inflation.

Anthony Saglimbene, global markets strategist at Ameriprise Financial, joined the latest episode of “What Goes Up” to discuss how to navigate a market where good news is bad news again. Isn’t it ironic?

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Wenting Shen, an analyst and portfolio manager at Harding Loevener, is traveling through China while navigating the country’s strict Covid-zero policies, visiting executives at the companies she covers to see how they’re faring. She joins the latest episode of “What Goes Up” to discuss what she’s learned on her trip, and how Covid-19 and the trade war begun by Donald Trump have altered China’s economy.

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Victoria Greene, founding partner and chief investment officer at Texas-based G Squared Private Wealth, joined the latest episode of “What Goes Up” to discuss the mood of clients and why she thinks the 2022 market selloff isn’t over yet.

“Not to sound like a snob, but I need a solid panic,” she says. “We just haven’t seen that solid, absolute capitulation—everything selling off. We aren’t there yet.” 

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