Lisa Shalett, Chief Investment Officer at Wealth Management, still sees the S&P 500 remaining rangebound throughout this year, even with a rate cut from the Federal Reserve.
“Powell’s Fed did a policy pivot early this year, putting its rate hike plans on pause. Now, as the U.S. economy has continued to weaken, Fed officials have indicated that they are open to cutting rates if necessary. Investors, in turn, are now expecting rate cuts as early as this summer, and that has sparked a rally in stocks.”
“I’m not convinced the ebullience will last. While cutting rates should help stimulate flagging economic growth, it wouldn’t affect some issues that have the potential to spark investor fear and volatility. Below are three current market risks that cutting rates won’t address:
- Trade conflicts aren’t going away.
- There is potential for a hard Brexit.
- Antitrust issues loom for tech giants.
I suggest that investors stay cautious. This could be a good time to create watch lists of companies in sectors like financials, energy, materials and select health-care and industrials that could be good buys if selling pressure resumes.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.