Speaker 1: Let's get to Loreen Gilbert, CEO at Wealthwise Financial. So
Speaker 1: to my friends who are bears, you may want to
Speaker 1: turn the radio down a little bit here we're going
Speaker 1: to make the case for the other direction. So, Loreen,
Speaker 1: we we got two main major overhangs. Obviously, one is
Speaker 1: the is the China COVID zero policy and the other
Speaker 1: central banks being aggressive on race. Yesterday, we got this
Speaker 1: little rumor that filtered through the markets that a committee
Speaker 1: was being set up for China to to reopen by
Speaker 1: next March, and the markets exploded to the upside. This
Speaker 1: is what's out there waiting, uh, you know, once you
Speaker 1: get the kind of all clear from the FED and
Speaker 1: from China. So yeah, I mean, b B be wary
Speaker 1: of that, Loren. Yeah, I think that the people are
Speaker 1: chomping at the bit, certainly on Chinese stocks, wanting things
Speaker 1: to turn around. And I guess you could say the
Speaker 1: same in the US, although I think investor sentiment is
Speaker 1: still quite negative and has been. That's what we've seen
Speaker 1: during earning seasons so far, is that people have been
Speaker 1: quite negative as they've looked it forward guidance. So I
Speaker 1: think we still got a very strong FED, a very
Speaker 1: aggressive bed definitely think that that's in the cards and
Speaker 1: they're not going to stop any time soon. But I
Speaker 1: do still hold that we are going to see, as
Speaker 1: we have in the past, after the midterm elections and
Speaker 1: potentially this idea of UH divided government. The markets tend
Speaker 1: to like that looking forward at what's ahead, and we've
Speaker 1: got a couple of bits of old wisdom kind of
Speaker 1: war here. I mean, on the one hand, there's that
Speaker 1: saying that you point out it's time in the markets,
Speaker 1: not timing the markets. So with that in mind, you
Speaker 1: get along. Or there's the other saying, don't catch the
Speaker 1: following knife. If we got more to fowl here, which
Speaker 1: is it? Yeah, Well, I think that I think you
Speaker 1: definitely have a following knife, especially in some of these
Speaker 1: growth names, where on those growth names, we don't know
Speaker 1: exactly where the bottom is. Certainly we know that valuations
Speaker 1: were high. Now they've come down quite a bit, but
Speaker 1: we've just seen even in the last few days after
Speaker 1: news of certain stocks, we've seen the continued decline. So
Speaker 1: that's really what I'm saying on the falling life. I
Speaker 1: think that you have to be aware of some of
Speaker 1: these growth names and stick to what's been working, which
Speaker 1: is on the value side, the dividend paying stocks. Yeah,
Speaker 1: I think even the bulls would not say, you know,
Speaker 1: back up the truck, but just that if you're looking
Speaker 1: out for say six to nine months, it could be
Speaker 1: a little better. It's been a great year for the bears. However, Um,
Speaker 1: we're actually higher than where we were in June. So
Speaker 1: you know, the last four to five months, even though
Speaker 1: the Bears have probably felt pretty good, Um, you know,
Speaker 1: we haven't seen continued losses. Now. We had a great
Speaker 1: October and better than we would have expected. And h Loreen,
Speaker 1: I just want to get your thoughts on earning season
Speaker 1: thus far and the risk of an earnings recission and
Speaker 1: a recission more broadly, because you do make an interesting
Speaker 1: point about earnings once you strip out energy, suddenly don't
Speaker 1: really look that terrific, do they. They don't, And so
Speaker 1: that's where if we really look at it, we're looking
Speaker 1: at a negative five point one per cent on the
Speaker 1: SMP five when you take out the energy sector, and
Speaker 1: so with that we are technically in an earnings recession
Speaker 1: for the sectors apart from energy. With that, though, if
Speaker 1: we look at next year, it looks much more promising
Speaker 1: as far as what analysts are expecting. And so just
Speaker 1: like we see the markets are always forward looking. The
Speaker 1: markets have gone down precipitously years date, but as things
Speaker 1: turn around, by the time we actually realize how much
Speaker 1: the economy has slowed down, the market might have turned already.
Speaker 1: A bear case scenario could be that productivity is falling
Speaker 1: pretty sharply and people are not sure what's actually causing this.
Speaker 1: And if you if you enter into a period where
Speaker 1: you have you know, prices remaining high, cost up, productivity down,
Speaker 1: it's not good for profits. No, it's not that good
Speaker 1: for profits. And what you also have, of course, this
Speaker 1: this wage growth issue too, that continues to be a problem,
Speaker 1: and that's increasing costs, most definitely for companies. So with that,
Speaker 1: the good news is we've seen a lot of companies
Speaker 1: be able to pass on those costs the consumer. But
Speaker 1: how long then can the consumer continue to purchase goods
Speaker 1: and services at these higher levels. And we know you
Speaker 1: have a bias towards US equities at the moment, but
Speaker 1: I just want to get your thoughts on China as
Speaker 1: well and sort of the balance of risks there. I mean,
Speaker 1: you know, obviously it's a much more stimulatory environment in
Speaker 1: terms of monetary policy. Um, we now have a little
Speaker 1: bit of political certainty going ahead with shij and Pink
Speaker 1: confirmed for that third term, but then there's those risks
Speaker 1: as well, zero COVID, the property crisis, the potential for
Speaker 1: sudden regulatory change. Is this a market that you trade,
Speaker 1: ware Lian? We do. We are keeping much more domestically
Speaker 1: versus Internet sationals. So within the US with the strong
Speaker 1: dollar and the and the Federal Reserve continue to raise rates.
Speaker 1: Once that rolls over, I think we will see more
Speaker 1: opportunities as the dollar than potentially weakens against other currencies.
Speaker 1: But you mentioned China specifically, but what we saw after
Speaker 1: that twentieth Congress is many more hardliners and more of
Speaker 1: a nationalist approach versus a globalism approach. So with that,
Speaker 1: we're still keeping it within the United States. And if
Speaker 1: you stay in the United States, Uh, probably a pretty
Speaker 1: good time for stock picking. Um. What are you most
Speaker 1: drawn to? Yeah, we like the value side of things
Speaker 1: across capitalization, large cap, MidCap, small cap. We do also
Speaker 1: especially like small cap as much as it has been
Speaker 1: beaten down and hurt so far this year. And if
Speaker 1: we look at sectors. We like healthcare quite a bit,
Speaker 1: and we still like industrials as well. Uh, we do,
Speaker 1: of course, have the FED meeting coming up. All the
Speaker 1: decision very very soon. I just want to get a
Speaker 1: sense of when you think that pivot might come, and
Speaker 1: it's going to come eventually that the question is all
Speaker 1: about the timing. Yeah, it is the timing, and I
Speaker 1: don't think we see it in two I think it's
Speaker 1: most definitely and maybe after February, so you know, maybe
Speaker 1: around March. But I think given the jolt's number that
Speaker 1: we saw today, I think we're going to hear a
Speaker 1: very strong FED tomorrow. Alright, Lorene Gilbert, we will have
Speaker 1: to leave it there. Thanks so much though for joining
Speaker 1: us on Bloomberg Daybreak. Asia Lorene Gilbert is CEO at
Speaker 1: Wealthwise of Financial