WEBVTT - Loreen Gilbert on the Markets (Radio)

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<v Speaker 1>Let's get to Loreen Gilbert, CEO at Wealthwise Financial. So

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<v Speaker 1>to my friends who are bears, you may want to

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<v Speaker 1>turn the radio down a little bit here we're going

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<v Speaker 1>to make the case for the other direction. So, Loreen,

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<v Speaker 1>we we got two main major overhangs. Obviously, one is

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<v Speaker 1>the is the China COVID zero policy and the other

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<v Speaker 1>central banks being aggressive on race. Yesterday, we got this

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<v Speaker 1>little rumor that filtered through the markets that a committee

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<v Speaker 1>was being set up for China to to reopen by

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<v Speaker 1>next March, and the markets exploded to the upside. This

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<v Speaker 1>is what's out there waiting, uh, you know, once you

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<v Speaker 1>get the kind of all clear from the FED and

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<v Speaker 1>from China. So yeah, I mean, b B be wary

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<v Speaker 1>of that, Loren. Yeah, I think that the people are

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<v Speaker 1>chomping at the bit, certainly on Chinese stocks, wanting things

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<v Speaker 1>to turn around. And I guess you could say the

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<v Speaker 1>same in the US, although I think investor sentiment is

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<v Speaker 1>still quite negative and has been. That's what we've seen

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<v Speaker 1>during earning seasons so far, is that people have been

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<v Speaker 1>quite negative as they've looked it forward guidance. So I

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<v Speaker 1>think we still got a very strong FED, a very

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<v Speaker 1>aggressive bed definitely think that that's in the cards and

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<v Speaker 1>they're not going to stop any time soon. But I

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<v Speaker 1>do still hold that we are going to see, as

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<v Speaker 1>we have in the past, after the midterm elections and

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<v Speaker 1>potentially this idea of UH divided government. The markets tend

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<v Speaker 1>to like that looking forward at what's ahead, and we've

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<v Speaker 1>got a couple of bits of old wisdom kind of

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<v Speaker 1>war here. I mean, on the one hand, there's that

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<v Speaker 1>saying that you point out it's time in the markets,

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<v Speaker 1>not timing the markets. So with that in mind, you

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<v Speaker 1>get along. Or there's the other saying, don't catch the

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<v Speaker 1>following knife. If we got more to fowl here, which

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<v Speaker 1>is it? Yeah, Well, I think that I think you

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<v Speaker 1>definitely have a following knife, especially in some of these

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<v Speaker 1>growth names, where on those growth names, we don't know

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<v Speaker 1>exactly where the bottom is. Certainly we know that valuations

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<v Speaker 1>were high. Now they've come down quite a bit, but

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<v Speaker 1>we've just seen even in the last few days after

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<v Speaker 1>news of certain stocks, we've seen the continued decline. So

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<v Speaker 1>that's really what I'm saying on the falling life. I

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<v Speaker 1>think that you have to be aware of some of

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<v Speaker 1>these growth names and stick to what's been working, which

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<v Speaker 1>is on the value side, the dividend paying stocks. Yeah,

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<v Speaker 1>I think even the bulls would not say, you know,

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<v Speaker 1>back up the truck, but just that if you're looking

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<v Speaker 1>out for say six to nine months, it could be

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<v Speaker 1>a little better. It's been a great year for the bears. However, Um,

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<v Speaker 1>we're actually higher than where we were in June. So

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<v Speaker 1>you know, the last four to five months, even though

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<v Speaker 1>the Bears have probably felt pretty good, Um, you know,

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<v Speaker 1>we haven't seen continued losses. Now. We had a great

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<v Speaker 1>October and better than we would have expected. And h Loreen,

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<v Speaker 1>I just want to get your thoughts on earning season

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<v Speaker 1>thus far and the risk of an earnings recission and

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<v Speaker 1>a recission more broadly, because you do make an interesting

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<v Speaker 1>point about earnings once you strip out energy, suddenly don't

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<v Speaker 1>really look that terrific, do they. They don't, And so

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<v Speaker 1>that's where if we really look at it, we're looking

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<v Speaker 1>at a negative five point one per cent on the

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<v Speaker 1>SMP five when you take out the energy sector, and

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<v Speaker 1>so with that we are technically in an earnings recession

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<v Speaker 1>for the sectors apart from energy. With that, though, if

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<v Speaker 1>we look at next year, it looks much more promising

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<v Speaker 1>as far as what analysts are expecting. And so just

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<v Speaker 1>like we see the markets are always forward looking. The

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<v Speaker 1>markets have gone down precipitously years date, but as things

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<v Speaker 1>turn around, by the time we actually realize how much

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<v Speaker 1>the economy has slowed down, the market might have turned already.

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<v Speaker 1>A bear case scenario could be that productivity is falling

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<v Speaker 1>pretty sharply and people are not sure what's actually causing this.

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<v Speaker 1>And if you if you enter into a period where

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<v Speaker 1>you have you know, prices remaining high, cost up, productivity down,

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<v Speaker 1>it's not good for profits. No, it's not that good

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<v Speaker 1>for profits. And what you also have, of course, this

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<v Speaker 1>this wage growth issue too, that continues to be a problem,

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<v Speaker 1>and that's increasing costs, most definitely for companies. So with that,

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<v Speaker 1>the good news is we've seen a lot of companies

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<v Speaker 1>be able to pass on those costs the consumer. But

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<v Speaker 1>how long then can the consumer continue to purchase goods

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<v Speaker 1>and services at these higher levels. And we know you

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<v Speaker 1>have a bias towards US equities at the moment, but

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<v Speaker 1>I just want to get your thoughts on China as

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<v Speaker 1>well and sort of the balance of risks there. I mean,

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<v Speaker 1>you know, obviously it's a much more stimulatory environment in

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<v Speaker 1>terms of monetary policy. Um, we now have a little

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<v Speaker 1>bit of political certainty going ahead with shij and Pink

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<v Speaker 1>confirmed for that third term, but then there's those risks

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<v Speaker 1>as well, zero COVID, the property crisis, the potential for

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<v Speaker 1>sudden regulatory change. Is this a market that you trade,

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<v Speaker 1>ware Lian? We do. We are keeping much more domestically

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<v Speaker 1>versus Internet sationals. So within the US with the strong

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<v Speaker 1>dollar and the and the Federal Reserve continue to raise rates.

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<v Speaker 1>Once that rolls over, I think we will see more

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<v Speaker 1>opportunities as the dollar than potentially weakens against other currencies.

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<v Speaker 1>But you mentioned China specifically, but what we saw after

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<v Speaker 1>that twentieth Congress is many more hardliners and more of

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<v Speaker 1>a nationalist approach versus a globalism approach. So with that,

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<v Speaker 1>we're still keeping it within the United States. And if

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<v Speaker 1>you stay in the United States, Uh, probably a pretty

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<v Speaker 1>good time for stock picking. Um. What are you most

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<v Speaker 1>drawn to? Yeah, we like the value side of things

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<v Speaker 1>across capitalization, large cap, MidCap, small cap. We do also

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<v Speaker 1>especially like small cap as much as it has been

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<v Speaker 1>beaten down and hurt so far this year. And if

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<v Speaker 1>we look at sectors. We like healthcare quite a bit,

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<v Speaker 1>and we still like industrials as well. Uh, we do,

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<v Speaker 1>of course, have the FED meeting coming up. All the

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<v Speaker 1>decision very very soon. I just want to get a

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<v Speaker 1>sense of when you think that pivot might come, and

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<v Speaker 1>it's going to come eventually that the question is all

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<v Speaker 1>about the timing. Yeah, it is the timing, and I

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<v Speaker 1>don't think we see it in two I think it's

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<v Speaker 1>most definitely and maybe after February, so you know, maybe

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<v Speaker 1>around March. But I think given the jolt's number that

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<v Speaker 1>we saw today, I think we're going to hear a

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<v Speaker 1>very strong FED tomorrow. Alright, Lorene Gilbert, we will have

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<v Speaker 1>to leave it there. Thanks so much though for joining

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<v Speaker 1>us on Bloomberg Daybreak. Asia Lorene Gilbert is CEO at

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<v Speaker 1>Wealthwise of Financial