Geetu Sharma, Founder and Investment Manager at AlphasFuture, reacts to a wild day on Wall Street and outlines her expectations ahead of a very busy week of earnings.

Closing Bell

Markets Stage Big Rally, End Monday Higher to Begin Week

Okay, let's turn back to the major indexes. What a day on Wall street whipsaw, volatility continuing. We were down 488 points on the dow, but we did end with a gain of close to 240 points or 7/10 of a percent on the dow, with the NASDAQ leading the way Up, Well, joining me now is G two Sharma founder and investment manager at Alpha's future and asset manager focused on impact investing in Minnesota. Thank you so much for joining me too. I want you to talk to me about this reversal that we saw in the markets today. What was behind it? Yeah, I think a very sharp reversal we have seen in the market today and we started the day with the, you know the scare of more covid lockdown and uh decline in oil price right in the market is taking some comfort in the fact that maybe it will take off some of the inflation rising inflation concerns, give some more breathing room to the Fed, the yields have come down and that is of course exciting for the markets and all of this news around twitter buyout and m and a activity in the market is also adding to the gains I think, interesting and of course big questions as to whether or not the twitter deal, what the future of it actually is. But of course Elon musk wants to take this company private questions as to what it will mean for users and advertisers, but certainly twitter share is getting a boost today, argue to to your point there, we have a very busy week of tech earnings on the docket, the most valuable companies and they do tend to move the overall direction of the major indexes Microsoft, Apple alphabet meta all set to report this week. What are you expecting and how might the market react? Yeah, I think it's going to be very interesting to see what these companies talk about, although we all, we tend to label them all as big tech, but they're really the issues driving them can be very different. Like I think Apple is going to be more about supply chain, whereas Microsoft could be talking more about business spending in the case of meta. We're looking at how the subscriber base is growing and how they're competing relative to in the social media space, relative to Tiktok and staff and some of these other players that they, that have been growing at the cost of meta. And then when we look at amazon, I think they are, they are actually at the forefront of inflation, you know, facing higher delivery costs and also labor challenges. So across the companies, we're going to see a mix of issues, a mix of topics and uh that they are likely to discuss, what will be most interesting to see is that each of these companies are still talking about or still demonstrating pricing power and resilient demand and you know, and how they are competing in a, in a very challenging environment. Here's a question for you. I know you're an asset manager at a fund focused on impact investing G2, where do you see opportunities there when it comes to making an impact with your investment dollars? Yeah. So we are fund is focused on uh several investment themes linked to sustainability and some of the themes include healthcare, good health and well being as well as a sustainable food and agriculture. Um The other themes that we invest in in smart energy and materials and smart cities at this moment, given where we are in the economic cycle, we think that we are in a in a late stage and at this time we are more focused on uh defensive sectors and that includes healthcare and staples. We also um we also more focused on quality companies that are high return businesses, low balance sheet risk. Because we think that some of these companies will be able to manage the inflation challenges as well as uh you know, they have more financial flexibility and a rising rate environment. Mm Hmm. Well, certainly we know higher rates are on the Horizon G two. And that is to combat rising inflation at the highest level that we've seen in more than 40 years. What's your forecast for? How long inflation at these levels last? Um I think we uh the risk to higher inflation staying higher is uh is definitely going to continue for a while because we have one. We are not seeing an end to the war in Ukraine and the impact on commodity prices across mining, commodities or agricultural commodities and energy is significant. So that will continue to put pressure on inflation. The other thing is the supply chain issues. And um given that china still continue to see high Covid cases, it's a concern businesses are continuing to talk about these challenges and struggling to keep up with the demand. So I think it's difficult to say how long or how much the inflation is going to be, but definitely it's going to be above the Fed's two person target I think through this year, end of this year, even next year and that means that the Fed will have to um um stay on this monetary tightening path that they have laid out, possibly. They'll have to be uh they may have to act harder and faster and that that is creating uncertainty in the market. Mhm. How much, how much does china's zero tolerance policy when it comes to the coronavirus impact? The global outlook, right? It was already cloudy of course with Russia's invasion of Ukraine, higher rates or borrowing costs, setting home prices through the roof as well as inflation. And I think as many of us were hoping that two years in Covid would be in the rear view mirror. Unfortunately, it's having some of its biggest impacts right now around the world and as cases rise here in the US. Yeah, I mean, I think from in china per se, uh maybe the lockdown will help them control the cases and bring it more uh more to a normal level and things can get back to normal again. The the difficulties is also trying to understand how the tightening cycle in in the U. S. Will compare with the more more loosening cycle that we're seeing in china and how that might play out. Because of course china is trying to keep its economy growing and steady despite these covid issues. Well, as we are seeing a big tightening cycle in the US where the the Fed is trying to maybe slow down the economy in its effort to combat inflation. So uh so there is a there is this kind of conflicting signals. It is not an environment anymore where central banks all over the world are tightening or loosening at the same time, it's more of uh you know on and off or push and pull and that is going to be continued to make the market swallowed, highlighting. Alright, you too, Sharma, founder and investment manager at Alpha's future. Again to thank you so much