Karen Robbins, senior vice president with UBS Wealth Management, joined Cheddar News to discuss Friday's mixed session as officials hinted at more interest rate hikes.

Closing Bell

Stocks Mixed as Officials Hint at More Hikes

Joining me now is Karen Robbins, senior vice president of U. B. S. Wealth management. Karen, it's great to have you on the show today. Mixed market for stocks. And I do think we close mixed on the week as well. We'll get to those numbers in a moment. Where do we stand heading into the long weekend when it comes to equity investors? So we stand mixed. I think there were many investors that we're hoping that this rally in january had legs to it uh certainly looked at the opening of china as favorable and the early indications that inflation was tricking down as something to be, you know, sort of joyous about. But as we see um it's gonna take more than, you know, those couple of factors. It's gonna be a longer, a longer stretch for the Fed to get this inflation under control. And as a result, I think the pause for everybody this weekend comes at a good time to sort of recalibrate, think about what what's working. Um Look back to being a bit more defensive in our mindsets. Um as we enter into the latter part of february and finishing out this first. So Karen, I am going to run through the numbers here. We have them in for the week unofficially the S and p edging down just 3/10 of a percent. The dow shedding 1/10 of a percent, the NASDAQ in 6/10 of a percent. So I do think it's fair to say, it was really just kind of a pause. Um as we've been discussing here after what was a very strong start to the year, what should investors do right now? Um recalibrate for sure. Um don't chase this. I think that many people were looking at the valuations particularly in tech and how how tech came down in the valuation so steeply through the course of 2022. And and we're anxious sort of um avoid missing this rally. I think there was that sentiment was, Oh my goodness. You know, did I miss the by And I don't think so. Um So we will continue to say trim around the edges if exited international or the last several years because of the underperformance there. Take a look. Um We're seeing those values, you know, those markets come back in a nice way, continue to uh make sure that your cash um needs are met, but then look at treasuries and other short term interest. Um Baring securities as a way to get a little bit more of a boost there too. You know, one of the factors that we might not talk enough about on this show, at least of late is it is almost the one year anniversary of Russia's invasion of Ukraine. And we've seen how that certainly hurt european markets, but with a lot of those indexes still pretty depressed. Is there an opportunity that you see in international markets and if so where Sure um UK especially is one area that that ups likes quite a lot. Um Do I think there's an opportunity to do again? We're talking about valuations and with the strength of the U. S. Over the multiple years. Um And and really outperforming those asset classes when you start to look at where our opportunities certainly that is one and why we all want what what's happening in Ukraine to come to an end. I think that the mild winter has helped. Right. So some of those forces that play to mean that some of the international markets particularly again in the U. K. Is one that we favor should continue to do well relative to the certainly to the US. Well when it comes to the path forward for interest rates. The market. I think up until this point Karen had been betting that the Fed would perhaps pause soon the bond market suggesting something else in the wake of the data that we saw for january. Certainly showing that inflationary pressures persisted and picked up that month. Has your view on the Fed's path changed at all? Um it has to a degree. I think that the jobs number particularly in January that 53 year low um is incredible. And and that while great on one level does still mean that the Fed has a lot of work to do. And I think that with you have sort of a double whammy in the sense that a deflationary period does will indicate that we have slower growth. That's going to be hard for equities. And on the flip side, the Fed continuing to raise rates and keep them perhaps perhaps at a higher target level than originally intended. Uh and longer than intended is also a headwind for equity. So either way defensiveness is still important and being mindful that the Fed has a lot of work to do to get this inflation number down to somewhere close to that 2% that they're looking for and we all ought to be ready. That that's going to take longer than any of us would like. Yeah, that's a good point. So it seems like of course your take is that these inflationary pressures will persist and that perhaps January wasn't in fact just a one off. I think so, I think what we're going to look for is that these companies that are able to grow their top line earnings are worth a look, right. And and the inflationary pressures that all companies are going to face all of us are going to face can be somewhat measured by what what happens at the top line. And that that's a focus as well that one should consider looking at when thinking about what to add to a portfolio. Alright, Karen Robin, Senior Vice President of U. B. S wealth management. Karen, thank you