Alex Morris, chief investment officer with F/M Investments, joined Cheddar News to discuss near session highs in Thursday's trading despite soaring yields.

Closing Bell

Stocks Near Session Highs Despite Soaring Yields

Alex moore's chief investment officer at FM investments Alex. It's good to see you today. Pretty decent games across the board for stocks. What do you make of today's market action chris it's great to be back. Um You know, I'm glad to see stocks reacting positively. Some good news. I mean, we we seem surprised when stocks do exactly what they should do, get good news about the underlying business and perform positively. You know, we we agree with some of what you see happening in Macy's, particularly as you pointed out there, Blue Mercury of subsidiary. We like alta for the same reasons this is a stock that was up 14% last year is attractive to growth and value investors is looking at long term GPS growth of 30% and we expect it to continue to grow. And we think others just like that are are still in the market despite some, you know, relatively ugly days of red from time to time. Yeah, well, let's talk about some of those pressures to the downside Alex because still today I see bond yields actually rising right? And we know the higher bond yields go, the higher borrowing costs rise, the more downward pressure that will persist on stocks, even though investors have proven pretty resilient so far this year. What is the data telling you about the path forward for borrowing crossing us? The impact on stocks. So it looks like borrowing costs are still gonna pick up, right. I mean every um every person sitting in a chair like me is becoming a money market pundit. It seems because of the Fed's ongoing desire to beat down inflation. We will see continued short term rates go up. That will probably drive the Treasury market up. And we've seen a flood of assets into short term treasuries and it's a trade that has plenty of capacity and why would you not jump into a six month or a one year Treasury now and four or 5%? And for that reason we launched a series of BTS that do just that and we've seen great flows as folks are very much looking to harvest that yield as a protection against potential stock pressures in the short term. How long do you expect those sorts of investments to remain attractive Alex? Because certainly I think you are in the majority there. We've had a whole bunch of markets guests join me after the close this year saying that they do see bond funds or bonds with those kind of yields attractive in this environment. So we talked to a lot of investors who come into our tea bill or no bill or YouTube products who, you know, think they're going to be there for the next year or perhaps, you know, much much longer if we look to what the Fed is up to, they look at 25 basis points happening for a few times and then rates staying stable. That will be a pretty elevated rate for 69, maybe 12 months. So it looks like that's a, that's a trade, that's going to be in good shape for quite a while. Any other sectors, Alex or even stocks that might look attractive to you right now is the chief investment officer, these short term bonds I know on your horizon and your radar, but anything else that investors should give a look at. So we like consumer discretionary. We talked about all to uh, we also like amazon in the space, this name, that's just been beaten down and and we'll come back given just its market dominance. And we also like infotech, you know, it's a name that the info tech sector was severely oversold last year, but as the sort of global exuberance over chat, GPT has shown a i is a factor. It's at an inflection point and it can drive demand and we look at someone like in video as well positioned to take advantage of all of the processing and computing power needed to drive check GPT and all of the other ai technologies that are primed for a coming out party this year. All right, Alex Morris, Chief investment Officer FM investments Alex, thank you on a date with a lot of green. As you see down here on the floor of the stock exchange