The Tactical Take:
Hawks, Hikes and High Bars
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Hawks, Hikes and High Bars
Portfolio manager Jack Janasiewicz and investment strategist Brian Hess discuss inflation, the Fed, earnings, and positioning in the Natixis model portfolios.
Jack Janasiewicz and Brian Hess discuss inflation, the May Federal Reserve meeting, earnings season and current positioning in the Natixis model portfolios.
- Stock market volatility in April broke the trend in place since late October 2023.
- Inflation prints for January, February and March came in worse than expectations – but there were nuances to the data that are significant.
- There are three components driving the stickiness in inflation: housing, medical care and car insurance.
- But none of the three are necessarily demand-driven – so hiking interest rates may not be particularly effective in bringing these particular line items under control.
- In his comments following the May FOMC meeting, Chair Powell specifically avoided mentioning rate hikes, but he did reference the Fed’s dual mandate of both price stability and full employment.
- Hiking rates could potentially cause collateral damage to the labor market – and the Fed seems cognizant of both the risks to the upside and the downside in terms of potential rate moves.
- We’re in the midst of earnings season now and while headwinds to growth are always a concern for the market, earnings have been better than expected – not fantastic, but not bad.
- The Natixis model portfolios continue to be overweight equities and have begun to add small and mid-caps to the large cap equity mix.
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Investing involves risk, including the risk of loss. The views and opinions are as of May 10, 2024 and may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third party sources, it does not guarantee the accuracy, adequacy or completeness of such information.
Natixis Advisors, LLC provides advisory services through its division Natixis Investment Managers Solutions. Advisory services are generally provided with the assistance of model portfolio providers, some of which are affiliates of Natixis Investment Managers, LLC.
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