Loreen Gilbert on the Markets (Radio)

next March, and the markets exploded to the upside. This is what's out there waiting, uh, you know, once you get the kind of all clear from the FED and from China. So yeah, I mean, b B be wary of that, Loren. Yeah, I think that the people are chomping at the bit, certainly on Chinese stocks, wanting things to turn around. And I guess you could say the same in the US, although I think investor sentiment is

still quite negative and has been. That's what we've seen during earning seasons so far, is that people have been quite negative as they've looked it forward guidance. So I think we still got a very strong FED, a very aggressive bed definitely think that that's in the cards and they're not going to stop any time soon. But I do still hold that we are going to see, as we have in the past, after the midterm elections and

potentially this idea of UH divided government. The markets tend to like that looking forward at what's ahead, and we've got a couple of bits of old wisdom kind of war here. I mean, on the one hand, there's that saying that you point out it's time in the markets, not timing the markets. So with that in mind, you get along. Or there's the other saying, don't catch the following knife. If we got more to fowl here, which

is it? Yeah, Well, I think that I think you definitely have a following knife, especially in some of these growth names, where on those growth names, we don't know exactly where the bottom is. Certainly we know that valuations were high. Now they've come down quite a bit, but we've just seen even in the last few days after news of certain stocks, we've seen the continued decline. So

that's really what I'm saying on the falling life. I think that you have to be aware of some of these growth names and stick to what's been working, which is on the value side, the dividend paying stocks. Yeah, I think even the bulls would not say, you know, back up the truck, but just that if you're looking out for say six to nine months, it could be a little better. It's been a great year for the bears. However, Um,

we're actually higher than where we were in June. So you know, the last four to five months, even though the Bears have probably felt pretty good, Um, you know, we haven't seen continued losses. Now. We had a great

October and better than we would have expected. And h Loreen, I just want to get your thoughts on earning season thus far and the risk of an earnings recission and a recission more broadly, because you do make an interesting point about earnings once you strip out energy, suddenly don't

really look that terrific, do they. They don't, And so that's where if we really look at it, we're looking at a negative five point one per cent on the SMP five when you take out the energy sector, and so with that we are technically in an earnings recession for the sectors apart from energy. With that, though, if we look at next year, it looks much more promising as far as what analysts are expecting. And so just

like we see the markets are always forward looking. The markets have gone down precipitously years date, but as things turn around, by the time we actually realize how much the economy has slowed down, the market might have turned already. A bear case scenario could be that productivity is falling pretty sharply and people are not sure what's actually causing this. And if you if you enter into a period where you have you know, prices remaining high, cost up, productivity down,

it's not good for profits. No, it's not that good for profits. And what you also have, of course, this this wage growth issue too, that continues to be a problem, and that's increasing costs, most definitely for companies. So with that, the good news is we've seen a lot of companies be able to pass on those costs the consumer. But how long then can the consumer continue to purchase goods

and services at these higher levels. And we know you have a bias towards US equities at the moment, but I just want to get your thoughts on China as well and sort of the balance of risks there. I mean, you know, obviously it's a much more stimulatory environment in terms of monetary policy. Um, we now have a little bit of political certainty going ahead with shij and Pink confirmed for that third term, but then there's those risks as well, zero COVID, the property crisis, the potential for

sudden regulatory change. Is this a market that you trade, ware Lian? We do. We are keeping much more domestically versus Internet sationals. So within the US with the strong dollar and the and the Federal Reserve continue to raise rates. Once that rolls over, I think we will see more opportunities as the dollar than potentially weakens against other currencies. But you mentioned China specifically, but what we saw after that twentieth Congress is many more hardliners and more of

a nationalist approach versus a globalism approach. So with that, we're still keeping it within the United States. And if you stay in the United States, Uh, probably a pretty good time for stock picking. Um. What are you most drawn to? Yeah, we like the value side of things across capitalization, large cap, MidCap, small cap. We do also especially like small cap as much as it has been beaten down and hurt so far this year. And if we look at sectors. We like healthcare quite a bit,

and we still like industrials as well. Uh, we do, of course, have the FED meeting coming up. All the decision very very soon. I just want to get a sense of when you think that pivot might come, and it's going to come eventually that the question is all about the timing. Yeah, it is the timing, and I don't think we see it in two I think it's most definitely and maybe after February, so you know, maybe

around March. But I think given the jolt's number that we saw today, I think we're going to hear a very strong FED tomorrow. Alright, Lorene Gilbert, we will have to leave it there. Thanks so much though for joining us on Bloomberg Daybreak. Asia Lorene Gilbert is CEO at Wealthwise of Financial