#126 Liz Ann Sonders On The 2024 Market Outlook, A Different Investing Environment, And Why You Can’t Rule Out A Recession

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Dec 12, 2023

Liz Ann Sonders, Chief Investment Strategist for Charles Schwab, discusses the macro picture, asset class behavior, active management, Federal Reserve outlook, interpreting economic data, the yield curve and recession, the bond market vs. equity market, and lessons from Marty Zweig. Key takeaways: rolling recessions in different sectors, bond yields and stock prices relationship, importance of active management, Fed in pause mode, challenges in interpreting economic data, bond market's caution, and lessons from monetary policy and sentiment analysis.

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Introduction

00:00 • 6min

Exploring a New Era in Investing and the Implications for Active Management

05:43 • 5min

Discussion on the Federal Reserve and Market Expectations for Rate Hikes or Cuts

11:07 • 5min

Interpreting Economic Data and Forecasting Trends

16:05 • 11min

Career Lessons and Transition to Chief Investment Strategist

27:19 • 3min

Liz Ann Sonders, Chief Investment Strategist for Charles Schwab, discusses the macro picture, behavior of asset classes, active management, Federal Reserve outlook, interpreting economic data, the yield curve and recession, the bond market vs. equity market, and lessons from the legendary late Marty Zweig.

Takeaways

* The current economic cycle is characterized by rolling recessions, with different sectors experiencing periods of growth and contraction.

* The relationship between bond yields and stock prices has historically been negative during inflationary periods and positive during periods of economic growth.

* Active management may become more important in the new era, as market conditions change and there is greater dispersion in how securities behave.

* The Federal Reserve is likely to be in pause mode with regards to rate hikes, but a significant loosening of monetary policy is not expected.

*Interpreting economic data can be challenging due to the presence of crosscurrents and conflicting indicators.

* The yield curve has historically been a reliable predictor of recessions, but the timing and duration of recessions can vary.* The bond market and equity market may have different perspectives on the current economic environment, with the bond market being more cautious.

* Lessons from Marty Zweig include the importance of understanding how monetary policy influences asset prices and the value of sentiment analysis.

Links:

2024 Outlook: https://www.schwab.com/learn/story/us-outlook-one-thing-leads-to-another

Twitter/X: https://twitter.com/LizAnnSonders

On Investing Podcast: https://podcasts.apple.com/us/podcast/on-investing/id1711806955?ls=1&mt=2

Timestamps: 00:00 Introduction and Macro Picture

03:55 A Different Environment

05:29 Behavior of Asset Classes, Opportunities

08:52 Active Management in the New Era

10:25 Federal Reserve Outlook

14:07 Interpreting Economic Data

19:03 Yield Curve and Recession

22:27 Bond Market vs. Equity Market

25:21 Lessons from Marty Zweig