Liz Ann Sonders: There's No Such Thing As A Typical Interest Rate Cutting Cycle

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Mar 12, 2024

Liz Ann Sonders from Charles Schwab discusses U.S. equities, highlighting the strength in a few large cap stocks. She challenges the idea of a typical Fed interest rate cutting cycle and its impact on the stock market. The podcast also explores Bitcoin accessibility through ETFs and the economic stimulus impact, along with the influence of AI on market performance.

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Introduction

00:00 • 2min

Market Trends and Stock Performance Analysis

02:17 • 20min

Exploring Bitcoin as a Macro Asset and Analyzing Economic Stimulus Impact

22:30 • 2min

Navigating the Current Economic Cycle and the Influence of AI on Market Performance

24:44 • 18min

Exploring Quality as an Investment Factor and Promoting Crypto Symposium in London

42:29 • 5min

Exploring Momentum in the Stock Market

47:52 • 6min

Exploring the Dynamics of Growth and Value Indexes

53:58 • 5min

Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit https://vaneck.com/HODLFG to learn more.

VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/hodlprospectus/

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, returns to Forward Guidance to share her investment outlook on U.S. equities. Sonders notes that a handful of large cap stocks have been leading the S&P 500 index higher, while the majority of stocks have been underperforming the index. While this so-called “breadth weakness” occurred at or near stock market peaks of 1999 and 2000, Sonders notes that breadth is strengthening. The phrase “Magnificent 7” is near-meaningless since, as of mid-March, the Mag7 includes both the best performing stock in the S&P 500 (Nvidia) and the worst performing stock (Tesla). Sonders argues that there is no such thing as a “typical” Fed interest rate cutting cycle, and that slower cutting cycles have tended to coincide alongside more bullish stock market action than fast cutting cycles. Filmed on March 4, 2024.

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Use code FG10 to get 10% off Blockworks’ Digital Asset Summit in March: https://blockworks.co/event/digital-asset-summit-2024-londonTimestamps:

(00:00) Introduction

(00:24) The Rally In S&P 500 Has Been Ferocious, The Rally In Average Stocks Has Not

(04:22) Large Cap Stocks Are Leading The S&P 500 Higher... Smaller Names Have Performed Less Well

(09:31) Earnings Growth Is Very Strong (Unlike In 2000)

(12:16) Companies' Earnings Guidance Is Less Specific Than Pre-2020

(16:47) Economic Outlook In U.S.: Rolling Re-acceleration

(20:13) Labor Market Situation Has Been "Mirror Image" Of What Normally Happens

(22:05) This Economic Cycle Has Been An "Orange" Compared To History's "Apples"

(22:29) VanEck Ad

(24:53) There Is No Such Thing As A "Typical" Fed Rate Cutting Cycle

(30:57) Slower Cutting Cycles Have Been Somewhat More Bullish Than Rapid Cutting Cycles

(36:27) Artificial Intelligence (AI)

(43:17) Quality As A Factor

(45:39) Momentum Has Been "Best Performing Factor Year-To-Date"

(49:37) Size and Value As Factors

Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.