Markets have been undergoing a correction, with major market indexes (^DJI, ^IXIC, ^GSPC) closing in the red for consecutive days. BofA Securities Senior US Equity Strategist and Head of US SMID-Cap Strategy Jill Carey Hall joins Market Domination to discuss the market outlook.
Hall acknowledges that a correction was looming, stating that "it had been a while since markets had seen any significant pullback." She notes that the ongoing earnings season would have investors scrutinizing company outlooks amid higher inflation, geopolitical risks, and uncertainty surrounding Federal Reserve rate cut expectations.
Throughout 2024 so far, Hall highlights that markets have seen "inflation data that surprised to the upside," which has led to Fed rate cut expectations being pushed out further. She cautions that this could affect the performance of small-cap stocks, boosting refinancing risks in the sector.
When asked about how investors should position themselves in the current market conditions, Hall recommended seeking exposure in sectors such as Energy, Industrials, and Materials, stating, "it’s an environment where it makes sense to be active rather than passive."
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