Federal Reserve Chair Jerome Powell is on his second day of testimonies before the Senate, speaking on how the Fed is still taking in economic data in order to make an informed decision around potential finance charge rate cuts. With many different factors in play, how could a potential rate cut play out in the markets (^DJI, ^IXIC, ^GSPC), and how should investors position themselves to take advantage of one?
Zacks capital Management client collection of investments manager Brian Mulberry joins Wealth! to give insight into where investors should consider positioning their portfolios during the first rate cut in current sector conditions.
Mulberry explains where his focus remains:
“The Magnificent Seven account for the lion’s share of that 17% expansion in the [S&P 500] index. So if that earnings is going to balance out, we feel like it’s going to come from higher quality names. It’s not going to be a broadening effect across all names because we are still in a very high finance charge rate environment. And I’m just making the case now that expansion is slowing, jobs are weakening. This isn’t necessarily the case where you’re going to see earnings expansion from every corner of this sector. So you really have to be concentrated on what we think are the highest quality metrics…”
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