Expect seasonal stock market weakness: Strategist

The bond market’s (^TYX, ^TNX, ^FVX) recent shifts have left investors wondering how this will play out for equities (^GSPC, ^IXIC, ^DJI). With the ten-year yield (^TNX) dropping below 4.3%, a substantial drop from its previous 4.5% range, Stifel’s chief equity strategist Barry Bannister provides insight into what this may indicate for market behavior. “Markets felt that, they went sideways. It pulled back to 4.3. That 50-basis-point drop in the ten-year-yield [has] really been keeping us from dropping. And, the question then becomes economy decelerates, inflation sticky, what’s the Fed [Federal Reserve] going to do? How does the bond market react?” Bannister explains. Bannister notes that the future path of both the economy and inflation remains uncertain, with the Fed’s actions remaining a key factor. On equities, Bannister suggests a defensive approach for investors: “What you do is you barbell that, or you are defensive against that with things like health care [and] staples utilities which are not doing well today. So you buy on the dip.” Watch the video above to hear Bannister discuss market trends and strategies in depth with Morning Brief hosts Brad Smith and Seana Smith. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here: https://finance.yahoo.com/videos/series/morning-brief/
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