Akoner: The rotation from mega-cap tech into small caps and cyclicals is underway

? (Anchor) 00:00.070

i want to start off with some of the news of this morning we're seeing oil prices move higher on sanctions on venezuela and also potential sanctions on russia does this idea of the potential for oil to move higher at least we're seeing that move this morning is to change your

? (Anchor) 00:12.270

view of any sectors of the markets in general

Lale Akoner (Global Market Analyst) 00:15.200

sure look i mean oil prices are so far not contributed to the inflation pressures in the US which obviously helped the fed cut rates this is a key indicator that we're watching if this is going to continue obviously that could that could slow down the the easing pad of of the

Lale Akoner (Global Market Analyst) 00:33.600

fed given that they're giving more importance to the employment rather than inflation at the moment but i think it's still very early to tell there's still time to see that spillover into the CPI data so no change at the moment you

? (Anchor) 00:47.350

where the day is rotation is that what you're seeing in the market right now and something that you're bullish on the idea you're rotating possibly away from tech into either cyclicals or some other underloved parts of the market

Lale Akoner (Global Market Analyst) 00:58.000

sure rotation is is i think it's going to stay for a while the fact is that you know the capital is basically moving away from the high multiple mega cap winners into the more small caps cyclicals and international markets i think that will continue given the fact that again the

Lale Akoner (Global Market Analyst) 01:15.760

monetary policy will stay easy coming from the fed with the end of the quantitative tightening and obviously the fed rate cut but also the fiscal policy will be felt more strongly in the US economy in the next few quarters

? (Anchor) 01:29.750

OK you mentioned small caps you actually like the SP six hundred why do you like that part of the market excuse me other than just the small caps or just the broader index i was just taking a look at it when you look at it it's about seventeen percent industrials double digits

? (Anchor) 01:44.590

when it comes to also financials i know financials are your pick for us today but why do you want to play it down cap why not play it up cap

Lale Akoner (Global Market Analyst) 01:52.830

we like down cat because they're still undervalued the fact that obviously rate cuts are are now coming into the picture and small caps in general they outperform when we are further into the rate cutting cycle so that's one thing the second one thing is obviously the fiscal

Lale Akoner (Global Market Analyst) 02:10.030

policy and the new tax bill helping the R and D intensive small caps particularly able to expense their you know R and D expenses basically so that's also very positive for small cap but we like quality high quality small caps and that's the reason why i selected SMP six hundred

Lale Akoner (Global Market Analyst) 02:31.390

because we think that liquidity is more expensive at the moment and therefore you really need to look for those companies with strong balance sheets consistent cash flows when when you are looking to invest in the small caps

? (Anchor) 02:46.440

but your actual pick is financial so are you saying small cap financials big banks when you're looking at financials are you playing the the broader sector are you being more of a picker and a chooser

Lale Akoner (Global Market Analyst) 02:55.570

broader sector we are very optimistic about i think regionals have more room to run still obviously private credit has brought them under pressure but overall for financials i would say that the that the fundamental backdrop is very strong obviously we're seeing now the

Lale Akoner (Global Market Analyst) 03:11.610

steepening in the yield curve thanks to pet cutting grades and the long end of the curve coming under pressure leading to higher rates there which is positive but also very importantly financials is now the second strong earnings season in the SP five hundred with twenty five

Lale Akoner (Global Market Analyst) 03:29.030

percent year over year earnings growth expected behind only tech and obviously we're also seeing capital markets activity coming back into the picture a pickup in M and A activity IPO slowly picking up as well which are all positive for for financials here again we like banks we

Lale Akoner (Global Market Analyst) 03:50.560

do like insurance as well and capital markets activity that the banks that are more to that so

? (Anchor) 03:57.790

you're mentioning IPO 's we're going to get our biggest IPO of the year actually going public later today with medline is that also making you bullish just about the IPO path going into next year and also the fact that there's actually a bit of a bottleneck from the government

? (Anchor) 04:08.950

shutdown so more than likely we are going to see a number of IP OS that were actually halted because of the shutdown they couldn't file the papers

Lale Akoner (Global Market Analyst) 04:16.590

correct i think the obviously liquidity is coming into the market again which is positive for the IPO market again the fact that monetary policy is in an easy position as well will help the IPO markets the overall we are positive all right i want

? (Anchor) 04:33.910

to talk about a data point you sent us the idea that people are going to get tax refunds in the range of a hundred to one hundred and fifty billion dollars next year where the treasury secretary talked about it as well a few days ago he said that's about one thousand to two

? (Anchor) 04:44.510

thousand per household what is in your in your mind what does that mean for the markets does that mean more for the economy or for the markets because we just had a guest on earlier that people kind of buy big ticket items does that also give a boost to the market