Monday, 23 May 2016

Fed rate hikes "not the stuff that would push stocks into a bear market"

The Federal Reserve may be ready to raise interest rates soon but some investors appear sanguine about prospects for stocks, according to a recent Wall Street Journal article.

“There is a lot of money globally chasing very few high-quality assets,” said Mark MacQueen, co-founder and portfolio manager at Sage Advisory Services Ltd.

Ben Mandel, global strategist at JP Morgan Asset Management, thinks that while first-quarter earnings for US companies were poor, “that may have been a nadir", and that US stocks could offer mid-single-digit annual returns by the end of this year.

David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, said: “No matter whether the Fed raises rates in June, July or later, the key point is that the Fed is in for a very slow pace of normalizing its interest-rate policy, which is not the stuff that would push stocks into a bear market."

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