Investors entering into 'new era' of volatility: Strategist
The major indexes (^DJI,^GSPC, ^IXIC) are under pressure amid a global market sell-off. Fundstrat Global Advisors managing director and global head of technical strategy Mark Newton joins Market Domination to discuss the movement and how investors should navigate the pullback. "A lot of this has been specifically technology related, and I think investors are trying to come to grips with this new era of really cross-asset volatility that's affected not only large-cap technology within equities, but also interest rates and FX [foreign exchanges]. And we're seeing cryptocurrency declines. And so it's really a new era where a lot of these have been declining at once," Newton explains. He believes that despite the broad sell-off, it will most likely bottom out this week: "We'll bring a short-term low to this decline. And I say that specifically for a few reasons. One is that dollar-yen, which is at least one of the reasons why equities turned down so sharply, was a huge change in policy. BOJ (Bank of Japan) cut their bond purchases in half and obviously hiked rates, so we saw a big surge in the end... "The second is that you're seeing sort of a dislocation finally in excessive volume to the downside. We never really saw that over the last few months," Newton explains. He notes that investors are now pricing in a 50-basis-point interest rate cut from the Federal Reserve in September, making the market "fairly valued." Fed officials are facing deepening pressure to even cut rates before its policy meeting next month. He believes that the sell-off could present a buying opportunity as he does not believe investor fear "makes a lot of sense based on looking at broad-based nature of what's happening across the globe." For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Melanie Riehl
