Election volatility opportunity to buy at a good price

After Federal Reserve Chair Jerome Powell delivered remarks indicating that the Fed’s 50 basis point cut reflects officials’ confidence in the US economy, Sandy Villere, Villere & Co. portfolio manager, joins Julie Hyman and Josh Lipton on Market Domination to discuss opportunities for investors amid the easing cycle and ahead of the upcoming presidential election.

Villere tells Yahoo Finance, “Powell, “said he's on no preset course. I mean, the way I look at things right now is that you really don't want to fight the Fed… When we look over history, and you go back to 1950, stocks in general, large caps have been up 15% on average after that first cut 12 months later, small caps up about 27%. So I think the wind is at our back.”

The portfolio manager notes, “We can use some volatility in October going into this election to buy some great companies at reasonable prices.”

He says, “It's a great opportunity to add to either large-cap value or also small-cap. And I think when you look at what did happen in the quarter, small caps maybe it's up a little bit under 9% with the S&P up about 4.5% or so. I think you're going to see more of that play out over the next 12 months. So it's a good time to be positioned in a lot of those businesses.”

Villere says that consumer facing companies could benefit particularly. “We do like names that are exposed to the consumer because I think they've been sold off a little bit more than they should have when people thought we may be going into a deeper recession, and according to Powell, we look a lot more clear on that front. So we like some of those, you know, smaller names maybe exposed to the consumer. And then we also like the large-cap value bucket.”

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Naomi Buchanan.