Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors:
“Investors are now focused on how the Fed will thread the needle of applying the brakes without stalling the economy. We’re just about 2% off the record high on the S&P 500, but the broad index is masking some interesting developments beneath the surface. It’s not lost on us that staples and utilities are the best-performing sectors so far in December. The fact that staples is outperforming discretionary on an equal-weighted basis also bears watching.”
Emily Roland, co-chief investment strategist at John Hancock Investment Management:
“The Fed holds the keys to this cycle. If they move quickly to stomp out inflation, they may risk cutting the cycle short. If they decide that they can be a little bit more patient -- which, I think, is looking harder and harder -- they have the ability to extend this cycle. We’re setting up for some hawkish moves into next year.”
Drew Matus, chief market strategist for MetLife Investment Management:
“I want to see with regards to the Fed funds rate changes -- which I think the Fed is going to signal that they’re going to go more than once in 2022 -- whether they signal more than that. Have we leapfrogged over the moderates? Have we gone straight into a much more hawkish stance? If we see that leapfrogging that suggests that the Fed feels like it might be a little behind the curve. That’ll make people nervous and move them into more of a risk-off framework.”
Kevin Gordon, senior investment research specialist at Charles Schwab:
“The notion that the market’s been resilient this year hasn’t been fully true -- what you just have to do is peel it back one layer and you can see that. We’re approaching a really crucial point. It’s probably not going to be as clear until we get more clarity on the inflation picture, heading into the first quarter and then into the second quarter.”
Brian Nick, chief investment strategist at Nuveen:
“The risk of the Fed tightening -- which gets more severe every time we get a high inflation number, like the producer prices we got this morning -- and then omicron, which is completely independent, those two things are wreaking havoc day to day with the market. But it’s been impressive to see that we were, as of Friday, back to all-time highs. We’re not that far off -- so there’s still a lot of resilience, there’s still a sense of investors still aren’t sure where to go if it’s not U.S. large cap.”
--With assistance from Emily Graffeo.
This article was provided by Bloomberg News.