Скачать или смотреть How to position your portfolio with a deeply hawkish Fed

The street and the Fed have been wrong in their predictions for most of the pandemic recovery so I’m only betting on the nearest rate hike likelihood and keep an open mind for anything farther ahead.

Defensives: Utilities and Real Estate
Defensive trades, especially after a multiple hawkish comments from global banks could be good short term trades. Since I see it as more a of short term strategic trade rather than a fundamental call, I prefer to use broad based ETF’s as an easy way to get exposure. Personally I think using equal weight ETF’s are better than cap weighted ETF’s in this case as smaller companies have been doing better than large all year. Invesco offers well traded S&P 500 equal weight sector ETF’s.

EWRE - Invesco S&P 500 Equal Weight Real Estate
RYU – Invesco S&P 500 Equal Weight Utilities

Will the Fed cause more pain across asset classes:
Very possible as inflation is causing broader pain to American consumer. As rates rise, equities will struggle to break to higher highs. Cash will be held on the sidelines from both equities and bonds until investors feel inflation is stabilizing. US Equities could be stuck in trading range for some time. I doubt we’ll break below the March 14th lows for most US equities but I could see the S&P 500 test the 4400 to 4350 support area.

Do you re-structure your portfolio for recession now:
Not yet. A recession would likely be 12 to 18 months away and it’s not clear what the duration will be. On top of that, it’s far from certain that the equity market will follow the economic path. I’m focused on what the market are doing right now, more short term trading ranges. Adding at the bottoms and taking gains when resistance is met. For now I’m balancing between risk on and risk off trading weeks.