Kate Moore on Market Volatility: Stay the Course, Don't Add New Risk

Navigating Market Volatility

• 💡 Kate Moore, Citi Wealth's Chief Investment Officer, advises clients to stay the course amidst current market volatility, rather than adding new risk.
• 🎯 The traditional advice to "buy the dip" is cautioned against due to significant uncertainty.

Earnings and Growth Revisions

• 📉 Analysts are expected to begin revising earnings and growth expectations downward, especially after first-quarter earnings reports and guidance.
• ⚠️ Companies may remove guidance, leading to a clearer picture of downward revisions for the full year.
• 📊 Uncertainty surrounding policy impacts and earnings makes it difficult to deploy new capital into risky assets.

Market Broadening and Technicals

• 🧩 The recent broadening of the market is attributed more to technical rebalancing and rotation out of concentrated positions than increased growth expectations.
• 🏦 Institutional asset allocators have not yet made significant changes to their overall risk exposure, which could be a key indicator.

Economic Policy and Equities

• 🤔 The current administration's economic policies present a mixed outlook, with a near-term tolerance for softer growth balanced against potential medium-term pro-growth policies like tax changes.
• ⏳ The timing and cadence of these pro-growth policies remain uncertain, leading companies and investors to hold cash and await clarity.

Diversification and Gold

• 📈 Investors are diversifying out of high-flying equities into other assets, a trend expected to continue.
• 🌟 While gold has performed well, Moore expresses no strong conviction on its continued performance from current levels.