Vince Lorusso on Equities, Tariffs, and Market Strategy | Clough Capital

Market Outlook: Constructive on Equities

• 📈 At a high level, Clough Capital Partners is constructive on equities and has been for a while.
• 📉 They believe bond yields are not exciting at the current moment and expect yields to move lower, especially on the front end of the curve.
• 🎯 Equities are viewed as the place to be for long-term investment.

Tactical Adjustments and Risk Management

• 🛡️ For hedged equity strategies like CBLS, the firm has been tactical and defensive, moving into resilient business models such as utilities and gold miners.
• 📊 Despite tactical shifts, the long-term view maintains a higher net exposure in equities, typically between 30% and 70%.
• 💰 The long-only equity ETF (CBSE) is fully invested, allowing investment across various sectors, geographies, and market caps.

Impact of Tariffs on Markets

• ⚠️ While tariffs can induce volatility, their overall impact is considered overstated and potentially deflationary.
• 🧩 Tariffs act as a tax, but substitution effects, supply chain absorption, and consumer spending shifts can mitigate their impact.
• 🤝 The political landscape suggests a willingness for negotiation and deliberation, with deadlines often extended.

Investment Strategy Amidst Volatility

• 🔍 Market overreactions to short-term tariff news are seen as opportunities to find attractive stocks.
• 🏦 A corporate tax hike would also be deflationary and could make the Fed more accommodative.
• 🚀 As inflation concerns decrease due to negotiation processes and market adjustments, monetary and fiscal policies are expected to provide a boost for equities.