The equity market didn’t much like rates at 3%…it will truly not like 4%

Jack Ablin, CIO at Cresset Wealth Advisors, interviewed on the Bloomberg Surveillance podcast on April 25, 2018. He discussed why he is somewhat conflicted about the outlook for equities at this juncture. Jack sees near-term upside but bonds will come back into favor as the ECB moves to end quantitative easing. Rates are inexorably headed to 4% and, in the context of potential GDP growth, which is much lower than it has been in the past, the interest rate appears to be historically high. The short-termism of corporate managers sparked by the pursuit of incentive returns has also pushed stock prices – one of the reasons why Cresset is looking at direct investments in private firms, which are not going public as quickly as they used to for this reason.

Link to podcast: https://www.bloomberg.com/news/audio/2018-04-25/surveillance-we-deployed-all-our-fiscal-muscle-zentner-says

 

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