U.S. Equities: Seeking Growth in the Current Market
Air Date: February 24, 2021
Hi, I'm Tom O'Halloran. I'm a partner of Lord Abbott and a portfolio manager for the innovation growth funds.
Title: Equities: The Current Environment
The market is has performed well since March of 2020, the end of March of 2020. We're in a bull market. There are many things to worry about. In the near term, we're looking at the pace of the vaccinations. We're looking at whether the government programs to provide stimulus to the economy are going to come through. And we're looking at interest rates which have been climbing up more than I had expected they would be. So there's the usual cast of characters of worries and risks presented in the equity markets. And those are the things right now that we're focused on, where we're pretty much through the earnings season. And then it'll pick up again in April, but generally the earnings have been better than expected, quite a bit better than expected.
Title: Equities: The Landscape for Innovation Growth
And in my world of innovation growth opportunities continue to be abundant. It all starts with technology, the semiconductors, the software companies that enable the exponential processing power to continue. And then to where the money is, the consumer, and whether new companies or products or businesses are addressing the hierarchy of human needs and making things better there. And then in healthcare in biotech and devices and diagnostics, there are many opportunities. And then finally, where the consumer and the technology intersect and things like social networks.
And then in payments … payments are being made more digital. They're being made divisible. The way that the money is moved around is, is moving toward more of a digital world. So abundant growth opportunities in innovation growth.
But we have our eye on interest rates because if interest rates go up more than expected, it could limit the value of some of these longer duration equity names, but as we speak, the technical profile of the market is fine. The government is behind the market in terms of fiscal policy, in terms of rates that they're controlling. So we have the support of the government and we have improving breadth in the market. People were worried a few years ago about just five stocks carrying the whole market. Now we have hundreds of stocks driving the market. So the market's healthy at the moment. But as always, there are many things to be looking out for in case that might change.
Thank you for listening. And thank you for your continued interest in Lord Abbett.________________________________________
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