Denise Chisholm's sector and factor perspectives – September 19, 2024

The Federal Reserve cuts interest rates by 50 basis points. Its first cut in more than four years. We check in with Director of Quantitative Market Strategy Denise Chisholm to get her thoughts on the recent announcement and what it could be signal for the broader economy. Denise said she expected the Fed to cut rates, but she’s not so sure that there's going to be an instantaneous reaction in the stock market.  She says there very strong pockets of the market, small caps and parts of the consumer that are very rate sensitive that in some ways have felt the impact of the Fed's cycle much more than large cap corporate America. She says that’s where the most excitement will be felt.  But she adds that it doesn’t mean it will translate directly into all stocks on the spectrum. Denise says real estate and financials are showing strong valuation support and wide valuation spreads and are something to consider as the current risk-reward is skewed to the upside.  She also says defensive sectors such as consumer staples, healthcare, and utilities face margin and profitability issues.

 

Recorded on September 19, 2024.

 

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For a fourth year in a row, FidelityConnects by Fidelity Investments Canada was ranked #1 podcast by Canadian financial advisors in the 2024 Environics’ Advisor Digital Experience Study.