Two ETF CEOs see a key market shift
The market may be experiencing a significant shift away from AI stocks.
A broader range of stocks are getting the “green light” as liquidity returns to the system, according to John Davi of Astoria Portfolio Advisors.
“The Fed cut interest rates four times last year. It has already reduced interest rates twice. They will cut interest rates in December as well.” [or] “January,” the firm’s CEO and chief investment officer told CNBC’s “ETF Edge” program this week. “Historically, whenever the Fed cuts interest rates, it’s usually the start of a new cycle. Market leadership tends to shift quietly.”
It lists the latest performance in a variety of areas, from emerging markets to industrial sectors. iShares MSCI Emerging Markets ETFFollowing the group, , was up 17% over the past six months as of Wednesday’s close. Industrial Select Sector SPDR Fund increased by 9% in the same period.
“I think these could be a good offset against the expensive, large-cap technology position that dominates most portfolios,” he added. “We live in a world with structurally higher inflation. The Fed is lowering interest rates, why do you want to take so much risk on just seven stocks?” And
Davi prefers a globally balanced investment approach over an overweight position in Magnificent 7. Apple, Amazon, Meta Platforms, Nvidia, Microsoft, Tesla’s And AlphabetIt is trading around all-time highs. Mag 7 accounts for about a third of these S&P 500.
Sophia Massie, CEO of ETF issuer LionShares, is also cautious about going all-in on AI trading.
“I think analysts have an idea of how much value AI will add to our economy. I don’t think we really understand yet how this will play out across different companies,” Massie said in the same interview. “So I feel like right now we’re pricing in the possibility that there could be a company that dominates, dominates AI and can become a major player in the future.”
