Russell Investments chief market strategist Stephen Wood talks with Bobbi Rebell about Monday's stock market and the reaction to Fed Chair Janet Yellen's comments.
All eyes were on fed chair Jenny on today here with more on the market reaction to your comment is Stephen wood is chief market strategist at Russell investments great to have you think it. Our social kind of left out some language from previous comments about a rate hike coming in the next few months what's your take on that and on the market reaction. Yeah I I think the Federal Reserve is still on course the chairs comments today where that the labor market is volatile and not to read too much. Into the data that we saw. A last week's I think that the Federal Reserve right now is essentially where they were a couple months ago the inclination of the Fed is to raise rates because they wanna be in what they consider. A normal policy environment so absent any really terrible data I think they're inclined to raise rates I think meetings are alive. The odds of June dropped dramatically but July and September I think are still live meetings and she's told us that the labor markets are improving. The inflation picture is improving and the economy still contain about a 2%. And issues pretty because my jobs report to every week. But it rate hikes are not immediate. They're not going to be aggressive system be gradual rate environment in an okay economic environment where inflation is recovering so by and large I think this is a positive. Data situation. And the window of course people are worried about whether or how long the window will open it you're seeing an okay economic environment it doesn't have to be phenomenal I guess it has to be just good enough. To get these great. I believe so that that cherry thinks that not only can the economy withstand a rate hike. That it would deserve going towards a more normal rate the Fed has been amazingly accommodative quantitative easing these very aggressive monetary. Policies I think the Fed wants to get closer to. A normal environment even now without having raised in December likely to raise twice this year is still going to be extremely long very competitive. And the market pared its gains. Passes. You think the markets stubbornly. Stop it over top your perspective youth market I think so so the US market we think is overvalued. You know the economic situation in the US is okay we're not calling. For reception. But when we look at the economic cycle which is okay we also look at valuations. And US markets panic rate seven year run and they're up again. This year so we just think that valuations are not there now. So looking in areas of the world where valuations are more tract where we think you're more likely to get paid. I equity space we figure would be good opportunity where valuations are more attractive but it needs big global multi s.'s strategy. Global credit for example is another way that investors can take advantage of not only that cycle but we're valuations. I thanked estate. Investment as well as players.