Is risk off after a ferocious run year to date?

Thank you Lisa Bernhard and Reuters for having me on to do a temperature check of the market heading into the fall.

Just ahead of the Labor Day weekend in the US, the Labor Department brought out their August report which showed job losses, particularly in leading indicator industries, trucking and temporary agency firms. I point out this is: “typically what we’ve seen prior to past recessions with transportation down.”

I also noted that on the stock market there is a shift from cyclicals to defensives.

“This was the first month since February that the Nasdaq and S&P weren’t positive…and it looks like there are cracks in the magnificent seven (leading tech) stocks. The defensive sectors were leading the market instead of cyclicals.”

We see plenty of opportunities outside of the big tech leadership this year. International, value and non-tech sector stocks are available at double digit EPS growth rates and multiples much less than the 27x P/E of the S&P 500 Info Tech sector.