00:00 Speaker A
It is time now for today's strategy session. US stocks opening in the red after snapping six days of gains with the rising bond yields sparked by deficit concerns weighing on risk sentiments. So, our investors still too complacent amid the recent market calm. Joining us now on this, we've got Stephen Dover, Franklin Templeton, Chief Market Strategist, along with Travis Prentice, CIO of the Informed Momentum Company. Thank you both so much for being here this morning. Stephen, I want to start off the conversation with you because we are seeing a little bit of so-called market complacency according to our sources here. What should investors do to hedge against that uncertainty? Where do you see continued opportunity?
01:26 Stephen Dover
We primarily are focusing on the broadening of the market. Um, we had a very concentrated market the last few years. That's broadened out even year to date, and we see a further broadening. And, uh, to to push that a little further, we would advise investors to go abroad. Uh, we see a lot more opportunity overseas versus to the US than we have over the last, uh, certainly four or five or even 10 years.
02:21 Speaker A
And so, with that in mind as you're thinking about the strategy and how that kind of sets up for where investors should be kind of placing their portfolio and and weighing their portfolio. I mean, where are you kind of looking at this activity and initiating any type of trade today on this?
03:01 Stephen Dover
So our, um, it it's interesting. We just had our CIOs meet and we said something that probably, you know, you don't really like necessarily to hear on the news because it's not aggressive, but we did call it aggressively neutral. That right now the market, we think the market's going to be pretty much sideways for the rest of the year. So it's an opportunity to upgrade in quality and broaden and probably look at where you're pretty far from the benchmark or pretty far from neutral and think about whether you want to move in that area. Most US investors and indeed many foreign investors are actually underweight overseas. Um, they're underweight and more broadly diversified, and that's where we look. Specifically, in terms of sectors, maybe a barbell type of approach where you're looking at growth, um, which would be the big tech firms, and then you're also looking at quality, uh, particularly quality, uh, um, dividends. And and then just lastly, uh, you know, what to avoid? You probably want to, uh, really look at avoiding, um, perhaps energy as prices drop. And you're going to have to be careful with industrials and consumer discretionary as the tariffs roll in. I think specific companies could do well, but as groups they're probably going to be challenged.
04:57 Speaker A
And, uh, Stephen, I want to bring you into the conversation because one thing that I've been thinking about here is Travis. I'm so sorry. I want to bring you into the conversation because I know that you sent over some thoughts about international plays as well, and it was interesting. You mentioned France, Canada, China, Europe overall, Europe financials, a lot of different opportunity and only one or two things related specifically to the US. Is that a signal of what you're hearing from clients right now about demand for those international opportunities?
05:47 Travis Prentice
Yeah, well, I think our clients, um, to echo what what Steve said a little bit is to stay diversified in this kind of tumultuous market environment. And so I certainly part of that is diversified by styles, but also diversified by geographic exposure. So, you know, we don't think it's an either or, you know, US or or non-US. We think it's all of the above. And specifically having a a a style of investing like momentum that picks up on trends kind of no matter where they emanate. I think if you look at the world stock by stock, opportunity by opportunity, it is a world of opportunity, and certainly we see some very strong trends, uh, as you laid out in Europe, uh, even Chinese biotech. Uh, we're seeing some emergence of Chinese biotech companies with some of the deals that we've seen lately. So there is tremendous opportunity even in these dislocated market environments.
