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'The markets have been pricing in more stimulus': WealthWise Financial CEO

Loreen Gilbert, WealthWise Financial CEO, joined The Final Round to discuss today's market swings and her outlook for the markets as investors wait to see if there will be a deal for a second round of stimulus.

Video Transcript

SEANA SMITH: All right, let's talk a little bit more broadly speaking here-- the broader market sell-off that we saw today, again, with the Dow off over 500 points, S&P off just around 1%, and the NASDAQ off a tenth of a percent. We're going to bring in Loreen Gilbert. She's WealthWise Financial CEO. And, Loreen, I'd love to get your thoughts on what we've been discussing for the first five or six minutes of the show, and that is the action that we saw in tech today-- the fact that a lot of these big tech names were able to weather this downturn, actually outperforming the markets-- big names like Apple and Microsoft closing the day in the green. Should investors be thinking that, hey, maybe we should buy on these dips, and maybe these big tech names are more attractively priced than we initially expected?

LOREEN GILBERT: Yeah, I think that what we've seen is a risk-off trade most recently in the markets, and people being concerned of all the things that were mentioned. I would say the greatest point that I see right now is that we're in a stimulus tantrum. And the markets have been pricing in stimulus-- more stimulus. And even with the Fed having made it clear that rates are going to be low for quite a long time, that wasn't enough to keep the markets going, whereas before, the Fed statements like that would keep the markets in the green. But right now, there's quite a bit of focus on stimulus.

So back to your question about technology-- I think for those investors that were looking to increase their position in technology, these are the opportunities that you're looking for when you see big downward days. Those prove to be good days on a 3% decline if you look forward. That's probably a benefit for investors as they're looking to increase technology.

SEANA SMITH: Loreen, it's interesting there what you were saying about stimulus. But I think just broadly speaking, would you say a day like today, that it's more internal and technical based? Or is there something a little bit bigger going on that investors also need to keep on their radar going forward?

LOREEN GILBERT: I do think there are quite a few things that investors are looking at. I mean, we've got an election coming up. You mentioned about Supreme Court justice being replaced-- there are a lot of things on the table that can make investors nervous. And we've been saying that running up to the election, we would see a pullback, we would see some volatility in the market. So I see it as a healthy correction in the midst of the markets. We still feel bullish over the longer term. And so for long term investors, they are fine. And look for those buying opportunities.

SEANA SMITH: Loreen, how about the US-China relations? This is one thing you didn't mention-- that, of course, in focus today when we talk about the latest going on with Oracle and TikTok. And then, of course, we had the "Wall Street Journal" story saying that China is compiling a list of US companies to blacklist. How big of a potential headwind is that for the market?

LOREEN GILBERT: It's a huge headwind. I think China is becoming very aggressive. And we've already heard on our side that there's this idea of decoupling from China. So on both sides, there's been this increased tension that's gone beyond just trade war talks. And so you know, we-- I think the markets are going to continue to react to that, most definitely. That is a big headwind.

SEANA SMITH: And, Loreen, you were saying in the long term, you're positive here on the market. Do you think we need to see broader participation, more participation in the markets in order to get to a new high?

LOREEN GILBERT: I do think so. I think it's been a very concentrated market on the way down, on the way up. And we see that we are in a sense of recovery, even though we're having somewhat of a pullback. We've said all along we saw a W-shape in the recovery, and I think we're seeing that right now with what's going on with lockdowns. The reality is it's going to take a long time for both the economy and the markets to recover.

But as we see recovery ahead, it is time for a broader based look at the market looking at beyond those large cap names, looking at your mid and your small cap names. Because we know in a true recovery, those are the names that do very well. We just look at the news that's been coming out of these large companies that are on a buying spree with the cash that they have-- that's going to be beneficial for these smaller companies.

ANDY SERWER: I wanted to drill down into that a little bit, Loreen, because, you know, people have been calling for that for a while, and it's sort of like inflation-- it never comes true, right? And when the US-- I mean, these smaller cap companies are primarily US-based in terms of where their revenues come from. So wouldn't we need to recover? I mean, maybe they're-- maybe it's a time to buy because they're down because of COVID-- because we've got the worst COVID economy in the world-- arguably, or one of them. So does that play into your thinking at all?

LOREEN GILBERT: It does. I would also say that when you're looking at smaller companies, capital is what's so important to those smaller companies-- access to capital. And with the Fed making it clear that we've got low rates for longer, than helps those small and mid-sized companies quite a bit. So I would say we've got a good overall environment for those companies to not only survive, but start thriving. And so I do think that it'd be good for investors to be broadening out their holdings into some of those names.

SEANA SMITH: All right, Loreen Gilbert, always great to have you on the show-- CEO of WealthWise Financial. We'll talk to you soon.