Financial Advisor Magazine reports financial advisors see “lots of potential for continued growth” in the U.S. economy, “assisted by the economic stimulus package.” However, “the tax increases that are being proposed could have a negative impact on mid- and small-sized companies and, therefore, on investors, said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Financial.” Zemsky “said he sees some potential for bad news, along with the increasing economic growth and overall good performance of the stock market. Long-term joblessness and weak labor force participation will remain major concerns and ‘are the main reason the Fed is holding its dovish posture,’ he said.” Zemsky noted the impact of any proposed tax increases “depends on what gets through Congress,” but said hikes in capital gains and corporate income taxes “will make business activities less profitable for investors and for corporations.” However, Zemsky explained, “I still expect to see record investment and business profits for the rest of the year. If equities become less profitable, we may see a shift to bonds” despite low rates. Zemsky added, “Right now, advisors should tell their clients not to overreact. The proposals that are being discussed are trial balloons and might not come to pass.”
Kiplinger reported markets “brushed off a dismal April jobs report Friday” as the Dow Jones and S&P 500 closed the week at new highs despite the economy adding only 266,000 jobs last month, “well below the nearly 1 million expected by economists, while the unemployment rate ticked higher to 6.1% from 6.0%.” Voya Investment Management Head of Fixed Income Research Brian Timberlake said, “The payroll data does not suggest that the reopening is stalling. On a non-seasonally adjusted basis, 1.1 million jobs were added.” Timberlake said the upward tick in unemployment coincided with a small rise in the overall labor force participation rate, adding, “As a result, the employment-to-population ratio – which we view as more representative of the current labor market dynamics – increased for the month from 57.8% to 57.9%.” Timberlake ventured that the disappointing jobs report would likely “give Fed Chair Powell some relief on the urgency to talk about tapering.” In other words, said Kiplinger, “no changes to the central bank’s bond-buying program and no interest-rate hikes quite yet.”
In an analysis, CNN reports that investors “should ignore the dumb, antiquated saying about selling in May and going away.” Investors “need to pay attention to the headlines — not what month it is” — because “it’s not as if Corporate America and the economy go on summer break.” Voya Investment Management Multi-Asset Strategies and Solutions CIO Paul Zemsky said, “There is no proof of any kind that selling in May and going away will add value ... First of all, market timing is very hard. And we like stocks and are not going to change that opinion just because the calendar says May.” Zemsky added, “The fundamentals remain strong and that’s what we look at. The economy is on great footing.”
Bloomberg reports stock estimates from Wall Street analysts have begun to miss by a margin significantly larger than normal as companies across numerous industries continue beating expectations. The FAANG tech stocks “have crushed analysts’ sales estimates by 8.4% for the latest calendar quarter, the best showing on record, data compiled by Bloomberg show,” and it isn’t only “the megacaps that are smashing expectations.” Firms from almost every industry are “doing better, with widespread profit beats seeing little precedent.” Voya Financial Multi-Asset Strategies and Solutions CIO Paul Zemsky said the surprise performances reflect the caution among corporate executives, who usually shape analysts’ views through their guidance, given the ongoing uncertainty amid the pandemic. Zemsky said, “Given how much economic growth depends on policy being right — and it has been right up to now — I can see why companies are hesitant to give too much guidance ... Companies are reluctant to guide higher because there’s still a tremendous amount of uncertainty.”
Speaking on Bloomberg Markets, Voya Financial Senior Portfolio Manager and Head of Asset Allocation Barbara Reinhard discusses the impact that the Johnson & Johnson vaccine pause could have on the economy. Reinhard argues that the data on the J&J vaccine is very preliminary and that the overall US vaccine program remains on track, mitigating the potential economic impact of the pause. Reinhard also addresses the pandemic’s impact on the Consumer Price Index, employment, and inflation.
Under its “Women in Finance” heading, Barron’s reported Voya Investment Management CEO Christine Hurtsellers “is responsible for the strategic direction of investments, product distribution, and marketing and client engagement” at Voya Financial’s asset-management arm. Hurtsellers “says she enjoys working to overcome obstacles with her team. And 2020 raised the bar.” Hurtsellers added, “Leading in this environment is tough.” Despite those challenges, Voya “generated $8.38 billion in net inflows last year through Dec. 31,” and “managed more than $245.5 billion in institutional and defined-contribution assets as of Dec. 31, up from $208 billion in the third quarter of 2016, when Hurtsellers took the helm.”
Bloomberg reported sales of collateralized loan obligations “have rebounded so strongly that the heavy supply is crimping a rally in the sector even while investors seek to rotate into floating-rate notes as Treasury yields march higher.” Sales “have risen following a difficult 2020 as issuers seek to tap higher demand to offload the securities cheaply and cut costs on existing deals through refinancing and so-called reset transactions.” Voya Investment Management Head of Securitized Credit Dave Goodson said, “Despite its idiosyncrasies, we are most bullish on CMBS to pick up beta. ... Coming out of the pandemic, we are willing to give the sector the benefit of the doubt and take some risk. There will be winners and losers, but we have a good feeling on some hotel and retail properties that might provide some spread premium. We do remain cautious on office properties.”
Bloomberg TV reported that Voya Investment Management Senior Portfolio Manager and Head of Asset Allocation Barbara Reinhard joined the program to discuss her take on the day’s financial news. When asked if there are opportunities in the tech industry given the recent selloff, Reinhard said, “Sure; we’re probably coming in relatively close to it at this point.” On that matter, Reinhard added that “with the stimulus program coming, you will start to see the dollar back down just a bit, and while tech is certainly out of favor at the moment, I do think that by the time you get to the end of the year, you’re still going to be happy owning it.” During the interview, Reinhard also discussed the economic reopening underway and said, “Earnings are going to be very strong this year,” and that investors should “stay in equities” now, even though it is a “scaring moment” in some markets. Reinhard also said, “We believe that the U.S. is probably at the very beginning of a very long and sustainable bull market.”
Barron’s runs a feature about the “enormous strides” woman have made in the public and private sectors over the past year, “particularly in the world of finance.” The article focuses on “the highly accomplished, path-breaking women named to Barron’s second annual list of the 100 Most Influential Women in U.S. Finance.” These individuals are “but a fraction of the army of women whose contributions are strengthening the financial-services industry and the U.S. financial system, as both prepare for the challenges ahead.” Voya Investment Management CEO Christine Hurtsellers is listed among the honorees.
Bloomberg TV reports Voya Investment Management CEO Christine Hurtsellers said that neither she, nor Voya, are worried about increasing yields and concerns over inflation, however, those issues “have some of our clients a little bit concerned.” According to Hurtsellers, “when you think about the rhetoric that’s been going on today ... the Fed told us that they were going to allow inflation to run hot and that we have structural damage in this economy.” Hurtsellers continued, “Even with a very aggressive” fiscal stimulus package, “this isn’t kerosene on a flame. I would say that the inflation fears and rate rises are episodic. So again, we’re getting to the point where there’s some pretty attractive entry-levels in the market for fixed-income investors,” including commercial real estate. Unexpected COVID variants that “slow down the recovery and ruin” economic optimism constitute a bigger economic risk than inflation, Hurtsellers added.
