What Goes Up

As the Federal Reserve’s efforts to tame inflation roil both stocks and bonds, investors everywhere are struggling to figure out the best way to play defense in markets amid concerns that a recession is on the horizon. One of the top executives at Goldman Sachs Asset Management has a surprising idea: Beyoncé. Katie Koch, the chief investment officer for public equities at GSAM, quips that “Beyoncé is ultimately recession-resistant” and so are other popular artists. That’s why the portfolios she helps oversee own shares of live-concert companies in the U.S. and Europe. While Live Nation Entertainment Inc. got hit hard during last year’s Covid-19 lockdowns, she points out that the company actually weathered the previous recession well and managed to grow revenue in both 2008 and 2009. “So the consumer will spend in a recession,” she says, but “they'll be quite selective in terms what they spend on.” Another example is beauty products, she adds. And Koch doesn’t buy the notion that China is uninvestable: “You can buy assets here in the US as well as assets in China that are overly discounted for something that we know is eventually going to work out, which is that the economy will reopen” Koch joined this this week’s episode of the “What Goes Up” podcast to discuss the state of play in markets and why -- despite share prices that have crashed over the past year -- investing in innovative companies is still a good idea for the long term.

The U.S. Federal Reserve’s effort to tame inflation with aggressive interest-rate hikes has some investors worried that a recession is inevitable, leading to a plunge in stock prices this year. Not so fast, says Jeremy Zirin, senior portfolio manager and head of private client U.S. equities at UBS Asset Management. Zirin joined the latest episode of What Goes Up to discuss his outlook for markets and the economy, and why he thinks the probability of a soft landing and longer expansion is higher than many believe.

It’s been difficult for even the most-seasoned veterans to discern a market message right now. Oil’s up one day and stocks fall. The next day, crude prices rise and so do stocks. Or bonds rally, and so do equities, and then the reverse happens just a few days later. Peter van Dooijeweert, managing director of multi-asset solutions at Man Group, joined this week's "What Goes Up" podcast to talk about that and the right asset classes to be in as the Federal Reserve continues its fight against inflation.

Adam Posen, president of the Peterson Institute for International Economics, joined this week’s “What Goes Up” podcast to discuss how Russia’s invasion of Ukraine threatens to further separate the world’s economies, and how a 20-year-long backlash to globalization is causing the U.S. to fall behind. “And when I say falling behind, I mean quite literally the rest of the world, including high income democracies, like those in Europe and Japan, but also places that you would not think of as terribly liberal or open have been continuing to open up,” he says. “The U.S. is a very big outlier. And it's not just trade, it's foreign direct investment, it's trade deals, it's immigration, the whole host of dimensions on which the U.S. has been closing itself off increasingly for 20 years.”

David Bianco, chief investment officer of the Americas for fund manager DWS Group, joined the “What Goes Up” podcast to discuss his cautious near-term outlook for the stock market: “We're quite concerned about the longevity of this cycle. I feel as if this cycle has aged quickly. It's aged mostly from very high inflation, much earlier than you typically see in the first couple of years of a new economic expansion.”