Sierra CIO, James St. Aubin Remains on Guard

Investors on guard for market stress as Fed signals more hikes ahead

The S&P 500 edged up 0.1% on Wednesday after shuffling between gains and losses. Bond yields, which move inversely to prices, inched higher. The S&P 500 is up 15% this year, while the Nasdaq (.IXIC) has gained 30%.

James St. Aubin, chief investment officer at Sierra Investment Management, has been adding to equity positions during the rally but plans to reverse that stance if the trend starts to change. He remains on guard for further stresses in the banking system, which he believes can be exacerbated by higher for longer rates and an inverted yield curve, making lending less profitable for banks.

“The longer the rate curve stays inverted the more pressure it puts on the banking system because it’s a very unprofitable place to be,” he said.


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