Market turmoil - U.S. stocks open lower on Monday - video Dailymotion

CGTN Europe

CGTN Europe spoke to Santosh Rao, Head of Research and Partner, Manhattan Venture Partners

Transcript

00:00Let's get more on this now with Santosh Rao, Head of Research at Manhattan Venture Partners.

00:04Welcome back to the show. Great to have you with us, Santosh.

00:07So global markets increasingly erratic, of course.

00:10Is this just the new normal?

00:12And if so, is there any let-up in sight for investors?

00:17Well, it's the new normal, at least till the dust settles.

00:22I think the whole market is waiting for where Trump wants to take this whole tariff issue.

00:29There's no visibility at what, I mean, it's on again, off again at this point.

00:33So they need some clarity.

00:35The companies cannot plan ahead.

00:37That's why you're not seeing any forecast from these companies,

00:40because they don't know where he's going with that.

00:43So, yes, it's going to be up and down.

00:45Essentially, the big companies are still, the fundamentals are still okay.

00:49You saw the jobs report was still okay.

00:51It was very good, above expectations.

00:53The unemployment rate is pretty solid.

00:55I mean, in the sense that it hasn't changed.

00:57So the participation rate is good.

00:59So the fundamentals are good.

01:01Now, the only issue is forward-looking.

01:03When will everything come into play?

01:05And until that happens, volatility is going to be the name of the game.

01:09It's the market for traders, not for investors.

01:12Investors are going to get a lot of headaches here.

01:15But that's okay.

01:16He wants certain things.

01:18He wants America first, on-shoring, everything.

01:20All those things fall into, he wants to do all that.

01:23And it's going to take some time.

01:24It's going to take some disruption.

01:25So, yes, it is status quo.

01:28Volatility is going to be, for a while, it's going to be, that's going to be the name of the game, for a while.

01:33Volatility, name of the game, I like that.

01:34And just specifically on this latest news, this latest tariff on foreign-made movies,

01:40how do you think investors are likely to respond to that?

01:43Yeah, this is a tough one.

01:46I mean, yes, it's in line with his thinking that everything has to be,

01:51America has to get the credit for doing everything that they're good at.

01:55But he's not taking into account the cost factor here.

01:59How do you value a film production?

02:03I think that's going to be a big issue.

02:05He will get to that in some way or form.

02:07Maybe he'll attack the subsidies.

02:09He'll call it unfair.

02:11China wants to cut back on American imports of movies, things like that.

02:15Companies are doing their stuff.

02:17So, there is definitely a sense of bycotting or rather moving away from U.S.

02:23in terms of kind of putting pressure on the U.S.

02:26But I think what's going to happen, yes, the data supports his logic,

02:31that companies are making money outside.

02:35They're producing here or they're based here,

02:37but making money outside for other foreigners.

02:39He wants the profits to stay here and the production to happen here and the employment here.

02:45So, all those things mean well, but it's very tough to implement.

02:48So, we have to see that.

02:49This is just the first shot at this whole issue.

02:52It's going to take some time, two or three iterations,

02:54till we get to how we value a movie.

02:57So, let's wait and see.

02:58But the cost factor is very compelling in terms of making it outside the U.S.

03:03So, you'll have to contend with that.

03:05Indeed.

03:06And amid all this uncertainty, this lack of clarity in this environment,

03:10what should global investors prioritize?

03:12Do you think diversification, safe havens, or just wait it out?

03:17I would say diversification and safe haven.

03:20That's the name of the game.

03:21Because at this point, yes, U.S. is still good,

03:26but the other countries are relatively better at this point because there's less volatility there.

03:32But I think whatever U.S. does has a dampening effect on the other markets as well.

03:37So, at this point, they need to watch.

03:39I would not go out, take any risks at this point, stay with quality.

03:43And that's the name of the game because you don't want to really go out and then get hit on the head,

03:49get blindsided, so to speak.

03:51So, stay with the tried and tested names.

03:56You know, you have cyclicals like the banks will do well,

03:59financials are doing well,

04:01and the industrials will do well as the economy recovers at this point.

04:04It's going to recover because in the end, he wants growth.

04:07He wants things to develop.

04:09He doesn't want a bad economy.

04:10He wants it good.

04:11So, I think right now he's tinkering on the edges.

04:14He wants the things to be straightened out.

04:16But in the second hundred days,

04:17I think he's going to focus on the other factors that really should help the country.

04:22So, let's wait and see.

04:23I would say at this point, don't do anything drastic.

04:26Don't take too much risk at this time.

04:28Stay with quality because that's where the real growth is.

04:31So, in terms of quality and defensive,

04:32we would say industrials, healthcare,

04:34those are like the safe bets and dividend-paying stocks.

04:38So, I know it's pretty broad-based,

04:40but I think that's where I would stay at this point

04:42and not go out on speculative, no-revenue names.

Market turmoil - U.S. stocks open lower on Monday

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