Hard to Be Bearish on U.S. Equities, Says BofAML’s Subramanian

The video discusses the Fed policy rate nearing zero and its implications for the market. It explores whether a Fed rate cut is a positive or negative signal for the market and the likelihood of future rate cuts. The impact of policy responses on risk assets is analyzed, highlighting diminishing market reactions over time. The video also examines the outlook for US equities, emphasizing the difficulty of being bearish in a Fed-accommodative environment. Finally, it identifies sector opportunities and risks, particularly in consumer discretionary and tech sectors, amid trade and tariff concerns.

What is the main concern regarding the Fed's potential rate cuts?

• They are expected to happen immediately.

• They might signal a strong economy.

• They will have no impact on the market.

• They could indicate economic weakness.

How has the market's response to policy interventions changed over time?

• It has become unpredictable.

• It has weakened with each intervention.

• It has remained consistent.

• It has become stronger with each intervention.

Why is it challenging to be bearish on US equities currently?

• The Fed is not accommodative.

• The market is in a recession.

• The Fed is supportive and accommodative.

• US equities are overvalued.

What is a key factor driving differentiation in the market today?

• Unemployment rates

• Trade and tariff risks

• Interest rates

• Inflation rates

Which sector is recommended for investment due to supply chain issues?

• Tourism

• Software and security

• Luxury retail

• Semiconductors