4/2/2023 0 Comments Goldilocks economy 2018![]() "If we were at Goldilocks levels, investor sentiment would be much more euphoric and robust. He told "Power Lunch" he would do "very little" de-risking. However, that's not what's on portfolio manager David Sowerby's agenda. "But at this point in the cycle, as late as we are, as much as we've made in the markets – particularly in technology – I think it's time to start de-risking," he said. Will it? Yeah, there's a good chance it will," he said. "Can the market continue to go up from here? Probably. Spika recommends that investors start to look at lower-risk assets. Netflix shares also tumbled after it missed its subscriber addition projections. Twitter shares, meanwhile, experienced their worst single-day percentage drop since 2014 after reporting declining monthly active users. "Markets are not going to react favorably if these high expectations are not met."įacebook, which posted second-quarter earnings in late July, suffered the worst day in its history as a public company after reporting revenue that missed analyst projections. "We saw what happens when companies fail to meet earnings expectations, with Twitter and Facebook and Netflix ," he said. ![]() While second-quarter earnings growth has been driving the market today, Spika's concerned that investors are expecting this current Goldilocks environment to continue. "All of this is a Goldilocks scenario that is just not sustainable," he told " Power Lunch." Goldilocks generally refers to an economy that is not too hot or cold such as having moderate growth and low inflation. He points to 4 percent GDP growth, 20 percent earnings growth, unemployment below 4 percent and wages "not growing like they should."
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