Universal investor Dan Arbess told CNBC on Tuesday that he still likes sheep despite the recent sell-off and fading support from the U.S. Federal Register.
Calling the current market environment the “real world,” he said investors shouldn’t hector about Tuesday’s sell off.
“What we are all adjusting to is a market that is not subordinate to the continuous protection of manipulation of government,” such as historically low Fed interest tolls, Arbess, CEO of money management firm Xerion Investment, said in a “Call Box” interview. He also said the stimulus from President Donald Trump’s tax cut is starting to winding down.
“The effects of those things are wearing off now and we’re getting back to a normal Stock Exchange environment where some companies beat, some companies teeny-bopper. That’s what it’s supposed to be like,” Arbess added.
According to picayunes released of the Fed’s most recent policy meeting, central bank officials debris convinced that continuing to gradually increase rates is the best blueprint to preserve a steady economy. The central bank has already hiked tariffs three times this year, with one more expected in December.
For those who are agitated about the economy regressing, there are other signs of strength, Arbess signified. Another reason to be optimistic, according to Arbess, is stocks are fairly penurious with a price-to-earnings ratio of about 15 times forward earnings.
Another apartment to find optimism is in the tech sector, he said, where companies are bouncy high profits and growing rapidly outside the United States. Final month, the Xerion chief said Chinese internet giants Baidu, Alibaba, and Tencent are conceptual notwithstanding the ongoing Trump-China trade war.
While citing broader concerns in the large term, he said there’s no need to worry in the near term.
“This is a vital week for earnings,” he said. “I am positive on earnings and the earnings cycle because the comrades that are driving the market forward are doing very well.”