Yahoo Finance What should be in your summer investing playbook?
As we head into June, one of the weaker months for the market historically, what should be in your summer investing playbook? Jeffrey Kleintop, Chief Global Investment Strategist for Charles Schwab, sees opportunities in Japan and Europe, and looks to the fall for a Fed rate hike in the U.S.
JAPAN
Kleintop sees opportunities in Japan arising from the Trans-Pacific Partnership deal working its way through Congress. The trade agreement would liberalize trade between the U.S. and 11 nations, and is being hailed by the Obama administration as one of the most significant trade pacts in the country’s history. “Japan has a lot to benefit on this trade deal. They have almost no tariffs on their end, but they’re facing stiff tariffs in the U.S. that will simply go away,” he said. “25% on trucks, 2.5% on TVs. That could be a big boost to what has been a flagging manufacturing sector in Japan.”
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EUROPE
Kleintop also sees opportunities in Europe. “That is where we’re seeing economic momentum. It’s one of the few spots around the world right now that’s actually seeing improving growth, whether it’s industrial production, or manufacturing, or even consumer spending, is picking up,” he said. “I also see some trends, M&A activity really picking up in Europe. Over the last year, $1.3 trillion in M&A deals in Europe… It is huge.”
U.S.
In the U.S., all eyes remain focused on the Fed, as markets look for any sign the Fed may hike interest rates in the fall. “If you look at each of the past five years, the economic data seems to firm up in the summer and improve in the fall. I think that lines itself up well for a September or October rate hike,” said Kleintop. “Usually you get some volatility around the announcement, but usually it’s not bad news for stocks because it generally accompanies better fundamental economic performance.”
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