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Tricks

Michele Schneider delves into divergence

Michele Schneider is the co-founder and director of education and research at Marketgauge.com, a platform that provides financial information and education for individuals and companies including Barron’s, Fidelity, Thomson Reuters and Bank of America.  

Prior to establishing Marketgauge.com, Schneider was a commodities broker. Throughout her career, she was one of the only female members of several New York commodity exchanges in the World Trade Center, rubbing shoulders with the likes of hedge fund legend Paul Tudor Jones.

Schneider also runs a discretionary trading recommendation service, called MMM Advantage, for active investors. This makes her ideally placed to consider how investors should be positioning themselves, something she considers compelling. 

“What’s interesting about today is that we’re actually in a divergence of phases,” Schneider told Opto Sessions.

“You have the tech space and the S&P 500 more in the bullish phase, and then you have the small caps and the financial part of the small caps more in a negative or even bearish phase, and then we have everything in between,” Schneider said.

“What’s interesting about today is that we’re actually in a divergence of phases”

She pointed to lessons from the past that might help make sense of this. “Generally, what happens with a divergence like this is that it does at some point reconcile.”

Schneider highlighted the outperformance in tech and explained how some of the weaker sectors such as retail and ecommerce are starting to catch up, alongside some stable performance in small-caps. However, there are sectors at risk.

“The big weaknesses still remain in classical energy, oil and gas, and banking, which is going to take the hardest hit because that’s where the loan defaults happen,” she considered

“The big weaknesses still remain in classical energy, oil and gas, and banking”

Asked if the weakness in financials could derail tech’s dominance, Schneider’s outlook was ominous.

“I think it’s very possible,” she responded, but not just because of the financial sector. She also considered the divide “in the markets between the haves and have nots, which of course, keep growing”.

For more on how Schneider thinks investors should be positioning themselves, and for some learnings from her book Plant Your Money Tree: a guide to growing your wealth, listen to the full episode.

 

 

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Listen to the full interview and explore our past episodes on Opto Sessions.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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