LIVE MARKETS-With the market in rough seas, rebalancing may help keep your ship righted

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WITH THE MARKET IN ROUGH SEAS, REBALANCING MAY HELP KEEP YOUR SHIP RIGHTED

President Trump’s ramped-up tough tariff talk has so far been a tough sell on Wall Street.

Jack Ablin, chief investment officer and founding partner at Cresset, is noting that the S&P 500 .SPX has taken a dive and wiped out all of its post-election gains. And on Thursday, the benchmark index confirmed it's been in a correction since its February 19 record close. With this, the tech-laden Nasdaq composite .IXIC has already seen a more than 10% correction, and there has been a flight to traditional safe havens, like bonds and gold.

On top of the recent headlines, Ablin says several forward-looking economic indicators are signaling a slowdown.

The Atlanta Fed’s GDPNow tracker projects first-quarter GDP could contract by 2.4% annualized. Ablin says the fall is being fueled by a surge of imports in anticipation of future tariffs:

He adds that both consumer and business confidence measures have taken a hit, while manufacturing surveys point to declines in new orders and rising input costs.

Meanwhile, the U.S. 10-year Treasury yield US10YT=RR, has been on the back foot so far this year. Traders are increasingly betting the Federal Reserve will resume cutting interest rates as soon as June, and Fed fund futures currently imply three rate cuts this year, up from just one cut about a month ago.

"Recent market turbulence is a natural reaction to a relatively expensive market overlaid with uncertainty. But there’s little tangible evidence to date that the US economy is slowing, or that the threat of recession is imminent," writes Ablin in his latest market update note.

While Cresset remains on the lookout for weakening, Ablin's base-case scenario of slowing growth coupled with easing inflation remains in place.

In any event, given market performance over the past several years, Ablin's believes investors "should take the opportunity to rebalance their equity holdings towards their longer-term targets to maintain proper diversification for the times ahead."

(Terence Gabriel)

FOR FRIDAY'S EARLIER LIVE MARKETS POSTS:

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INDIVIDUAL INVESTOR BULLS AND BEARS JUST DID THIS FOR THE FIRST TIME - AAII - CLICK HERE

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LUXURY'S FOURTH QUARTER FALSE DAWN - CLICK HERE

STOXX UP BUT HEADING FOR BIGGEST WEEKLY DROP IN 3 MONTHS - CLICK HERE

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MARKETS COME UP FOR AIR BUT TARIFF THREATS LURK - CLICK HERE