Channel
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Fox Business Network
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Interviewee
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Andy Sieg, Merrill Wealth Management President
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Air date
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01 March 2023
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Airtime
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08:22am ET
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Total duration
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05 minutes 44 seconds
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Maria Bartiromo:
Joining us right now to look ahead is Merrill Wealth Management's President, Andy Sieg. Andy, it's great to see you. Thanks so much for being here.
Andy Sieg:
Maria, great to be here.
Maria Bartiromo:
I want you to give us your take on the macro story as seen through the earnings. Did you learn anything so far in this quarterly numbers and what do you see for the rest of the year?
Andy Sieg:
Well, I think many have been surprised by the strength of earnings and the strength generally in the US economy. We haven't been as surprised, we've got a lot of insight into what's happening at the consumer level through Bank of America, 60 plus million US households. And as we've been talking about, the consumer remains healthy. Savings levels are high, spending's trending down a bit year over year, but the consumers still resilient and in the game, and we see that coming through. Of course, earning story varies widely across sectors, but overall it still is pretty strong support for the market.
Maria Bartiromo:
Yeah. And that's what Brian Moynihan, your CEO, told us recently when we asked him about his thoughts in terms of the consumer and growth. We want to know where the growth is. Here's Brian Moynihan from a month ago.
Brian Moynihan:
We basically have a mild recession predicted starting sort of mid this year into '24. We expect that it takes the Fed will move rate up over 5% and hold them there all through pretty much next year, unemployment will move up a little bit. And so that's how they have to slow down the economy and I think people are debating about pulling them back down, they can't pull them back down to the service-
Maria Bartiromo: So, Andy, what about that? As the economy slows down, is that priced into the market or do you want to adjust how you're investing?
Andy Sieg: Well, I think today versus what Brian said a few weeks ago, we think the recession's a little further out. Because of that strength in the underlying economy, we now think the Fed's going to move three more times, 25 basis points each, not just two. Doesn't fundamentally change the investment strategy and the investment outlook. We think we're closer to the end than the beginning here on the Fed doing its job, it's been effective. Month to month the inflation data moves around a good amount, but it's coming down. We expect it to keep trending down. So I think as we look to the back half of the year, we're bullish on equities.
We look a little further out. I think we're triple bulls. We feel good about equities later in the year. We think rates are going to come down, certainly on the short end of the curve. And there's shortages of all kinds, you think about commodities, other real assets. We think there's going to be continued appreciation there as well.
Maria Bartiromo:
And you're seeing questions from clients about this, right? You say that activity is up in terms of, what? They want to speak with an actual manager?
Andy Sieg:
Yeah. I mean, well, the advisors across Merrill and Bank of America do an incredible job for clients. And in the first eight weeks of this year, the activity has really been unprecedented. Years ago, in a full year we would add one 2000 net new client households at Merrill, we've been adding about 1,000 a week so far this year. So I think that represents a demand for advice. People got knocked around pretty badly in the markets last year, as they come into this year they're thinking about a more structured strategy, a plan, and an advisor that can help them.
Maria Bartiromo:
Adam, you're pretty bullish too, right?
Adam Johnson:
I am. Well, I was going to say, Maria, it's so nice to finally sit next to another optimist, they're not many of us out there. I'm a stock picker, that's my value add. Your value add is advice in wealth management. Are you finding as you talk to people that they want to index themselves because there's uncertainty or they're actually, are they getting back to that stock picking and looking for people who can actually manage a portfolio?
Andy Sieg: Well, I do think, hey, this is a market of stocks and so we're seeing an interest in individual names, individual stories, so that's surely coming through. At the same time people are thinking about bonds again, obviously. And so this sounds a little bit back to the future, but a 60-40 portfolio-
Adam Johnson:
Works again.
Andy Sieg:
... Little more individual stock selection. We think it's going to work. And clients are adding alternative investments to portfolios much more regularly today, both because it helps them diversify and the selection of what's out there and appropriate for retail investors is far different today than it was 10 years ago.
Maria Bartiromo:
How much of a factor is this? I mean, you look at volatility out there and that is what has kept companies from going public. The drought in IPOs, M&A in 2022. We've just seen a couple of bright spots in M&A. Pfizer is going to acquire cancer drug maker CGEN for more than $30 billion. Are you seeing a pickup in capital markets activity right now?
Andy Sieg:
Well, when we talk to my colleagues who are in the investment bank, the level of discussions among CEO corporate boardrooms is clearly ticking up. So I think animal spirits are back again. As Adam was saying, there's more bulls out there once again. So we do think M&A activity will be stronger this year than it has been.
Maria Bartiromo:
How are you dealing with this ESG fight? There's a fight in terms of whether or not it should be mandated, that you have ESG ideas in a management proposal.
Andy Sieg:
Our business is very different from the business of asset managers. I mean, our business is a client service business. So when we have clients who talk to us and say, "I'd like to be exposed to the market, but I might want a Christian values portfolio," or, "I might want a low-carbon exposure to the S&P 500," our advisors have to be in position to provide those solutions. This isn't a political topic to us, this is a client service topic.
Maria Bartiromo:
Yeah, it's a good way to put it. Andy, do you think we're going to have an up year this year? I mean, I know I'm asking you for a crystal ball, but we just came off of a really tough performance last year. You think things get better even with the recession?
Andy Sieg:
I do, and I think this is no time to be on the sidelines. Investors should be balanced. But when we came to the end of January, we had a lot of people asking questions about why did I wait so long to get back in the market and invested. So we're bullish when we think about 2023.
Maria Bartiromo:
Yeah, I mean, long term the best way to wealth creation is owning stocks, isn't that right?
Adam Johnson:
Well, stocks rise two days out of three.
Andy Sieg:
Yeah.
Adam Johnson:
Not to steal your line, but-
Andy Sieg:
Thank you.
Adam Johnson:
We're in the same business.
Andy Sieg:
Yeah.
Adam Johnson:
Yeah.
Maria Bartiromo:
Andy, it's great to have you.
Andy Sieg:
Great to be here. Thank you.
Maria Bartiromo: Thanks so much.
Andy Sieg:
Thank you.
Maria Bartiromo:
Andy Sieg from Merrill Wealth.
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5487157 - 03/01/2024
