Markets continue to be volatile as investors await crucial inflation figures and earnings reports that are set to come out later this week, which in turn will inform the Federal Reserve’s future actions. Active ETFs can help investors weather the storm.
After reaching its lowest level since November 2020 earlier in the session, the S&P 500 rallied 0.73% early Tuesday afternoon, reversing earlier losses. Meanwhile, the Dow Jones Industrial Average also rebounded, gaining 400 points, or 1.35%, while the Nasdaq Composite rose 0.56%, rebounding from a 52-week low.
Several key metrics are scheduled for release later this week. The producer price report will be released on Wednesday, with the September consumer price index coming out on Thursday. On Friday, September retail sales will give further insight into consumption.
This week also marks the start of earnings season, with JPMorgan, Wells Fargo, Morgan Stanley, and Citi set to report their quarterly earnings on Friday. Unfortunately, analysts are not optimistic.
All this data will determine how aggressively the Fed will raise interest rates to fight inflation. Many are concerned that the U.S. central bank’s hawkish path to curb high prices will push the U.S. economy into a recession.
On Monday, JPMorgan CEO Jamie Dimon told CNBC at the JPM Techstars conference in London that several headwinds, including high inflation, rising interest rates, and Russia’s war in Ukraine, are “likely to put the U.S. in some kind of recession six to nine months from now.”
In a note to investors, David Bahnsen, chief investment officer of The Bahnsen Group, wrote: “This is an awful stock market environment that is grappling with a weakening economy, uncertainty over earnings and how long the Fed’s tightening will last, and sentiment issues with an extremely risk-averse investor psychology.”
Amid such an environment, it would be wise for investors to not panic and sell off their assets. Instead, they may want to consider a more active approach. While passive strategies lack the flexibility to adapt to changing market environments, active ETFs can offer the potential to outperform benchmarks and indexes.
“Active managers have the flexibility to take advantage of market volatility and add to favored positions when prices become more attractive,” said Todd Rosenbluth, head of research at VettaFi.
As part of its lineup of active ETFs, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP), the T. Rowe Price Dividend Growth ETF (TDVG), the T. Rowe Price Equity Income ETF (TEQI), the T. Rowe Price Growth Stock ETF (TGRW), and the T. Rowe Price US Equity Research ETF (TSPA).
T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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