Carlyle's top stock picks during a global economic recovery
Despite several volatile weeks for the stocks triggered by concerns of a faster-than-expected interest rate hike by the Federal Reserve, markets have steadied and some economists are urging investors to buy into the economy before it’s too late.
“We have a global economy that is, really for the first time in many people’s professional lives, growing in a synchronized fashion,” Glenn Youngkin, the co-CEO of the Carlyle Group, told FOX Business’ Maria Bartiromo. “And it’s really driven by good fundamentals. So we have strong growth in Europe, strong growth in the United States, strong growth in China.”
Europe -- which entered into a recession after the U.S. in 2008, and exited it after America’s recovery -- is growing at a slightly faster pace than the U.S., Youngkin said. That’s made Europe’s valuations a “little more attractive”, he said.
But, the asset management guru warned that because prices around the world are so high, and assets are priced at “tip-top expectations”, investors need to be more careful than usual when selecting stocks to buy into. “This is not a place where you just put the sale up and hopefully will make money with everybody else,” he said.
In early February, the Dow Jones Industrial Average dropped 1,000 points twice in the same week, the two largest intraday point drops in history. Since then, the blue-chip index has climbed back above 25,000, slowly recovering from its worst day since 2011. In a statement following its January meeting, the Federal Open Market Committee said it sees “further” interest rate hikes in 2018, further buoying fears on Wall Street of inflation.
Youngkin, however, dismissed inflation concerns, wage growth and interest rate hikes as normal market behavior that underpins a growing, healthy economy.
“If we’d been sitting here a couple years ago, what we would be talking about are abnormally low interest rates,” he said. “Why isn’t there inflation? Why isn’t there wage growth? Today, we actually have normalized interest rates that are healthy.”