JPMorgan is one of the few bulls it seems on Wall Street as Kolanovic says markets are just pricing in too much risk, but three stocks could be in the best position to rally. ACV Auctions is first which is a wholesale auto dealer. The revenues and the price are just a mismatch accordinding to JPMorgan. Boot Barn Holding is next with a rise in consumer spending as well as resilient profits are moving the EBITA nail for BOOT. Finally, there is Springworks Therapeutics which is a clinical research company for rare diseases. They have two prime candidates in different stages which could mean big things for their future moving forward.

Finsum: If the Fed steers its way around a recession then markets have definitely overreacted to tightening and equities could have a high upside. 

There has been a sharp uptick in the high-value bond ETF trades in the last 12-months which most investors are attributing to activity from large institutional investors. Transactions are up as much as 36% on some platforms from the previous year. This has been part of a longer more ongoing trend that has been successful for many bond funds. Since the GFC, investors have questioned the resiliency of these funds to economic downturns, but regulators and investors alike are pleased with their performance in the covid pandemic. Just as important to this is the support from the Fed and Fiscal policy to the economy. Stepping in with bond relief has helped these ETFs. Finally, the increase in investment in bond ETFs has actually led to tighter underlying spreads in bond markets themselves and reflects better liquidity.

Finsum: Many believe that over-investment in index funds could be disruptive to equity volatility over time, but it appears to be stabilizing bond spreads.

Charles Schwab, Vanguard, Fidelity, BlackRock, Morgan Stanley, and others are all launching direct indexing products and trying to rapidly spread the word, but are they actually right for as many people as they are targeting? They promise to be customizable, generate tax alpha, and are professionally managed. The most significant edge is definitely tax advantage, but its benefits hardly offset the energy and expense for the average consumer. However, for more wealthy individuals with large amounts of capital gains, it could be worth it. Specifically for very high short-term gains which are generated from hedge funds as an example. Here direct indexing has its most significant benefit.

Finsum: While companies are racing to create smaller minimums chances are the tax effect might not matter for those individuals, particularly with their lower flexibility, but for higher net worth clients it could be worth it. 

BNY Mellon is one of the biggest asset managers with $2.3 trillion in AUM, and they are expanding their offerings by building model portfolios designed for the UBS Wealth Management USA clients. They will be particularly designed to deliver more reliable results during business cycles and geared toward meeting income-generation goals with clients. The range of portfolios will come in three different income varieties: stable, strategic,  and a growth hybrid. They view this as a natural evolution of their business at BNY and they are well suited to deliver models to UBS to meet income goals.

Finsum: More investors are looking for income products and models are rapidly trying to adapt to this demand.

Jenny Johnson, CEO of Franklin Templeton, said that while times are volatile that active management ‘really pays off’. FT is one of the largest asset managers with over $1.5 trillion under management and they are one of the largest active management firms. The firm has looked to acquire firms in what they label as a ‘bolt-on’ strategy to fill in the gaps in their offerings. Their acquisitions include Legg Mason and custom indexing provider O’Shaughnessy Asset Management. They are looking mostly into technology and alternative products to tie up loose ends. Johnson cited macro headwinds like Ukraine and the Fed’s hike as large macro factors generating volatility along with Covid spikes in developing countries, but their strategies are well suited to handle volatility.

Finsum: Active fixed income has a bigger advantage in high volatility than its equity counterparts, but still it could prove to be a picker’s market.