On today's episode of Catalysts, Co-hosts Seana Smith and Madison Mills dig into this week's market volatility, from jobless claims data to the yen carry trade unwinding. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are reversing some of the gains made in Thursday's trading session as volatility rocks the market. Edward Jones senior investment strategist Mona Mahajan explains, "Markets have certainly calmed much more meaningfully over the last couple of days than we saw Monday and Tuesday of this week even... We've seen this week alone the jobless claim figures that came in below expectations provided a little comfort to the market that is really looking for direction on a couple of things. One, is the US labor market headed towards some sort of meaningful collapse or downside, and two, is the broader economy headed towards a downturn as well? And I think for us, both of the answers to both of those questions are no." The tech sector has been particularly rocked by market volatility this week, yet Goldman Sachs Asset Management fundamental equity managing director Luke Barrs still sees opportunity. "Selectively, there's great opportunity across the broad market, but specifically in tech as well. There are some transformational themes that are coming through that are driving earnings," he explains. He adds, "When we come to technology, what is very apparent is not just the macroeconomic picture, but also the fact that people want to see... evidence that that gen AI trade is actually driving positive outcomes." A global market sell-off occurred on Monday after the Bank of Japan hiked interest rates, which unwinded the yen carry trade (JPY=X). TD Securities global head of FX and EM strategy Mark McCormick believes that the carry trade unwind isn't over, explaining, "The structural nature of the carry trade is that for pretty much around the last decade, Japanese investors have put their money, mostly pension funds, which accounts for about 80% of GDP in other markets. So the assets that they're tracking in other markets are actually a big form of the carry trade." Some retail investors used the market sell-off as a buying opportunity. IG Group North America CEO JJ Kinahan notes, "Every crisis... we've had over the last five years, where retail traders tend to start are two technology names, Apple (AAPL) and Microsoft (MSFT)." He adds that "Apple and Microsoft are going to be names that retail trades significantly anyways, but made up a larger percentage of trading on Monday and Tuesday, for sure, as people were looking for places to go buy." For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Melanie Riehl
