Talkington: a zero return this year would still be a wonderful return

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Rising rates and quantitative tightening are likely to weigh on the “majority” of U.S. equities this year, says Requisite Capital Management’s Bryn Talkington.

Talkington’s comments on CNBC’s ‘Halftime Report’

Talkington sees 2022 as the year of the Fed and expects it to be rather challenging to make money this year. Speaking with CNBC’s Scott Wapner on “Halftime Report”, she said:

Economy is really strong. So, that gives Fed a tremendous cover to raise rates and start quantitative tightening. That’s not good for the majority of equities. If the market could the year at a zero return, I still think that would be a wonderful return.

The U.S. central bank has indicated plans of aggressively raising rates in 2022 and reducing the size of its balance sheet by $95 billion a month, starting from next month.

Where does she stand with the big cap tech?

The money manager does not see a place for the mega cap technology stocks in the current macroeconomic environment. The Nasdaq 100 index has pared roughly 8.0% in less than two weeks.

Every once in a while, people say big cap tech can be used as a cash surrogate or low risk. I’ve never even remotely understood that. If you want to make money this year, you need to do covered calls, be defensive, be in certain commodities.

Just days ago, Ritholtz’ Josh Brown also said the quantitative tightening will be a negative catalyst for the U.S. stock market.

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