BREAKING NEWS PG&E announces possible weekend Public Safety Power Shutoff for three counties Full Story
BREAKING NEWS Bear Fire: More evacuation orders reduced to warnings Full Story
SEVERE WX : Fire Weather Watch View Alerts

Equity strategist: Volatility is the new normal

Savita Subramanian, Bank of America's head of US equity and quantitative strategy, tells CNN's Alison Kosik that investors should expect swings in the market and not trade on emotional fears.

Posted: Dec 7, 2018 3:25 AM
Updated: Dec 7, 2018 3:50 AM

Investors should start getting used to wild market swings.

That's the advice of Savita Subramanian, Bank of America's head of US equity and quantitative strategy.

"Volatility is the new normal," Subramanian told CNN business correspondent Alison Kosik on "Markets Now" on Thursday. "We need to just prepare ourselves for volatile markets."

Most recently, the Dow has been reacting to news on the trade war between China and the United States.

The arrest of Huawei CFO Meng Wanzhou in Canada at the request of the United States renewed doubts about the US-China truce and sent the Dow plunging on Thursday. Before that, stocks rallied on news of a truce and then fell as uncertainty returned.

But even if trade tensions ease, Subramanian expects the markets to continue to swing over the next few years.

"One of the most reliable predictors of market volatility is the yield curve," she explained.

The yield curve is the gap between short and long-term Treasury rates, an metric that can shows investors' sentiment about economic performance in the future. The yield curve has been flattening, a signal of concern that the US economy could enter recession in the coming years.

Though Subramanian doesn't necessarily see a recession on the horizon, she sees the flattening as "a very good predictor that volatility is likely to remain."

Investors shouldn't take the warning as a recommendation to sell, Subramanian noted.

"The worst thing to do in a volatile market environment is to sell on emotion or panic sell," she said. "That is the route to under-performance."

Investors should be picky about their stocks and hold on to them. Software makers, financial firms, utilities and health care companies are a good bet, she said.

"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.

You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 799516

Reported Deaths: 15393
CountyConfirmedDeaths
Los Angeles2644146455
Riverside578831179
San Bernardino53359918
Orange526221182
San Diego45596773
Kern31712360
Fresno28019362
Sacramento21872399
Alameda20951397
Santa Clara20756304
San Joaquin20126437
Stanislaus16436345
Contra Costa16238204
Tulare15829259
Ventura12591146
Imperial11741317
San Francisco1094699
San Mateo9714144
Monterey970170
Santa Barbara8973113
Merced8828140
Kings756977
Sonoma7262120
Marin6641114
Solano627863
Madera445865
Placer353544
San Luis Obispo347929
Butte279043
Yolo278255
Santa Cruz22949
Sutter168911
Napa165313
San Benito132111
Yuba11367
El Dorado10884
Mendocino89418
Shasta75916
Lassen7360
Glenn5713
Tehama5334
Lake53011
Nevada5286
Colusa5246
Humboldt4967
Calaveras31414
Amador29616
Tuolumne2274
Inyo18715
Mono1652
Siskiyou1630
Del Norte1381
Mariposa752
Plumas500
Modoc250
Trinity150
Sierra60
Alpine20
Unassigned00
Chico
Clear
66° wxIcon
Hi: 84° Lo: 66°
Feels Like: 66°
Oroville
Clear
65° wxIcon
Hi: 84° Lo: 62°
Feels Like: 65°
Paradise
Clear
66° wxIcon
Hi: 78° Lo: 62°
Feels Like: 66°
Chester
Clear
39° wxIcon
Hi: 74° Lo: 48°
Feels Like: 39°
Red Bluff
Broken Clouds
67° wxIcon
Hi: 86° Lo: 64°
Feels Like: 67°
Willows
Clear
66° wxIcon
Hi: 86° Lo: 61°
Feels Like: 66°
A weak disturbance passed over northern California early this morning, but as expected, it only brought some gusty wind, a few clouds, slightly cooler weather, and no rain. Much bigger changes to our weather will occur this weekend.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events