‘The Fed has been really clear about their intentions’: Defiance ETFs CIO

Sylvia Jablonski, Chief Investment Officer at Defiance ETFs, joins Yahoo Finance Live to discuss the outlook on the market following April’s jobs report.

Video transcript

ALEXIS CHRISTOFOROUS: But let's get back to the markets into this jobs report, shall we, with Sylvia Jablonski, chief investment officer at Defiance ETFs. Sylvia, we're not going to ask you what you think of Doge right now and Elon Musk. I want to ask you about this jobs report and how the market is reacting. Do you think that stocks are getting ahead of themselves? Are investors celebrating prematurely, I guess, in thinking that today's report basically cements the deal with the Fed, that they're going to keep interest rates lower for longer?

SYLVIA JABLONSKI: Well, you know, it's really interesting because so much of the market these days is just moving on the daily news, right? So I think the jobs number today, that 266,000, that miss versus a million, and looking at the 10-year, which fell below 1.5 for a little while, led investors back to the growth in the tech stocks just overnight. Not a whole lot really changed, right? I think that the Fed has been really clear about their intentions. They're still saying that they're not really thinking about thinking about it. They're going to keep up with asset prices and give ample notice before they cut it off.

But the sentiment of this is that the Fed came out months and months ago and had said that one of the signals to raise rates or to stop purchases will be full employment and that they'll have a very high bar set for what they view that number to be. And it was probably around a 3% level. So we're at 6.1% now. Today's number didn't really bring us down. So I would assume that it will be sort of par for the course. We'll keep seeing fiscal stimulus. We'll keep seeing supportive monetary policy. And that actually bodes well for growth again, which pulled back in the last couple of days. So, never count the FAANG out.

KRISTIN MYERS: So you say that you're actually looking for deals. Where do you think they are, or what are they? Where should folks be looking for, at least in growth? Where are some of those opportunities? Because valuations right now, prices are pretty high.

SYLVIA JABLONSKI: They're pretty high, but they're not at all-time highs. So if I think about what happens or what's happened over the last decade, that period of time from May to October, you know, they call it May, go away. And you sort of see suppressed stock prices in the market. So I think that I'll be looking for opportunities to buy in coming months. And I think this week was actually a good opportunity to buy in some of the names like Apple and Alphabet and Facebook that pulled back. So they're still off of all-time highs. They haven't sort of recovered since that March low that we saw hit earlier this week.

So I think that if you went all the way the other way and rotated to straight value, and you have some gains to take there, or else you have cash on the sidelines, maybe you go back to the barbell approach and add in growth, right? So for the last decade, we've been saying add in a little bit of a value, particularly as we reopen, and airlines, casinos, cruises, things like that look interesting.

But now growth is, I think, a value type of play. These are quality companies with strong balance sheets-- absolutely crushed earnings. I mean, you can't argue with the fact that these companies are profitable. And their outlook, even with the headwinds that they describe, is just so positive. So I think that on the down days, it would behoove you to take a look at some of those big players there, the Apples, Alphabets, Googles, Facebooks, and so on.

ALEXIS CHRISTOFOROUS: All right, we're going to leave it there. Sylvia Jablonski, chief investment officer at Defiance ETFs, thanks for joining us.