The recent selloff in global equities hit only the “high-flying” stocks and doesn’t indicate a looming bear market, Liz Ann Sonders, chief investment strategist at Charles Schwab Corp., said.
“We have more of an internal correction among high-flying stocks,” Sonders said in a Bloomberg TV interview. “There are some high flyers within small segments of the market but it is neither infecting the market from a valuation perspective nor likely to bring the entire thing down.”
A rotation from bonds to stocks is also unlikely, said New York-based Sonders.
“We have not been a big buyer of the thesis of a great rotation” from bonds into stocks, she said. “There was supposedly going to be this mass exodus out of bonds. The pendulum may have actually swung away too far from the public equity markets to every variety of alternatives, with big fees and less liquidity, and I think that’s where you might see a little bit of a rotation.”