Francis Gannon in The New York Times: Is the Market Righting Itself?
article 08-18-2015

Francis Gannon in The New York Times: Is the Market Righting Itself?

While a shift in investor sentiment from optimism to doubt could lead to a major sell-off once rates begin to rise, Co-CIO Francis Gannon believes this reversal in market behavior could bode well for active stock pickers.


"The laws of finance have been suspended for quite some time," said Co-CIO Francis Gannon in a recent article published in The New York Times. "Now this is starting to crack. I think we are on a road to normalization," he added.

The article, written by Gretchen Morgenson and published digitally as "Doubt Starts Chipping Away at the Market's Mind-Set" on August 14, 2015 (a version under a different headline appeared in print on August 16, 2015), cites examples of how investor sentiment may be shifting from optimism to doubt, including negative reactions to Apple, Keurig Green Mountain, and China's devaluation—stock market news which might have otherwise been met favorably or with indifference.

According to the article, a reverse in sentiment—particularly from those who invested with borrowed money and those who entered the equity market in order to satisfy a hunger for yield, a consequence of Fed intervention—could lead investors to sell-off quickly when interest rates begin returning to their historical norm.

"This particular cycle has been affected by the actions of the Fed and the many unintended consequences of what the Fed has done," said Francis. "We think we are at a point where that is beginning to change."

Francis Gannon has 22 years of investment industry experience, eight of which at Royce.

Read the full article at

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