(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Portfolio managers are watching the transition taking place in the markets with the election, interest rate movements and a broadening out of participation among stocks. Also, strategists and traders are weighing the risk of the rising dollar to earnings. Worldwide Exchange Word of the Day: Transition Kevin Mahn of Hennion and Walsh says the country is in transition following the election and so is the investor landscape. “The other area that is transitioning is the stock market rally, beyond the Magnificent 7 now into the non-Magnificent 493 stocks,” said Mahn on Worldwide Exchange. He added: “Last year those Mag 7 stocks accounted for 62% of the total return of the S & P 500. Through the first half of this year, still 59%. But here is the good news in the third quarter of this year they only accounted for 9% of the total return of the stock market. That’s good. It’s healthy for the continuation of this bull market. Rising Dollar impact on Q4 and 2025 The U.S. dollar’s more than 2.5% rise since election day is starting to create concerns about a potential impact on Q4 and 2025 earnings according to a number of traders and strategists. “It should give investors in multi-national companies, which by definition is the S & P 500, some pause and some concern, but it is very very difficult to model. I think for now, for better or worse a lot of investors are saying ‘eh’ we will worry about it when it is time to worry about it,” said Steve Sosnick, chief strategist at Interactive Brokers. The ICE U.S. Dollar index is currently at a higher level than it was in June of 2022 when Microsoft warned of a stronger dollar impact to earnings. Other multi-national companies including Johnson and Johnson, Estee Lauder and Amazon also warned of the dollar impact that year. According to Evercore ISI, S & P 500 companies get approximately 30% of earnings from outside the United States. Making the ‘wise choice” on investing in China President Joe Biden and Chinese President XI Jinping met at the annual Asia-Pacific Economic Cooperation summit on Saturday. During the talk, Xi said a stable China-U.S. relationship was critical and also advised the incoming Trump administration to “Make the wise choice”. Xi added without naming the President-elect, that Trump should, “Keep exploring the right way for two major countries to get along well with each other.” “I think the choices are already made to a certain extend,” said Ross Mayfield Investment Strategist for Baird Private Wealth Management on Worldwide Exchange. Mayfield added, he expects tariffs on China to be larger, broader and more targeted: “As far as investing there, the stock market has been extremely volatile and not a big total return over the last 20 or 30 years.” Mahn echoed some of the same sentiment on China: “I’m very dubious about investing in China as a portfolio manager. I see better opportunities in the U.S. and other international developed markets. I like building globally diversified portfolio but China is not a part of that mix for me right now.” Chart of the day: Howmet Aerospace Mahn said Howmet Aerospace (HWM) is one of his top picks in the Defense sector. He believe the incoming Trump administration will boost defense spending overall and be a tailwind for Howmet which manufactures metal products for the defense, aerospace and and space industries. Mahn believes the incoming Trump administration will boost defense spending overall and be a tailwind for Howmet which manufactures metal products for the defense, aerospace and and space industries.
