Three strategists who appeared on CNBC's "Squawk Box" on Monday discussed how they're positioning clients.
Sandi Bragar, managing director of Aspiriant, is investing in quality companies to hedge volatility.
"Our equity positions are in the quality stocks — so companies with really strong balance sheets, a lot of cash on the balance sheet, little or no debt leverage and a lot of sales happening in good economic times and bad. So that's why we like Apple and Microsoft. We get those quality players in there that we think will help bolster volatility and will be poised to help out if you do see inflation coming, which might be on the longer-term horizon, based on what we're seeing."
Phil Orlando, chief equity market strategist at Federated Hermes, is watching the growth-value divergence.
"We understand why growth has done so well from this March 23 bottom. Technology and health care have been phenomenal performers, but you're at a point now where large-cap growth has outperformed large-cap value by 37 percentage points since the bottom of the market on March 23. So the question is what's the catalyst that's going to get this to start to reverse? When is the value going to start to see some love? And from our perspective, it may be the concept that the recession ends here in the second quarter. Now the second-quarter earnings right now have been better than expected, estimates for third-quarter GDP are moving up, we've seen some numbers up around 20% to 25%, which are phenomenal. So if and when the market begins to sense that the recession has ended here in the second quarter and that we're going to get back into a positive growth mode here in the third quarter, maybe that'll be the catalyst to finally get this value rotation going."
Stephanie Link, chief investment strategist at Hightower, says one big question is hanging over the market.
"We have this push-pull going on between the economic recovery and the number of new virus cases and any progress on vaccines, and that sort of thing, and that's what we're going for. And that's just the life that we live right now, but it's against a very favorable liquidity backdrop with … money supply up 25% year over year and more is coming. So to me, last week I was very encouraged by the economic data, the broad-based economic data that we got. We got industrial production, retail sales, housing, across the board things are getting better. The big question is, do these new closures from certain states, does it actually dampen a recovery, and that's the big question mark."