SANTA MONICA, Calif. — Toss a bucket of cold water on the stock market rally.
“We remain cautious in terms of where to deploy incremental risk assets. Our message has not been to liquidate your portfolio and go to cash. Our message has been, right now, there’s great uncertainty. We’ve seen soft data but not a lot of hard data yet,” Citi head of wealth Andy Sieg told Yahoo Finance at the Milken Institute Global Conference on Tuesday.
Sieg noted that there have been “as many downward [earnings] revisions as we’ve seen in a long, long time.” His team is looking for additional information before taking on more risk assets.
“We generally think the market’s going to remain in a trading range here over the next few months until some of these things become more visible,” he added.
Sieg oversees a global wealth business at Citi with more than $1 trillion in client assets and 13,000 employees.
Strong first quarter earnings reports from Meta (META), Alphabet (GOOGL), and Microsoft (MSFT) in the past two weeks have powered the tech-heavy Nasdaq Composite (^IXIC) to a 13.5% gain over the past month. That’s despite the likes of Apple (AAPL) warning that the Trump tariffs would hit its cost base to the tune of $900 million.
On Monday, the S&P 500 snapped a nine-day winning streak. It marked the longest winning streak for stocks dating back to 2004. The Dow Jones Industrial Average (^DJI) also ended a nine-day winning streak, its best since 2023.
All three major indexes are in the negative for the year, however, with the Nasdaq leading with an 8.5% drop.
“I think there’s two reasons for [the rally],” Nuveen chief investment officer Saira Malik told Yahoo Finance at the Milken Institute Global Conference. “No. 1, when markets tend to go down quickly, they actually recover quickly. So history did repeat itself. And No. 2, I think ‘Liberation Day’ was peak tariff pain, and we’ve seen a lot of negotiating since then, and I think markets are starting to appreciate that.”
As for Sieg’s wealth business at Citi, it’s coming off a strong first quarter thanks to a strong market prior to April’s “Liberation Day.” The division posted revenue of $2.1 billion, leading to a 30% gain in net interest income. Client investment assets were aided by $16.5 billion in net new investment assets, bringing the total to $595 billion. Operating expenses were flat year over year.
Whether Sieg can keep the momentum going amid heightened market volatility is up for debate. The backdrop is such that wealthy investors may think twice before allocating more funds to private and public markets.
That influx of money to wealth management firms has been a driver of asset valuations. If that stalls out, the global asset management industry may see some challenges.
A new report from consulting firm BCG revealed that more than 70% of the industry’s $58 billion in revenue growth in 2024 was fueled by market performance rather than investor flows. A slowdown on both fronts could result in a double whammy for the industry.
Read more about what business leaders and top political figures are saying at the 2025 Milken Institute Global Conference:
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Treasury Secretary Scott Bessent aims to soothe nerves of international investors
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Bill Ackman: Trump tariffs on China should be paused and taken down
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Private equity titan Robert Smith: Tech stocks are still the place to be
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Apollo CEO: I don’t agree with Warren Buffett on tariffs
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Mattel CEO on Trump tariffs: We’ll raise prices and shift where we produce
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram and on LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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