Uncertainty over eurozone should strengthen dollar: Solaris

Tim Ghriskey, Chief Investment Officer of Solaris Asset Management spoke about the US economy, upcoming quarterly results, gross domestic product (GDP) print and outlook of eurozone.

Below is the transcript of Tim Ghriskey\\'s interview with Surabhi Upadhyay on CNBC-TV18. Q: Lots of Greek drama playing out but market is kind of settling down, it is not as bad, what do you make of it? A: Little choppy day, I think the markets are settling in here. The data we received this morning showed that GDP did decline in Q1 but to a lesser extent than the other regional estimates so just a very slight decline in GDP in Q1 primarily due to the weather that we had here in the US. The GDP also showed a very little inflation, that is certainly good news. The markets are focusing on earnings here for Q2. We are getting to the end of Q2 when preannouncements will begin to start for a number of companies. If those preannouncements are negative that could drag the market down a bit here but in general the market while it has been choppy and we haven’t seen great gains, the trend is positive and remains very much of a goldilocks economy although the hand of the Fed certainly is hanging over all of us.

Q: I want to talk to you also about the dollar and what is happening in bonds and how do you read it? We haven’t seen too much of volatility despite all that Greek news coming in, the possibility of a default, not too far away from the end of June, what is your reading on the dollar and if at all we move towards more uncertainty in the Eurozone, what is that going to do for the dollar? A: Certainly, more uncertainty should lead to strengthening of the dollar as well as the increase in interest rates should lead to strengthening of the dollar. While we certainly saw the dollar move significantly last year and early March this year, we have seen the dollar sell off a bit here will moderate, stabilise and we would expect the dollar to regain strength as we move into an interest rate hiking cycle, there is just too much uncertainty about what the Fed is going to do, the Fed doesn’t know what it is going to do and despite their attempts to provide transparency, there is just a nagging uncertainty about whether the Fed will overstep and cause a global contraction in growth. So we do expect the dollar to strengthen in that type of environment. Q: Talking about equities once again, Nasdaq all time highs of course not today but over the last couple of sessions, would you buy more technology? A: We like technology certainly. I think this is an environment, a market to be selective across all asset classes and active managers have done well in this environment versus the broad indexes. So this to us very much is an active manager type of market and you need to be selective in terms of what you own. As you head into a higher rate environment, certainly financials become a more interesting asset class than they have been and perhaps some capital flows out of this strongest sectors technology and healthcare as we move towards a higher rate environment.