The Big Takeaway:
Successful investing is about identifying trends before they emerge and positioning portfolios to be ready for growth. While that’s a basic concept, there’s always fresh uncertainty – like inflation, interest rates, policy changes and more that make investing challenging. Regions Bank’s Chief Investment Officer, Alan McKnight, is experienced at cutting through the noise and assessing the motions of the markets to help people stay on track with their investment strategy. He recently shared some insights recently with Bloomberg and CNBC.
The Investors’ View: Driving Success in the New Economy
Bloomberg is hosting a series of events across the country to highlight business and investing opportunities. McKnight joined a panel of investors and portfolio managers in Atlanta recently to share sectors, strategies, innovations and regulatory changes that are top of mind.
“We are optimistic on the U.S. market, especially from a free-cash-flow yield perspective, and in spite of high valuations, we see it as the best house in a bad neighborhood of equities across the board,” McKnight said. “Yes, you may see lower valuations in Europe and parts of Asia, but the bottom line is we support higher valuations for a reason. We think both large-cap stocks and mid-cap stocks can do well.”
McKnight highlighted key sectors of the economy poised for growth. Those include:
- Communications Services: “Despite the rally last year and the year before, we think communications services will continue to do well,” McKnight shared.
- Financial Services: “We like financial services, especially with the deregulation play we are seeing with a new administration,” McKnight said. “There will be more discussion around what deregulation looks like moving forward, but it should free up some capital.”
- Industrial Services: “If you think about the broad global infrastructure spend, it is not just on the technology side, but also on the old sector of industrials, like manufacturing and mining. We think there is opportunity there,” McKnight concluded.
This is the third consecutive year Regions was invited to share insights with Bloomberg. Previous events focused on automation and artificial intelligence (AI), and both topics were front-and-center at this year’s event, especially on the heels of DeepSeek launching in the AI space, creating volatility in the markets and causing some concern for investors.
“DeepSeek reframed the AI conversation and moved it from ‘it’s going to cost $75 billion to $6 million,’ and I believe the cost will end up somewhere in the middle,” McKnight told the Bloomberg audience. “The real benefit is how AI will impact productivity at the corporate level. Corporate leaders are looking at AI now and recognizing they may be able to implement solutions for less than originally thought.”
Emerging Markets
With tariffs top of mind for many business leaders and investors, McKnight shared his thoughts on emerging markets and what investors are exploring.
“You really get this tale of two cities when you think about what is happening in China versus India, where the growth story is more services driven verses infrastructure manufacturing,” McKnight told attendees. “We look more to a country like India where we believe you can generate higher growth with fewer regulatory tariff issues.”
Further, in a recent discussion with CNBC’s “Money Movers,” McKnight said portfolio diversification among developed and emerging markets is important.
“We are big advocates for diversifying, but it has been tough over the last few years with European equities and global equities underperforming in the U.S.,” McKnight commented. “If you look at the start of 2025, we see value there. These equities are trading at a discount compared to the S&P 500, and while we think the U.S. will benefit from exceptionalism and more dollars moving forward, it is important to have that diversified portfolio and allocate to both developed markets and emerging markets.”
McKnight regularly speaks with national and local media to provide commentary on the markets and the economy. Additionally, the team in Regions Wealth Management provides a weekly market outlook and monthly investment strategy outlook. Upcoming media interviews for McKnight are below.
- March 17 Fox Business—The Claman Countdown
- March 18 CNBC–Money Movers
- April 8 CNBC—Worldwide Exchange
- April 14 Sirius XM-The Business Briefing
Investing in securities involves risk, including possible loss of principal. The commentary and opinions expressed are intended only for informational purposes, and are not formal or binding opinions of Regions Bank, its parent company Regions Financial Corporation, or its subsidiaries. This content is solely for information and educational purposes, and should not be construed as an offer or solicitation to purchase any security, the recommendation of any particular security or strategy or a complete analysis of any security, company or industry or constitutes tax, accounting or legal advice. Information is based on sources believed to be reliable but is not guaranteed as to accuracy. Commentary and opinions provided reflect the judgment of the Speaker(s) as of the date of the presentation and are subject to change without notice. Statements may contain forward-looking statements based upon the reasonable expectations, estimates, projections and assumptions of the Speaker(s), but forward-looking statements are not guarantees of future performance and involve risks and uncertainties, which are difficult to predict. Investment ideas and strategies presented may not be suitable for all investors. No responsibility or liability is assumed for any loss that may directly or indirectly result from use of information, commentary or opinions. Only bank deposits are FDIC insured.
