
Fed Will End 'Summer Camp Romance' Rally, CFA Arone Tells CNBC
NEW YORK (TheStreet) -- When the Federal Reserve increases interest rates, the recent "summer camp romance" market rally will end, State Street Global Advisors managing directorMichael Arone predicted on CNBC's "Squawk on the Street" Monday.
"I do think we remain in this cycle where risk assets do very well, measures of volatility decline and then the Fed begins to signal that they are going to have an interest rate hike," Arone said.
If and when the Fed votes to increase interest rates, the recent market rally led by better-than-expected company earnings, will face a headwind, he continued.
"I've been calling this kind of a summer-camp-romance rally and we remember all those romances at summer camp. They were exciting, they were hot, they were thrilling but when summer camp ended, they ended. I think what is likely to happen is summer turns to fall, this particular rally will begin to slow down," Arone stated.
Arone does expect the S&P 500 to continue to perform consistently throughout the year.
"In that you'll get the dividends, you'll get whatever earnings growth it can generate and you'll get very little multiple expansion," he explained.
The S&P is slipping by 0.53% to $11.53, the Dow Jones is lower by 0.49% to $91.08 and the NASDAQ is falling by 0.24% to $12.25 late this morning.










