Chris Konstantinos, RiverFront Investment Group Chief Investment Strategist, and Geetu Sharma, AlphasFuture LLC Founder and Investment Manager, join Yahoo Finance Live to discuss Fed interest rate hikes, inflation, new economic data, and Russia's grain and energy markets.

Video Transcript

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RACHELLE AKUFFO: And there you have it, your closing bell for this first trading day in August. Let's take a look at how the major indices fared. A choppy day, as Ines was mentioning there. We see the Dow losing about 45, 46 points there. We see the S&P also relatively flat, losing about a 1/3 of a percent. And the NASDAQ also relatively flat, losing about 21 points. But certainly, not the momentum that we saw to close out the month of July.

Well, let's break this down with our market panel. Let's bring in Chris Konstantinos, Chief Investment Strategist at RiverFront Investment Group, and Geetu Sharma, AlphasFuture Founder and Investment Manager. So, Geetu, I want to start with you. In this sort of climate, where markets are really digesting a lot of different data points and trying to manage their projections for a recession, how do you advise clients in this sort of environment?

GEETU SHARMA: I think-- thank you for having me-- the market is definitely very uncertain right now. We have interest rate risk, recession risk, and high inflation. And given what we've seen so far, it makes sense to be cautious in the portfolios and be very careful of what kind of risk we are taking. We definitely don't want to take a risk of high leverage, because if we do see interest rates going higher, it can have an impact on highly levered companies and make them-- impact their cash flows and ability to pay.

So we are advising our clients to focus on quality, quality defensives, quality growth, especially many of the stocks have-- are looking very attractive in the sell-off. And if the business model is still resilient and cash flows are strong, financial flexibility is high, that's the place we think investors should be.