The bottom line: big retailers confirm or don't confirm inflation is on the horizon. Home Depot, Target, and WalMart report - all ending this week with an important speech from Fed Chairman Powell in Jackson Hole.
This Fed is data driven, and there are 30 more days to get hot inflation reports and job data. If labor stays strong and inflation starts to bite, don't expect a cut in September.
I'm a buyer if all of this causes a market disruption. Position accordingly.
Let's not bury the lead! I said it, "no Fed cut in September" - and you would have thought I said the world was ending. Simply put, the Fed is data driven, and any small bump in inflation will dash hopes. Plus, by what measure are financial conditions tight? Look at the NFCI from the Chicago Fed then let me know when it's actually tight. Now, back to the main body of the interview:
CSCO - mid single digit growth during the best backdrop in years? You have AI pushing up sales and that is all it can do? Don't tell me bedtime stories with the Splunk aquisition - but if that makes you feel better... notiable it's almost at all time highs - last seen in 2001. That is a long wait.
DE - we sold this week ahead of earnings, but the reality is the stock did well this year since 80% of the parts are sourced domestically - but the reality is forestry and construction customers are being hit by tariffs. you can execute perfectly, but if the customers pull back - you know the line: you can't escape the Macro!
DHI - I was dead in the water all year and all of a sudden it's beating the SP500 and up 30% in the last few months. Bottom line: investors can see future fed cuts (if they panic in September, I could buy more). Now it's about managing expectations between now and May, when we know Trump will install a dovish Fed Chair.
It's real simple: the best we can hope for is no trade embargo. China is our military advisory AND our third largest trading partner. They want advanced chip technology and we want rare earths. Neither side can go forward without the other. Like most things in life, there is not a one shot solution but a slow and constant effort to keep the peace.
Outside of that I was asked about interest rates. Let me be clear on how I see it, and how I am playing it. I don't see the Fed cutting anytime this year. Inflation is not 2%, unemployment has not fallen off a cliff, and we still do not have clear trade policy. Period. Add to that, we never had highly restrictive monetary policy in the first place. The market will have to live on the hope of a new Fed Chairman being installed by the Trump White House next May - it's less than a year away. And really, what would a 0.25% cut this year do? Not much. The market will live either way.
What is my big takeaway from the interview today? People are all bulled up on optimism due to strong earnings, the promise of higher productivity from AI, and nobody can see a problem on the horizon. Expect the markets to keep ripping higher until reality settles in when America gets a 15% across the board tax on imports. Will moderated growth cause valuations to drop on Mega Tech as smaller firms see renewed interest? Time will tell.
While stock and bond markets are closed - money never sleeps. I was asked my opinion on Fed Policy, Oil and the Iran Conflict. Let's dive in!
Fed Policy - The Fed should take the rest of the year off—and I think they will. While the market is pricing in some cuts later this year, Powell was very clear that he has to see size of the effects on tariffs before making a move. Don't fear! The current narrative is Treasury Secretary Bessent will take over next may with a quick path to cuts. A host asked if I thought the market could hold out by then. I said it all depends on the hard data, not sentiment.
OIL - Yes, oil spiked on the Iran conflict, but it’s right back to where it was in January! We’re at the high end of the normal range we had before the “Liberation Day” selloff. This isn’t a breakout. It’s a reset. We should be watching for demand destruction or surprise OPEC moves before we overreact.
Iran - Bottom line: a safer world is a more investable world. Two things can be true at once: many Americans are deeply troubled by the broader conflict in the region, but there is near-universal support for how Iran was handled by Israel by major European countries. The U.S. standing firm behind the actions and providing military support shows strength, and markets love certainty. I'm surprised that markets hav held up so well.
Nothing is better than being asked to share my vies on the Fed after a big meeting - what an honor! Maria give me a chance to get my ideas out there even when it's not in consensus with the mainstream narrative.
The bottom line: I love the Fed's position. They want to see hard data and not just bearish sentiment polls. They are clear employment is front and center.
As for earnings, 85% of firms have reported as of this interview and I was SHOCKED that we had so many CEOs give forward earnings - I even admitted I was wrong a month ago when I suggested very little forward earnings were expected - so nice to be wrong! Let's just see if we can get a few trade deals - there is nothing this bullish snapback from Liberation Day need more.
Lee Munson, President and CIO of Portfolio Wealth Advisors, breaks down why investor expectations are about to get challenged—from CEO silence this earnings season to a possible summer spike in inflation. He discusses how tariff uncertainty and Fed policy may shape the next move, and why he’s staying aggressive. Don't miss this sharp, no-spin market read for long-term investors.
Markets hate uncertainty, and with the White House changing their direction every few hours, it’s difficutlt for investors to want to buy. No buyers? Stocks drift lower.
So, let’s look at the facts. There is a plan, we just don’t like it. it’s called unilateral tariffs and policy changes the US is not used to. A different style is an understatement. We also have the chaos of DOGE, which is a real issue - but I want to focus on what moves stocks longer term - earnings and profits.
Depending on what analyst you ask, consensus is someplace around 1% decline in earnings growth for every 5% hike in tariffs. Do the math, take it off the low double digit earnings growth Wall Street is currently expecting. We still get high single digit, low double digit growth. At a 6-15% discount (this selloff depending on what asset class you are looking at in the US), the prices reflect tariffs. Interst rates also reflect possible summer inflation due to tariffs and higher prices. It’s baked in.
This is why I’m a buying. It’s not that I’m bullish, it’s that when investors are paralized by uncertainty and the weak players sell out and cash out - it’s a buying opportunity. If things are slightly less horrible than people expect, markets may have a positive reaction. And I’m buying at valuations that make sense given the tariffs and policies the White House is threatening the world with. Time will tell, but over the last 400 years of markes every past decline looks like an opportunity, and every future decline looks like a big unknown risk.
I was in NYC in mid February and Jared Bilkre and his partner in crime Sydnee Fried asked me to come down to the NYSE and do a live podcast. It was a tiny little studio on the second floor, but I don’t care, I got a full access traders pass to the NYSE!!! You bet I just went wandering around taking pictures and chatting people up. Eventually security gave me the “okay, it’s time to go now, whoever you are” but there is still nothing like being down on the floor. And yes, there are still real people doing trades and some tense moments, it’s just not as packed or busy as the old days.
As for what we covered, I was in a “let me tell you how the world works” mood and remember that this is for Yahoo! which has a younger Gen Z, millennial crowd. So I get a little more animated and definitely just say whatever is on my mind. Enjoy!
It was a Friday morning and Walmart had a less that enthusiastic earnings forecast the night before. First off, WMT tends to take a conservative view at the start of the year and gets progressively more optimistic as the year goes on - so I'm not convinced consumer spending is dead. But yes, every CEO in America has uncertainty about tariffs and immigration.
Second topic was all about rate cuts. I'm not really concerned about what Fed governor said what about how may cuts we will see this year. Nobody knows because it's 100% dependent on the data and we could see a summer inflation spike due to tariffs - or just the overall hot economy. While I'm not exactly in the camp that we could see a rate hike (could you imaging the markets reaction to that???), it's best to assume no cuts until employment really falls off a cliff or we see inflation under 3% for three to six months.
It was the day after Nvidia had the biggest single day loss in stock market history. Of course! 20% decline on the largest firm in the world, we shouldn't be surprised. I break down why AI is important to most stocks - it's all about increasing productivity and making AI models for less get the tech into corporate America's hands faster that expected. And while I agree with Maria that nobody is making an AI model for 6 million bucks - the point is, the price structure came down faster than expected. There will be winners and losers.
