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On in the metals because a lot of people are pointing to this and saying the dollar's collapsing and metals are soaring and should they feel good about owning stocks in this environment or you hold your nose into I mean like can you kind of just unpack for us what you think is going on here?
Um yeah, I mean I think metals uh is proving to be a a real genuine asset class because I think for many years maybe people thought only gold bags should own gold but now especially the last three years metals have I think proven to be a bit of a juggernaut and it's hard to tell how much of it is geopolitical uncertainty, dollar and currency weakness versus dovish central banks but maybe if it's all three uh that explains why gold's done so well. I don't think that those are bad for equities because if this is anticipating dollar weakness or more dovish moves by central banks, then it's good for asset prices. So, I almost think the goal move could be sort of a glimpse into sort of risk appetite growing for stocks as a result of things like dollar weakness and everything else, right? This idea that you go into more riskier assets or ones that are diversified away from there.
If you're going to look at that though with the dollar weakness intact, Kelly also mentioned the mag seven stocks and the slew of earnings we've got coming up. Weaker dollar has typically in the past from a conventional wisdom standpoint meant better for large multinational companies. It helps their overall revenue profile especially outside the US. Is that still something that we want to look towards as a true tailwind for this market other than just saying maybe risk assets are in vogue and we just want to play the AI trade adnauseium for the rest of this year?
Um yeah, I mean in some ways I I think one of the big sort of real stories this year is earnings growth is accelerating and that was because of onshoring um the tariff headwinds disappearing but now if we have dollar weakness I think it puts more upside to the earning story. Uh investors aren't necessarily paying for that right now because multiples have been compressing but I I think it really helps anchor stocks. So between now and the end of the year, I think there can be a lot of reasons for speed bumps, but I think as we exit the year, the earning story is anchoring I'd say upside to our 7,700 target.
>> Yeah. Which is I mean we we're starting to look at we've seen one round number after another falling for gold and the likes and you wonder if we're finally going to get back to talking about S&P 7000 and Dow 50k and all of that. Um but so you're not worried there's going to be, you know, kind of landmines hiding in the earnings reports or anything like that? Does the government shutdown matter? I mean, we we just had one at the end of the year and and yet here we are with equities.
>> Yeah. Uh in the short term, of course, shutdowns create uncertainty and we just like as you said, went through the longest one. Those have all proven to be buying opportunities, but it's like it's hard to ignore the fact that gold and silver are like sucking oxygen out of everything. Yes. Right.
>> Yeah. So, what what is what do you do with I mean Carter worth for what it's worth? I want to know what all the technicians what everyone thinks about this. He's now put out a note and saying sell all of it. the silver, right? Just sell all of it. I mean, it's up.
>> It's parabolic. It's parabolic. It's just in the last two to three months.
>> Yeah. Yeah. And as you know, like when you look at extensions like this, it's dangerous to fade it because you don't know how long it will go. But you're right, a parabolic move high marks the end of the move, not the beginning of the move. So, it it's a good question of like timing, but it sure seems like commodities, especially precious metals, needs to have a place in people's portfolios.
If you look at the way that the earnings story is going to shape up since you brought it up, if we want to look towards this season, we we've kind of established the fact that we're maybe in this transition phase. This earnings season is going to be important but maybe not as important given the future macro tailwinds that the market may have. In your mind, are there certain key parts of the market that you should be more exposed to? You had in the past talked about banks and financials being there. We saw the run last year and since the earnings season has started, those banks have kind of sold the news, so to speak. So, are the banks still one of those places you want to be?
>> Um, yeah. Uh, from Fund Strat's perspective, when we did our outlook, our top sector picks this year would be energy and basic materials, and that was from early December. Uh, we still like the mag 7 and financials and industrials and small caps. I think the financials are being buffeted because the White House is choosing winners and losers and and right now they want to reduce the burden on consumers by potentially capping credit card rates and maybe making it harder for institutional buying of homes. So I think this is hurting the banks to an extent but the bank fundamentals are so good and I think tokenization and so blockchain are really big productivity drivers and AI is a huge tailwind that I I think banks are in the process of rerating more like tech stocks over time. So I mean I would use any of the weakness to buy them.
Exciting times go Tom stay right there, don't move. We're going to see you again in just a moment. Before we head to break, just want to also give you a quick market alert on Intel. The shares are now down about 20% since last Friday. It's only its worst two-day drop, by the way, since August of 24. Uh they issued that disappointing guidance, warned about supply shortages. A lot of people were questioning kind of what happened in the execution front for them last year. The stock is still on track for a positive month, and it has also doubled in value over the past year, but those losses now, Dom, are becoming pretty significant.
All right. Now, just exp sort of explain or unpack this for us. um what crypto continues to experience because we talked about this before the October 10th reset and all of that. I don't know if that applies to Ether and kind of where it goes from here.
>> Uh yeah, I I think there we're still feeling the ripple effects because uh on October 10th there was a massive deleveraging. It crippled many of the key players in industry, some exchanges and market makers. And so the industry is sort of limping along, but the fundamentals have improved a lot. And I think even Davos really amplified that that Wall Street is now starting to view traditional finance and tokenization and blockchains as one business that that's converging and it's not just Larry Frink but it's the UBS CEO, Standard Charter CEO, Euro Clear, many really Wall Street sort of is on board. Um I think the precious metal move has sucked a lot of the oxygen out of the room. So, I think crypto prices aren't quite keeping up with fundamentals, but as you know, when fundamentals go up and to the right, prices eventually follow.
Does that though mean that there is a a a certain degree of relative cannibalism between regular gold and digital gold, so to speak? I'm just using that as a kind of a metaphor, an analogy right now. But if you're saying that the move up in silver and gold is kind of drawing a lot of that money or interest away from digital gold and digital silver so to speak, does that then mean that the investor bases that they share is growing and so they make that distinction from an allocation perspective?
>> Yeah. And I think part of it is mechanical like you know when gold and silver rise and let's say folks are using uh margin or options then then they're using capacity that could be used to buy other risk assets whether it's mag 7 or cryptocurrencies but because crypto inherently has delevered then that's going to be felt more in the crypto space. So I think crypto which should be going up on like weaker dollar easing Fed it doesn't have the leverage sort of tailwind because the industry delevered and as long as gold and silver are rising then there's a FOMO into buying that instead of crypto. But of course that is just a leading indicator, right? Because when gold and silver take a break then and in the past that would lead to a Bitcoin and Ethereum surge afterwards.