Transcription
5% GDP growth, inflation fading, rate cuts on the table, Wall Street is buzzing, Washington is smiling, and some are calling it economic nirvana. But is this the real deal or just a perfect moment in time? Welcome back to Navagar Market Buzz.
[music] >> [music] >> Dad, congratulations for calling 5% GDP growth on Maria's show.
>> They're also entering the new year, which is expected to be strong. What is your assessment of the macro story? How do you want to be invested in 2026, Louie?
>> Well, we're going to hit uh 5% GDP growth. Okay.
>> Are you serious?
>> Yeah. Well, we're running 35 to 38 now, but they're going to be revising it up because the trade numbers, the trade deficit's the lowest in 5 years. The exports the second highest ever recorded with low oil prices. So, that's going to big upward revisions. Obviously, a lot of the growth was onshoring, but even uh and and the data centers, but u if you look at the data centers, their order backlogs uh are up 20% quarter quarter. So, we're going to enter the new year with just uh we're going to hit 5% GDP growth. And it's not inflationary. There's deflationary forces all around the world. We import deflation from China. [snorts] Real estate prices are still very soft. Rentals are down the last four months. We want to see what the owner's equivalent rent is and the CPI tomorrow. But I I I think we are getting close to deflation and every economist is trying to fight that. So I we got to lower rates a lot.
>> I got to underline what you just said. You're expecting the GDP to show 5% growth. That is a big deal, Louie. If we see 5% growth in 2026, you got to expect that markets react to that as well, right?
>> Oh, yeah. Yeah. And uh what President Trump has to do, he has to >> cheer everybody up. He has to run around. And you know, in the State of the Union, he may offer $2,000 to low and middle income people from the tariffs. Um but they have a great economic team. Scott uh Scott Bessett is phenomenal. [snorts] I love Howard Lutnik. I know him personally and Kevin Hasser is great. So, I mean, we just have three great cheerleaders for America. It's just time to to be happy and and and celebrate what what >> she repeated that prediction on Jesse Waters just ahead of President Trump's address. When you heard the president say the best is yet to come, did you feel that the data is finally caught up with your outlook?
>> Well, uh this is a very interesting conundrum we're in. I have noticed the the news media is incredibly negative and it's probably because the midterm elections are coming up and they probably don't want to give any credit to President Trump for his economic policies. But uh the truth of the matter is you can't have $18 trillion of onshoring and not have it have a positive impact on America. So yeah, I'm extremely bullish. Obviously the Fed is now joining the party, continue to cut rates. So we have a lot to look forward to in the new year. Some in the media are suggesting that the CPI report was missing key details. Do they have a legitimate argument or is this just a narrative driven skeptism?
>> I think it's narrative driven, but in their defense, there's a Bureau of Labor Statistics report in the CPI that you're showing now and it shows that some categories for October, November were blank. So what they're insinuating is they didn't have the data, so they didn't count it. So therefore, inflation fell. So that's an interesting insinuation. The problem is we showed on last week's episode of Market Buzz how rents have fallen for four straight months and the fifth month it was flat. We showed that housing prices have peaked out. So there is deflation out there in housing and the housing inflation was largely causing the C CPI to jump. Of course, we have the lowest oil prices in 5 years. That's deflationary and uh we're importing deflation from China. So there's just no uh inflationary pressure right now. And I think the central bankers better be careful because if deflation shows up like it is in China, their choices are very very limited. China will have to have a currency devaluation. Their rates are already lower than Japan. They can't lower rates further. So a currency devaluation is the only thing they can do to stabilize prices. And we don't want to get in that conundrum ourselves. I think that the Fed's going to have to cut a lot and we'll see who our next Fed chairman is in the new year and we'll take our guidance from him.
>> Now, the Fed Governor Christopher Waller just met with President Trump and is openly calling for a 1% in rate cuts. Does that stance put him in serious contention to become the next Fed chair?
Well, after President Trump met with Christopher Waller, he praised him and um I think uh President Trump is running this um Fed chairman selection, kind of like The Apprentice show, and he's trying to keep the Fed chairman in the news. He's also trying to get more people to view things his way. But Christopher Waller is a very serious man. He saw the decline in US labor markets before the labor department did. He went on Bloomberg TV and predicted that. He's a very serious guy. And the fact that he would like rates to be 100 basis points lower than they are today is just wonderful. I'm sure President Trump would like him to be 200 basis points lower. So, we'll we'll see who who the chairman is going to be eventually. I still think Kevin Hassid has the lead. After him, it's Kevin Walsh or Christopher Waller. So, but all those people are very qualified.
>> And this isn't just a US story. Britain and Mexico both cut key interest rates last week. Is this beginning of a broader global easing cycle? And what does that mean for the US markets?
>> Yeah, the European Central Bank led the easing cycle. They didn't cut um this week, but uh you know, they're their rates are a lot lower than everybody else. Okay. And they don't really have deflation because in their defense, Europe is just so darn old. You know, when an economy gets old and you your households are shrinking, you just don't grow. But um the rest of the world is right behind uh Europe and uh we're probably going to be the last country to significantly cut rates. But yeah, the rate cuts in Mexico and Britain uh were welcome. Now Britain was interesting. That was a 5 to4 vote. And uh so that was a lot more closely contested, but the people on the board of the Bank of England don't seem to ever agree anyway, but their economy is now tipping into recession. So I think that there's probably more cuts coming.
So, with rates easing and inflation cooling, investors are asking one big end of the year question. Is tax loss selling finally behind us? And is this the Santa Claus rally back on track?
>> Oh, yeah. Oh my god. We the reversal on Thursday and and today, which is Friday, uh is unbelievable. And you know, stocks that were getting hit on on tax selling, some of them reversed or more in in under two days. Uh yeah, the last 10 days of December are seasonally strong. The volatility we had in the markets uh in previous days were just tax selling. So it's lock and load time. It's time to be bullish on America. My only caveat is Bernie Sanders did come out and call to stop the data center expansion. He didn't like the fact that the the data center and AI makes a lot of the the billionaires we have leading our tech companies extra rich. and um he didn't think it helped working families and things, but I don't think anybody's going to take Bernie Sanders seriously on that that front.
>> Our friends at Bpoke flagged a shocking anomaly in the Ethereum ETF, suggesting it's only profitable after hours. What's going on here?
>> Yeah, it is also shocking. And when I was going through Lagoria airport, I saw nothing but advertisements for Grayscale crypto ETFs as well. What um is going on is this ETF is run by Eyesshares which is an extremely respected uh firm and um if you uh bought it at the close and sold at the opening you are up over 115%. But if you um bought at the opening and sold at the close every day you're down um uh 61 plus percent. And then if you bought and held it you're down about 14% when Bpoke did that report. It it got weaker in subsequent days. So I think it's more like 20% now. So this shows you that the the you know there is a mandate to basically make um crypto easier to trade. But based on that report from Bpoke, it's it's the ETFs are not the solution. They're they're actually part of the problem. So this is a good reminder for everyone. When you go to buy an ETF, go to morningstar.com and we we're showing you a sample here and there's a thing called intraday indictive value and if the intraday indictive value is very close to the quote then you can buy it but sometimes it's nowhere near it and that's the problem. So, in general, ETF spreads tend to be tight at the opening, tight at the close, but during the middle of day, you can drive a truck through through them. And, you know, I've been explaining to clients because we had all this profit taking and tax selling that markets are not liquid. And there are windows when you can buy and sell. And if you try to sell in one of these illlquid periods, it's devastating even on stocks. So, you have to wait to buy and sell. And what an ETF does, it puts a spread on something that already has a spread. And um and and it's like anything in life, sometimes it works, sometimes it doesn't. But this is very disappointing. And one last comment I have is Wall Street makes money on spreads. And there's a lot more money in spreads than management fees. So in the old days, they used to to push uh pot ETFs or marijuana ETFs. And the some of those ETFs had 20% spreads. um you know it's you just got to realize um that when they create these products for you um they can make a lot of money on spreads and so I'm very disappointed that the the crypto ETFs are not being uh efficiently traded at this moment. Hopefully they'll get a lot better. You know, President Trump's family announced their own. I'm sure they'll be furious if they don't get good pricing. So, um, so let's hope the markets get a lot better.
>> Now, for the holidays, let's give our subscribers something special. The best A-rated stocks to buy this week. Dad, let's start out with the first one.
>> Yes, all these stocks have very strong forecasted sales and earnings. Palunteer is the AI leader. Um, PLTR, it is a screaming buy. It's also fundamental a stock. Another one is HSAI, which is LAR. It's a Chinese company. They build the LAR systems for our vehicles. All the vehicles are now coming with self-driving modes and that's a LAR system. Very valuable. It'll also help you see animals at night if you live in an area where you have that risk. Wilden Group WLDN is basically an energy engineering and grid uh company and they're booming with all the data center expansions. Another one is Comfort Systems FIX. That's commercial air conditioning and they do a lot of the air conditioning in the data centers. Great stock. Celesteica CLS is a supply chain expert and they are also benefiting from the cloud boom. So they're doing exceptionally well. Bloom Energy is probably the most controversial. So when Oracle shot up with their guidance a couple quarters ago, Bloom Energy also exploded to the upside because Oracle's using the Bloom Energy natural u natural gas fuel cells uh in the data centers which is an extra green way to do things. Oracle's guidance was a little sloppy. Oracle has since consolidated here a bit. Bloom Energy got hit uh with that, but it's roaring back right now and that's one of those stocks that's up 15% under two days. So that stock is a phenomenal buy in any dip. EAN EG is the plumbing behind the AI infrastructure. So they're uh doing exceptionally well. Uh AUP as a pharmaceutical company and they treat neuropathy in your feet and lupus. So they've got some very good products and they're doing very well. Another stock we have is INDV. They provide substance abuse treatment. And let's face it, in the wake of what happened to Rob Reiner and his wife, that tragedy with her son, you know, you get all kinds of things coming out now. But yeah, if you have an addiction problem, you got to get treatment. And that's what INDV does. And finally, we we have we recommend now 15 gold stocks. Equinox uh uh is one of my favorite. But um you know, gold's just booming because the central banks are buying it. And let's face it, we have gold up over 60% for the year. We have a lot of crypto down 15 to 20% for the year. Bitcoin isn't down that much, but some other crypto is. And Ethereum would be an example. I I if I think the crypto crowd better just switch to gold. That's my personal opinion. It's less volatile, appreciates more, you'll have better liquidity. So, I think the gold boom is going to continue.
>> Well, we hope you all appreciate this special gift. From economic nirvana to rate cuts to crypto to some special stock picks, that's how we're going to close out this week's video. Thank you all so much for watching. We hope you have a special holiday and a very merry Christmas. Make sure to give this video a like and subscribe if you haven't already. We'll see you all next week for a new video.
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