Ben Emmons is the CIO and founder at FedWatch Advisors joining us here for the first time in person, right?
That's right, first time, my man.
Thank you for being here.
Your take more broadly on what we've seen out of earnings season.
Obviously we got past the big financials.
We are setting the stage for a few heavy hitter mega caps coming up.
We've had a lot of companies beat, but maybe not get the rally that people were expecting.
What have you seen so far?
So it is really good earnings.
And it continues, but like you said, it is not necessarily the bullish picture because maybe it's too much pricing, too overextended, too hyped up.
We had the big IPO from SpaceX which I think started to put pressure on the market because of basically being somewhat overextended, but I will say this for this week that take a company like Intel and IBM, they've both drawn.
Quite a bit and they're solid companies.
They just have drawdown on the sentiment, so I think they're going to beat earnings quite significantly.
Even though IBM came up with the bad news, but they're going to beat earnings, and I think those are opportunities to buy.
I think those are great stocks.
Yes, IBM was kind of a pre-earnings warning, sort of setting the stage a few weeks in advance of earnings.
You mentioned SpaceX.
It's been down to the right, but a little bit of a relief today, up 3%.
If you're following SpaceX.
You're like, will this thing ever turn green today it did at long last.
What do you fall out of names out of Tesla and Alphabet?
They report tomorrow.
These are some of the most important, most consolidated names in the S&P 500, the first of the so-called Mag 7 stocks set to report.
Yes, so if you think of Tesla, I mean it has outperformed SpaceX for a period of time.
I guess people were looking at the merger between the two, but what's interesting now is that today.
With these tariffs announcements on Canada, it's bad for Tesla because they get a lot of parts out of Canada, so we'll see what they're going to say about it.
It's not going to impact their earnings now, probably going to be decent beef, but the one to watch is Google because of that new chip that they are developing that they do for their GPUs, different GPUs.
I think that's the biggest news.
I think Google will probably get more of a relief rally on kicking. after the 2 or 3 weeks of this memory that we've seen because what Google is really doing is trying to get autonomy from Nvidia and others who compete there with those chips, and they're not dealing with this margin issue that came up out of the new LLM that we saw, I believe on Monday from China last week.
So that's a boom story.
If you and I were having this conversation in March and April of 2025, we would say, oh no, more tariffs.
We know what that means for.
Markets and yet here we are, Ben Emmons today and yesterday.
We've got new tariffs.
We're still basically at all-time highs.
What has the market learned maybe from that big 20% drawdown in the spring of last year that maybe it's implemented a little bit differently every time it has another Trump tariff-related headline?
Well, I have learned that Trump is the taco, right?
Basically, if it really impacted the market significantly, negatively.
He would pull those tariffs a back or put them on pause, but in this case though, JD, we're talking about a yearlong investigation into trade practices, and these tariffs are going to be in place permanently unless the president changes it or Congress intervenes, this is actually a significant change today.
And we're importing a lot of goods out of Canada.
It's right across the board, so it's impacting the economy really quickly.
We put 50% on there, which is the maximum.
It's going to drive up our inflation.
It's going to potentially hit our growth rate sometime in the next 1 or 2 quarters, so it's actually not a good story, I think.
The market is distracted today by the Google earnings coming up, by the chips rallying overnight from China, by buying chip stocks, that sort of thing.
But once that is all kind of phased out, the tariff story comes back.
They're not done with these investigations, right, so it's a recurring story.
In this case for Canada, that's negative for the US economy.
It's not good.
Ben, sadly, I'm out of time, but I hope you'll come back soon because we do have a big FOMC meeting next week.
Kevin Warsh's second.
Give us some sense on the path forward for interest rates.
Ben Emmons, friend of the show, CIO, founder at FedWatch Advisors, my man, come back anytime.
It's good to see you again.
