Record Highs, AI Stocks & Oil: What’s Next?

The Dow and S&P hitting fresh records on Tuesday.

Investors taking advantage of the pause in military action between the US and Iran, which has led to a sharp drop to begin the month for oil prices.

And meanwhile, earnings season is in full swing.

The season heating up with reports from SpaceX and AMD yesterday afternoon, though shares in both companies falling this morning.

Now joining me to discuss this is Matthew Tittle, CEO of Tittle Capital Management.

Matthew, thank you so much for joining us today.

Thank you very much for having me.

All right, so let's start with tech.

Tech has rallied since young billionaire Leeor Asherburger's hedge fund situational awareness got liquidated last Thursday.

So did this event put AI volatility to rest, at least for now?

It looks like it did.

I mean, a lot of times when these sell-offs happen, you need someone to get carried out on a stretcher really to end it, and unfortunately for Leopold, he was the guy, but yes, it looks like that has kind of calmed a lot of the concerns we had on all these AI bottleneck trades, and so far so good.

So let's talk about stocks and some funds.

So what stocks and funds are you watching for when it comes to a bottom signal for the AI trade specifically?

So we're really seeing it in the short term.

So we look at the charts and for example the SMH, which is the semiconductors, we're looking at kind of the low from last week as the line in the sand, and you look at it now, it's on an uptrend.

So right now we do think.

That all of these AI stocks bottomed last week and you know we would be buyers here.

So let's talk about oil in the Middle East that's been top of mind for a lot of people, that's been making headlines specifically this week.

Are oil concerns in the rearview mirror at this point, or is this pause in the U.S.Iran conflict doomed to last?

I mean, how many times have we won this war?

How many ceasefires have we had?

I'm not going to believe. until it actually happens.

We've been telling people all along whenever oil dips, you want to own the oil stocks, and we think the same thing here.

Until we see things flowing through, missiles stopping, we're not going to believe it and we're going to fade any of these any of these downturns in oil.

So let's talk about the bearish outlook.

So what bearish factors could investors be overlooking at this point?

Really it's interest rates and oil goes into that higher oil prices, higher inflation, higher rates.

What we saw in the Fed meeting was really interesting.

A couple of things.

3 dissenters, we haven't had that for 10 years, and the bond vigilantes basically gave Warsh a vote of no confidence.

They raised rates up.

I would be watching 5% on the 10 year.

That would be the line in the sand.

We're Right now tenure goes above 5%.

All bets are off.

All right, so let's talk about individual stocks right now.

In your point of view, what individual stocks picks do you like right now?

I mean, obviously it's been an interesting last couple of weeks.

We've seen a lot of movement with the Fed.

We've seen a lot of movement with oil.

So let's talk about what stocks would you like right now.

So we're looking at the AI trade, we're looking at picks and shovels, and we're looking at the companies that are benefiting.

From the spend, not the companies making the spend, you know, some names we like, for example, are Cadence.

They're integral to chip making.

We like CLS.

They're integral to the whole data center buildout.

We like Broadcom.

They're at the forefront of all of these AI bottlenecks, and we like the oil stocks.

We like the gold stocks.

We think you need to barbell all of that.

All right, Big top of mind, and everyone was talking about this yesterday, SpaceX.

So let's talk about your reaction regarding SpaceX and AMD.

Yes, so on SpaceX, the topic of our newsletter tomorrow is going to be the AICAPX debate goes to space, and that's what we're seeing, you know, Companies are getting penalized for spend right now.

The market wants to know, you know, where's the revenue in this.

So I think that's a big part of what you're seeing on SpaceX because their earnings.

Blowout.

Also remember they were up 9.5% yesterday.

So really all we're doing is giving that back.

Love SpaceX long term.

Short term it's going to be volatile.

You've got the unlocks.

AMD is a little different story.

I mean that's up like 140% this year.

Price for perfection.

They gave you close to perfection, the market saying not enough.

We don't own it, but I would treat that dip as a buying opportunity.

So let's get your thoughts also on macro data.

I mean overall, what are you seeing?

What are you looking?

What are your thoughts on that?

I mean, it's really all about rates and the things we're focused on that go into that are oil prices.

We're also focused on what's going on in Japan.

You've got the potential of the unwind of the yen carry trade.

You've got the US coming in to stabilize the yen and the possibility that the Japanese will have to sell treasuries.

You know, we are very concerned about rates right now, but again, I'm not going to raise a red flag until we get above 5%, if we get above 5% on the 10 year.

All right.

I want to talk to you about price targets for the major averages.

What are you looking at right now?

What are your thoughts on that?

So I mean price targets are always really, really tough.

We are bullish now.

It looks like we've seen a bottom in all the AI names.

Everything else is chugging.

I mean we're getting new highs everywhere.

Economy is strong.

Worsch is accommodative.

The stock guys like what Worsch did.

Bond guys don't.

Stock guys are in control right now, so you know we would be buyers here and again just watch rates.

So let me ask you this any specific sectors that you should watch out for at this moment that you're watching out for?

Well, so it's all the AI bottlenecks, the memory, the photonics, space is an AI bottleneck.

Elon is going to put data centers in space.

I would be balancing that out with the Halo names heavy asset, low obsolescence.

We have an ETF for that HALX, where basically it's value stocks that are not going to be put out of business by AI.

Balance the AI names and the Halo names.

That's where you should be invested.

Awesome.

Well, Matthew, thank you so much for joining us.

Pleasure to have you.

Thank you very much for having me.