Host: Today's capital markets segment is brought to you by October rate hike odds remain muted with this week's economic data points not expected to cause much repricing the next key report that could sway rate expectations of the September CPI and PPI data due out next week. Now the Fed's preferred inflation gauge coming in the low forecast in August, but headline PC outpacing. Wage growth on an annual basis and at the same time the trade is red hot here on Wall Street and making the record highs and $6 trillion in terms of market cap while SpaceX has now rebounded around 60% from its low this summer. We joining us this morning to weigh in is Michael Landsberg, chief investment officer for Landsberg Bennett Private Wealth Management. Good morning. Michael, thank you so much for joining us. So in terms of the latest data points on inflation for PC coming in below forecast for the month of August, but overall inflation still running above target and have IPC outpacing yearly wage growth. So how much of an economic risk factor is the inflation and especially considering where oil prices are right now. I mean,
Michael Landsberg: we think it's a huge deal because I think what's gonna happen, we use PCI just from a modeling standpoint, it's been more accurate for us. We have, um, you know, PC uh you know, inflation number CPI going up to 375 um reported next week, and we actually have it going higher in October when that reports in November. So, I think it's something to be, to be, you know, a little bit alarmed with, obviously, uh, you know, inflation higher, um, you know, rates higher. It's not typically good for, for large swaths of the stock market.
Host: Well, I do want to get your take on Treasury yields. This is the space that we have been eyeing not just in the US but also around the globe, and yields have hit multi-decade highs as more rate hikes are being priced in. But in October rate hike here in the US appears unlikely as of now for the Federal Reserve. So what is your outlook for the central bank and how's inflation factoring in here overall?
Michael Landsberg: I think you're not gonna see one in October, primarily because it's, obviously, they got some, you know, some of the job numbers that came out, I gave them the right to pause. But also right before midterm, I think it would be a lot of noise. But I do think you're gonna get one in December. I don't know if you're gonna get another one cause I think what we're modeling is we think inflation starts to go down next year as some of the base effects of oil start to come back in. But I think ultimately what happens is inflation driving higher rates driving higher and then the dollar driving higher are areas that we have to be concerned with. I think that's why parts of the market are not doing particularly well in this environment.
Host: And of course we are keeping a close eye on the Nasdaq, which hit record highs yesterday given the record intraday and close in the previous session. And even the S&P 500 is within a stone's throw away from all-time record highs, and tech is leading the gain. So when we look at the semi-trade, it is back in focus, and elsewhere in AI, we're also seeing. SpaceX shares surging in the past 5 days. So with financing concerns overhanging hyperscalers, where do you stand on the AI trade and what are the risks of a portfolio being too exposed here?
Michael Landsberg: Well, I mean, I, I think there's two great questions. We like growth right here. I mean, if you look at the last month, you know, uh, tech is up 8%, financials are down 7%. So, you start looking at there's a lot of disparity with rates going higher. There's areas like financials, like utilities, like real estate, you probably want to avoid. We want to be very pro-growth. I think what happens, unfortunately, is you're starting to see this breadth go away, where only a handful of names are kind of leading this rally. I think the AI trade, um, and we're thematic investors. We have a lot of maybe 30 to 40% of our money is in the AI trade, but it's spread across multi-sectors, multi-countries, multi-cap. I think that's what investors have to continue to remember. You can't have it in a few names because of the volatility, you've got to spread it out. But you also have to look at things like cybersecurity, which we think is probably our, it's certainly our one B theme. One A being AI. One being cybersecurity, because the more AI gets smarter, the more you're gonna need security to keep the criminals out of your business. So, I think there's some, some things that kind of spawn out of the AI trade. I think you don't own AI at your own peril, but I think investors need to remember you can't own too much of this. Too much of a good thing is definitely a possibility here. If we do get the correction, and if rates stay high for some of these lower quality AI companies, the borrowing money is gonna be real tough.
Host: Right And Michael, finally, before I let you go, I do want to ask you about seasonality. So October historically the best month of midterm election years. So what is your market outlook for the rest of the month as well as the fourth quarter?
Michael Landsberg: You know, right, I, I don't like this period of time in between when we have earnings and no earnings. Cause I think what happens is we, we kind of look for things to look at and think about. I like it when next week we'll start seeing earnings again. It's something really to talk about. I think earnings are gonna be strong. We've had what, 7 quarters in a row with double-digit growth. Last quarter was the best we've had in the 7. I think that can Continues. The GDP is 4%. You can't find that anywhere else in the world. That's not an emerging market and even some of the emerging markets don't grow where we are. So, I think it's very positive right now for a lot of the growth areas. If you're getting growth in your stocks, that's where you want to stay. You want to stay with what's been working, which has been tech, which has been healthcare. And I think a lot of these things, obviously, Midterms will be choppy. I think there's a concern in financials that the Democrats take over, maybe more regulation. I think in utilities that the Democrats take over some of this AI data trade may go away. So I think there's some nuance that you've got to pay attention to. But if you stay away from that and stick with what's been working, I think you'll do well in the next 30 to 90 days.
Host: Well, Michael, thank you so much for joining us as we head into the market open here on Wall Street. Appreciate your time as well as all of your insights.
Michael Landsberg: My pleasure.
