Stocks are higher in pre-market trade after Sunday's regaining momentum and big tech also higher this morning, while with 2nd quarter earnings season heating up, investor attention does turn to the first reports coming out from some of the mag 7 companies this week, including Alphabet and Tesla tomorrow.
Also looming, the Fed's July meeting next week, cooler and softer than expected inflation reports in the US hoping to push rate high expectations to later this year.
Well joining me this.
Morning to weigh in is Ted Thatcher, founder of Bright Lake Wealth Management.
Ted, great to have you here.
Thank you so much for joining me.
It's always good to be with you.
Well, earnings season is well underway, and all eyes are on Alphabet tomorrow after the bell.
But what do you make of the volatility not only in tech but also in semis?
Yes, you know, so much of the market has been led this year by the broad earnings and certainly by the semiconductors, the chips, the memory names, and I think that there's a little bit of a natural cyclical, I think, pullback.
In my opinion it's a healthy one, actually.
Investors love to see a rally, but then everybody gets a little nervous and it is very normal and it's OK for markets to pull back a little bit.
There is some headwinds, a little bit of an AI cooling trade seems healthy to me.
Obviously there is some uncertainty still about just the new Fed chair Warsh getting his handle on things, the market getting used to that, some of the.
And tertiary consequences of the war in Iran kind of lingering on, you know, petroleum products, even outside of the spike in oil that we see, the supply constraints there too, and so the market has to digest that.
Fundamentally.
I'm very optimistic about the second half of 2026, but what I expect right now is continued volatility and CHOP, and I wouldn't be super surprised if there's a little bit of things perhaps got a little bit worse before we really saw a push back up.
Yes, and Ted, as you mentioned, geopolitics do remain front and center.
We continue to monitor the price of oil as well as the pain at the pump here.
But one factor that I do want to bring up is IPOs.
That is something that we've been paying attention to, especially with SpaceX and more listings coming down the pike here.
So for Americans who are watching these market debuts, what is your perspective?
You know, I think with IPOs it's really important that investors remain disciplined.
You know, obviously there was so much FOMO excitement about SpaceX and what has happened since, you know, SpaceX, you know, it spiked up and now it's down, I think 120, 20 a share or something like that.
And so I think it's a good reminder, you know, if we didn't want to think about what happened with FGM last year and those other things that hey, these IPOs don't just go straight up.
I think we should have a little bit of cautiousness around Anthropic's potential release as well.
That doesn't mean.
These aren't you know, world changing even technologies, they are exciting to be a part of.
I think investors just want to be systematic.
A nice approach, of course, would be like any kind of dollar cost averaging strategy, but if you're really wanting one specific name, a strategy I like a lot is a 30, 40, 30 approach.
Pick a time frame, 36 months a year, and then come at it systematically.
Start with 30%, halfway through that time frame, add 40%, and then of course the final 30%.
In another perspective I'd like to get is on inflation as well as the Federal Reserve.
So we are counting down to the July meeting which takes place next week.
And while we don't expect any change from the central bank next week, there are a lot of considerations as we head into the end of this year as well as next year.
So how should investors be looking at rates right now?
Yeah, I think it's one of the most important questions investors can ask because that phrase always comes to mind.
Don't fight the Fed.
Figure out what they're going to do and then get out of their way and with Worshch he came in a lot more hawkish than a lot of investors expected.
Of course, to your point, we don't expect any changes.
I don't actually believe though that Warsch will stay as hawkish as I think some fear.
I was actually hopeful we might get a cut by the end of 2026 despite some of the belief and statistics saying that we wouldn't just up until the most recent kinetic activity in Iran.
We're now going.
I think 10 days of strikes and rents above 90.
Depending on how long this lasts, it's going to hold that inflation number a little higher than I think investors would like, and that does make it really hard for W to consider lowering.
I don't think it's totally out of the realm of possibility for them to lower this year, but right now it's not what I believe is going to happen, at least with the kinetic conflict that we see in Iran.
Well, Ted, we will have to leave it there for today, but always great having you on the show.
Thank you so much for joining us.
Thanks.
