Tony Zapparro, CEO at Equityset, my man, happy Friday.
It is good to see you down here today.
You too.
So you had a really interesting note, and we can talk about stocks and equities, and we will.
How about we start with the tale of two economies?
There are people for whom they are involved actively.
They are engaged with this market and maybe far too many Americans who are not.
We're kind of using the word bifurcate again.
What are you tracking there on that story?
Absolutely, and I don't think it's been a surprise as of late, but a lot of what we're seeing.
As the consumer is struggling a little bit, flatlining spending again surprised this latest period, but you've got ongoing debt, you've got stalling housing.
Uh, but then on the corporate side, right, the AI Capex, the spending, the growth story, that's what's really driving the, the GDP numbers, right?
That's what's driving the markets, uh, and again decoupling from a lot of fundamentals that you've seen, we're kind of in that, uh, willy-nilly, uh, period where, uh, the markets are trading so much on hope and growth, uh, whereas again the consumer is right, when, when retail FOMO gets.
In the crux of the story, you've got to wonder if it really aligns with the numbers.
Yes, and the psyche of the consumer is interesting because you and I are having this conversation.
We did get the latest University of Michigan consumer sentiment survey figures.
Sentiment picked up for the month, which is good, but it picked up at the same time that we saw gas prices fall nationally about 60 cents a gallon, and I wonder what that correlation is.
In other words, is our happiness as consumers, whether or not we realize it.
Kind of tied to what's going on in the Middle East right now.
Yes, and that's off of all-time lows of the consumer had permit, which for a while it doesn't seem to matter to the market itself.
And so absolutely I think you're running into potentially a stagflationary rate period.
I know it's the dirty word, but obviously you've got the energy shock, oil prices rising, and you've just got a struggling consumer right that's kind of maxed out in terms of debt.
It's really.
Kind of trying to chase the the train there uh and so you're absolutely right is like anything they can grab onto right any gains, any savings right with with energy coming down I saw people posting in uh our local uh Facebook and Instagram groups about hey guys, they're posting, uh, crude oil coming down the last couple weeks they're like, but it hasn't moved at the pump and so if that's any kind of story that you can kind of pull from they're they're really hoping that.
10-20% pullback.
It's going to save them money at the pump, which we know it doesn't necessarily work exactly like that.
Yes, of course we have what's called the rockets and feathers phenomenon.
We see crude oil prices go up.
Gas prices tend to shoot up very fast in your local neighborhood.
The opposite does not happen.
It takes a lot longer for those gas prices to come down.
Let's do some stocks.
You like some of these beaten down names?
Yes, we'll start with tech.
Microsoft and Adobe down 23% and 42% respectively.
What do you see her like there?
So I don't like the price action, but what I do like is seen in a market that's really, I feel, decoupled from fundamentals is you start to nibble, you start to pick them up.
I mean, Microsoft alone over the last week, two weeks, down 1015, 20%.
It's just getting hammered.
Same with Adobe.
What I like there is that when.
Reason comes back into the market and they look for earnings, earnings growth, and kind of it being bifurcated in terms of value compared to where the price has gone.
I think those are going to pick up substantially.
Obviously software, it had a bit of a rotation in capital today, right?
You saw those names up.
4 or 5%, uh, which is more than they've seen up in a long time.
Uh, so that's why I like those names even though they're the laggards and likely to get some more choppy waters.
Tony, really grateful for your time.
Thank you massive crowd of fans we hear.
Hey, can we give it up one more time for our special guest down here at the New York Stock Exchange.
It's a Friday.
I make up the rules.
We'll talk to you soon.
