On today's episode of Catalysts, Hosts Seana Smith and Madison Mills break down some of the biggest stories dominating the trading week, from the 2024...
break down some of the biggest stories dominating the trading week, from the 2024 election to bullish tech sector calls., explaining,"If you're bullish on the S&P 500 this year for an institutional investor that's not buying the index, well, how does that really help them? Because you look at the market this year, we're up 16 17%. Typically, that much of a rally would come along with massive risk on leadership.
We discuss what comes next for the troubled maker and another critical week for President Biden as he prepares to host NATO members ahead of a planned press conference on Thursday with Congress back in session.We're going to discuss what's in the race. It's more about, you know, in the last few months, as I was trying to think about raising my target again.
Um But, you know, again, if I covered Apple or Microsoft and I was bullish on Apple or Microsoft and said, you know, you know, the conclusion is clear, go buy Apple or Microsoft. So really that was much of 23 was just kind of a give back uh on the 2022 bear market from here, we haven't seen as much of a rapid improvement in valuations this year at the index level.So we're looking for companies that have continued to outpace their peers in terms of earnings growth uh that are of the highest level of profitability.
Well, Michael, given the, uh, high bar that has been set this earnings season, are you cautious on the upside? The second surge in breadth at the beginning or the end of last year as the fed pivoted and from here to get wildly bullish on equities here, you have to think bread's gonna continue to, to improve.We don't think that's gonna happen though.So if I was, you know, very bullish at the beginning of this year, because I still thought there was a lot more upside from lower interest rates and the fed eventually cutting.
Because when you can look, you can look throughout history and there is no magic number where payrolls or the unemployment rate or initial claims hit and the market just all of a sudden turns over each cycle is a little different with this cycle.Uh and, and we think the unemployment rate will continue to move higher, but at the same slow pace, it's been moving higher, give or take about 10 basis points a month.Uh And the average client or the most popular answer from clients was 5%.
But here we stand this morning and at least taking a look at that letter from President Biden to congressional Democrats.I don't think we're at any kind of resolution yet. Well, Greg, I think the question here is, what do you think is going to get President Biden to step aside in this race?Is it someone that is going, that comes out and says that publicly that he should step aside that is going to make him change his mind.I think, you know, maybe if Chuck Schumer and Nancy Pelosi come out together and say he has to step down, that would have clout.
And Greg, let's talk a little bit more about those tax cuts because I think initially investors are looking at that saying, hey, that this could actually be a good thing here for the markets, especially when you take into account, maybe what the Republicans want to do when it comes to the corporate tax rate.
Unfortunately, Powell and Trump do not get along as, you know, and I think if there's real friction between the two and Powell Lee is his term, doesn't expire until the end of 2026.I'm curious from your view because we've heard and there's been lots of coverage on this over the last week and a half about donors now starting to pressure and starting to speak about President Biden stepping aside.
So that is making, you know, this bullish signal, not just apply to TS MC, but also those other names.Now we had Morgan Stanley raising its price target on this stock by about 9%.They expect the chip maker to raise for your sales estimates and their earnings announcements coming out here in the coming weeks.
But since January 1st is massive run up in the stock, you're looking at gains here over the last seven months or so of just around 80%.
So again, some upward movement within meta, they're saying that that's going to support their view as they see it in terms of where they are in that Capex cycle and some of those potential gains here. They raised their price target to or at least looks like their new price target on the stock is 29 bucks a share.
And of course, the concerns around inventory being a little bit just too robust and concerns about managing that inventory moving forward. Um You know that if you look at the asset levels in the markets, the SS and P is up about 5% for the quarter. Uh So we, you know, we're pretty positive the, the the banks have had a good run here, you know, some of them are up over 20% this year.
One thing I'm interested in is the read through that we get on the consumer from these big bank earnings. You can see that, you know, some of the retailing names that we've followed tangentially, you know, have been impacted uh by the, you know, the changing consumer patterns. And again, you know, it's, it's a pretty simple platform, they're making progress in banking card uh in terms of growth areas.It's interesting to me that city is not included in that ETF why is that?
Well, I think they've managed their risk to that owner of the market much better than, you know, the, the smaller regionals, et cetera. Uh And so I, I think just the exposure being sub 10% for a lot of these companies and also being in specific areas of CRE they're doing better. You know, they list a host of different components to their uh balance sheet and their customers, et cetera.
They have said, first of all, we're going to step up and do something to ensure competitiveness and fairness in the market, something that American regulators have failed to do.We're not going to clone the old industrial era style regulation, which was micromanagement. Given the fact that this has been an issue that has been brought up on both sides of the aisle yet either side can't seem to agree with each other on exactly how to address these issues.
Uh That's what the theme, that's what the conclusion of that book is that we need to take an entirely new look at how we structure our oversight, that we have to have oversight of this uh incredibly powerful, important and contributory, new set of technologies. Banks are starting to increase reserves for future losses while some investors choose to pull out or seek alternative strategies of commercial real estate funds here to weigh in.So let's talk about where things are, where things stand today within commercial real estate.
So on the supply demand side of the equation, which is the most important part, the industry as a whole is doing great.There are pockets of over building in multifamily and industrial but broadly, we are not overbuilt and we are basically under demolished. So each one of these niches has its own cycle, has its own supply demand and therefore investor demand.
So when you see a good asset in a market, you wanna be in as an investor at those price points, you almost don't care about the interest rate.
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