Prepare for a financial thrill ride as Analyst Bret Kenwell from eToro, unveils how to thrive amidst economic turbulence. He and host Andrew Brill dive into the vortex of tech, AI, investment strategies and more. This episode aims to provide insights for those ready to conquer the market’s chaos.
Andrew Brill 0:05
Welcome to Wealthion. Thanks for joining us. I’m your host, Andrew brill. Our mission is to help all of us keep and grow our money. Through interviews with our experts, we’ll break down economic trends, markets and investments. But Wealthion is not just a channel. It’s a conversation with our community. So please keep the feedback coming. If there’s something you’d like us to talk about, or someone you’d like to hear from, let us know. And if you could like and subscribe to the channel, we really appreciate it. Now let’s dive into today’s episode, which is our weekly market recap I’d like to welcome in Bret Kenwell, Bret’s an Options Analyst at eToro, the E trading and investing platform. Bret focuses on market research and has been featured on CNBC, Bloomberg, Yahoo, finance, the street, and many others, including right here on Wealthion. Previously, Bret has been a financial journalist at the street covering many different markets and other topics. Bret, thanks so much for joining me.
Bret Kenwell 1:04
Yeah, thanks for having me, Andrew, appreciate the intro.
Andrew Brill 1:07
Certainly and I want to start with a tweet that I read of yours this week, and actually on Thursday, and I thought it was great. And I want to start there. So I’m going to read it. So I apologize for looking at my paper, but it’s not you versus the market, you tweeted, and the screens are not the battlefield, It’s you versus you. And the battlefield is in your head training and investing is a mental game, the sooner you realize that, the better. So I’m gonna call you my financial psychologist, and ask you exactly what you meant by that.
Bret Kenwell 1:38
You know, ironically, I always compare the market to the ocean and the markets, the ocean, and traders and investors are the surfers. And ironically, I don’t surf. So it’s kind of a funny analogy. But you know, some days are going to be great surfing days, you know, it’s going to be perfect weather, sunny, excellent waves. Other days, it’s going to be boring, there’ll be nothing to do. You just sit out there and paddle around. And other days, it’s way too dangerous to even be in the water. So my point being with the tweet, just that, you know, the market is going to do what it’s going to do, it doesn’t care what you think. So many people I see this all the time. And if it works for them, it works for them, that’s great. But for a lot of people it doesn’t they get this mindset where it’s they’re fighting the market. And they’re, you know, they’re trying to scratch out some points on the s&p or, you know, battle the stock up and down a certain level. And it’s it’s not a battle against the market, you’re not fighting the market, you’re really fighting yourself, and you’re trying to find a strategy that you can consistently repeat over and over that works for you. And that just takes time.
Andrew Brill 2:42
So, you know, I guess we’re catching a really good wave right now if we want to use the surfing and I’ve been surfing, so it’s not that easy. And I’m not good at it at all. But we are catching a really nice wave right now and the s&p over 5000. Now, and you know, the other indexes are obviously, right near their highs. So how do you see this going? At this point? Now the s&p has gotten to that like that. 5000 Mark, you know, where is this going at this point?
Bret Kenwell 3:13
Yeah, you know, it’s been a fun couple of months. Mark, it really kicked off the rally right at the end of October. So it’s been, I think, swimming, if the s&p can close higher this week, which it’s set to do provided, you know, we don’t have a big pullback this Friday, you know, be up 14 out of 15 weeks. So it’s been a really fun ride for anyone who’s been long for people who have, you know, want to see their 401 K’s get back to those old highs. And it’s been a great ride. But you know, at the same time, we’ve probably pulled forward some of the, you know, 2024 annual returns, we it’s a typical to rally like this. It’s obviously not sustainable trend. So at some point, we’ll have to, you know, see things kind of level out a little bit. And, you know, we’ll have our consolidation or pullback period at some points. more a question of when not if so. But it’s been fun.
Andrew Brill 4:03
Yeah I mean, we’re talking about that mental toughness and finding ourselves. You talked about being a 14 out of 15 weeks. At what point do you get cautious. I mean, our investors range in age from probably their young 20s being at a college to retirement age where they want to see their retirement now that they’re like you said, 401, k’s are getting back to where they were, they’d like them to be anyway. How do you protect yourself at this point?
Bret Kenwell 4:29
Yeah, you know, like you just mentioned that age range between 20s and near or at retirement so wide and broad. And it really, so much of it comes down to what an individual investors capable of sitting through from a risk perspective, if I was a younger investor and making, you know, regular contributions to a 401k I wouldn’t alter anything that goes for railing 15 or 14 out of 15 weeks. It also goes for, you know, 20 When we were in the bear market, we were down 20%. So Um, the market is a is a long term compounding machine, that’s, that’s what it does getting to 5000 just kind of exemplifies that fact. So I wouldn’t alter my, you know, my path. Personally, if I was a younger investor. Now, if I was older, or even if I was more active, as an active investor or a trader, you know, I might think this is a good opportunity to lock in some of the gains we’ve seen over the last three months, it’s an opportunity to either you know, raise stop losses, or maybe put some hedges in place. But as a retiree or someone nearing retirement, I think you just have to ask yourself, like, what’s your risk tolerance? Like? What’s your outlook on the economy? I don’t, I’m not one who likes to fight the longer term trend, which does favor the upside. And I’m an optimist at heart. So, of course, I like to think that, you know, the market will continue to generate nice returns over the long term. But yeah, when it comes to that kind of thing, excuse me, it’s just kind of up to your individual risk tolerance, I think,
Andrew Brill 6:00
So somebody who’s not willing to take the risk, I mean, I pop Toms like their candy. So you know that the risk for me isn’t such so great. But what you prefer being in certain funds, where the risk is like an s&p fund, where the risk is sort of spread over a wide range of stocks? Yeah, there’s obviously the Magnificent Seven that are blowing up the s&p at this point, but you’re going to ride the wave and the wave is going to be buoyed by the really good stocks, it’s going to be pulled down a little bit. But in the long run, it’s probably going to go up incrementally, it’s not going to have the tremendous gains that you’re going to see if you invest in these individual stocks.
Bret Kenwell 6:39
Sure, yeah. A more diversified approach is is absolutely the way to go. Like you said, being invested in the broader broader market indices, s&p five hundreds, you know, specifically, is kind of the safer way to go when it comes to equities, picking individual industries and sectors, which I know we’ll get into some of that a little bit. But that can have both huge rewards, but also enormous risk. And we do not have to look back very far just you know, a year and a half ago to see what some of that risk really looked like when when things came tumbling down. So yeah, diversification really helps. But you have to be, you know, cognizant of risk everywhere, right? Everyone thinks bonds tend to be this really safe haven, this place to hide out and for maybe a lot of instances it is. But we also saw what happened when the Fed raised rates so aggressively, what happened to bonds, you know, a lot of the bond funds really, really suffered. So I know, for me, personally, a lot of family members and friends with bond exposure, who didn’t, not only didn’t expect that to happen, but didn’t know that could happen with bonds. So it’s really just a game of, you know, spreading things out, right, and making sure that you kind of know the risks going into it as best you can.
Andrew Brill 7:54
And kind of being educated as well, you know, you could read your stuff on eToro, and kind of get educated on bond stuff, you can come to Wealthion.com, where we can help you out with, you know, even an investment advisor if you want to do that. So it’s mainly about educating yourself, I would assume.
Bret Kenwell 8:10
Yeah yeah, education plays a big role in it. And, you know, that’s kind of the thing, you know, just from my personal perspective, that’s what I love about the market is, you know, every market cycle is a little bit different, you know, we’ve had the highest rate of inflation in 40 years, yet, the market and the economy are responding in a completely different manner than it did in the 80s. And so, you know, it’s just, it’s fun for me to kind of constantly learn, you are always learning in this game. And that’s, that’s kind of a fun part. I think.
Andrew Brill 8:39
We learned and I know, you talked about it, and we see the employment numbers that are pretty good. I mean, the CPI, the adjustment CPI came in this week. It’s a it’s a was a little timing a fraction worse than they thought it was, but still really good. So you have high interest rates, but you have everything else that seems to be trending in the right direction. Is it? You know, do you see interest rates thing here? I would assume now that because things are good, interest rates aren’t going to be cut and probably until the summer time, and is that too late at this point?
Bret Kenwell 9:15
You know, that’s hard to say if it’ll be too late or not. At the surface, and at the moment, it No, it doesn’t feel like it. That like you mentioned the the labor reports have been strong. The economic reports have been pretty robust these last really this last month, but it’s been a continuation. And inflation is getting to where it needs to be, apparently for the Fed. It’s not to where it is supposed to be for them. And that’s okay. You know, on an annualized basis, the PCE figures are back down in that 2% range, which is where the Fed wants it. And you know, Chair Powell made it pretty clear. Last Wednesday during the FOMC meeting, March was probably not on the table. He said we’re the Fed is unlikely to be confident enough at that point to cut interest straits, and essentially reiterated that point over the weekend on 60 minutes show. So, March is probably off the table unless unless the economy takes a pretty drastic turn south, which we, you know, obviously, we don’t want to see that. I would rather see, you know, for again, you know, for me personally, I’d rather see a strong economy and the Fed holding on to rates at current levels. And hoping inflation keeps working its way down. I think chair Powell said it really well, when he said, We don’t need to see better data, we just need to see more good data. So basically a continuation of what we’re seeing. And if we see that over the next couple of months, you know, we get CPI next week, that should give us a little, you know, another update another indicator on where that’s headed, where those trends are. And if we can keep this pace up in the economy, and we can get to May or June sort of seems to be the June for sure seems to be consensus at the moment, we will have cut by then. But there’s chance to amaze on the table as well. So if we can get to one of those with the economy intact, and basically with labor market economy, where it’s at and cut interest rates, and I think we’re sitting in a pretty good spot.
Andrew Brill 11:07
Explain this to me, if interest rates are where they are, and the economy is where it is, and we’re stable, and we we don’t get to that 2%, we maybe we dropped below the 3% level, but we don’t get to that 2% If we leave interest rates the way they are the debts just going to keep growing. And you know, we just saw a bond sale by the government so that that’s going to go up again. And at some point, we get to a place where we can’t afford our debt anymore, I would assume.
Bret Kenwell 11:41
Yeah, you know, when when we look at it from a bigger picture. The difference in meetings, like from the March meeting, that’s coming up to the main meeting is six weeks, a six week difference. And excuse me a 25 basis point cut in interest rates really isn’t a big deal. But you know, when you look at where rates are, they are in a restrictive, and restrictive territory, like this is not a an interest rate environment that is generally sustainable, or it hasn’t been sustainable for the US. And it is restrictive. So at some point, the Fed will have to cut those rates, we we just are hoping that it comes on the back of lower inflation and not on the back of a deteriorating labor market or deteriorating economy, which for the US kind of goes hand in hand given how much of the economy is powered by consumption, consumer spending.
Andrew Brill 12:31
So let’s get into you know, the market a little bit. And obviously, we talked about the s&p 500. The Magnificent Seven AI is the buzzword. And it seems like AI, the any company that’s into AI right now is doing well, you have I think Google and Facebook announced they’re they’re pumping billions of dollars in the 30 billions of dollars into AI and bettering themselves. What’s the CEO we went through the.com Bubble obviously, in in late 90s, early 2000s, what’s the ceiling on this? I know that we’re in the $27 billion range, we’re talking 400 $500 billion industry at this point, I would assume if it keeps going the way it’s going, it’s gonna be more than that.
Bret Kenwell 13:18
Yeah AI is. It’s not a hype. It’s not built on fluff. It’s not a flash in the pan. It’s a sustainable, you know, industry that has a lot of real world applications. I was lucky enough, maybe five years ago, six years ago, to go to one of our videos GTC conferences, and if you don’t have to go to the conferences for this, but if anyone tunes into the company’s keynote addresses, they’re so insightful than they always get me all, like, give me really excited about just tech in general. But when I went to this one with AI, you know, I didn’t know very much about it. And I was actually there for the autonomous cars perspective of it. And I didn’t realize how far reaching AI was going to be. They gave examples like autonomous driving being one and what it can do and cloud in large datasets, but also what it’s doing in agriculture, what is doing with drones, improving efficiency on repairing oil rigs. It it was another example was healthcare where the AI could say there was you know, 100 scans of a patient that a doctor has to look through each one that AI could, you know, pick out maybe the top 10 or 15, that was most likely to be what the doctor was looking for just made him more productive and and it just was an aid to a lot of these employees. And so AI has this huge opportunity in front of it. And a lot of people do like to compare it to the.com Bust because that was the last time we saw such an enormous you know, that was internet. And that was the last big revolution. I guess you could say the cloud too, but that was the last you know who huge revolution we saw that drove our valuations higher drove the stocks higher. The big differences time being, not that the internet was hyped, but in this case, you know, Mata has real profits and real real earnings growth. If you look at Nvidia, who’s you know, arguably, I don’t think arguably, but is the front runner of this revolution, right? It’s as its earnings estimates and cash flow estimates, revenue, and not just estimates, but the actual hard data, it’s all come roaring higher. I mean, this caught so many people off guard and, you know, there’s actually a sustainable tailwind to it now, obviously, are we a little bit stretched with some of these names? Yeah, like invidious rally 50% and three months and a couple 100% over the last, you know, year and a half. So, yeah, we’re probably a little stretched here in the short term, but in terms of like the secularity of the secular pneus of this trend, it definitely has some sustainability to it. I think
Andrew Brill 15:53
You’re taking little stocks like Palantir arm that just have skyrocketed just this past week with earnings because of AI I missed that boat but I’m sure there’s others out there
Bret Kenwell 16:06
Yeah, I I’m with you. I was I also missed the boat with it. So what can you do sometimes? I guess Palantir has been an often on favorite for investors. You know, it’s been very volatile around earnings. Luckily for bowls this was one the market like they cheered it. Strong results solid fullier guide you know, it’s pushing like it’s up over 40% in three days. I don’t not sure what it’s doing today off the top my head but really impressive. And when you look at arm, same thing, I think at one point it was up, you know, 60% Yesterday, it was really fun to watch. But yeah, it’s it’s funny, too. You know, Nvidia tried to buy arm a couple years ago, and I think it was a year ago. To the date it’s very close last February, they abandoned the, this the acquisition because of regulatory hurdles. And I think maybe now investors are seeing what Nvidia saw in arm, you know, with with, with what their business is capable of doing and how it can help pave that way in AI and of course Nvidia’s ahead of the curve when it comes to to look into the industry’s future. It’s, that’s their job. So yeah, I think there’s just people are seeing that potential there now, and they’re not hesitating to dive into it at all.
Andrew Brill 17:19
With your research, I want to ask is AI a double edged sword because we see a bunch of companies that are announcing layoffs, we’re trying to run more efficiently. And as they say, and I mean, that’s how Mehta became profitable. They laid off a bunch of people last year, they became more efficient. They said, Google is doing the same. And there’s a bunch of companies that announced layoffs, because AI is replacing the people that can do these jobs. So is it a double edged sword in a case where, you know, right now unemployment is low. But if AI keeps taking these jobs, we could run into a problem.
Bret Kenwell 17:58
Look, in every instance aside from basically the stock price job cuts, job, no one wants to see people lose their jobs. Right. I mean, the the stocks might go up and it will help the bottom line. We’re seeing that we’ve seen that in big tech, we saw with Disney cost cutting measures, you know, do help the stocks, unfortunately, I say only unfortunately because no like no one likes to see people lose their jobs. That’s an unfortunate reality. When it comes to AI there. There is going to be some there’s gonna be job loss tied to it. There’s there’s no question What the what those platforms can do, maybe not necessarily as much today, but certainly what they will be able to do in the future is going to work, douce our workforce in some areas. And that’s just a natural, I think cause and effect. At the top of the show, you know, I said, I’m an optimist at heart. So I like to think that, you know, the job creation that we will see in AI, alongside the boost in productivity that we’ll see because of AI will more than offset those those job losses we see and just kind of shift people around in industries. I think it’s a little too early to tell for sure what its full effect will be but that’s sort of that’s sort of my hope, anyway.
Andrew Brill 19:12
And I guess, you know, Disney is one of those companies that could invest in AI, they’ve obviously invested in Epic Games, but Disney had a tremendous bump this week. They went up quite a bit after earnings and with some of their announcements. I want to talk a little about Disney and now we know that Disney was ripe for an activist takeover of their board or they wanted to get some members onto their board. Can we as you know someone who looks at the market and studies some companies, can we look at Disney and say, oh, you know what, these these earnings are true, or was Bob Iger trying to stave off some of the activist people and say, okay, you know what, we’re going to fudge a little bit here and we’re going to Uh, make this look good so that they kind of get off my back.
Bret Kenwell 20:03
Obviously the markets loving the quarter, you know, they they took Disney up to 52 week highs on the numbers. And there was a lot in that quarter to digest. We had, you know, they upped their dividend put out a buyback made that big investment in Epic Games. And they had, but then they had, you know, there was mixing parts of the quarter to, you know, there was the pretty big earnings beat, a lot of which, you know, fortunately just said talked about was came on the back of cost cutting, but revenue was kind of disappointing and debt was flat year over year. So Disney is not getting to where investors want to be because it’s has so much revenue growth, it’s right now it’s getting there because of capital return, and because of cost cutting measures to boost the bottom line. That’s okay, for a little bit, I think investors probably feel more feel confident that Iger is back as CEO that probably a little comforting, just based on what he was able to deliver over the years prior to but eventually, you know, investors are going to want to see that return to revenue growth, they’re going to want to see that, you know, they look over at Netflix, they see them adding, you know, millions of subscribers every quarter, they’re gonna want to see Disney doing the same thing. So far, Disney had a really big initial jump in their streaming product, but they’ve struggled to grow it since and, you know, eventually investors will want to see that return. Maybe it comes from part of their investment in Epic Games, maybe it’s in streaming, I think the company mentioned they wanted to crack down on Password sharing later this year. So that, you know, obviously the that helped Netflix. So you know, investors are going to need to see that revenue growth. But for now, it seems like a should we say like a good enough quarter to give them a little more more leash.
Andrew Brill 21:51
And people love their Fortnite. I think that’s what got a lot of people through the pandemic, but it’s a you know, it’s a good investment, I guess, for Disney to try and piggyback off that and come up with something good. You mentioned, buybacks, stock buybacks. Can you explain to us? How does that work? Does Disney just say okay, you know, I have all this cash, I’m gonna buy back my stock? And is that the wisest thing to do for a company? Because Disney’s now saying, You know what, we’re a great investment at this point. So we’re gonna buy our stock back?
Bret Kenwell 22:23
Yeah, that’s a great question. You know, buybacks can be a bit of a double edged sword. So on the one hand, it does telegraph, like confidence in the stock price, say, and this is management’s way of saying, hey, look, this is we’re, we’re way too cheap down here at these levels. You know, I think Disney came down, you know, 50 60% off the highs, and they’re still pretty even though they hit 52 week highs, they’re still well off that that high they saw in the last Bull Run. So it is a confidence booster for investors, I think to see a buyback come into place management saying, Hey, this is work too cheap down here. There’s value down in these in these shares. At the same time, is many times have we seen buybacks go go? Well, you know, especially in mega cap tech, and some of the bigger names, they’ve it’s really been a catalyst. But at other times, you know, especially, you know, in some of the more struggling retail names, I know, Bed Bath and Beyond really jumps to mind. Those buybacks, you know, did not provide value to their shareholders and didn’t pan out. So I think it’s a bit of a double edged sword here. I think it’s a, at least a confidence booster for investors in the short term. Hopefully, it’s a longer term inspiration. But yeah, it can go both ways.
Andrew Brill 23:35
We talked a little bit before about, you know, diversifying through industries. One industry is the media industry. And Disney teamed up with Fox and Warner media to create something of a sports streaming network. You know, Netflix got into the sports scene by partnering with WWE and caring they’re, you know, their big thing which is raw so that got Netflix into the the entertainment sports arena, if you will. But now Disney is really look, they have ESPN, and they have rights. But is this going to give them power now to compete with not so much Netflix but Amazon who’s going after the football market and Apple TV obviously in the football market and the baseball market this is going to make things more difficult in the sports arena.
Bret Kenwell 24:28
Man, the streaming space is so interesting. A it evolves a lot but but be we’ve seen it changed so much over the years when streaming first came out it was this you know, you could get Netflix for like 10 bucks, and it had, you know, all the shows under the sun and as all these other you know, all these other entertainment companies, Disney included, you know peacocks out there now they realized how valuable their content was to and they started pulling you know, they start getting their content rights back and and now all of a sudden we went from being able to have one or two streaming services, to needing, you know, probably four or five, if you want to keep up with all the things you love, and, you know, and then on top of that they there has been price increases in streaming. So I think consumers are kind of getting a little fatigued of the cord cutting, you know, trend at this point, just in the sense of is it even cheaper to have all these different services versus just having, you know, just having cable, so but on the other hand, you know, the one thing that was kind of missing, I felt like from streaming was sports, you know, Netflix had a big, you know, was a is a big name and streaming Disney plus is big, you know, for kids, and you have Hulu and peacock. And but one thing I always felt like it was kind of missing was a was a streaming sports app. And so to bring, you know, these companies together, and they each own, like an equal share of the proposed platform, to bring them all together, maybe it’s a game changer in sports. And like you said, big tech getting involved, maybe they’ve maybe, you know, the traditional entertainment giants, maybe they felt a little bit of that heat coming from big tech, knowing they will not be able to out muscle, and Amazon financially. And certainly not, you know, Google, Apple, basically, you know, mega cap tech there, if it’s a head to head fight on dollars, they’re not going to win, you know, and maybe this is their way of trying to stave off some of that competition, they feel from that side of things,
Andrew Brill 26:27
we spend so much time cord cutting, and trying to say, You know what, I’m going to get away from that, because I can just go to any streaming service and get what I want. But now to get what you want, you have to go to four, maybe five different streams or streaming services, we’re gonna go back to the cord, because we can get a lot of the stuff we want. And, you know, for our viewers, you know, money may not be tight, but you don’t want to throw your money away either. So where you might have been paying, you know, whatever it is for the corded service, now, you’re going to be paying a multiple of that, to be able to watch everything you want to watch.
Bret Kenwell 27:05
Yeah, that’s what the price increases. And the diversification really, we’re seeing and streaming it, it’s really become a math equation, you got to sit down on the weekend and figure out where where’s the value? Am I? Am I losing money by cord cutting at this point? So yeah, it’s, it’s, it’s an interesting industry, for sure.
Andrew Brill 27:25
I’m gonna have to go to my chat GPT, which I’m a new adopter of, by the way, and ask them how I can just use AI to get everything that I want to watch. Because I think that’s where we’re headed at this point. Exactly, exactly. So but I want to also touch on the commercial real estate issues that we’re having, we know nycb, the previous week dropped this week, it dropped a lot more. It’s down 60 to 70%. I don’t want to call it a banking crisis, because I don’t want to alarm anybody and start running out and taking cash out of the cash machine. But there were a bunch of banks that are in the commercial space, the commercial real estate space, that are getting crushed, in a way there’s a lot of money coming due within next year, that you know, and there’s a lot of empty real estate out there. So where is the banking? Where does that where do they go from here with, you know, the banking and the commercial loan problem?
Bret Kenwell 28:27
Yeah, you know, it is it is kind of a concern. You know, to put it lightly we saw a little bit of that flare up with with those worries a little less than a year ago, that was the regional banking crisis, the market shrug that off miraculously fast? Just sort of glossed right over that reality? I’m not, you know, I’m not a banking expert, by any means. So I, you know, I speak from what I do know the situation, but I think it was just kind of a perfect storm, right, we had COVID happen, where we were sending all these employees to work from home. And then we had the Fed raise interest rates at an incredibly rapid pace. So not only were rates higher, and that affects loans in its own way. But we had, you know, we have no one in the buildings. Well, not no one, but you know, what, I mean, there’s a lot lower occupancy than then pre COVID. So it’s just sort of this perfect storm and you’re seeing it be, you know, being weathered in different ways, like, especially in the banking industry, you look at, you know, regional banks, they’re down. I think like 25% in the last year 10% This year, it’s been a really rough start for them, especially as sort of those rate cuts. The goalposts get moved back on the feds, you know, rate cutting agenda. And but then you look at some of the, you know, the mega, the mega banks and mega cap banks and the financial sector as a whole it’s up seven 8% This year, three to four or seven 8% Over the last 12 months three to 4% this year. He sees this sort of divergence between the bigs and then the smaller years and Uh, it’s not too surprising, but it’s something like I think everyone’s keeping an eye on, for sure. But, you know, it’s it’s not surprising based on what we’ve seen in the rest of the market, right? s&p is at all time highs, Russell 2000, small caps are, you know, up 20% below their high. So in tech, the same way growth names are still really struggling, even though they’ve had a really nice three months, they’re still well off the highs, and a lot of mega cap tech, you know, Magnificent Seven, not all of them are perfect Tesla kind of being the one that’s not specifically but as a whole, they’re doing really well over the last year. So kind of seeing that divergence and the large mega caps, and then the smaller, smaller companies are more affected by REITs.
Andrew Brill 30:44
So is there any concern about you know, there are some overseas banks that are heavily invested in commercial real estate here, you see the ripple effect globally, with the commercial real estate problem here in the United States.
Bret Kenwell 31:03
So I like I always like to say, a black swan event rarely comes from something that everyone’s watching. And so that maybe it’s a little bit of false comfort, but I find a little bit of comfort in that. I like to think that in those moments, we’ll find ways to whether it’s kicking the can down the road a bit at some point, there’s probably going to people are going to take some haircuts, right. But we hope we can get out of this situation relatively unscathed, as it pertains to the overall economy, specifically in those areas. Yes, there’s there’s going to be some pain. My hope is just that there’s not a big ripple effect through economically, either domestically or abroad. And, you know, not in the market either.
Andrew Brill 31:47
So looking ahead to next week, what do we have coming up next week that we should keep our eye on? And, you know, what do you see? Guy you’re 14 out of 15 weeks up? Are we going to AI is going to buoy us we know that but you know, we’re, I think like you know what, I’m going to look at the top 15 stocks in the s&p and I’m gonna create my own little fund. But where are we going next week? What do we have to look forward to? I think Nvidia is the last amendment, The Magnificent Seven that’s going to come out with earnings. What else is on the agenda?
Bret Kenwell 32:20
Yeah, that’s, that’s so funny about the s&p 15. That’s a I’m actually gonna when we’re done with this, with this
Andrew Brill 32:27
top 15 or down by the way,
Bret Kenwell 32:28
I did check. I’m gonna go play with that idea. Yeah, that sounds kind of like a fun concept.
Andrew Brill 32:35
It’s doing well.
Bret Kenwell 32:37
I will send you the studies. Yeah, next week, you know, this week was kind of quiet on the economic front. kind of quiet on the earnings front. You know, we’re still in earnings season of course. But last week, we had five of the seven Magnificent Seven report. So that was, you know, everyone was glued to those those outcomes. We had Tesla the week before that. So like you mentioned, we’re down to just the last one in video reports later this month, I believe it’s on the 21st which is interesting because in Intel has a as a big presentation that day too. So kind of a lot going on in the semi world on the 21st. But next week, we get CPI on Tuesday, that’ll give us a good insight on on where inflation is at might, you know tip the scales a little bit when it comes to those rate cut bets favoring May, or June every inflation report at this point is probably gonna be very closely followed as it has been for the last year or so. We also get PPI later this week. I think that’s on Friday. And then we have retail sales sandwiched in between hopefully we get a strong retail sales number. So much of this economy is driven by the consumer. So that’ll be a nice important update to get. And yeah, earnings that’s that’s going to be the big one. We’ve we’re kind of shifting here from mega cap tech. We’re not quite to the retail portion of earnings, but we’ll hear from some of those higher growth names some of those former growth darlings from the last Bull Run, you know, your CoinDesk your DraftKings, Airbnb Twilio. So we’ll see if you know this latest run is has some legs to it, or you know if it starts to pump the brakes. And lastly, we have the February monthly options expiration. So we’ll see SMP is about 5000. Now on a massive win streak, so we’ll see if maybe we kind of hover that 5000 number a bit. And then you know, as those options positions expire, and we roll into the second half of the month, and then the next into March, we’ll see kind of how things rebounds themselves. You’ve
Andrew Brill 34:32
been doing this a while. Is there anything about the consumer confidence that surprises you? I mean, I’m, I’m optimistic but consumer expectations seem to be consumer confidence seems to be pretty high and people are still spending money.
Bret Kenwell 34:48
Yeah, you know, I think that that surprised me personally. Especially less so now more so in the last year, you know, go back a year ago and stuff stock market was still really, you know, feeling the pit, we weren’t at the lows, but we were feeling the pain from that last bear market and rates were high mortgages were shooting up mortgage rates were shooting up, it was inflation wasn’t fully under control. So, you know, the consumer over the last year has really surprised me and staying with that confidence. And I think now they’re starting to feel the impact of you know, they’re seeing inflation moderate, they’re seeing prices, maybe not come down so much, but at least they’ve stopped going up at such a rapid clip and, and just seems to be giving them confidence, confidence to travel confidence to, you know, do more shopping, gas prices have been coming down lately, that’s, you know, how that is with with consumers big driving country. So that’s like an immediate tax cut rate for the middle class. So yeah, the consumer confidence has stayed high. At this rate, I don’t see it dipping a whole lot unless, you know, we see a spike in inflation or dropping jobs.
Andrew Brill 35:59
Is there anything that you look at in the economy or markets that really troubles you that might keep you up at night?
Bret Kenwell 36:05
The trend lately has been really positive. And that’s just broadly speaking, but you know, you you always have to worry a little bit about what the Feds worried about, you know, so they’re, they’re still I think the market and investors came into, especially came into this year really optimistic about rate cuts, because under the narrative that, you know, inflation is be they slayed the inflation dragon. And look, we didn’t suffer economically for doing so. The reality is, we’re not necessarily out of that out of those woods yet. We need to see more progress, or more specifically, the Fed needs to see more progress on inflation. And, you know, the hope is that they will and the hope is that it won’t come with the drawback of the economy contracting, right. So I, you know, I always worry about the labor market from that perspective, just being that if we were to see weakness in the labor market, it can be kind of hard to repair that weakness. It’s not like flipping a switch. So if we do see things kind of deteriorate there can take a while to repair it. And, you know, that would be a big concern, just because of how much our our country really is driven by the consumer and their spending, and, you know, their willingness to participate. So if we see a contraction there, then that would definitely create a concern, a larger concern.
Andrew Brill 37:27
A one fun question before we finish is, what’s the best investing advice that you’ve gotten that you’ve either taken or not taken?
Speaker 1 37:36
That’s a great question, I guess I will answer from from my stance personally. And it is that maybe it’s just because of the way I look back at things. But when you find a great winner, don’t be afraid to hold on to it. Whether that’s, you know, broadly speaking, if you say you bought the low in the s&p, you know, don’t be afraid to just hold that. But, you know, if you bought some of those big winners, you know, Fang really jumps to mind. It was easy to buy them and you know, see 50% 100% gains, and say, I’m locking in the double, you know, I doubled my money. I’m, I’m, I’m gonna go have some fun. If you hadn’t done that, you know, you’re probably 10x Your money. So, if you find a winner, don’t be afraid to stick with it. That’d be my advice.
Andrew Brill 38:24
Awesome. So, Bret, where can people find you on social media? I know I found you obviously on social media because I read your tweet. But where can people find you on social media?
Speaker 1 38:33
Yeah, I’m I’m on Twitter. My handle is pretty simple. Bret Kenwell. And same with LinkedIn. I’m on both spots.
Andrew Brill 38:40
Excellent. And once again, Bret can be found that eToro Bret, thanks so much for joining me this edition of the weekly market recap.
Unknown Speaker 38:47
Thanks so much Andrew had a blast.
Andrew Brill 38:50
Excellent. That’s a wrap on another episode of Wealthion thank you for joining us. If you need help being financially resilient, please head over to Wealthion.com and sign up for a free no obligation consultation from one of our vetted registered investment advisors and remember to follow us on social media for the latest news information to help you invest wisely. Thank you for watching, and until next time, stay informed, stay empowered, and may your investments flourish.