00:11welcome to the myers report and it's thursday april 9th and this week marks the first in a
00:21new weekly series on the economy that we're going to be doing with a focus on the markets
00:26and we're going to be it's now going to be called welcome to carlos on the markets by way of
00:33introduction carlos lagaspi is a board member of the myers report he also is a broker dealer stock
00:40trader he is the owner of precise investments which is based in highland park illinois and
00:46six offices in the u.s plus mexico and nine offices in south american countries when it comes to
00:55knowing what is going on in real time we go to carlos okay carlos let's start with the with a
01:03rundown of investments shown in the great race for those who don't know the great race it was started
01:09by the myers report as part of a newspaper feature back in 1982 it tracks 10 hypothetical investments
01:17made on the first business day of the year and races daily through the new year's eve for a winner
01:25so carlos what is happening what is your take on the s&p 500 for the beginning of the year
01:32it's still
01:33down it's down a little but where do you see it going well it's uh right now the the market
01:40you know
01:41after the announcement of the ceasefire um bounced back uh to roughly break even a year to date for uh
01:50point three percent down for the year after being down near near 10 percent uh from the from the all
01:58-time
01:58highs so it's um it's kind of back to neutral um it had traded significantly below the 200 day moving
02:07average which is a um important technical level now we shot north of that and um though the rally has
02:18continued we uh went up today another 0.6 percent on the s&p 500 and uh 0.83 percent
02:27on the nasaq
02:28but on a lesser and lesser volume so for us it's indicating that um probably some of the movement
02:37was a fair amount of um short covering and and right now it's kind of going back into a holding
02:43pattern especially going into the weekend and see what emerges over the weekend what about the 10-year
02:50uh treasury the 10-year treasury we had uh uh important economic numbers this morning uh so
02:59though it's it's i think it was already what we call baked in the cake because the the yield didn't
03:06move much uh we closed around 429 on the 10-year and um in spite of of numbers we're getting
03:18mixed data
03:19economic data we were inflation has come out harder than expected um but at the same time we're still
03:26seeing um job creation uh below expectations and but still strong consumption and so uh it's kind of
03:39like what do we call uh no hire no fire environment so people that have a job they feel secure
03:46in the job
03:47continues to consume but it's just not enough new job creation and um with uh with inflation on one side
03:56and some signs of economic weakness or labor weakness on the other side so again i think though 10 years
04:05is going to continue to be range bound um from 425 to 430 uh
04:13at least for the foreseeable future for the crude oil obviously with what's going on in iran that is
04:19really jumped uh however if uh if this is going to don't you think this one's going to pull back
04:26if
04:27we have a peace settlement i well right now we we we always we're calling the 85 is the new
04:3465
04:34so we uh definitely believe that even if if uh you get a resolution of a conflict there's been
04:45uh enough damage to the infrastructure that um we don't see it going below 85 um so yeah we believe
04:56that's probably going to be 85 to 110 the range with probably medium price right around 100
05:03uh uh you you have backwardation on the futures for the oil that probably takes you uh into the 70s
05:13early next year so still the market feels somewhat confident that the conflict is not going to last
05:22too long but even in the best scenario production is going to take a while to recover and gold and
05:30silver looks like uh the people that expected it to really go sky high this year uh it advanced but
05:38it's not it's not having a major run in the yeah it's it's it's yeah gold you know was a
05:45star
05:45performer both gold and silver were star performers last year um and it's it has increased this
05:54correlation to the market which is um what do you don't want with gold normally what the what what
06:02you want in gold this is it's a hedge against market volatility and uh for multiple reasons some of
06:10them technical um it has become correlated so the stock market sells off gold sells off and vice versa
06:17um i i think a lot of has to do with derivative plays that they've entangled them
06:25and until those things unwind i said i still we're going to see them moving in parallel um in the
06:32near future okay and so what's your view on where the stock are you optimistic about the stock markets
06:40well i think right now we're trading water it's um the uh the even the sell-off to the
06:50the bottom part of the sell-off it wasn't that far far off all-time highs so i think i
06:58think it was
06:58remarkable actually yeah yeah so it's it however i do not see the conditions for a continued rally
07:07until the uncertainty lifts and um and and it because you know we believe that the the ceasefire is
07:18fragile and uh and the only way to um gain more confidence is time you know the longer it lasts
07:26the
07:26more confidence will build and the market will uh reassert itself but for now it's not you know it's
07:35not bad enough to sell but it's also not good enough to buy so just holding pattern for now sideways
07:42it's remarkable considering the uncertainty in days past the market would have gone down 10 20 percent
07:51or more but it didn't this time it's interesting the the market went in and starting the beginning of
07:58the year unrelated to the middle east conflict uh very hedged um so part of it was a tax strategy
08:09you know that uh that investors wanted to lock in the gains but not pay the taxes so they
08:15just bought insurance on the downside and uh if you see you know the put call ratio and the value
08:24of
08:24the options or where the vix was trading so i think that created um a uh support for the for
08:33the market
08:34because investors didn't feel the need to head for the exits because they had a counterweight um
08:40and and that's why it's so important how long the conflict lasts if the conflict lasts longer than
08:47the hedges then it you may see you know market go lower but for now there's uh you know people
08:55are
08:56not liquidating unless they're forced to be a margin or something like that so now i think sideways is the
09:03the our baseline scenario uh are there some market segments that could be hot but particularly that
09:11would be hot once when the conflict is resolved well we regardless whether the conflict continues or
09:19resolves but we're bullish on defense because it's uh the um the stocks have to be replenished
09:28so um so uh the defense contractor sector uh i think that's it's interesting to us um
09:39uh the uh also we're optimistic with financials i think financials have pulled back um
09:49we see the steepening of the yield curve which is good for for banks so that's one of the ones
09:56we're
09:56watching um so we have a shopping list but not something that we're committing capital right now
10:02until we get more clarity but i think those those are sectors that we're definitely uh inclined to add
10:10what market segments do you think might actually be hurt if there's a peace settlement
10:17well i i i the uh like defensive stocks you know that have been the refuge you know consumer staples
10:31that um uh the ones that everybody runs when there's uncertainty i think that those have become pricey
10:39and i think if which ones for example um well i can't you know i can't name individual stocks by
10:46by compliance but i could give you sectors but but yeah you know like you know like you know um
10:53cosmetics um uh household products uh you know cereal and things like that you know that that's
11:00going to go down they're going to go down if there's a peace settlement yeah because then there's
11:05confidence in the market and it's going to be rotation so not because the companies are
11:12impacted negatively it's just because the source of investment because they figure in people they
11:17would figure that no matter what people are going to eat cereal and the women are still going to use
11:23cosmetics and the other way around if there's a peace settlement you can liquidate those positions
11:28to buy an aggressive investment that so so it's that makes that makes sense yeah so it's it's just
11:35yeah because many times it's not a fundamental play it's just okay i want to buy this high-tech stock
11:43that sold off well where i want to get the money well i want to sell this other one you
11:48know to buy it
11:48so it's so it's rotation that's an interesting way to look at the market i hadn't thought of that quite
11:53frankly yeah okay carlos are you optimistic about the future for the markets and for the u.s in general
12:01or pessimistic for the for no for the long term i'm i'm i'm i'm a i'm an optimist i still
12:08think
12:09they're part of uh productivity and um technological revolution um that uh can um uh bring a lot of
12:20benefits both um for the markets and and the economy so we're still in those early stages
12:27and uh so when you have this type of of of uh technological innovation revolutions um
12:37you know in the course of five years it's it's it's a good market it's just sometimes you just need
12:45to
12:45kind of push through the the short-term uncertainty okay carlos thank you very much stay safe have a
12:54good weekend be well and god bless america
12:59you
13:15you
13:18you
13:18you
13:18you
13:19you
Comments