Benzinga's PreMarket Prep is the #1 go-to source for everything you need to know before the market opens! Join our expert hosts as they break down the latest market trends, analyze key indicators, and provide actionable insights to help you navigate the trading day ahead.
Category
🗞
NewsTranscript
00:00Uh, what about the start to Q2 earnings season here? Delta yesterday, Delta, who always sets a
00:06really high bar for itself, last quarter comes under that high bar. It doesn't have a that good
00:12of a day. You're looking kind of a, uh, mixed here in the bank earnings, uh, Wells Fargo trading down
00:18substantially, Citigroup up substantially, uh, Fastenall, the nuts and bolts of the economy,
00:24that's trading up, uh, kind of a mixed start here to Q2 earnings season.
00:29Yeah. And I think that's what we're going to get and that's what we should get, right? The
00:32uncertainty of what's in front of us, uh, is a reality. When we talk about what the Fed is going
00:38to do, that uncertainty has been there and it's going to continue to be there until we get some
00:43more clarity from them. The geopolitical risks that are out there are going to continue. Our
00:49own election cycle, um, uh, impact is going to be there and that's going to, that's going to
00:54continue. So I think we are going to get somewhat of a mixed bag, um, and, and appropriately so. I
00:59don't, I don't think we're going to get a real, um, you know, gung-ho speeches from CEOs and CFOs
01:06that everything is rosy and the outlook is rosy because we're all, we're all kind of fighting in
01:10this, in this same trench of, of what's in front of us. Uh, you had, you know, Jamie Dimon talking,
01:16you made a comment today that, um, you know, M&A activity should really pick up as we get towards
01:21continue throughout this year here. But from the regulatory element side of it, that's going to be
01:27somewhat of a headwind, uh, that gets in front of that there. So we're going to hear this, this
01:31hedging comments coming out of these, these earning calls. Um, and, and I think it's right. It's
01:36rightfully so. No one can really pinpoint what the Fed is going to do and when they're going to do
01:40it. Yes, economic dent data is kind of showing us where this might go, but you never know what the
01:45Fed's going to do. We continue to watch what's coming out of Washington and, and, and that,
01:50not that the election has a overall impact, um, on, on individual companies. I just think from a,
01:58from a economic point of view, the outcome of this election is going to be very interesting.
02:02And the position that we're in right now, where you have an incumbent president who is struggling
02:06in the polls, um, and the other ancillary issues that are coming, coming along with that, I think
02:11that's just going to force a lot of lack of participation into our markets here. So, uh,
02:18for, you know, second quarter earnings, they should be decent, they should be tepid, but I
02:24don't think we're going to get real, um, real, you know, positive outlook, forward-looking comments
02:31coming out of the C-suite offices. And again, rightfully so. The, the, the headwinds that are
02:37in front of us, um, are, are real and they're going to have to navigate these very, very gingerly.
02:44So what sectors, uh, would you be looking towards here? It seems like we're kind of
02:49in a stalemate here, uh, with the, uh, uh, with, on the rate situation, something I've
02:55talked about, like, you know, why do rates hit necessarily? I mean, well, they pretty much
02:59established that they're not going up, you know, why not, you know, why do they substantially have
03:04to, you know, go down? Where do you go if it just rates are just, are muddled in this area
03:11six months from now, you know, new, uh, you know, change, perhaps a change in administration,
03:16interest rates are still where they're at, you know, what, you know, where, where do you go?
03:21Yeah. So I, I think in this interest rate environment that we are in, um, we're not
03:26going to see, we're not going to see the pendulum swing back as fast as everybody wants, right? If
03:31you look at, if you look at how long it took us to get to this point, it's not going to,
03:36it's not going to swing back. So we are going to remain in this interest rate debate and move
03:44for quite some time. Uh, it's going to take us a long time to get back to somewhere where I think
03:49people feel, feel comfortable. So that being said, I think, you know, financials have been
03:54relatively been doing well throughout this, uh, throughout this timing. Um, and I think as we
04:00continue that this is going to take a longer period of time than people would like, I think
04:03financials certainly, uh, remain in play. When you look at the tech sector, it's hit or miss,
04:09right? I mean, you, you're either going to be really right or really wrong. And when the swing
04:14is, when it, when it's swinging up, you're, you're, you're, you want to be on that board.
04:18You're not going to be able to pick the timing, right. Of when that rotation occurs as we,
04:22as we noticed yesterday. Um, but I think overall, again, that two steps forward, one step back,
04:28if you're, if you're in that tech sector, uh, I think overall you're going to do well.
04:32Uh, I do think people are becoming a little bit more comfortable, um, with real estate interest
04:38rates, mortgage rates of where they're at. We've seen some activity continue to pick up in, in that
04:44sector there. Um, again, as, as it's going to take quite some time for interest rates to come down,
04:50people do need to buy houses. People will want to sell houses that transactions are going to
04:56continue to occur. You find that in this, you know, six to 7% range at this point where people
05:03do feel comfortable, even if rates come down, we're not going to see an initial pickup in that
05:07area. Uh, but I think as we get to get a couple of cuts, we'll start to see that area certainly,
05:14certainly start to pick up. Homebuilders have had, uh, have had a lot of struggles,
05:18um, within themselves. People are watching, uh, you know, people are watching what they're doing
05:23on home improvements and, uh, and, and home builders are being very careful about what
05:29they're doing moving forward. So we're going to have to, we're going to have to continue to watch
05:32that. And the last sector I just think we need to keep an eye on is the, you know, travel and leisure.
05:36I think people are, um, you're really watching what, where they're spending money, where their
05:41discretionary spending is coming. Are they overspending? Are they splurging on those
05:45vacations? They're thinking twice about that. Yes, we've seen airline tickets come in,
05:50uh, pricing come in due to, due to fluctuations in oil prices. Uh, but I think, you know, travel
05:55and leisure is one that we're going to have to keep an eye on as, as discretionary spending
05:59continues to be tight.