It may seem like smooth sailing for the stock market, but hidden pressures could soon shake the calm. Gene Goldman, CIO, Cetera joined TheStreet to explain.
Transcript:
CAROLINE WOODS: What are the implications for the stock market, which is at record highs right now if inflation is, in fact, going to be worse than we expect?
GENE GOLDMAN: Yeah and I always use the analogy lately that it’s like a White Lotus financial market in the sense that everything is calm at the surface, very peaceful. And if you think about the show the White Lotus, you have these resorts with, you know, beauty and sunsets and cocktails. Everything is really nice and mellow on top. Underneath all this potential chaos occurs in the show. Similarly, right now we have high valuations, high expectations, significant market concentration. We have earnings and revenues slowing down a bit. That’s chaos growing. My perspective is high valuations pricing and everything being perfect. This is a bump and uncertainty that could create a big piece of market volatility.
CAROLINE WOODS: How is this chaos brewing underneath going to play out in terms of market action?
GENE GOLDMAN: So I think we’ll have a sideways moving market for some time. Sideways lots of volatility just because lots of conflicting data. But I do think, you know, if you think about the show the White Lotus, it’s a very dark comedy. I’m not going to be dark like the show. I’m going to be very optimistic. I do think by year end, stocks will be higher at year end than they are right now, because we have tariff revenues looking like $250 billion this year, that gets recycled back into the economy. You also have the CBO said $2.5 trillion. And they are a nonpartisan group $2.5 trillion in tariff revenues over the next 10 years. Also, the tariff negotiations, even the news that came out today suggests that we’ll get some better terms for tariffs. That’s good news as it opens up or opens up other economies and $26 trillion of cash on money markets and savings account on the sideline looking for better valuations. All this, taken together says be the we’re big buyers. Any pullback any sell off any potential like 5% pullback we’re buying like crazy.
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