Can North American markets sustain record highs?

追加: 2026-06-04

[00:00:00]Okay, US markets are seeing some pressure as the US Iran ceasefire is strained driving up the price of oil.

[00:00:06]All this comes as US President Donald Trump announced a new wave of tariffs on 60 countries around the world. Joining us to unscramble all this is L. Stein, president of Forest Global Wealth Management. L thanks as always for joining us.

[00:00:19]>> Good morning, Roger.

[00:00:21]>> Uh just another day in the United States right now. Uh which which one shall we talk about first? We talk about the markets and uh where they're going.

[00:00:29]They're all in they're essentially in record territory right now.

[00:00:33]>> Yeah. So markets basically want to go up. There is just this uh momentum trade. There's a fear of missing out.

[00:00:42]There's just a sense that you know everything is great and so let's go buy stocks. You know it kind of reminds me of the days of years gone by when we used to talk about TINA. There is no alternative. And that's kind of the environment we're in. Interest rates are static and low. So money is going into equity markets and that's what's driving every market, you know, in North America, you know, essentially around the world to new highs.

[00:01:06]>> And are are the earnings solid enough to justify it?

[00:01:10]>> The earnings are great. You know, the the first quarter earnings came in much better than expectations. Now, some of that was a GAP GAP, generally accepted accounting principles that allowed some of the tech companies to see a big bump from their holdings in revaluations of the tech shares that they own. But the reality is right across the board, earnings have been strong, margins have been good, revenue expectations were beat. It's been a a a great environment to to see earnings. The question is not what happened though, it's what are you going to do for me going forward?

[00:01:44]>> And I think that's a big question. And I think is oil finally coming in to be a factor. Everybody's just kind of placed it in a spot. There's going to be a resolution. We're now hitting uh 3 months into it. Uh reserves are being drawn down. Summer driving is coming. Uh is it a legitimate concern now?

[00:02:03]>> Well, you know, we it's it's oil and tariff day today, right? And so when you when you look at the imposition of uh the tariffs, that's a tax increase. When you look at what happened with respect to the uh Iranian conflict, Iranian war, uh oil prices have had a 50% tax put upon them. The $60 oil is now $90 in oil. And that's not good for anybody.

[00:02:26]And so clearly it's having impact expectations when it comes to earnings.

[00:02:31]You know, I think as we go through the Q2 earnings reports that'll come out starting, you know, mid July, it'll be a much different story than what we heard because I think most people are expecting the war to be resolved, prices to fall back to $60, $70 a barrel and it's just not happening. And so as that get cooked into people's expectations, I think we could see some dislocation going forward.

[00:02:55]>> And what how big a dislocation?

[00:02:58]>> Well, that's the that's the wild card.

[00:03:00]And you know, when we look at the global economy today, we're always thinking about the K-shaped paradigm. You know, the fact is that if you have assets, if you have investments, if you've got a job, you're on that upward swing in the K. And frankly, you've been immune from the oil price increase, you've been immune from cost increases generally.

[00:03:21]But if you are on the downward shape of that K, if you're worried about your job, if you don't have a house, if you don't have investments, it's been a very tough period. And so as we go into the summer, those who need to travel, those who want to fill their car won't be able to spend. And that's going to have economic implications that I think we haven't really given full thought because we discounted the end of the u the Iranian war.

[00:03:45]>> All right. And then you mentioned about tariffs. More tariffs being announced today. uh they're not going into effect yet. There's going to be they want to have reviews of it before anything goes forward. What kind of an impact will it have? And it is is this one that one that's going to stick, do you think?

[00:04:02]>> Well, remember that we we lost Trump's first round of tariffs uh with the Supreme Court decision back early in the first quarter. That was replaced by a 10% across the board tariff that had a a limitation that ends in July. And so this 301 tariff that he announced last night is just an extension of the 10% that's on everybody that he was able to do. 301 requires discussions and consultations and what have you. So we'll have to see how it shakes up. But right now that 10% tariff is being charged, but then there's exceptions.

[00:04:37]And the question always is what are the exceptions? Who which industries are going to be immune from these tariffs?

[00:04:44]because that's important particularly as we go into an election period. You know, you think of the farmers in the US, their diesel prices are higher, their fertilizer prices are higher as a result of the hormuse tariff. They're not happy. And so you you have to think like what are the consequences are? And I think as we go through these summer months, the consequences are going to come come home to roost.

[00:05:06]>> All right. And with all this unfolding, we didn't really get into AI, but what are some of the companies you're looking at that uh looks like they might hold up through everything that's unfolding right now?

[00:05:15]>> Well, this is a tough one because I mean it's they go up and down uh you know, more than a toilet seat, so to speak.

[00:05:22][laughter] The the AI stocks have been the place to be. There's just no question. But now you're starting to see some rotation.

[00:05:29]You know, I think the big thing in the AI trade, as it's called, is look at Nvidia. You know, despite being a $5 trillion behemoth, the stock really hasn't done much since November. There's been a great rotation from shares like Nvidia into the Microns, the uh memory makers or the the the next chip to come along the line. You know, Broadcom's having a nice run in here because its chips are going to go into phones um that are manufactured by I even forget the name. I mean, it the playing field changes. But the big question on AI is are we going to actually see the spending? You know, the the Wall Street Journal had an article yesterday that the capital spending plans that have really driven the economy are coming under suspect because the data center, which has driven all this, they they're just not building them fast enough because of capacity issues with respect to generators, because electricity supply. Um, you know, will this massive amount of spending actually take place?

[00:06:30]And that'll hit the chip companies as well as it does everybody. So, you know, it's fun. It's great. You got to kind of be there. You talk about FOMO in markets in general. It's in the in the AI trade.

[00:06:41]So, you know, we we own Google. We think it's well positioned. Uh, you know, they raised $80 billion. That's kind of like what Musk is going to raise in SpaceX or Anthropic or Open AI. And it kind of went out the door easily. Stock was hit only 3%. We own Micron. We like the memory chip trade. We think that's a great space. Uh we also own the Korea ETF to participate in the memory chip play through Samsung and Hinx which are hard to buy as individual names. So I mean we're playing memory I guess in the in the AI world today as well as natural gas. That's been a theme that we've been on for a long time.

[00:07:19]>> All right, we have to wrap it up there.

[00:07:20]Loa, thanks as always for joining us.

[00:07:23]>> Take care Roger. Have a good day.

[00:07:24]>> Cheers. You too. Alstein, president of Forves Global Wealth Management.