Forget the Mag 7 and focus on Al infrastructure

Hinzugefügt: 2026-06-03

[00:00:04][music] >> Welcome to Trader Talk. I'm Kenny Polcari and today we've got a very good conversation, a very interesting one that I'm excited to get started. We've got David Miller who's a senior portfolio manager and chief investment officer at Catalyst Funds and we've got the president of Pacer ETFs, Shawn O'Hara. Gentlemen, welcome to the conversation. Thank you for joining me and let's just kick it off. The first half of 2026 was really great. Let's talk about that a little bit, where you kind of saw our opportunities and where you think the rest of the year is going to go.

[00:00:35]>> Certainly 2026 has been a wild ride so far. I mean, the the Iran conflict, well, it's not over although there might be some hints that it might be winding down. We really don't know.

[00:00:44]The market has had very different reactions to it. You know, earlier this year it was getting slammed.

[00:00:49]At this point, people seem to not care whatsoever looking almost as if it's in that positive.

[00:00:54]>> About the geopolitics?

[00:00:55]>> I mean, I think there's good arguments for that. If you're an oil exporter and oil prices are high, it's not like the early '90s when we had a an oil crisis.

[00:01:02]We're we're making a lot of money especially in the Permian Basin and the Bakken with this situation and obviously the tech industry has not been affected.

[00:01:11]So, it's been been quite a ride.

[00:01:13]>> And so, what do you think considering that we're on the verge of maybe a deal with Iran which should take some of the some of the anxiety out of the market, will also take $100 oil off the market essentially. Should go back down to somewhere I would imagine initially in the in the mid '80s. I suspect over time it'll go back to more levels where it was prior to the prior to the war conflict which is like in the low '60s.

[00:01:37]>> Yeah, I I think 70 80 bucks a barrel is probably a fairly sweet spot. You know, people say 20% of the world's oil comes through Hormuz, but it's not really the case because you have these bypasses.

[00:01:47]You know, Saudi can get their oil out through the the Red Sea. They're building another pipeline through the the UAE. So, yeah, they've got a lot of those.

[00:01:57]>> yet.

[00:01:57]>> No, no, I mean the Saudi one is, the UAE one's not.

[00:02:00]>> Is not?

[00:02:00]>> Yeah.

[00:02:01]>> Right. Okay, Sean, help me out. Talk to me about Pacer ETFs and where you guys stand in the first half of the second half of the year.

[00:02:07]>> So, it's been kind of interesting, you know, we've had the resurgence of international, if you will. Uh some of that's been, you know, tailwind dollar, but some of it also has been valuation driven and and they've gotten off to a great start. So, we're starting to see bigger flows onto the international side. Uh we had a little bit of a shift when, you know, when when it >> I was going to Define international.

[00:02:26]Developed or emerging market or both?

[00:02:28]>> really everything's both for us. Our emerging Like everybody used to laugh at me. I own our emerging markets ETF and have for a long time cuz it's just so way out of whack.

[00:02:35]>> Yeah.

[00:02:35]>> And now they're like, wait, that wasn't a bad move. But, um you know, we international, global, emerging markets, um you know, we launched a product with Nasdaq that sort of trades on their brand, if you will. They think innovation makes the Nasdaq what the Nasdaq is, so we use a company that they partner with to measure patent value for companies. So, like the thing with international is like, you know, we do it and then we hold our fingers and hope we say, why did I do that again, right?

[00:02:58]But, when you reorga- like like somebody said to me once, the United States innovates, China imitates, and Europe regulates.

[00:03:07]And anytime you invest internationally, you're always going to have a big chunk of Europe there. And so, you have heavy savvy asset sectors that don't have great growth profiles. Using this innovation screen with Nasdaq and measuring patent value, we reorganized the international index. So, now it's heavy tech. It's heavy consumer brands.

[00:03:23]It's heavy uh pharmaceuticals. And so, when you look at the performance of that, it's gone above and beyond what international has done. But, international's been a great uh great surprise for us. We've seen, you know, the world clamoring for income in a lots of different forms, whether it's just generic fixed income, short-term bank loan funds and things like that, or dividend paying strategies, or covered calls. So, it's been a lot of interesting developments. The one that I think is the most significant that we'll see play out is that these hyperscalers that are came under pressure earlier this year because they've committed to so much capex.

[00:03:56]>> Right.

[00:03:56]>> And we don't know whether they're going to get the money back.

[00:03:58]>> No, but they were probably stretched.

[00:03:59]Coming into the year, I think they were stretched. The whole sector was stretched, right? We talked about that.

[00:04:03]We talked about they'd gotten ahead of themselves. And we actually saw that in January and February before the conflict, we saw them start to back off, which I thought was actually very healthy because I did think it they got stretched.

[00:04:12]>> Yeah, but I think the way to play that trade is to not necessarily be back in under you back away from them, but I don't think you should be loading the boat and being only in seven stocks.

[00:04:21]>> Agreed.

[00:04:21]>> They're going to spend the like four to six trillion dollars over the next three years. They're going to buy buildings, >> Right.

[00:04:26]>> data centers. They're going to buy equipment. You're talking about chips, hardware, software, networking equipment, >> Air conditioning equipment.

[00:04:33]>> like train. These buildings are going to have to run on their own, which means you're going to get Johnson Controls in there so they don't have to have 15,000 employees running these things.

[00:04:41]>> Right.

[00:04:41]>> And so there's a massive shift going on there that we've had a great participation in. And I think the world's finally waking up to that. You know, Nvidia's only one kind of chip.

[00:04:50]>> Agreed.

[00:04:51]>> It's a GPU. What's needed for AI to really work is memory. And so we've seen this explosion into >> Micron, Western Digital.

[00:04:58]>> own all of those names in an ETF. We took everything out of a data center, put it in the parking lot, >> Yep.

[00:05:03]>> and sorted into piles and then made that into an ETF.

[00:05:05]>> You know, it's interesting. There's an ETF out there called DRAM, right? D R A M, which is the memory.

[00:05:11]>> Yeah.

[00:05:11]>> Do you have an ETF like that?

[00:05:12]>> We do, Traffic, TRFK, but we go further than DRAM, right? And we go further than SMH, which is a VanEck product, right? I think the story the short-term story is we've woken up to the fact that there's going to be a shortage of chips.

[00:05:23]>> Yeah.

[00:05:24]>> I think the longer-term legs on this is that we're going to wind up with a shortage of cooling systems, >> Yeah.

[00:05:28]>> right? And all of the electrical equipment that goes with that. So, there's another wave coming of scarcity that's going to be driven by this massive buildout in AI and traffic.

[00:05:38]>> Traffic owns it all. It owns the chips, the hardware, the software, the networking, the cybersecurity, the cooling systems, and the building management functions.

[00:05:47]>> What do you think about, either one of you, what do you think about the pushback that we're seeing around the country in data centers? You know, people saying not in my backyard, they're not interested.

[00:05:54]>> People may be pushing back, but the reality is they're getting built anyway.

[00:05:58]And when you look at how they're getting built out, the earnings power that these are going to generate is really incredible.

[00:06:04]>> Agreed.

[00:06:05]>> And it's not like a nuclear power center. Like there there are certain situations where people push back really hard. There's plenty of places where you can still build data centers that don't have that NIMBY situation that you you have otherwise.

[00:06:17]>> There's two problems that got to be solved first, right? One is where the where's the energy going to come from?

[00:06:22]It's not going to come from the grid. It cannot because it will drive electricity price price up. So, we think we have our data center product we tucked in 20% energy into that product, but it's all on-site behind the meter stuff. So, it's gas-powered generators. It's hopefully in the future small nuclear reactors.

[00:06:38]>> reactors.

[00:06:38]>> And then you need some source of water.

[00:06:41]Um I'll tell you a funny story, Kenny. I have a friend down in Florida who's building a data center.

[00:06:44]And he was getting some pushback in this little like he he used AI and said, "Where is the best place to locate?" And it's somewhere in Virginia, right?

[00:06:50]>> Yeah.

[00:06:51]>> So, he's building a data center. He he went and met with the town and he said, "You know, if you guys allow this to happen, the amount of tax revenue you guys can generate out of this can make everybody in the town not have to pay real estate taxes ever again in their entire life."

[00:07:02]>> Yeah.

[00:07:02]>> So, you're going to see some of that stuff going on, but I agree they're going to get built. It's just how much hard work is going to have to be done.

[00:07:09]And then are we going to be able to ramp up the power in in the water in a way where it's not completely intrusive to the overall system and it doesn't overwhelm it.

[00:07:16]>> interesting that you bring up that point about what the data center could do for the town. Yes. Cuz there was a story on last night I I think it was on Fox Business, but it was about there's this pushback in the town and the town management, you know, the town leaders came out and said, "What these people don't understand is all the benefit that could result." And that's a you know, whether it's education, whether it's taxes, all the benefits that that will come to these towns if they allow them to happen. I understand some of the pushback maybe, but I I think people also have to take a step back and realize it is the future.

[00:07:46]>> What's happened in the United States is kind of sad. When you drive into towns, you used to drive into the town center, right? And it was a square. And that's where all the commerce was. And then we put a Walmart on the exit by the highway and hollowed everything out. And so there's lots of opportunities in these places to sort of regenerate their economies based on something new if they'll only pay attention. And and to get over the fact that, you know, it's not going to drive your electricity prices up and it's not going to be a nuisance to the town. It actually could be a benefit.

[00:08:12]>> that's what the the argument is is that it's driven up the electricity costs and you know, utility costs have just skyrocketed. So talk about small nuclear reactors. You brought it up, but talk about talk about that industry. Where do you see it? Where do you see it? Do you Is that an opportunity for investors in 2027 and beyond? Is it an opportunity now? SMR originally, which I was big on, I'm still big on it, you know, had a nice move and then it got crushed again this year, but I think it's kind of bottoming out now.

[00:08:36]>> Yeah. It will definitely be something huge in the future. The issue is, if you look at the companies that are in the space now, it's very promotional.

[00:08:44]They're not generating the EBIT to justify those types of valuations. What we do know is they're going to need uranium. So I like a Cameco. If you look at what they're else they're going to need, they're going to need copper. I like a Freeport-McMoRan. So I'm trying to figure out those spaces where you really have a constraint in the market and that constraint needs to be met.

[00:09:02]Who's going to actually address the solution? That's harder to figure out.

[00:09:06]>> Cameco, I Interesting you say that. I call Cameco Cameco. However, um >> You said Cameco, I say Kamako.

[00:09:13]>> Yeah, right. You say potato, [laughter] I say potato.

[00:09:15]But um has been a good performer.

[00:09:17]>> Yeah.

[00:09:17]>> Cameco has been a very good performer.

[00:09:20]>> Oh, yeah. No, absolutely. I mean, people know that the nuclear is coming and you need the uranium in the US.

[00:09:27]>> So do you think the opportunity's lost there? I mean, has it already happened?

[00:09:30]Do you think there's so much further?

[00:09:32]>> Uh I think there's a long way to go. I I I think the clear solution long-term is nuclear for for power. People realize the mistake. It's much safer than it used to be.

[00:09:41]>> Right.

[00:09:41]>> Uh 10, 20 years from now, that's clearly how the world's going to be getting its power.

[00:09:45]>> to your point, >> Yeah.

[00:09:47]>> the data centers, they can't depend on the grid. The grid goes down, they're screwed.

[00:09:50]>> I I did full disclosure. I own NuScale.

[00:09:53]I own Oklo. I've owned them for a long time.

[00:09:55]>> You individually?

[00:09:56]>> Personally, yeah. We also own them in our ETF as well, right? Um but I also you The other thing that's part of this story that not a lot of people talk about, which is again into the frontier a little bit a little bit towards the horizon, is quantum computing. Because then you don't have to have a building the size of Manhattan to do it. You can shrink down the footprints, and they're much more energy efficient. So I own a lot of those names as well, which is just, you know, long tail on it.

[00:10:17]>> So let's talk about that cuz last week, what did Trump do last week? He he uh >> He He green-lighted NuScale with somebody, I think somewhere in the Midwest, where they're going forward.

[00:10:26]>> Right. And IBM took off, and IonQ took off, and we're getting to They all exploded higher. I think IBM was up 12% on that day.

[00:10:34]>> Yeah.

[00:10:34]>> It was crazy, right? And I own IBM, to be fair, I own it. The firm owns it. So it's great. But um I think quantum computing is going to be the next generation. But with that is going to come more needs for cybersecurity.

[00:10:46]>> Yes.

[00:10:46]>> Right? So the cybersecurity sector is going to become even more important again.

[00:10:51]>> That's part of our product that owns everything in the data center, right?

[00:10:53]It's in that TRFK is the ticker. That's in there as well, and it's really important part of it cuz we got to be completely secure.

[00:10:59]>> How many names do you have in that ticker?

[00:11:01]>> I think there's 85 or 87 names in that ticker.

[00:11:04]>> Wow.

[00:11:04]>> Yeah.

[00:11:05]>> What are the names, isn't it?

[00:11:05]>> Yeah, well, I mean, we own most of the chip makers. I The to get into that fund, and it will go up over time. The screen to get in is you have to have you have to generate 50% or more of your revenue from the use, transmission, or or manipulation of data. So that gets everybody in there, right? So then that you have like uh you know, you got your your memory chips, you've got your Nvidia in there as well.

[00:11:24]But then you get those ancillary services that that help make that happen as well. So >> Right. All the kind of adjacent Talk to me about your view on the second half of this year.

[00:11:33]>> So, I'm still pretty bullish going into the second half of this year, largely because I think the pressure on interest rates is a huge driver on equity valuations. And I think this pressure from the rent war is likely to to lighten up. And once we can see interest rates come in, when you see that denominator, you know, you got the earnings on the top and interest rates on the denominator. Once you see the denominator come down, you can really see equities rip.

[00:11:54]>> You think we're going to get a cut in the second half?

[00:11:56]>> I don't think we're necessarily going to get a cut until oil prices come in and CPI comes in, but I think there's a good chance towards the later half of this year that that could happen.

[00:12:05]>> Really?

[00:12:06]What do you think?

[00:12:08]>> Uh, I'm in the no cut this year, but Trump says he's going to be independent, so you know what that means.

[00:12:12]>> what?

[00:12:12]>> [laughter] >> He's going to He's He's going to Lyndon Johnson Kevin Marsh up against the wall 100% and say, "Listen, you you know what?" I want to see how quick he turns on Kevin Marsh.

[00:12:23]>> it will depend on whether he he listens to what I mean.

[00:12:25]>> You could make the argument, right, that, you know, we need to look at what's going on with >> oil and what that means for inflation and just sort of set that aside and be more proactive.

[00:12:33]>> Yeah.

[00:12:34]>> Yeah, because I think, you know, rates are a little bit of a headwind for the market. I mean, we got the 10-year was 4% earlier this year. Got as high as about 470, 480, 490.

[00:12:41]>> Yeah, I think I think they are.

[00:12:43]>> to come back now cuz it's it feeds into so much else. It feeds into all the real estate. It feeds into the lending that's going to be behind building out all of this AI. So, uh, you know, could we see a cut? I I wouldn't put it past them, but, you know, with with Trump give him a little bit of pressure to get it done.

[00:12:58]But, if you stick hard to that 2% number, I don't see it happening this year.

[00:13:01]>> Okay, but it but tell me if I'm wrong. If they cut, he's going to have to he's going to have to start to shrink the balance sheet. He can't continue to expand the balance sheet.

[00:13:10]>> No, he's going to do that.

[00:13:11]>> Because because we'll get into a 1980 style inflation cycle.

[00:13:14]>> Right.

[00:13:14]>> Right.

[00:13:15]>> Which nobody wants to see.

[00:13:16]>> I think that's the primary reputation that he has, right? Is he's a he's he's hawkish on the balance sheet, right? So, I think he probably will shrink it, which I think is good. I'm a free market guy. Get the government out of everything we can.

[00:13:28]>> you.

[00:13:28]>> Now, you know, whenever the government gets behind something with my that causes bad problems. So, I'm happy to have them shrink the balance sheet and let the private capital come in.

[00:13:36]>> That's the Ronald Reagan famous famous quote, you know, "Knock's on the door, I'm the government, I'm here to help."

[00:13:40]>> Yeah.

[00:13:40]>> Uh-uh, no you're not.

[00:13:41]>> [laughter] >> Yes.

[00:13:44]>> Wait, so then tell me what sectors in the second half cuz we also have a midterm election. So, I think, you know, that in the summertime that's going to cause some anxiety in the markets as you kind of get to see which way it's really which way it's really going. I think right now the market is assuming the house flips to Democrats but the Senate stays. I'm not in the camp that I believe the Senate's going to they're going to be able to control the Senate.

[00:14:04]>> Yeah, yeah, I think it's actually probably more likely they're not controlling the Senate.

[00:14:08]>> Which means they're going to lose both.

[00:14:09]>> We'll see what happens with the house. I mean, the redistricting really changed the picture quite a bit. So, I I think things are going to be a little bit more red than people had originally anticipated.

[00:14:18]>> Really? That's interesting. What do you think?

[00:14:20]>> On that topic, I think I agree. I think they played the game right on the redistricting side to give themselves enough of an edge in the house and I don't see them flipping the Senate cuz I think there's more Senate seats that are blue up for election there are red and so I like their odds there as well.

[00:14:33]>> Well, I hope you're right. But we'll see. If they don't resolve the Iran crisis and oil stays at $100 a barrel, then that's also going to feed into the election cycle which could end up being which is why he needs to resolve that sooner rather than later. Like sooner like tomorrow. Right. The Michigan sentiment number came out last week, the lowest it's been, right? Although consumer confidence came out today, it was a little bit better. But um I I still think it's a good concern.

[00:14:56]I think inflation expectations on Friday suggested that, you know, the the expectation house for inflation running at 4.8%.

[00:15:03]>> sure the Michigan sentiment number has valid validity today on today's age where everybody can and gripe about whatever they want in the internet with anonymity. I think we're generally we just are more miserable people than we ever were probably [laughter] because of that.

[00:15:14]>> Yeah, no, I agree. But ta- talk to me about opportunities in the second part of the year away from tech. Because listen, we can talk it we can talk till we're blue in the face about tech. But talk about where you find opportunities away from tech in second half into the 2027.

[00:15:29]>> So So I like the payment gateway networks. I I really like the Visa's, the MasterCard's of the world. When you have some inflation in the system, when you see that these companies have margins that are as high as they do, there's good reason to think those companies can grow revenue and earnings into the teens and and I don't think that's really being fully valued. The stocks aren't cheap, but but I I really like both Visa and MasterCard.

[00:15:49]>> Okay, but if inflation continues to rise, say we don't get a resolution. Say oil stays this higher.

[00:15:55]Aren't the credit card companies going to get hit because people going to pull back?

[00:15:58]>> Oh yeah, so the credit card companies themselves I don't like. But the Visa and MasterCard's, the more inflation you have the better for them because they're just taking a cut off the top. So the bigger that that top line number, the the better their their bottom line number. For the credit card companies, I I'd stay pretty far away from those.

[00:16:12]>> Right. Okay.

[00:16:13]>> We we we use a couple of screens that that we think over the long haul make a lot of sense. Free cash flow yield on one side, which is free cash flow divided by enterprise value. It's a measure if I bought the whole company, how much cash would I get? It's kind of a Warren Buffett-esque approach. And then free cash flow margin on the growth side, which is free cash flow divided by sales. So what gets the growth stocks in trouble is lots of sales but no real profits. Peloton, right? So we use those. And so when you look at those screens, right? The two things that that that continue to pop out uh I mean on the margin side, obviously tech, but you see health care >> Yeah.

[00:16:44]>> and you see energy continuing to pop out. And when you look at like as an investor, you know, Google. Here This is a good point.

[00:16:53]Google is in the Russell 1000 Growth, the Russell 1000, and the Russell 1000 Value.

[00:16:59]One stock is in all three of those indexes. How can that be?

[00:17:02]>> the value? How can it be in the Russell 1000?

[00:17:04]>> And not only that, it's a 7% weight, which is stunning. So when you're when you're traditional value guy trying to compete against that and you've got Google as a number one holding in the Russell Value ETF, it's hard to stomach.

[00:17:14]So I think for investors, you know, we've become so concentrated >> Yeah.

[00:17:18]>> that there are opportunities to go a little bit against the grain, buy high-quality companies that generally a lot of free cash flow that trade at a discount, that grow their earnings faster than their peers, and you can get there by using like a free cash flow yield screen, and it's going to tilt you towards health care, and it's going to hit tilt you towards energy, and it's going to tilt you towards consumers.

[00:17:37]>> Health care's been an underperformer >> Yes.

[00:17:39]>> all year. I I like health care. I think there's an opportunity in health care. I think people that want to continue to chase tech, I think they're missing an opportunity. Doesn't mean you have to sell your tech. Just means you got new money, you should put it somewhere else.

[00:17:49]And I think health care is a is a place that you're going to find real value.

[00:17:52]>> Yes, I agree with >> Right? I think health care is, I think basic materials are, I think financials will do well.

[00:17:57]>> And everybody thinks the energy companies are like going to live and die by the price of oil. They're so far out the runway on stuff. Like it's great for them now, right? Because oil is like, you know, 90 bucks or 89 bucks a barrel, but they still make as much money and down the road because they're long-term planners in terms of their fields and the development of all that stuff.

[00:18:13]>> Right.

[00:18:14]>> That, you know, as long as it stays above 65 or six low 60s, they make tons and tons of money, and they trade at such deep discounts that, you know, there's a contrarian play there to sort of barbell yourself.

[00:18:25]>> Yeah.

[00:18:26]>> Don't don't go away from the AI trade.

[00:18:28]That's going to be a big win, for sure.

[00:18:29]>> from that.

[00:18:30]>> But you need you can't have everything on that side of that table. And with the rise of ETFs, which has affected actively managed funds because I'm an active manager and I'm benchmarking to the S&P 500, I can't be too far out of line, or else I'm taking basis risk or greater tracking error.

[00:18:45]So with the rise of ETFs and having Vanguard and iShares have trillions and trillions of dollars tracking the S&P 500, it's hard There's almost a an endless momentum piece of that. And it's not really what your father's S&P was when seven stocks were 50% >> Not at all.

[00:19:00]>> So diversify into places that are not popular today, uh that are out of favor, that are high-quality companies, and they pay dividends and grow their dividends and things like that.

[00:19:09]>> Okay. But let's talk about something else because it's certainly top of mind and it's going to be in the news the next 3 weeks is going to be SpaceX, right? The IPOs they it's going to the road show starts on the 4th, pricing is on the 11th, the first trade on Nasdaq is the 12th, right? So talk about potential because I think one of the things that's concerning is that Elon Musk wanted almost immediate inclusion in the index. Now I don't know whether or not he got that. Has that been out Did that come out yet or it didn't come out yet?

[00:19:37]>> they're probably going to wind up making a special exemption. I have a little thought on this whole issue, right?

[00:19:42]>> So it's And I think it's important for people to understand.

[00:19:45]>> IPO. It's going to blast off, no pun intended, right? Or maybe there was pun intended. So it's going to be if it's going to go into the Nasdaq or it's going to go into the S&P 500 for example on a cap weighted basis, it'll be in the top five or top seven names. What that means is that they're going to take share away from some other names in that index, right? Cuz you got to trim everybody else to let them in. So it'll be interesting to see. I think there'll be a boost, another pun intended, for SpaceX if it goes in because there's all that sort of pent up automatic buying by people who buy either Qs or they buy the S&P 500. And it may have a negative effect on some of the other names as they lose some of their allocation or they see some for sale. It's going to be really interesting to watch what happens.

[00:20:27]>> Right. One second. Justin, is there something wrong with the screen? I don't know if that's going to be a problem.

[00:20:32]>> No, that's fine.

[00:20:33]>> Okay.

[00:20:34]It's It looks perfectly clear.

[00:20:35]>> No, it was Well, it was >> that way a little bit so you're better light.

[00:20:39]>> All right. No, the only reason I brought it up because it was all >> Yeah, that >> Okay, I didn't I just didn't want to do this and the whole thing got screwed up.

[00:20:45]Okay, so we'll pick up from there.

[00:20:48]Okay.

[00:20:50]No, I agree with you 100% and I think that's going to be very interesting because cuz I know that was the rumor that he wanted immediate inclusion. I just don't know whether or not they did it. For some reason I thought they were going to they were going to give it like a month or something to decide if >> So they wait a month will >> Right. Yeah, it's said immediate inclusion.

[00:21:05]>> still going to play out. How does that happen? What effect does it have on the overall indexes and and who are the winners and losers in that?

[00:21:11]>> Okay, but then what happens when Open AI and Anthropic are going to demand the same thing? Right? If they want to go to cuz I'm sure that was part of Nasdaq's kind of carrot.

[00:21:20]>> Yeah, yeah.

[00:21:21]>> Right? And Open AI, if that's true, then the other two are going to demand the same thing.

[00:21:26]>> And I saw something today like, you know, I'm a big fan of Elon. So, I think he's a genius. He's great for the planet, great for society.

[00:21:32]>> 100%.

[00:21:32]>> Um but like the valuation I think that Amazon has something like 20 times the revenues >> Yeah.

[00:21:40]>> of SpaceX.

[00:21:42]>> Yeah.

[00:21:42]>> And they're trading at the same >> Yeah.

[00:21:45]>> $2 trillion market cap.

[00:21:46]>> Yeah.

[00:21:47]>> Unless he can get you know, and by the way, he's been doing this dance his whole life with with Tesla and he's managed to get by without actually really having, you know, phenomenal earnings and things of that nature. But that that sort of worries me a little bit in the equation.

[00:22:00]>> All right. So, listen, we're running out of time. So, I just want to get some final thoughts just and then and then listen, I thought this was a fascinating conversation. So, I'd like to do it again 4 to 6 months down the road. We'll see where we all stand. But let's get some final thoughts just on kind of what you think is going to happen second half of the year in terms of the economy and in terms of the market.

[00:22:17]>> Yeah. So, I think we'll we'll see energy prices come in some. I think we'll either see interest rates stabilize or even come back in a little bit. And I think we're going to see this rally continue. I I don't think there's anything stopping this rally. When you look at the amount of stimulus that's going into the market from both the deficit spending $2 trillion plus all that AI build-out, it's very hard to not see that flow down into corporate earnings. And I I think some explosive corporate earnings are likely to result in some great growth in S&P valuations over the next year or two.

[00:22:46]>> Opportunities.

[00:22:47]>> You know, the number one contributor to the overall economy typically is the consumer and their spending. Right now, the spending on the CapEx is greater than the consumer and the consumer hasn't gone away and I don't think that they're going to. So, I think in the throughout the end of this year, we'll see whether or not the consumer eventually gets tired. Maybe they will if inflation stays up at 3 or 4 or 5% but I don't expect that to happen.

[00:23:08]>> Yeah.

[00:23:08]>> Um and so I think, you know, we're in a pretty good spot and you have to remember we're in an election year.

[00:23:13]>> Yeah.

[00:23:13]>> Right? So there's going to be a lot of a lot of trading of looking Yeah, yeah, yeah.

[00:23:18]>> there'll be a lot of that as we get closer to November. Anyway, gentlemen, I really appreciate >> one more point? Can you everything that's going on is it that that this is again a somewhat longer term story but with the straight closing, I think the world learned an important lesson that you can't have these crazy people in charge of that, right?

[00:23:34]>> So there's been sort of a reorientation of the supply lines for energy. We've got tankers now heading to the Gulf of America as the president election is.

[00:23:41]>> Right.

[00:23:42]>> Right? Now we won't see the effect of that cuz a tanker can only go 15 miles an hour so by the time they pick up whatever and go it'll be a month or two down the road. But that's one of the longer term things that I think for the United States and our energy industry is that we're we have reoriented. We now are net exporters and we're going to be in a better position.

[00:23:59]>> yes, definitely a positive. Listen, gentlemen, thank you very much for joining me. Like I said, we'll we'll regroup in 4 to 6 months and talk about kind of where this all ended up. In any event, this was Trader Talk. Thank you very much. We'll see you next week. Take good care.

[00:24:12]>> [music] >> This content was not intended to be financial advice and should not be used as a substitute for professional financial services.