Tyler Herriage Sees Inflation "Much Lower," Tech Dips Getting Bought, $6,000 Gold

[00:00:00]Welcome back to opening bell. Want to get you ready for the trading day.

[00:00:04]Joining me right now, Tyler Herage is with me, partner vertical research [music] advisory. Um, I think I'm so glad you're here in person. Thank you for being here. And I know you were talking about the tech selloff and what to do with your money on the sidelines, but first let me just get your reaction to today's big news of the memorandum of understanding the idea here that we're going to have a peace deal and um your thoughts on look we have oil right now at 8047. Tell me more.

[00:00:33]>> Yes, that has been our one of our long-term calls for the year. Um since the Iran conflict has wrapped up, oil is going to be heading much lower is our view. also the US dollar and yields heading lower as well. Uh that's been our call for since 2022 actually. Uh but since Trump came back into office, we were looking at it as a very similar scenario to 2017 when shortly after his inauguration, the dollar moved lower, yields moved lower. Uh we think we're back in that kind of an environment, which means we really want to be long stocks here.

[00:01:06]>> So that is your long-term view. You said you felt that oil will go lower, yields will go lower. Let's talk about some of the numbers. Um, right now we're just around the levels we were one year ago on oil. I think it was 8015 or something, but we were at 50 sort of before all of this started. When you say oil is going lower, what are you anticipating near-term, long term?

[00:01:29]>> I think before the end of the year, we're looking at oil well below $70 a barrel. Um, and I would say that's even conservative. Um, and so with that, we'll also see an increase in gold.

[00:01:41]That's been another one of our our bullish cases here. Uh, gold has been hit hard from from the beginning of the conflict to today. We're seeing a big move higher this morning as well. Um, and we look for the miners to outperform gold here.

[00:01:54]>> All right, gold is up $132. By the way, Barclays came out. I saw this morning.

[00:01:59]Barclays had um some year-end targets on gold. They were both below um this year.

[00:02:05]they had 47.91.

[00:02:07]It's at, you know, 4,300 and change.

[00:02:10]Next year they had 4,900. Um, let's stick with the original thought, the yields. You expect those to come down.

[00:02:16]Kevin War on Wednesday. What kind of range do you expect because we got to 46 not that long ago? Um, where do you expect yields to go and specifically?

[00:02:26]>> Yeah. Uh, so we're looking for yields below 4%. And they likely should be there much faster than they are. Um we're looking at a situation right now they're at the very top end of where they've about stopped moving higher uh for the last 2 years. So we also on top of that view we look for inflation to move much lower. I know that's a big concern right now as well. Um but inflation lower yields lower GDP higher economic growth higher as well.

[00:02:59]>> That's very bullish. Um, so does that mean rate cut from the Fed?

[00:03:03]>> We would love to see a rate cut from the Fed. Yes. And >> are you expecting one?

[00:03:07]>> Well, yes. Yes. Before at least one before the year end is what we'd like to see.

[00:03:12]>> Ah, and then um you mentioned gold.

[00:03:14]Let's talk about that. You said you're bullish on gold and the miners. I don't know if you could do specific pick or sort of give us, you know, these were sort of conservative numbers from Barclays. Are you seeing 5,000 again?

[00:03:25]>> We look for gold at 6,000 by year end is what we're looking for. Um, and then for the miners to outperform, we're seeing it this morning in in pre-market. Uh, the miners are performing great after this pullback. Specifically, love Snow Line Gold is one of our top picks for the gold miners. But the sector as a whole is in a phenomenal situation right now. A lot of these companies have break even rates on their mining below $2,000 an ounce. So, with gold above 4,000, they're basically printing money in this environment. the first quarter earnings, the gold mining sector was the highest profit sector of everything, even better than tech. So, >> wow, I didn't even expect to talk to go to you about gold today. Thank you for that call on Snowline gold, your top pick in the miners. Let's talk about the tech selloff. You noted that and you said now at this point you're still looking at AI and chips. Are you buying on pullbacks? What you know, is it overdone? What do you think about tech?

[00:04:24]>> Yes, that's a great question. We are buying on pullbacks here, especially semiconductors um from the big names.

[00:04:31]Nvidia is another top pick of ours. I know that's not exactly a bold take, but they have plenty of room to run. I think we're looking at an environment they'll be likely the first 10 trillion company, and that'll be the first of many to come.

[00:04:46]>> For example, the memory stocks for, you know, we saw price target hikes today on Seagate and Western Dig and Micron. So Nvidia is a favorite and it's been a goodie, right? I mean I I know you said it's not bold. I think it's you know obviously people love it and they own it in all their What else in tech I mean you know near-term short-term are you you said maybe it's a short-term bounce.

[00:05:07]What kind of selloff could we see?

[00:05:09]>> Um it would be we think dips in this environment are going to be very short and very sweet and a great opportunity to buy. We've seen so many already um where you know we're down one 2% on the day and then right back to all-time highs two to three days later like like we'll see in small caps today as well.

[00:05:28]Another alltime high.

[00:05:29]>> You like small caps?

[00:05:30]>> We do here. Yes. Uh specifically for that, we like to trade a little bit of leverage ETFs. TNA uh is a is one we're big fans of, but we do like small caps here as well, especially in an environment with rates heading lower like we talked about earlier.

[00:05:45]And when you think about you also mentioned that uh the dollar is heading lower. How will that help?

[00:05:51]>> Yes. Uh so from from many different angles here as we talked about Kevin Worsh earlier um we look for the dollar to head lower, inflation to head lower and really what we'd like to see on the rate cut side is for housing. We are very bullish on housing here as well. Uh so specifically for us the home builders um and that's been a very sticky part of what we've seen in inflation. So that should help bring down those numbers considerably.

[00:06:16]>> What do you think about the housing market? You talked about inflation coming down, affordability is always an issue, rates will come down.

[00:06:23]>> Um the home builders, how about that housing environment? It's such a big part of our you mentioned GDP going higher. Um what do you think about the housing market overall, the consumer overall? Just like a big picture final thought.

[00:06:35]>> Yes. Um really on the housing side, this has been such a sticky part of inflation and I think the story that many people miss and they want if you want higher yields, it's actually hurting home buyers in this environment and home builders in this environment as well. If we could get yields lower, that would be a huge impact on inflation for the consumer, bring down affordability for housing and then from there we'll be off to the races. So we remain incredibly bullish into year end here. We think this is only the beginning of this move higher in a bull market that'll run through 2030. That'll ultimately send the Dow Jones to 100,000. Uh the NASDAQ above 40,000 50,000 more likely.

[00:07:15]>> Wait. Okay. Dow Jones 100,000 by when?

[00:07:18]>> By the end of the decade.

[00:07:19]>> Decade.

[00:07:20]>> We we made that call in 2022 actually too.

[00:07:22]>> Oh, okay. And then you said the NASDAQ what?

[00:07:25]>> 50,000.

[00:07:27]>> And that's also by the end of the decade.

[00:07:29]>> And year-end S&P here now?

[00:07:31]>> Yes. Uh, so going into the year we were looking for 30% gains for the S&P on the year and we remain with that. We might have to be raising those pretty soon actually.

[00:07:42]>> Wow, you're really bullish.

[00:07:43]>> Tyler, good to see you. Tyler Herage, thank you so much. A vertical research advisory. Thank you, Tyler.