'I do believe that oil prices will come down shortly': Lee

Añadido: 2026-05-26

[00:00:00]Global stocks are getting a lift after senior US officials said that the US and Iran are approaching a deal that would lead to the reopening of the straight of Hormuz. Our next guest says the markets are rangebound until we see how higher energy costs will impact inflation and what this will mean for the Fed's ability to cut rates. Joining us now is Jimmy Lee, CEO of the Wealth Consulting Group. Jimmy, thanks as always for joining us.

[00:00:26]>> Great to see you.

[00:00:27]>> All right, just uh how rangebound are they? right now. What What are we looking for?

[00:00:33]>> Well, our upside target for the year is is much higher than than we're at now. I think we're on the S&P 500. Our upside could be as high as 8,500, but that's on the premise that uh interest rates come down and we get at least one rate cut before the end of the year. So when I say rangebound, I think in the short run, we've got uh interest rates climbing higher, which is my biggest concern right now uh due to uh fears of inflation and also the the debt we have here in the United States. And uh I think those two things are are hurting a little bit. But that being said, this market is really trading on fundamentals. Um, you know, we like the broadening out trade as interest rates come down, but we've said that, you know, buying tech, especially when they when it sells off, uh, was a smart move that's played out so far. But investors are also being more discerning about not just buying everything as we've seen communication services sector not participating like the tech sector has.

[00:01:26]And so I think investors are being much more selective and it's it's smarter to be active certainly than just passive.

[00:01:32]>> And is it is everything about oil right now? Is that where all eyes are? And and are are you worried? Are people we keep hearing the pricing in that there's going to be an agreement or a deal of some type in peace, but what if there isn't? What might what's the what's the concern there?

[00:01:48]>> Well, I think we'll get continued back and forth like we've seen in the last 30 days if we don't get a deal sooner than later. But I think investors are past the oil shock. So, I don't think it's just about oil any longer. Uh and that being said, the oil shock is causing inflation uh concerns which leads into interest rates being higher. So inadvertently, yes, it is about is about the war. I also think that uh there's a fight between analysts between whether or not you know the economy is slowing here in the US or or growing too fast. I think the other argument is that rates are higher because the economic data is heating up a bit. And so you know I think that uh that could be happening also. Um again I'm in the view that we need rates to be lower. I do believe the economy is slowing a bit. Um but it is great to see the earnings being so robust as as expected.

[00:02:38]>> And what what gives you the main reason for thinking that it's slowing?

[00:02:42]Well, just anecdotally, if you talk to small business owners, uh if you look at look at the layoffs, if you look at uh I know that we might get a nominal GDP print that's hot, but uh you know, I think that underneath the surface, housing certainly is is not moving the way we want to. And I my thesis was that housing could be the one thing that really changes consumer sentiment, which happens to still be awful, but that still could happen, but I think it it's now getting pushed out further towards the end of the year if that were to happen. So I think uh the economy has slowed a bit but uh earnings have been strong partially because job growth has been you know not robust and uh and wages have been stable so margins are expanding which is what we expected. So we like the fact that technology is bouncing back. We like some of these sectors that are not participating as much like financials worse in the cyclical side in terms of the sectors that we do like. So, we do like the industrials. We like materials. Um, and we again, like I said, I think we like tech on the dips.

[00:03:42]>> All right. And, um, excuse me, talking about the interest rates, the Fed, uh, we've got the the new head. Where do we Where does the Fed go here? Are they Are they caught and they just have to kind of hold the line for now?

[00:03:56]>> You know, I think that uh I I don't think we're going to see a rate hike. I think that would be a mistake. Uh, I don't think we're going to see a rate cut anytime soon. I think Worsh is sort of up against this higher inflation uh data that we're going to be seeing. And I think in in the coming weeks, as your previous guest said, I think we're going to see a little bit hotter print on inflation. We've got the summer months coming now with record travelers here in the US hopping in their cars and they're going to be feeling it at the pump. And um so I think that's going to cause even more consumer sentiment to to be negative. And so I think once we get past oil oil prices coming down and that's what I would expect. I do believe that oil prices will come down sharply and uh prices at the pond could come down sharply with it and and that will help change consumer psyche as well that but you know we've got trillions of dollars on the sidelines when it comes to the markets. I think investors that have missed this uh big bull run since the bottom in 22 are trying to find their spots and that's why I think small cap stocks are are doing really well this year so far. overseas stocks and emerging markets continue to get follow on flows um which have they haven't in a while.

[00:05:02]>> Do you see that continuing with the with everything that's unfolding with tech?

[00:05:07]>> You know, I do and which I I like which is the the markets broadening out outside large cap US. I think even though you know we haven't really seen um a sustained rally uh in those areas but I think we can and uh we I want tech to participate and you know our projection was that for earnings growth to be as robust as predicted before this year started tech was leading the way certainly that's where all the growth is coming from and so um I think you have to be in the AI trade but it's been good to see the second and third derivatives of the AI trade um those stocks kind of moving up in those sectors Um but there have been a lot of uh stocks that have gone up very sharply in a short period of time. So I caution investors uh to not get you know too speculative and uh be prepared for volatility which would which is what I would expect in some of these names that have really popped uh so quickly and so much.

[00:06:00]>> All right and uh going the other way bonds we were hearing a lot of talk about them seems to have faded a little but uh are they still looming on the on the side there?

[00:06:09]Yes, I think uh yields uh at these levels bode well for bond investors to to get their feet wet if they're sitting in cash. I I it's still incredible just talking to people and how much money they're sitting uh they have sitting in cash both retail investors and you know institutions are are still holding a lot of cash I think even though it's come down um but there's a lot of cash on the sidelines to help uh boister equity prices and as we get these selloffs as been the playbook for the last few years uh investors have been buying the dips uh like you know in in this year on the dip I think it was more institutional investors and the retail investors kind of missed out according to the data. But uh I think that buying on the dips will continue to be a theme. Uh which will be smart. You know, the stock market's up 2/3 75% of the time one year later anyways. It's very difficult to be a short investor. I think this year, you know, if we get consumer sentiment to change a little bit. Uh we might get some animal spirits towards the end of the year, which could really force the market to melt up and then cause a little bit more volatility afterwards.

[00:07:10]>> All right, we have to wrap it up there, Jimmy, but thank you as always for joining us.

[00:07:14]>> Thank you. It was great to be with you.

[00:07:15]>> Jimmy Lee, CEO of Wealth Consulting Group.