We Asked The Einstein of Wall Street How’s The Economy?
08 mins 54 secs
Speaker 0: This is your view from the floor from the New York Stock Exchange. I'm joined by Peter Tuchman broker at Trade, Peter. Always a pleasure. Thank you for joining us. Good
Speaker 1: morning. Nice to be here.
Speaker 0: So the other day, a friend asked me, how's the economy? And I, I, I was kind of stumped. So I figured I'd come down and ask Einstein of Wall Street, how's the economy?
Speaker 1: OK. You know, I actually like I, I, I appreciate, I, I
Speaker 1: uh I appreciate the question because recently, you know, I was talking to somebody, I don't know if it was on a Twitter space or something. And someone said to me, look, sometimes the economy and the markets trade in concert with each other. Obviously, we saw that split up uh over COVID, right? So economy was in desperate condition yet due to the stimulus package and, and the Enthusiasm Post COVID, the market went up while the economy was suffering due to uh the global economic shutdown. Ok.
Speaker 1: Now, what we're seeing is, look for some reason we have the debt ceiling crisis, which I think is just a dance until the final hour and then we'll probably make a deal or I may be wrong. We've obviously got some struggles. Retail is showing some signs of a bit of a fracture even though a lot of the companies have come back with solid earnings. We're seeing whether it's Home Depot or Target. A lot of the guidance going forward is a little bit questionable. So look, the economy seems like it's not really, really bad. But look, I think people are struggling. I think inflation
Speaker 1: taken a hit on a lot of people. We've got a lot of people who are struggling lead, lead. The labor market is going through whatever it's going through. It's kind of odd. We have the lowest unemployment rate forever but still you need to get people, less people working. I mean, and this one is a paradox to me, less people working in order to curb inflation. So there's so many, many moving parts. But it's clear to me from where the market is. Think about it. We've got all this potential winds. People talking about a recession still interest rates on the
Speaker 1: table. Obviously the debt ceiling question retail in, in trouble yet the market is trading at 4200. We broke through the spiders yesterday in a big way and the dow is trading at almost 34,000. So the market itself. So while it seems that there are troubles within the economy, if I was and I'm not an analyst, I'm not an economist and I know I look like Einstein, I'm not that freaking smart, but at the end of the day, the economy is not doing as well as the market is doing. So I believe people have confidence in the market
Speaker 1: and less confidence in the economy. I think that's the best way to describe it because the market tells us what it thinks of all this information. Is there a lot of things to be worried about anxiety. The markets don't like anxiety and unknowns and there still are a lot of them yet. The market, we haven't seen this big sell off, right? People are touting. You know, there are a lot of the doomsayers even. We saw Carl Icahn yesterday come out and say, you know what, I've been shorting the market. I lost $9 billion. I was wrong. You had the the the guy come out and said, look, I've been shorting this market
Speaker 1: too and I was wrong. So a lot of the big guys who are in the market, look, people who are struggling economically are not invested in the stock market per se. They're not the ones taking this market up to where it is. I think people who have money are trading the market, right? So I think the econ I, I can't really get a sense of how the how is the economy doing? Maybe not that great. It's not as bad as I think we think it is. But however, the market itself. People do have confidence in the market because they're buying it. The market is up. These are real numbers, real dollars
Speaker 1: going to work. You know what I
Speaker 0: mean? And you think they'll catch up maybe next quarter or in the next few
Speaker 1: months. But I don't, I just don't know. I think we are still coming out of, uh, the pandemic. We, there's no real playbook for what's been going on over the last number of years. You know, obviously we had $3 trillion plus the, the, the kitchen sink thrown at the economy to get us through COVID. Then we had 2022 where interest rates started to rise. There's no more free money that has put a bit of a wrench in the whole sauce. So you saw that
Speaker 1: effect. Some of the names that were the high flyers of the 2020 21 got decimated in 2022. Those stocks are coming off the mat in a big way and video got down to 103. It's now trading at 376. The Tesla names, the apple names, the Facebook names, those stocks, Shopify some of those names. Ad they got really decimated in 2022 because of the raising interest rate environment are now starting to come off the mat. So then we've got another sector that's sort of getting
Speaker 1: which is retail and some of the other names, obviously oil, we've got a lot. Look, I, I, I'm giving you a really broad picture, you know, it's like the, the, the economy and the markets are like a puzzle, right? It used to be a 500 piece puzzle. Now, if you ever have a kid, you know what? It's like, you got the 1000 piece puzzle. There are so many moving parts, there's so much information, I'm sure you're gonna ask me about the Federal Reserve And at the end of the day we go ahead.
Speaker 0: Yeah. Yeah. So the next question is yesterday, Saint Louis fed, uh, James Bullard and, and
Speaker 0: fed, uh, Laurie Logan implied that the, that there, the, the rate hike in, in, uh, June is, is certainly, is certainly on the table. And the, uh, C M E fed watch tool moved from, uh, 28% of a rate hike to, well, I, I, I, when I last checked it was 36 but, you know, significant jump based on those two, uh, fed presidents coming out. What would that mean for the market?
Speaker 1: Ok. So I'm watching that too. And so look, obviously
Speaker 1: we've had an, an aggressive 15 months of interest rate raises. I think it's unprecedented and I know why they're doing it. Obviously, there's an economic playbook that says, in order to curb inflation, we've got to pull money out of the market out of the system, right? Money supply. And in order to do that, you've got to raise interest rates. Ok. That makes sense. And there's the labor market component to that whole story. And so we've been dancing through that 75 75 75 basis aggressive moves then
Speaker 1: trail down to 50. And the last one we saw 25. Ok. So because we are seeing a little bit of disinflation, we are seeing it working a little bit, but there's that weird weird paradox where some of them are saying, oh, we're doing great. I think it's time for the runway to go. Did we get that clear? All clear Bell from the Federal chairman last time saying, you know, we're done, it's all good now. No, there was kind of a little nuance to that statement saying we are still data driven. We are, we are heading into
Speaker 1: right direction but we, our goal is 2%. How are we going to get there and they left it on the table? Is the market engaging that in a negative way? No. However, look Bullard said that yesterday, a number of them did say and the numbers are proving it that there is a chance in mid June that we are going to see another one. I don't think the market is prepared for that. Is it engaging it? No, because if people really believe that they'd be sort of selling the market here. So as I say, we are being thrust, thrust upon us so much information,
Speaker 1: I don't even know if there's a way to even analyze all of it because the components are wild and crazy. They change on a daily basis. A couple of weeks ago, fed said 25 we're almost done. Now, these two well known fed presidents are saying we think that it's actually we've got another one coming in June. Now we're all eyes are gonna be on that for the next few weeks. The minute we start to engage that and that becomes a reality. The market probably
Speaker 1: we will respond in a negative way. But we've had a look yesterday was the highest close since August 2022. Well, that's look in the eyes of all this madness. The market is still trading at, at short term highs here. So I, I your guess is as good as mine. OK.
Speaker 0: And then finally, uh you know, as you said, we were, we hit a high yesterday. Uh So are you, uh are you seeing the market? Are you as, as the saying goes selling me
Speaker 0: go away. You know what?
Speaker 1: Look, I, I, I, I look at the, the, the market has had these, these, these statements, these, these uh uh tropes, I guess is the word, I don't know what you would call them. Uh You know, certain sayings, right? There's always, there's the sell on, there's the sell in May and go away, you know what, for years and years. That was in fact the case, whether it's coming into summer, whether it's retail. I don't really know what the idea behind
Speaker 1: it is so far. This May, you know, it was good for about a week or two. And now we're like in the, in the second beginning, second week, there was, there were some problematic uh uh trading days in the beginning of May, but now we're bouncing back. We had a record close. So sell in May and go away so far has not been a profitable trade unless you've been very nimble and you sold it on the first of May and you covered on the seventh of May. You probably made a couple of shackles
Speaker 1: along the way, but I'm not clear where the market is gonna go from here. It is a little long and technically, it's a little long in the tooth. A lot of these stocks have rose quite quickly. The AM DS, the NVIDIA invidious trading at uh up from one oh 3 to 100 to 3 76. That's a major move. So, um, I don't know and I don't know, is a legitimate answer. Well, Peter
Speaker 0: as always, thank you so much for joining us. Always a pleasure and to, to our viewers. Thanks for watching for a TV. I'm Jonathan for, we'll see you next time.Transcript
We asked Peter Tuchman, Broker at TradeMas, aka “The Einstein of Wall Street”, his thoughts on how the economy is doing amidst recently released retail figures, a debt ceiling stand off, and insinuations that the Fed might keep hiking rates.