Mueller: Staying Away from Tech, Looking to Reshoring & Energy

0:00And let's keep the conversation going. Welcome in Patrick Mueller, RFC and president over at Bella Advisors. Patrick, great to have you back on the show here. Would love to start on the extended sell-off that we're seeing so far this morning, a continuation of yesterday. Yeah, it's going to be really interesting to see how we're going to move forward. We've been really moving sideways since in the market, since about November, where we've been in a price home since then and the market's really done a whole lot of nothing over that time frame. So I think the markets are just bouncing back and forth here on a daily basis. And we're going to have some type of catalyst that's going to happen here in the new future that's either going to push us to a new high and bounce out of that. Or we're going to start seeing it come down and it's been quite a while since we've been through a downturn. And I think with the overweighting and tech right now, I think we can see that pullback here in the near future. All right, so if we start to see that pullback, you do anticipate this rotation away from tech to continue.

1:00And if so, where do you see the most opportunity in the markets? I see the most opportunity in different sectors, all the reshoring that's going on and bringing jobs back to the country and manufacturing in the country. So I think that that is going to be in the next few years a big pull. Energy is another one with all the data centers and infrastructure that needs to get them put in place with all of the AI that's existing right now. And I like a lot of fixed in-come place and using a lot of structured notes right now to take some of that risk off the table and get a better yield. All right, and so with energy, you know, certainly that has been a theme through 2026 amid this data center build out. But how much does it change the thesis here knowing that we may be looking at an extended conflict in the Middle East here and we are seeing, you know, oil prices as high as we've seen them since 2023 today? You know, how does that change your outlook at all? Yeah, I would be looking more when we're investing, I would be looking more for companies that have the infrastructure and building facilities when it comes to energy when we're talking about oil

2:04and we're seeing, starting to see that oil prices skyrocketing and I think we're just going to continue to see that until there's some type of resolution what's going to happen long-term with Iran. And so until that happens, and we're going to start seeing that increasing and that's going to start leading to inflation because that's going to start raising the prices of everything. So a little bit longer term, you know, it's just going to, we're going to see more volatility and you know, another reason why the markets will start trending downward. And so if we do get this anticipated potential uptick and inflation tied to this rise in oil prices here, Patrick, combined with the jobs data, the surprising jobs data that we got this morning, how does that change the course of action for the Fed this year? I think the Fed's going to have to make some moves and they've already said that they're going to cut rates once this year. But with all of these things that are happening right now, it could add up to more pressure to them having to make more cuts. But we'll see what happens with, you know, mainly the rising oil prices that we see

3:06with cost of goods and services going on, but there's going to be a timeframe, right, where it takes for that stuff to kick in. So we might not see those things and the pain from that for, say, three to six months. And I'm just looking at the board here. I mean, the tenure has ticked up to about 416 here. As far as looking at treasuries and potential opportunities there, you know, where are you seeing opportunities and what areas are you avoiding right now? Yeah, well, the opportunities, they're great funds that are out there. You've got like Morgan Stanley's got Jeppie, which has an 8% yield on it. You've got first trust that's got a great ACYN, which has got a great yield on it of 12%. So when we're going through these volatile times and treasuries, you know, kind of being around 4%, and it's tough to keep up with inflation with rates like that. So I would be looking outwards and looking at more funds like that that's going to give a better yield. And I would just be sticking away and I wouldn't have too much tied to tech right now

4:09because here's a crazy thing, Marley. It's that last year, you know, market overall S&P was up 17%, but 40% of the S&P was negative last year, which I think it's just, they're such a huge disparity right now and everything's leading towards tech. And we have to kind of ride that train until we shouldn't anymore, but I would be very cautious of being overweighted and tech right now. And where does gold fit in a portfolio in this environment right now, Patrick? We keep having conversations about the safe, haven, metal, and it's placed in a portfolio right now. Obviously, you're to date, and we're up still about 20%. What are your thoughts there? I think as you start seeing on more unrest around the world, anytime there is fear that's out there, you're going to see precious metals doing well. And especially when the dollar is weakening, you're going to see more money going into gold and precious metals also. So gold, I think it's still a good play. I think it's a good, you know, safe haven until this unrest stops. And then the same thing with silver, there's a lot of demand for silver. And there's going to be more demand

5:10as we have electric cars and things like that that are progressing. There's going to be a lot of demand there. So I think it's good. I wouldn't be putting more than, you know, maybe maybe five, five, 10% and a portfolio into that. All right, Patrick. I hope you have a great weekend. Thank you for taking the time to be with us again on Trading360. We love having you on the show. Patrick Mueller from Bella advisors.