Pizzurro: Stay Risk-On Amid Volatility, Keep Mag 7 Exposure

0:00let's continue to take a look at the big picture and Brandon zeros with us president cio guide sign capital guide stone capital management thank you for being here some of your thoughts on this market action i mean i know some people actually sold and and tried to you know blew up the cash a little yesterday others who were staying in the course because they think we go to seventy six hundred seven hundred by the end of the year where are you standing in this sure thanks for having me on i mean portfolio managers around the world rejoicing today as they get some window dressing for the end of the quarter as markets have as you mentioned or taking up quite a bit a lot of green arrows but overall yeah i mean it's interesting to see how people when you kind of reach that max pain threshold i don't know how much more i can do do i want to be exposed going into the end of the the quarter for the year or for the first quarter here it's interesting to see that you get that kind of a tailwind up so i tell a lot of people often you must be present to win if you're going to take the down days you have to be present in order to get these days like we're having today and so that's an important piece is just being exposed it's okay to be risk aware but days like today remind you that markets

1:00can take you anywhere when you wake up so you're staying in your optimistic you're not you know booing up all the cash and selling everything you're staying at are you optimistic the war ends sooner than later particularly after some of these confirmed and unconfirmed reports that we've been getting well those are very relative terms but i think we can see an into this hopefully in the next several weeks i mean markets are obviously pricing that in and looking right through it it seems reasonable there's a lot of parties that want this to end for a wide variety of reasons there's still a lot of really fundamentally sound elements to the US economy and really global markets for the most part right now and so to just kind of batten down the hatches go all in the cash to really under expose yourself i would say we'd be more risk-nuclear all these days rather than risk off certainly not risk on either it it pays to be there right understood how much of the fed moves are you worried about one way or the other or hoping for well still hoping for that one rate cut i mean

2:01markets as you know we're starting to price in hike which is kind of hard to believe but we started to see that last week we saw a 22 percent probability that we'd get hikes Monday of course that came off the boil dramatically we saw about a 4 percent just check before i came on today it's about a 2 percent probability now that you'd get a hike so you are starting to see that that easing start to come back into the picture we're hopeful for that a lot of a momentum is predicated on that but i would also mention we've already had 175 basis points of cuts that are just now starting to work its way through the system so that's a big tailwind what do you think about the folks that say we might get a hike at the end of the year how likely do you think that really is you know it seems somewhat unreasonable to think that that could be a reality force at this point i mean hiking into the strength seems like a way to kind of tamp down on on expectations we would see that as a low probability anything's possible of course markets move on a dime as we're seen today but we would we would estimate as we stand here today no hikes and at this point now do you feel positive on the market because i know we're

3:03getting some of the earnings even today on Nike and a few others but do you feel that earnings and we're really going to kick it off april will kick off and we'll get so much our earnings and fundamentals solid in your opinion yeah they're still solid i mean as you mentioned we'll kick off earnings season here robustly with financials always the first to report out there was a lot of good that happened in the first quarter that we think we'll continue to make its way through the system we'll also see more broadening as we know mag seven or down double digits as it stood through q one here and other stocks have had their turn in the sun so to speak so we expect a broadly positive earnings season for markets and not even just in large cap but starting to go down the spectrum to mid and small as well what are some of your favorite mag seven names do you feel like some are better than others you know they trade in such a big group it's hard to dissect them too much clearly they all have their their own nuances certainly my compliance department would not let me get into those specifics but it is interesting to see how they trade in tandem especially

4:04because of the ETFization if you can call it that of so much of trading these days there's obviously more ETFs than there are individual stocks so people tend to trade these things in basket so as one goes so goes the others especially when you have these times where things are just kind of a beta trade everyone selling the whole basket everyone's buying the whole basket so again a lot to parse through there but typically right now when you're seeing that some of that pullback they were all trading down anywhere from a 10 to 15 percent so on the pullback when do you buy this group yeah you know there's still a lot of sound reason to own the basket and own the group overall that capic spending that keeps ticking up is going to continue on into the future that has not abated or changed in fact it's just continued to accelerate as your prior guest mentioned just talking about kind of videos recent tie-ups so you do want to continue to make sure that you have exposure there clearly it's such a large portion of any S&P 500 index exposure you have to have it but you want to incrementally add to it it's boring dollar cost averaging in if you've been doing that throughout

5:05Q1 you would have been incrementally adding to some of these names but they're they're cash flowing there's still a lot of capex to be had their products and services are being utilized at an incredible clip so there's a lot of the momentum behind those names still and at this point now just the final thoughts here i mean the war i guess let's just say it's gonna wrap up i don't even know what to say i know it's confirmed and i'm confirmed reports but that was originally the plan so i'll say that but there was always still the AI bubble the private credit worries i don't know anything else that you might be having on your mind any major headwind or is it more tailwinds for the back half of the year well there's always something to keep you up at night and to bite your nails over so you know we want to be cognizant of those risks on a balanced perspective certainly private credit particularly private credit as it's exposed to individual and high net worth investors not so much you know that's more in the bdc space versus lp where you have some of that

6:05money that's more tied up in a bit different dichotomy there but nonetheless anything else that's keeping you up at night certainly want to continue to keep a close tabs on how much of this capex is going into AI and is it being used productively i think if anything this healthy pullback that we had as you mentioned at the top of the hour s and p just narrowly missed at least for right now correction that kind of moves some of these valuations down to where they start to make a little bit more sense again so i think it's healthy that we had this pullback i would leave you with one stat twenty twenty five s and p five hundred was up eighteen percent of course about seventy two percent of the stocks in the s and p five hundred were down at least ten percent some point in twenty twenty five so you can have a healthy pullback a reset and still have a good year yeah understood that's a good stat i like it brand and for zero thank you president cio guidestone capital management you