Stephanie Link & Nancy Tengler | 03-07-26

0:00America leads the world in medicine development. It matters. We get new medicines first, nearly three years faster. Five million Americans go to work because we make medicines here at home, and not relying on other countries keeps us safe. But China is racing to overtake us. Will we let them? Or will we choose to stay ahead? When America leads, America cures. Let's tell Washington to keep us in the lead. Learn how at AmericaCures.com. Pay for it by Farma. The Larry Cudlow Show. Intertaining and informative on the Red Apple podcast network. Welcome back folks. Larry Cudlow here with dissecting the Iranian war and related subjects for that info, the economy and all prices and the straight of her moves. Hormuz. You know, all I'll say is I'm going to let our experts tell us what they're thinking. But for all the negative headlines and the market got, you know, pumped last week. But the first seven days,

1:04the Dow Jones is off three percent. That's all it is. And the S&P 500 is off two percent. And the NASDAQ is off one point two percent. So whatever your vision of the future is, we have not had a catastrophic, I mean, we know 8, 10, 12 percent drop. At least not yet. Anyway, we have Stephanie Langkite, our advisors and Chief Investment Strategist and Head of Investment Solutions. We have Nancy Tengler, CEO and Chief Investment Officer, Lothar Tengler Investments. Nancy's latest book is the Women's Guide to Successful Investing. Ladies, thank you for coming on. Nancy, I'll start with you and just say, what are you thinking? Tell us what you're thinking. Well, it's good to be on with you and Stephanie Larry. Thank you. I'm pretty optimistic. I think this is an opportunity. Earnings have been great. The tenure is still below the levels of a month ago. So it's staying range bound and not really

2:05signaling panic. And we've had great opportunities to buy companies that have exhibited or performed triple plays, which is a beat on earnings, beat on revenues, and raise of guidance. And they sold off on the news. So I think this is an opportunity to add to many of those names, which is what we've been doing in some of the software plays, for example, ServiceNow, Microsoft Palantir over recent weeks, and then to really enjoy the performance of some of our largest holdings like Broadcom and Lamb Research. So I think investors need to step back and say, you know, we keep hearing this like this breathless. The Iranian said they were going to, you know, double down and dig in and fight back. And it's like, yeah, and that's what we call rhetoric. Yeah, rhetoric. Yes. They didn't have the they don't have the tools. And so I think we're getting close to more certainty. And I think the bond of the oil market will capitulate to some extent. And that'll be good news all the way around. We're going to fix the oil market. The proud of the oil market was not the Iranians. It was Lloyd's of London.

3:09Right. And now that's being fixed. You know, we have this, whatever it's called, it used to be, it's, you know, we're guaranteeing the insurance development finance corporation. That's the name actually we put it together in the first term. So they're going to, you know, reinsure. And then hopefully, well, but, you know, I want to see a bunch of tankers go through the straight of hormones. If they require naval protection, fine, just get that done to show people that whatever they're worried about on the oil front, it's not, it's not a problem. I mean, there's only a few rating motorboats left. They're like a little skiffs. You know, the rest that made the Navy is at the bottom of the Persian Gulf for God's sakes. Anyway, Stephanie, Stephanie, what's the thinking? Well, it's number one, in terms of the war, I've never, Larry, I've never made money trading

4:13around any kind of geopolitical issue other than to say what Nancy just said in that there's opportunity to be buying great companies on sale. I've never made money selling into the fear. And so there is opportunity. And you kind of stole a little bit of my thunder because you talked about the markets year to date. You know, we had Venezuela, we had SCOTUS, we have AI and software Armageddon, we have private credit concerns. And now we have this. And the S&P equal weight is actually up three point five percent. So we have seen the broadening out. Why did we see the broadening out? Because yeah, the non farm payroll report was ugly, but there was a lot of one off there, including weather strike, birth death and birth death adjustments. But beyond that, you had some pretty decent economic data this week. Number one, the claims, initial claims continue below. Productivity keeps on, it keeps, it's keeping up ongoing. It's, it actually got

5:13revised for the third quarter to five point two percent, two point eight percent for the fourth quarter. ISM manufacturing is now in expansion mode. And even retail sales, I'll take three percent growth year over year and retail sales, given all the weather stuff that we've had going on. So my point being is, yeah, okay, war is ugly. The non farm payroll report is kind of ugly, but there's some other things there. And we yet to see one big beautiful bill. So I think the economy is still going to hang in. And that's why earnings are are doing better than expected. And that's why you want to be buying unit labor costs 1.3 percent. That's the ultimate inflation for labor and perhaps for the economy. You're so right. Retail sales 12 month change 3.2. The core retail sales, you take out the autos and gas and buildings 4.9. Again, you're right. Purchasing managers looking very strong. Productivity 2.8 last four quarter. Yeah, I mean, I agree. Initial employment claims stuck at 213,000. It's a big nothing burger. I mean, I agree with all

6:22that. I'm glad to hear you're not. You're not. I mean, I think all prices are right. You might have an inflation thing. Not this report, but the next report. But we know it's temporary, right? Don't we know that? Yeah. And we also know that tariffs are going to be a net benefit to individuals or to companies declining by about $79 billion on the new tariff rate. Thanks to scotas. I think the president should have gotten up at the state of the union and said, thank you. I think that's going to offset, but I just want to add one thing. He did shake their hands. He shook their hands. He was very gracious, right? They just took his major policy out, but he was there and shook their hand. Did you notice that? This is the new gracious Trump. Very important. I'm proud of him. I'm sorry. Go ahead. No, I just going to say in the 90s, you know, we had an average rate of unemployment of 5.8 to 5.9%. And productivity was about just

7:26under 2% and then in the second half of the decade it ran up to 2.5% annually. So I agree with Stephanie 100%. We believe that productivity is going to carry the day. We've been talking about it for three years. It's not just AI. There's all sorts of efficiencies that are being realized. But you can have an, oh, and Chairman Greenspan raised the Fed funds rate after cutting. So we can always hand-dringing over whether we're going to get one cut or three cuts. At this point, that is not what is going to drive stock prices. It's going to be fundamentals. And there are a lot, I mean, I don't know how you felt, Stephanie, but I thought this was an incredible earning season and guidance was good, which is what really matters. And it wasn't just, it was revenues, but it was margins. Margin, everyone's talking about how margins are going to roll over. I feel like for the last 35 years, that's what I've heard. Margin's are always going to roll over. And actually, we're seeing margin expansion. So you get such operating leverage. And that's why, I mean, 14% earnings growth is phenomenal after what we have seen over the last couple of years. It's incredible.

8:30Yeah. You two down through the years, you two are among the smartest investors I know. And you're laying it out. You're laying it out. Look, profits of the youngest milk stocks, this other stuff is going to pass. I don't want to downgrade it because it has massive, massive historical and world affairs. But the American economy is in good shape. We're producing a lot of oil. By the way, we're an oil exporter. I keep saying that to people. Even the oil, whatever oil shock is happening, it's not like the 70s. Yes, because we have producer. We're producing a lot of everyone associated with producing oil and gas actually benefits from our prices. Okay. So it's a whole different idea. But the profit story was good and the productivity story was good. I love your e. What did you say? The equal weighting is three and a half percent. Yep. S&P equal weight up three and a half. My God. You know what? That's fabulous. I forgot to look at it. I'm going to have

9:34to put that on my stuff. Just put a post-it note on your computer screen. You know, I had covered with it. I had your Denny on the TV show this week. It was a great pleasure. You know, he's a smart guy. We were talking, you know, we're going to reinsure the oil tankers, get them through the, get them through the straight hormones, just put a bunch of them through to show that it's okay. And these oil prices will stop, they'll stop rising and eventually, you know, they'll settle down to where they ought to be, which is probably some place around, you know, 60 bucks where they were. Anyway, I think it's kind of interesting. You know, we go after Venezuela and we go after Iran, well, that's, that's going after China. Of course. Yeah. And that's a good, that's a good thing. Oh, and geopolitically, this is just a wonderful thing. A wonderful thing. President Barack Obama. Virginia, we are counting on you. Republicans want to steal enough seats in Congress to raid the next

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11:36on track. That's how work is handled. Visit us at Asana.com. it is why it's bad and how to fix it Steve. Thank you for doing this. You're going to stay over for many politics too if you can. Yes, our two ladies are relatively optimistic about the longer-term view in the market. I just wonder what you're thinking. Well, I think we're trying to trade the market and these kinds of orders would be ridiculous. And they just have to see things through even though there's going to be probably a lot more volatility. These, you know, Larry Wars always throw up unexpected things, both good and bad.

12:38So just stay, stay, stay through with it. And one of the things we should be looking at too in terms of that seemingly bad jobs report is we've got a seasonal adjustment problem. As you know, in December, we got hundreds of thousands, perhaps a couple of million people coming temporarily into the job force for the holidays. In January, most of them leave the labor force. So they try to seasonally adjust for that these massive numbers. And that's why December, January numbers, I take with a huge grain of salt the side of Mount Everest. And when you have the uncertainty about tariffs from the terrible weather, you have a nurse strike in New York, which affected health care workers. I just shunt that old side. I want to wait a couple of months till we finally get a real take on things. And to see how the Kevin Wars hearings go in Congress, because the Federal Reserve, what I worry about with the Fed, is that if we have a sustained spike in oil prices with their Philips curve prosperity or inflation mentality, they may do something dumb

13:43instead of reducing short-term rates, which they should have done a long time ago. Well, on that point, I had Mickey Bowman on the show last night, Vice Chair of the Fed for Supervision, an old friend of mine, very smart woman. She wants to cut rates, Steve. In fact, she wants to do several things. She agrees with Kevin Wars about shrinking the balance sheet and reducing the Fed's assets. She wants to have lower interest rates. She believes the banks are over-capitalized. And she wants to see the make more CNI loans to medium and small businesses. I mean, she has a very good pro-growth agenda. We talked about how stupid the Fed is, 1.7% growth forever and ever. And she agrees. I mean, she basically said, I'm a supply slider. I mean, it was really quite an informative interview. I just kind of, I just turned the switch on and she went and go. And she did. It was terrific. Well, that's good long run when we get over these current crises because the

14:48Federal Reserve needs a fundamental overhaul and have at least several governors understand the profound flaws of the Fed in terms of their modeling. You're going to get institutional resistance. But if you have the Treasury Department, what you do and the White House, what you do, and you have several people on the board itself will understand how a malfunctioning the Fed has been in terms of their modeling for a number of years. That can begin to fundamentally change the way the Federal Reserve sees the world because they've been a destructive force. That size of the balance sheet, by the way, they'll never research it, honestly, has had a bad impact on lending the small businesses and the like to store to the capital markets. And in terms of her point about the banks lending again, yeah, imagine banks hiring more lending offices instead of compliance officers. We need that. Stephanie Link, what do you think of all that? That was quite a mouthful. He's a smart guy, Steph. He certainly is. I'm glad he's very constructive on long-term on the equity market. And honestly, I mean, the Fed is going to be an interesting watch,

15:53right? Because they're kind of a little bit in a bind in terms of what do they do. He's got a corral all the people, right? And I just hope that he can. And I think Steve's right, in terms of I think they should have been lowering rates for a long time. And now with the labor market, kind of a little soft, they can. I think. And I think that they should. You know, Nancy, I will say this. This goes to Steve's point about flawed seasonal adjustments. I don't believe any of these numbers. Because of the shutdown, I mean, and I'm a numbers guy, okay, or I used to be. I just don't believe any of it. Honestly, I just, I see them. I just say, yeah, what else is new? Well, and they're so subject to massive revision. Right. You've seen over the last couple of years. And so it always surprises me when the market trades off the today number because we know it's going to be revised. But if you look deeper in the ISM

16:54manufacturing and ISM services, you see that people are hiring. And the employment numbers went up. So that, that's to me, is much more instructive real-time data, real data instead of all the estimations and seasonal adjustments. And Kevin Asset said on, on all heirs on Friday that, you know, it's the birth death model. And so it's been revised again. But we treat this like it's the gospel when the numbers come out. And so I just think, again, it just creates opportunities for long-term investors. Because the employment pictures pretty solid. I mean, we had 5.8% unemployment during the 90s. And stock prices, the economy grew, stock prices rose, generationally high, you know, high levels. So I just think you have to step away from the numbers. Look at the trend lines. But look at the real real data. And to me, that is the ISM numbers. Look at the four-week moving average of weekly jobless claims. That is what you pay attention to.

17:54Because it's real more real-time. And you're at 215,000 over the last four weeks. These are historically low numbers. Recession is 350 to 375,000. We are away away from that. So I think a lot of it, I think Nancy is right. And I think Steve is right. This is a lot of noise. And you're getting a lot of opportunities. You know, business is hiring. Small businesses are hiring. E.J. Antoni, I don't know if you know him, he's a smart chap. He looks at this private sector inflation tracking. I don't know, a million of prices. Much bigger than the government. And the inflation rate is less than 1%. Anyway, you're all fabulous. Stephanie Lang, thank you, Nancy. Tengler, thank you. Steve Forbes, thanks. You're going to stay over for money in politics with Liz Peak and Steve Moore. I'm still cut low. And this is a great country, folks. We'll be right back. The Larry Cudlow Show on the Red Apple Podcast Network.

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