Navigating Market Highs: Insights on Copper, AI, and Investor Sentiment

The price of copper hit a record high this week, and it's not just happening in a vacuum.

Now markets are reacting to Trump's new 50% tariff plan on the metal set to kick in August 1.

And ahead of earnings season, US equities hit new record highs this week with the S&P 500 and Nasdaq hitting all-time highs.

So what is the signal about inflation tree tensions, not to mention investor sentiment?

Well, joining me live here at the New York Stock Exchange is Steve Elaine Lawrence, chief investment officer at Balfour Capital Group.

So Steve, great to have you here.

Thank you so much for joining me.

Well, always a pleasure to be here and I'm really excited to talk to the viewers.

Yes, and first.

I think it's important to take a pause right here because yes, we're looking at US stocks in the red on this Friday morning, but that huge run up to record highs for the Nasdaq S&P 500, not to mention the highs we're seeing on an intraday level for the Dow.

So explain to us what's happening underneath the surface.

OK, what I see happening is this.

Obviously the market is going to come off a little bit.

It's you know and I and I maintain a very bullish position on the market even though interest rates will go higher here.

I mean, I'm, I'm in the camp of a Jamie Dimon that rates will go higher and you're seeing that, but you're also seeing growth.

OK.

I think the public doesn't realize like copper, copper is a very, very important commodity for growth.

You can't build any infrastructure without copper.

It's the DNA of building, so I think the public needs to realize that commodities are bullish and it's understanding how to be diversified with understanding the risk reward.

Yeah, I think diversification is a key word here.

And when we're looking at the stock averages as well as Nvidia, not to mention copper and Bitcoin hitting new records here, we're looking at. that are expensive.

So tell us about some of the interesting spreads and what's happening there.

OK.

One of the things that you'll see is you're going to see new relationships develop.

OK, so what's the relationship between copper, a 2 year note.

5 currencies and 3 ETFs.

OK, so new relationships are developing in the market.

And one of the things that you'll see with the BTC and all the alternatives is how they're grabbing traction into the market in two aspects.

Number one is the ETF aspects, and number 2 is the physical aspect of the coin itself.

So I think you're going to see a lot of long term growth and the public needs to understand, right, that there has to be retracements.

OK, it's not about day trading, it's about, it's about getting into a position, right, what you can afford and not afford monetarily and from a risk point of view.

I mean, take a look at Oracle.

I mean, Oracle is just taken off.

I mean, but Larry Ellison and Sara Pats, they're.

Brilliant people without question.

OK, and you're seeing even a day like today.

Look at the investment that Goldman Sachs made in AI.

Yeah, that, that's pretty impressive.

Yeah, and that is a very interesting story here because when it comes to Goldman Sachs, that's the name that we all pay attention to whether we're looking at their analysis, their price targets for the S&P 500, but in particular when it comes to the AI.

There are a lot of concerns about how AI is going to affect the labor market and what humans play in terms of a role.

So where do we go from here?

And do you think that they are the pioneers when it comes to trading for with AI?

They've always been the pioneers and when they've made mistakes, OK, like Marcus, they made a mistake.

You know, everyone's entitled to make a bad investment, even Goldman.

All right, but the point is, when you look at Goldman and when you look at BlackRock, and when you look at JPMorgan, where are their investments really going within their own people?

By utilizing the AI, it'll make the company much more efficient, but at the same time, new economies are going, they are being created.

And do you trust AI for say surgery, driving in addition to sophisticated trading.

You know that's a really tough question and for me personally, Ronald Reagan used to say this trust and verify.

I think that like anything else, you know, you can't go into something saying, oh, it's the end of the world, trust and verify, right, so have your own comfort level with anything that you do.

Yeah, and of course as we're seeing lofty levels as these names, these indexes hit new record highs, there's a reason for this whether we're talking about momentum or even FOMO, but tell us about the tailwinds.

Like anything else.

It's it's so based on psychology, right, it's the sentiment of what drives the market.

So it's not if the market will come off 2, 3%, 4%, but does that mean it's a sell that it's going?

Absolutely not.

All right, but the consumer and the public gets nervous.

When they see that, but what we've seen that the public is is actually buying the depths.

OK, and they've created almost a new economy in that when you look at companies like eToro, they've created new economies.

OK, E-Trade is no minimum, it's a new economy that they're creating and you just saw today, OK, flutter and DraftKings.

OK, so all kinds of new economies are being created and that's what the public needs to realize, but take it in one step at a time.

Yeah, and finally, before I let you go, we'll keep an eye on all the new economies that pop up, but one thing that has been put to the sidelines right now is geopolitical risk, but we know that that will be an ongoing concern.

So how are you factoring everything in in the second half?

Listen, the geopolitical drama story is a story, OK.

It's it's something that the world has to accept.

All right, so it's how you read the tea leaves.

It's a lot of negotiation, it's a lot of saber rattling, but at the end of the day, what is the world actually saying?

We're all connected whether you want to accept it or not.

The banking system is connected.

The fiat currency system is connected.

Everything is connected.

Yeah, it's like the human body.

I mean it's like your fingers connected to your risk.

It's the same thing.

Yeah, and I think that's important to consider, especially given all the headlines out there.

So finally, ahead of earnings season before I let you go, what are you bullish on and what do you bearish on?

OK, I'm bullish on energy, fossil.

Oil, we still need it.

OK, and it is what it is.

OK, we need it.

OK.

I'm bearish on certain aspects of ESG.

All right, certain aspects of it, it's a loaded question, meaning there's always going to be any sector when a stock doesn't perform.

I'm, you know, unfortunately I am bearish on some big large retailers.

Like the JC Penney's of the world, I mean, Kohl's, it's terrible.

OK, right, but on the bullish side, you're seeing companies like Walmart who are just that good at what they do and they've been through the cycles.

You know the difference between a Walmart and an Amazon is time.

Walmart has been through inflation, been around for a long time.

They're not getting worse.

They're getting smarter.

And Alan, speaking of which, Steve, thank you so much for joining me and I think the moral of the story here is that everything is connected, so I appreciate your time.

Thank you so much for joining me today my pleasure.