RDS Wealth founder and CEO Dale Smothers joins the show to break down the latest market rally, explaining why he believes the recent rebound could continue following upcoming earnings from Nvidia. He argues that recent selling in software stocks appears to be an overreaction, noting that emerging AI players like Anthropic are more likely to partner with existing tech leaders than replace them. Smothers maintains that the broader bull market thesis remains intact and expects the S&P 500 to finish the year higher, though he cautions investors to prepare for significant volatility, especially around the midterm election cycle. He also discusses policy risks, including tariff uncertainty tied to actions from Donald Trump and legal challenges involving the Supreme Court of the United States, which could either pressure markets or create a tailwind if companies receive refunds on previously collected tariffs. From a strategy perspective, Smothers says his firm favors equal-weight exposure across the market while selectively buying dips in major tech names such as Amazon and Microsoft, while closely watching commentary from Jensen Huang as a key signal for near-term market direction.
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But the good news is we're going to talk more about these markets and I'm pleased to be joined by Dale Smothers, founder and CEO RDS Wealth.
Dale, great to have you on the show remotely today.
What do you make of today's market rally?
It's the constant struggle between the Bears and the Bulls.
We've seen a rebound in my opinion, that's going to continue after the earnings are announced with Nvidia tomorrow.
I think that this continues deep into the week, Kristen.
I'm I'm, I'm, I'm finding that the software is being bought back up, this dip that has been.
In my opinion, an overreaction has been balled up, and I think the market's getting it right here to not overreact to places like or people like Anthropic who are coming out.
We're seeing this partnership instead of a replacement, which is exactly what you said.
I like that analogy, and I think that continues deep into the week.
Is the bull market thesis still in place?
Certainly is.
I think the end of the year we see the S&P 500 higher.
You've got the midterm election that that in itself gives us historic reason to believe it's going to be a volatile time.
Between now and December 31st.
I think it's higher, but it will certainly not be a straight line.
It's going to be everything but you're going to have a lot of volatility to come.
Nvidia is front and center.
You said the main event.
I think that in itself is going to tell us what the next 2 to 3 weeks are going to look like, especially if we consider the bull story, the bull market story for technology.
Nvidia is the load bearing wall in that story.
How should investors deal be navigating through tariffs of course we saw the Supreme Court ruling late last week and we saw President Donald Trump's response.
Yes, I think the tariff announcement is likely to resurface.
I think we're going to find the administration coming up with a new way to announce tariffs on countries that do not cooperate.
Donald Trump has used this as a tool.
You know, this tool has essentially been ripped out of his hand.
He has other ways.
I don't think that the Supreme Court specifically said that tariffs were illegal, Nicole.
Instead, Kristen, they basically were saying.
That this particular way that he brought tariffs to be was the illegal process to do things, so he is going to pivot.
This administration is going to pivot.
They're going to bring tariffs back into the picture.
It's going to continue to be a tool.
Now if I'm wrong on that thesis and instead.
The government has to repay these tariffs because they were they were collected illegally.
That is likely going to act as a tailwind for the market because you're going to essentially have a tax return for these corporations that have paid in all of this money.
Now they're getting this money back.
They've already.
Figured out how to do more with less and Kristen, that tax return is going to be put to work.
I think that in itself could be a mess.
The court's labeled it a mess logistically, but when the money actually arrives, if that's the case, I think you're going to see a tailwind for the market.
What are you advising your clients to do in this market environment?
Yes, we like right now we like playing an equal weight, the other 493 and then buying dips on names specifically like Amazon and Microsoft as we've seen these dips appear, you know, there are a lot of heavy hitters, if you will, big traders that are considering trying to pick at Jensen Wong's announcement.
Coming out tomorrow and I'm sure there will be a tax on anything he says that's not just absolutely spectacular to try and bid a name like Nvidia lower even in our belief though, we've got a lot of these names that should be much higher than they are right now, software specifically buying the dips out of the equal weight position.
So Kristen, we're essentially heavy.
RSP, an ETF that gives us equal exposure to the entire S&P 500, and as we see these dips appear, we're picking up positions out of the RSP and we're buying into, we're pulling money out of RSP and buying into these names going into the remainder of the year.
We think that again the market finishes higher just being prepared for volatility.
All right, Dale's mother is founder and CEO of RDS Wealth.
Uh, Dale, thank you so much for joining us today on taking stock.
Thank you, Chris.