And let's talk much more about today's tape with Ted Thatcher, president at Bright Lake Wealth Management.
Come on in this way, my man.
We'll take you here.
Thanks for being here, of course, and thank you for bringing the all-time highs more broadly as you look up.
What do you track across the markets and what do you make of the resiliency that we have for another round of highs?
It really is a special Cinco de Mayo here at JD.
I mean, we're seeing absolute green across the board.
S&P closing at all-time highs.
Wall Street has absolutely.
ROI has demanded revenue out of the $600 what has become $750 billion of CapE spend the mega caps have put into play, and we're seeing it today, a glimpse into that ROI, into that revenue come to fruition.
Markets are at all-time highs.
What is the message, however, you think that Main Street is getting right now?
It's an important distinction that the stock market is not the economy, and sometimes they tell two very different stories, Ted.
It's very, it's really true.
If we ask ourselves, hey, How is the economy doing?
We have to make this distinction.
Are we talking about the financial economy here on Wall Street, or are we talking about Main Street and the real economy?
The truth is the real economy is a little bit under pressure here.
I mean, Wall Street may have entirely moved on from the war in Iran.
Oil prices are at over 100 now for over two months.
The average consumer doesn't have the luxury of looking beyond that.
We are going to see that inflation bubble have to move through the economy, obviously.
Putting pressure on costs.
We saw PCE come in last week at + 3.5% year over year.
I want to get your take on the hyper scale AI spending because largely what is fueling the current spate and success of corporate earnings season is confidence in the hyper scale spending.
You say there's a bit of a new twist, however, in the general narrative of market concentration.
What do you think we should be paying a bit more attention to here?
So in 2025 there was this real clear narrative that there was so much concentration.
In the mag 7 companies really pulling the markets up driving returns.
We're seeing that again now with a little bit of a tweak, a little bit of a nuance.
It's really the bottlenecks in the AI economy that again $750 billion of Capex is going.
We can just follow the money.
It's putting demand pressure and so absolutely we're seeing that, especially on the memory side, you know, we saw Micron have huge we have returns and then AMD comes out today.
I'm expecting. there as well.
Yes, we got AMD coming up here in just a short time.
What's your current thinking on monetary policy?
Obviously Jerome Powell out, at least as a chairman.
He's not totally vacating the Fed, I should say.
Kevin Warsh coming in.
Your expectations for rate cuts between now and the end of 2026.
You know, the base case at this point, if we look at the statistics and odds, is that we actually won't see a rate cut until December of 2027, at least that's what the odds are currently telling us, telling us.
That said, There is going to be a change of the guard here.
Kevin Warsh is starting to put out a little bit of a different narrative.
He's saying, Hey, AI may be deflationary.
We may be able to lower interest rates, you know, sooner than expected.
My only concern there though is, of course, if you start that type of rate decrease cycle too early while consumers are having to work through this, you know, energy cost bubble working through the economy, that we could be put sort of between a rock and a hard place.
Before I let you go, and I've got about a minute or so left, you.
A lot of these big tech names.
I know you like Oracle, but how about some of these Mag 7 names Microsoft, Alphabet, Meta, Amazon?
We've heard from earnings results from a lot of those names.
Do you like where they are right now?
Yeah, I really do love, especially where Amazon is at right now.
You know, I remember we were talking back when they closed their last earnings report.
They were getting absolutely beaten up because of all the extra capex.
Look at where they are today.
They're leading the pack with Google in terms of the Mag 7 performers.
Out of this quarter with a whole lot of great headlines, you know, Andy Jasse letting us know, hey, if you know, just our chip business can be worth $50 billion and we saw a ton of headlines yesterday about, you know, the logistics empire that they have continued to build, and that is to say nothing of the robotics side.
Yes, of course Amazon was the big mag 7 laggard last calendar year so far, but of a different narrative that has emerged here.
Ted Thatcher, president of Bright Lake Wealth Management, thanks for being here to kick off the show.
It's nice to see you.
Great to see you, Jake.
