Let's bring in a longtime friend of the show, Dale Smothers, CEO and president at RDS well, for his take on today's tape and much more.
My man, it's nice to see you here.
Thanks for joining us.
Good to be here, JD, always.
As you look up, you get a sense that we're closing today in the S&P at 7353 off these levels.
S&P 800 is about 8 8.5% away.
What are you seeing in these markets and your expectation for maybe inching a little closer to 80?
Yeah, and I think S&P 500 and 8000 is certainly within the realm of possibility.
There's going to be some chop here.
This is why it's important to know what you earn, what you own, to, to hold that even through this chop, and I think earnings is the primary reason why we see the market continue towards this 8000 mark.
But even at 7300 coming off of this little bit of a pullback over the last couple of days, who would have thought that to be the case as early as just March of this year to think that we were going to be at 7300 so quickly, you know, this is the idea that artificial intelligence, AI is likely to continue taking us higher with continued.
Demand, continued earnings and continued margin growth.
JD, Dale, talk to me a bit about how you are positioned in this market and where are you positioned in this market.
Yes, so you know, clearly you want to own leadership here and leadership for AI means Nvidia, Apple, Amazon, Microsoft, these names that have had some pullbacks even that we've taken advantage of.
For instance, Microsoft's one.
We like Amazon.
We continue to believe that the AWS story tells a powerful growth story for Amazon.
These names are leadership and we want to own them.
We're heavy leadership.
We've got a holding as well as core holdings in the Q's or SPY cycling out of those and buying names that are gonna help leadership continue to be strong, names like Micron, which are going to be a big player in this continued boom towards AI.
Oracle bouncing off of its 200 week moving average.
You gotta pay attention to that just a few weeks ago, continue to own those names.
Anything under 200 for us at Oracle is a buy.
And then we like names that are kind of out there as a, a long shot, if you will, but Estera Labs is a great example.
Example, if you think of Nvidia as the as the engine, no engine, no matter how powerful it is, is, is any count without a transmission.
Names like Astera Labs are building the transmissions, which is the connectivity between these GPUs.
The fast, uh, connectivity or how quickly tran uh data is transmitted between those those GPUs is just as important as the computing power itself.
That's a little bit of how we're positioning this risk on trade for our clients.
Dale, when you talk.
About market leadership.
You want to see the generals leading the pack, and there's no bigger general, more than 8% of the entire S&P 500 than Nvidia, the great Jensen Wong.
We'll get a lot more of a look under the hood for NVDA this time tomorrow, 24 hours' time after the close on Wednesday.
Does it still have to do the heavy lifting?
Are you looking for rotation and your expectations for what we'll hear?
Yes, Nvidia is the load bearing wall of this entire sector, and the market doesn't just want it to outperform.
It wants it to.
Significantly outperform, it'd be like going to watch LeBron James score 20 points in a game.
It's not necessarily spectacular.
We want a, uh, a triple-double if you will, in this particular earnings report and the idea that Nvidia, if it underperforms or if it surprises to the downside, that could cause a little bit more turbulence and continue chopping this market.
I'll tell you another interesting fact is the fact that that semiconductors now makes up almost 25% of the entire index, the S&P 500 in terms of market weight.
And semiconductors before the launch of chat GPT, only 6% of the S&P 500.
This again tells us why semiconductors are so important, not only in the sector, but in the index entirely.
Yes, you mentioned the great LeBron James.
Tonight is, of course, game one for the New York Knicks.
So I'm hoping to see Jalen Brunson put up those monster numbers before I let you go.
Any other big catalysts you're paying attention to, you think investors at home should be paying more attention to?
Clearly it's geopolitical tension.
This geopolitical tension will cause speed bumps in the road to 8000.
I still think we get there.
By the end of the year again it's continued AI demand earnings and margins that take us higher but know what you earn.
I cannot stress that enough or know what you own rather because the idea of of of this chop is going to kick a lot of people out as the market sells off and you don't wanna sell in a low just because you think that it's the end of the earnings season or the end of that particular stocks earnings season.
These earnings will continue to grow, but geopolitical tension, uh, you gotta understand that it's not only.
The Middle East, the Far East, Cuba, who knows about that variable that we aren't even really hearing much of right now.
This is going to continue to put pressure on energy and oil prices will make inflation sticky.
So all of this kind of ties in together.
AI takes us higher is my thesis.
Yes, as investors here on Wall Street continue to pay very close attention to what the president, what the White House has to say on the geopolitical front and beyond.
Dale Smothers, longtime friend of the show, CEO and president at RDS Wealth, my man, come back and see us anytime.
It's good to see you again.
