Wall Street has opened lower on the heels of the latest tariff uncertainty after mostly recovering from Friday's sell-off in the previous session.
Now the latest results from the big banks are being digested this morning.
City, Goldman Sachs, JPMorgan, and Morgan Stanley have gained between double digit percentage points year to date, outperforming the S&P 500 index by at least 9% points.
Also, global M&A deal volume has surged past $1 trillion while IPO's corporate debt.
Syndicate and lending also on the rise.
Well joining me this morning here at the New York Stock Exchange is Chris Versace, CIO and Tamatic, strategist at Tomatica Research.
Well, Chris, good morning.
Great to have you here.
We are looking at markets pulling back this morning after yesterday's rebound and of course Friday's sell-off.
So give us your take on what's happening.
Well, I think you know we're kind of in that back and forth, if you will, between the US and China, and I think that that renewed trade war concern is.
You know, weighing on markets, and I think we're going to see more of this leading up to the expected meeting between Trump and Xi in South Korea later this month, kind of a, you know, rising escalation if you will.
What will we see coming out of this?
But at the same time, Ray, this is kind of classic game theory, and I think the idea here, you know, for your viewers is pretty simple in that if there is no similar response that's viewed as a point of weakness, and I don't think either side wants to have that going into this potential meeting.
Yeah, so despite all of this volatility, we are still seeing the major US stock averages in positive territory year to date.
So as we move towards more earnings as well as the Fed meeting at the end of this month, what are you watching and why?
Well, if we take a look at where the market has gone, right, it has, you know, made some very A very nice moves of late, despite the most recent pullback between last Friday and what we're starting to see today.
So you have to ask yourself, you know, where is the market multiple and either should the multiple expand further, or do we need to see the, the earnings start to come up?
And so far, you know, the big bank earnings pretty good.
We need to see More of that follow through across other sectors.
So I think the next couple, you know, the next couple of weeks will be very important for the market.
If we start to see consensus S&P 500 EPS numbers for 2025, 2026 start to move higher, that multiple comes down, and I think folks can be a little more bullish going forward.
Yeah, and one thing we have to keep in mind is that there's been a lot of M&A action as well as deal making, so it'll be interesting to parse through some of the earnings figures as well as the earnings calls coming out from the big banks moving forward.
But given that we've seen this push into AI and there's been talk about a bubble, what do you mean?
Of some of that conversation in terms of you know I think a lot of people harken back to the internet bubble when there was excess capacity and then eventually you know dark fiber.
So there's some concern that, are we possibly moving into a time of overcapacity for AI and data centers?
But when you look at the adoption levels, We're not there yet, so I would say that are we in the earliest innings of AI adoption?
Probably not anymore, but are we in the 7th, 8th inning?
We're not there yet either.
So I think we're somewhere, call it 3rd, maybe 4th inning.
So I think we have plenty of time to go, and I think as long as we continue to see AI adoption rise and usage rise, then we're going to continue to fill that AI and data center capacity that comes on stream now. the end of 2026, early 2027, depending on where we are in those figures, perhaps we need to be a little more careful because at some point when the AI adoption and usage matures and the incremental growth starts to slow, that's when I think we have to be a little more careful.
Yeah, and Chris, while I have you here and while we're talking tech as well as adoption, one thing that all of us have in our pockets is a smartphone.
So I do want to get your take on Apple.
So the iPhone foldable is expected next year, but give us your take on what this means for the price target of that company.
So we recently raised our price target on Apple for a couple of different reasons.
One, you know, we had very strong September revenue out of Taiwan.
Conductor key partner for Apple.
We also saw that organic light emitting diode shipments for the current quarter have been are now expected to rise 15%, largely due to stronger smartphone demand.
So that kind of tells us that the smartphone market is a little stronger than people were thinking, and Apple is about to unveil its iPhone Air in China very soon, which should also be another positive.
But when you talk about 2026, I think there are two things for Apple we have to watch.
You mentioned.
Which is the foldable, that is the next market, you know, to happen, a higher ASP than what we're seeing our average selling price, that'll be good for Apple's revenue, but it's also going to be positive for a company called Universal Display, which is one of the key component companies in making the organic light emitting diode display that allows the phone, and I hope we can get this to open up because you have to have a stretchable display.
So I really like the shares of OLED for that as a play.
OK, Chris, always great having you on set in person here at the New York Stock Exchange.
So thank you so much for joining me today and as always, thank you for your insights and perspective.
Thanks.
Thanks Chris.
