Matt Cheslock, Equity Trader at Virtu Financial, joins Remy Blaire at the New York Stock Exchange to discuss the current state of the U.S. stock market, which is experiencing a notable rise, with the S&P 500 nearing a record high. Oil futures are also up by about 1%, hovering around $65 a barrel, as geopolitical tensions in the Middle East begin to ease.
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Let's get to the big story breakdown.
US stocks are rising and the S&P 500 is fast approaching a record high.
In today's trade, we are looking at oil futures up by about 1% and hovering around $65 a barrel, and this does come as geopolitical tensions in the Middle East ease.
In terms of company names and focus, FedEx shares fell in after-hours trade after the company suspended its full year outlook.
It does. tariffs to add $170 million in costs to its adjusted operating income this quarter.
Well, joining me to weigh in on what's moving the markets is Matt Cheslock, equity trader at Virtue Financial.
Matt, good morning.
Thank you so much for joining me.
Absolutely, I'm glad to be here.
Thanks for having me.
Well, outside, we're experiencing a heat wave here in the Northeast and in terms of the equity averages, we are seeing gains and the Averages fast approaching record highs.
So what's going on here?
Look, the heat wave is affected more than just outside, you know, it's inside in here.
We still have the same names that are driving us a little bit higher.
It's, you know, the absence of, let's say Google or Alphabet and Apple and all of this is kind of amazing.
So we have new leadership groups that have taken us higher.
People are afraid of missing out.
Quite frankly, that's what it is when you see the chips rally as strongly as they have.
We've seen some of the AI names rally as strongly as they have.
People are wanting to get in the same boat at the same time, and that's why you're seeing these massive moves in these sectors, seeing the Nasdaq 100 at an all-time high.
Nasdaq Composite knocking on the door.
The Dow's got a little bit to go, you know, but certainly there are some catching up names, you know, that might see some flow if we see any kind of retracement in this market.
And yesterday the S&P 500 closed right below the 6100 level and given where we were when the tariffs were first announced the Liberation Day announcement, we have come back strong.
So as we wrap up the second quarter and head into the second half, what do you expect in terms of macro and given some of the rumblings that are coming out from Fed Reserve officials, what are yours?
Well, I think that if the if the product is important enough, we can pass through those those tariff increases to the consumer without a problem, and I think that's what we're seeing.
So the tariff hasn't been as big of a deal as we expected.
We expected it to almost ruin the second quarter.
It hasn't happened yet.
I know we haven't had finality on what those numbers will be, but seemingly we have some kind of guidance, you know.
Market obviously is excited to get that over with so we can start moving on to other things, but you know you start to see some of the bets that have happened, you know, some of the war premium on oil that just didn't happen.
You know, people got crushed in that, so people have now really taken a short term approach to investing and they're buying the momentum names and that's not going to, I don't think that's going to change right now because people are so caught up in chasing the latest headline.
And speaking of which, whether we're talking about the Nasdaq 100 or the S&P 500, when we break it down by sector, tell us what you're seeing in terms of leaders and laggards.
Well, you know, again, the big names, some of the mega caps, you know, they're still seeing that inflow of money on day to day.
We're starting to see headlines, you know, we're not even talking about what NATO.
Said today about agreeing to a 5% of their GDP spending, you know, that's an important thing.
So you could see defense rally.
Yesterday it sold off a little bit today you could see it rally because now this is coming to fruition.
Now the fact is, will they actually spend 5%?
That's another issue.
But the headline reads, you might see the knee jerk reaction maybe to buy.
Some of the defense.
Yesterday we saw some of the energy and some of the integrated oils down.
Obviously after a 3 day slide in oil that's going to happen, but eventually oil will settle in and then there will be an opportunity there to maybe buy that dip and that's what this market's been all about back in April by that dip, by that liberation day dip, and that's worked effectively.
And speaking of volatility, we are looking at the VIX low at the 17 level.
But given some of the uncertainty that is out there in terms of the macro picture, what are some catalysts that you're paying attention to as we head into not just July but the rest of the year?
Well, the Fed is going to take, you know, Paramount importance, you know, we're starting to get some dovish comments which the market obviously loved yesterday, even if it wasn't, you know, the overwhelming. consensus, it's certainly a start, and that's what the market likes, you know, we always joke about the market doesn't like uncertainty.
Well, I disagree.
The market loves this uncertainty right now and they love the opportunity to trade that uncertainty.
The people that are probably on the other side are the people that are going to make some money here because you know they're taking a. of the opportunities whether it be a massive sell off in a certain sector or a massive rally.
So but that's going to be the biggest one I think going forward.
I think tariffs have probably been played out a little bit.
We know what to kind of expect.
We know what's going to get passed on, but if we can get some rate cuts as as you know, going forward, maybe the second half of the year, that'll be a positive.
And that finally, before I let you go, only a few more days until the end of the month.
What are some key levels that you're paying attention to?
I think you know we have the Russell rebalance here on Friday, so there's going to be some massive volume over the next couple of days.
That's going to give portfolio managers an opportunity to readjust going into the first week of July, which could be a quiet week as it's a.
Short week people may take a break before the earning season starts and you start to see if their consensus estimates from the 2nd quarter can be walked down enough where they can now exceed those analysts' expectations.
Well, Matt, always great talking to you.
Thank you so much for joining me and thank you for sharing your perspective and your insights.
Sure, Ronnie, have a great day.
You too.