Matthew Tuttle, CEO of Tuttle Capital Management, joins us to break down a turbulent market stretch marked by sharp declines, sector rotation, and mounting concerns over AI disruption and hotter-than-expected inflation data. He explains that while headline market moves may look chaotic, the real story lies beneath the surface, where certain sectors are being heavily punished while others rally making this a true stock picker’s market rather than a broad trend. Financials were among the worst performers in the S&P 500, with private credit risks emerging as a potential systemic threat that could spill into other areas, particularly regional banks. Tuttle also warns that rising inflation could disrupt expectations for policy easing from the Federal Reserve, especially as AI-driven infrastructure spending increases demand for scarce resources. While he cautions that artificial intelligence will disrupt multiple industries, he notes that market sell-offs can create selective opportunities, pointing to companies like Snowflake and CrowdStrike as examples of stocks that may have been unfairly dragged down alongside broader declines.
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And joining us now is Matthew Tuttle, CEO of Tuttle Capital Management.
Matthew, great to have you on.
Thank you so much for joining us on this Friday.
So we are seeing a sea of red, and this does come on the heels of concerns about AI disruption as well as the hotter than expected inflation figures.
So what do you make of this price action?
Yeah, I'm not gonna miss February.
Um, it's been, it, it, it's been crazy.
It's been one of those months where, you know, just looking at what the markets are doing does not tell you the story.
Beneath the surface, you've got.
Certain areas that are just getting crushed for a lot of the, the reasons that you mentioned, and then you've got areas that are rallying.
You know, a lot of times people like to say it's a stock picker's market, and when they do that, it's usually a cop-out, but right now it isn't.
Um, you know, if you're not in the right areas, you've been getting your head handed to you. and absolutely because we've been hearing about momentum rotation as well as dispersion but today we saw banks fall hard and even the sector financial sector was the worst performing in the S&P 500.
So what do you make of these private credit concerns?
You know, so when you look at risk in markets, one of the things that concerns you is anything that can be systematic, and private credit is one of those things that if this gets worse, this can spread to a whole bunch of other areas.
I have never been a fan of regional banks.
You know, we run SKRE, it's an inverse regional bank ETF.
And, you know, I, I think regional banks could get hit very hard.
Never really been a big fan of the financials either, but, you know, it, it is definitely something you've got to be keeping an eye on because it's one of those systematic potential risks.
And Matthew, of course all of us are paying attention to what's happening in the US economy.
We got those harder than expected PPI figures.
Is this a canary in the coal mine.
It could very well be, you know, so everyone's all excited about the AI bill, data centers, power, all of this stuff.
Problem is it's inflationary, you know, they're, they're bidding up scarce resources that causes inflation, and, you know, higher inflation obviously is bad for a bunch of different reasons, but everyone thinks the Fed's going to be dovish.
If we have higher than expected inflation, they can't, and that changes the entire narrative.
And Matt, one final question for you.
Tell us about your concerns when it comes to AI disruption.
Well, I mean, AI is going to eat a lot of different areas, uh, you know, we saw it this past month, property and casualty brokers, financial firms, software, you know, anything that's in danger of being crushed by AI you want to stay away from, but A lot of times, people throw everything out, and, you know, you can pick through some of that dislocation and find some nuggets.
We like names like Snowflake and CrowdStrike that, you know, got crushed along with everything else.
OK, Matthew, well, we will have to leave it there, so thank you so much for joining us on this Friday and we appreciate all of your insights.
Thank you.