Eric Criscuolo, global market strategist at the New York Stock Exchange, joins Remy Blaire to break down market volatility following Trump’s Fed chair nomination and shifting moves across equities, metals, and currencies.
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Remy: Let's get to the big story breakdown. President Trump has nominated Kevin Warsh to be the next chairman of the Federal Reserve. And ahead of the market open on this Friday morning, we are looking at the major U.S. stock averages in negative territory off a little over half a percent.
Well, joining me to weigh in on what's moving markets this Friday is Eric Criscuolo, global market strategist at the New York Stock Exchange. Eric, great to have you here. Thank you so much for joining me.
Eric: Happy to be here, Remy.
Remy: Well, here we are, the final trading week of January. And we've had a lot moving the markets. But of course this pick for the Federal Reserve. What does this mean for the markets?
Eric: Yeah. So there was obviously a lot of back and forth between who it would who it was going to be. We were hoping well, the NYSE Mac desk was hoping that we would get the announcement during the press conference of Jay Powell to kind of muck up everything, but it didn't quite happen that way. But, you know, I think, you know, his name has been out there for a while. So markets have been able to at least discount, you know, at least some of what he would do as he comes into the if he comes into the chair role, he still has to get through the Senate confirmation and he still has to deal with, you know, a dozen members of the committee that are also voting as well. So, you know, he's not an autocrat. He's not a dictator. So you know how much his influence, he'll certainly have influence. Assuming he gets in the role. How much of it, you know, is there remains to be seen? We know that he's been in favor of cutting rates. Short term, short term rates. We know that he has also been in favor of compressing the fed balance sheet. He wants to take it lower. Uh, so, you know, those are, you know, somewhat opposing dynamics. We'll just have to see how it plays out. But I think, I think there's now a lot of people trying to figure out, you know, how that plays into what Treasury yields will do, what the dollar will do. Andthen, of course, how that flows into the equity markets right now.
Remy: Yeah. And indeed, when you mentioned Powell's speech earlier this week, it does feel like it was weeks ago. But of course it happened on Wednesday afternoon. So the Federal Reserve left rates unchanged. And we heard from Powell. But since then we've seen a lot of interesting price action, especially when it comes to the asset classes. So whether we're talking about equities or precious metals. So I do want to ask you about what we're seeing across precious metals and the relationship with the U.S. currency.
Eric: Yeah it's been really interesting. You know they've obviously been on a huge run. We started at Gold's and it went to silver. And now you know platinum and palladium and these other these other metals they're all kind of catching up. Part of this, you know, close to parabolic move in these metals. So it's quite interesting to watch. A lot of it is, you know, positioning a lot of it is due to the fact that investors have been so under allocated metals for a long time. So there's a lot of dynamics coming into play right now. Gold had an incredible day yesterday. It was, you know, trading $5,100 - $5200. It spiked at $5,500, fell back down to $5,100. Finished the day flat, maybe a little positive. So. Like an incredible 10% intraday move. How it affects you know other markets um including the dollar you know typically commodities and the dollar move kind of together. Strong dollar versus a weak commodity and vice versa. The dollar right now is pretty volatile or it has been volatile. It's been selling off, it's been weakening, very recently against the yen. There's a lot of crosscurrents right now and that could kind of detach, you know, the typical correlation between assets. And I think that's what's kind of happening right now.
Trump has wanted a weaker dollar. We got it. But now it's been taking a little higher off its lows. So we're going to have to see how that plays out. The euro is pretty strong right now. So again all these crosscurrents are happening right now and commodities are they're kind of trading on their own planet right now. And there's a lot and each commodity is different as well. Gold, very different than silver even though silver is kind of like a gold backup. As far as like a store of value as a precious metal. But silver is also used in industrial applications a lot more than gold. So there's, you know, buyers that need silver to make products, right, versus buyers that just want gold because they're worried that the dollar collapses, you know. So there's a lot of dynamics going on right now. Crosscurrents. It's really a fascinating time to be watching these markets.
Remy: Yeah. So I do want to round out our conversation talking about massive news we saw this week. And of course, we can't forget the fact that it is earnings season. And we did hear from key tech names earlier this week including overnight with Apple. earlier this week we saw that sell off and health care names on the heels of UnitedHealth falling by double digit percentage.
We also saw that with Microsoft and software names selling off. So given the performance we're seeing in the S&P 500 leaders and laggards, do you expect more of the same? And why are we seeing these extreme moves?
Eric: Yeah. So you hit on basically the major the major movers you know in tech. Software is just getting it's getting slammed right now. It's been under pressure for for several months. It's the AI narrative right, that AI is going to eat software, and so so many of these companies are down 25%, 50% even like 80% from their highs. So, there's a lot of carnage in software. You know, that's going to have to work out. Do the leaders rise to the top? Do they consolidate market share? Do they prove their mettle? That kind of remains to be seen. I am not a software expert, so I don't want to I don't want to say which way it's going to go. It was interesting yesterday with, you know, Microsoft sold off with great numbers. On the flip side, Meta also had great numbers. And they shot higher. Dynamics very different between the two companies. It's a very - if you're a stock picker, this is like this is what you live for, right? Passive flows, you know. Just buying the spy. That's been great for a while now. But when this volatility happens and when these stocks begin to disconnect from each other, inside their own sectors, that's when the if you're a stock picker this is what you live for. So it's kind of like the Super Bowl of stock picking. It's really hard. But it's really fascinating to see how these how these trends play out.
Remy: Well Eric, we will have to leave it there. But thank you so much for joining me on this Friday morning and helping us to make sense of all the volatility we saw this week.
Eric: Pleasure to be here.
Remy: Thank you so much.