Navigating Market Noise: Insights on Trade Deals and International Stocks

Let's get to the big story breakdown.

While US stock futures getting a bump this morning, Trump says he's struck the largest deal ever with Japan, a reciprocal 15% tariff on autos and other goods in exchange for a massive $550 billion investment into the US.

Now Japan will also open its markets to US cars, trucks, and rights.

Well, the S&P 500 hit a new record high following Trump's trade deals with the Philippines and Indonesia yesterday and also after Treasury.

Besant voice support for fetcher Jerome Powell.

Meanwhile, the Mag 7 tech stocks may still be a pack, but they're not moving in sync anymore.

Ahead of Mag 7 earnings, some key names already providing insight into sector performance.

Well, joining me here to talk about market movers is Luke Lloyd, president and CEO of Lloyd Financial Group.

Well, Luke, great to have you here.

Thanks so much for joining us.

Always glad to be here.

I think we have a good opening today too at the stock exchange.

We have an IPO here this morning.

That's always important.

Well, first and, when we're looking at the S&P 500 record closes for that index, but there's a lot of noise out there.

So how are you separating noise and signal?

Well, noise is always going to be there, but it seems like it's been very loud right now with the political volatility, right, with tariffs.

I mean, you hit on like 5 different countries this morning right on trade deals, the different percentages, but what's interesting is when you take a look at the macro side of things, everyone thinks these trade deals are going to benefit US stocks, which they might, right?

They could actually.

US stocks, but really who they benefit, I think, in the big scheme of things is a lot of the international areas.

If you open up trade and you actually allow free trade of items, you allow us to actually invest in each other's economies.

International's been unloved for I think like 20 years.

I mean like we finally saw International get a bump earlier this year, but that was really the first time in 20 years that has outperformed US stocks.

So where I'm actually looking at positioning money from an overweight standpoint is some of those international countries.

Yeah, and Luke, you bring up an important point here because we're waiting earnings coming out from some of the mag 7 names including Google Parent Alphabet, not to mention Tesla.

There's been a lot of volatility there.

And when we heard from GM as well as Texas Instruments, we know when it comes to guidance for looking outlook, there are some challenges here.

So you mentioned the US economy.

What are you looking at when it comes to fundamentals?

Yeah, so I think when it comes to the fundamentals of the markets and the indices specifically, you look at the RSP index, which is the equal weight, right?

It trades about 20 times earnings price to earnings ratio.

You look at the NASDAQ, it's traded at 28 times price to earnings ratio.

Nowever throughout history have they ever equaled each other, you know, because obviously the Nasdaq usually trade at a premium because Of the future growth projections being a little bit higher, but what I think is going to happen is Nvidia, Microsoft, Apple, Google, these big tech names that have rallied so hard, I don't think there's any kind of big downturn coming, but I think there is a rotation of money coming around the corner.

So what I think is going to happen is the PE ratio for these other stocks needs to catch up as we head into the end of this year.

So I think the money is going to flow out of the Nvidia's Apple's Microsoft.

Google, and I think that what you're actually going to see is maybe a stagnation in the NASDAQ.

Yesterday is a good example.

RSP was up 1%.

The S&P was flat.

The Nasdaq was down.

I think that's going to actually continue from a big, you know, general standpoint heading to the end of this year.

My clients actually don't own Nvidia, Microsoft, Applicable.

They don't own the big tech names right now.

They're very heavy in the value stocks in the RSP for that catch up trade heading to the end of the year.

Yeah, so that brings me to my next question, Luke.

So if they're not buying these Mag 7 names or even Nvidia, which did hit new record highs, what names are you looking at right now and why?

Yeah, so AT&T is a great example from this morning.

They just reported earnings.

Obviously stocks down about 2 or 3% because a little bit of margin compression looks like in the future with the guidance cut down the road, but I'll give that example.

Verizon and AT&T are the nervous systems, the highways for AI.

So there's So many different areas outside of the AI space there are these almost valued dividend payers that have not been loved, that have not really had the caught up catch up trade.

They have not necessarily partaked in the AI trade.

You have STX Seagate Technologies.

They're the memory of AI.

They finally have started partake in the past couple of months.

You see a rocket ship rally.

I'm looking at the 50 day moving average to buy more at the $128 level.

It's like $145 right now, but my clients have owned that for.

Couple of months.

So you want to look at these ancillary areas that aren't trading at these extremely high PE multiples that actually pay a good dividend as well, because what I think is going to happen is you also have the ancillary AI areas, but you also have a call option because I am in the camp again.

Interest rates over the long term are going to be coming down.

They have to for the dead scheme that exists that we talk about all the time.

So if you get the call option on lower rates combined with a catch up trade, that's going to be a rip your face off, I think, kind of rally around the corner.

Even small caps are going to partake with that.

And Luke, finally, before I let you go, we have about 60 seconds here.

So I understand you're an early Bitcoin adopters.

So given more crypto is right now, the passing of the Genius Act, where do we go from here?

Bitcoin, OK, so you can talk short term, long term.

I know we only got 60 seconds, but long term, listen, Bitcoin is going to a million dollars a coin.

I actually was on with a representative from Congress, a Republican from Pennsylvania, that enacted this part of this bill.

Small business organization and the biggest risk to Bitcoin and crypto is government regulation is the fact that governments can outright ban it one day.

That is the sole biggest risk.

That doesn't seem like it's happening.

So if you have a limited supply of Bitcoin, a lot of these cryptos are limited supplies, not all of them, you actually have it adjusted for inflation over the long term.

You have more dollars printed.

We're living in this debt Ponzi scheme.

Bitcoin is going to, I think, get up to gold's market cap of $20 trillion.

That puts it close to a million dollars a coin.

The most ironic situation is the most likely situation.

So one day here very soon I see in the headlines gold and Bitcoin have the same exact market cap.

So that's where I think it's heading in the long term.

Short term, I would look for a pullback to buy on the short.

Yeah, any time frame for that price target, Luke?

I would give it 5 to 7 years.

OK, well, we'll keep an eye on those prices and we'll have you back to talk about that.

Thank you so much for joining me.