Let's get to the big story.
Breakdown while Wall Street is flat to mix ahead of the market open on this Wednesday morning.
The central bank, the Fed does kick off its policy meeting today as chair Powell navigates stubborn inflation as well as wartime energy shocks.
Meanwhile, the max 7 hyper scales are in deck to report earnings just as doubts creep in about the actual revenue growth of the AI while joining us to break down his outlook on monetary policy. and where he is finding unique investment opportunities is Michael Rosen, Managing Partner and CIO at Angeles Investments.
Michael, great to have you here.
Thank you so much for joining me.
Great to be with you.
Well, we are counting down to key events today, including the central bank meeting as well as Powell's presser and that bonanza of earnings after the close.
So where does the US economy actually stand right now the US economy is in pretty good shape actually.
Growth is running around 2 2.5% GDP.
That may come down a little bit with the higher energy costs kicking in as we get later into the year, but I don't see any recession in sight.
In the meantime, corporate profits are at record highs, profit margins record highs.
We'll obviously get some data this afternoon that will deny or confirm those profit growths, but In general, the private sector is in strong shape.
Corporate balance sheets, household balance sheets are really strong.
Real wages are up, and as I mentioned, corporate profits, which are really what drive equity markets, are at record highs.
And so I think investors need to stay invested in this market.
It's a benign to positive supportive background.
And we all know that here on Wall Street we have been seeing record highs for the Nasdaq as well as the S&P 500.
And when we look at some of these levels, especially for the S&P 500 and look under the hood to see what's actually driving these gains, we have to separate the fact that the market, the stock market is not the US economy.
So what do you make of the leaders and the laggards.
Well, it's these big tech companies that continue to generate the bulk of the profits in the stock market, and so far no letup in sight.
Again we'll have some data this afternoon that will confirm that or not, but No, I think actually what we've begun to see the profit growth spreading out just beyond the 5 or 6 top names in the market.
The industrial sector, for example, is doing exceptionally well.
The demand for energy, electricity is growing.
Everything around that infrastructure, I think, is really strong.
Never bet against the American consumer.
We are the world's greatest consumers.
It takes a lot to knock us off our consuming binge, but I do think higher energy prices at the margin will have some modest effect on the consumer as we get later into the year.
So I think in general the industrial energy. tech space all seems really strong you bring up a lot of important points there because when we look at the year to date sector gains for the S&P 500, we're seeing this divergence from the gains we've been seeing since March 30th in terms of the leaders.
But when we dive into the big tech names, especially the AI plays, we have to keep in mind that it is a big ecosystem.
Where are the risks that were the opportunities?
Well, actually throughout the entire ecosystem there is a far greater demand than supply, and that means everything from Nvidia chips to micron to LAM and applied materials and just Taiwan semi.
If we go overseas and SI Heins.
Look, all these companies are doing exceptionally well, so the providers of this technology are really the big winners here as opposed to the big hyper scales that are spending this money.
They're doing fine.
They're very strong companies generating lots and lots of cash in their businesses, and they're spending that cash.
The real winners are the providers of these technologies really across the entire ecosystem of the hyperscalers.
Michael, if we zoom out and take a look at where we were at the beginning of 2026, we're looking at three straight years of double digit percentage gains for the major US stock averages and when it came to that diversification play, we were looking overseas.
But given the volatility we've seen across global markets, do you still believe that overseas equity markets and which regions are you more bullish about so.
Beginning sometime last year we had moved money out of the US and diversified overseas Europe, Asia, Japan, emerging markets.
What we were seeing was economic growth that was improving overseas relative to the US, and so that economic gap was narrowing.
The profit gap was narrowing, and so that argued for having more overseas.
We kept that until about February 28, and when the war started in Iran, we reversed.
And went back to an overweight to the US and I think the thesis that economic activity will be stronger overseas is very much in doubt now with the higher energy prices which really affect Europe and Asia in particular which are massive net importers of energy.
So I think at least for the rest of the year my sense is that their economies will struggle relative to the US economy and that means an overweight to the US which is Kind of where we are now longer term, I do think that diversification overseas makes a lot of sense, but in the immediate term, the higher energy prices is putting a damper on economic activity outside the outside the US, and that is something that we're paying attention to, especially since it is a big week for global central banks.
So we have heard from the BOJ.
We will be hearing from the Fed, and we'll be watching closely for the other central banks this week and what they have to say since we're Paying attention to those rate differentials as well.
But finally, before I let you go, Michael, I do want to get your take on crypto since here at Fintech TV we do cover digital assets.
So where do you stand when it comes to crypto?
Well, you really shouldn't ask me because I completely missed the boat on this one.
I have never been a believer in the private crypto space because I just can't imagine governments giving up fiat power and so the combination of The very high volatility, so still a very speculative investment.
The use case still in my mind has really not been proven either as a store of value or a unit of accounting or a mechanism of exchange.
The three characteristics we typically see in currencies.
I do think that tokenization, central bank digital currencies are things that will happen.
I think the technology is not quite there yet.
Blockchain has been around for about 25 years.
And still cannot process the amount of data that we can you know currently in the current system.
I think that will change as well.
So I do think the digitalization of a lot of the financial system will occur.
I'm just not sure if the beneficiaries will necessarily be the private cryptocurrencies, but there will be other areas and other ways that you'll see you'll see that benefit.
Well, Michael, it was great having you on the show today.
Thank you so much for joining us, and I appreciate your time and all of your insight.
Pleasure.
Great to be with you.
Thank you so much.
