Alex Guiliano, Chief Investment Officer at Resonate Wealth Partners, joins us on the trading floor of the New York Stock Exchange to break down a volatile session marked by heavy options activity and heightened geopolitical uncertainty. With markets deep in what he describes as the “middle phase” of a geopolitical event, Alex explains how investors should think about volatility, drawing parallels to past shocks like the Russia-Ukraine War. He highlights how oil price surges impacting both inflation and equities are often driven by short-term headlines, urging investors to focus instead on whether these shifts represent structural changes or temporary disruptions. The conversation also explores how markets can move ahead of sentiment, why waiting for clarity may mean missing opportunities, and how investors are reassessing portfolio positioning after a strong year for equities. Looking ahead, Alex shares insights on defensive strategies, including dividend-paying stocks and potential opportunities emerging from recent market pullbacks, emphasizing the importance of staying disciplined and using volatility as a chance to reset long-term investment strategies.
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Let's bring in Alex Guiliano, chief investment officer at Resonate Wealth Partners, for his take on today's tape.
Come on in this way, my man.
Thank you for being here.
Nice to have you.
Great to be here, JD.
Unfortunately, I wore my red jacket, which means I brought nothing but red for the big board here at the stock exchange.
But man, oh man, what a session today.
Wow, we cleared 4 billion here for options exploration.
What are you seeing in these markets?
A lot of chop and volatility, especially on a day like today.
Yes, well, in the midst of the events going on now, JD, you know this is an event.
That has a beginning, a middle, and an end, and we find ourselves really deep now, 3 weeks into the slushy middle of an event.
You know, if you're looking for a parallel back in 2022 with the war in Ukraine, you had another geopolitical spike where people weren't sure how long things were going to take.
Oil spiked.
There were inflation concerns, and then you found yourself now in a conflict 4 years later that's still going on.
I think the challenge for investors are trying to navigate when a geopolitical shock happens and fear sets in, how to react in the moment.
And I oftentimes want people to understand that in the moment that things are happening.
Markets can move faster than you may suspect, and if you're waiting for calm, the markets may have already moved.
And so this is actually an opportunity for investors to reassess where they wanted to be in the first place and should they be looking for opportunities going forward for Alex, I wonder the guidance you're giving your clients and the questions they're asking you with a specific focus on oil.
We're down here right now.
We've got West Texas price just under 99.
We got Brent crude up to 111.
That's the highest water mark I've seen it hit all week, and it's been the highest it's been for some time.
What are you telling clients about oil shock, what that means for inflation or prices at the pump, and how does that translate to equities?
Yes, I think the most important thing to remember is this isn't the first oil shock that's happened, let alone for the last 5 years, let alone historically.
And so again, this is the middle of an event.
The market's looking for clarity.
Oil is moving on every tweet that happens or notice that gets posted.
And so instead of focusing necessarily on the intraday moves in policy, you should be asking yourself, is this a structural change to the economy or is this an event.
That will have an ending and that ending may come later than people expect, but the markets may adjust before that.
Yes, this is a good news cycle to have your notification set for Twitter or for Truth Social, especially given the president's post on social media really do tend to move the markets.
What are the top questions that your clients are coming into you and the firm with as they try and navigate how to become smarter investors on this backdrop of a lot of uncertainty still?
Yes, I think people mostly focused on are they positioned in the right way, right?
So we find ourselves in a situation.
That over the last year, the S&P 500, even after today's decline, is still up nearly 15% from the same time point last year.
And in the last year people have dealt with tariffs, they've dealt with challenges to the Fed independence, they've dealt with immigration protests, they've dealt with Doge, right?
There's always a wall of worry to climb, and I think investors are asking themselves, even after the decline today, they're still up significantly over the last year.
And do they want to continue to be positioned in the same way they have been?
And for the outlook for the future, do they want to take advantage of this as more of an opportunity to level set?
Where they want to be rather than focusing on changing what they've done in the past.
Markets climb a wall of worry.
I love the phrase wall of worry.
Before I let you go, what do you like defensive plays, dividend paying stocks?
I'm sure we're going to talk a lot more about an ongoing rotation for retail investors, at least more into consumer staples.
Yes, so JD, you mentioned the rise in rates recently, and I think that's an opportunity for strong dividend paying companies that have a well capitalized dividend to take advantage of the opportunity that now that rates have gone up, those names have been taken have been hit because. aren't as valuable in that environment.
This may be an opportunity if rates drift down and we get an outcome in this in this conflict faster than people expect that they may be an opportunity, and you've had a decline in certain names that have run up quite a bit that have declined significantly, especially the concerns around SASS, that there may be opportunities there to dive into with the decline we've already had.
Yes, the SASS apocalypse may continue.
We'll see what the rest of the month and beyond beyond Q1 brings.
Alex Giuliano, chief investment officer, Resonate Wealth Partners, my man, thank you for being here.
Great to have you.
Appreciate it.