Friend of ours here at the New York Stock Exchange, Eddie Ghabour joins us via Zoom.
Eddie is the co-founder and CEO of Key Advisors Wealth Management.
Eddie, let's start there.
I know you're bullish.
You got conviction on the semis.
AMD and others having a strong day today, but man, you gotta love what you're seeing out of the Russell 2000.
Absolutely, uh, they are really outperforming on a relative basis, and I think the setup continues to be fantastic for small caps, you know, they've been beaten up for a while, you know, really since the end of 2021.
It wasn't until this year where they really started to break out and I think one of the biggest components is the bar was set really low for.
Small caps heading into this year in regards to earnings and look what this is telling us is that the underpinnings of this economy are much stronger than many people had priced in, which is why you're seeing these economically sensitive areas outperform the broader market, and we think that's going to continue.
So small caps should continue to be a big winner in 2026.
Yeah, I know you're tracking in Nvidia.
You mentioned earnings.
You can't go very far this week, Eddie, without talking about the big tech names.
A big tranche of them yesterday.
We got Apple's figures crossing the wires here after the bell today, really coming any moment now.
For Apple, we're looking for iPhone growth, how the company handles the CEO transition.
What other big tech storylines are you following right now?
You know, the big story is of CapE spending.
You know, just yesterday, all these mag 7 companies that announced earnings.
It's over $700 billion of CapE spending.
It's just a massive cycle that we're going to be going through here, and this is why we're so bullish on certain areas.
Now.
You have to be in the right sectors and stock selection is going to be critical, but I think we're back.
This sell-off.
We had in tech earlier in the year was exactly what we needed to recalibrate and have them set new highs, and you mentioned Nvidia earlier, we just bought more Nvidia today.
We think that's something we want to own going in the earnings because I think they finally are going to break out and blow through new highs.
So it's uh it's great to be leaning towards tech again and I think they're going to continue to be a big winner.
Eddie, I want to get your thoughts on Powell yesterday.
Jerome Powell, probably the biggest headline.
We knew what the interest rate decision would be.
He's basically saying, I'm not going anywhere.
I'm going to keep my voting seat on the FOMC as a Fed governor, at least for now.
Your take on that and general expectations for Kevin Warsh?
So I was really surprised that Powell wants to stay at the Fed, so I, I was really scratching my head on that one.
I'm not sure why he would want to, but it's to me it's, it's a distraction.
But you know he has the ability to do that.
So I think it's the first time in over 70+ years that the head of the Fed is staying on as a voting member.
So we'll see how that goes.
In regards to Warsh, uh, I don't think he's going to be as hawkish as the.
Market is concerned with, you know, he's definitely talked about getting the balance sheet down, but I think he understands markets.
He was at the Fed during the financial crisis, so he understands that if you're going to reduce liquidity, you have to do it in a methodical way that's not going to break the bond market.
So I'm very comfortable and confident that he's going to do a good job.
And at the end of the day, if he does shrink the balance sheet, that's not necessarily a Bad thing and trying to get us back to a normalized situation with balance sheets.
So I think we get one rate cut this year and then we're done.
I don't think we need any additional rate cuts because I think the economy is strong enough and I certainly don't think we're going to get a rate hike and I know that's something that people seem to be concerned with with coming in.
I see a very, very low probability of that.
That's not even anything we're concerned with at this juncture.
Yeah, despite the fact we got that core PCE print just this morning at a 3.2%, we will see how incoming Chairman Kevin Warsh and the other FOMC members handle those prints.
I've got about 30 seconds left.
Any other big macro forces or catalysts you're paying attention to?
You know, I think the story now is we're looking through oil prices and we're focusing on economic growth and the earnings story.
It's all about CapEx, and I think Nvidia is going to be the next major catalyst for this market to take the next leg up because it's such a highly weighted stock in all the indices.
So I think they're going to really surprise again to the upside on earnings and take this market to another leg higher.
Eddie Ghabour, longtime friend of ours, co-founder and CEO of Key Advisors Wealth Management, my man, thanks for being here.
Nice to have you.
Thanks for having me.
