00:00 Speaker A
Now that we've had some time to digest the Fed, what stands out to you and what are the implications for stocks?
00:07 Chris
Well, you know, the market was looking for six rate cuts by the end of 2026. The Fed didn't say that, but it did give us one more. And I think uh the comments that Jennifer Schenberger made a few minutes ago about, you know, the growing importance of the labor market are spot on. And I think what the Fed telegraphed is we're going to look to get ahead of this to the best that we can, but also do a little catch-up given those revisions that we've seen and those massive, massive number of jobs that were pulled out with that big revision that we saw through uh the 12 months ending in March.
00:39 Speaker A
I mean, how concerned are you about the labor market, right? Because as we know, if the Fed is cutting and even if it's trying to get ahead of it, if it's doing it because it's worried about the labor market, there is a risk to the economy that even with it cutting, we're still going to see the job market deteriorate.
00:58 Chris
Yeah, so I I think what you're getting at is, isn't there a time lag between when the Fed cuts and we actually see the benefits of those cuts? Absolutely true. So, you know, but but here's the thing. When we look at the preponderance of economic data so far, and I have to be careful, so far, the economy is in pretty good shape, right? You know, the Atlanta Fed GDP Now model, 3.1% after yesterday's housing numbers. We look at uh 2.1, 2.2% for the New York Fed for the second half of the year. Consumers are spending. So, you know, by and large, the economy is good. It's really the labor market that's kind of an issue, and I think that's what the Fed is hoping to address.
01:34 Speaker A
Okay, so here's my big question for you. You're a stock picker. You look at where are you you're seeing opportunity right now. Are you changing sort of your models and your screens as the Fed starts to cut?
01:50 Chris
That's an interesting question because so the the setup for that is, we've had a tremendous run in the market, right? And I I was saying to folks that, wow, the Nasdaq composite going into the Fed meeting was classically overbought with its RSI level. S&P 500 was close, valuations were stretched. So, for me, the whole thing now is about earnings growing going forward and preferably faster than the S&P 500. We've always tried to lean into those companies with demonstrative tailwinds and faster earnings growth. And we are starting to look at some areas that have pulled back. Um certain stocks that have, you know, fallen out of favor but still have very favorable drivers behind them. And in some cases, because of the rate cutting cycle, we are warming up to some REITs and other things.
02:40 Speaker A
Okay, so let's do kind of a lightning round here. We don't have much time left, but you were talking about three stocks in that category, OLED, Dutch Bros, Welltower.
02:51 Chris
Which one you want first?
02:52 Speaker A
Just do them in order. Why not?
02:54 Chris
So, uh, I can't remember the order, but you Universal Display, uh, they are, uh, one of the companies behind the organic light emitting diode technology. We're seeing this get adopted increasingly in smartphones, tablets, other end markets, and the push to foldables increases the surface area for the display, driving more need for their solutions. Dutch Bros, West to East Coast classic, um, expansion story. Company's on track, and when you see stocks like Darden, you know, having a tough time or their, uh, fine dining falling, Olive Garden exploding, people are still going to continue to eat out, but I think they're shifting towards more affordable, uh, experiences. Dutch Bros lines right up with that.
03:39 Speaker A
And does Dutch Bros continue to sort of eat into Starbucks, or?
03:43 Chris
Great point, because their price points are actually lower than Starbucks. So I I think that is absolutely what can happen. The only thing I wish with Dutch Bros is that the management team, not that they would be more promotional, but they would be more engaging, uh, sharing their milestones as they continue to expand their footprint.
04:02 Speaker A
And 20 seconds, Welltower?
04:03 Chris
Uh Silver Tsunami, shortage on, um, senior housing, REITs back in play, rising dividend.
04:12 Speaker A
That was you know what you're doing. Thanks so much, Chris. It's great to see you.
04:15 Chris
Thanks for having me.
