During these turbulent times, some investors might be tempted to ask how do I get off this merry-go-round?
We're hearing all about tariffs, artificial intelligence, cryptocurrency and an incredibly contentious political environment.
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Jason Meshnick, managing editor for TheStreet and TheStreet Pro, sat down recently with some of the TheStreet's top contributors for the August edition of the Live Quarterly Call to review the state of the market.
Tariffs have been a key factor for traders since April, when President Donald Trump unveiled his regimen of levies.
“Who's going to pay them?” Meshnick asked. “And, what will the impact be? Will the impact be as great as some are fearing or hoping?”
TheStreet Pro contributor Louis Llanes said that it is difficult to make a blanket statement about the effect of tariffs.
“If I had to guess, it's going to have a slight inflationary impact, but not a massive inflationary impact,” he said. “There are some companies that don't have to pass it on.”
Technician cites AI Capex spending
“And secondly, because I think a lot of the tariffs, the actual percentages will drop over time as negotiations work themselves out.”
The Trump administration is fighting against legal challenges to the tariffs, including a case in the Court of Appeals for the Federal Circuit in Washington.
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“I think the question is, will these tariffs even last the next three and a half years?” TheStreet's financial markets reporter Noah Weidner said.
“The One Big, Beautiful Bill seems to be kind of a busted attempt at mopping up our budget and growth problems. So at this stage, I think the best case scenario for Americans and for traders is that tariffs do decline.”
“I don't know if they're going to go away,” he added. “But I do think one of the longer tail questions is, what will they look like in four years?”
“That is the billion dollar question.” Meshnick said. “What will they look like in four months?”
Helene Meisler, a market technician and equity trader who has been writing for TheStreet since 1998, said that “there are a lot of charts out there that show when it comes to CapEx spending, it's all AI and consumer spending is dipping below the line.”
“And I'm no economist,” she added. “But I also know that the consumer is 70% of our economy. So, something's got to give.”
Meshnick noted that the CapEx has grown dramatically for AI companies.
“As revenues grow, they're also spending more money to continue that growth rate,” he said. “And so they're probably looking more like a manufacturing company.”
The panel discussed opportunities in the current market and Meisler said that in this earnings season even if a company meets or beats Wall Street's expectations, the stock is gapping down or going nowhere.
Focusing on ‘macro safe havens'
“We're having a lot more gapping down in July, and you have a lot more stocks that are going nowhere,” she said. “The majority of stocks right now have been in a correction for six or seven weeks. And it seems to me they're probably still in a correction.”
“I think a lot of people were happy about what happened in April,” Weidner said. “It gave them an opportunity to buy up. I think a lot of large wealth managers were happy to buy that dip for their clients.”
Related: Veteran fund manager turns heads with Palantir stock price target
“A lot of people bet on American exceptionalism, for what it's worth,” he continued. “I don't know if a lot of people see the long tail of what's going to happen, but they saw a dip and they bought it, and we are back where we started. We're well-above where we started.”
Llanes said he was focusing on what he called “macro safe havens,” such as gold, mining, and as well as “the AI tailwind concept that made quite a bit of money on Palantir, Nvidia, and surrounding.”
“I still think that that trend is in play,” he said. “There is some consumer resilience in certain areas. DoorDash. And then the re-industrialization, like CSX. Freight is likely to continue and actually to improve.”
Llanes said his biggest position currently focused on growth in the slowdown, such Hershey (HSY) –“which everybody hated”– and Constellation Brands (STZ) .
“I've always talked about quality valuation, evaluation, and technicals,” he said. “The best investments that I've had in my career have been when you can get alignment on those.”
Regarding cryptocurrency, Weidner said he believes that “that among sports, gambling, stock trading apps, and crypto, one of these businesses doesn't know that they're all in the same business.”
“I would expect that if the stock market were to start falling, you would start to see crypto falling,” he said. “You would start to see gambling behavior falling. You would start to see people not using prediction markets as much.”
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