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What's really moving these markets
Wall Street Unplugged
Episode: 832December 15, 2021

Are you ready for 11 straight interest rate hikes?

Christmas season is here… and I love this time of year—not just for the holidays, but because I get to attend the annual Consumer Electronics Show (CES) held in Las Vegas every January. Be sure to follow me on TikTok by January 5 to get my most important updates on CES 2022… including the latest tech set to take the world by storm. [0:35]

After finally admitting inflation isn’t transitory during last month’s policy meeting, the Federal Reserve has some difficult decisions to make as it gathers for its final meeting of the year… One investment bank is predicting nearly a dozen rate hikes over the next three years.

While Daniel and I have different takes, we do agree: The Fed must act aggressively… Here’s what that means for 2022 market conditions. [4:25]

Last week, executives from six large crypto firms appeared on Capitol Hill to discuss the future of crypto regulation. Daniel explains why the hearing has him more bullish on crypto than ever. [15:45]

Pfizer (PFE) released positive results for its COVID pill. This is, of course, great news… but it doesn’t mean COVID is going away. [22:45]

Finally, Daniel and I each share a stock we’re excited about for 2022. [26:35]

Inside this episode:
  • Follow me on TikTok by January 5 for CES 2022 updates [0:35]
  • The Fed’s difficult position will mean tough market conditions [4:25]
  • Why last week’s hearing has Daniel more bullish on crypto than ever [15:45]
  • Pfizer’s good news doesn’t mean COVID is going away [22:45]
  • Frank and Daniel’s favorite stocks for 2022 [26:35]
Transcript

Wall Street Unplugged | 832

Are you ready for 11 straight interest rate hikes?

Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.

Frank Curzio: What’s going out there? It’s December 15th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I breakdown the headlines, and you know the rest… Tell you what’s really moving these markets. And moving these markets, man, major, major moves right now. Meme stocks are getting nailed. We have inflation running wild. Crypto, extremely volatile, especially as we have a bunch of CEOs from top companies talking to the Hill, Congress. And, of course, we had the Fed meeting. To break all this down with us, let’s bring in Daniel Creech, Senior Research Analyst, Curzio Research. Daniel, what’s going on, man?

Daniel Creech: Frank, what’s happening? Another great day. Yeah, got a lot. Pfizer news, more again. Variant news, more and again. This is like a Groundhog Day. But, it is Christmas season. I got to ask you real quick, does your neighborhood do anything fun to spread the Christmas joy or anything?

Frank Curzio: We have very few houses that put lights up. And, we’re in an older community. I’m glad I’m moving to Jacksonville again, because I don’t mind being in an older community, but a lot of these people are grumpy, they don’t wave. They don’t like us for some reason. I don’t know. Anyway, but so you don’t see lots of lights, but there are certain neighborhoods, and they have a really nice thing downtown, Dickens on Main Street, which is really cool for the kids. That was a lot of fun. And some blocks really go crazy with lights, and we’ll be able to drive through there and stuff, which is really cool, though. What about you?

Daniel Creech: Yeah, no, I’m a terrible neighbor. I don’t do a whole lot of decorating. Plus, I go to Ohio for, I’ll be in Ohio, as well, for Christmas. I say all that because did you see, these ugly sweater, ugly Christmas sweater parties?

Frank Curzio: Yep.

Daniel Creech: There’s one out there making the news. Somebody’s asking $40,000 for an ugly sweater.

Frank Curzio: Did I get it yet or no?

Daniel Creech: No. Well it depends on, I haven’t seen my bonus yet this year.

Frank Curzio: And that’s not an NFT, it’s a real sweater, right? That’s a real sweater, yeah.

Daniel Creech: NFT. Yeah, no, it’s a real sweater. So, that’s pretty hilarious. But, it made me, when I read that or saw those headlines, I thought about the meme stocks we see, little to no profits with crazy valuations. The cryptocurrencies like Dogecoin that you point to, and how the hell is this not like a sign of the tops when you’re dropping this? But anyway, it’s a little Christmas fun there for everybody.

Frank Curzio: Nah, that’s cool. I wish I would do more. I mean, it’s been really busy. We’re about to launch our token, hopefully in a couple weeks and it might be a little bit before the New Year, or into the New Year. So, we’re just finalizing a few things, which is really, really exciting, but just finishing a year really, really strong, and it’s been really, really nuts for me. So, my team’s been working incredibly hard, Daniel, I don’t know if I told you this, but the last week from the 27th to 31st, I’m closing. I’m going to give everybody in my company off. So, I’m still going to be on social media platforms. I’m still going to be talking at TikTok. TikTok, we’ve had a couple things go viral now. I mean, 400,000 people who we’re watching a couple of these things. We’re taking little clips from our podcast and putting on there.

Frank Curzio: And, that’s one of the best platforms right now. I mean, you’re looking at Twitter and Instagram, and Facebook, a lot of these platforms are saturated. We’re getting a lot of traction, so we’re going to be going live for the Consumer Electronics Show. So, I’ll be posting stuff during that week on social media, through TikTok and through Twitter. But the live stuff’s going to go through TikTok, and we’re going to post a lot of that stuff and put in reports, and just tell you what the best stocks are, and ideas, which I always find really great ideas. In 2019, one of my favorite ideas was Kodak at $2, and it went to double digits. It was weird. I said, “I’m going to tell you Kodak.” I’m like, “Insiders are buying, which I’m surprised to see. I don’t know why, but they have a very big presence here,” and sure enough, that thing really, really took off. And I know they got to deal with, through Trump and stuff like that. Whatever it was.

Frank Curzio: But, you saw it coming and just little things like that, that you see. We had the media badge, which yeah, I’m going there on the fourth. I’m going to be broadcasting. It’s a media day only, which I’m going to have special access thanks to you guys, because it’s, I’m under Influencer and stuff like that, and industry analyst. Then Wednesday, Thursday, Friday going to be taping a lot of stuff. It’s going to be a lot of fun. I’ve done this every single year for, I think the last eight or nine, outside of last year, which it was close to COVID but lots, lots of fun. So, I’ll be posting that week. Daniel, you will have off, everybody will have off, and that’s going to be the last week, just let you know. We’re not going to do any podcasts or anything, but my team’s really worked their ass off and they deserve it. So, just want to make sure that they have that week off and have some fun, spend time with their families.

Frank Curzio: And again, if you have anything for customer service, that part is going to be open, and feel free to give me a shout. But anyway, Daniel, let’s go over the most important thing, which we’re taping before the Fed’s actually going to speak, and Powell’s going to speak, right? So a little bit before, so which I’m setting that up, Daniel, so we can’t mess up. But it’s cool because I like making forecasts. I don’t think you’re going to see anything crazy, right? They already announced that we’re going to taper. It is going to be double what was expected, and we’re going to raise rates. But I do want to talk about some of these reports like Goldman Sachs, because Goldman Sachs is expecting a lot more rate hikes, than I think people think.

Frank Curzio: And I want to break that down, but what are your thoughts on this? I don’t know if it’s factored in. They’re predicting three, I’m predicting at least four next year, or not just a 25 basis point raise. Maybe a 50 basis point raise, because they’re extremely nervous about inflation. We saw that with Powell, do a complete 180. You don’t see that often. The Fed, over the past 10 years, to ease the credit crisis has done, I wouldn’t say a great job, but they really do a good job of telling you what they’re going to do months ahead. This way, they don’t surprise the markets. That was a major surprise in November, Powell. That was a major shift. No one would say, “Oh, we’re going to raise rates a lot quicker.” That wasn’t on the table. We saw that, that’s where the markets reacted. What are your thoughts? I’m thinking that it’s going to be more than that, at least four hikes. You’re thinking differently, right?

Daniel Creech: I can’t go to four. It’s hard to go against Goldman with three just because they’re the most wonderful, terrible people on Wall Street. I only say, I would take the under so we can have a fun beer bet on that, Frank. So, you got over three to four. I got three at the most, I would say two. And only because, I don’t believe that they are as independent as they claim. I don’t believe that they don’t pay attention to asset prices and they want to help that, or help manage those. You are talking about the entity that thinks that they can control the economy, which is individuals making decisions on a random basis for the betterment of themselves. So, good luck with that, which is why they’re so terrible at it. They do have a lot of influence though.

Daniel Creech: So no, I think that if they start, if they, as they scale back on the bond buying, as interest rates start to rise as they hike them, I think that’ll cause volatility like everybody’s expecting. I just think that they’ll try to manage that, and they’ll give investors, “More of the niceness,” or what they want to say, “Hey, we’re still here for you. Not to take away the punch bowl.” Not saying I agree with that necessarily. I just think that that’s how that’s going to play out. As far as the meeting coming up, I don’t think he’s going to do anything crazy, back to back, because it was the most recent, right? All these Fed meetings run together. Did he do the 180 on the last public one?

Frank Curzio: This is, yeah. So when he spoke, yeah.

Daniel Creech: When he retired transitory?

Frank Curzio: This is November 30th, I think, the end of November. So this was about two, three weeks ago. Two weeks ago, so.

Daniel Creech: If he did give any clarity on the amount of rate hike, like you said instead of 25 basis points, maybe raising it a half, that would be great.

Frank Curzio: But, they just said they’re going to raise sooner. But they… And it’s incorrect.

Daniel Creech: Yeah, but that would be the only thing I think would be really good to see, but well, you know.

Frank Curzio: And the tapering, right? So, we have the tapering here, which in November, they announced they’re going to slowly trim how many bonds it’s buying, which was, 15 billion a month, which is really nothing, right? So, they were doing just to compare, they’re doing $120 billion a month, right? The Fed’s been purchasing since June 2020, even though all asset prices were just screaming higher, hitting all-time highs. They kept this in place, and now they said, “Oh, we’re going to taper. We’re going to stop buying.” Now they said they’re going to double that pace. And if you’re looking for rate hikes, Goldman came out saying they expect three, and they’re looking at May, at that meeting, July, for OMC meeting, and November meeting. They’re expecting three rate hikes. And then, tapering a pace of $30 billion a month from November to, which started already, so into February, March.

Frank Curzio: So, you’re taking a lot of that, your excess out of the market. It’s creating tighter market conditions, but here is what I disagree with, Daniel. I mean, we’re looking at inflation numbers, which are insane. And we’re looking at 9% on the PPI, which just came out. Fastest pace on record. 7% of the CPI, the highest rate since for 39 years, ’70s and ’80s. And, I had my podcast yesterday, and monologue, and I was saying that it’s not an apples to apples comparison, because they changed that index 20 times over the past 30 years, the CPI. And, just looking at how they calculate it is an absolute joke. And I explained, I won’t get into the details, but if you’re looking for apples to apples comparison, I mean, we’re much, much higher than that, honestly. That’s why Powell did an about-face. It’s very rare for the Fed to do something like that, where they surprised the market. They never want to surprise the markets, and they surprise the markets, and they’re losing credibility because of it.

Frank Curzio: Because it’s no longer transitory, which they pounded in our head. The media pounded in our head, yet every one of you listening to this, all of us, we all knew, listen, the CPI is not rising by the 7%. Okay. It’s rising by about 15, 17%. If you’re looking at gasoline price up 50%, you’re looking at car prices, up 30, 40%, used car prices. Everything across the board, food, everything that we pay for is much, much, much, much higher, right? So, these are real costs, right? These are real costs that we see.

Frank Curzio: Now, we have a market, Daniel, where companies are being forced to grow, to see very strong growth every single quarter. If not, with the valuations where they are, then you see DocuSign, 40% down, boom, right away. I’m talking tens of billions of market cap wiped out. You’re looking at, how many stocks have we seen that happen to? Even PayPal got nailed, it’s down tremendously. You’re looking at a lot of these names, especially high leverage names. If you’re not showing that growth, like the Peloton coming out and reporting those terrible numbers, you get destroyed, which means what? Which means these companies are going to be forced to raise prices. Some of them can, they’ll have pricing power, but a lot of them won’t, which means we’re going to have inflation continue. And where inflation is right now is very, very scary, Daniel. I don’t see it subsiding.

Frank Curzio: The Fed just threw in the towel and said, “It’s not transitory.” So for me, I think, I might even be conservative on that. Really quick, to put this in perspective, in case you guys want to know more about this Goldman report and I’ll highlight this, if you’re on our YouTube page. So it says, “We expect,” this is Goldman, “To show two hikes in 2022,” which is weird, because they’re predicting three hikes, but at least two hikes. So this is three in 2023, and four in 2024. Right? So, this is where they have all the dots and stuff like that. But, if you’re looking more specifically here, they’re only looking for 1%. So, this is end of 2022, 1% here, 2% by the end of the next year, and 3% by the end of 2024? That is not going to be at a quick enough pace. It’s just not going to be at a quick enough pace for us.

Frank Curzio: So, when I look at that, that’s where I see the Fed getting much more aggressive. And I could be wrong on that. Maybe you’re right. Maybe it’s only two, but they don’t have that luxury of trying to control the markets and try… I mean they have to control inflation. Inflation’s the biggest threat.

Daniel Creech: Well they need to, absolutely. We’ll just see how they do that. Again, maybe in one of the rate hikes, they do it by a higher amount, a higher percentage. Maybe, they signal that they’re going to raise more. We’ll just have to see how the market reacts to that. I just think if you see a quick pull, if you get a 20% pullback or, “The bear market,” I think they would at least try to soften the blow. That’s my opinion on it. So, we’ll see how they navigate around that. I think that’s going to give a lot of, I think, certain sectors are going to do well during inflationary times like we’ve seen in the past. Again, you just can’t look at past because things are different this time in a lot of senses, but I know we’re both bullish on energy, Frank.

Daniel Creech: But yeah, what would be nice here is that this year, as you’ve talked about yesterday, you basically have a handful of stocks carrying these indexes and making it everything’s up 20 some percent, when a lot of individual stocks are getting hit. It’d be great to see the indexes say, flat to down five to 10% next year because of some of that rotation out of the biggest stocks. Doesn’t mean they’re going to crash, but also to see a lot more individual stocks and portfolios do well for the individual investor. So, it’ll be a wild ride, but that’s all right. We’re prepared, Frank.

Frank Curzio: Yeah, I know. And they’re showing them meme stocks right now at CBC, where you’re seeing just AMC was at 60, it’s 23. GameStop is three whatever, and it’s 140 something. I mean, just massive moves in a lot of these names. I agree with you. I will say this though, which I mentioned yesterday, there is a pretty wide gap between… What, when you’re looking at the firms. For example, yeah. I’m talking about forecasts for 2022, the S&P 500. For example, when you’re looking at a specific stock, especially a large cap stock and you have 20 analysts, 30 analysts on it, that target price is usually, you’ll see some guys get like 20%, 30% higher. And others, outside of them being one or two crazies, which maybe be small firms, maybe it’ll be down 20% and 10%. But they’re usually pretty tight on a stock. When it comes to the overall S&P 500, it’s usually four or 5% upside, maybe 7% upside. And that’s not including the last year or two after the pandemic, because we saw a massive decline followed by all this money inject to the system.

Frank Curzio: But, normally historically, it’s usually pretty tight. Three, four, five, 6% gains, maybe two, 3% of downside. And we have 10% upside for Goldman Sachs. Morgan Stanley, in particular, is 5% downside. I think it is Stifel also, well known sell-side firm, very respected, they’re also seeing… they see 10% downside. So, you’re looking at that, volatility is pretty crazy, right? It just tells you what they’re thinking and how this market, people are just like, it’s going to be lots of uncertainty. You’re going to see inflation running wild. The Fed’s doing something it hasn’t done a very long time. They just did it briefly in 2016 through 2018. Quickly reversed that, especially as the markets started getting hit, and then we had COVID. They brought it back to zero again.

Frank Curzio: So, we’re talking outside ’16, ’17, a little bit into ’18, almost a 12-year period we’re at zero. These things are going to go much, much higher. And there’s a big difference, Daniel, between paying a 3% mortgage or a 5% mortgage, like I said yesterday. I mean, when rates go higher, you’re going to see a different landscape. You’re not going to see all these projects get funded, 30, $40 billion like nothing. All these crazy SPACs come out. And the demand, a lot of that is going to slow down, and we’ll see. I’m hoping I’m wrong, inflation doesn’t go wild. But right now, I just don’t. I don’t see it’s the case.

Daniel Creech: Yeah. That’s an easy argument to make that, that’s the path of least resistance right there. And it is, I mean, inflation, everybody needs to prepare for that. And I think that’s what the market’s doing right now ahead of the Fed meeting, and looking into next year. So, you don’t sound very… You sound more like a Grinch than a jolly guy right now, Frank. I know you’re not sounding the alarm button, but got to have some fun for you. Fun with it.

Frank Curzio: It’s funny because I’m a little bit of a Grinch, but here’s what worries me. Right now, we’re seeing massive inflation, and that’s okay. Right? We’re seeing high yield default rates at all-time lows, right? Debt is never a concern. What’s a concern is if they’re paying it, everyone’s paying off their debt. However, that’s because our government has been handing checks directly to people and that’s stopping. So, that’s going to stop now. So now, you’re not going to see that money handed directly to people. So now, you’re going to pay these rising prices, which people didn’t care, and they didn’t care for like the last nine months. And, want proof of that? They went out spending like crazy. Look at Black Friday sales. And this is a first year I could remember when they were flat year-over-year, because everybody was spending like crazy before.

Frank Curzio: Now, you’re not handing out checks as much. Companies who don’t have pricing power will be cutting back, and pricing on employment rates, not going higher. And, people aren’t going to spend like crazy, especially at these prices. I mean, how much could they spend on gasoline? Eventually, when you’re looking at the market, all these things that existed, which is a perfect environment and you’re taking away that Kool-Aid, that’s what has me worried. And, again, I hope I’m wrong on this. I hope stocks go up. I know most people won’t, but this is a time I think you really need to protect yourself, now that there is a fundamental change in the marketplace.

Frank Curzio: Now, I want to change subjects here and go over crypto, which has been extremely volatile. Chief executives of six cryptocurrencies, they testified Wednesday for the House Financial Services Committee. This was the CEO of Circle, CEO of FTX, Bitfury, Paxos, Coinbase, and even the CFO of Coinbase, and then of Stellar, the CFO of Stellar.

Daniel Creech: They weren’t all CEOs, just to make sure.

Frank Curzio: They were all CEOs, but they also had the CFO of Coinbase. I don’t know, Coinbase. Well, I think Lisa Haas is the CEO, and the CFO of Coinbase, which is kind of weird. CEO and CFO of a company that big. But anyway, I thought it was just, CFO was somebody different. So, you’re looking at it top executives, right, and all of them testifying. And I kind of like this, because it felt like the government is least trying to understand this. And if you listen to that, which I know you did, you highlighted a lot of cool things, right? I mean, there was a lot of really good stuff said in that testimony.

Daniel Creech: Yeah. I commented on this, quickly last week, because it was going on when I was doing one of the Wall Street Unplugged for you, Frank. And there was a little bit of grand standing by both political sides, which is understandable, but I would encourage everybody, you can Google this. The links were free on, or the replays were on YouTube. I’m sure the House Committee or whatever has those as well. But the way these work is, you have kind of an intro, and then each representative from those six crypto firms you named get a five minute opening statement. And then each member of the committee gets five minutes to go back and forth and ask questions to whoever they like. I would tell everybody, if you have some time, go search for that review and listen to the opening statements. You can listen to it, pick up the speed and stuff.

Daniel Creech: But what I thought were, I’ll hit on a couple of these things, Frank. The highlights were under-banked users, versus CEOs and disruption. The political grandstanding was like, “Hey, we, we don’t want to undermine the US dollar. What’s keeping from,” they named Meta, formerly known as Facebook about, “Hey, if they let, if they get this crypto stable coin and these wallets, if people go there versus the US dollar, that’s going to be bad for us.” These executives were just, you want to talk about some intelligent people building some exciting, neat stuff, forget the price of cryptos right now. Listen to their opening statements, and what they’re talking about. Because if you don’t walk away from this and, again, I am not the perma-bull, but I am very bullish on the crypto space in general, because of the innovation, money, and people flocking to that industry. And what you’ll hear from these executives is they’re already talking about, all they want is regulatory clarity here in the US.

Daniel Creech: So, it’s not your… One side is, “Hey, we don’t want any oversight, any rules. We want to be every man for themselves.” They are basically saying, “Hey, just like big banks in the United States, your Goldmans, Morgan Stanleys, Bank of America. Just like they deal with regulation because they know what that regulation is, just tell us what it is for us, and let us work. Let us into the banking system.” But, the under-banked they talked about in NPR from, is it April of this year? Have over 60, yeah. April of 2021, this was out and NPR is talking about the under-banked. There’s over 60 million Americans that are under-banked or don’t have a bank, Frank. That means that they don’t use credit, debit cards as easily as you and I. They don’t apply for credit. They don’t even use banks to cash checks in many cases. Why? Because they may not have a lot, and then what fees and loopholes that you have to jump through to get accounts.

Daniel Creech: So, these guys are talking about a global system. They’ve already, Frank, you ought to hear the exchanges. Now these six companies, Coinbase is exchange, FTX is exchange. Circle is a stable coin. Paxos is basically a banking platform, and transfer platform. You ought to hear them list the regulations they’re licensed with, and dealing with all over the globe. So if you go into this thinking, “Oh, these guys are just shooting from their hip,” they’re not. It’s amazing to see some of the smartest people in the room, and to our credit on the House Service Committee, there was actually a few decent questions in there about, how to build this out? What would you like if you were in our shoes? And, they just want clarity. And that, there’s no way you don’t come away very bullish, in my opinion, from that.

Frank Curzio: Yesterday, I said, “You need to understand crypto. It’s a $2 trillion market now. Institutions are late to the party, they’re just getting in. This is just the beginning. I think, you have decades and that’s where the most innovation’s going to come from.” I said, “Start doing your research, take your time.” If you’re going to do research, listen to what some of these people said. Okay? And it’s important, because what wrong with this industry is that it’s very difficult to understand for the average person. And, proof of stake, proof of work, all the technology behind them, and the use of these utility tokens. And, they don’t do a good job of it because, look, they’re not marketing firms, right? So, these guys did a great job of breaking it down and understanding who their audience was.

Frank Curzio: They understand that we have Gary Gensler, the chairman of the SEC, who said that many cryptos and these tokens, they fall under agency’s purview, and should be registered as securities. Right? If they are, that changes the whole landscape of the entire industry. These guys are going to have to report financials, everything. And, that could really crush some of these names, because they’re going to have to come off Coinbase. They’re going to have to come off all the US exchanges and only be on the Binance, and things like that and out there, and international exchanges if they do that. So, they’re trying to say, “Okay, hey, let’s sit down and talk about this and we’re going to tell you why.” And, the descriptions and why this is so massive, it was done so well.

Frank Curzio: So, if you have not really looked at crypto or you just want to start learning about it, go there and listen to some of these things. They’re on YouTube. They’re on TikTok, there’s little snippets. You don’t have to watch the whole, I think, it was five hours of testimony, whatever. You’re going to have the best parts, but man, it was really done well with like, “Okay, we need to break this down simple. This way, they understand that.” Listen, there’s a lot of great companies. Innovations are going to come here. Yes, you need a little bit of regulation on top of it, which I think they’re all, believe, right? Because you’re seeing still a lot of shady shit in this industry, but it was really fantastic. And I thought that was a big deal for crypto. Again, something that we’re big believers in, but I don’t know. And I said this, I’ve been saying this for the last year, as it went up tremendously this year, 6,000, and now we’re below 50.

Frank Curzio: I don’t know where Bitcoin’s going to be in the next three months or six months. I know three years, four years, five years, 10 years, it’s you going to see much, much more adoption. It’s going to go a lot higher. And you’re going to see a lot of the biggest trends in technology develop. And that’s why you need to be in this industry, because as someone that follows these trends, goes to the Consumer Electronics Show every single year, I’ve never seen this much innovation since the 1990s. And, the internet and everybody just finding out, what’s the best ways to play this? Remember Amazon was like, “Oh, we could sell books. Right?” That was the original plan for Amazon. And, look where they are now. Netflix, too, when it came to just using the mail, right, to send their DVDs through the mail. And then they’re like, “Wow, we could stream this.” They just, it’s amazing to see all the innovation that came.

Frank Curzio: But now, when you’re looking at crypto, this is where the innovation is. It’s that exciting. And, it’s one of the places where you could see enormous, enormous returns. Returns that you really can’t get in the stock market, which is evident just by looking at our Crypto Intelligence portfolio. So, really exciting stuff, Daniel.

Frank Curzio: Let’s go over, because I know we wanted to talk about Pfizer, COVID-19, that their new pill, they’re 90% effective, which was news. And, you’re seeing a little bit of a rebound in these companies as well. But, look, that’s another risk to the marketplace right, going forward, and which provides uncertainty, because I think we’re going to see these new variants come up every single year. Just similar to like the flu, right? New flu shot and stuff like that. We’re going to see it every year. And when we do that creates uncertainty, just like we saw with Omicron, which hurt the market.

Frank Curzio: So, it’s good that we’re seeing more news. It’s good that we’re seeing it in a pill form. But, I mean, your thoughts on this because I think this is a big deal. I mean, the more certainty we could provide around COVID and people feel safe, the better it is because I think people are really getting annoyed about wearing masks now. They feel protected, they feel okay. And Omicron, they’re not really getting impacted, getting really sick from it, so.

Daniel Creech: Yeah, so far the news is good from that perspective on… Now, I didn’t see when this pill is supposed to be in circulation, or all that kind of thing, but it is good news. It’s just, it’s a wait and see thing, because you have the UK and Johnson over there saying that they’re expecting a huge tidal wave. So, I think Hong Kong, I saw this morning or yesterday that Hong Kong is making people from the US quarantine over there, because there was one case or very few. I think there’s been very few deaths from this, which is good. I’m not saying any deaths are okay, but yeah, as investors, you just have to prepare for this. I mean, this is a yearly thing. We’re up to, I think Pfizer’s recommending four booster shots now. Fauci said to just deal with it, if you have to take more.

Daniel Creech: Yeah. So, hey, have some exposure to that to get back at them. But unfortunately, the worriness is, I think the market is pricing in longer term, it’s going to be okay. But the short-term, volatility. Because if you get these lockdowns or partial lockdowns, that’s only going to continue to affect supply chain disruptions. And, just these tedious issues during the worst of times, when you have inflation really kicking into gear. So yeah, unfortunately, this is the new normal that you just have to learn to live with and expect this volatility in these headlines.

Frank Curzio: Yeah. And a big thing with this pill too, they said that you can give it to someone like three to five days after they are confirmed that they have the infection. Right? So, which I thought was a big deal. So, the fact that you could take it when you know, it’s a big, it’s a huge deal, because I’ve covered healthcare for everyone. Whenever you have treatments, or anti-aging, or if you do this with DNA, you look at DNA and genes, you could see what diseases you’re subject to based on your DNA code. And, again, going back through history. So, but when you take, people don’t like taking medicine that prevents them from… Otherwise, we wouldn’t have a high obesity rate, right, if you were… Because everybody knows, you got to eat better, and you’re good. Right? You feel good.

Frank Curzio: So, but when you’re sick and you need to take something, and you want to get rid of that pain, that’s when you see massive, massive adoption. So, I thought this is a big deal, and we’ll see, right? The bottom line is, we want to lower this risk somehow. Florida has been open for a long time. We’ve been very, very fortunate. We have the lowest rates, I think, of any state for infections. And, I just wish that a lot of states did it the same way, because economies have done well, people have done well, we protected the right people. Given that, saying that, some people are over the top of vaccination, “You should get vaccinated.” No, there’s a specific part of the population that’s over 60 years old, that needs to get vaccinated if you have underlying conditions. Right? So hopefully, this helps in that risk. But again, I think we’re still going to see this come up more and more, Daniel, as time goes on.

Daniel Creech: Yeah, it’s forever. It’s not going away. So unfortunately, that’s just the way, that’s the world we live in, Frank.

Frank Curzio: All right. So, let’s end on this: Let’s get some of your predictions. Again, we’re going to have a podcast next week. The following week, we’re going to have it off. But, what is your projection? If you’re thinking not as many rate hikes, I guess you’re suggesting that inflation’s not going to run wild. So, would that be good for stocks, or you’re looking at gold, you’re looking at Bitcoin? What are some of the things that you like, Daniel, going into next year and even names, if you want to share them?

Daniel Creech: Well, I do. I have one, EQT, and this is the energy play. And, this is just recent. I was watching, I actually had CNBC on and they had the CEO of EQT, who is Toby Rice. And, you mentioned the other day about energy companies. You were talking more oil, but we can paint with a broad brush here. It’s not the old energy companies where they’re burning through cash like crazy. They’re focused on rewarding shareholders and kind of, that’s more steady growth and longer-term thinking. So Elizabeth Warren, Senator Elizabeth Warren fired off an industry kind of letter to oil and natural gas producers about, basically the higher prices are because of companies just gouging consumers, not supply-demand, not anything else. So, I thought it was pretty impressive, EQT led the way with a reply.

Daniel Creech: And I’m going to give you this stat, Frank. Here’s a couple bullet points from their reply and letter. And then, I’ll tell you one other thing why I’m bullish on the company, and going to put it on the radar. So, from the shale gas boom, between 2005 and 2019, he claims the United States led the way in emission reductions. And this is a quote. He says, “The emission reduction from coal to gas switching, seen in the United States between 2005 and 2019, is equivalent of actually electrifying about 190 million cars.” Okay? Well, put that in context. So, 190 million cars basically being electrified is important, because do you know what the actual… What do you think the EV cars projected global sales are in 2030, Frank? So, we’re in 2021, now.

Frank Curzio: I would’ve no idea, but I think it’s about-

Daniel Creech: About 31 million.

Frank Curzio: All right, they’re projecting it should be about, I think 3% of overall sales?

Daniel Creech: This is a great stat, because this is just kind of shining light on something. Because, I would’ve never guessed this. So, “Hey, you basically have already electrified 190 million cars. That’s the use we’re giving you.” Okay. That’s good. They’re projecting in 2030 that global sales will be 31 million. So, that’s incredible. That ought to be celebrated. I think everybody ought to be like, “Hey, that’s a good job. You’re reducing this.” Everybody’s for reducing emissions. Cleaner is better, as long as it’s affordable, because nothing is free and you got to balance that price and things. So EQT, I thought did a great job on that. Or, at least trying to highlight that. They’re the leading natural gas producer in North America. And yesterday I believe, they just announced they’re reinstating their dividend, which is only going to be about two and a half percent, but that’s good in a 0% world, even though those are beginning to go up. And they actually did a billion dollar buyback. Okay?

Daniel Creech: So if you, and again, that’s why you pay and listen to us, but everybody could go to their website and look at their news release. But this really stood out to me, Frank, check this out. He says, this is Toby Rice, the CEO talking. And he says, “With a premier asset base projected to generate approximately 5.6 billion in available cash through 2023, we,” and then he gives another great stat, but I won’t bore you with numbers. “We have ample flexibility to achieve both our debt reduction and execute capital return initiatives at any price environment.” Any price environment, Frank, what does that mean? That means he’s not worried about natural gas prices falling from the recent peaks. That means he’s not worried about… Now, they’re all cheerleaders. CEOs are optimistic people. That’s a good thing.

Daniel Creech: But when you have the moves that have been made to shore up the balance sheet, they’re very transparent in what they’re targeting as far as leverage goes. Dividends, buybacks, and being able to basically give you a base off of a $3 natural gas price, when it’s $3.70, I think give or take right now, $3.50, $3.70, even on the low end, that’s the kind of stuff you want to see from management when you’re investing, and when there’s a lot of turbulence in the markets. Inflation is going to continue across the board. That’s an energy prices, and this is a very top tier producer. And, it’s trading, I think a little under 52-week highs. So, it’s not massively run up. You haven’t missed this.

Frank Curzio: So, that’s your pick. That is your number one pick. So, you’re looking at EQT at, EQT, I think-

Daniel Creech: I don’t know about number one pick, I’ll think about that. That’s a good pick for me. I like that. Galaxy Digital is probably my number one pick, but I’m biased on that. I keep buying a little bit of that, damn near every month.

Frank Curzio: So EQT. So, Dan said, “It’s guaranteed to go up 100% over the next few months,” just to let you know. If not, did you say you’re going to do a personal golf lesson, live on TikTok for everyone, if you’re wrong, right?

Daniel Creech: Sure. Yeah, that’s an easy one.

Frank Curzio: That’s what I heard. All right, cool. That’s what I heard, Daniel. So for me, I think, one of my picks that I really, really like, and I’ve recommended this in newsletters, but it’s, we’re doing okay with it. So, I’m going to give it away. I really like Alcoa here. I mean, Alcoa, man. I mean, they had an unbelievable quarter. You’re looking at all the numbers. They’re absolutely fantastic. It’s seen strong, super, super strong demand. It is kind of, with aluminum, it is an environmental play, right? So, it fits the ESG thing. They just announced they’re going to join the Mid-Cap 400, which is pushing the stock higher. And, just when you’re looking at the numbers and what this company is doing, it’s pretty incredible. I mean, they’re increasing their buyback now. Just the numbers are very, very strong.

Frank Curzio: This is a new company. It’s only about 7% off its highs, 8% off its highs. I just think it’s a screwing buy here. And, it’s a name that I think that is going to have a fantastic, fantastic year going forward. But yeah, that’s one of the names I really, really like. So, when I look at that buyback, it was 150 million that was remaining under their last authorization. They announced another $500 million share buyback. So, numbers are really, really good. They achieved all the goals. They checked off all the boxes. I just feel like this is a name that hasn’t really participated. And I think, really, really strong to the upside, but that’s one of the names that I like right now. And one of the names that I’m giving away. So, Daniel, I want to thank you for coming on. We covered a lot today. I love shouting, giving you guys out ideas. That’s what we do. Questions, comments, feel free to email me at frank@curzioresearch.com, or Daniel, which your Daniel, is which email address?

Daniel Creech: Daniel@curzioresearch.com. Thank you.

Frank Curzio: Perfect. All right guys, great interview coming up for you tomorrow. One of the heads, one of the top people at tZERO, which we’re going to be listing our token, so it’s going to be a lot of fun tomorrow. So, definitely tune in. That’s it for me. I really, really appreciate all the support, and I’ll see you guys tomorrow. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.

Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His weekly Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 9 million times.

Editor’s note:

Tomorrow, Frank will release one of the most exciting digital assets on the market to members of The Dollar Stock Club… one set to soar as we get back to our lives in the “new normal.”

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