Wall Street Unplugged
Episode: 924July 26, 2022

The stocks to watch in a critical earnings season

stock market trading

I’m traveling this week for a family vacation. It seems whenever I leave town, the markets like to move lower… 

Walmart is keeping the trend alive by announcing negative news, pushing shares down around 10%. I explain what Walmart’s announcement means for investors as inflation rages. 

Right now, the market is focused on two things: The Fed meeting Wednesday and the GDP report due out Thursday. I break down what I expect the outcomes to be…

I also tell you which companies to pay attention to this wild earnings season… especially Ford. 

Inside this episode:
  • Two focal points for markets [3:25]
  • How high will interest rates go before the Fed pauses? [8:25]
  • The stocks and sectors to pay attention to [12:00]
  • What Ford’s been lying about [15:00]
  • The standout stock of the seas [19:30]
  • Why you want to be long going into September [24:30]
Transcript

Wall Street Unplugged | 924

The stocks to watch in a critical earnings season

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 on out there? It’s July 26th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break the headlines and tell you what’s really moving these markets. So, I am leaving for vacation a little while. That’s it, I’m out of here. Don’t bother me. Don’t call me. I don’t care if the market crashes, doesn’t matter. I’m just kidding. I’m just preparing you because I feel like every time I have a business trip or I’m going someplace for business, because I really haven’t taken… Probably outside, not even outside the country, but really a nice trip with my family in a while, since COVID. And we’re going to the Dominican, which is a lot of fun. But every time I’ve gone on a business trip, it seems like the market crashes. And now, we see Walmart come out and warn.

Frank Curzio: So, it is earnings season, but Walmart was not reporting on schedule. It came out early actually. So, we saw them warn, and man, it was a pretty big warn. So, bringing down earnings estimates for next quarter. Again, this announcement came intra quarter, intra quarter. So, what that means is usually, they have that scheduled date, and you usually see these companies come out and warn. They didn’t do that last time, Walmart. Remember, they came out of nowhere and said, “The last month was horrible. And it crashed.” And it was like, “Why didn’t they warn?” This time, they warned.

Frank Curzio: This study came out a few weeks earlier than they were supposed to report and lowered their estimates by over 10% for next quarter. Expected a 13% decline for a full year from the current estimates. And it’s interesting, right? A lot of Walmart’s business, one of the biggest food retailers in the world, and they have a lot of exposure to that area, which is seeing massive, massive inflation.

Frank Curzio: A couple of things could be said of this. One, you better watch out with Target and Dollar Tree. Target did report terrible numbers last quarter and warned almost immediately after that going into this quarter. I don’t think they’re going to warn again, but I can’t see those results being great. But maybe their stock doesn’t go down because the stock is getting hit today on Walmart in sympathy. Dollar Tree as well. They reported decent results last time, I think it was in May. So, they’re going to report. Watch out.

Frank Curzio: The lower income family is struggling mightily right now. And you’re seeing that across the board. You’ve seen that with AT&T. AT&T reported and said that more people are paying their bills late on their lower income spectrum. It’s pretty obvious, right? These are people who are going to get hit the hardest. And there’s so much money filtered into the system where people did okay, but people with assets are doing okay. Their home price is probably holding up pretty well. Yes, we’re seeing stuff come down in the housing market, but that’s what rising interest rates do when the Fed’s forcing recession. It’s going to hurt that low income consumer the most. And we’re seeing it. We’re really seeing it.

Frank Curzio: We’re going to hear about that a lot across the platforms. Hear that from Jamie Dimon as well, with JP Morgan. A lot of companies are set to report. I’ll go over that in a little while. But the main focus here we’re looking at is two things. Really, the Fed, which, tomorrow, is going to raise rates, likely by 75 base points. Hopefully, they don’t do anything crazy stupid like 1%, because this is obviously working. Not by the PPI and CPI data that came out, which is lagging, but if you’re looking at a copper, you’re looking at oil, you look at a gasoline prices, you’re looking at a corn, everything has come down. Everything, everything is coming down. Wheat, lumber. You see more companies announcing layoffs, or they’re freezing their hiring like Google, Goldman Sachs, TikTok, Apple. Those are all big growth companies slowing down or laying off people.

Frank Curzio: Housing is definitely cooling across the board, even prices starting to cool. So, we’ll see if this works, and it’s just going to get progressively worse, just where rates are right now. And we’re going to go with a 75 basis point hike. And the Fed’s probably going to say, “September, we’re going to do another 50 basis point hike.” Come September, I think the Fed’s going to say that they’re done raising, because the numbers are going to get really, really ugly. They’re going to get really ugly. And let’s see if it’s anticipated or if it’s priced into stocks, which are still down tremendously. We saw a nice bump up.

Frank Curzio: Sentiment was the worst all time ever. I’m not even kidding. All time. It’s still at zero. The sentiment indicates the breadth in the market. When you look at Bank of America and they basically go over about seven to 10 different indicators and batch them up at a ball and have a zero to a hundred reading, and it’s at zero, which is a contrarian indicator, meaning that the market is, it’s still after this move, up. Right? We’ve seen stocks come back a little bit off their lows here. And it’s still at zero. That’s how bad we are.

Frank Curzio: So, the market’s down sharply. We could see further decline here a little bit. I said the next couple months are going to be crazy, but in September, I’m telling you’re going to expect the Fed. What I see real time hearing from people going out there, people are struggling. You’re seeing what they’re doing working.

Frank Curzio: They’re taking money out of the system. They have to force a recession. And let’s talk about that. Because everyone’s talking about Wednesday and the meeting and what they’re going to say. They’re going to be pretty consistent, not surprising. But Thursday is going to be a big announcement with GDP, because GDP ranges, all right, the ranges are 0.9% growth to negative 1.6%. And that negative 1.6% I covered, if it’s not last week, the week before. That’s from the Atlanta Fed. It’s a real-time index and has a history of being pretty accurate. So, they’re expecting a 1.6% contraction in GDP, which would mark the second straight quarter of negative GDP, which is a definition of recession of dating back 30, 40, 50 years. I don’t know.

Frank Curzio: However, it’s not going to be a true recession. You know why? Because the White House is going to say it’s not a true recession. Because unemployment is holding up well. That’s why. Because you injected so much money you’re still seeing demand where people need workers and stuff. And they’re all businesses. F5 reported great numbers. You’ve seen several companies raise their estimates. It depends what line of business you’re in. Some are seeing strong demand and have pricing power still. Others do not.

Frank Curzio: It is going to be interesting. It’s going to be interesting to see how this plays out over the next few months. Again, it’s going to get ugly before it gets better. We might see another retest of the bottom around there and then have the final bottom. But you’re looking across the board where it comes to stocks, much, much cheaper, especially on the small cap end. You’re going to see a lot of companies come out like Walmart and lower snap than even offer guidance. It’s hard to offer guidance when you don’t really know what the Fed. I mean, it’s looking like there’s certainty around the Fed and what they’re going to do finally, which you had no clue for a while, and the Fed had absolutely no clue.

Frank Curzio: Everyone else knew that there was inflation. The Fed didn’t know though, right? Those are people we hire and paid money to figure this stuff out. They’re supposed to be the smartest of the room. They didn’t know, even though every single person who pays their bills knew 18 months ago, 12 months ago that inflation is skyrocketing and going a lot higher. We all saw it. They didn’t, that’s fine. That’s the past.

Frank Curzio: Let’s see what happens going forward. 75 basis point hike expected. I think they stopped at 3%, which will be a 50 basis point hike in September. And the Fed’s going to say, “Okay, we’re done.” They’re not going to do another 25 base November, another 25 basis in December, which is consensus. Goldman Sachs believes that as well. These numbers are going to get worse and worse and worse. And it’s just starting. It’s just starting.

Frank Curzio: It’s not going to get better. Right? Interest rates are higher now. I mean, I like that the 10 years holding below 3%, which is nice. So, I’m not seeing it run away from us. But right now where the Fed funds rate is, you’re seeing. You’re seeing it impact so many different industries, even business activity. And you look at Empire Survey Index, New York, Philadelphia, I mean, these manufacture surveys. You’re seeing it across the board. You see inflation’s still high in food. You’re going to see inflation still high in some commodities. But overall, look, inflation is still high in oil and gasoline prices, but gasoline prices are now close to $4 when they were $5. That’s where they where I live. It was $5. Now they’re $4. So, it was $3 a year ago. It needs to come down.

Frank Curzio: But that’s an indication that what the Fed is doing is working from an investor point of view. That means they’re going to stop and slow a lot quicker. And Bank of America just came out and said that they expect the Fed funds rate to be a 2.75 to the end the year, which means 75 basis point hike this time around and then 25 base point hike only for the rest of the year. I see it. I mean, they can’t go higher than 3% because they’re going to result in really, really, really crashing this market.

Frank Curzio: And they’re seeing the statistics. They’re seeing the data, what I’m seeing. Again, this is what you want them to do. Remove money out of the system. You’re doing it fairly well. You’re forcing recession. Recessions are okay. Even though everyone’s going to change the definition of recession, because we’re going to have two straight quarters of negative GDP, most likely, except who knows how they’re going to be manipulated. I know.

Frank Curzio: Remember, GDP number is a lagging indicator. When it comes out, it gets revised two more times or even three more times, I believe. So, you’re going to see the number come out and then it gets revised two more times. So even if it’s positive, which it may squeak out a positive gain, chances are it’s going to be negative. That’s two straight quarters of negative GDP growth. And finally, we have a recession that everybody said we’re going to have, which we all know we’re in now. Ask any low income consumer how they feel, right, that doesn’t own assets.

Frank Curzio: So, with the market down as much as it is, it feels like a recession. So yeah, when you’re putting all this together and Walmart, just be careful in earning season. It’s hit or miss. F5 sees 11, 12% gain. Snap, Snap’s down 25% in a day. And they remove their guidance, which was interesting because they beat their estimates. They said we’re not offering guidance. And they offered a massive buyback and the stock crashed. I mean, if I was the CEO of that company, it’s probably not the worst thing to remove guidance, because everyone’s going to assume that it’s going to be horrible. And if you meet that guidance that stock’s going to pop. But the guys announced a massive buyback of shares, you’re going to get a chance to buy them back at super cheap levels. If you want to announce a buyback and buy them back at cheap, that’s what you do.

Frank Curzio: I’m not saying that they’re doing that, but I bet you that just Snap meets their estimates next quarter. What’s funny about Walmart, too, if you guys want to look into the option activity one hour before they made that announcement. Remember, they weren’t scheduled to report earnings for a couple weeks from now. This is intra-quarter. So an hour before, massive, massive option puts. People making a fortune. So, I think people forget that this gets a log and it’s very easy to see who’s doing this. But yeah, there’s going to be a little trouble there on the insider trading front.

Frank Curzio: But holy shit, I mean, nine, 10% move in Walmart on a day that it’s not reporting. And those options expire on Friday. So, just paint yourself red and just run through the streets and say, “This is me.” That’s what they did. So that probably, we’ll see what happens on the inside trading front.

Frank Curzio: Overall, so we have the Fed, then we have GDP. So, a lot of news. It’s going to get ugly on the news front, which is good, because it’s going to provide more better buying opportunities. I said small caps are cheaper than they’ve ever been in history. When you’re looking at their earnings. They’re not tied to the dollar to the point where a lot of these companies do business here, not overseas. Even Walmart got hit with currency.

Frank Curzio: You’re going to see a lot of companies that do business internationally, which is, I think 40% of the profits come from international from the S&P 500. The dollar’s crushing them. It’s going to crush them. It was horrible, especially last month of last quarter. Or last two months last quarter. So, expect to see earnings all over the place and it’s going to provide great buying opportunities. Because remember, even if the NASDAQ is down so much, even if it goes up 15% from here, it’s still going to be down 20% from its highs. That’s how much stocks have gotten hit. All right.

Frank Curzio: So, we’re reflecting a lot of bad news. You’re going to see it. The headlines are going to be terrible. Just like I’ve been telling you, get out your playbook, get out the stocks you’re going to buy. And which stocks are those you’re going to buy? Let’s cover them. Let’s go over them real quick.

Frank Curzio: Because on Wednesday, you have Rockwell Automation, one of the companies I want to see. Robotics, just, where are you seeing the demand supply chain issues, you’ll be able to see a lot more. Conoco, a producer, an actual producer of uranium. You don’t see many of those these days. So, I’d like to get an update from them on what they’re saying in terms of the big shift into there, especially with Russia and everything going on. And man, if you’re looking at natural gas prices in Europe, holy cow.

Frank Curzio: And I think I saw a stat today. Actually I’m going to pull it up just so I don’t mess it up. If you give me a second here, because this is funny. And this is from a Bank of America report. And yeah, it’s definitely going to be worth it. So, give me a second here as I pull it up. This way, I don’t mess it up. And it’s regarding Europe. And let’s see where to find this. There it is. For new flows. This is the greatest stat ever. I didn’t know this, but man, your contrarian radar should go up tremendously when you see this.

Frank Curzio: So this is Europe. Europe outflows. So, you saw outflows. In Japan, this is the first outflow in three weeks. Remember in our market, it was a record. I think we saw 11 straight weeks of declines in terms of the stock market. Right? But when it comes to flows, Europe outflows 23 weeks in a row. Holy cow. Holy cow. I mean, contrarian, there it is. I don’t know how much worse, or did they have any money there at all left?

Frank Curzio: But yeah, I know 2 billion outflow, obviously. Yeah. I’m just exaggerating the point. But outflows past 23 weeks. 23 weeks outflows out of Europe. Maybe you should start looking there for ideas. Hilton’s reporting. I want to see this state of the market demand and I got to tell you hotels are basically, I was going to use a very dirty analogy. I won’t. I’ll say that they’re just ripping your clothes off as soon as you get in there and killing you. I saw it in Vegas. I’ve seen it traveling over the past year. It’s gotten 10 times worse where even Expedia and companies like that, they used to tell you, “This is how much we charge you. And that’s it.” When you get to these hotels, they charge you in extra fee. And that extra fee is a hundred to $200. If you’re staying in four, five days, which you have to do on some of these trips, in four days, it’s $50 extra a night.

Frank Curzio: I got a fee for checking in an hour early, which is great. Fees everywhere. So, you’re going to see earnings. They’re feeing everyone to death. But you want to see where demand is, capacity is, vacancy rates are. So, pay close attention to Hilton. China is open up a little bit more, where it’ll open up now. Again, there’s a lot of problems with the housing bubble and what’s going on there, but let’s see how demand is, especially for hotels.

Frank Curzio: Boeing is just starting to sign orders like crazy again. The airlines are seeing strong growth, but having problem with pilots and canceling lots of flights. Let’s see what Boeing has to say. General dynamics is another one I’m going to look. Sherwin Williams, demand, housing. That’s important. This is all Wednesday, right? This is Wednesday early. And after the close, Carlisle Group, I want to see what they’re investing in, how much cash they have, what they’re seeing in terms of trends. These guys are the best of the best when it comes to investment in private equity.

Frank Curzio: Ford’s reporting. I usually like to watch Ford. I’m sure they’re going to beat their earnings estimates, but they just have a habit of storytelling now and lying right to your face when it comes to supply chain. I was going to say, I want to see what they say about supply chains. All I know is Ford told me last week, this is what Ford said. They said it. I’m taking two different pieces when they said it, but this is what they actually said. “We’re going to spend $50 billion on our EV initiatives.” This is what they said, 50 billion. It was 8 billion three years ago. It’s 50 billion now. Telling you, the technology’s not there. 50 billion on cars for EVs that they currently are not making money on. Think about that statement for a second.

Frank Curzio: Holy shit. That’s a lot of money to be spending. And right now with inflation, they’re not making any money on the EVs that they sell. Let’s see what happens with Ford. Again, they tell a great story, a massive demand, even though, what was there? Four, 5,000 cars they have on the market. I think almost all of them got recalled, which you’re going to see across the industry. But here’s Ford’s problem. In order to fund that 50 billion, they have to sell more gas vehicles. You’re selling more gas vehicles when there’s a hundred, literally a hundred if you look around. A hundred, little bit more than that, of new EVs that are going to be released. Your competition’s getting better, and you’re being forced to sell these because you have so much debt and this is costing you so much to get into this initiative. And you’re not in great shape compared to some of the other ones, other OEM providers.

Frank Curzio: I’m interested to see what Ford’s going to say. I’m not telling you to sell it or buy it here. I told you to sell the shit out of it when it was in the twenties and that worked out well for you. It’s a super expensive stock. There’s a lot of story and hype built in. The cars look pretty, the EVs, but in order to get those models and scale, the amount of money that needs to be spent, they don’t seem to have the technology when it comes to batteries, they don’t seem to have their plants up to date. If you look on YouTube videos, compared to Tesla’s manufacturing, basically the robots that make the cars, compared to Ford and GM, and you’re going to see how far Tesla is ahead of everyone in this industry.

Frank Curzio: So, it’s going to be interesting to see what Ford said. And I’ve heard Ford lie through their teeth about supply chain issues, which I get all data from and said there’s no way that supply chain issues are getting better, which they said 24 months ago, 18 months ago, six months ago. And still you’re having problems with that, especially now that China’s closed for a little while. So, let’s see what Ford has to say. It will be interesting, but man, the balance sheet does not look good and the initiative to get into EVs, which everybody wants and everybody says they want, and they love, the fact that they can’t make money on their cars right now tells you that they don’t have the right technology in place. And it’s pretty scary when you’re spending that much money to get into a business when you’re selling products you can’t make money off of.

Frank Curzio: That may change, and that also includes the tax breaks that they’re getting, but let’s see. Maybe they have pricing power. They can raise prices, which is becoming harder, more difficult in this market to raise prices while we’re in a recession. Okay. A lot of these companies losing pricing power. So, I want to hear what they have to say about the industry.

Frank Curzio: Qualcomm as well. I love Qualcomm. I did get a downgrade recently, but I want to see how these guys. They were cheap coming in all the major trends, including the Metaverse. I love Qualcomm. And also that decision with Apple. Let’s see how that turns out where Apple’s going to try to do its own fab, its own chips. And it looks like we’re hearing from insiders who cover that that they’re not going to be able to do it and are going to continue to use Qualcomm, which would be a big boom to their business. Let’s see if they give us an update.

Frank Curzio: Thursday, take a look at Arch Cole. No, one’s going to tell you to take a look at Arch Cole. You’re not allowed to. If you say you like coal, you’re going to get shot in the face and die. And your family, you’re not allowed to say you like coal. They’re printing money right now because everyone’s going back to coal because everything else is so expensive. I want to see what they’re saying. They’re conservative. They’re going to dial it down. But wait until you see the amount of cash flow they’re generating how much stock they plan on buying back. These guys are in prime position. That stock is dirt, dirt, cheap.

Frank Curzio: Harley Davidson. I want to see spending. Spending by retirees. We’re seeing spending obviously being pulled back, lower income. Then, we see people who are retired, a little bit higher end and buy Harley Davidsons. I want to hear what they’re saying in terms of trends and give you a better idea how far this is reaching right now. Because it’s going to get worse and worse when it comes to spending, when it comes to slow down. It hits lower income, middle, higher when they start closing their wallets. Let’s say when Harley Davidson has to say. That’s on Thursday.

Frank Curzio: Royal Caribbean. Royal Caribbean and Norwegian Cruise Lines is not Carnival. Carnival is a piece of shit compared to those companies. I researched all of them. They’re all different. I know they’re all in the same industry. They’re all cruises. Royal Caribbean is a little bit better. Norwegian is the cream of the crop. They have 80% of their debt fixed. They don’t need to raise money. Carnival is in terrible, terrible, terrible shape. That’s why when their stock went up 10%, they had to do a billion dollar offering right in your face. Let’s see Royal Caribbean. Sorry, I pronounced that wrong. Let’s see how they’re going to do. Let’s see on Norwegian. But Carnival brought down the industry. I think Royal and also Norwegian are screaming buys here, but let’s see. Not here. Wait till Royal reports. Norwegian, I like a lot better.

Frank Curzio: But Carnival is definitely, focuses more on what? Low income consumers. So, another name that’s getting nailed, where the estimates weren’t that good. Carnival wasn’t that good. But that’s another one where the low income consumers, that’s usually the place you go for cruises is carnival for lower income. So, that’s another place that got hit.

Frank Curzio: I want to hear about Tilray. Hear what they have to say. I think marijuana could be a nice trade. It’s always a nice trade heading into elections where you’re going to see a lot more states approve. And these things roar higher then go two X, three X higher, and then they get crushed. But if you look at it’s really a cyclical industry. I’m not crazy about it because the barriers are extremely low. Anyone could create their own product, which is very easy. And I don’t think you know the difference between one product or another. Of course you do know the difference between strands, but I don’t think you know the difference in who’s selling and who’s not. Maybe a little bit if you’re really, really, really smoke pot 20 times a day. But I want to hear what they have to say. It might be a good opportunity to get in as a trade.

Frank Curzio: And then, after the close on Thursday, we have Amazon, and we have Apple, Amazon. Let’s see if they’re seeing the impact as well that we saw with Walmart. Not as much impact to food. So, we’re going to know whether Walmart is just overall horrible all the way around or is it just mainly their food division, which is a big portion of their earnings and operations. And let’s see what Amazon says and if that filters over. Amazon has significantly underperformed all the FAANG stocks. So, expectations are very, very low for Amazon. Let’s see what they come out.

Frank Curzio: But Apple, too. Is there a slowdown iPhone sales or not? You ask 20 people, 10 say yes, 10 say no. Let’s see. That’s going to be huge. Apple is the stock. That goes down 10, 15%, all major indices are going to get smacked. So, let’s see what happens there. Continental Resources is another one. Continental Resources. I want to see more about the oil industry. What they’re doing. This is a company that never ever leverages, they never hedge their position in oil ever, which is good and bad. So, they’re not leveraged at all, which means they’re going to get crushed in terms of margins compared to everybody else when oil goes from 130 and it goes a lot lower.

Frank Curzio: So, IMAX is another one that I’m seeing that I really, really like. So, IMAX is a name that easily should blow out the estimates, based on Top Gun came out, you’re looking at Thor. We saw Jurassic Park. I mean, a massive amount of movies. IMAX is just printing money. People going back to the theaters. Let’s see. Let’s see if it translates into a higher stock price, because the stock has gotten hit a little bit. But those are guys that are seeing. They should blow out the numbers. I looked at the estimate. It’s easy number to beat for them. They should have no problem beating it. So, expectation is going to be a little high for IMAX. Let’s see what they say in the future quarters because they’re going to have the whole slate of movies that’s coming out. And right now, just the pipeline’s very good for IMAX.

Frank Curzio: Roku is another one I want to see. Is advertising really slowing or is it just a Snap problem where they can’t figure it out? So Roku is in that industry. It got hit along with Snap. Let’s see. Let’s see what they have to say. So, those are the earnings I’m focusing on guys, focusing on to. Start making a playbook. A lot of these names are going to get hit. You’re going to see recession. And then they’re going to say, “Well, it’s not really a recession. This doesn’t count, because unemployment’s great. We’re going to change definition.” Just like we said, we’re going to raise rates when unemployment goes down, unemployment went down, we changed it from unemployment to the inflation rate and 2%. So this way, they kept rates low for whatever. The better part of 11 years outside of maybe a small period in 2016. So, let’s see how they define it or how they change the definition.

Frank Curzio: They don’t change it before, they’re going to change it during. The White House is definitely going to change the definition. No administration want to be in office when you have a recession. But that’s the definition of a recession and it is a recession. So, if this is a recession, we’re going to have two recessions because there’s a lot of people predicting that we’re going to see two cores of negative GDP growth next year, probably early to mid-next year. So, we’ll see.

Frank Curzio: And then, we have the Fed raising rates. There’s no way, even based on this earning season of what we’re seeing, that they’re going to go more than 75 or more than 50. There’s no way. They’re crazy if they do. I think they go 75 and maybe 25 and then keep it as is. But you’re going to feel some pain over the next few weeks. Been kind of right. Predicting the markets and where we’re going over the past few months, six, seven months. Let’s see.

Frank Curzio: Going through our new season, it’s going to be a little crazy. We did see a nice rise off the lows. Sentiment was so terrible and horrible that it was bound to see that. Let’s see how earnings play out and write down some of your favorite names. You might be able to get them at discount, because going to September, you want to be long. You want to be long. Because the Fed’s going to do about face. Not really so much of about face, but they’re going to sound dovish for the first time in a long time and say, “Okay, we’re just going to wait and see.”

Frank Curzio: Because a lot of this stuff is working. We’re seeing money come out of the system. People spending less and you’re going to see inflation start coming down with the numbers. Yes, it might be a little skewed because rental is a big part of CPI and that’s still rising. But overall, if you look across commodities, which is a big indication, every session have collapsed across the board almost every place except for natural gas, which is probably going to go a lot higher in Europe.

Frank Curzio: You’re seeing companies lay off. Now, you’re seeing earnings being lower. You’re seeing it. The Fed is doing its job. This is what they needed to do to get money out of the system. It’s working with the rates where they are, where it’s going to get slower and slower and slower. You don’t want to overshoot here. So, I don’t think the Fed’s going to do anything crazy. Rock the boat. 75 base point hike probably announced. It’s going to look like a 25 to 50 base point hike. And then, I think they’re going to stop September. They’re not going to go November, December, and that’s going to be a good time to be long.

Frank Curzio: But for now, expect volatility. Write down your favorite names. Pay attention. This is your money. Some of these stocks down 30, 40%. And I know you look back at a chart and say, “Holy shit, I wish I invested in 2001 when the market crashed. I wish I invested during the COVID crash. I wish I invested in 2009, early 2009, 2010 when the market crashed. It was an opportunity.” Here it is. For all of you who will bullish a while ago, here’s your chance to buy tons of assets that are 40% cheaper than they were six months ago. And rightly so, because inflation’s here. The market outlook is shitty. That’s going to change. It’s going to change, and it’s going to change a lot quicker than most believe. So, start doing your homework now while everyone’s like, “I don’t want to look at my portfolio. I hate it.”

Frank Curzio: Start doing it. There’s a lot of great names out there that have huge, huge, huge upside potential. One sector especially is biotech. Pay attention to biotech. Those names are down 70, 80, 90% each. Unbelievable trading near cash. A lot of these are very, very good names. You’re still seeing a lot of these projects getting funded. They’re not hurting that much, but yet there was so much leverage that a lot of the good names had to be sold to cover those margin calls. And you’re seeing amazing, amazing discounts. Those names are popping up on our portfolios in our newsletters. And that’s another area I’m going to be looking at during earning season.

Frank Curzio: So guys, I will see you in a week. You got to be stuck with Daniel Wednesday, Thursday, and even Frankly Speaking, I’m coming back next Tuesday. So should be fun. But again, questions, comments, feel free to email me, frank@curzioresearch.com. That’s frank@curzioresearch.com. And we’ll see you guys in a week. 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
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 Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 11 million times.

Editor’s note:

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