00:00 Speaker A

Jim, we were talking earlier in the show today to a strategist. Uh, smart guy, he recently cut his target for the SPX to 5900. Uh, but we were asking him what he still likes, and he brought up Big Tech very quickly and his reasons were listen, he thinks, no surprise, he thinks valuation looks a bit more compelling now, and he, by his estimates, he thinks earnings growth looks attractive. I’m just curious what you think about Big Tech, Jim, your thoughts.

00:35 Jim

Yeah, look, it’s probably a bit oversold at the moment. Uh, obviously, the AI trade unwinding a bit here recently. Um, so we’re constructive on tech. I would say this too, when we think about sectors, you think about times of uncertainty. Look, the energy sector has done really well year to date. And in some regards last year, utilities were white hot, and they’re interconnected. So you think about rising global demand and limited supply could keep oil profits high and prices high. And you, you couple that with actually building the infrastructure, um, to deliver on what’s happening with AI and the high energy computing needs. Utilities have done really well, have done really well also. And, and look, it’s, um, you know, it’s a defensive play. So while we’re constructive on risk assets, obviously tech’s a big part of that and will certainly be a big part of it into the future. I think there’s some short-term opportunity there, um, to take some yield.

02:27 Speaker A

Is there any sectors, and again, I understand completely your earlier comments and at the margin, but are there any sectors you’re a little more worried about? Tech is defensive, good opportunity. What are some of the things you may want to avoid at the margin?

02:56 Jim

Yeah, look, I don’t want to say avoid, but I am concerned about the consumer, right? Uh, we hear about the potential spending becoming an issue. Obviously, some of the money that’s been in the system is coming out. So, um, you know, as we navigate that, I think it’s going to be really important to see how the consumer reacts. So, uh, obviously, the sectors that are, um, directly attached to that are a concern right now.

03:52 Speaker A

Okay. Something totally different. If we stop talking about tariffs for one second, what are you sort of most worried about or what do you think we should start thinking about in the second half of the year?

04:11 Jim

Yeah, it’s a, it’s another great question. I think, look, the geopolitical uncertainty, tariff is grabbing the headlines, but we still have, um, when you think about the global trade war and that obviously being a big issue, the geopolitical uncertainty has to come into play. You know, that impacts supply chains, you think about that bleeding through to earnings, jobs, fed policy. So it’s, it’s very much interconnected and while certainly maybe not in the news every single day like the tariffs, it’s something to certainly keep an eye on as we embark through 2025.