turning back to the major indexes joining me now is David
Chesky Ceo of sound planning group, a financial services firm.
David thanks so much for coming on the show fractional losses across
the board and I do have the numbers for the week.
So I just want to run through them quickly for our viewers.
Looks like the S and P. Shedding 3.4%
This week.
The Dow down 2.8% and the NASDAQ underperforming down about 4%.
What should investors be watching here as we approach a big week ahead
with a Fed decision on tap and another read on consumer prices.
Well, great to be with you here.
Nicole uh kristen the most important things that we need to
be evaluating right now are a look at uh inflation.
Of course, that's what the Feds talking about.
I actually have seen inflation dropped right now,
I prefer the true inflation indicator,
which would tell us that we hit 12% on the 11th
of March this year and we're now down just over 6%,
so that's moving in the right direction.
Um We're starting to see these unemployment numbers uh to come up now,
that's not great for the consumer,
but that's right for the economy and what
the Fed Reserve Powell's trying to accomplish here.
So, um I think we're all looking at C. P. I.
As that has ultimately been, you know,
the reason why we had such a big uh Jump here in in June as well as
in the November rally on hopes that we get the pivot looks like we're
probably gonna get a pivot I guess we'll find out for sure though.
And uh I think the big thing that we find is, you know,
what a retail number is going to look like.
Do we get a Santa Claus rally and then what are
we looking like at 2023 and it's a mixed bag?
Yeah.
So a pivot in the sense that the Fed is set to slow
its pace of rate rises right after a very aggressive rate rising policy.
The most aggressive that we've seen in about four decades.
David corresponding with that inflation
that you noted there as investors look at their portfolios,
they're wondering what to do.
2022 was a rough year. How did they set themselves up for success
in 2023?
Well,
a lot of what we're seeing today is that that many investors are getting cautious.
You know, there's, there's so many of these C. E. O.
S that are coming out now and saying, hey,
we were believing that there's gonna be a recession in 2023
so we're, we're looking to pull back and be a little bit more cautious now.
We have to remain invested all the time, at least in certain areas.
And so a couple of places that that
we're finding opportunity today are within metals,
Our metals portfolio is up about 8% within the last month, which is amazing.
So we've seen a transition or a change in
leadership maybe as other areas are getting weaker,
we're seeing some new players becoming stronger.
Um, we, we are very concerned about real estate in general.
However,
there are some good opportunities within real estate if you're looking for them.
So as an example, healthcare inside of real estate,
we think that Medicare is going to keep paying the bills.
So these organizations will as well.
And we've seen an aging population that will likely give us a better trend towards,
uh, you know, senior based and medical based
type of real estate ideas.
Um, you know,
you can also say that that we've
been pretty significant in our investing domestically.
We're also now looking more internationally.
That was a big shift in adjustment here is
emerging markets have some good opportunities within them.
But we do need to be also cautiously optimistic here because, you know,
there is a global recession that's just beginning right now.
And so, you know, all those things coming together at one time,
create a whole lot of headwinds that make it difficult to navigate.
Okay, so what's your take, David, do you think we will have a recession next year?
And for the stock market, what does that mean?
I mean, could we fall another 10-20% in stocks?
I do believe that we could fall 10 or 20%.
Anyone who tells you that they know exactly what's coming? Well, they really don't.
Um, there's, there's a number of ways this is gonna go based upon, you know,
how the Federal Reserve responds, how quickly what Congress might do,
how the new house is going to be evaluating things and, and,
and and working with things.
Will the United States start doing some supply side economics?
I mean,
those are the factors that were the difference between Maybe how we came out of the,
this big inflation crisis in the early 80s and
then what we're kind of dealing with today.
So, uh, it's my opinion
that we are headed for a recession and that 2023 is probably gonna be worse than 2022.
And I don't want to say that light heartedly because it is tough stuff.
But,
but what we have done is we've priced in kind of this perfect Fed pivot and that
they're going to be able to get the splash this landing that they were talking about.
I think that they're going to probably have to keep rates up
higher for longer and we might find ourselves with new inflationary pressures,
like when we, you know,
bring everything back domestically and start producing here.
Well, it's not going to be as inexpensive or cheap as it was when we were doing it,
you know, in another nation china as an example.
So we'll see inflation prices with that just because things are going to cost more.
So there's a re pricing
that's, that's taking place here. But the biggest concern that I have would be
With what's happened on the interest rates that
that the consumer borrows with for for homes.
But also businesses have to borrow for for, you know, debt purposes,
for growth purposes to to to get things moving.
And and we were in a very different world
at 3% interest rates and now we're above seven.
So as we look at that,
I think that cash flow is critical to be
evaluating fundamentals are critical to be looking at today and
you know, who's in charge of these organizations. So
I think that being selective is gonna be very important
for families to be looking at here in the future.
All right, David,
Chesky, Ceo, Sound Planning Group, a financial services firm. David, thank you.