WEBVTT 1 00:00:00.229 --> 00:00:01.920 (lively music) 2 00:00:01.920 --> 00:00:02.940 - Welcome back. 3 00:00:02.940 --> 00:00:06.270 Ben, is the Fed, which meets next week, going to stay put 4 00:00:06.270 --> 00:00:07.470 or are they gonna move 5 00:00:07.470 --> 00:00:09.600 in some direction to react to the economy? 6 00:00:09.600 --> 00:00:12.450 - So it's coming down to the last minute. 7 00:00:12.450 --> 00:00:14.490 The data we're just getting in hand 8 00:00:14.490 --> 00:00:17.880 from the payrolls data to ISM to CPI next week, 9 00:00:17.880 --> 00:00:20.700 which is one day before the meeting will be taken 10 00:00:20.700 --> 00:00:22.740 into account for that decision. 11 00:00:22.740 --> 00:00:25.710 So on the one hand, you can say what they're going to do 12 00:00:25.710 --> 00:00:27.960 'cause they've made it this data dependent, 13 00:00:27.960 --> 00:00:29.610 overly data dependent. 14 00:00:29.610 --> 00:00:30.683 On the other hand-- 15 00:00:30.683 --> 00:00:31.516 - [Merrill] Short-term data dependence. 16 00:00:31.516 --> 00:00:32.670 - Short-term data dependence. 17 00:00:32.670 --> 00:00:33.570 On the other hand, 18 00:00:33.570 --> 00:00:36.240 it's about where's the economy now and how's it coping 19 00:00:36.240 --> 00:00:39.090 with all the tightening that we've had over the past year? 20 00:00:39.090 --> 00:00:41.370 We know that interest rates went up at 5% 21 00:00:41.370 --> 00:00:44.940 in a record time and yet the economy's showing resilience. 22 00:00:44.940 --> 00:00:45.773 It doesn't show 23 00:00:45.773 --> 00:00:48.510 like material slowdown that we're in a recession. 24 00:00:48.510 --> 00:00:51.480 So you could well have an interest rate hike next week. 25 00:00:51.480 --> 00:00:52.950 That's possible. 26 00:00:52.950 --> 00:00:56.700 - Beyond tech, how are you thinking about portfolios 27 00:00:56.700 --> 00:00:58.230 and what people ought to be looking at 28 00:00:58.230 --> 00:01:00.990 and any particular recommendations outside the tech sphere? 29 00:01:00.990 --> 00:01:03.150 - Well, there is a lot of opportunity I think 30 00:01:03.150 --> 00:01:04.410 in the economy still 31 00:01:04.410 --> 00:01:07.500 because as much as we came off a major boom, you know, 32 00:01:07.500 --> 00:01:09.390 there's been sectors like financials, 33 00:01:09.390 --> 00:01:12.540 like energy that have started to lag, in part, 34 00:01:12.540 --> 00:01:16.320 pricing in the scenario of a major slowdown or recession 35 00:01:16.320 --> 00:01:17.280 that hasn't happened. 36 00:01:17.280 --> 00:01:20.100 So we think there's opportunity. 37 00:01:20.100 --> 00:01:23.640 You could look outside of the US and at times, 38 00:01:23.640 --> 00:01:25.800 because of the change in the dollar 39 00:01:25.800 --> 00:01:27.720 and especially if the Federal Reserve were to move 40 00:01:27.720 --> 00:01:29.040 to a more neutral stance, 41 00:01:29.040 --> 00:01:31.440 perhaps the dollar could slow down appreciation, 42 00:01:31.440 --> 00:01:32.550 if not weaken. 43 00:01:32.550 --> 00:01:34.080 We think that so many emerging markets 44 00:01:34.080 --> 00:01:36.780 and European stocks look quite attractive. 45 00:01:36.780 --> 00:01:38.100 - Let's get back to Apple for a minute 46 00:01:38.100 --> 00:01:40.080 because this is a big week at Apple 47 00:01:40.080 --> 00:01:43.110 with their major conference taking place in California. 48 00:01:43.110 --> 00:01:45.420 They announced a new headset and a new version 49 00:01:45.420 --> 00:01:46.680 of MacBook Air. 50 00:01:46.680 --> 00:01:47.760 Are those gonna be meaningful 51 00:01:47.760 --> 00:01:50.250 to investors in the Apple stock opportunity? 52 00:01:50.250 --> 00:01:52.320 - I think if you look at the chip component of it, 53 00:01:52.320 --> 00:01:55.890 those new processors, the M2 processor, that's meaningful 54 00:01:55.890 --> 00:02:00.540 because that's now showing its significant competition 55 00:02:00.540 --> 00:02:02.940 to companies like Nvidia who even matter 56 00:02:02.940 --> 00:02:05.460 for that matter and sets the tone again 57 00:02:05.460 --> 00:02:09.780 for having more competition in the sector appearing, 58 00:02:09.780 --> 00:02:12.750 which in a way would lead likely to lower prices 59 00:02:12.750 --> 00:02:14.610 on those processors in the future. 60 00:02:14.610 --> 00:02:17.700 So I've had to sort of take from this like tech deflation 61 00:02:17.700 --> 00:02:19.890 as we call it is totally back 62 00:02:19.890 --> 00:02:22.290 but it's a very positive development for the tech sector 63 00:02:22.290 --> 00:02:25.380 because more competition means more products, more sales, 64 00:02:25.380 --> 00:02:26.820 more revenue opportunity. 65 00:02:26.820 --> 00:02:28.290 - So should investors be adding 66 00:02:28.290 --> 00:02:30.690 to their Apple holdings or perhaps staying put? 67 00:02:30.690 --> 00:02:32.790 - I think this is in the right direction for Apple 68 00:02:32.790 --> 00:02:36.420 in terms of its product selection and suite that it has. 69 00:02:36.420 --> 00:02:40.680 So I say actually, Apple does not look that overvalued 70 00:02:40.680 --> 00:02:41.513 at this point. 71 00:02:41.513 --> 00:02:43.440 It's at a record high price 72 00:02:43.440 --> 00:02:45.300 but the forward multiple is lower 73 00:02:45.300 --> 00:02:47.010 than where the tech index is. 74 00:02:47.010 --> 00:02:50.070 That tells you that there's upside for the stock. 75 00:02:50.070 --> 00:02:52.170 - And in terms of the other so-called FANG stocks, 76 00:02:52.170 --> 00:02:54.630 which include Netflix, Google, and others, 77 00:02:54.630 --> 00:02:56.160 are there others you're recommending right now 78 00:02:56.160 --> 00:02:58.170 that you'd advise investors to take a good look at? 79 00:02:58.170 --> 00:03:00.960 - So Google has been definitely in another position 80 00:03:00.960 --> 00:03:03.420 of taking the artificial intelligence 81 00:03:03.420 --> 00:03:05.310 that it has already had since the '90s 82 00:03:05.310 --> 00:03:09.660 in its search engine to basically accelerate that process 83 00:03:09.660 --> 00:03:12.120 and that could be very favorable for a company like Google. 84 00:03:12.120 --> 00:03:13.080 - It's an interesting weekend. 85 00:03:13.080 --> 00:03:14.430 There's a lot just in front of us, 86 00:03:14.430 --> 00:03:15.630 so thanks for joining us, Ben. 87 00:03:15.630 --> 00:03:17.310 - You're welcome. Thank you for having us. 88 00:03:17.310 --> 00:03:19.020 - [Narrator] For more of today's top business news 89 00:03:19.020 --> 00:03:21.843 and insightful analysis, stick with qz.com.