May 30, 2023
On this week's Stansberry Investor Hour, Dan and Corey are joined by Alfonso "Alf" Peccatiello. He's the founder and CEO of disruptive investment-strategy firm The Macro Compass. His company provides educational macroeconomic analysis and professional portfolio strategies to bridge the gap between Wall Street and everyday investors. And Alf brings those same skills to the podcast by simplifying complex topics for our listeners.
Dan and Corey begin the episode by talking about chipmaker Nvidia. Its recent earnings report sent shares soaring and prompted one of the biggest moves in U.S. stock market history by market cap. Part of the reason for that big move was the company projecting a huge increase in sales next quarter. The chips that Nvidia makes will help with the coming artificial-intelligence revolution, so investors are buying in hand over fist. However, Dan and Corey question whether the company is worth these high valuations.
Alf then joins the conversation to discuss the debt ceiling. He predicts that U.S. politicians will probably reach a deal to raise it... but he also analyzes the magnitude and severity of damage to economic growth that a default would bring. Alf further explains that he believes Republican Party members are using time to their advantage to try to get the best out of the deal, since the Democrats took more time to start negotiations. Regardless of what happens with the deal, he warns... Investors must always have attackers and defenders in their portfolio.
Next, Alf mentions the Federal Reserve's aggressive rate hikes and how those have caused U.S. stocks to remain relatively expensive. But even with this poor outlook for U.S. stocks, he points out that you can still find "attackers" in Japanese stocks. With the country's nominal growth picking up, wages rising over 4%, and the new Bank of Japan governor not rushing to raise interest rates, Japanese equities are reasonably valued and poised for growth.
Lastly, Alf and Dan revisit March's banking meltdown. Alf notes that loose regulations led to terrible risk management, but he argues that the rest of the banking industry will not be affected much. Now, though, the second part of the problem is exposure to commercial real estate, credit quality, and the asset quality of bank loans. In short, the banking system is deteriorating. Tune in to hear Alf and Dan's take on what's coming next so you can prepare yourself for this slow-moving train wreck.