Larry Berman CFA, CMT, CTA

Markets are falling declining in part because Trump is bashing Fed Chair Jay Powell, but also because of tariffs, tariffs, tariffs creating uncertainty. Trump's policies are inflationary, worsening things for the bond market and overall economy. You need 100% an independent bank, but Trump wants a Fed chair who will do his bidding. The reality is we're likely heading to a recession, likely catalysed by Trump's tariffs. He better start talking fast about deregulation and better tax rates. Now, he's after more revenue to pay for those. Trump's style of leading could be with us for a while; historically, trade negotiations take 18 months. Until there is clarity, CEOs will be cautious and defer decisions, which would be good for the economy, but are on hold. What will change Trump is the Republican Congress are worried about losing the midterms and pressure Trump. No doubt, we have a hard economic landing coming.

Industrials have a question mark over them, but if this ETF gets cheap enough, it's a strong long-term buy. It pays a lot of income. Industrial REITs 6-8 months ago were unattractive and expensive, but now should be on the minds of income investors. This could fall to $9. Good managers.

Earnings missed last time, but great before that back in November. The price target has fallen from $30 to $20. But it's starting to get interesting.

He likes the strategy behind this, but the additional yield sacrifices a lot of potential price increase.

The yield has been flat in the last two years though shares have been volatile with the bond market. The bond market is broken long term as a buy-and-hold; you have to be an active bond manager given inflation's impact.

Current oil prices in the low-$60s/high-$50s are attractive. Accumulated these stock during weakness, not when they rip higher. We won't see massive growth in oil. You can buy a tranche now.

A corporate bond money market fund maturing under a year and is good for parking cash.

An analyst produced a chart showing all headwinds to the US economy are related to tariffs; he predicts a 90% change of recession, caused by tariffs. During Trump I, his tariffs were up 2-3% and the economic impact was -0.25% to -0.33%, but the current tariffs are way larger, so he predicts a -4% GDP impact. Also, earnings will be downgraded constantly for 6 months, leading to 4,200-4,800 fair value on the S&P. More downside will come. Further, it takes 18 months to sign a trade deal and 45 months to implement on an historical average. This will matter in the US midterms elections when Congress has had enough of this and the Republicans fear losing control. Small businesses make up 85% of capex and 75% of the labour force; sentiment skyrocketed after the election, but plunged last month when tariffs hit. Small business is the heart of the American economy. Trump has to start talking about lower taxes and regulation.

Last week, indicators showed that stocks were in the opportunistic zone and investors should start to look for opportunities. On Wednesday we saw a face-ripping rally. But the level of volatility is still very elevated, and we're in the very early innings of this.

Seems that one day there's good news, then the next it leans against that. Mixed messages coming out of the White House. That level of uncertainty doesn't portend the beginning of a new bull market. There's a lot more to go and still a degree of caution. All this volatility increases trading, which is great for companies like GS and MS.

So while at 4900-5000 on the S&P there was opportunity, there isn't at 5400-5600 because we won't be able to sustain these levels looking out 3-6 months.

It's going to be lower than what we've already made, but we need to see the economic decay and job losses that the market's worried will tip us into recession. If we don't see that, then he's wrong and the market can go higher. 

Remember that we started from a place of extreme valuation relative to history. So it's not as though the market got cheap last week; it didn't and is still very expensive at a 21-22x multiple. Earnings would have to grow phenomenally, which is going to be tough in this environment of uncertainty. We're starting to hear from companies as earnings season begins. Earnings from retailers and those with global channels will tell us whether to be conservative.

If he were in charge, his share buyback zone would be between $360-450. Looking at the chart, you can see overhead resistance since the election; this shows up on so many stocks, and is more of a sell zone. See today's Educational Segment.

Last week we saw volatility in the interest rate markets. Normally your bonds are safe. We saw bond yields at the long end blow out in a big way, and that was one of the catalysts for the Trump administration to kick the tariff can down the road. Larry likes long bonds that high, and he and his team were nibbling last week.

Where do you run for safety if interest rates are rising and we're worried about inflation? There aren't a lot of safe havens. Gold has been one of them.

There isn't a company in the S&P 500 that doesn't use leverage. A lot of advisers who don't understand the private markets, or who don't have access, will speak out against it. It's naive for someone to say that private equity's future returns will be depressed due to leverage.

Private markets are illiquid, and that's the biggest distinguishing factor. As an investor, if you want something you can trade into and out of all the time, then private markets aren't for you. If you understand the benefits of earning the illiquidity premium, then you should allocate a portion of your portfolio to it. 90% of the investing universe is in private securities, not public markets. Pension funds around the world have been doing this for decades.

Investing in companies like KKR gives an investor access to the profitability from private market and private credit investments, but not actually to the private market and credit themselves. The two situations are very different.

Junior speculative. Not profitable. At the price for gold and silver today, if a company's not profitable you have to ask why. He doesn't play penny stocks, and certainly not in the junior mining area. A very challenging asset class; he learned his lesson 35 years ago.

Believes gold prices are going higher. Stocks are overbought, and getting more overbought. He wants to buy into weakness. From his understanding, the costs are rising at a faster clip than revenues for a lot of mining companies. That's why valuations are remaining relatively depressed compared to the price of the underlying commodities today.

He'd defer a more detailed analysis to someone much better versed in the fundamentals of the sector.