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Ladies and gentlemen, guess who just said they're bullish on Tesla? Tom Lee. What do you know? In this video, I'm going to share with you a clip from Tom Lee on why he's bullish on our markets, but specifically on Tesla and even other Max 7 companies. Now in this video, I'm also going to share with you your major events coming up next week.
Fed Powell's speech, retail sales, Netflix and TSMC earnings, American Express and other banks, and what the next week may hold for Tesla and the broader markets. But first, listen to what Tom Lee just said. With all this volatility, where are we going? Let's ask Tom Lee. He's the managing partner of Fund Strat, head of research, and also a CNBC contributor with me here at Post 9.
Thanks for being here. So, Liberation Day did n't go as you expected, and you publicly apologized for it, which I think a lot of people appreciated. You are always a sincere person about this. Uh, so what now? Where are we going? Well, I think we have a couple of things in mind that we're thinking about: we know that the markets have become very pessimistic.
They considered a 60% probability of recession. And if tariff negotiations de-escalate, the likelihood is not that high. So I think the markets still have a lot of time to recover significantly , but that's really the path of this de-escalation. We are in a bare market. I mean, we, we, we, we're in the naked market , right?
I mean, it almost doesn't matter, you know, textbook, whether you say we're in a bare market or not. It's as if so many stocks were just completely wiped out before this uncertainty hit the market . Yes. I mean, if we define a naked market as, uh, stocks feel like a millstone, you're losing money, I would say it really started in December because the markets were fluctuating even during the February high.
But if I were to define a naked market as a solution to the financial tightening that leads to recession, we haven't yet reached that criterion. But I think for the average person it's like a bare market. Should we buy into this , or just remain cautious and aloof? Do nothing, sit idly by . I don't think people know what to do.
And I'm not just talking about CEOs' offices, because they obviously don't know what to do. How can you? So what should an investor do? Yes. I mean, there are two types of brains that people struggle with. One is the tactical brain that wants to know if this is the bottom, and it wants to be convinced by seeing stocks rise on bad news.
But if someone had an investor's hat, and you know, a long-term brain ... Um, you know, I'm very confident that American companies will get through this betrayal. Stocks are extremely oversold because you never truly lose money buying VIX at 50 or when the percentage of stocks above the 200-day moving average drops to 15.
This is almost a guarantee of positive returns over 1 year, three years, or 5 years. So, it depends on what brand you're wearing today, but I would say most of our customers try to be tactical. I hear the thoughts that it's very difficult to be too pessimistic right now because the headline at any given moment, as I've said openly here, is that the market is so desperate for some good news that if you're not on the wrong side, you're going to have a day like Wednesday.
Yes. I mean, to put it simply, the US and China currently have an absurd level of tariffs on each other. And if you think they are working, then the world economy is in trouble and you should be pessimistic. But if it's a question of who's going to bid first or miss, but we know it's de-escalating, then I think the downside is largely showing up dramatically, and I think the stock could actually sell well through the end of the year.
So you would be a buyer right now. Yes. And with apologies, of course, you know, I didn't think Emancipation Day would be this draconian, but yes, I would buy stocks today. What would you buy? Well, one of the things we did for our clients last night was look at what Walter Demer calls a sold-out stock, which is worse than oversold.
Sold-out stocks don't fall because there's a lot of bad news in the price . There are many stocks that did not reach new lows on Tuesday, April 8th. They hit their lows a month ago and had lower trading volume on April 8th. These are what I would call washed stocks. The group that I think has washed out is Mag 7.
So I would view Mag 7 as a place where you can really expect a recovery, including stocks like Tesla . Good. You used the word "draconian" . It was your word. But I'm going to beat that and say : What if we were in a post-Draconian period, where because of this we're left with the ruins of decision-making in the White House, and the damage is already done.
CEOs have no visibility whatsoever. Consumer. Do you see this consumer sentiment indicator today? Yes, they are terrible. Do you see where inflation expectations are? Yes, they went crazy . Do you see that they 've made earnings expectations higher recently? I mean, there is no way to make predictions.
So what if the damage has already been done? That's true. Now we have to remember that 10 days have passed. So, it's a shock, a high- amplitude shock, but only for 7 days. So someone can restart the patient's heartbeat. Um, I think the White House is now clearly aware that Main Street can't handle a huge debt reduction because it will lead to job losses , and it's listening to the CEOs.
So, I think there's a really big window to reverse the bulk of this damage. And on the other hand, of course, we have mutual tariffs that are acceptable. We have changing tax policies and less regulation. So I actually think the outlook for 2026 is still pretty good. Which put option are you relying on more right now, so to speak?
The Fed's option or the Trump option? Well, I think there's a call at work and a few put options. Um, you know, I think there 's a Fed put option on liquidity, which was evident today from the Fed when Collins said what she did. That's right. And we know, but we know that the Fed has set rates much lower.
The White House has a put option because we know that you can't manipulate the global economy to a standstill just to try to make China blink. And I think the call is, " I think there's a negotiator's call," which means the White House took Navarro's call and replaced him with Besson. And as you know, I've been disagreeing with everything Tom Lee has said lately.
Uh, I don't really agree with most things. I agree with most of what he said. There may be a possibility to undo some of the damage done, but I don't know how likely that is, to be honest, because how do you undo the damage done? We need to bring China to the negotiating table, and China does n't seem to want to negotiate.
In my opinion, this whole tariff situation is, to be honest, related to TikTok. As if Trump actually wants 50% ownership of TikTok and to keep it in the US, forever. It doesn't look like China wants to sell it . It doesn't seem like China really wants to negotiate. So you can make all these deals with other countries that will inevitably be made, and I think that's factored into the markets.
But without China, I think it will be very difficult to repair this, um, this damage now. From an investment perspective, from a recession perspective, this 90-day pause on tariffs is good, but it's still uncertain. We don't know what the deals will look like. Companies can't, you know, implement capital spending until we know what the tariffs are going to look like in Vietnam, Malaysia, Cambodia and India, some of these important countries that are currently under high tariffs.
Now, given the deals that are being made, it could be completed, but I think there is still some nervousness that the deals could fall through at certain points. So maybe until the pen, you know, until the pen touches paper on these deals and they're actually finalized, you know, there's not going to be a lot of certainty here.
And I think it's really, um, you know, a capital expenditure issue, a trust issue on the part of the companies that are putting everything on hold and the companies that are going to be subject to the tariffs that are going to be negatively impacted by that. All companies will bear some tariff burden from this to some extent.
It can be assumed that they will start reducing their workforce. They will seek to increase margins internally. This may be positive for AI, but it may be bad for the job market. And that's what we need to remember. But I think Tom Lee is right again. It's only been 10 days and you could, ahem, regain some confidence.
You could avoid, um, some recessionary problems. The question is, has this been factored into the markets? And is there still room for a price increase? Markets have fallen about 13% from historical highs. You could grow a little more, but I think it's hard to say that everything is okay until a lot of these deals are actually done.
On the other hand, corporate America is n't going to give us much clarity, okay? There won't be many instructions. There wo n't be much clarity about anything. And let me give you a list of the major companies reporting this week. Starting on Monday in the premarket, you have Goldman Sachs and Mnt Bank.
On Monday and after closing you have Applied Blockchain. This is the name for artificial intelligence for data centers. Of course, what they say about data center investments will be important . Are companies cutting back on their investments? Do they take a short pause? This will be important. On Tuesday in the premarket: Bank of America, Citi, Johnson and Johnson and PNC, as well as Ericson and, uh, Albertson's.
On Tuesday and after the close you have United, Interactive Brokers, JB Hunt . On Wednesday in the premarket: ASML, US Bank Corp, Abbott, Progressive. Wednesday and after close: Bank of Ozark, CSX, X , Kinder Morgan. Uh, on Thursday premarket, there's TSMC, United Health Group, Huntington, American Express, Ally Bank, and then, uh, on Thursday, after the close, there's Netflix and Independent Bank.
It's clear that TSMC, when it comes to the AI story, will be, I think, the biggest company reporting this week, because TSMC will give us a little bit more clarity on semiconductors, right? What does the demand for semiconductors look like? If demand is good, then perhaps these falling AI stocks will be attractive to buy.
I think TSMC will be very important this time. American Express is also important. How are consumers doing? I think we are so pessimistic about consumers that maybe if American Express has positive reviews then we can start not being so negative. So that's a potential positive catalyst, although it could be negative if they indicate that consumers are slowing down even further.
And Netflix is obviously important. It usually moves big tech companies, but Netflix, as far as I can see, isn't really a big target for rates. It is completely digital and virtual. So, I do n't think Netflix matters much here. And, uh, I don't even think that, you know, the Netflix guide means anything to the broader markets.
It's really going to be like Apple, I think one of the biggest this reporting season, like Nvidia, and, uh, maybe even to a lesser extent, like Microsoft or some of the other names will be a little more important than Netflix this time, but it's still definitely worth paying attention to next week's earnings reports.
Now we'll also get some economic data, a lot of soft data. Starting Monday, consumer inflation expectations will be addressed by Fed Barkin, Fed Waller, Fed Harker, and Fed Bostick. On Tuesday, you will get export prices, import prices for the month. The manufacturing index at Empire State University in New York, Fed Barkin will be speaking again, uh, Fed Cook, and some, uh, GDP data from China.
On Wednesday, you will receive retail sales data for the month. Now you expect a really good score. You expect a positive 1.3%. Last month it was, ahem, a positive 0.2%. Okay, so you expect really good performance. If it's bad, well, recession fears, okay, it's simple. Um, monthly business inventories, um, NAHB housing market index.
Um, Fed Powell is speaking at 130 on Wednesday. We really want to see what they have to say about providing liquidity to the bond market, as you heard in that, um, video from Tom Lee. Fed Cook said they will basically support the bond market if they need to. They will provide liquidity if they need it.
This will most likely be quantitative easing where they actually go out and buy bonds because obviously China, Japan or some international players are selling bonds. They are putting pressure on bonds. And, um, when the bond market starts to collapse like this, it's not good. This could destroy all the, you know, um, financial markets.
This could destroy the economy . This is just a bad situation. So Juran Powell on Wednesday this week will be very important. Now, building permits, housing starts, initial jobless claims, Philadelphia Fed manufacturing index , um, all of that comes out on Thursday, the Fed's lawyer speaks, uh, the Fed balance sheet, uh, and then on Friday you don't really have anything , but you have the Fed Daily speech.
Now, to be honest , I think we're going to have volatility for months. I do n't think this is going away anytime soon. Also, you know, I don't think now is the right time to assume that the markets have bottomed out. I think that would be a very bad assumption. Maybe yes, maybe no, but it all depends on how the economy develops further .
If the economy holds up, and it doesn't look like we're entering a recession, maybe it's just a weaker growth environment , hopefully inflation continues to progress and come down, then that would be a much more optimistic scenario. Even if there are still bigger trade wars going on, okay, for a company or a specific stock like Tesla, I think Tesla's catalysts still matter, right?
For a cheaper, cheaper Tesla. We should hear more about this regarding Tesla's earnings. It seems like a lot of people have forgotten that this is even supposed to happen. This is definitely not reflected in Tesla's share price today. I mean FSD, the launch of Robo Taxi in Texas, and many other catalysts that we expect by the end of this year.
None of this seems to be factored into Tesla's price right now. We've factored in the negative outlook, you know, the chances of a recession and all that, but we're not factoring in the positive . So when you consider the negatives instead of the positives, it can lead to a growth scenario. And I think again, Tesla is not reporting earnings this week.
They are going to publish the next report next week. Uh, you'd think it might be in a week, but I think it'll be the week after that. then, um, people can start paying attention again to what's going on at Tesla. And if you're bullish on Tesla, if you're buying Tesla stock at these levels, you should be making that assumption.
So share your thoughts on this matter below in the comments section. Have a nice weekend, and see you next time ...
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