저자: GlennSmith · 외국인
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10월 랠리 지속 전망, 과거 중간선거 해 12개월 평균 +15% 근거 제시. 빅테크(엔비디아·브로드컴·램리서치)는 강세 유지 전망이나 코어위브 등 부채 의존 기업은 금리 상승기 위험 경고. 연준 12월 금리 동결 또는 소폭 인상 가능성 언급, 인하 가능성 낮게 봄. 섹터는 금융(JP모건 순이자마진)과 헬스케어(J&J, 유나이티드헬스) 선호. 마이크론 등 AI 반도체는 이미 큰 수익을 냈으므로 과도한 집중 투자는 비추천, 비중 축소 또는 분할매수 권고.
다듬은 글
I want to broaden the scope of our conversation. Welcome to our next guest, Glenn Smith, Chief Investment Officer of GDS Wealth Management, joins us. Glenn, it's good to see you this morning. I would like to hear your thoughts and start with the rally we continue to see in October. Tell me, do you think we are going against historical trends?
Earlier this month I talked about " Octoberphobia," but I haven't mentioned it in about a week. Yes, October is usually quite difficult. This October and the rest of the year promise to be quite successful. Companies continue to beat earnings expectations, and that will be interesting. An interesting fact that you're probably familiar with: since 1950, every time there's been a midterm election—and that's happened 19 times—the stock market has been up an average of 15% 12 months later.
So we believe that this trend will not be disrupted. We think it will be another strong 12 months before the midterm elections. And I don't think it's worth focusing too much on which party will get more seats or what will happen. After all, since 1950, the stock market hasn't paid much attention to it in the 12 months following and leading up to a midterm election.
So, Glenn, as we look at earnings as the main driver of the continued rally, how do you view earnings in the AI space? As expectations continue to rise . We saw many predictions rise at the start of Q3, but now there is much more talk and concern about AI trading than in Q2. So, does this theoretically leave more room for disappointment?
I agree on several points. I believe that it is worth paying attention not only to profits. Will these big tech companies achieve their profitability goals? But even more important, in my opinion, are predictions for the future. What predictions will they make for the future? It's not enough to simply exceed expectations, now you need to declare that you will exceed them again, and by a wide margin.
Everything has already been evaluated almost perfectly. However, I would add that many people lump AI and technology together . You know, you have to be very careful when you do that. Look at companies like Microsoft or Google. Yes, they make a ton of money from AI, but it's still a relatively small portion of their overall revenue.
Microsoft still makes a ton of money from cloud technology. Google, or should I say Alphabet—is on advertising. They cannot be compared to a company like Coreweave, whose shares fell 25% last week and 12% on Friday. And her problems are completely different. They are trying to stimulate their growth through debt.
And this is a problem in an environment of rising interest rates. They have $35 billion in debt on their balance sheet. And if rates continue to rise, it will put them in a difficult position. So I would say that some of these big tech companies like Nvidia, Broadcom, Lam Research, I think, will continue to perform very well.
But if you rely on debt, I think you should be very careful, especially given what the Fed will do in December. I don't think we'll see a rate cut in October, but I'm a little worried about December. You highlighted what everyone dreams of knowing if they had a crystal ball: when these higher rates will start to slow down some of these incredible capital spending figures that we're seeing.
Glenn, what is your position on the forecasts? Is this a quarter where we could potentially start to see a small pullback, or are we not quite there yet? I don't think anything will happen in October. I think that in December rates will either increase slightly or remain at the current level. Ultimately, the Fed needs more data, which will be available in November.
If inflation falls even slightly , it will help them avoid a forced rate hike. Or if employment figures, which have not been very strong recently, continue to weaken, we may not see a rate cut, and perhaps even have a chance for a cut in December. So, I think it's a strategy of waiting to see how the economy will behave.
There are certain stocks that will certainly benefit if rates are lowered. And many of these big blue chips have done well at high stakes and will likely continue to do so. No one has mentioned rate cuts to me for a long time. So , let's dive into this. I just updated the CME Fed Watch Tool . We have an abnormal probability of a rate increase of 91 %, built into the forecasts for December.
0 % chance of decline, Glenne. So let's consider both options. If we get the expected result , which is already almost built into the price, how do you build your position? And how do you also build a position, keeping in mind that there is a small chance of a rate cut? Well, let's see what happens to the Strait of Hormuz.
If the facts change, my opinion will change too. But we still have a few months. A lot can happen. If the Strait of Hormuz opens quickly after the midterm elections and we see some reduction in inflation. Again , am I saying it's 100%? No. Am I saying it's zero? I want to say zero. This is always possible, but we want to remain flexible and take advantage of any scenario that arises.
Ultimately, the most likely scenario is no rate increase or decrease in December. And that's how we're building our portfolios now. So, Glen, what sectors do you currently favor, if that's your expectation for the end of the year? We love healthcare. We love the financial sector. If you look at JP Morgan, right?
The net interest margin is simply "igniting." We believe they will perform well if rates remain at current levels. If they grow a little, they'll still be fine. Mergers and acquisitions have been quite successful for them this year. So, there are certain sectors, including financial and healthcare. In healthcare, look at Johnson&Johnson, United Health.
These are stocks that we think will do well in these conditions, even if this is somewhat of a long-term bear market and it's not as bullish as I predicted earlier, which was actually a trend, right? Since 1950, we have had 19 midterm elections. Rates were rising, even if the market was a bit more bearish .
I think such stocks would feel pretty good in such conditions. And if the bull market still has room to grow, how do you position yourself regarding AI? Who did you like in the AI sector? Do you like big players who are focused on the top? Do you play on more indirect bets, the so-called " gold mining tools"?
No, we like big companies— Broadcom, Nvidia, Lam Research, Hewlett Packard Enterprise—but I think it's important to decide this individually for each investor. We have clients who entered Micron in 2024 and increased their capital 10 times. So , if it is more than 10% of your portfolio, and the technology sector is 70-80%, we reduce these positions.
If you are an investor who has zero technology stocks, zero Micron, Nvidia, Hewlett Packard Enterprise, I would definitely recommend a cost averaging strategy . Um, but I wouldn't want to and wouldn't advise concentrating significant funds in these assets over the next few years. I think at this point, most of the easy money has already been made.
Yes, expectations for many of these technology companies are very high. Glenn, thank you very much for being with us. I hope you will join us again soon. Glenn Smith of GDS Wealth Management. Thank you again for being with us.
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