Tommy Mancuso, president and co-founder of The Bad Investment Company, joins Cheddar News to give his outlooks on the markets. 

Between Bells

Stocks Trading Higher Monday Ahead of Corporate Earnings

Welcome back to between bells, everyone january has been a dreary month for stocks. As investors brace for the final trading day, stocks are trading higher right now. All the major indexes and the green ahead of a big week of corporate earnings results. Of course we will bring you every detail throughout the week. Meanwhile, investors are keeping an eye on inflation supply chain issues and the upcoming rate hikes from the Federal Reserve that we told you about joining us now to discuss is Tommy Mancuso president and co founder at the bad investment company. Tommy, Welcome to the show in this last day of trading for january. What are we looking at here? How will the markets end after such a volatile month that we've been seeing? It's, it's, thank you for having me. And, and it's obviously been a little bit of a disappointing month to start off the year, but these types of Pullbacks are healthy. Um, and I think it's a time where investors should take advantage of some of the volatility right now. Um, if you weren't in the markets earlier in the month right, you've done maybe a little bit of damage control in your portfolio. Um, you know, we always want to be looking ahead and there are some uncertainties in the market right now. When we talk about the Fed supply chains inflation. Um, there's the attentions in Russia and Ukraine and these are things that we just want to be cautious of when we look at our portfolio and some of the whole things that are in there right now. I think it's an opportune time that we still have this reopening narrative in America is going to be coming back. So I think it's a good time for us to just stay invested and think about our long term investment plan and just kind of be prepared for a little bit of minor Pullbacks here and there. But this is normal market activity. I know we've been on a great two year run and the market's gone up, up up and a lot of people may be new to investing this day and age, especially in that retail market, but this is normal. These Pullbacks happen and we just want to be thoughtful in our decisions when we're looking at where we should be placing our money. So looking at january markets, you're saying this is normal. Most investors believe that very sentiment, but what does it mean going? It's a february in the next month, Tommy going into february again, we want to be have that long term outlook when we look at rising interest rate environment and that that's a sign of a healthy economy this day and age, right? It means we've been on a great growth now, we just need to stabilize it keeps some of these things in check. So again, is there gonna be a little bit more volatility I suspect. So looking ahead, but when we want to keep in mind our long term outlook at the end of the day, at february, right? We're getting all these corporate earnings coming out. The numbers have been strong. Maybe a little bit of a little bit unexpected or not as reaching our higher expectations. That's what I'm trying to say here. But I think again, it's an opportune time. We want to be placing our assets may be in more of some of those value or growth locations and what not. And so again, just something we want to take advantage of when it comes to the markets here looking even further ahead, what can we expect in the next six weeks before the Federal Reserve revamps? Its easy money stands? Yeah, I think we'll probably see a little bit more of a transition to value stocks, right. We've been in this great growth and some of the tech companies have been on a tremendous run, especially in the, during the pandemic, where we were technology base from a work at home environment. I think with the Fed rising interest rates, it's something where we want to take advantage of a value and I think we're starting to see a shift in that. So I would suspect that value maybe outperformed growth stocks, maybe a little bit of defensive in there as well, some consumer staples, maybe a good area to go into. We do want to be cautious of the supply chain, but I do know where there are indicators that we've maybe reached some of the bottlenecks and it's gonna be start opening up and the worst is maybe behind us for chill. I that is very fortunate. I'd love your take here. Do you think the Fed rate of raising interest rates without negatively impacting our economic growth and corporate profits? Do you think that is possible here? I think it is. Now again, they said they're going to be nimble and they need to be just cautious, right? We don't want to move too fast. This is something where we want to just proceed with caution. There's a lot of uncertainty and investors don't like surprises right now. So again, the Fed, I think they need to keep their hawkish standpoint, but again they need to evaluate the whole landscape and make sure we don't rise interest rates too fast. But it is something they need to do to get it back more of a normal environment. We've been at historically low interest rates and this is just again common. This is normal market behavior and things that we need to do to make sure our economy has stabilized. Again, we're in a growing economy. We just want to make sure things we keep checks and balances in order to make sure we can continue this growth. But slow and study is what our outlook it should be and what the Fed needs to do just to be remain consistent with their hawkish standpoint. Tanya, I am curious here. What do you like and dislike from what we've seen so far, especially from the big tech companies. Yeah, obviously big tech is where you want to be, what I I want investors to be very cautious of some of the highly speculative stocks, some of the stuff that doesn't have a strong cash flow, I'd be very cautious when it comes to two specs we've seen, I'd say some over saturation in the market, people coming in there and I think you're seeing a little bit of a pullback in there and yes, this might be as much as we want these specs to go to the moon, they haven't been able to really generate or most of them have not been able to generate, you know, normal cash flows, like some of the value stocks in that space. So, again, I think your strong core tech stocks are a good place to be. I think the casino areas are gonna be a good spot to be when we look at Vegas expansion of legalization. Um, again, just some of these more reopening narrative places that maybe have been beat up and haven't had the full recovery that we've seen across the board, there's still areas of the market where we can take advantage of get into some of these, you know, names that have still not seen a full recovery and then again, just be cautious of that. But again, highly speculative stocks is somewhere I would not want to be in a rising interest rate environment right now. So again, it's proceed with caution. Make sure you're gonna be in high quality companies with good and strong balance sheets, cash flows, you know, something with a very good business model that's making money today and not have speculation three or five years out. Again, there's a place for those. But right now, in this environment it may not be the best time. Great context. They're joining us now to discuss what's Tommy Mancuso, president and co founder at the Bad Investment Company. Thank you so much for your time. Tommy. We really appreciate it.