Brian Vendig, president of MJP Wealth Advisors, joined Cheddar News to discuss the market ahead of the Federal Reserve's meeting on Wednesday and as investors digest JPMorgan's takeover of First Republic Bank, which was recently seized by regulators. A slew of earnings are also slated to be released this week as well.

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Stock Market Kicks off New Month With Uncertainty, Ahead of Fed Meeting, More Earnings

Joining me now is Brian Van President of M JP Wealth Advisors. Brian, thanks for joining me. Thank you. Great to see you a lot to talk about. No shortage of news. Of course, coming up for the markets investors and our viewers this week, what are you going to be watching? I think this week it is critical to watch what the fed says on Wednesday, especially when you think about the recovery of First Republic and the asset purchase by JP Morgan Plus at the same point in time, we know we're leading into a jobs report, an inflation report right around the corner. So I think right now when we look at pricing and positioning in the market, investors are expecting the fed to cut rates in the second half of the year, expecting a slowing economy. But I think the fed has been deliberate in saying they're going to keep rates elevated and maintain these levels moving forward. So I think that's critical on Wednesday and then we have 162 companies reporting on the S and P. Kristen. So hearing about where earnings are going and outlooks are also critical as well. Whole host of earnings. You're right. We heard from a lot of companies last week, Apple Uber on tap. This week, most of these companies per usual have been beating expectations. But what do we really need to hear about guidance, you think for investors perhaps to feel comfortable entering the market? Absolutely, the guidance is critical right now because valuations are elevated. We're still seeing that the market is positioning in the short term more to growth and growth obviously has the highest p and earning multiples moving forward. So I think hearing about those outlooks to say, ok, maybe right now, things were not as bad as we were fearing, but are we going to get an earnings recession in July? We think so. But is it really the outlooks for the second half of the year into 2024 that investors waiting here to justify these valuations? So again, and don't forget we got the debt ceiling debate right around the corner as well. So a lot of jitters and coming back to the fundamentals, I think is what makes sense moving forward. Ok. So the market is basically flat today, kind of light volume, not a lot of movement. There is that famous saying, sell in May and go away. Does that apply this year? I think it does apply that you have to be cautious going into the next 30 to 60 days and especially as we move into July earnings. So even weight growth versus value. Look for some positioning in defensive as well as in fixed income, makes a lot of sense in this environment. OK. Interesting. I see some sector ideas here, health care, industrial technology kind of speaking to the mix there, speak to me more about what you like, maybe about some of these more defensive or value plays. Absolutely. I think if you look in the global industrial spectrum, you can find some value in some companies that are just predictable no matter what happens with the economy. So think about HVAC companies, think about supply chain companies, warehouses that are looking to move goods around the world and rebuild those supply chains. We think health care plays a little offense and defense. We know that it is a defensive sector when things get a little bit more volatile. But we're seeing the innovation come through with new drug inventions and therapies and that's something that can support growth evaluations moving forward. And lastly, I think in the technology space specifically, you have to be selective to look for areas that have that durability where you know those investment dollars are going to come. And that's why we like cyber security. Interesting. A lot of I think excitement or just reliability in the cyber security space that I have continued to hear on my show in this very time. What about cash, right? Cash as an asset class bonds, some of these cds in this environment do those look attractive to you. We think bonds are fairly attractive thinking about how bad last year was for fixed income. And we look at, look at where bonds fit in right now, you can get higher credit quality with a higher yield and that's a win win for investors. So keeping that as part of the traditional asset allocation makes sense, but of course, prime money market yielding over 4% cds that you can lock in rates close to five. That still makes sense right now. So we're at the top of the yield curve as the fed is talking about rates and maybe locking in some of those rates using a CD or a longer duration bond makes sense. So it sounds like what I'm gleaning here, Brian is that there are going to be winners and losers, not necessarily that the overall major indexes for instance, are going to continue to rise or fall, but that generally we might just continue to stay in a range. Is that the deal? I think that's fair. I think in the short term as we're trying to move through this sandwich of data that we all have to digest, we're going to be in a range. But I think when you do think of about things from a longer term point of view, if earnings outlooks are improving s growth forecasted for next year does hold true. Equity should have a chance to shine later on in the year and in the interim, you're hedging for inflation, you're hedging for risk and volatility, fixed income and cash still makes sense in the short term. Right. Brian Ben, president of MJ Wealth Advisors, Brian, thanks for breaking it down on a busy week. Thank you.