Stocks closed mixed Tuesday as retail companies lifted the Dow, specifically Home Depot and Walmart. Those retail reports show consumer spending currently remains strong enough to potentially prevent an economic downturn. Meanwhile, President Joe Biden also formally signed the Inflation Reduction Act into law, which is expected to reduce the deficit by more than $300 billion over the next ten years. Zach Stein, Co-Founder and Chief Investment Officer at Carbon Collective, joins Closing Bell to discus today's close, inflation, and more. 

Closing Bell

Stocks Close Mixed as Retail Lifts Dow

So let's turn back to the major indexes, we can see that out performance by the dow today and joining me now is Zack stein co founder and chief investment officer at carbon Collective Zack. It's good to see you mixed day on Wall Street, certainly some positive results coming in now that we're toward the tail end of the second quarter earnings season. What's your takeaway from the reports that we got this morning? Overall, we're seeing that consumer spending is remaining relatively high even in spite of inflation, um that is still very much with us and here to stay. We know that the Fed is targeting That 2% number and it's much more likely going to be a matter of years rather than a matter of months and getting their supply chains around the world are still recovering from COVID and also the war in Ukraine. But seeing spending at places that is more discretionary like that at home depot is certainly encouraging. So it is interesting because seemingly Zach, if consumers spend at least in the case of walmart, if they continue to spend on essentials, maybe not so much on discretionary items like clothes or electronics. I mean that alone might be able to continue to buoy this economy because some of the guests that we've spoken to say that food prices likely to continue to rise and I mean the simple fact is consumers need to eat right, of course, um, spending is not going to fully stop, that is not going to happen. Things would be very bad if that was going to be the case. We again over this next year and two years we're going to be seeing supply chains come back online, especially with things like food prices and that commodity, a lot of wheat has been held up in Ukraine and now you have farmers in the US for example reacting to that because we're in a state of supply and demand where demand is outstripping supply and that means that the market is going to react. Individuals within it are going to make those decisions and build up a lot of momentum that we should start seeing and falling inflation soon, interesting. So target results on tap tomorrow lows as well. Both of those sort of a reiteration of what we saw with walmart and Home depot today. Of course their results will be unique and could be different, but in the same categories of big box retailer and do it yourself. Home improvement store that will get tomorrow as well. Do you expect those results to be any different? Any new clues that we might be able to glean from the reports on deck tomorrow? Probably not to be honest. When you look at companies like Home Depot and walmart, they are so large that you I have fairly similar shopping bases as you would have at a target or Costco with them. So I think that we probably will see this trend continue into tomorrow and retail sales data also on top tomorrow. Zach, we've gotten pretty much every positive data point possible for the month of july Do you expect retail sales to be a positive as well? It's looking like that. It's when we look at the other sectors of the economy, um, people are living their lives, they are traveling, they're moving were beyond that stage here. Um, and it seems like inflation is they are adapting that into their lives as well. So obviously the results will tell here. But I think that we could have some confidence confidence. That's definitely a good thing. What are the other major data points as act that you'll be following here? Especially as the second quarter earnings season starts to come to a close, we got a few weeks of breathers I think before the august data starts rolling in before the feds september meeting. But I think a lot of investors wondering what should I be doing in this market and what is the information that I need to be following? Absolutely. So at carbon collective, we're long term investors, we take that long view that decades long view and something that we've been telling our clients and others for months is that this is the time to sell your energy stocks. Energy is a notoriously volatile sector and it over if we look back over the past 10 years, there's still about at all time highs for that period. What is now that we're seeing inflation starting to come down a little bit and also oil prices start to come down a bit, this is a good time to get out now. One thing that the energy sector is facing that it has not faced before is competition in its core markets. When we look at the transportation sector or the electricity sector, the electrification of our economy is bringing competition to oil to fossil fuels that we have not seen before. Fundamentally better technologies are here they are scaling they cost less and they don't use oil that market share, especially as we just saw earlier with the passage of the inflation reduction in President biden signing, it is very symbolic of what is going to be happening in the future, especially when it pertains to energy stocks. This is the time to sell. So zak how fitting of course that you joined just moments after at the top of the hour the president did sign into law the inflation reduction act $740 billion package. A good chunk of that aimed at fighting the climate crisis over time. The biggest climate climate commitment that we've seen from a federal basis from a president, certainly in the history of America, what are some of the stocks, the technologies that you like as we enter this new era? So we believe we are in a fundamental trans technological transformation akin to going from digital to film or dumb to smartphones, we have better technologies in the electricity sector, renewable energy, solar wind and batteries are fundamentally better. They are cheaper to deploy in most places around the world. And as those supply chains continue to scale, that is likely only going to be more so the same thing is true of electric cars and that supporting industry, an electric car is simply a better car. All the things that you look for in a car, they are faster, they can tow more, they are far roomier, they are far more comfortable and quieter. They cost a quarter of as much to maintain and cost way less to fuel within the next five years. They're likely going to cost the same to buy at a dealership as a gas powered car. We're in the middle of a technological transformation. The time to get in is now and when we see the passage of things likely inflation reduction act, that only adds more momentum behind industries that already have all the positives already on their side. All right, Zack, we're gonna leave it there. Thank you for joining On this momentous day that Zach stein, co founder and chief investment officer at the Carbon Collective