Ed Siddell, CEO and chief investment officer of EGSI Financial, joined Cheddar News to discuss Tuesday's market session as stocks traded higher after Fed Chair Jerome Powell gave a favorable glimpse into disinflation.

Closing Bell

Stocks Up After Powell Comments

Joining me is Ed Seidel Ceo and chief investment officer at E. G. S. I. Financial Ed, it's good to have you on the show today, especially for a day when the stock market is higher. Can this momentum last? Well, thanks for having me. And you know what, I think this really is becoming a, a bull market, a momentum bull market. Uh, and it's, it's really shocked me because, you know, every time, you know, pal has, has talked about, you know, we're not there yet, we're going to continue to, to raise rates and they would rather raise rates and and and keep the gas down instead of letting up and and letting inflation come back. You know, there's been just a little bit of pushback from investors, but you know, there it's really pushing forward. So I actually, I was not surprised today by how the market finished up. So, Ed, is this a rally that you think investors should be mine? You know what for us, we're actually looking at it differently and saying yes. Um, and, and the reason I say that is, you know, the money supply has not tightened up, You know, people are still borrowing money, the banks are still lending, um, and they're not worried about paying the higher interest rates. You've got a lot of companies, you know, there have been a lot of layoffs, uh, for for sure, they're kind of tightening the belt and and getting ready for earning season. So, you know, I think that this is probably a good time for for us very slowly cautiously to to get back into the market a little bit. And what do you like ed as you are trying to dip your toe back into the stock market, what sectors, what stocks, you know, for us, you know, it's more about the sectors, you know, I I like those things that that were pretty stable last year, but maybe underperformed kind of like energy, you know, I I we like that a lot because with china opening up, you know, we're getting ready to to enter the travel season here in a couple of months. You know, I think that that's gonna be a service very well, you know, I do like health care as well, utilities, you know, in um not yet, but you know, I think we're also gonna be leaning towards consumer staples as well. Consumer staples, interesting. They're probably perhaps the dividend play going on. How do we make sense of the economic data that we're looking at at that blockbuster, january jobs report that came out on friday comments from the Fed that disinflation is underway. And of course, the reality though, that there are still at least a few more rate hikes on the horizon. Yeah. You know, and I think the market has been pricing that in honestly, I was very surprised that they only raised the rates 25 basis points when you were looking at, you know, the markets did well, but you had some commodities that, that were up as much as 25 to over 30% during that same time period. So, you know, the feds are looking at and saying, you know, we're going to use the tools that we have to to keep pushing forward and, and stave off inflation. But you know, I I really think Powell is looking at it saying he has enough tools in his tool belt to have a soft landing, maybe not even have a recession this year. So it'll be interesting to see how that pans out. How should investors prepare though, add in the case that volatility does strike. Right? I think that it's still fair to say that there are risk factors out there a lot, a lot and that's why I say cautiously optimistic. You know, you need to look at uh kind of where you're at as far as your risk um and and make sure that you understand what's going on, you know, before doing anything, obviously check with your advisor, but even for us, I mean it's going to be incremental over the next couple of months, we're not getting all back in. I mean for us over the last year we, we've had a lot large position in cash. We like the one you're Treasuries that are that are coming due. Um And and so we're still, we're being cautiously optimistic until we make sure that this is really, truly not just a momentum bull rally, but a fundamental boulder alright Ed Bell Ceo and chief investment officer at the Financial End, thanks so much.