U.S. stocks closed Tuesday at session highs after staging an afternoon rally.  The tech-heavy Nasdaq finished up 1.75%, the S&P 500 climbed 0.16%; but the Dow closed down 0.4%, as investors continue to factor in concerns about a possible recession, after returning to trade after a three-day holiday weekend.  Robert Conzo, CEO and Managing Director of the Wealth Alliance, joins Cheddar News' Closing Bell to discuss.

Closing Bell

U.S. Stocks Rally to Close at Session Highs on Tuesday

So turning back to the major averages joining us now is robert condo ceo of the wealth alliance and investment advisory firm. So I gotta ask us investors returning to trade today after the three day holiday weekend, what is your reaction to how markets ended today? There's a lot of volatility. I think that's the name of the game right now. That's an understatement. The vix volatility index is upwards of around 30 from 16. That's an 85 to 80% increase year to date. So volatility is the name of the game. You're seeing that in the equity markets, you're also seeing that the bond markets, you know, some quick Checks on the S&P down roughly at least at 12:00 today, down 22% year to date, in the NASDAQ, down 30. So, you know, there's some carnage out there on the bond side, It was down 10% in the first quarter and that actually being down 10 on the equity and 10 on the bonds actually never happened in history. So uh volatility is truly the name of the game uh where portfolio managers are going and the reasons for that are many um where pretty excited about what's been happening, what we've been doing uh to mitigate some of those moves. So U. S. Markets last week wrapped up there, Worst first half in more than 50 years. So what are your expectations for the second half of the year? How long do these bad days last? Oh gosh, that's a great question ken. And uh like I should have said, we're glad to be on the show. But um well I gotta be honest with you, it's a it's a tough game out there and if you look in history is any indication of what's been going on? The S and P. From 1932 to 1975 periods of time Where it was down first half 15 plus percent. And in every one of those times the second half of the year is up 24%. There are some analysts out there who believe that we could be bullish. Our take on it is we're going to see a lot of sideways movement going forward until some sort of clarity comes from some certain areas. Number one where C. P. I. Going, it was in March 8.55, then it's 8.6. So it's kind of going sideways, you saw a pullback of commodities today, which is starting to believe maybe there's a little bit of a topping on inflation uh fed monetary policy in relation to that were obviously expecting uh point Reyes coming. What happens in september and then you have the openings in china as well as the Ukraine war. So I think you need just a little bit more clarity on some of these areas before you start predicting tops or bottoms of markets. All right. And the question on everyone's mind when could the us enter a recession? Your thoughts? And if we do enter recession, do you think it'll be shallow, How bad could it get? Right? And the and the word of the day that everyone is speaking about is soft landing? Which for those viewers who don't know what that means. It's it's simply the Fed is going to raise interest rates to bring back the economy and slow it down effectively landing it softly. That being said that that landing strip is narrow, windy and bumpy so and the way I'm not gonna go that far. But I will say it's very difficult to engineer a soft landing. Um but to the extent that the data and they keep saying it's data dependent. So we're looking at CP I we got to see a few more prints of C. P. I hopefully we see that kind of come back in. Um If we see uh some Pullbacks as we saw in some economic data regarding factory outputs as well as retail sales coming in, there are some signs that the economy is slowing now as you know when your question begs the answer, hey Are they gonna pull back to a point of recession very well could happen if that happens? Probably be in 2023 the length depth how big it is. We all know recessions happen in in many different forms. That just depends on how well the Fed could navigate this landing strip and deal with monetary policy. All right. So today U. S. Treasury Secretary Janet Yellen held virtual talks with chinese officials to address macro economic conditions including U. S. Sanctions and tariffs on china as well as ongoing supply chain issues too. So what impact do you think these talks will have on markets in the short and in the long term? Well, whether you think it's a good thing or a bad thing, uh china and the US are very very co dependent on one another, their powerhouse. Uh We needed the lockdowns to open up which is starting to happen. We need china to buy and sell. Um And I think as that happens some of the concerns of that is will that further fuel inflation or not? But I think I think to get some order to markets and to get a little bit more clarity? I think you need the china lockdowns to open up the tariffs? Many believe will we very very minimal impact to the market. I think the bigger thing is we need these lockdowns to subside. We need china back in the game. And as that happens we'll start to see a little bit again more clarity as to where this equity market is going and revenues as a result. So for younger people looking to invest for the first time and I hope that they could one day build wealth over time, what advice would you give that? Because wouldn't that be nice? What would you give them, what kind of advice would you give them? Especially now with this continued volatility. Well, you know, when you speak to younger people, um you know, with the advent of Robin Hood and, and the meme stocks and they're exciting, they're um, you know, Bitcoin and cryptocurrencies. It's, it's very enticing for younger people to get caught up in that. Uh and when you speak about long term trends and boring things like rebalancing, which is something we do a lot meaning selling things that are doing well and buying things that are on big discounts, like large cap growth right now. Um there are great ways to manage a portfolio for the long term and there are also great ways to blow yourself up real quick. So we're trying to, and we deal a lot with the younger generation and our older clients. I love them. Um I love their energy, I love their enthusiasm. Um, but the game now is after a 1920 and 21 of unprecedentedly big markets going up very easy for people to get the wrong view of, Hey, how do we make money? I think our goal is to try to bring them back down a bit, try to instill some longer term investment philosophies and, and get unfortunately the word is saving money, which is something people have a hard time doing. Uh it is the cornerstone of having wealth, working hard, saving money and not going for the big winds and blowing yourself up now, are there companies in sectors that you're keeping an eye on specifically? Yeah, sure there we speak to our money managers and mutual funds a lot and obviously the word has been inflation, inflation inflation and there are, there are sectors that are very, very inflationary resistant, which we've talked about uh, a lot yesterday which are essentially consumer staples, food and tobacco people are gonna buy food and by tobacco, pretty much no matter what the prices as well as the big word now as health care, health care, people are going to do that as well. These are very, very inflationary sectors. They've done relatively well. Health care down Are roughly 10%. Remember the markets down 22-30. So relatively speaking, doing well, consumer staples down seven. So these are pockets of the market that managers are going into some other areas that have done pretty well. Mlps meaning pipelines, uh, done very well, private reads up and you know, dividend payers, large cap value still relatively doing pretty well. So there are pockets where you could, you could do well protect, make some money. It's just uh, it's a tough time. So consumer spending at least the meta behind it has shifted in recent months. But after we saw over the weekend people are traveling, how do you feel about travel stocks? People still the travel stock, the recovery trade is still in full effect. Um, with covid subsiding, it's, you're starting to hear about something that was a bad word cruises. Um, no one wanted to even speak about a cruise. Uh, now suddenly you're seeing people going for it. So travel is there people want experiences. Uh, aside from things, I think Covid taught us experience is sometimes more important than having a lot of things. So the travel stocks, uh, bars, restaurants, experiences are where it's at right now and I think that will continue obviously through the summer months. So it's, it's typically a pretty good trade, Save my money and go on a cruise. I heard you loud and clear robert, robert console Ceo. The wealth alliance robert love to have you on. Thank you so much.