Welcome to the Market Minute Podcast with Jason Katz, a
UBS Managing Director, private wealth advisor and senior portfolio manager
with Katz Wealth Management.
We are located in the Manhattan Market in New York
and can be reached at jason.m.katz@ubs.com.
I am Jordan Ricciardi, a Senior Wealth Strategy Associate on Katz
Wealth Management and
host
for today's podcast
So let's get into it,
Jason.
Over the weekend, news broke the US military had invaded
Venezuela and captured the Venezuelan dictator Nicolas Maduro.
Yet flash to Monday morning, equity futures are little changed.
But Jason, talk to us though about this long term
impact that a move like this might have on the
markets.
It really depends, Jordan, on which markets we're talking about,
energy or equities.
As far as oil is concerned, Venezuela is really more
about noise than it is anything else.
They produce only 1% of the global oil, thus it's
really unlikely it's disruptive to supply or spikes prices.
Now, longer term, yes, the country has massive reserves.
Thus once those reserves are unleashed, it could vary and
probably does push oil prices higher.
Now, when it comes to stocks, markets may start to
price modest risk premium depending on a few factors.
It could be one,
any political transition and how that unfolds.
Secondly, the global balance of power.
Third, whether our country is signaling broader ambitions in the
region.
But at this point, stocks are viewing these actions really
as an incremental positive.
But we have to see how it all plays out,
of course, in the ensuing days, weeks and months.
Right. Then let's talk about how gold and Bitcoin reacted.
Well, gold and Bitcoin investors are interpreting the news a
little bit differently than equity investors at this point.
Stocks are viewing this as a stabilizing force, whereas gold
and Bitcoin investors are construing it as creating incremental uncertainty.
So the move in gold and Bitcoin is really about
investors pricing geopolitical risk or reaching for outside assets.
The instability that's back in focus forces people to look
at these types of stabilizing assets again, and they want
to look at assets that are outside of any government
or banking system.
So we'll be watching the equity markets as well as
gold and oil as we see this really play out,
'cause it feels like it's the early innings. Then switching
to rate cuts,
Jason, you're saying there's a clear case for two this
year and it doesn't require a recession.
Tell us why.
Well, despite conventional wisdom, or at least conventional media outlets,
inflation is actually moving in the right direction.
Shelter inflation makes up a third of consumer prices
of the index and it's the most lagged component
and rents are very much cooling.
So we should start to see that filter through the
system in the ensuing months.
And you have an environment where the labor market is
cooling, wage growth is slowing, job openings are coming down,
but layoffs are remaining contained.
That's sort of the definition of a soft landing.
And so if we have that scenario, it's a perfect
environment for the Fed to do what they said
they would do
and that's cut at least two times this year.
Exactly, and you're saying this cutting environment, not requiring a
recession, you're saying it's the perfect recipe for what you're
calling four-peat, which would be 2026.
But explain more what this four-peat
means.
Well, we had a three peat which is highly unusual
to have 3 double digit gains in the market.
A four-peat is highly unusual, but certainly has happened.
But at the end of the day, it's sort of
like flipping a coin. Every time you flip it
the odds of it being heads or tails are 50/50.
And I'm not saying the market being up next year
is a 50/50 chance.
It's going to be predicated on what? Earnings.
And we expect earnings to grow at least 10% as
we shift from this AI enabling to the application layer.
And then you have all these other catalysts, whether it
be the one big beautiful bill that's not only stimulative
but amounts to tax cuts.
I think there'll be reduced drag from tariffs, easier financial
conditions as I mentioned before with the rate cuts.
And I think you're going to see companies absorb some
of their costs instead of passing them on because of
AI.
You put that all together and that's a fairly constructive
set up for equities.
Well thank you, Jason.
We covered a broad range of topics from the capture
of the Venezuelan dictator to what we think the rate
cut environment looks like to setting up for a perfect
four-peat in 2026.
Jason, thank you for joining us.
And to our listeners, we hope you tune in again
for next week's episode of the Market Minute Podcast with
Katz Wealth Management.
Have a great day.
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