Howard: Corporate profits are strong, and we're hitting the sweet spot on unemployment

? (Host) 00:00.070

i mean this is the kind of santa claus rally that people have come to expect for this time of the year how do you see this last trading week before we hit the new year vance

Vance Howard (CEO & Portfolio Manager) 00:11.590

oh i think it's going to be kind of slow i think everybody 's kind of taking a break but i think we're going to move higher wouldn't surprise me if we reach up and touch seven thousand on the SP before the end of the year i love breakouts and you know the SP reached a new fifty

Vance Howard (CEO & Portfolio Manager) 00:23.430

two week high just the other day so i think that's a very positive sign you have to remember i always tell people for an index or a stock to double it's got to it's got to continue to hit new highs the whole way up so this is a very positive sign

? (Host) 00:34.910

when you look at target was seven thousand you have just about a week left in twenty twenty five we're pretty close to that as it stands now your word of the day and it fits the way you've kicked off this interview is that you're bullish tell me why what are the factors that are

? (Host) 00:51.790

fueling your optimism about the new year

Vance Howard (CEO & Portfolio Manager) 00:54.710

well i think corporate profits are looking very very strong you know you had unemployment that came in earlier this week which is very attractive i think we're hitting the sweet spot on unemployment by the way GDP is up you know is up you've got to in may you're going to have a

Vance Howard (CEO & Portfolio Manager) 01:06.390

new fed so you know that the fed is going to be dovish you know that interest rates and all probability are going to go down so i just think you've got a really good tailwind here to see the market move much much higher now i think in twenty twenty six we're going to see a

Vance Howard (CEO & Portfolio Manager) 01:17.190

little bit more volatility i think we could see some you know a ten percent correction but that's not a bad thing it's just the way markets work but net net i'm very very bullish not only in twenty twenty six but at five and ten years out i think the S and P is going to be much

Vance Howard (CEO & Portfolio Manager) 01:29.590

higher than what it is now it looks

? (Host) 01:30.950

like the fed expectations though have turned a little bit hawkish with only a thirteen percent of a january cut do you disagree with that you

Vance Howard (CEO & Portfolio Manager) 01:39.030

know the feds going to do what the fed is going to do but i think again if you look towards may may is only what a couple of three months off i mean you're looking at a new fed chair so you're going to look at a new paradigm and a new outlook i think that's a really good sign

Vance Howard (CEO & Portfolio Manager) 01:49.430

for for twenty twenty six and also one of the things that i wrote about is is you really want to take a look at january january is very very critical if we get an up month in january the odds of twenty twenty six being upper seventy three percent now this is this is goes back to

Vance Howard (CEO & Portfolio Manager) 02:03.390

nineteen fifty if the first five days of january is up you can expect the market to be of an eighty three percent chance the market will be higher in twenty twenty six so january is critical and it's kind of a fun statistic to look at we kicked

? (Host) 02:17.030

off this hour with a couple guests who were both eyeballing inflation and the drag that that could be on the economy and especially on consumer spending how do you factor that in well

Vance Howard (CEO & Portfolio Manager) 02:27.790

when you look at inflation i think it's going to take up just a little bit but i think it's moderated and it started to come down from where it was it's definitely a lot lower than where it was a year to two years ago but look at the energy process too if you look at west texas

Vance Howard (CEO & Portfolio Manager) 02:38.990

intermediate crude it's trading down you know around fifty eight sixty bucks a barrel you know gas prices have dramatically dropped that's going to help inflation quite a bit i don't think inflation is going to be is is is burdensome as some people seem to think that it is so i

Vance Howard (CEO & Portfolio Manager) 02:51.350

think that you need to look number one at corporate earnings i need you think you need to look at liquidity on the sidelines you've got a record high and cash that's sitting on the sidelines they can come back into this market if he starts to drop rates in may and june and july

Vance Howard (CEO & Portfolio Manager) 03:03.230

which i think that he will then i think they're going to see a lot of money market money come back into the stock market pushing it higher you're

? (Host) 03:09.630

especially bullish about alphabet and i bet explain why yeah

Vance Howard (CEO & Portfolio Manager) 03:13.950

well you know if you look at gold gold has really taken off it's almost gotten parabolic and it's almost the opposite side of the trade of i bit and i bit is basically the i shares ETF of bitcoin bitcoin is sold off to the point now that it's overdone it's oversold but then

Vance Howard (CEO & Portfolio Manager) 03:27.990

again gold has has gone parabolic it's almost gotten to the point that it's way overbought now i get why gold 's going higher you know looking at the the weaker dollar you're going to centralized banks that are picking up gold and gold 's doing very very well it wouldn't

Vance Howard (CEO & Portfolio Manager) 03:39.630

surprise me if gold hits five thousand but i think that bitcoin at this point it is a great way to play it with the ETF i think it's a good risk to reward trade right here all right

? (Host) 03:48.990

well so if your goal was seven thousand on the S and P five hundred this year what about next year i think

Vance Howard (CEO & Portfolio Manager) 03:54.710

we'll we'll we'll get over seventy seven hundred maybe seventy eight hundred on the S and P i'm i'm bullish but i think then a year fourth you look at three year cycles on on the S and P five hundred if you have three good years a lot of times the fourth year may be a little bit

Vance Howard (CEO & Portfolio Manager) 04:06.470

sluggish a little bit sloppy so we're going into four years of a good solid bull market and so you know expect some volatility expect some pullbacks but there's just too much liquidity on the sidelines and too many companies are making too much money for this market not to move

Vance Howard (CEO & Portfolio Manager) 04:19.390

higher in twenty twenty six