Fund manager panel raises eyebrows with market forecasts

This article is based on TheStreet’s Stock & Markets Podcast. Hosted by the veteran Wall Street investor Chris Versace, the weekly podcasts are available early to members of TheStreetPro investing club.

Tennis, anyone?

The beloved racket sport received a mention during the July 2 edition of TheStreet Stocks & Markets Podcast.

Chris Versace, lead portfolio manager of TheStreet Pro portfolio, spoke with Todd Campbell, co executive editor at TheStreet.com, and Helene Meisler, market technician and equity trader on a wide of topics, including tariffs, the S&P 500, and, yes, even tennis.

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“What a crazy ride it’s been and what might be coming next.,” Versace said at the outset. “At the beginning of the year, expectations were pretty good. The market was moving nicely higher January, February. And then we hit a skid mark.”

“We continued to fall, especially once we got to Liberation Day in early April,” he said, referring to the day President Donald Trump announced his tariff regime. “And then slowly but surely, some of the uncertainties that were weighing on the market started to dial back a little bit.”

Lo and behold, Versace said, “we exit the first half of the year, the S&P 500 at a new record high, potentially.”

Panel considers what comes next

Meisler worked in a tennis analogy when discussing “down and out” stocks like Pepsi  (PEP)  and UPS  (UPS) , which were both climbing recently.

 “I always fear that this little rally we’re having in those down and outs that I love so much is going to be like the grass court season–short,” she said. “And that it’s not going to be lengthy like that hardcourt season we have that comes after Wimbledon.”

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“I’m glad you connected that,” Versace said.

Campbell said people won’t have tariffs on their bingo cards as long as the status quo persists.

“If Trump starts saying it’s going to go to 50% on Canada next week because they’re not making a trade deal, that’s a different story,” he said. “But who knows, right? It becomes guesswork now. Look, they didn’t care about UK and the China deal. There’s no real there there. All they cared was that it looks like we’re stabilizing out at a particular rate.”

“So, you’re saying as long as there’s some potential progress and we move towards a new framework, over time, the market will wrap its head around it?” Versace asked.

“Yes, because in April, May, they were expecting Armageddon,” Campbell said. “Anything less than Armageddon is actually a win.”

“We stopped thinking about tariffs,” Meisler said. “As soon as Trump dialed it back a week after liberation day, we stopped thinking about it. We started focusing on the economy. We started focusing on tax cuts and the Fed cutting.”

“Whatever it is that takes us down next,” she added. “it’s not anything we’re discussing right now. Because if we’re discussing it, it’s priced in. If you look back a year ago, I mean, even December, how many people talked about tariffs?”

What about the dollar?

Meisler steered the conversation toward an issue that she said needed more attention: the dollar.

“All of a sudden, everybody is saying a weak dollar is good for multinationals,” she said. “I remember when a weak dollar was bearish, but OK, now it’s bullish. And I think the dollar is bottoming. I’ve been wrong; I can’t help it. I think the dollar is making a low. And if the dollar starts going up, I’m certain the narrative is going to change: A strong dollar is good.”

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“But whatever it is, you’ve got to watch that because that does have an effect on earnings 100%,” she added.

Campbell said the dollar has the biggest impact on the technology sector, with 59% of sales for tech companies in the S&P 500 coming from overseas.

“I just think that how much of the hope that earnings revisions are going to go higher are based upon the impact of the weaker dollar on technology stocks, and what happens if the dollar does find its footing here. It’s at a three-year low. More than three years, I don’t know.”

Versace said that consensus expectations have been revised over the last few weeks to account specifically for the dollar

“I think there are a lot of folks out there going, channel checks are good, yada, yada, yada, but they’re not saying anything about that,” he said. “So I think you’re right, Helene. I think few people are really focused in on the dollar. Or if they are, they’re not saying dollar.”

As the podcast wrapped up, Campbell encouraged listeners to remember that it’s summer.

“Enjoy time with family and friends,” he said. “The market’s going to do what the market’s going to do. And just remember that good times and bad times, as we learn in April, things can change on a dime. It’s just the way the market is.”

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