This space is hosted by NicholasABrown_
Space Summary
The Twitter Space, featuring Kevin Gordon from Charles Schwab, explored various market sectors' performance, including challenges faced by sectors like energy and financials. The conversation highlighted the potential benefits of cyclical market sectors during rolling recoveries. Tech and communication services sectors were noted for their momentum correlations and consistent performance. The discussion also covered investor shifts towards tech post-pandemic, emphasizing the importance of fundamental valuation in understanding sector performance. Furthermore, the challenges of maintaining free speech on platforms like Twitter and the influence of AI on market dynamics were discussed.
Questions
Q: Good morning, Kevin.
A: How are you?
Q: Hey, Nick, how's it going?
A: This is amazing, getting you on spaces.
Q: We'll just wait for a few more people to join up.
A: And we have a lot to talk about today, given it's Friday and we got some PC this morning.
Q: I know, lots going on.
A: It's a busy week.
Q: Yes, even though it's a summer holiday, we'll still give it a busy week.
A: Never a summer holiday for me, but for everybody else, I'm happy. If that's a holiday, that's great.
Q: Good morning, everybody.
A: I know people will still be trickling in here, but we are live this morning with the director, senior investment strategist of Charles Schwab, Kevin Gordon.
Q: Kevin is well known on Fintwit now.
A: Well, Finx, what do we call it now?
Q: Kevin, do you still call Twitter?
A: You know, I'm still calling it Twitter.
Q: "Hey, Nick, how's it going?"
A: "This is amazing, getting you on spaces."
Q: Kevin, do you still call Twitter?
A: You know, I'm still calling it Twitter.
Q: Good morning, Kevin. How are you?
A: How are you?
Highlights
Time: 00:00:12
"Good morning, Kevin. How are you?"
Time: 00:20:18
"Our view for 2024 is that rolling recoveries could benefit cyclical parts of the market."
Time: 00:21:16
"It’s hard to bet against sectors like tech and communication services."
Time: 00:21:31
"Tech and mega-cap stocks have performed well even with softer economic data."
Time: 00:21:57
"Investors are moving to tech during skittish market conditions."
Time: 00:22:04
"Large caps have been some of the best-performing parts of the market."
Time: 00:22:18
"AI and tech advancements are heavily influencing market dynamics."
Time: 00:22:42
"The valuation of sectors should be fundamentally evaluated."
Time: 00:54:47
"Debate around the possibility of free speech on Twitter."
Time: 00:54:59
"Challenges in ensuring context in social media algorithms and free speech."
Key Takeaways
- Energy
- financial
- and materials sectors have underperformed recently
- contrary to historical strengths.
- Rolling recoveries may benefit cyclical market sectors.
- Tech and communication services sectors exhibit strong momentum correlations and have outperformed.
- Investor behavior post-pandemic shows a trend of moving towards tech sectors during uncertainty.
- Mega-cap and large-cap stocks have maintained strength despite weaker economic data.
- AI and tech advancements play a significant role in influencing market dynamics.
- Valuation methods should incorporate fundamental analysis for better sector performance insights.
- Challenges persist regarding free speech on platforms like Twitter.
- Traditional defense strategies in investing are adapting to the current economic landscape.
- Diversified investment approaches are favored due to the difficulty of betting against well-performing sectors.
Behind the Mic
[
{
"speaker": "Kevin",
"sentence": "They actually have underperformed relative to their fundamental scores relative to earnings growth or expectations or revisions.
That’s why we don’t have underperformed ratings on them.",
"startTime": "21:16",
"endTime": "21:21"
},
{
"speaker": "Kevin",
"sentence": "But it’s hard to bet against sectors like tech and communication services when you go through these periods where they’re so heavily tied and highly correlated with momentum as a factor.",
"startTime": "21:21",
"endTime": "21:31"
},
{
"speaker": "Kevin",
"sentence": "And clearly that’s been the case in the first six months of the year.",
"startTime": "21:31",
"endTime": "21:34"
},
{
"speaker": "Kevin",
"sentence": "Also, it is a little bit more, I guess, philosophical, but our thinking around the fact that the concept of defense from the perspective of the average investor having changed a little bit post pandemic,
I think that the knee jerk reaction for a lot of investors has been to jump into areas like tech or tech adjacent when skittishness starts to creep back in.",
"startTime": "21:34",
"endTime": "21:56"
},
{
"speaker": "Kevin",
"sentence": "Perfect examples over the past few months with the softer patch of economic data yet would have been the best performing parts of the market.",
"startTime": "21:57",
"endTime": "22:03"
},
{
"speaker": "Kevin",
"sentence": "It’s been mega caps and large cap growth inclusive of tech and communication services.",
"startTime": "22:04",
"endTime": "22:08"
},
{
"speaker": "Kevin",
"sentence": "So I think there is a little bit of a change in psyche where investors are now more willing to go into those areas even if they’re really expensive.",
"startTime": "22:08",
"endTime": "22:18"
},
{
"speaker": "Nick",
"sentence": "No, really good insight as always, Kevin, and just put your, I put your post up here on the top of the only two mag, seven stocks top ten when it comes to the best performers year to date in the Nasdaq 100.",
"startTime": "22:20",
"endTime": "22:31"
},
{
"speaker": "Kevin",
"sentence": "That’s very interesting given how far tech has run.",
"startTime": "22:31",
"endTime": "22:35"
},
{
"speaker": "Nick",
"sentence": "We’re about two weeks out from earnings season.",
"startTime": "22:35",
"endTime": "22:38"
},
{
"speaker": "Nick",
"sentence": "How do you kind of look at the banks?",
"startTime": "22:38",
"endTime": "22:39"
},
{
"speaker": "Kevin",
"sentence": "I think it’ll be obviously a broader story beyond just the regional banks because there are other financials.",
"startTime": "22:39",
"endTime": "22:45"
},
{
"speaker": "Kevin",
"sentence": "I think that have had the pressure of higher rates and deposit betas,
but overall the earnings season is probably going to be one where I don’t know if anyone’s going to take the big risks heading into the prints to set expectations that far for the second half of this year,
but will probably be one of the most highly anticipated earnings seasons.",
"startTime": "22:45",
"endTime": "23:05"
},
{
"speaker": "Nick",
"sentence": "All due to the separation in AI winners and losers in earnings or not, it’s going to become apparent.",
"startTime": "23:05",
"endTime": "23:08"
},
{
"speaker": "Kevin",
"sentence": "So I want to thank you for joining me, Kevin.",
"startTime": "23:08",
"endTime": "23:10"
},
{
"speaker": "Nick",
"sentence": "Do you have any final thoughts that you’d like to share?",
"startTime": "23:10",
"endTime": "23:12"
},
{
"speaker": "Kevin",
"sentence": "I don’t, just watch the earnings season, keep an eye on us.",
"startTime": "23:12",
"endTime": "23:18"
},
{
"speaker": "Kevin",
"sentence": "We will keep updates coming and best of luck in the second half of the year.",
"startTime": "23:18",
"endTime": "23:22"
},
{
"speaker": "Nick",
"sentence": "Perfect. Thanks a lot, Kevin. Have a great rest of your day.",
"startTime": "23:22",
"endTime": "23:25"
},
{
"speaker": "Kevin",
"sentence": "Thanks, Nick.",
"startTime": "23:25",
"endTime": "23:26"
},
{
"speaker": "Nick",
"sentence": "Appreciate it.",
"startTime": "23:26",
"endTime": "23:27"
}
]
