Let's get to our guests. Robert Shin c i O at Blankie Shine Wealth Management. Robert, So, a natural tail wind is the seasonal time of year, it's usually good for stocks. A natural headwind is the big and muscular FED with its QT and with its higher interest rates. Does one win in the short term and the other win in the longer term. Yeah, we believe. So we're seeing as we come to a close for a lot of still uncertainty, a lot of um guessing as to what the FED is going to do, and data dependent
as the Fed's going to be. But we're still we still believe that the FED is going to continue. It's has to win at all cost strategy meaning hawkish going into well. San Francisco FED suggested that the jobless rate doesn't necessarily signal an impending recession. Do you agree? And canna resilient labor market and consumption support equities in the coming up months. If we look at the invert of
yield curve, it's forecasting a recession. For the question is how deep and the timing of which is is really on the minds of everybody. But going back to the strong labor market and the accelerating rate. Wage growth basically poses the biggest threat for the FED, and ultimately they're going to have to work on that. Next week we have the wage inflation number, whether it's being uh, you know, embedded entrenched in the economy, and that's what the FED
has really said. They're gonna they're gonna focus on that, and they're going to push rates at all costs. But the yield curve is telling us something completely different. That fore we have to set up and be um cautiously optimistic. Essentially, as we navigate through the new year. Let's say the yield curve is wrong, and and the and the reason I want to postulate that is that, um, the yield curve probably didn't know that China was going to flip on a dime and open up the economy like it did.
And we don't know exactly the trajectory of that. But let's say that you know, they start cooking, um, consumers start spending, they start traveling, and the economy grows. Doesn't that bring the long end of the yield curve, the tenures say, up around maybe four and a half percent, And once it gets up near where the two year is, then maybe people won't keep talking about the inversion of
the yield curve and recession. Yeah, you also have to keep in mind that the globally, Europe's in recession right now, and a lot of other outside the US we're seeing signs of recession. And obviously the pivot in terms of um sort of the support within China to support their economy from real estate and so in other aspects um, the global economy and the weight of global economy is actually growth is coming down. And so that's a momentum
that really is unpredictable. So we have to be cautious as we calculate that and as we navigate that, and as much as central bank want to, you know, be proactive and sort of have a soft landing. Um, we're seeing, you know, the global markets tell us something different. How about the dollar, the once mighty dollars now I guess, for a lack of better word, languishing at a six month low. Might the weak a dollar bit tailwin for
US earnings next year? The dollars a function right now of predicting what would happen excuse me for the US as are fed gets closer to maybe a not a not a pivot but a pause in the US, which is supporting the interest rates or the dollar if you will, in the US. Uh, you're seeing the central banks around the world stronger. So that's where you're seeing the dollar, you know, below the twenty the two outer day moving average, and even the fifty day moving average, which is a
technical basis. Yes, it's coming down, and it's actually a welcome sign, uh for for for the globe. But at the same time, we still think that the US is going to continue on the interstrate policy that could strengthen the dollar a little further from where it is. So I'm interested in your strategy and how you play this. Uh, you're sounding a little on the various side obviously going into at least the first part of next year. UM,
what are some of your best ideas at the moment. Yeah, we're we're definitely we've definitely been you know, risk management philosophy for our clients for two and we're going to continue the theme for and that's really the major theme essentially. Um. You know, healthcare is going to be a good place because the cash flow, the dividends, uh, consumer stables, especially as you enter into a recession not only here but around the world. Um, you know, those those household products
are are important. UM. We also believe that you know, positive dividend growth, cash flow is king. And finally, it's all about strategic rebalancing. What we did for our clients and Blank Sealth Management back in March and April of twenty twenty is when the equity markets provided a tremendous opportunity. We rebalance client portfolios to take advantage that. We believe that could happen again in going forward and we're positioned
for that. So in the short term, we're positioning treasuries because treasury yield on the short term yield curve is you know, well over four percent. Uh. And then the large caps Robert, I want to I want to talk about TAG. Tag having its worst year since two thousand eight, is trying to claw back some of those games before the year ends. Big winners today where too for Tag? Yeah, we like large cap tech and that's the future if
you look at you know, three or five, ten years. UM. Yes, this last year hasn't been the you know for large cap tech. UH. What we own for our clients are the large established companies you know, UM, have cash, strong balance sheet and they can within a storm and out on the other side of the recession they get stronger. So we like that. Even though yes, year to date they're down twenty respec actively, but they're the biggest, largest companies and they will prevail long term. So we're strong
believers in large cap tech. The companies that don't have strong balance sheets, don't have cash flow or sort of the I p O of the spect world. For for this year, we didn't invest in our clients for that UM, and we don't believe in that. So yeah, there's two different sort of markets in tech, but large cap tech is an opportunity moving forward. Okay, in the large cap tech space, UM, let's talk about some of the different industries.
So you've got semiconductors, you've got cloud, and you've got software. Uh, and then you've got obviously the the sort of internet companies and the e commerce companies. So which ones you like the most? You like software, cloud will continue, UM. And then again even the chips, even though we've seen a chip glut, you have to look at these valuations on these these companies because they'll work through the inventories. UM. And you know, keep in mind the equity markets, price
in well before the recession. So you want to sort of dollar cost average and take advantage of some of these categories within technology because by the time you say okay it's all clear to invest, that opportunity has passed. So we're dollar costs averaging. We like the software is, we like you know, some of the cloud computing, We like some of the even the cyber securities which got beat up this year. Um, but that's you know, there's
some good opportunities out there. So we're picking and choosing our opportunities. But we have confidence long term on the companies that we're picking up. Will you be picking and choosing? Tesla has been caught up in a horrible route. Have we seen bottom? You know, Tesla has been in a you know, a tornado of headlines. Um. Long term evy number one, they're going to continue. In fact, if you look at the scalability, Uh, they're just hitting their numbers now.
Obviously China and in terms of COVID and potentially production and ability to meet the production numbers is what we're all waiting on. But yeah, we're taking advantage of Tesla, you know, at these levels because we believe that even a year to two years from now, even five years from now, they're going to still maintain their leadership position. And we believe that the growth is still there in
the e V space. And keep in mind that the US has passed the bill that is going to even add an incentive for all e VS for U S consumers starting January one, so that's sort of a tail win as well. We're seeing economic activity rebound in Chinese cities where COVID infections have peaked, and so if you look at the particularly in the north and the central parts of the country, Beijing, chong Ching, chung Do, and and Wuhan have seen their subways jump forty in the
week through Wednesday. So this is just the idea that once you give freedom to Chinese people who have been locked down for a couple of years, that they're going to run. Can I get you excite died about China at all? You can, um, But that's also going to add to the inflation fears around the world right because of the pent up demand. And so this is just gonna be the knock on effect of economies around the world going through COVID or COVID going around through the
world and adding into the demand. The goodness is the supply chain around the world seems like it's it's opening up. So that's going to help on the demand pressures to ease some of the inflation and pressures. But I think that's the number one key here is inflation around the world. Um. For if we can get that under control and not hit a global depression or a recession if you will. Um. You know, China looks interesting, it really does. Um. So
it does a lot of opportunities. So we see the first half around the globe, um, you know, be cautious, be patient, and then start taking opportunities um as they come, because I think we could see a turnaround, but we could see some headline risks, some valuation, you know, concerns in the market, bring the market down a little bit further. But then it could be you know, sort of the story of finally we have growth again and we have you know, some opportunity in all right, Robert, thanks very
much for joining us. Really enjoyed it. Robert shin Ce io it Blankie Shine Wealth Management