OF THAT REPORT RIGHT NOW, WITH
SOMEBODY WHO KNOWS BETTER THAN
MOST ABOUT TECH INVESTING,
JOINING US US IS A TOIR FUND
FOUNDER POSITIVELY FOUNDER DAN
NILES WE SO APPRECIATE YOUR
TIME THIS MORNING.
>> MY PLEASURE, MARIA.
>> I WANT TO GET YOUR TAKE ON
FED, I WANT TO GET YOUR TAKE
ON MARK STORY BUT LET’S START
WITH TECH EARNINGS, HOW WOULD
YOU ASSESS THE EARNINGS PERIOD
SO FAR DAN?
WHAT ARE YOU EXPECTING FROM
APPLE NEXT WEEK?
>> THE EARNINGS PERIOD SO FAR
STAYS BETTER THAN WHAT I WOULD
HAVE EXPECTED ESPECIALLY GIVEN
WHAT IS GOING ON AT MACRO
PICTURE WITH FAILURE OF
SILICON VALLEY BANK BUT I
THINK WHAT YOU ARE SEEING IS I
BIGGER SORT OF GETTING BIGGER,
AND THE COMPANIES MORE ON THE
FRINGES YOU ARE STARTING TO
SEE ECONOMY KICK THEIR TOLL SO
SNAPCHAT TODAY, LOOKING
DIFFERENT THAN OUT OF GOOGLE
OR META.
AND I THINK, THAT IS GOING TO
BE A THEME YOU ARE GOING TO
SEE THROUGHOUT.
QUITE HONESTLY YOU ARE
STARTING TO SEE IMPACT ON THE
BIG GIANTS LIKE AMAZON, ONE OF
THE REASONS THAT LOOKING DOWN
TODAY, IS BECAUSE AMAZON WEB
SERVICES WAS GROWING 20%, IN
FOURTH QUARTER THAT WENT TO
16% IN MARCH QUARTER NOW
LOOKING AT, TRACKING AT 11%
MONTH OF APRIL, THAT IS
CONTINUING TO CLIMB, AS THE
MACRO STARTED TO IMPACT THEM I
DON’T THINK SO CLOSE TO DONE
YET I CONTINUE TO BELIEVE
THINGS DECELERATE THE BACK
HALF OF THE YEAR.
>> I WANT TO TALK ABOUT THAT
YOU’VE SEEN SO THOUGHTFUL
ABOUT THE MACROSTORY I WILL
GET TO APPLE IN A SECOND, I
GOT TO GET YOUR TAKE ON APPLE
A GREAT WINDOW INTO SO MANY
THINGS, BUT FIRST LET’S TALK
OIL FOR A SECOND CHEVRON
EXXONMOBIL BEAT FIRST-QUARTER
EARNINGS REVENUE EXPECTATIONS,
OIL PRICES THIS MORNING ARE
ACTUALLY AT ELEVATES LEVELS
1%, 79.20 CRUDE 74.897 UP A
QUARTER OF ONE PERCENT YOU
HAVE BEEN WATCHING TALKED
ABOUT OIL STOCKS HAVE OWNED
THEM WHERE ARE YOU ON OIL
GIVEN THAT STRATEGIC PETROLEUM
RESERVE IS LOWEST LEVELS SINCE
1980S, DAN.
>> YES, SO, WE HAVE TO LOOK AT
O COMMODITY WHEN WE TRADE
UNLIKE A STOCK LIKE AMAZON, ET
CETERA, OIL PRICES CAN’T GO UP
INFINITELY, WHEN OPEC CAME OUT
APRIL 3 DID A SURPRISE, OIL
PRICES SPIKED BEING FROM 76 TO
83 WE SOLD ON THAT DAY.
AND NOW THOUGH IF YOU LOOK AT
OIL PRICES THEY’VE COME BACK
BELOW THOSE LEVELS DOWN ABOUT
75 ON WEST TEXAS INTERMEDIATE
SO WE’RE MUCH MORE INTERESTED
WE PUT THIS OUT ON SOCIAL
MEDIA PLATFORM, THAT WE ARE
STARTING TO BUY BACK INTO THE
OIL STOCKS, DON’T FORGET,
CHINA WHICH IS A WORLD
SEGLARGEST CONSUMER OF OIL
THEY HAVE GOLDEN WEEK COMING
UP A WEEK WHERE EVERYBODY,
TRAVELS GO TO HOME TOWNS, AND
I THINK WHAT YOU ARE GOING TO
SEE IS AFTER THREE YEARS BEING
LOCKED UP, DUE TO COVID, YOU
ARE GOING TO SEE CHINESE
TRAVELERS PICK UP THERE WAS
ABOUT 150 MILLION THAT WENT
TRAVELED ABROAD, IN 2019, THAT
NUMBER LESS THAN 10 MILLION
LAST YEAR, SO, THAT IS A BIG
CONSUMER OF OIL WE HAVE TO SEE
WHAT HAPPENS BUT, YOU KNOW, I
AM ANTICIPATING APPLYING MORE
OIL STOCKS GOING INTO THAT
FIRST WEEK IN MAY.
>> I AM GLAD YOU MENTIONED
GOLDEN WEEK THIS IS ONE MORE
IDEA, THAT IS PART OF YOUR
NARRATIVE SO THOUGHTFUL IN
TERMS OF INVESTING, LOOKING AT
SO MANY VARIABLES THAT COULD
IMPACT THINGS I KNOW THAT
YOU’VE GOT A LOT OF THIS ON
DAN NILES.COM, SO THANKS FOR
THE PUTTING IT OUT THERE YOUR
TAKE WHAT YOU JUST SAID YOU
SAID CHINESE SINCE WILL BE
TRAVELING YOU DON’T THINK
GOING OUT AND BUY APPLE
IPHONES; RIGHT?
WHAT IS YOUR TAKE ON APPLE
AHEAD OF QUARTER NEXT WEEK?
WHAT ARE WE GOING TO LEARN
HERE DAN.
>> MARK TWAIN HAD A GREAT
QUOTE HISTORY DOESN’T
OVERNIGHT REPEAT IT’S BUT
OFTEN DOES RHYME IF YOU LOOK
AT U.S. WHEN WE GOT UNLOCKED
FROM COVID WERE NOT BUYING PCS
OR SMARTPHONE’S YOU SAW APPLE
REVENUES DECELERATE A HUGE
AMOUNT SAME WITH PCS PEOPLE
WANTED TO GET OUT TRAVEL,
RESTAURANTS, MOVIES, ET
CETERA, THE CHINESE CONSUMER
HAS BEEN LOCKED UP THREE
YEARS, SO, ISSUE YOU ARE
SEEING THAT WITH A LOT OF
TREFL RELATED COMPANIES THAT
REPORTED A SO FAR SAYING WE
SEEING CHINESE DEMAND START TO
PICK UP MOVIE THEATRES SAME
THING CHINESE CONSUMERS ALL
THEY CAN DO LAST THREE YEARS,
APPLY IPHONES, PCS GO ON
INTERNET PLAY INVADIO GAMES
NOW WRABT TO DO SAME THE REST
OF THE WORLD HAS BEEN DOING
OVER A YEAR YOU LOOK AT APPLE,
AND I ALWAYS BRING THIS UP YOU
HAVE TO LOOK AT RISK VERSUS
REWARD, AT 27 P/E, MARKETS
TRADING AT 19 P/E, SO IF THERE
IS SOME KIND OF ISSUE, WITH
DEMAND BECAUSE EVERYBODY IS
CONVINCED THEMSELVES THIS IS A
CONSUMER STAPLE BUT IT ISN’T
YOU DON’T NEED THIS THE WAY
YOU NEED WATER, FOOD THINGS
LIKE THAT, PEOPLE CAN CUT BACK
ON APPLE, YOU KNOW UPGRADING
IPHONE THEY CAN’T CUT BACK ON
FOOD OR QUARTER THAT IS VERY
DIFFERENT TYPE OF COMPANY THAT
PEOPLE WANT TO BELIEVE THAT,
BECAUSE IT IS THE WORLD’S MOST
VALUABLE COMPANY HAS BEEN
GOING UP BUT 27 P/E, YOU ARE
NOT DISCOUNTING ANY RIV IF
THERE IS AN ISSUE AND YOU’VE
SEEN SUPPLIERS HAVING TO CUT
NUMBERS GOING FORWARD PSMC,
SIRIUS LOGIC, CUTTING NUMBERS
A LOT OF COMPANIES TALKED
ABOUT WEAKNESS IN SMARTPHONES
AT THIS MULTIPLE NOT SOMETHING
YOU WANT TO BE INVOLVED WITH I
THINK, BECAUSE IF THERE IS A
PROBLEM, YOU ARE GOING TO GET
ABSOLUTELY HAMMERED.
MARIA: I KNOW YOU THINK THE
NEXT QUARTER WE’RE GOING TO HE
SO A ESTIMATES COME DOWN FOR
APPLE, SO THERE IS THAT --
>> YEAH, I THINK MARCH QUARTER
IS FINE NOT AN ISSUE THERE, I
THINK CAN WHEN YOU LOOK AT
JUNE ESTIMATES PEOPLE HAVE, I
THINK JUNE NUMBERS COME DOWN
THE STOCK DON’T FORGET
RESULTING, SO FAR FROM BIG
TECH COMPANY IN GENERAL SOLID,
GOOGLE DOWN ABRATE AFTER
RESULTS, AMAZON LOOKS LIKE
DOWN TODAY AFTER RESULTS, BUT
IN GENERAL, TAKING AS A WLOEL
THEY ARE BETTER THAN I WOULD
HAVE THOUGHT THAT IS SETTING
UP A HIGH BAR FOR APPLE NOW
WHERE PEOPLE JUST ASSUME OH,
EVERYTHING IS FINE BUT WE HAVE
TO SEE HOW THEY PLAY OUT,
ESPECIALLY, AND I CAN’T STRESS
THIS ENOUGH -- AT THAT
MULTIPLE THE RISK/RESTORE
ISN’T IN THEIR FAVOR FOR ME,
WE’RE GOING TO BE -- NOT
INVOLVED MAY BE SHORT A LITTLE
BIT I THINK PROBABLY WHAT
HAPPENS, BUT -- BECAUSE, THAT
DOESN’T MAKE SENSE CONTRAST
THAT AGAINST NAMES LIKE
FACEBOOK UP A LOT BUT, JUST
ABOVE MARKET MULTIPLE.
AND SO AT LEAST THERE, YOU CAN
SAY BUSINESS IS ACCELERATING
YES STOCK MAY HAVE MOURN
DOUBLED OFF LOWS WE STARTED
BUYING LOW 90S LAST YEAR, YOU
HAD ME ON YOUR PROGRAM, BUT AT
LEAST YOU ARE NOT PAYING AN
EXCESSIVE MULTIPLE FOR THE
COMPANY AND GROWTH LOOKS
REALLY GOOD.
THAT IS A BIG BUSINESS.
MARIA: A GREAT POINT, THIS IS
THE ISSUE THAT I KEEP BRINGING
UP, TO PEOPLE WHO SAY WELL,
LOOK, YOU KNOW I WANT TO BUY
TECH I SAY LOOK AT THE MARKET
THEY ARE UP SO MUCH, AND IN
EVEN FACE OF EXPECTATIONS THAT
WE’RE GOING INTO A RECESSION,
IN A WE’RE GOING TO HAVE AN
ECONOMY SLOWS DOWN MARKET WILL
NOT QUIT YOUR TAKE WHAT CAN
THE HECK HAPPENED IN YOU MARCH
HERE, BECAUSE I KNOW THAT
YOUBRIEF THE S&P 500 BEING UP,
WAS LARGELY DUE TO THE FAILURE
OF SILICON VALLEY BANK, AND
THE FED’S REACTION TO IT.
THE FED IS GOING TO RELEASE
THAT INTERNAL REVIEW OF THE
VVRGS REGULATION OF SILICON
VALLEY BANK DAY DAN U.S.
OFFICIALS WILL REPORTEDLY
COORDINATING URGENT TALKS TO
RESCUE FIRST REPUBLIC, SAY
GOVERNMENT VOLT OF HELPING
BRING BANKS PRIVATE EQUITY
FIRMS TO TABLE PERHAPS APPLY
SOME ASSETS WHAT DO YOU THINK
IS BEHIND THE RALLY IN STOCKS,
EVEN IN THE FACE OF THIS
CRISIS IN BANKING, WORRIES
OVER MACROSTORY, DAN?
>> WELL, I THINK IT IS PRETTY
SIMPLE WHEN YOU LOOK AT FROM
IT THIS PERSPECTIVE, IF I TOLD
YOU, MARIA, WE ARE GOING TO
GET A BLOW -- GLOBAL PANDEMIC
THAT SHUTS DOWN THE WORLD.
YOUR FIRST THOUGHT ISN’T GOING
TO BE LET’S --
>> FIRST THOUGHT RUN OUT BUY
STOCKS, IN 2020 S&P UP 16% FED
EXPAND BALANCE SHEET 3.2
BILLION, NOW, WHAT YOU SAW
DURING SILICON VALLEY BANK
FAILURE ANYWAYS THE BALANCE
SHEET EXPAND BY 4 HUNDRED
BILLION, THAT IS WHY, IN MONTH
OF MARCH THE SECOND AND THIRD
LEARNING BANK FAILURES IN
HISTORY THE MARKET WENT UP NOW
WHAT YOU’VE SEEN IS OVER THE
LAST FIVE WEEKS, THAT BALANCE
SHEET IS STARTINGING TO SHRINK
AGAIN GONE DOWN ABOUT 170
BILLION I THINK THE RISK IS
COMING BACK INTO THE MARKET,
WHERE YOU ARE GOING TO HAVE TO
LOOK AT EARNINGS AGAIN,
BECAUSE INFLATION IS STILL IS
HIGH, YES COME DOWN UP FROM
PEAK LVRLZ OVER 9% TO 5, BUT
STILL WELL ABOVE 2% FED TARGET
I THINK YOU SEE FED RAISE NEXT
WEEK BEING 25 BLOOD PRESSURES,
ON PAUSE I DON’T SEE A RATE
CUT BY OR TWO RATE CUTS THE
MARKET IS DISCOUNTING I THINK
INFLATION IS GOING TO REMAIN
LIAR THAN PEOPLE THINK BECAUSE
OF CHINA, AND, COMMODITY
PRICES HIGH THE FACT WE HAVE
70% MORE JOBS THAN PEOPLE
EMPLOYED WILL KEEP WAGES HIGH.
>> UNBELIEVABLY HERE EXPECTING
FEDERAL RESERVE CUTTING
BALANCE SHEET UNWIND UNWIND
UNWIND AS WELL AS HIGHER
INTEREST RATES BUT WHAT YOU
ARE SAYING IS THAT IN FACT THE
FEDERAL RESERVE HAS INTEND S
EXPANDING THE BALANCE SHEET BY
ALMOST 400 BILLION DOLLARS,
JUST IN THREE WEEKS, REVERSING
THE BALANCE SHEET SHRINKAGE.
>> THAT HAPPENED, THEY
BASICALLY UNDER FIVE MONTHS
SHRINKING BALANCE SHEET IN
THREE WEEKS THAT IS WHY MARKET
WAS UP OF.
MARIA: WOW.
>> SAME REASON MARKETS WAS UP
IN 2020, THE MIDDLE OF THE
GLOBAL PANDEMIC WHEN THEY XABD
THE BALANCE SHEET BY 3.2
TRILLION, NOW SHRINKING IT
AGAIN YOU HAVE TO GO BACK LOOK
AT FUNDAMENTALS OF COMPANIES,
AND YOU KNOW GOOD, EARNINGS,
BOUGHT HIGH MULTIPLE STOCKS
MUCH MORE RISKY, AND THAT IS
WHAT YOU ARE GOING TO HAVE TO
DEAL WITH.
AND SO -- BETWEEN NOW AND
YEAR-END OUR VIEW IS MARKET
WILL GO DOWN, BECAUSE YOUR
GOING TO COME -- WE INFLATION
STAYS HAY.
>> FASCINATING DAN THANKS FOR
GETTING UP EARLY FOR US TO