Earnings are a Warning! Eddie Ghabour on TD Ameritrade "The Watch List"
Eddie Ghabour joins Nicole Petallides, host of The Watch List on the TD Ameritrade Network, to discuss the latest round of earnings and his point of view on where the market goes from here.
We believe that the latest round of economic data, including earnings, warns that the second quarter will experience serious headwinds. We are seeing consumer demand wane and inventories rise, which will further squeeze profits that are already under strain because of the cost of capital from inflation and interest rates that have increased 5x in the last year.
The most significant and unspoken market threat is the debt ceiling debate. We believe Congress will wait until the 11th hour before agreeing. However, the tax revenues seem lower than expected, which will likely speed up the debt ceiling discussion. Unfortunately, this also will put the U.S. at higher risk of defaulting on our debt.
Given these factors, we have chosen cash and treasuries as our safe harbor. We are not looking for the yield in the treasuries as our payout. Instead, the appreciation of the treasuries as the economy worsens is where we will make meaningful gains.
Watch to learn more.