Stocks & Markets Podcast: Why Big Tech Will Continue to Lead With Jay Woods

Jay Woods, Chief Market Strategist at Freedom Capital Markets, returns to chat with Chris Versace from the NYSE on this installment of TheStreet’s Stocks & Markets podcast.

Out of the gate, the conversation centers on the uptick in market turbulence that began with Palantir’s (PLTR) recent earnings report, with Jay sharing why he thinks opportunity may be around the corner following the big run-up in Palantir and other stocks.

The two then discuss the market rotation underway in Big Tech leadership, why a pause to refresh in the market is likely following its multi-month run-up, and how safety stocks are not providing any safety to investors.

Jay also shares why he is bullish on cybersecurity, answers Pro Portfolio member questions about the technical indicators he’s watching now, and offers up thoughts on small-cap stocks, a sector that… well… you’ll just have to hear it from Jay, as well as his picks in a stock round robin match-up.

At the time of publication, TheStreet Pro Portfolio was long PLTR.

Transcript

CHRIS VERSACE

Hey, folks. Christopher Versace here and it is time for another Stocks and Markets podcast from TheStreet. And I'm fortunate to be here back as you can see at the New York Stock Exchange.

And that means we have one of our favorite guests joining me for this installment of the podcast, Mr. Jay Woods from Freedom Capital Management.

Jay, the market we've been in October better than expected. We're starting off November. Can I ask you right out of the gate, your technical hat on anything change big in

October that we need to know about going into November?

JAY WOODS

Well, the the seasonal factors that we've, you know, talked about, have not been as reliable as we thought. This bull has been much stronger. But what we're seeing right now is a little momentum shift, and we'll talk about it during the podcast. So as we kick off November, we're doing this as we're in the midst of the longest government shutdown ever.

Correct. We are in a very strong earnings season, but we're not getting the follow-through across the board. That we're used to. And, it feels as if there is a little turbulence under the surface with the with the breath.

CHRIS VERSACE

So let's let let's talk about that. Right. Because we're coming after a week of, you know, Meta, Microsoft, Google, Amazon, Apple. Yeah. A lot of the big players in the S&P 500, the Nasdaq Composite and this week we had Palantir report with arguable blowout numbers across the board. And yet the post reaction was not positive. Yeah. So what's in from your from your perspective what's going on.

JAY WOODS

Oh I got a lot to unpack with that question. Let's talk about Palantir. First. We're way back to those magnificent names. I love the fact that they're like, oh, the valuation all of a sudden is too high. Those earnings crushing on all metrics. Yeah. All right here we have a P that's you know well.

CHRIS VERSACE

I'm going to stop you right there because that's the wrong metric to use. All right I would argue that it's p/e to growth I guess when we look at the earnings growth that's slotted. Yeah. Just based on what we knew. And then we factor in the fact that the company's backlog is $8.6 billion year incremental operating margins north of 70%.

Think about what that means for incremental profit growth as they monetize that backlog. Yeah. You're going to see Wall Street's numbers come up.

JAY WOODS

With without a doubt. But what I look at is price action in tech right first. Right. The story is there. The multiples. You know we can debate that all the time. And to me it's a cult like stock. Just like a Tesla is a cult like stock. And that's why the multiples don't don't mesh. But from a technical point of view, what we saw was a breakout going into earnings.

We gapped after the big announcement. We after hours we were trading and then we reverse on the call. And now we're trying to find that new home for this stock where it will settle.

Where are we finding it around this 190 level where we broke out above just a week before the earnings came out. So we're pulling back percentage wise it sounds awful, but perspective wise the stock is one of the biggest gainers for the year.

Right. It broke out ahead of earnings. It couldn't keep that momentum going. It's settling back above the level from which it broke out. Above this 190 level. If it pulls back to 175, this is a great opportunity to add to a name that you may have been missing out on for a while, because the the growth is there, the earnings are there, and the trajectory is still in a nice secular uptrend.

So I welcome this, you know, as an opportunity to buy the stock on a dip. It didn't give us that next leg, which it has over eight of the last 11 times it's reported it's gone higher and by an average of 20%. It didn't do it this time. It kind of got a little out in front of its skis.

Okay. But what it's doing to me price wise, pulling back a nice setup going forward and the story's phenomenal going.

CHRIS VERSACE

For it and that level that you're watching. That 175 kind of meshes with the 100 day moving.

JAY WOODS

Without a doubt. Yeah those moving averages are key. It's also that uptrend line when you connect the series of higher lows. As we've gone up this March. But I think 190 is looking good right now as we tape this. But you know we're taping this during a pocket of volatility. And if the sell off continues then yeah you may get an opportunity to buy it on the cheap.

And that's the one time you don't want to buy it. Oh, maybe this is the time it's changed. I don't think it is. I still think this is a very big high tech growth story. The biggest stock in the software ETF, the IG. So this is a place you want to put money to work. And it's giving us an opportunity to get involved on sale.

CHRIS VERSACE

So let let's continue this. Right. So that's one company. Yeah. But you said before we might be entering a pocket of volatility. So from a technical perspective yeah. What what is it you're watching that is either might be causing some alarm or are you watching for a shift that could signal more to come.

JAY WOODS

Yeah. We're seeing a few things. Definitely the breadth of the market meaning the stocks that have gone up versus stocks that have gone down has been very negative.

We've seen more losers than winners at a clip that you don't historically see when you're making new highs. In fact, the new high list has over 2% new winners and 2% losers.

The good news is the leadership is right. The leadership is technology. The leadership is some of the consumer discretionary names that we want to see. Leave like an Amazon Tesla on the verge of new highs. They've got another news event coming up later with, the Elon Musk.

CHRIS VERSACE

Oh it's really in their pay packet.

JAY WOODS

That's kind of important. You know if he doesn't get this then who knows what it means for that company. Because without Elon Musk there is no Tesla. And that will be fascinating to watch going.

CHRIS VERSACE

So cult leader for the cult company.

JAY WOODS

Without a doubt. And you're going to pay this guy to perform well guess what? That's what they did. The first time in oh, we debated the pay package. But if you're an investor in Tesla, you're not investing in the electric cars. You're investing in Elon Musk.

CHRIS VERSACE

Well, in what's to come.

JAY WOODS

And what's to come and what's to come. My goodness. He were going to Mars. We've got spaceships. We've got satellite technology. There is so much under the umbrella that is Tesla.

But we focus on the cars in autonomous driving. But the robotics aspect of it, to me, the sky is the limit. But you need to, you know, you need to let them cook.

And, this pay package is something that will drive him and drive investors to get on board.

CHRIS VERSACE

All right, let me bring it back. Bad breath. Yeah. Is what you said. Anything else that we're watching.

JAY WOODS

With the momentum indicators? We have seen a tremendous run. We're up six months in a row.

We haven't had a seven month winning streak since I believe was 2021. This is the longest streak since then. They don't happen very often. So a pullback to me is healthy and necessary.

And then we're in a government shutdown. And I know the facts about the government shutdown.

This will be it's tied as we tape this for the longest.

CHRIS VERSACE

Whenever it will be the longest it.

JAY WOODS

Will impact GDP. All right. It has to of course.

CHRIS VERSACE

What my what what I've been saying is Craig, let me know if you see this differently. Yeah. It's a speed bump that will be made whole eventually 1,000%.

JAY WOODS

But as it goes longer. How long? Oh no, no.

CHRIS VERSACE

100%.

JAY WOODS

But here's the next caveat. We learned from Jerome Powell last week. Didn't really talk too much about it. But he said the available data is showing us this is what we want to do. They're now relying on data that is more survey related, and they have to interpret the data that they're getting to dictate fed policy going forward.

The market had another cut in December. Big ten. Yes. Still, chances of that cut now are getting less and less because we're not getting data. Friday unemployment data for October supposed to come out.

CHRIS VERSACE

We can push so so but if I would take a slightly different stance okay, okay. To me, the big thing last week was Powell's comment that, a rate cut is not baked in by a long shot. Yeah. Now that we all heard him say the fed is going to remain data dependent, blah blah blah and ad nauseum, you know, drink, drink when he says it.

Yeah. But that remark, which seemed rather off the cuff, I think was the most telling and and I agree with you that we are forced to rely on, you know, a lot smaller data, data set than what we've had in the past. But the data that we are getting, you know, ism manufacturing for October was what it was.

But ahead of us, ADP, you know, do we see the reversal that the market expects in those numbers. We'll see.

JAY WOODS

Yep.

CHRIS VERSACE

Does the service sector continue to carry the economy. And is inflation still kind of running at elevated levels. Those are the questions we need to answer you know. But we'll still get November data before the fed meeting. So a lot more to go.

JAY WOODS

We hope so. You know it depends how long this this drags out. There's people talking about this dragging into the Thanksgiving holidays. If it does, the American public will be in an uproar. I can't imagine that they won't get their act together in Washington and come to some key resolution where all of a sudden, you know, we put a stop to it, got people back to work, you know, focus on things going into the end of the year.

CHRIS VERSACE

So, you know, we keep saying as we're taping this is just just to lay the cards on the table. Today is Election day. Yeah. And there's going to be some outcomes in my home state of Virginia. Your home state of new Jersey. Yeah. We'll have the, mayoral race here in New York City. And I think there's one other big race with the folks are paying attention.

JAY WOODS

Yeah. So we have our East Coast bias.

CHRIS VERSACE

Yeah, yeah yeah, yeah we do, we do. So so. But it'll be the outcome of that. And then I think you can layer in some of these other recent surveys where, you know, people are starting to blame the Republicans and Trump for the shutdown for, you know, let's just say not handling the economy or addressing inflation. Yeah. To me, that says that.

I think you're right. We could see something happen sooner than, you know, Black Friday, which is what I think Polly Markets is saying is yes.

JAY WOODS

Yes they are.

CHRIS VERSACE

So I I'm hope I'm hopeful. But as it relates to the data, you know, people are not going out and collecting data, you know, so we may not get all this, make whole data, so to speak, December, January.

JAY WOODS

Yeah, yeah. I mean, when Powell said we're, you know, the next thing we're focused on is November 26th. Beige book, the beige Book. Like, really, this is what we're worried about, the economy in 12 different cities and their surveys that you know, who knows how reliable they are. But that's what he laid out the groundwork for in. That's if the shutdown continues.

That's what we'll be watching for.

CHRIS VERSACE

And it I view it as a piece of the puzzle. Yeah. So one of the things that you said yeah, you didn't say it, but you kind of hinted at it. We we've had a strong run. You know through the end of October S&P was up six consecutive months Nasdaq seven. We could be in for a pause to refresh as Coca-Cola's old symbol used to be.

Right. Right. Pause to refresh. Not a bad thing. And typically when we see this from a Chartist perspective, the technical perspective that kind of sets us up for the next move higher.

Yes.

JAY WOODS

Yeah, without a doubt. And what we want to see is rotation. And we're losing a little bit of that rotation where I'm seeing the rotation is within the Mag seven. So you rattled off Microsoft and Meta. All right. That is the biggest disappointment where we're bailing on them because of that $16 billion tax charge no one saw coming.

But it's broken down. It's got some work to do to get back into our good graces. It's now the worst performing stock in the mag seven.

CHRIS VERSACE

What does that mean? It's a buying opportunity long term.

JAY WOODS

It probably is. But right now I go where the puck is. And that strength Apple broke out into and ahead of earnings. And it's continued that momentum. The Apple is becoming utility stock. This is the staple of our lives. Look you know without this this product we're nothing. And we keep recycling that the I spend hasn't been catastrophic yet.

We're worried about what are you going to do when it comes to AI yet they keep hitting singles and doubles up the gap.

CHRIS VERSACE

But did you see the news with Google?

JAY WOODS

Google? Another.

CHRIS VERSACE

No, no no.

JAY WOODS

Apple and Google I did not.

CHRIS VERSACE

So Apple is going to, on the Q.t use Google in its Gemini models in a select way to power. Yep, the upcoming AI enhanced Siri. That'll be out next year, which should hopefully accelerate the upgrade we need.

JAY WOODS

Siri to improve. Yesterday.

CHRIS VERSACE

Siri's kind of a I hate to say this, I might get flack for this. It's of she's kind of a dumb blond.

JAY WOODS

Okay. I will never die. Let's pivot real quick. Go ahead and show alphabet. Yeah. Also known as Google, change your symbol to something like ABC, which is available, and I will call you Alphabet. But Google, broke out like Apple going into this earnings and it was a solid quarter.

And Gemini is improving. So their AI story is there.

They have the litigation fears push behind them right now. They don't have to divest Chrome or their Android operating system. So this is where the rotation is. And then Amazon Amazon finally broke out. It was my pick of the year. Didn't do too well. But it's it's looking good. It's not the worst performing sector stock in the Magnificent Seven.

We're seeing those three now take the mantle. Nvidia is still leading. Will have their earnings in a couple weeks. Let's see what they're doing. And they just continue to hit on all cylinders. So Microsoft and Meta and go to the back of the line. So the story still plays out but it's not a tide lifts all boats. And as a result the market is pivoting.

And some of the other sectors are just not picking up the slack. And then you look at those safety stocks. There's no safety in staples right now.

CHRIS VERSACE

So so when you're saying that and saying staples you're talking your Coke's your Pepsi Kimberly-Clark, Procter and Gamble. Well, I mean Kimberly Clark's making this big acquisition for Tylenol. Any thoughts on that?

JAY WOODS

It to me, it looks like a team trying to take a flier on this injured player, hoping they come back.

And that's what, can you who's been, you know, they still have the baby powder litigation going on in London where Britain, as we like to call London, is not a country. It's a big city in that country, like Boston is not the state. But I but we all call Massachusetts Boston. But I digress there in can you right now is is beaten down. And to me it looks like Kimberly Clark is taking a shot that this Tylenol news will eventually go away. The litigation against it will will probably be beaten. And, the baby powder stuff is limited to just Britain right now.

So they're looking to get some great product on the cheap and hope to reap the benefits when they come back from this injury. That's how I look at Kimberly-Clark soon.

CHRIS VERSACE

So getting it on the cheap. With that in mind, we're heading into the holiday shopping season or moving deeper into it, I guess is the right way to think about it. You know, Costco's not performing well, and I like Costco personally. I, I've got a number of different, different reasons for it. We have other discount retailers, TJX Ross stores.

You know, I think those are well positioned for the type of consumer that we have on the low to middle end. Yep. Upper end American Express. But from your perspective, what's it going to take to get this group moving?

JAY WOODS

Yeah, I think it's going to take some time. And, you know, that's something that long term investors will have the patience for a Costco, a Walmart that, you know, had a tremendous row, Walmart and Costco through the roof the last three years. And now, okay, they're not up that much this year. Some you know some of these stocks are down.

This is normal. But when you own them you get a little upset like come on, why aren't we keeping up with the Joneses? So these are staples that I believe that are, you know, perfect in a long term portfolio. But if you expect to see double G returns every single year, you're going to be disappointed.

CHRIS VERSACE

So that's an interesting question, especially in this environment. Right. Because when we look at some of the moves we talked about earlier, whether it's Palantir or Amazon starting to work for, Google, Apple, we kind of forget that sometimes things take time and they have to play out.

Yeah, can be frustrating. When you hear folks, you know, whether you're teaching and your students are talking about this or other folks, you're you're talking with, what do you say to them to help kind and kind of frame this for them?

So like, sometimes you need to be patient.

JAY WOODS

Yeah. Well, you have a very astute audience and everyone in your audience is a little different.

They have different time frames. So you have to know your time frame. And we're talking about the general markets. You don't want to scream like I think the next two weeks we could go down 5 to 10%. Oh, it's a headline. But you know, how do we how do we look at that?

CHRIS VERSACE

I'm sorry I'm laughing because those headlines. Yeah I saw them today. Yeah they talk about it.

But you read the story. It's sometime in the next 1 or 2 years.

JAY WOODS

Oh oh 1929 is a book. He doesn't tell you that 1929 is coming. It's a great read. And, you know, it tells you about like, Livermore, Jesse Livermore and great stories like that. But the headline is 1929 and this is coming in. Look, it's about clicks. We know that. But, you know, I want people to get a general understanding that these corrections happen.

We haven't had a 5% correction since Liberation Day, since we went down 19.8%.

CHRIS VERSACE

And you'd have one. No, no, no, no, no, 2 to 3 is the number we get during the year. So you would argue potentially that after such a strong run. Yep. We're kind of do.

JAY WOODS

Exactly. I think it will be your garden variety pullback with some crazy headlines whether it's shutdown related a change in election policy because the elections go one side red or blue.

Right. People will spin that to a narrative that fits with the market's doing Palantir perfect example. Earnings were fantastic. The stock went down which changed Microsoft solid earnings.

Oh no. Now we're worried about our CapEx spend when we say that.

CHRIS VERSACE

But when when there when we were.

JAY WOODS

Rewarded for in the past. So the narrative is changing. But overall, I think the general trends are there. The one space that I think is was talked about a lot and now is being overlooked is is cyber. I look at a lot of these cyber names, some of these trends like a Cisco. What a boring stock long term.

Yeah. You know, but to me these are slow and steady stocks. They could get a little euphoric. God forbid there's, some cyber concerns going forward.

CHRIS VERSACE

But let's just put it this way. Yeah. Do you see any slowdown in cyber attacks?

JAY WOODS

Cyber attacks? No, no, in fact, that's a growth industry. If you are a hacker out there, congratulations. You have a future.

Yeah, yeah. So we own the cyber Cyber ETF. We've owned it for a long time. We're going to continue to own it. Why. Well for the reason we just discussed and I suspect that I in the hand of bad hands of bad actors, we're actually going to see the volume of cyber attacks increase over time. Yeah. So yeah it's tucked away.

CHRIS VERSACE

We're not going to forget it but we're going to benefit from it.

JAY WOODS

Yeah. Without question. And that's a sector that I think you have a lot of strength.

You look at CrowdStrike. You look at Broadcom. Broadcom yes it gets a big eye rap as well. But it's also cyber. Cloudflare has been on a tremendous run. It's pulling back when you see these pullbacks. As a technician you look okay.

Is the trend intact. Oh it sure is. And get overextended. Yes it did. Now where is an opportunity. And it's why this.

CHRIS VERSACE

Strength so when you say a stock just take Cloudflare or anyone when you say that it it pulls back. It was extended. It pulls back. But the support level is still there. What are we looking for?

JAY WOODS

Yeah, we're looking for areas where buyers generally step in. Those areas could be moving averages a 50 day, a 200 day. But price has some sort of memory. All those prices where we're buyers stepped in or sellers got aggressive. And that's what I look for areas to support resistance. And when something gets a little too euphoric, guess what?

It generally comes back to where it was before. And then you reevaluate the trade. The you look at the sector is something changed in the sector and something in the overall market. Thesis that makes me a little skittish and maybe go bearish. I am not bearish. I am still bullish, but my horns aren't pointing out of my head.

JAY WOODS

I got a little skittish in August when.

CHRIS VERSACE

I was on your I you know, I remember you had said back then the time was to be patient, wait for the opportunity, and it eventually gave.

JAY WOODS

Yeah. And you know what a good investor wants to do when you are lucky enough, like I happen to be on long Amazon, long, long Google percentage wise, they're now growing in my portfolio in Nvidia. You know, my parents have owned that one. I gave it to them I never bought.

But they I tell them my my father doesn't listen this stock.

He's just owns it and puts it away. But a nimble investor will like, wait a second.

This was 10% of my portfolio. Now it's 15%. Let me scale it back. Correct. And you're taking profits, and you have a little money on the sidelines for that rainy day. Now, my umbrella is not out just yet, but I have it ready.

And I'm looking to buy some stocks that may go on sale or some turnaround stocks. And that's what I'm doing. Most of my work and my team and freedom. We're looking at those stocks those Disney. So Starbucks, those Chipotle, those UPS's that have been beaten down Nike. Which ones are turning around. Which one gives us the best set up going into 2026.

So the next time I come and we talk, I think one of my themes will be these are some stocks risk reward that have been beaten down for a while. We're starting to see the I hate the expression green shoots and, you know, but we are starting to see some signs of life that may give us, I know, a nice runway going forward for 6 to 12 months.

CHRIS VERSACE

So those sounded like a lot of consumer related names.

JAY WOODS

Yeah. Well, what's beaten down a lot of those consumer names. So you want to look through the rubble if you will. I looked at biotech is a sector that we've discussed that has started to turn around. But it's not every biotech stock. Some look like they were turning around like a Sarepta and got destroyed on earnings day. Got hurt in that one.

Risk reward was favorable. If it could turn around, it didn't. That's what's dangerous about biotech stocks, because each individual name has a story and a specific drug linked to that. Correct. So that's why you go into the IBB where the xbi the ETFs. Yeah. Yeah.

CHRIS VERSACE

Right. BS come in all over you Ronnie Broad. Yes. The broad based coverage. So if any one particular one doesn't work out you're still relatively protected.

JAY WOODS

You tell me when Pfizer's going to turn around that that stuff. You know I cannot. That was a short term hold that turned into a 20 year long term play for me. It has a great dividend. We buy it for the dividend, we put it away is.

CHRIS VERSACE

As we move towards the end of the year, is there a sector that you think might actually start to heat up?

JAY WOODS

I'm looking at, believe it or not, and I hate the sector. The transports, the transports have been resilient in the shutdown. The airlines, when they move, they move speculatively. So they move in a straight line. You have American Airlines, the worst performing of the big three. United would be the best one down 1%. Delta down 3%. American is down I think 14%.

I think once we get through the shutdown, we may see a spike there. Uber in the I it's the transport ETF that I like to follow that is under some pressure after its earnings. But I think it's giving a long term investor an opportunity to buy. And then the rails have been doing allright. The shippers are starting to turn around and then beaten down name like ups.

It turned last quarter. I still think it needs another quarter to go. It's in a two year downtrend right. But it made a higher low. We kept above key moving averages. It's in that turnaround phase. I'm watching it closely.

CHRIS VERSACE

So on that we have one position in the portfolio called Eaton Corp. Or perhaps you heard of it.

JAY WOODS

Yeah. Eaton. Yeah. Yeah.

CHRIS VERSACE

Yep. Great. Great company really benefiting from the data center build out their vehicle business and their e-mobility business. We're a little down in the September quarter. No real surprise. Yeah, right. When we think about e-mobility and the, slowing production levels that we've been hearing about for EVs as the, as the tax subsidy has gone away. But on the vehicle side, we're in November, which means that the section 232 tariffs should be a little more friendly.

JAY WOODS

Yes.

CHRIS VERSACE

That leads me to thinking with your comment about transports that you know, better days are ahead. Yeah. Perhaps in the trucking sector.

JAY WOODS

Yeah. And it's always in December. Do you remember. And do you ever get a car with a bow on it for Christmas. You.

CHRIS VERSACE

No no no. Yeah. Me neither. No.

JAY WOODS

Maybe one day.

CHRIS VERSACE

So correct me if I'm right though. If I'm wrong. Sorry. Yeah.

JAY WOODS

I'll correct me if you're wrong.

CHRIS VERSACE

But please do. Please do. Transports move higher. Good sign for the overall market.

JAY WOODS

It's a great time for the overall market. It's the one thing that old school people that doubt the ears of the world. And it's a different world. The things that make and the things that take the industrials have been doing well. We've seen the Dow Jones Industrial Average make new highs. The transports have been lagging. But what are they doing.

They're basing and it looks like they can break out and possibly join the party and confirm this secular bull market we've been in for roughly three years. But, I don't put my hat on.

No, we need Dow theory to confirm things. No, technology is leading. Technology is the leadership. That's what you look. So there there is a new Dow theory out there.

But the old school people that, you know, make us learn the Dow theory and teach it and I teach it in my class. It's still the things that making the things that take. But there's a new angle to it. And, the sectors that need to lead are communications. Google, Meta is discretionary. Tesla, Amazon and then it's technology Nvidia, Apple, Microsoft.

And those are the sectors that have been doing well.

Discretionary has been lagging. I think we are seeing a breakout in now thanks to Amazon. If Tesla can resolve to the upside it's had a five year base. It can really break out. Tesla is one to watch in 2026.

CHRIS VERSACE

So with your bear and sorry bullish stance yeah longer term.

We're looking at some now targets start to emerge for the S&P 500. Yeah lofty 7750 I think I think someone was out with it earlier this week. If we don't see EPS numbers come higher in 2025 really 2026 now. Yeah. That means the multiple gets really big. And I know what you said earlier about multiples, but you know, from your perspective, just when you see numbers like that, you get a little nervous.

Are they overly aggressive?

JAY WOODS

You're in targets are fun and I have mine. I am watching 6900 very closely because that's when I said we would end up this year. I have not come up with my year in target, but when you say 77, 50, all right, that's 12%. That's a little above an average year after a tremendous three year run rate, you know, boring.

We we don't see anything crazy happen into the end of 2025. I still think we finish higher, but I don't know if the momentum will be there to have another strong double digit rally on top of this.

But I don't think will derail the rally there. There are a lot of factors we're looking into going into the second year of the presidential term, those midterms next year, a year from now, will be very interesting tariff resolution.

It seems like we're getting there. But the Supreme Court ruling, they're meeting literally today,

November 5th, when we take this to discuss whether or not the tariffs are legal. Now, I studied this. I'm not a lawyer, but I play one on TV. They're not supposed to resolve until early next late spring, early next summer. June. I don't know if there will be a leak, but what every CEO is watching, every market participant should be listening for is if these tariffs are not deemed legal,then we have a new problem.

CHRIS VERSACE

Yes.

JAY WOODS

Right. We have to pay them back.

CHRIS VERSACE

And we're. And where does where does that come from. How does it happen. Yeah I don't. And to consumers get a bite of this. Yeah.

JAY WOODS

This is new territory for me I don't have a playbook on this. Yeah I don't even but I do know it will cause a whole new wave of uncertainty. And one thing we learned this year is the market doesn't like uncertainty. When President Trump went out on Liberation Day, the thought was we were going to have 15% across the board with maybe a few wonky countries with different numbers.

And then he held up that big, beautiful chart. Was it a big.

CHRIS VERSACE

Beautiful I think he said it was.

JAY WOODS

Yeah. Okay. Then if he said it then it has to be true. I just ask my mom, but, I take out when we edit that out, I digress. What happened was we have a new wave of uncertainty, and when that hit the market, we sold off dramatically. And then once we walked it back, yes, the taco trade was born.

We have slowly progressed. We had that V-shape recovery. And now when we hear tariffs and we hear we see tweets, we don't take them very seriously. It's like the boy that cried wolf, we're backing down and we're not scared by it. But if the Supreme Court dictates the narrative and changes it, we have to go back to the well again and see what the administration does to try to circumvent that decision.

If it is negative or if it's positive, maybe it's business as usual and we rally. But CEOs watching this, they their earnings depend on the tariffs and how they navigate those.

CHRIS VERSACE

And if there's.

JAY WOODS