VIDEO: We're Prepared for Market Uncertainty After Trump WEF Address

In today’s Daily Rundown video, Chris Versace lays out what we’ll be interested in when President Trump delivers his address to the World Economic Forum on Thursday. 

We suspect that, depending on what is said about tariffs, trade, defense spending and other geopolitical hot topics, the president could inject a fresh round of uncertainty into the market. 

He shares how we’ll handle that as well as some insights from Samsung’s Unpacked event and quarterly results from LG Display LPL that are bullish for holdings in the Portfolio. 

Chris closes out the video by sharing his take on Elon Musk’s shade-throwing at the Stargate AI announcement, and why it’s overblown.  

Transcript

CHRIS VERSACE: Hey, folks. Chris Versace here. Thursday, January 22. Earnings season continues today. We'll have some comments coming up from what we saw, particularly from Alaska Airlines, American Airlines. But we've got no major economic data out today. We have no Fed speakers making the rounds. We're in that quiet period ahead of next week's policy meeting. But President Trump will deliver an address at the World Economic Forum today at 11:00 AM Eastern.

Now, we will be interested in what Trump presents to the business and political leaders at Davos, watching how he balances his America first agenda against alliances with the EU and other countries in attendance. Our thinking is that we could very well hear more on tariffs and build on some of the recent remarks that we heard about potential tariffs for Canada, Mexico, China, and even Russia. We'll also be listening for anything new on Russia, Ukraine, Israel, Palestine and other geopolitical hot topics.

We'll also be curious to see if the President fleshes out his agenda for energy and trade. So there's going to be a lot to listen for. But as important in my view, we'll be listening for the responses from those in attendance at Davos, as well as the potential ripple effects from what Trump has to say today when we get comments and guidance from companies as they report their December quarter earnings in the coming days and in the next few weeks.

This could very well interject-- excuse me-- inject a fresh round of uncertainty into the market. I mean, we know that Trump is very comfortable operating in the gray using that uncertainty to his advantage. But we also know that the market does not like uncertainty. And as we think about that, let's also contemplate that the S&P 500 hit a fresh intraday high yesterday. And while it's not overbought, if we do see that injection of uncertainty, could we see short-term minded folks look for reasons to take chips off the table?

Well, we certainly could. In terms of what we'll be doing, well, we'll be doing what we usually do when we see on the horizon a patch of uncertainty. We'll be cautious. But we will continue to follow the data. And as we've done in the past-- periods of uncertainty, they have brought about opportunities for the portfolio, so we'll continue to look out for any incremental ones, any new ones that we see, should this patch of uncertainty unfold.

So the big event for today is going to be Trump's remarks at Davos and the responses that we gather. But I also wanted to talk about a few other things with you. So first on that path, yesterday, Samsung announced several things at its Unpacked event. Probably one of the more interesting ones on the smartphone front was the Galaxy S25, where, much like we're seeing with Apple and others, Samsung is really leaning into AI.

I think this is just another data point that says the smartphone market is looking to leverage AI to foster an upgrade cycle. My thinking remains that as AI adoption across a variety of consumer focused devices, whether that's going to be smartphones, tablets, even PCs, we are going to see data usage simply soar. And it's another reason for us to remain on the path of rising carrier infrastructure spending as their network capacity tightens.

This is, of course, a reason for us to be positive on the shares of Marvell that we have in the portfolio. But it's also going to be a reason that we want to keep a close watch on the shares of Cisco that are currently in the bullpen. Samsung also announced another interesting technology, SmartThings that's going to introduce a blend of AI and home automation. Now, I'm kind of curious to see how this works in the real world, so to speak.

But if it does catch on-- I'm not saying that it will, but if it does, it probably adds to the prospects for the IoT market, something we're watching carefully for Qualcomm. But it's also another reason to think that we could see even greater use of data driving, yes, incremental spending on the network. So Samsung has some interesting things to watch. Certainly supportive for some of our positions. But there could be more to go. We'll have to continue to monitor that. Second, yesterday an alert with you.

We dug into the quarterly results from LG Display. And I have to say, what we saw was very positive, supportive for the portfolio's position in Universal Display. If you missed that alert, I would encourage you to read it. But there were really two key findings that I want to share with you. First, even in a slower growth smartphone market, which is expected to be up low to mid single digits this year-- that seems to be the consensus forecast-- the reality is that the adoption of organic light-emitting diode displays will proceed at a far faster pace.

That led LG Display to forecast its smartphone business being up about 20% year over year in 2025. Now, this stems from, yes, a wider array of models utilizing the display technology, but I suspect there's also going to be a factor in here for foldables. We've talked about that. So this keeps us rather bullish on that aspect of Universal's business. But the second data point is, I would argue, as important.

And that's the following, organic light-emitting diode adoption is proceeding in other markets, both connected device and in the automotive market. Now, you're going to say, Chris, you've been talking about this. And I have. But let's remember, it is nice to get this type of confirmation from one of the larger display manufacturers in the world. And with that in mind, the next big data point that we're going to want to pay attention to will be from Samsung.

Yes, that is the other major organic light-emitting diode display company. It also happens to be a very large customer for Universal Display. Samsung is going to report on July 31. So when we dig through that report, we're going to have a lot to go through, not just for the display business, but we'll be interested in what they have to say about memory, smartphones, the PC market, as well as watching their capital spending levels for 2025 as it relates to semi cap equipment.

I touched on that yesterday. So that will be a big report for us and another one that we'll want to pay close attention to. There is a third thing that I wanted to talk about. And that was really Elon Musk and his tweet that kind of threw some shade, if you will, on the Stargate project that was announced by President Trump earlier this week. Trump is saying, oh, they don't have the funding line up. And look, it is a lot of money, $100 billion eventually growing to $500 billion.

I don't think anybody expects all of the funding to be lined up out of the gate, but it will come together. My thinking is that, yes, there is an AI arms race. And that is important. But I also think that-- let's face it. This was a big announcement out of the gate for President Trump. And I suspect that the funding will come together. It's just going to be a matter of time. So I don't really view the pressure that we saw yesterday on Nvidia shares or Marvell shares as really anything to be concerned about.

Perhaps it's just simply some sour grapes for Musk for not being included, but we'll see. And then finally, before we close out today's video, if you missed yesterday's set of office hours in the forum, be sure to head on over there. And just review the back and forth that we had. Odds are there may be a question or two that we answered that was on your mind. And to the folks who participated in office hours yesterday, thanks for coming along. I really appreciate it.

You know that there's a number of things that we're doing with the portfolio. And I think office hours is one of the ones that really helps what we're doing, differentiate us from the crowd out there. So thank you so much for participating. And folks, I do look forward to entertaining and answering your questions every Wednesday 4:00 to 5:00 PM in the portfolio. So if you are a returning member, I'd love to have you.

If you are planning on joining us, we certainly welcome you and look forward to it. So that's today's video. We do have a lot more coming at you today, so please be sure to check your emails, your alerts. We want to make sure you're getting our latest thoughts. And as I like to say, if we make any moves with the portfolio, we want to make sure that you are right there with us. Thanks for watching.