Why the stock market is in a 'White Lotus' moment

It may seem like smooth sailing for the stock market, but hidden pressures could soon shake the calm.

Transcript

00:00What are the implications for the stock market, which is at record highs right now,

00:03if inflation is, in fact, going to be worse than we expect?

00:07Yeah, and I always use the analogy lately that it's like a White Lotus financial market

00:11in the sense that everything is calm at the surface, very peaceful.

00:15And if you think about the show, The White Lotus, you have these resorts with beauty and sunsets and cocktails.

00:21Everything is really nice and mellow on top.

00:23Underneath, all this potential chaos occurs in the show.

00:26Similarly, right now, we have high valuations, high expectations, significant market concentration.

00:33We have back seven earnings and revenue slowing down a bit.

00:36That's chaos growing.

00:37My perspective is high valuations, pricing and everything being perfect.

00:41This is a bump and uncertainty that could create a big piece of market volatility.

00:47How is this chaos brewing underneath going to play out in terms of market action?

00:52So I think we'll have a sideways moving market for some time.

00:55Sideways, lots of volatility, just because lots of conflicting data.

00:59But I do think, you know, if you think about the show, The White Lotus, it's a very dark comedy.

01:03I'm not going to be dark like the show.

01:05I'm going to be very optimistic.

01:06I do think by year end, stocks will be higher at year end than they are right now

01:09because we have tariff revenues looking like $250 billion this year.

01:14That gets recycled back into the economy.

01:16You also have in CBO said $2.5 trillion, and they are a nonpartisan group, $2.5 trillion in tariff revenues over the next 10 years.

01:24Also, tariff negotiations, even the news that came out today, suggests that we'll get some better terms for tariffs.

01:30That's good news as it opens up other economies.

01:33And $26 trillion of cash on money markets and savings accounts on the sideline looking for better valuations.

01:41All this taken together says, we're big debt buyers.

01:44Any pullback, any sell-off, any potential 5% pullback, we're buying like crazy.