Should investors be cautious or optimistic of market trends?
Consumer discretionary stocks (XLY) maintain year-to-date gains of over 20%. However, amid challenges stemming from rising oil prices and housing market pressures, investors are expressing caution for the upcoming months. "The market is at a super compelling moment," Dylan Ratigan, host of TastyTrade's Truth or Skepticism, says. "It's like a tight rubber band with equal pressure at both ends."
Yahoo Finance Live's Seana Smith and Brad Smith sit down with Ratigan to explore whether investors should approach the current market condition with optimism or caution.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
SEANA SMITH: All right. Well, with headwinds threatening to rain on the parade for consumer discretionary stocks up more than 20% so far since the start of the year, what can investors expect from the broader market? Is there reason to be optimistic, or is cautious pessimism the winning play? Here to discuss that and more, I want to bring in Dylan Ratigan. He's a host of "Truth or Skepticism" on Tastytrade. Dylan, it's good to see you. So what do you think investors should be focused on here? Certainly it has been remarkable how resilient the market has proven to be given the fact that we have so many challenges and so many headwinds ahead.
Yet, it does seem that more and more strategists are warning about what could be a rough couple of months here on out.
DYLAN RATIGAN: Well, the market is sort of a compelling moment. It's like a rubber-- it's like a tight rubber band with equal pressure at both ends because you have this incredibly well documented and very credible list of headwinds. You guys just did a great job of summarizing it, you throw oil prices in, on and on, housing, residential housing. And then on the other side, you literally have a quantum advancement in the tools of productivity. And so you have this massive positive force that's once in a, you know, millennia generation at the highest rate of change ever.
Not just AI, not just EV, not just, you know, one specific component, payments, currency movement, all the-- but the integrated consequence of all of those things, which is a massive boost and sure positive force. Just as sure as higher rates, higher oil, higher housing, et cetera, and so I think the reason you see the market exactly where it is because, as you so perfectly articulated, you've had a substantial advancement in price levels over the first half of this year, first-- you know, up till, let's say, early August.
And then a war has broken out and the Fed got in and changed things a little bit, which makes it more interesting, but more tense. Volatility goes up. Market levels didn't change that much other than the immediate adjustment lower after the Fed decision and the immediate adjustment higher and volatility. So I'll call it-- I call it a Titanic battle on a razor's edge. And the truth is, I personally am short for better or worse and I have no standing as a market-- anything other than-- but I'm saying if you want insight into my sentiment, and I say in terms of perform, not here advocating a position. I don't have-- I wouldn't.
But personally, I believe price levels will go lower and it's working today. But personally, I believe in the optimistic tale. So there's some hypocrisy for you.
BRAD SMITH: So, Dylan, all these things considered, who do you think wins that battle, as you were describing a moment ago?
DYLAN RATIGAN: Optimists always win. Optimists always win.
