U.S. markets close in 4 hours 9 minutes
  • S&P 500

    4,564.15
    +51.11 (+1.13%)
     
  • Dow 30

    34,595.20
    +573.16 (+1.68%)
     
  • Nasdaq

    15,302.94
    +48.88 (+0.32%)
     
  • Russell 2000

    2,181.87
    +34.45 (+1.60%)
     
  • Crude Oil

    66.57
    +1.00 (+1.53%)
     
  • Gold

    1,766.90
    -17.40 (-0.98%)
     
  • Silver

    22.38
    +0.04 (+0.16%)
     
  • EUR/USD

    1.1317
    -0.0005 (-0.05%)
     
  • 10-Yr Bond

    1.4390
    +0.0050 (+0.35%)
     
  • GBP/USD

    1.3311
    +0.0033 (+0.25%)
     
  • USD/JPY

    113.0540
    +0.2740 (+0.24%)
     
  • BTC-USD

    56,231.46
    -2,425.05 (-4.13%)
     
  • CMC Crypto 200

    1,428.54
    -10.34 (-0.72%)
     
  • FTSE 100

    7,129.21
    -39.47 (-0.55%)
     
  • Nikkei 225

    27,753.37
    -182.25 (-0.65%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Market Recap: Tuesday, September 21

In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Stocks fluctuated between gains and small losses on Tuesday. Lamar Villere, Villere & Co Portfolio Manager and Loreen Gilbert, WealthWise Financial CEO joined Yahoo Finance Live to discuss.

Video Transcript

- Just about two minutes to go here until the closing bell. You're looking at a mixed picture, actually, the Dow barely in negative territory. S&P and NASDAQ holding on to gains. We have Lamar Villerie, Villerie & Company portfolio manager joining us, and Loreen Gilbert, CEO of WealthWise Financial. Loreen, let's start with you, because certainly, we saw a massive sell-off yesterday. A lot of that had to do with the potential risk coming out of China. How are you looking at today's moves and some of the, I guess, more muted reaction that we're seeing in the market today?

LOREEN GILBERT: Yeah, so we saw a violent reaction yesterday to the news about Evergrande and Evergrande being never grand at this moment. And I think that the market settled down today. But I don't think the worst is over. I think there will be more volatility in the coming weeks as we hear more. Let's not forget that the property market represents 20% of Chinese GDP growth, so that is significant. So I think the ramifications will be significant in China, and the big question is, how much contagion will there be around the globe?

- Lamar, really quick, are you worried about what happened with China, or is it more about a Chinese economic slowdown?

LAMAR VILLERIE: Yeah, I think even a slowing rate of growth. So I still think we're looking at China as a growing market. Obviously, there's some risks with the amount of debt that Evergrande is facing. But we think it's not going to be a global slowdown by any stretch.

- That certainly looks to be what the broader market thinks today. Again, you're looking at some muted reaction, the Dow off just around 25 points. There's some selling here into the close. S&P is flat, the NASDAQ holding on to gains up just around 3/10 of a percent. In terms of the sector action that we're looking at today, energy is the outperformer. That was the sector that was hardest hit yesterday, energy up just around 1%, plus we're seeing gains in health care and financials.

[BELL RINGING]

[CHEERING]

- All right, we got a closing bell, and let's see where we are going to finally settle after a day of ups and downs, but nothing like what we saw yesterday coming out of China. And of course, the concern over the debt ceiling.

The Dow is going to be off today about 48 points. The S&P 500, it's going to be down almost four points. And the NASDAQ's going to be up. NASDAQ will close up 32 points. Some of the Dow laggards-- once again, Walt Disney, Dow, and 3M. But some of the gainers on the Dow today, just to let you know, American Express, Home Depot, McDonalds, Nike, Johnson & Johnson. We had the big interview with [INAUDIBLE] and Johnson & Johnson folk, about their vaccine and the second shot efficacy earlier in the hour.

But let's get back to the panel to talk about the things that are driving these markets. And I want to go back to you, Loreen, because we were just talking about the Chinese effect. But more important, forget the Evergrande and whether there's contagion or not. This issue of the Chinese economy slowing down. We've not decoupled in any way from China. We're still very much "Chimerica," as they say. Are you worried that a slowdown there, we would catch a cold?

LOREEN GILBERT: Well, the reality is we're in a global economy. All of us are in a global economy. So what happens in China does affect the rest of the globe to some extent. There is this inner working of their banking system, and their debt, et cetera. So there are things to consider.

However, China was ahead of us in the recovery. They're ahead of us now as they slow down. But it does not mean that the rest of the globe is going to go into a recession. I do think it's a bump in the road, and I do think that there will be effects that are felt and are widespread to some extent, but I don't think it derails our own recovery to the point of a recession. I think it's a bump in the road that we then see through.

- Lamar, what about some of these beaten-down Chinese stocks? We've seen a little bit of a bounce back today. Certainly, this sector or many of these Chinese names that trade here in the US overall have taken a pretty severe beating over the last couple of weeks. Are you seeing any investment opportunity there, or just still too early at this point?

LAMAR VILLERIE: Yeah, we're not really focused on Chinese markets. We're really more of a US investor. But even if you look at US stocks, a lot of the large caps are really multinationals that have a significant or even majority exposure to China. So I think there is some more risk there, but in the US side, US stocks, particularly on the smaller-- the mid-cap side, you're a little more insulated from some of these issues.

- Lamar, I want to follow up on that, because you've given us some of the picks, at least stocks that you hold and that you are interested in-- Open Lending-- and it's not necessarily, are they actual lender, or are they doing some of the background work for banks and other lenders to lend to us when we want an auto loan?

LAMAR VILLERIE: Yeah, so Open Lending really serves the near prime market. So there's the prime market, obviously, that's well served, and then there's the subprime market, and there's a huge void in the middle, which is exactly where Open Lending participates. This is about a quarter-trillion-dollar-a-year opportunity. Open Lending is not an actual lender. They're just sitting between the lenders and the OEMs, helping basically additional car sales that might not have happened otherwise. So they're not taking any balance sheet risk. We think it's a really interesting growth story.

- Loreen, where are you putting money to work? Where are you seeing some opportunity in the market today?

LOREEN GILBERT: So we are taking this opportunity of a pullback in the equity markets, looking that we're in that mid cycle of the expansion, and in that period, we're looking at companies like Pinterest in communication services, and companies like Lennar. Even with some of the housing issues and supply chain issues, we think that valuations are favorable, and with continued building going on, that will continue and that will improve as the supply chain issues also improve.

- Loreen, we've heard different people come on the program, talk about the fact that among the S&P 500, you've got some stocks which are off 5% from their peak with the S&P 500, small cap stocks. You got many-- almost half-- which are well off their peak of the last 52 weeks. Are you targeting any specific stocks within those sectors, or within those metrics, or are you looking more deeply at fundamentals?

LOREEN GILBERT: Well, an area that continues to be resilient, certainly, is technology. And I think for investors, as we see pullbacks in the market, if they're-- that also tends to be somewhat volatile, a retail investor that might be in and out of certain stocks. But if an investor has been eyeing some of those stocks, certainly we would say a 3% pullback or more in some of those stocks could be a buying opportunity, because as we said, we believe that this bull market is going to continue, that it is a bump in the road, and we expect more of a year-end rally after some more capitulation.

- Lamar, how are you looking at the latest coming out of DC? We were talking about the fact that we're approaching the debt ceiling right now. There's also lots of uncertainty about what's exactly going to happen with that reconciliation bill, whether or not it's going to be $3.5 trillion. How is the market looking at that?

LAMAR VILLERIE: I think generally, the market's looking at the overall picture out of DC, and it looks like it's going to be leading to a massive increase in infrastructure, a massive increase in spending, which, at least for the near and mid-term, is a positive. There's going to be a lot of money sloshing around the system. One of our stocks that we like right in here is Freeport-McMoRan, and we think there's going to be a huge infrastructure spend on the energy sector. So a huge copper spend, which is going to support the copper market.

Also, we think electric vehicles are very popular, both with consumers as well as with regulators. There's a huge amount of-- there's 180 pounds of copper go into an electric vehicle, as compared to about 50 pounds go into a traditional vehicle, so we think there are opportunities that are really going to be boosted by some of the spending [INAUDIBLE] see.

- When you talk about those opportunities, Lamar, a lot of people will pay attention to-- I hate the expression, but the dot plot tomorrow with the Fed. Should they just take it with a grain of salt and dive deeper into, for instance, the price of Dr. Copper will tell you more about what copper futures are telling you than what the dot plot's going to tell you.

LAMAR VILLERIE: Yeah. I think-- we look at the Fed. You can't not look at the Fed. But at the end of the day, the gradual picture is pretty clear. I think the Fed is going to slow down its spending. Inflation is real, whether they come out and say it or whether they just quietly know it and call it transitory. There is going to be-- we're not going to see as much Fed buying. So I think we're ready for that, I think the market's ready for that. So I think barring a massive change, we think your time's better picking individual stocks.

- Loreen, what do you think? Do you agree?

LAMAR VILLERIE: Yeah, a couple points on the whole infrastructure package. I would agree with Lamar. I think that EV is an interesting play, and what's notable in the current version is that it would benefit US companies, or where there's manufacturing in the United States. So that limits where some of that EV money would be going, so that's interesting. And then as far as the Fed is concerned. I think what we're going to hear tomorrow is the talking about tapering, talking also about interest rate and getting a better picture. We know it's far out still, and now we're going to get a view into 2024, but are we looking at 2022, or are we looking at 2023? So we'll be listening carefully to the talk about interest rates and what they see, as far as when we'll see lift off.

- Loreen Gilbert, CEO of WealthWise Financial. Thanks to you, and also our thanks to Lamar Villerie, Villerie & Co portfolio manager.