Keith Fitz-Gerald of the Fitz-Gerald Group shares why he sees plenty of upside when it comes to A.I., tech, and energy, despite high borrowing costs.

Opening Bell

Apple’s June Developer Conference Could be an ‘iPhone Like Moment’ 

Take a deeper look at what is moving the market. I want to bring in the Fitzgerald Principal of the Fitzgerald Group. He is great to see you on chatter this morning and we are talking the final trading day of March, the final trading day of the first quarter. What do investors need to know? Well, it's very interesting. Everybody is saying that, oh my gosh, this guy is gonna fall. They're waiting for the other shoe to drop. But the reality of the situation is that the markets are, are, you know, despite it all rally mode, there's still a lot of money on the sidelines, Kirsten, there's still a lot of opportunity ahead. So the daily squiggles don't concern me. I tell individual investors take a deep breath, concentrate on the best and ignore the rest. Ok, good to know. Uh, concentrate on the best. Ignore the rest. Would that mean Keith that you, that you would be adding to the stock market in this scenario? Yes, very definitely because again, the greatest companies are going to be out there with margin protection, they're gonna be selling anyway. They've got CEO S who know exactly what they're doing so for the most part, if you've got a company, like for example, an Apple or a Microsoft or even an NVIDIA, which is pulling back. If you look at the bigger picture, then that's very much an opportunity, not a threat. How long do you think this rally has in it? Maybe another way to ask that is at what point are we in this economic cycle? Is this a several year cycle where you think the stock market can continue to gain? You know, my belief is, yes, I think we're emerging into what Pierre Dumont is, refers to as an age in abundance and what I would call the next era of investing markets move in long broad cycles. And we saw that with the introduction of power, the introduction of penicillin, the introduction of various technologies throughout history. This one is sharper and faster because it tech base, but there's still again, plenty of money that wants to go to work. So I think if the fed stays on the sidelines, if I mean, obviously there's some big caveats here, Russia and Ukraine doesn't worsen, then, in fact, we have what we need the horsepower to move ahead. Anything that you would not be buying in the stock market. Well, it's funny enough, you know, two of the great big stocks that are long time favorites, you know, Walgreens and Home Depot right now, those are the kinds of stocks that I'm going to stay away from because they're really iterations of something we've done in the past. In one case, it's home improvement. In the other case, it's drugs and pharmacies. You know, there are better models out there, there are better mouth traps. So those are kind of stocks. I'm going to steer clear of going to favor companies in the defense sector, the tech sector, the health care sector, all of which can benefit from technology and glowing. I read in lips this morning growing global demand. How's that? We got? We got that loud and clear, Keith, thank you so much. So we talked a little about a bit about A I, as you mentioned earlier. Certainly NVIDIA is the trade there. Invidia we know has been powering the stock market rally. I think it's fair to say roughly for about about the past 18 months or so. Certainly since the onset of chat GP T that is what are some other places in artificial intelligence or how would you suggest that investors consider getting exposure to A I beyond just in video? Well, that's a great question. The thing here to think about is think like the gold rush in 1849. You know, if everybody wants to go prospecting you sell shovels. So to me right now, it's the chip makers. It's the AM DS of the world, the videos of the world even arm is a proposition here. Everybody is gonna need those chips. What how they get to it, what software they use, which tools they have. It's tempting to go for the small unknown names. But really in this market, it's too early to do that. You want to go with those big names because everybody needs the chips regardless of what platform they're gonna be on. You know, we had seen Apple actually uh pull back some this year and I saw some of those tech names under performing of late, even though we had seen the NASDAQ certainly uh lead the gains in the stock market last year and still momentum overall in the NASDAQ, a broad uh tech investments, a broad tech index that we've seen this year. What's your take on Apple? Oh, my goodness. I think, and, you know, again, I this is a controversial opinion but I think the company is far more invested in A I than the public understands. I think the developer conference, there's a very high probability this June's developer conference is going to be an iphone like moment once the world realizes that if I'm correct, I think Apple is off to the races. So for me having this stuff pulled back right now is a great big discount. I'm I'm resisting the to be a Viking and all you can eat buffet. You know, we had talked about some of the geopolitical concerns. You had brought them up the wars that we see still happening, certainly between Russia and Ukraine and what's continuing in the Middle East as well. What does that mean for the energy market? Well, I think oil has a very high probability of reaching 100 bucks coming into the elections. You know, there are a lot of bad actors in the world who would like nothing more than to hurt the United States high oil prices, in fact, could do that. It's going to worsen the impact on the middle class on the lower class. It's going to divide economics even more decisively than it has so to date. But that doesn't mean from an investing standpoint, there's not opportunity. So this is the big oil majors, particularly if you find companies with clean balance sheets, we've got global footprints. Interesting. So NVIDIA Microsoft certainly has exposure to A I as well with its investment in chat GP T the owner of that does Microsoft look attractive to you at these levels very much. So, you know, I own most of the stocks we're talking about today personally, as well as my family and then our company recommends them because we think these are the players, we're still early game, you know, early das early innings, whatever you wanna call it with A I, that could be the greatest investing theme in human history. I'm just curious, uh in terms of your outlook for rate cuts because generally, I think that, you know, investors who watched the stock market for a long time, they associate low rates with higher stocks, potentially vice versa. At least what we saw in 2022. Do you expect three rate cuts from the fed as forecast this year? Well, I'm chuckling because I think the fed is been wrong from the very beginning. I think they got transitory wrong. They missed the crisis and formation. The idea that we're suddenly going to bow and kowtow to every word they've got now is, is ridiculous. So I don't pay the fed much attention except to the point where I look at that as a three rate cuts. How, when and why? Because I don't see it coming. I've maintained, I thought they were going to hike into this first quarter. They haven't gone to the sidelines yet. That concerns me. Interesting and inflation does still seem to be sticky, right? I mean, can the fed effectively get to 2% in the near term? You know, that's an interesting one as well because you know what, a lot of people don't realize everybody BAERs around about this 2% thing, but people don't realize that that actually is a completely made up number. It just came out of thin air in the late 19 eighties and suddenly the world central bankers adopted it. I think 3 to 5% may be the new normal as much as I hate that expression. But I think the fed is slow to the, to the table here. They don't understand that that's what's happening or if they do, they haven't made that public yet. All right, Keith Fitzgerald, principal of the Fitzgerald Group. Keith, it is good to see you. Thanks so much for joining.