Market Pulse: Street Pro's Risk Fears Unanimous, But Apple Bucks the Trend

Hey everyone, it is Julie here with TipRanks and I am once again joined with Jason Mesnick, the CEO of The Street Pro. Jason, how are we doing today? >> We're doing great. It's a beautiful summer day here in Colorado. What could be bad? >> Yeah, no complaints. Now today we are diving into the latest of The Street Pro's sentiment survey and it did come in mixed this week leaning a bit bearish. And then we're also going to dive into Apple who just hit an all-time high the same week that they sued OpenAI for corporate espionage. So we're going to unpack both. Starting off with the survey, walk me through the top line. We had a few bearish, a few neutral, a couple bullish on the S&P 500 over the next two to four weeks. So how does that compare to the last survey? Where are we looking at now? >> So we've been I'm going to say we've been pretty mixed all along. However, a couple weeks ago last time we talked, the survey was the the raw score that I calculate was a plus one. It fell to a minus one. Um you know, Doug Kass has has been kind of our our biggest bear. He moved a couple weeks ago from being very bearish um to just just regular bearish. So he even this morning covered some of his shorts. Um so, you know, I'd say overall, you know, the score even though it leans like slightly bearish, a little bit less bullish than it was before, um it's it's still pretty much a mixed score. Uh you know, our team they're It's one of the great things about working with them is that they're pretty diverse in their opinions and their and their thoughts is that um you know, really you can have uh lots of lots of different opinions there and it just I think it really helps investors to understand a little bit more about uh both sides of the market, the bullish case and the bearish case. >> Absolutely. And positioning also came in mixed. Uh and your one remaining bear was actually net short. So what does that say when the bears aren't just cautious but are actively positioning against the market? >> Yeah, so again, you know, our our biggest bear is Doug Kass and and he shows up as positioning net short. He's the only one really and part of that is the fact that he runs a hedge fund, right? So, he's constantly got uh long positions and short positions. Um someone like Chris Versace will never be net short. Um you know, the others will give you short trading ideas, but Doug Kass is actively making long and short trades. Right now, he is net short as I mentioned a second ago. He is a little bit less net short um as of right now than he was earlier in the day, but you know, when it comes to comes out to it, Doug Kass is he's putting his money where his mouth is and and I just I love that about it. Um so, you know, he's tactically in there shorting overvalued securities um and as well as uh volatile stocks and ETFs uh including the big tech names really where where he's going right now. >> And then the risk score, I think was the most distinct as nobody sees low risk in the market right now. What is driving that consensus? >> Yeah, so um I would say yeah, the good news is even though nobody sees uh sees low risk, um three people are neutral on risk. So, we can we can sort of put them in the positive camp here. But yeah, generally, you know, people are worried. I'd say that if we were to um you know, identify exactly why the worry is really around geopolitics, right? We've got war going on. There's the the the world is seems to be coming less and less stable every day. Um valuations are very high in the market. Um we have inflation worries, although yesterday's number um certainly helped there. But you know, the other one is we have a low VIX right now. And and what's the one thing that happens what what do we know when we have a low VIX is that well, the next move in the VIX is probably a higher VIX. So, uh we don't know when that's going to happen, but we do know that um you know, that could be the next move. Uh and so so risk uh everyone is just worried about risk. >> And another interesting stat was that none of the bulls are actually adding risk and you actually did pick up another broad seller on the survey. So, why would the bulls be sitting on their hands instead of adding exposure right now? >> Yeah, so you know, our our team they they really they look to add selectively on a dip. Um so, that's the really you know, I won't say they're part of the buy the dip mentality cuz I think they're smarter than that. They're not just looking for a dip, they're looking they're looking for things that are tactically make sense and I think a great example is that, you know, IBM is down huge over the last couple of days and Sarge actually wrote an article that uh yesterday while the whole world was selling um he decided that this was actually a good place to start his IBM holdings. If you look at IBM also, uh this stock dropped down to an area of support. So, I I thought that was interesting as I was taking a look at it this morning. So, yeah, so it really, you know, they're they're always looking tactically uh even if they may be bullish and they may not be buying, uh they're looking for tactically the right time to take action. >> Perfect. And on the risk question, geopolitics came up as one risk, but as well as rates and oil as uh top risks for one contributor. How seriously is the desk taking that right now? >> You know, I think they're looking at everything uh so closely and I think that's why people are saying that risk is a little bit high. You know, when we talk about geopolitics, that influences everything right now, uh right? Um you know, so the geopolitical situation impacts oil prices as we've seen. Um oil prices impact inflation. Uh inflation has an impact on rates. Um I thought it was interesting Peter Chair, uh he wrote an article uh I believe it was yesterday or the day before. It titled it as uh he has seven inflection points that he's talking about that he feels that people really need to watch. I'm just going to read them off quickly. Um we're all familiar with all of them, but I think it's worth just having them in in one place. Um the Iran war, obviously, uh AI spending, you know, and and the question there is is AI spending beginning to slow down? Right, and so there could be some worries in in that sector of the economy. We're in earning season right now. We've seen the banks report this week. Peter says that normally 70% of companies beat earnings. And so he's paying closer attention to the cycle. He wants to really see what do those numbers look like. Russia and Ukraine, right? We're seeing some some changes. We're seeing the Trump administration kind of softening a little bit on their opinion or their willingness to help Ukraine. So so how does that impact things? Um Getting getting a little further down the geopolitical spectrum, you know, we've got the the Japanese yen. Peter looks at that. He he talks about the yen carry trade and how in the past when the yen has rallied, it's actually been bad for for US stock market. And then gets into talking about crypto and the dot cos or the digital asset treasury companies, like like MSTR or also known as strategy. Um and then finally South Korean stocks and the and the recent IPOs. So those are some of the things that he feels are really important to watch right now when we're thinking about risk and and about the the macro situation in the world. >> They mentioned a little bit about AI potentially slowing down on spending and that AI names are also potentially priced for perfection. Do you guys share that concern across the the street pro there? >> Um yeah, absolutely. Um The AI name names are priced for perfection and I think that is something that everyone should be worried about. I think I think in in many ways we're starting to look a little bit like 1999. You know, the worry is is it 1999 or 1997? Right but you know, some of the things that we have to consider on the risk side are well, first of all, you know, open AI which was one of the most anticipated IPOs of 2026 is now been delayed until 2027, probably. I mean, could happen this year, but looking like 2027. Um And you know, frankly, you don't talk about delaying your hot IPO when times are good. You talk about delaying your hot IPO when it's some of the the shine is coming off of it. There's also a ton of fighting right now in the industry, right? You've got obviously Apple and and open AI right now. You've got uh Elon fighting against uh Sam Altman. Um you know, they're they're kind of acting like children. And these are things that you just don't do when there's so much money sloshing around. It's almost like they're all fighting with each other because the pie is not as big as they thought it was. And so they're all fighting for their own slice of it. And then you know, finally, when we look at what's actually happening in the in the stock market, well, we had a big IPO in SpaceX and the stock went from, you know, it opened around what was it, 150, traded up to 225 within a few days. Well, today it's trading around 130. So, can we call it a broken IPO yet? I don't know but I thought that the stock was way, way overvalued when it IPO'd. It now has a now has a market cap around 1.8 trillion. So, we're getting closer to a better valuation. I'll I'll be I'll be more interested when it's I think below $100 a share. But you know, I think that these things are are just signs that there's there's worry out there and that investors are starting to pull in you know, reduce some of their risk in their portfolio. >> And now I want to touch on earnings as well because banks this week kicked off earning season and mostly beat. So, what does that tell you heading into the rest of the season? >> Well, I I think it's a good sign, right? So, while not all the banks did well, you know, Wells Wells Fargo was down. I think I think City was the other one. You know, JP Morgan and a lot of the others did really well. And their results were strong across the board. Um so that means it wasn't just the trading team uh that was doing well. Uh it means that the the bank was executing well across the board and and not only were they executing well, well the people who they're loaning money to were doing well enough to repay those loans and and and get engaged in new deals and and everything. So um so I think I think that's good. It means that the banks are willing to take risk and that they're being uh repaid for that risk. Um so that tends to be something that's good for the economy. And I I think hopefully that is a good sign for the rest of earning season. >> Fingers crossed. Now we're going to dive >> We're going to dive into Apple now. They showed up as a bullish pick this round specifically because they shook off the so-called bad news last week. Can you walk us through what that bad news was and why it didn't seem to stick? >> Yeah, so um so the big news that had taken Apple down from I can't remember the numbers off the top of my head, but it was at you know, all-time highs and then and then it it dropped. And and that was because people worried about increasing component costs. Um you know, throw in the um throw in the the lawsuit against OpenAI having allegedly stolen trade secrets and you know, there's just some some some issues going on there. But why didn't that decline stick? Well, I think the biggest thing is that Apple has pricing power. I mean, you know, I've I'm recording this on an on an Apple computer and I got my Apple phone sitting right next to me, part of the Apple ecosystem. I'm going to buy an Apple phone this year and Apple knows that they can probably charge me whatever they want because these are frankly luxury goods. You don't need to have an Apple product, but people just like them. Um and not only does Apple have pricing power, but the entire industry is having the same issues that Apple is. So um so you know, for consumers, we're the ones that are going to have to bear the brunt of that and Apple will be able to, you know, hopefully well, hopefully for them, not so much for me and and the rest of the consumers, but um maintain their their uh their margins. >> And then last week we did see them hit, I think it was about $323 the same day that the Nasdaq had fallen 1 and 1/2%. And it was right as their OpenAI espionage lawsuit broke. So, why didn't the market seem too phased by that? >> Yeah, exactly. Um so, yeah, there's I think there's a couple things there. Uh first of all, um Ed Ponsi, one of our guys um he wrote a very bullish article, couple bullish articles about Apple. And uh one of the things that he says is that, you know, Tim Cook, as we all know, is stepping down. I think September 1st is the date. John Ternus is taking over. And one of the cool things about Tim Cook, I think one of the things that has made him a great CEO, is that he doesn't have a lot of ego. And and so, Ed believes that because he does not have a big ego, he is leaving some big surprises for Ternus to announce. Um and, you know, uh September tends to be the time when the new iPhone comes out and and other things. So, um so, Ed's sort of looking for September 1st or thereabouts as the big time that we'll see, you know, a date that we real should really should be optimistic around. Um but the other thing is I think it goes to showing Apple's dominance. Um right now, who are the bad guys? The AI companies are the bad guys. Apple, which, you know, we all have learned to love. It's a friendly logo. It's a product that we all, you know, spend all of our time on. Um we love Apple. And so, Apple is the good guys. The AI is the bad guys. And so, people I just don't think are are worried about it. I don't think this is something that's going to tarnish Apple's shiny reputation among its fans. >> All right. And then they also came out with a price target of $360 off of a cup and saucer pattern. So, what was the case for that? >> Yeah, so the cup and saucer pattern, um you know, so basically when we talk about technical analysis, when we talk about some of these price patterns, what we're looking for are magnitude. So, how big is the move, right? How many how many points was the the move that got us to the breakout point where we're at right now? So, a cup and saucer sort of looks like a cup and saucer. You know, it's it's sort of a sort of a little cup that has a a little, you know, thing dangling off of it. And and so, what we're looking at there is what is the the magnitude of the move? So, the that decline, the bottom, and then that rally. And so, that turns out to be, you know, we were at about um 315 was the high, fell down to about 275. So, that's around, you know, 40 points, give or take. Um so, Ed, he takes that uh 40-point move, uh the the magnitude, the size of that cup and saucer. He adds it to the breakout point of around 315. And so, you get a price of around, you know, 355, 360, somewhere in there. That's how he comes up with that. It's worth noting, too, that um when we look at TipRanks, the analyst consensus right now has a target price of 324. Um I think the the high analyst was around 400. And, you know, what do we know when we look at analyst ratings? Well, when their price target gets hit, it's not like they say, "Hey, it's time to sell." What they do is they reevaluate and they say, "Oh, hey, it's time to buy more. The stock is acting so well um that they think it's going to go higher." And um really the the last thing to throw out there, which Ed mentions in his column, is that um Apple's been doing really well, and it's actually showing real strong relative performance versus the S&P 500. So, this is a stock where money is flowing into it. And when that happens, that's usually a good sign. Um so, I think, you know, those those really encompass Ed's uh bullish case on on Apple right there. >> All right, Ed. Well, as always, Jason, I appreciate your insights. Thank you so much for joining me today. >> Thanks, Julie. It is great to be here, and I look forward to the next one. >> Absolutely. And for all of our viewers, if you wanted to see the sentiment survey for yourself or any of these articles we've referenced, you can head on over to this week in crypto below. Thank you so much for watching.