Market Pulse: Wall Street Pros Lean Bearish — But Here's What They're Still Buying!

Hey everyone, it is Julie here with TipRanks. Every week The Street Pro is surveying their professional contributors to get their sentiment on what is happening in the market right now. We're looking at what they're buying, what they're avoiding, and where they see the risk building. So today I am joined by Jason Meschnick, the CEO of The Street Pro, who's running this weekly sentiment survey, and we're going to dive into some of the results. Jason, thank you so much for joining me today. >> Thanks for having me, Julie. It's been a while. Glad to be back. >> Yeah, glad to have you back. Uh so we're going to go into this week's results. We're going to kind of rapid-fire through some of these questions here. So we're going to get right into it, and I want to start off with a simple one. Over the next two to four weeks, are the bulls or bears winning the S&P 500? >> So as has been the case since the day we started just a few weeks ago, uh sentiment leans bearish. We've got uh if we were to look at the breakdown, we've got two bulls out there. We've got um three bears, one who is very bearish, so we have four in the bear camp, and then two are neutral. For now, yeah, we're leaning bearish. >> All right, and is the team putting their money where their mouths are, or how are they positioned in the markets right now? >> They are. They are putting their money exactly where their mouths are. Um the one trader who is very bearish is also net short. That's how bearish she is. Um the others, yeah, you know, that the bulls are net long, and and and the bears are reducing risk. So it's really just following along along their uh bullish bearish lines. >> Absolutely. Now, the next one surprised me a bit when you asked about the overall market risk, because some of the bulls were even a bit nervous. So when they were weighing in on the market risk, what did that look like, and what did that tell you? >> Yeah, so that's a great question. Um so what So first of all, when we when we talk about where they are right now, we had no one who said that the market is not risky. There were two who were neutral, uh but even one of our bulls turned and said, "Yeah, risky." So what that tells me right now is that um then I've been I've been thinking of for a while. I've I've been a fan of passive investing, but I'm going to say right now I think passive investing is broken and I think in a lot of ways it's broken the market. Um, the reason is with market cap weighting, which is how the S&P 500 and most of our major indexes are constructed, what that means is that you end up with concentrated positions going into the larger companies. And as money flows into the market, well, more and more money flows into those companies first, into the into their stocks, not necessarily into the company. And and that just leads to um, to really concentrated risk. And I think the good news here is that if I can plug The Street Pro for a second, I think I think this is one of the benefits of The Street Pro is that um, and Tim Brakes as well, is that we are really benefiting people who are doing the research, putting in the time, and and who are in the end, you know, stock pickers, and not just asset allocators. And so I think I think this is actually bodes well for for um, our subscribers uh, on both sides here. Um, is that, you know, concentrated risk is just going to favor people who are interested in looking for great companies at great prices. >> That is fair. And when we're looking at the risk trajectory, obviously they feel risk is high right now, but is it getting better or worse from here on out? >> It's getting worse. Two of them see a decline in risk, but the other six, well, there's one neutral. There's always one fence sitter out there, but six of them believe that uh, risk is going to increase. >> All right, so that was our overall market sentiment. Now we're going to dive into some more stock specific picks here. I mean, hard to not talk about SpaceX this week after their massive debut last week. They're now trading at over a two trillion dollar market cap, and your team had a pretty clear view on that. So how did they weigh in on the SpaceX stock? >> So they do not believe in the hype, most of them, and they believe that SpaceX is horribly overvalued. Um, I I gave them a bunch of levels, and uh, two of them said that 1.75 trillion was a reasonable valuation for SpaceX. The rest of them said 1 trillion was a reasonable value valuation for SpaceX. And I think, you know, when we go back and we talk about, you know, why is SpaceX so um so valuable right now? A lot of it's based on hype and a lot of it's driven by that manufacturer scarcity for for the number of shares that are out there. So, our team really feels that this thing um is not going to have legs to move higher. >> All right, we'll keep an eye on that. And then stocks to watch this week, uh which companies does the team have on their radar as potential market movers? >> Well, obviously SpaceX. Everyone's going to be watching and talking about SpaceX. We can't avoid that one. Uh but the other two that the team mentioned were Accenture and Apple. >> What the stocks are that they're most bullish on. So, what are some of them top picks? >> All right. So, um I'm going to start off with Marvell. Um this is This one is a big holding in our portfolio. Uh Chris Versace mentioned it. Um this one we've held for more than a year now. This stock's up 350%. Chris uh believes it can move higher. I will caveat that by saying the stock is above the the consensus price target on TipRanks. It's also above Chris's current price target. However, I just pinged him before this meeting and he said it's under review. He still is really bullish and we still have a position in the portfolio. So, Chris is still Even though he hasn't raised his price target, um he is still betting on this one. Uh couple of the others I I love this one. Um I love the rationale as well. Uh La-Z-Boy. Um La-Z-Boy announced earnings yesterday. So, you know, they picked it last week. Um they had a really nice pop on earnings. Um the reason why they liked it has no debt, no need for data center in space, and it's it's a stock you can really get comfy with. >> Right. That should be the new marketing line for La-Z-Boy there. That's perfect. >> [laughter] >> Exactly. >> And on the flip side of things, which stocks are the team running away from? What are they feeling bearish on? >> Okay, so they were afraid to give me specific stock names, but they gave me two we'll call them themes. One is housing. They're they're all nervous about housing and the other one they're nervous about I think we've already touched on a little bit today, but those mag seven names, right? That big concentration in the indexes. They they really don't see opportunity there. You know, we talked about Tesla in the past. Tesla's trading where it was in 2021. So even though you've had great trading opportunities and the bulls still love that stock, but it's it hasn't really moved in in years. >> And then on the economic side of things, obviously we have a Federal Reserve meeting later today, which might play into this, but what economic data are you and the team watching closely this week? >> So obviously they they did mention watching the Fed. So we've got that. Interest rates go along with that. That's one of the key things that they're watching. They're always watching jobs numbers, which again feed into the Fed data. But then yeah, the big one was inflation numbers. >> For sure. And then last one here for the technically minded investors watching, what are some indicators that they should have on their screens right now? >> So they threw out a few, but the one I'm going to pick is just to keep it simple is the MACD. Specifically the MACD on the S&P 500, which has which rolled over a few weeks ago. It's kind of trying to make a little comeback right now as the market rolls higher, but you know, it's still kind of in that danger zone where where it's rolled over and it's below zero. And so it's something to to watch out for. >> All right. So to sum it all up, I mean the headlines were things are leaning a bit bearish, but you did make a point in the article in the survey that six out of nine doesn't mean that everybody is running for the exits there. So what's the key takeaway for investors watching this week? >> Yeah, I think it comes down to stock picking, right? I think I think you know, like we were talking about earlier, I passive investing has been the best way for most investors to manage their portfolios. But lately what we're seeing is that it's broken. There's There's so much hype and so much money flowing into the mega cap stocks and and those have been working. Um but, a lot of them are becoming way, way, way overvalued now. Um and so so there's there's caution there and I think our team is looking and saying there are better opportunities in the market and even if they're not being realized necessarily just yet, they will be uh for for patient investors. And you know, to give a plug to The Street Pro again, I think that really is one of the big values that we offer for people is that they don't just have to be stuck with uh with the passive investing, right? They can actually go and and figure out how to generate alpha in their portfolios. >> All right. Well, we appreciate the insights. I look forward to seeing how this survey comes in week after week. For all of our viewers, the survey is live over on The Street Pro right now, so you can head on over there if you want to read through it in more detail. And Jason, I'll look forward to chatting with you next time. >> Thanks a lot, Julie. Appreciate it.