Ghabour: September Will Create Buy Opportunity, MU & MRVL Strong Outlook

this data. We'll be watching that throughout the course of the week because it's had a pretty good run of late. All right. I want to bring Mollie back into the conversation, turn our attention to the current market setup with Eddie Gabor, who's the owner of Key Advisors Wealth Management. Eddie, big day here. So let's just rewind the clock a little bit. You told your clients to buy the dip in July. Hopefully that's paid off for some. Given everything we're about to hear from Nvidia, Jackson Hole and the broader backdrop with tariffs sanctions, the 30 year at these highs that we've been seeing. What are you telling them next. So right now to your point, you know those that bought the July dip should have seen a really nice bounce from July to where we are now. And we're telling our clients as we head into September, we've got the war, we've got a new fed that's going to get inflation probably re-accelerate in September a week before their meeting. You have a midterm election year and weak seasonality with September. So that checks a lot of boxes off for investors to expect volatility to pick back up in September. And we believe for the market's going to have is going to trend down in September and have another buyable dip. So we're playing a little bit cautious here going into September after a really nice rally off the lows. Because at the end of the day this new fed has pigeonholed themselves in a box with this 2% number that they've doubled down on, on the last two meetings. I'm not so sure they're going to go into meeting number three and not do some type of tightening in the form of balance sheets. So but it's going to be a viable dip. I can't stress that enough in our opinion, because we think fundamentally the economy is going to accelerate in the latter part of this year, and earnings are going to continue to be fantastic. So this is just another short term tactical call that we're making here. And Eddie how deep of a pullback are you expecting here. And what levels would you consider an attractive entry point. So it's going to depend upon where you're positioned right now in your portfolio and what you own. So for example on gold which we're very bullish on, we added a little bit more today. We think as you get days where the yields spike like today and a dollar rises, you're going to see the drop in gold. And so we're going to incrementally buy over the next few weeks. We don't expect to see anything more than a 5 to 7% drop on the S&P. I think 7% is probably going to be the deepest that you are. So it depends upon where your position. So we're going to incrementally buy each week on a down week as we go into September. Because we think once we get towards the end of September, beginning of October, all the fears of inflation getting worse will probably be at its peak. And hawkishness will probably be at its peak from a sentiment perspective. And that's probably when you bottom and have the year end rally that we expect. Okay, so if September is hurricane season for stocks, then and you talk about a 5 to 7% pullback, you say you're going to buy, what are you going to buy into year end. So we're going to look at the areas that take the biggest hit. Some of the things that we have on our list. I just mentioned gold where we think that the dollar is going to stay weak for the foreseeable future. To us, that's going to be a great place for some upside. On the memory side, you know, we like micron. Micron has still, you know well off of its highs. We expect that will probably take a hit in September as well too. Marvell is a name we like in the semi space that we would favor that name over Nvidia because we think there's just more upside even though there's more volatility there. And then we still like the CrowdStrike of the world in the sense of you're looking at the cybersecurity names, you know, in the software area. So it's more than just semis on the tech side, but that tech trade will be the one that takes the biggest hit due to an inflation scare or a rise in yields. And that's where we're going to want to be incrementally increasing our exposure because we're currently underweight there. And in the next 25 hours or so, we're going to have Nvidia and Marvell. So as you sort of stack them side by side, Eddie, do you have a favorite in that race? So we do like Marvell over Nvidia just because we think it's just more upside because Nvidia obviously has just I mean, they've blown it out of the water for so many years now. And now they're becoming like a very large cap and most important name in the market. So the moves on Nvidia are up and down in our opinion will not be as high as Marvell. So the problem the semis have going into this earnings cycle right now we'll find out today after the bell is expectations are already so high. That's going to be really hard to see them really beat to the upside or give any type of upside surprise. So again this is why we would look at the dips that we're going to see going into the next 3 to 6 weeks as opportunities, because that pendulum should swing back in their favor in the fourth quarter and first quarter next year. What about outside of AI? I mean, are you dipping your toes into health care? I mean, that's been having a pretty good run of late. It typically performs quite well in a midterm year as well. I see you've got Lilly on your shopping list. Yeah. So we have Xlb and we have Lilly in health care. And health care has been a great place to be. We're fortunate to have a decent position in health care right now. And you know, everyone talks about this AI trade. Well when you look at health care, that's a sector that's going to really benefit from AI. And you're really starting to see this. So health care may be making a turn where it stays strong, even in a defensive position where it's usually a defensive sector. This could be an area that you could see accelerated growth going into the next 12 months. So I don't really see us getting rid of our health care when we get into a more risk on environment. And specifically about Lilly and you liking them, is that primarily the obesity drug opportunity? That's what I have the most conversations about when talking about Lilly. But as I look more broadly just over this space, I mean, a lot of the big drivers lately, specifically Moderna and Revolution medicines today are more tied to oncology. Yeah. Well, for Lilly it is a GLP one play for sure. But also, I mean, they're accelerating their growth and expanding globally as well too. And when you look at the obesity problem that we have in this country, I mean, naturally you're going to continue to see an acceleration here, which is going to be, you know, continue to just be a tailwind for Lilly, the biggest risk they have is some type of reform on on health care that changes any type of reimbursement. So if that changes, we'll have to change with it because they would certainly take a hit there. But right now, I mean the outlook looks really strong. And it's just the demand supply demand dynamics there are very favorable for Lilly. You know Eddie the portfolio manager team here at Schwab have been telling me that one of the key top questions that they've been getting right now from clients is, is there any trade outside of artificial intelligence? Because you look at industrials, you look at materials. They've all become these sort of de facto AI trades. Even financials have become sort of this adjacent trade because obviously they're funding a lot of it. What are you telling your clients right now. I mean where is the trade. Where are the investments outside of artificial intelligence. Is it just in healthcare? Know the beauty of what we're seeing right now and it's flying under the radar, in our opinion, because everyone has just been so focused on AI. I mean, if you look at the last couple of months and you look at the RSP and the equal weight, it's outperforming on a relative basis by a pretty wide margin. So we are heading into a Goldilocks scenario where you're seeing a product economic productivity boom. And in that scenario, the beauty is you can broaden out your strategy. We think financials are going to be a fantastic place to be as well too. So you have financials industrials and more on that equal weight side that I think are just going to continue to surprise to the upside because again the earnings cycle for those areas the bar is not set as high. So it's going to be a much easier beat for them over the next two quarters. And that's why small caps again have continued to do well because the bar has been set low. So we have exposure to those areas. And again I don't see any type of change really because again, this is going to be a broad based story once we get through this seasonality and midterm election season. Eddie, some great insight there. Always fantastic to talk to you. Really appreciate you joining us tod