Caroline WoodsAre the lows in? My next guest says yes and he’s staying overweight equities. Ryan Detrick is chief market strategist at Carson Group and joins me now. Ryan, great to have you back.Ryan DetrickNo, thank you for having me back. There’s, plenty to talk about. I’m excited to do this. Thank you.Caroline WoodsYeah, certainly a lot has changed since you were last on back in late December, but you’re making a pretty clear call here. You think the lows are in? What gives you that confidence, Ryan?Ryan DetrickYeah, there’s a couple of things. You know what’s really interesting time we’re doing this. The S&P 500 is exactly flat on the year. You think about all the headlines all the stuff that’s going on and we’re flat I mean after, you know, two years in a row of 25% gains last year, about 18% total return, we’re in a midterm year.Ryan DetrickAnd last time I was only talking about midterm years can be choppy and frustrating. We are where are the headlines? We’re read the headline Risk the volatility in oil. But you get down to it. There’s a couple things I think we’ve been watching that we’re optimistic about why the lows potentially are in. We had about a 9.1% peak to trough correction on the S&P 500 recently.Ryan DetrickObviously yes. The war and the spike in, you know, the energy markets caused that. But most years have about a double digit return. But we’ve seen over the top fear over the top kind of skepticism. And now on this rally we’re starting to see the right things. Lead like technology has been leading the last couple of weeks and the market is broadening out.Ryan DetrickWe get more into the weeds of it, but listen, we’re not shocked. The first let’s call the first half of this year maybe it’s kind of choppy and frustrating after the rally that we’ve seen. That makes sense. But the underlying fundamentals, we can get more into that earnings and things like that. Those are still why we think this is still a bull market.Caroline WoodsOkay. Still a bull market. You mentioned the S&P 500 is flat year to date only about 2% off the all time highs. Where is it going to go from here.Ryan DetrickWell great question there. You know we still think low double digit returns this year. Make sense where we came into this year and we’re still there. You know again a couple of things to think about here. This bull market just turned three years old last October. Right. The bear market 2022. We looked back, you know, over 50 years, five other bull markets made it to this point past their third birthday.Ryan DetrickThe average length of those five was eight years. The shortest any of them went was five years. So I understand this is just history, but sometimes history is a guide. And to think that this is a, you know, an old bull market, we’d say no, not at all. In fact, it’s a fairly young bull market, which, you know, kind of is opposite what a lot of people think.Ryan DetrickBut then you peel back that onion. We’re looking at record earnings right now. We’re looking at record profit margins. We’re looking at a market that’s broadening out. I don’t think most people realize is small cap technology, mid cap technology and equal weight technology. All last week close at their highest levels in history on a weekly basis. Semiconductors also closing near all time highs right at all time highs.Ryan DetrickParts of the market are weak. We understand that. But to see that leadership from tech taking the baton back, I think kind of quietly is another sign that this this indigestion we’ve had the first quarter, you know, the first 14 weeks or so this year, it could be over fairly soon. We could be back to your regularly scheduled bull market being led by strong earnings.Caroline WoodsBut we also have this blockade of the strait going into effect. Stalled peace talks. It seems like oil right around $100 a barrel. The president threatening 50% tariffs on China. Are investors underestimating any of those risks.Ryan DetrickWell his famous last words we’re going to find out on that. Now I will say this much when it comes to risk. Yes we’re overweight equities. But what we do with the billions of dollars that we manage the Carson Group we have equities. Yes. But we think about that other part right. Bonds. Well bonds haven’t done well because inflation has been stubbornly high.Ryan DetrickClearly everything going on with the war has has kind of push back the idea of any potential fed cuts anytime soon. But then you look at things like, again, gold is still up double digits this year. Silver still their managed futures have done well. Shorter term bonds have done a little bit better. So you know I think we say diversify your diversifier so that in the old days 60% stocks 40% bonds set in.Ryan DetrickForget it. Well that’s not where we are anymore because bonds are not necessarily zigging when stocks are zagging. So having this diversified portfolio and everything you just listed are very, very real concerns. But look around the globe US is like flat the time we’re doing this. Most other stock markets actually up on the year right. The Acwi all world as of Friday was up 2% on the year.Ryan DetrickI’m not saying it up 2%. So spectacular thing. But then you look at all the headlines, all the worry worried. It’s like the market is smart. Any of us, the market is going to do what it’s going to do. And as terrible as the war and all the uncertainty is, you know, if everyone’s thinking like somebody isn’t thinking, last comment on this year, we’ve had like eight weeks in a row of more bears and bulls on the a I sentiment pool.Ryan DetrickYou’ll get hedge funds are about as short as they have been in years. Like 100 year pandemic and bear markets. There’s a lot of reasons to think, listen, it’s not about good or bad. It’s about better or worse. Yes, things aren’t good out there, but are things going to get better? We think they are. And I think the market again yesterday futures open on Sunday night.Ryan DetrickEverybody’s freaking out. Rightfully so. Crude oil up 10%, SB futures down one of 8%. And now you’re getting past that. And the realization is the market is telling us it likely wants to go higher again not better. It’s about better or worse. And things are getting a little bit better.Caroline WoodsDoes that mean any pullback from here? We thought we were going to have win this morning doesn’t necessarily seem to be the case in green arrows across the board now, but does that mean any pullback from here is a buying opportunity.Ryan DetrickYeah great question there. We think it is I mean we think so given we’re overweight equities I better answer that way I guess. But but the reality is we had the nine and a half 9% pullback. And I know it’s more I mean the reason so many people feel the way they do because the headlines are the headlines.Ryan DetrickBut from an investor’s point of view. But the popular stocks your mag seven a lot of those names have obviously been really hit. What’s been leading this year is like industrials boring old industrials. No one really owns a ton of boring old industrials you know. But again that’s why we’ve been preaching to keep this diversified portfolio, not go all in on any one particular shiny object, as we call it.Ryan DetrickAnd stay overweight. And again look overweight equities and around looking around the globe there’s still opportunities because the bad stuff happens particularly in the US. You know, potentially other parts of the globe could do well. But I will say this much last thing on this one. Since the war started, what’s been happening? U.S has done better relative to the rest of the globe.Ryan DetrickWhat do we see? Last year, rest of globe did really well. The first all we’ll call it three months or so. The two months or so this year rest the globe the better. We think there’s a good chance the US is going to take back that baton by having a little bit better growth than the rest of the globe, the second half of this year, being led by strong earnings in the US, is still a place you want to be an investor in.Caroline WoodsOkay. So I want to dig into that. But first just tell us. And we’ve talked about you being overweight equities. Where are you seeing the most opportunity right now.Ryan DetrickYeah. Great question. Technology specifically I mean technology is one area that, you know, this time 4 or 5 weeks ago everybody didn’t want to own technology. They’re going to buy the staples at 25 times earnings. That kind of felt a little lopsided. So I think technology is an area looks nice. We do like and you just slice and dice it a little bit.Ryan DetrickYou know telecom inside of there I’ll tell you software I know software has been beat up. We understand that been a very weak area. But software is the one area that if it can really turn around a we think it can. That’s another nice reason that I think you can be optimistic. The second half of this year. And I mentioned already industrials I mean industrials are the kind of the Jane Brady group.Ryan DetrickRight. No one’s really talking about them. But they’re doing really really well. So industrials technology, maybe even parts of financials which have been beaten up and are very, very cheap. And oh by the way technologies like as cheap as it’s been in years, everybody loved it 6 or 7 months ago. Now nobody wants to touch it. But again, one more one more thing on financials.Ryan DetrickVery cool. If you look at insiders, we’re seeing huge insider buying on technology companies in the last couple of weeks. So yeah, those are some things to, to think about from that sort of side of it. So industrial technology, two groups we do like here the rest of this year.Caroline WoodsAnd you can talk individual stocks, but when you talk tech you mentioned software. But are you thinking mag seven or are you thinking other technology names.Ryan DetrickYeah. Mac the great question there. I mean no, we think Mac seven makes sense. I mean, the mag seven names that are beaten up and were over loved and overhyped this time a year ago. Oh, what was it? It was, the time magazine person of the year in December last year. All the AI architects, right. All the great AI companies who’s done amazing, amazing, amazing at the same time.Ryan DetrickThat’s a high bar. And now nobody wants to own those names. So I think the Mac seven makes a lot of sense when you get into it. And I’ll tell you also on software, I can’t mention like specific, but there are some well-known software ETFs that we’ve actually gone into. And some of our more longer term kind of think longer term investing portfolios a year from a year or two from now, there’s a lot of software names.Ryan DetrickYes, I’ve been beaten up, rightfully so, with all the uncertainty over AI, but similar to last year when we had a lot of selling around Deep Seek and those concerns, which were kind of, in the end, overblown, I think we’re going to see that, take place once again.Caroline WoodsOkay. And you brought in international, but think that the U.S. is going to take the baton. So does that mean, you or how should investors be thinking about international exposure now, given higher oil economic factors, recession risk?Ryan DetrickYeah, a great question there. So we came into the year, we had a little bit more European exposure on a relative basis. But since everything started with the war, we understand Europe is going to be more hit. The higher oil prices are. And natural gas specifically are going to hurt Europe. But I want to be very clear, we think it still makes sense to own different buckets.Ryan DetrickLike if I join you a year or two ago, we were pretty optimistic that U.S. is going to do really well. We’re not so sure now. We think this is a global I think the U.S. going to do just fine. We clear. But this is more of a global bull market now. So you want to have different pockets and different sectors.Ryan DetrickI’d say we like the U.S. the most developed international second. And we put emerging markets third. But in the portfolios we run we definitely have exposure to all three of those. But that’s kind of how we rank them here.Caroline WoodsWhat areas of the market would you take profits in right now?Ryan DetrickOoh, that’s a good one there. You know I mean honestly not on equities because there’s not too many stocks that are up on equities. I would go kind of what we don’t like where we’re underweight. I mean we can talk about bonds a little bit more. I mean bonds have not done that well this year. Right. I mean we understand why they higher higher inflation, the worries about the war, the fact the Fed’s not going to probably be cutting anytime soon.Ryan DetrickSo we’d still say kind of be a little bit underweight your fixed income area of things. And also on the defensive side of things, you know, like you utilities, health care staples, the more defensive things by nature they did. Oh, they did. Well, obviously when things were going, you know, with the war going on, but now the last 3 or 4 weeks or so, they’ve been weak.Ryan DetrickSo those are some areas that I think you want to get out of the more defensive areas and into more of the cyclical growth areas. As we head into the second half of this year.Caroline WoodsSo, Ryan, you mentioned price action. You mentioned history as a guide. Fundamentally speaking, what is it that underpins your bullishness right now and what would change that view.Ryan DetrickYeah great one there. So I think it’s I say as simple as as simple as earnings continue to be extremely strong. Right. We’re looking at our sixth quarter in a row of double digit S&P 500 earnings growth. We think that’s going to be the case I know it’s very early. Just last week we had Delta come out with I mean Delta said like their best five days ever have taken place since after the war because yeah they hiked prices.Ryan DetrickBut people still buy tickets though I get it. There’s going to be an area where prices go too high and that changes. But the reality is we’re looking at S&P 500 earnings so far this year up 7%. Right. We just talked about market’s flat right. So the market’s flat but earnings going up 7%. Stocks are cheaper. If we you know back in December when we talked you know we said one potential worry we’re bullish yes.Ryan DetrickBut stocks are low we’re a little pricey. But now they’re not they’re not nearly as pricey when you look at that. So those are some things to I think think about from an investor’s point of view.Caroline WoodsBottom line. What’s your message to investors right now.Ryan DetrickYeah. Stay great on there. So stay in the game. Right. The headline is going to be bad. Everyone’s gonna tell you how bad it is. We’ve seen this before. Every single year has volatility. Every single year has bad headlines. Of course you should pay attention to your money. You should pay attention to what’s going on out there, but also understand that the underlying pinning that got us here, like you asked me that question right before, are stronger profits and stronger profit margins.Ryan DetrickWe call those the dual tailwinds. This bull market been calling those that for three years now. And we are looking at again I mean, this time at the end of 2019, profit margins were 12%. Okay. What’s that mean. Well they’re a record 15% right now. We’ve been told for years profit margins only have one way to go. And that’s lower.Ryan DetrickThat hasn’t happened. So profit margins keep trending higher. Earnings keep trending higher like we think they’re going to. Those are going to continue to likely say that the overall equity bull market that we are in here in the United States and honestly globally is still alive and well.Caroline WoodsAll right. I think that’s a great time to transition to our rapid fire game of this or that you’ve played before. A quick questions. Quick answers. Are you ready? All right.Ryan DetrickYo let’s let’s see what happens. Let’s do it.Caroline WoodsWe’ll start with an easy run here. Bull market alive and well are at risk.Ryan DetrickAlive and well.Caroline WoodsMiddle innings or final stretch.Ryan DetrickOh.Caroline WoodsMiddle innings War premium priced in. We’re still at risk.Ryan DetrickNo. No, it’s not priced in. I don’t I don’t think the war is, I think the war is overblown from an equity point of view. I think it’s gonna be over soon and still bullish.Caroline WoodsToo much fear in the market or not enough.Ryan DetrickOh, there’s way too much fear. And again, from a contrarian point of view, that’s a good sign.Caroline WoodsThe stock market from here grind higher or breakout higher.Ryan DetrickNo breakout higher.Caroline WoodsHow much higher.Ryan DetrickLow double digits. Makes a lot of sense for the S&P 500 before all is said and done. Flat right now. So you’re talking to the 1,213% for end of the year.Caroline WoodsAdd risk here or wait for a better entry.Ryan DetrickNo add risk. I mean there’s there’s a lot of reasons to think this market wants to go higher.Caroline WoodsU.S. or international.Ryan DetrickU.S, but have a little bit of international in there but overweight U.S.Caroline WoodsGrowth or value?Ryan DetrickThat’s a good one. We’re more you I know it’s boring. We’re more even that. But I’d say maybe right now look at technology on one side, industrials on the other. So you kind of hedged to have a little bit of both.Caroline WoodsSo S&P market cap or equal weight as you do.Ryan DetrickWe’d say with market cap moving large caps going a little bit better in small caps second half of this year.Caroline WoodsOkay, I was going to ask large caps or small caps. But you already gave the answer there. Tech leadership for broader market.Ryan DetrickNow techs won’t take back that baton after lagging for a while.Caroline WoodsIndustrials are defensives.Ryan DetrickIndustrials. The cyclical economy is stronger. And people think industrials for sure.Caroline WoodsBonds essential or dead money.Ryan DetrickThey’re dead money. But you should own some. But I’d say look at other parts of your diversifier. We don’t like bonds all that much.Caroline WoodsHard assets hedge or high.Ryan DetrickNo. All you should hedge. I mean, you should own some hard assets. If you drop it, it hit your footing. It hurts. Those are things you want to own. Maybe in place of bonds in this particular environment.Caroline WoodsOil at 100, sustainable or temporary?Ryan DetrickNo, it’s it’s temporary. We’re going to get some good news there. And the oil is going to go back lower here.Caroline WoodsOil trade sell it or buy it.Ryan DetrickNow we would sell it awfully extended in the oil trade.Caroline WoodsFed done or not done cutting.Ryan DetrickOh we’d say not. I’d say I will give you a quick answer there on pause the rest of this year. But I don’t think we will see any hikes.Caroline WoodsResilient economy or delayed slowdown.Ryan DetrickYeah. This is a very resilient economy led by earnings, strong corporate profits and still a pretty solid labor market.Caroline WoodsHonestly the labor market weakening or cracking.Ryan DetrickOh we would say actually improving. So neither if you look at it the unemployment rate is still low. There are still some signs that we’re seeing it’s a low, high or low fire world. But we think the second half of this year labor market improves.Caroline WoodsIn one word, biggest opportunity right now.Ryan DetrickEquities one word stuff. Yeah stick with equities.Caroline WoodsIn one word. Biggest risk right now oil. Finish this sentence. Investors should be blank right now.Ryan DetrickShould be cautiously optimistic.Caroline WoodsRyan Detrick always a pleasure. Thanks so much for playing along and for your insights. We always appreciate your perspective.Ryan DetrickThank you for having me. I look forward to the next time. Preciate it.