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Speaker 1: Let's get to Shane Assistle, our guest for the half hour.

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Speaker 1: Shana is the president and CEO of Bannery on Capital Management.

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Speaker 1: She's on the line from Chicago. Shana, always a pleasure,

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Speaker 1: Thanks for being with us. Let's begin with the Fed

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Speaker 1: speak that we heard today, a couple of officials pushing

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Speaker 1: back us on the idea that tightening is nearing an end.

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Speaker 1: But I think one of the key points is John Williams,

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Speaker 1: the head of the New York FED, saying the FED

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Speaker 1: should avoid incorporating financial stability risk when considering the path

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Speaker 1: of rate hikes. This seems a little dicey. Are you

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Speaker 1: concerned when you hear a statement like that. I'm absolutely concerned,

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Speaker 1: but I'm not surprised. They've been telling us for a

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Speaker 1: while that they're not concerned about that, whenever they said

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Speaker 1: that people will feel pain. Uh So, it's concerning because

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Speaker 1: financial stability should be some part of their decision making process.

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Speaker 1: But they have been very clear for several months now

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Speaker 1: that they intend to maintain this aggressive tightening and h

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Speaker 1: rate hike philosophy for as long as it takes to

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Speaker 1: get inflation to the point where they are comfortable. And

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Speaker 1: the problem is that a lot of the economic indicators

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Speaker 1: that you look at to see about the health of

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Speaker 1: the economy, things like consumer or spending things of that nature, UM,

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Speaker 1: and even just inflation in general, they're lagging indicators, and

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Speaker 1: so UM Relying too much on that is a mistake,

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Speaker 1: I think, and absolutely is a dicey decision that could

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Speaker 1: lead to a much worse hard landing as opposed to

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Speaker 1: the soft landing that everyone keeps hoping we can have. Well, Shandon,

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Speaker 1: this is the thing, but there's got to be a

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Speaker 1: trade off at some point. There's got to be a

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Speaker 1: level of which they do not wish to inflict pain

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Speaker 1: beyond you would think that. But again, you don't know that.

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Speaker 1: A lot of the indicators that will suggest what the

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Speaker 1: pain is are lagging, so they won't know that till

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Speaker 1: it's too late. For example, you know, retail sales came

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Speaker 1: in better than expected today for October, That in no

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Speaker 1: way indicates that the consumer is not stressed or under

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Speaker 1: any stress. We probably won't know that till after the

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Speaker 1: holiday season. And yet if you look at the results

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Speaker 1: from Target, they seem to suggest that shoppers are pulling back,

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Speaker 1: But yesterday's numbers from Walmart indicate that higher income shoppers

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Speaker 1: are trading down, so the market seems a little bifurcated. Well,

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Speaker 1: if higher income shoppers are trading down, I would suggest

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Speaker 1: that that is an indication of consumer stress. Okay, fair point.

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Speaker 1: Now what do you make of the semiconductors. Is this

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Speaker 1: a macro story? When you look at the Philadelphia Semiconductor

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Speaker 1: index today tumbling after Micron said the outlook for the

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Speaker 1: new year is weaker, I think it is less a

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Speaker 1: story about the fundamentals of demand and more a story

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Speaker 1: of the macro picture. I think there's a lot of

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Speaker 1: stress on semis because of their reliance on China in

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Speaker 1: particular for their supply chain, and China has this zero

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Speaker 1: COVID policy they're likely to continue for at least another

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Speaker 1: year that you know, people are saying, it's it's all

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Speaker 1: that we might be seeing a little bit of a

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Speaker 1: change of heart coming from shi Jing Ping. But you know,

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Speaker 1: the thing is, you look at who's gonna have well,

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Speaker 1: your bread is going to be butted more, and I

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Speaker 1: guess you've got to really look at the West rather

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Speaker 1: than Russia. I think that's true that a lot of

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Speaker 1: the Chinese economy is far more reliant on the West

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Speaker 1: than it is on Russia. Uh. And I think, um,

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Speaker 1: he realizes that, so, you know, you've gotta figure out

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Speaker 1: what's gonna lead you to be successful and keep your

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Speaker 1: people happy, which I think is extraordinarily important, and that

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Speaker 1: the type of government that they have. Uh And so

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Speaker 1: I think that that has a lot to do with

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Speaker 1: sort of the softening of of some of his tone

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Speaker 1: with the rhetoric U in support of Russia and against

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Speaker 1: the West. Well. And at the same time, I think

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Speaker 1: there's another agenda. They're given the fact that there is

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Speaker 1: very strict prohibitions that have been put on by the

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Speaker 1: Biden administration when it comes to advanced technology, and I'm

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Speaker 1: thinking of the semiconductors in particular. So at some point

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Speaker 1: China is going to have to maybe consider that as

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Speaker 1: a factor in US China relationships. I'm sure it already has,

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Speaker 1: but that's more time goes by, the more critical that

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Speaker 1: issue is going to become. And now we're seeing the

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Speaker 1: move on the part of Beijing to attend to the

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Speaker 1: weakness of the property market to deal with COVID zero.

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Speaker 1: All things taken together, would you be tempted to put

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Speaker 1: money to work in the Chinese economy right now through

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Speaker 1: the equity trade. You know, every time I'm on with

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Speaker 1: you guys, you ask me this and I always seem

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Speaker 1: to have the same answer, and it it hasn't changed.

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Speaker 1: I'm not a fan of investing in places where the

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Speaker 1: government has far too much influence over the markets and

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Speaker 1: at any given moment can really change things beyond the fundamentals. UM.

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Speaker 1: So at the moment, I don't see enough progress there

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Speaker 1: to feel comfortable putting money to work there. So where

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Speaker 1: are you putting money to it? Begs the question, of course, Shana,

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Speaker 1: So I have I think you know, I've mentioned a

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Speaker 1: lot of the things I'm going to mention are not

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Speaker 1: going to be new to you. UM. I have been

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Speaker 1: focusing on some of the less exotic, less sexy names

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Speaker 1: staples healthcare industrials, one of the names we talked about

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Speaker 1: the last time I was on, continues to be one

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Speaker 1: of my favorite stocks UM and kind of falls into

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Speaker 1: the industrials and healthcare, which is litosh government contractor. UM

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Speaker 1: has a very strong health division that is growing fast.

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Speaker 1: You know, I just I hadn't taken a look at

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Speaker 1: the stock UH in this performance in a while, and

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Speaker 1: I have to admit I just looked it up and

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Speaker 1: was kind of shocked. Um. I don't know if it's

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Speaker 1: going to continue that kind of momentum, but um, I

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Speaker 1: certainly think that some of these names, which have defensive

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Speaker 1: qualities to them, uh, are the names I want to

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Speaker 1: be in because I am kind of preparing for the

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Speaker 1: fact that the fourth quarter and probably the beginning of

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Speaker 1: is going to be rough as the economy really starts

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Speaker 1: to show the stress of the FED policy. So if

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Speaker 1: your theme, one of the themes seems to be tied

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Speaker 1: to a little bit more spending on the part of corporates,

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Speaker 1: let's call it capex, and maybe a little bit more

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Speaker 1: government spending too. When it comes to technology, Can I

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Speaker 1: interest you in Cisco Systems? The numbers after the belt

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Speaker 1: today on the revenue side, top estimates. Would you chase

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Speaker 1: the stock here? Uh? It has some fundamental issues just

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Speaker 1: industry wise, but it is a stock that I've looked

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Speaker 1: at before. I think it's quite interesting. I've gotten burned

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Speaker 1: on that stock a couple of times, so I'm hesitant.

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Speaker 1: But yeah, the fundamentals and the strength and exactly what

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Speaker 1: you're talking about certainly makes that stock uh interesting, and

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Speaker 1: it's definitely worth a second look. Um, you know, I

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Speaker 1: have to get over my my PTSD as it pertains

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Speaker 1: to system. What about crypto? It's speaking of PTSD. I mean,

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Speaker 1: if you look at the crypto space, so you've got

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Speaker 1: to be recoiling on what are you? Are you tempted

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Speaker 1: to play in this arena at all? So I am

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Speaker 1: but very tentative at this point. I think that we're

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Speaker 1: kind of at that massive uh all the news is

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Speaker 1: bad news part of the market that we kind of

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Speaker 1: saw when the tech bubble burst in two thousand, pets

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Speaker 1: dot Com, like all these companies that were major, um

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Speaker 1: you know, successes going into that that just completely like

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Speaker 1: died and we've completely don't exist anymore. Um, it's hard

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Speaker 1: to kind of go through the casualties and figure out

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Speaker 1: who can be saved, and so crypto kind of feels

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Speaker 1: like that to me right now. But I think the

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Speaker 1: blockchain is here to stay. Shana, thank you so much

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Speaker 1: for joining us. Still there a Banarian capital