Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.

Daniel Creech: How’s it going out there? It is Wednesday, January 5th, 2022. You’re listening to the Wall Street Unplugged Podcast, which is normally hosted by the one and only Frank Curzio every Tuesday, Wednesday, and Thursday, now that we switched to our newer format a little while ago. But as he noted yesterday in his monologue, he’s on the road. He is traveling, living in it up and doing boots on the ground research at the Consumer Electronics Show. Yes, he is in Las Vegas. Viva Las Vegas, as they say. I’ll keep the singing to a minimum. So today and tomorrow, you are stuck with me. Welcome, Daniel Creech here, Senior Analyst at Curzio Research. Have no fear, Frank will be back in the saddle. We’re just kicking off the new year. Things are moving, lots happening that’s really exciting, so more than happy to try to sit in for him and get us through these next couple of days.

Daniel Creech: I’m going to go over a few things on the market, kind of set the tone for what I expect on 2022, what we’ll need to navigate, and what Frank and I have been kicking around, and what we’re expecting to play out and such. Plus, I’ll give you some updates from Frank. I talked to him earlier as he was going through day one, where he gets access a little earlier than most because of his media badge and because of all you wonderful listeners out there to the podcast, so that’s pretty cool. I give him a hard time about being famous and connected, so us peons like myself, just have to sit back here and hold down the fort while he’s out enjoying himself. But be sure and check him out on TikTok. He’s going to do a lot of live videos, he’s going to be posting a lot of things and pictures, also on the Curzio Research YouTube page, so be sure and do that.

Daniel Creech: Only other programming note here, outside of the one and only Frank being out, is I want to point out and apologize up front about how I sound. I feel like I’m talking through my nose and I’m stuffed up a little bit here. I was jumping through climates, and of course, the weather can’t make up its mind. I went to Ohio for the Christmas holiday to visit with family and I was in Southwest Ohio for the spring holiday, I should say, because it was 60, like 61 degrees on Christmas day.

Daniel Creech: And don’t misunderstand, I don’t want to complain, although now that I don’t live in cold weather, I wouldn’t mind seeing snow. Snow is easy to visit, and then you can leave. Everybody that is in cold weather or actually has winters is probably shaking their heads. But yeah, it was 61 degrees, and one of the things that I look forward to most, and one thing that I really enjoy is premium cigars. So, I always take some Romeo and Juliets up to my grandfather. Him and I, that’s kind of our time together where we get to hang out, burn a cigar. And yeah, on Christmas day, we sat in the garage, sun was shining, and it was just pleasant as can be.

Daniel Creech: Then I come back to Florida to sunny, Florida, and it was already summer. I flew back on the 30th and it was 81, 82 degrees or something like that. Pretty crazy. So now, it’s now… It’s colder or chillier, and windy, and everybody’s walking around and it sounds like everybody has a cold, or the Omicron variant, or whatever, it’s sweeping across everywhere. So I hope you guys are all safe, I hope you had a very Merry Christmas and a wonderful new year. Hopefully, it was uneventful, meaning everybody stayed out of jail, but you were able to enjoy some adult beverages and ring in the new year, say goodbye, good riddance to 2021, and let’s get excited for 2022.

Daniel Creech: So yeah, so I sound rough. We’ll get through this together. I’ll give up an update on Frank here in just a minute, but I wanted to turn your attention and just highlight some of the things that worked out well in 2021, and again, what I think will continue to work well in 2022, and just give you some macro themes to pay attention to, and that sort of thing. I’ve mentioned this in the past, we don’t get paid to say this, we just try to give out some of the free websites or services that we use to do research and look at data. FINVIZ is a great website. I’ve talked about them before. I do hope that as our audience continues to expand and we get on the map and we can charge them. That’d be nice to earn some more fees, or shout-out fees and advertising fees from them, but we’ll work towards that.

Daniel Creech: But anyway, when you go to FINVIZ, it’s got some charts and some data, and then if you hit their Groups tab, it kind of funnels everything and it breaks it down by sector, and you can look at different timelines of performance. And I just pulled up the year performance or year to date at the end of the year, and I wanted to see, hey, what really worked in 2021, and do I think that’ll continue to work? So you consumers out there, anybody that drives a vehicle knows that energy had to perform very well, and it did. Energy took the top slot with an almost 37% return last year, the energy sector, followed by real estate at 28%, technology at almost 27%, and financials, 21%.

Daniel Creech: In short, I expect if you’ve listened to the podcast here, you know that I’ve been bullish on oil longer than what I can take credit for, because I should’ve got in a lot earlier and missed a lot of that move. I did throw ExxonMobil as just a low-hanging fruit for the Dollar Stock Club. I think that’s up a handful percent. Hasn’t been a great trade, but I do think it’ll work out, and go a lot higher and work out for you guys if you follow that advice. Why am I bullish on energy with all the variants around and the rumors of lockdowns? You got China having a zero COVID policy. So, if a few cases are breaking out, you’re reading about lockdowns and millions of people. That’s going to affect more supply chains, more shipping headaches, or cause more shipping headaches and things like that.

Daniel Creech: Air travel isn’t quite back to pre-pandemic levels yet, but the Fed has finally admitted they’re not even selling this dream of transitory inflation anymore, and during your periods of higher inflation, I just, I feel like that’s going to continue to put pressure on commodities, oil being the easiest and low-hanging fruit there. So yes, I think energy prices are going to continue to rise across the board. We are going into winter now, which typically, you have higher prices. I mean, natural gas, I know some of these are pulled back, but I’m just bullish on energy, as I am inflation.

Daniel Creech: Real estate, the same way. Technology, the big dogs, I still think you can hide out in the Microsofts, and Facebooks, and Googles. I don’t know that they’ll have such a stellar year going forward, but don’t be crazy overweight, but I’m not worried about having any exposure there, and I still like Facebook. I still like those companies around the political sphere, and for your new listeners out there, regular listeners know that I look at everything. I look at the world through an economic and political lens. I’ll tell you exactly where I stand, you don’t have to agree with that. I’m just wanting to build my thesis on what I’m thinking about, why I’m thinking about, and how recommendations come about here, from me, anyway.

Daniel Creech: And so, the political side, that’s going to continue to push energy prices higher, and on the technology side, anytime you read about Google, or Microsoft, or Facebook getting broken up, they’re monopolies, they’re going to get dragged in front of a committee hearing in DC, I just think that’s bullish. I don’t think that they’re going to do anything that’s going to harm them from a business standpoint. I think that there’s incredible value there, and so, I think those big dogs should continue to do just fine.

Daniel Creech: Financials, coming off of stellar year, 21%. Goldman Sachs has been a good pick for us, and a Curzio Research Advisory for all you subscribers. We like to have fun with Goldman and call them the vampire squid, whoever dubbed that, referenced that, just the ruthless guys on Wall Street, as all Wall Street is, but I’m bullish on them because banks have found a way during a long period of 0% interest rates, basically, to find other sources of revenue. That’s not going away, and if interest rates do and are rising, and they actually earn interest on deposits and/or gives them more flexibility and more revenue streams, that’s a bonus for them. Now, you got a couple with that if interest rates starts spiking, it’s going to cause slowdowns in the economy, which could counter that, but overall, I am bullish on financials, and I think you should have exposure to those Goldman Sachs, even play some of the smaller banks, because there’s probably, I would expect more mergers and acquisitions and things going on that way.

Daniel Creech: Healthcare had a solid year, up double digits as well, coming in just under 13%. Lucky number 13 for healthcare. I like healthcare. On a political side, you have massive push to expand healthcare services and different programs, and so, I want you to pay attention this year especially, because it’s an election year for the midterms coming up, but pay attention, and I’ll segue into Omicron to cover all my bases in just a minute. But I want you to pay attention to the way things are sold and/or presented to you, mostly in the media, and that’s a big key, because I want to share with you, for instance, this Build Back Better plan that is being debated now, and whether or not they have the votes or not, how are they going to go about that?

Daniel Creech: That’s infrastructure, and that expands a lot of things, child services, I believe there’s some healthcare in there and all that kind of stuff, but there’s another part of this bill, there’s another section where they’re dubbing it, and you can see politicians say “human infrastructure,” and more of a social safety net, and the idea that, “Hey, we got wealth inequality, and you got too few people that have too much money, and too many people that don’t have enough, so we want to distribute that, we want a wealth distribution.” Now, this isn’t going to shock anybody, and if it does, hopefully you’re all sitting down, but that’s not the way to go at it, that’s for another time. In my opinion, I don’t think the government should step in and do that, but it doesn’t matter what I think, it doesn’t matter what Daniel Creech thinks. I don’t make the rules, we just have to play within them and navigate accordingly.

Daniel Creech: So, I like those sectors, we’ll see what’s going on there. Dev and energy is, I think it’s a 52-week highs this week. I don’t have it right in front of me, but Frank and I talked about that as a way to play rising oil prices, if you believe in that. And then, I talked about the Big Tech stocks, the financial with Goldman Sachs and other smaller banks, and healthcare, you can buy an ETF, or I’m trying to think, off the top of my head. We did Humana, or I’m drawing a blank, and I don’t want to waste too much time on there, but we can give you some more other picks on that.

Daniel Creech: But yeah, I like those picks, and just to put it into perspective here, 2021, this was in The Wall Street Journal from Monday, and they did a great recap in things, but the S&P 500 rose 27% in 2021, and that was capping the third consecutive year of double digit gains. All right? Now, the forward P/E is about 21 times. That’s higher than the 10 year average and such, and get this, Goldman Sachs, RBC, Wells Fargo, and Credit Suisse predict that for this year, 2022, the S&P 500 will rise somewhere between 6% and 11%. Now, compared to 27%, that may sound weak or not so exciting, but remember, we’re coming off a massive bull run, lots of stimulus money, a lot of tailwinds from the government, not necessarily needing the economy to unfold or produce on its own, and we’re also changing this entire paradigm shift of interest rates. So going forward, if the Fed follows through with what it says and starts hiking interest rates, it’s tapering its stimulus money through bond purchasing and all that, that’s going to have an effect, that’s going to cause some volatility.

Daniel Creech: But I want to just spend another couple minutes here on it’s okay to have rising interest rates. It’s okay to have a cooling off period or a slowdown. The Fed is in such control and so obsessed with managing and controlling the economy, that you would think that a recession or a pullback is like the end of the world, the wheels are just going to fall off completely, and that’s simply not true. Now, don’t misunderstand, don’t hear what I’m not saying. I don’t want the market to crash, I don’t want me or our investors and our subscribers to lose money.

Daniel Creech: No, not at all, but I’m trying to paint the picture that it’s not the end of the world if you have a flat year. We’re still going to be able to take advantage with individual stocks, but have exposure to the S&P 500, that’s okay, and just don’t go headline by headline or day by day, because the media will just sell you all kinds of crazy stuff. Remember, they want you to click on things. Everybody does. That’s how they generate clicks, fees, and all that kind of stuff. But just realize that one day doesn’t make an entire streak and/or change something.

Daniel Creech: So that’ll be a little interesting, but I like how some of the banks are just saying, “Hey, we might have a flat year. Let’s say we’re up 5%, let’s say we’re down 5% as the indices.” It’s not the end of the world, so just prepare for that, and if you’re nervous about volatility or anything, it’s okay to have some cash on the sidelines, it’s okay to take winners or some profits off of your big winners. There’s nothing wrong with that. So don’t get caught up in the trading mentality. Not that trading is bad, but just don’t get caught up in that and be too wishy-washy, as my grand-folks would often say. Yeah, anyway, that’s funny, but ‘ll tell that story some other time.

Daniel Creech: So 2022, why do I think the market will be up or down? I’ll take the easy one, up. 5 to 10% sounds just fine. I don’t have a number. I’m not as smart as the Goldman Sachs guys or the other investment banks, but there’s just too much money still sloshing around in the economy. I don’t understand, unless interest rates really take off and spike, which I don’t see exactly happening. Of course, I could be wrong, and I will gladly admit it if I am, but the Fed just continues to move the goalpost, and that’s okay. They do. So yes, they say they’re going to raise rates, do all this tapering and stuff, but they can always change their mind.

Daniel Creech: So, there’s just a lot of easing still going on, there’s a lot of monetary policy still going on, a lot of those tailwinds are still in place, and I think that they’re going to try to navigate that because yes, despite what they say, I do think that they watch the stock market, and I don’t think that Jerome Powell wants to take on another tenure, another term at the head of the Fed and be responsible, or be in office, or hold his position when stocks crater or tank. So, I just don’t think that’s that big of a possibility.

Daniel Creech: Also, the big elephant in the room is the new coronavirus variant. And so far, if you noticed, and I talked to you about the way things are sold, and pay attention to that this year with inflation, how it was trying to be sold as transitory, now that’s out of the bag, with the human infrastructure bill that’s going to come and pull at your heartstrings to get more stimulus money in the hands of people. Also, have you noticed, and if you haven’t yet, I want you to pay close attention to this, because I’ve been watching CNBC the last couple days, and even though it kills me at times, it’s good to have a pulse of what mainstream is talking about and have an idea of what’s trending and/or what’s going on.

Daniel Creech: And if you notice, this variant for coronavirus is, I mean, the mayor of Chicago was on CNBC earlier this week and was basically saying, “Oh, well, we expect this to peak in a couple weeks and then really slow down,” and the data is showing that, hey, it’s more like the flu than the other variants, and yes, it’s highly contagious, and as you see, it was getting over a million cases a day, but they’re not worried about the long-term or the big health effects. It’s not as dangerous as what they’re saying, and everybody’s cautious on that. You don’t want to jump the ship. Everybody wants to be safe and all that, I get that, but the narrative now is,” Hey, this is getting better.”

Daniel Creech: And on CNBC also, they had, and I wrote it down here, it was Dr. Kavita Patel, and I’m probably butchering that. I believe it was on Tuesday, I saw some of this interview, and I believe Becky Quick did it, and the long and short of it was, it was a decent interview until the end, when it was kind of the wheels were falling off because people are growing frustrated over the amount of tests available. I’m sure you saw headlines about people getting in fist fights, and long wait times in New York City, and this and that and the other. The media has done so good at scaring the hell out of you for the last couple years over this that now, they’re trying to backtrack, and they’re talking about, and of course, Florida is one of the favorite whipping boys, because they’re telling people not to test for this and not use tests if you don’t feel bad or you have no symptoms or whatever, but the narrative, Fauci is even talking about, “Hey, we shouldn’t focus on the number of cases so much as we should hospitalizations and/or deaths,” and that’s great.

Daniel Creech: I would argue we should’ve been doing that a long time ago because yeah, you can get caught up in the number and scare the hell out of people, and a million cases a day, but if it’s not doing anything overall, A, we should be excited about that. We should be happy about that for everybody that it’s not as dangerous as what was once feared, and that narrative is going to be a tailwind for the markets, in my opinion. I mean, you can shrug that off and say, “Okay, well, we’re kind of taking that off the plate of a total lockdown.” President Biden spoke earlier this week, and he continues to pound the table and say, “Hey, schools need to remain open. We have a pandemic of the unvaccinated.” Of course, he likes to put the blame there, but he had to turn ship. Listen, he ran on the idea that he wasn’t going to mandate vaccines, he wasn’t going to shut down the country, he was going to shut down the virus. And then last week, he says, “Hey, there’s no federal solution. This is a state thing. I’m going on vacation.”

Daniel Creech: I’m paraphrasing, of course, but they’re changing the goalpost, and they have to, because people are growing frustrated with doing what they were told, A, get a vaccine, now they need booster shots. Pfizer, which is another pick I’ve been excited about. Tongue in cheek, if you put your conscience aside and are okay with this stuff being forced, but that’s one way to profit from it, and I believe that’s either at or near 52-week highs. Again, I don’t have it right in front of me, but they got the COVID pill coming out. I believe it was them. I don’t want to get these confused, and I’m sorry, this is on record, so that’s good, you can hold me accountable, but I believe that for kids or younger kids, they just got approved, or the FDA, somebody approved that you could get a booster five months after a vaccine or six months.

Daniel Creech: My point is, is that this is going to be an ongoing thing, and people are not only frustrated about that, in my opinion, but they’re starting to push back there, and that’s why you have moving of the goalpost between everybody, with Fauci explaining, “Hey, let’s not focus completely on the cases. Let’s focus on something else.” That’s all positive for the markets, because that’s a bullish scenario. The idea to get back to normal, the economy can operate, people aren’t going to be scared and be willing to go out, spend money, go to work, get new jobs, pay for services, pay for goods. That’s all good for the economy, and it’s also good for the stock market. So in a nutshell, I think we could have a positive year. I do think we’ll have a lot of volatility, but with volatility is going to come a lot of opportunity and individual stocks, and that’s something that I’m really excited about, and I’m looking to.

Daniel Creech: One last thing on the Omicron thing is, and I’ll sum this up this way, if you haven’t listened to the Joe Rogan podcast, you should do it through Spotify, and a couple weeks ago he interviewed a Dr. Peter A McCullough, and more recently, he interviewed Dr. Robert Malone. I’m not going to go into great detail, but I’m going to sum it up this way, and I told some people a month or so ago, and repeated this in Ohio when I was visiting and was talking to family and friends. I don’t care what your opinion is on COVID or any of that, on how it’s being handled, how should it be handled.

Daniel Creech: My point is, and these are long interviews, but you can download them or you can just stream them, listen to them at your own time, but if you’re not willing to listen to these interviews and listen to these doctors, these published, well-respected, top of the field doctors, talk about all kinds of different things and field different questions from Joe Rogan, then that’s a bummer to me if you’re not willing to put in that time, because all you have to do is listen, and just think. Use your brain that God gave you. Have you heard most of this stuff in mainstream media? You’ll probably hear things you’ve not heard before. Why is that? Why are some of these getting censored on social media platforms like YouTube? Why?

Daniel Creech: And if you’re not willing to put in a little bit of time and pay attention, that’s okay, you’re allowed to, but it’s very difficult, in my opinion, to form an opinion, and you’re just going to be persuaded and pushed around by what you hear, and basically who’s barking the loudest and/or the most fear, because that’s what grabs your attention, including my attention. I’m not singling anybody out there. But definitely check out those. That should be your new year’s resolution. Listen to those two podcasts, and do it quickly, and like I said, just understand and ask yourself, why and what’s going on there?

Daniel Creech: Back to the markets real quick, from FactSet, I think this was from December 17th, they did their update for earnings and different things. Fourth quarter earnings, we’ll be starting to report here relatively soon, but just as an overall macro view, before we give Frank’s update, revenue growth for 2022 is coming in at around 7.5%, is what they’re expecting, and earnings growth is about 9%. That’s for the companies for cyclical year 2022. Why do I point that out? Just to give you a heads up. So, the big banks are calling between 6 and 11% increase in market indices this year, revenue growth, earnings growth. So, when you’re looking at your own ideas, or we’re pitching our own ideas and why we like it, we’re going to look for things that are of good value. Why are they down? Why are we buying now, and are they projected to grow faster than the overall market? Then they could outperform, see more money flow into it, and make all of us lots of money.

Daniel Creech: So, that’s kind of where we were, and where we’re headed in a nutshell. Now, let’s turn to a fun topic here with Frank’s update from day one, where he was using his media badge, because of all you wonderful listeners here on the podcast. Again, be sure and check him out on the TikTok page and Curzio Research YouTube. But I was talking to him earlier, and I got to tell you, it’s just like another Wednesday with one of Frank’s good rants, even though he’s not personally here, but he’s a little pissed off, and I can’t blame him, because a lot of major companies went virtual and/or canceled, pulled out of the CES, Consumer Electronics Show, because of the coronavirus variant.

Daniel Creech: And so, he got up early and started going on day one of the media day, and a lot of the presentations were moved to virtual, and as you know, that just doesn’t have the same… It’s like watching a great concert in person, or at home on a DVD. Yeah, it ain’t bad on a DVD, but if you’re going to watch somebody in person, and you get to your seat and you realize you’re just going to have to watch a big screen and not have them on stage, that’s going to be a disappointment. So, he was pretty upset about that. He thinks that the companies that are going all virtual, even the big guys, like Intel, are really going to struggle with that and really going to suffer.

Daniel Creech: The highlight for day one of him was no doubt, Qualcomm. He said he went there, they were live, they were in person, and he was blown away, and I don’t think I’m exaggerating that, I think he’d be just fine with me saying that, but he said, “Everything is around the metaverse.” And it’s just fun, because you guys know Frank’s a passionate guy, he’s doing his boots on the ground, he’s doing what he loves to do out there, digging through ideas, talking to people, got a lot of interviews and stuff lined up. But you could just tell, I got the impression, I remember him a few years ago talking about how everything was being connected, and we had some good recommendations around some smart cities and connectivity, everything was going around Alexa through Amazon. This year, already with the Qualcomm, he was saying how everything is just metaverse. Everybody, a lot of different companies are going in on the metaverse and augmented reality.

Daniel Creech: Qualcomm, I think threw out a 700 billion opportunity, as this unfolds over the coming years. That is just a massive, massive opportunity, and Qualcomm wants to be the gateway to the metaverse. Now, there’s still a lot of details that are light, still a lot of unknown about this. We’ve talked about this on the podcast with what Zuckerberg through Facebook, or now Meta, thinks about that. They’re incredibly bullish, pouring tens of billions of dollars a year into that, but he was explaining how Qualcomm wants to be the gateway. So, definitely put that on a watch list, that may find its way into Curzio Research Advisory, our newsletter to focus more on large cap and things.

Daniel Creech: And Qualcomm has partnered with Microsoft for, I believe he said something through Microsoft glasses. Again, probably more on the augmented side of reality and things, but the fact that they were there in person, they’re going to unveil a lot of new products, it sounds like. Again, be sure to check out TikTok, because he’s going to try to capture a lot of that live, and post to you guys just like you were there, right alongside him.

Daniel Creech: John Deere has some really cool stuff. I know that’s kind of a boring… Nothing against all you farmers out there, but you don’t think of an exciting stock, or at least I don’t when you think of John Deere, but the investments they’ve made and the technology they have with just narrowing in on data and artificial intelligence is just amazing, so that’s pretty cool.

Daniel Creech: The media day, he said, the overall vibe, he was really upbeat overall, but he is disappointed, and there’s less people. Less companies is a good thing, it got a little too big and convoluted at times. This is better to focus on less companies, you get a little bit more time, but the buzz isn’t there, or the same at the beginning, so hopefully, that kind of picks up. He was talking about how there wasn’t any lines in the airport for the CES when you get to Vegas, which normally is, and that was a big change, and they’re obviously expecting a lot less people there this year, just because of the coronavirus, and the fears, and all that kind of stuff. So, kind of a bummer there, but definitely from day one, Qualcomm was the big takeaway, and on tomorrow’s podcast, I’ll give you another update from Frank, and also talk about some more headlines and things like that.

Daniel Creech: So again, we’re really excited here about a lot of different things here at Curzio Research. We couldn’t be more excited. I couldn’t be more just grateful to be behind the mic sitting in for Frank here for a couple days, and hope all of you guys are having a great start to the year, and we’ll check back in tomorrow. Again, I know I’m plugging this pretty hard, but send your feedback to me, daniel@curzioresearch.com. Frank is frank@curzioresearch.com, and again, check out the TikTok and the Curzio Research YouTube. We’ll see you tomorrow, folks. Have a great day.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.