The 'reindustrialization' of America is a key theme for economic recovery, says Rich Bernstein

Do you think that it matters now whether we get a cut this year or not or is all of this speculation about what the Fed is going to do sort of already baked into what we’re seeing in terms of a refocus on companies reporting earnings and and are they going to be profitable, Rich, so I it’s great to be with you. I think it’s a little bit of both, right? I mean earnings and interest rates are always the two factors the that drive the equity market. The earnings front, I think we should expect earnings to continue to to Rev up. The profit cycle is accelerating. I think we should see that continue the next several quarters. The interest rate side I think is is a little bit more interesting right now because the reaction to the weakness we, let’s say last week that we saw in the employment report was not for defensive stocks to outperform, it was for speculative assets to outperform. In other words, the expectation of the Fed would cut that. There would be more liquidity for speculation. We’re still very much in the speculative period of the stock market. Yeah, you had consumer staples in healthcare, two of the three worst performing sectors then on Friday. And all of that, against this backdrop of the geopolitical tension we’ve been reporting today on the headlines coming out of Israel and whether Hamas has accepted the ceasefire and whether Israel does it. Does that factor at all into how you’re thinking about your investments more broadly right now, Rich? So, so definitely longer term, I don’t think, I don’t think we, we think we’re smart enough to know what’s going to happen in the next, you know, two weeks or two months or something like that any more than anybody else. But I think as you look out, these are symptoms of globalization contracting, right. Whether it’s in the Middle East, whether it’s in Eastern Europe, whether it’s our relationship with China, some of the things are going on in Africa and Latin America are all symptoms of the bigger picture, which is globalization is contracting that we think continues to be the major long term investment theme. I know everybody’s up on AI these days, but I think that and I think my my colleagues here would agree with me that that the deglobalization, the reindustrialization of America is a critical theme to the US economy. And you think that’s going to happen. We think it’s, it’s starting to happen already. It’s been in the background happening. We think it’s it has to happen. I mean, if it doesn’t, Tyler, then we’re going to him. Tremendous inflation here in the United States because we have a massive trade deficit in the United States which was number big deal as long as globalization was expanding. But to be dependent on the rest of the world for everything, it’s not just semiconductors, we’re dependent on the rest of the world for everything. At a point where globalization started to contract, not a very good combination. It changes the story from secular disinflation to secular inflation, except corn, we have a lot of corn here in the United States. But but if that’s the case and you’re watching at a contraction in globalization, then where do you put your money? How do you make money on that trend? Right. So I I would say, look, there’s the energy sector. We need a lot of energy infrastructure, You know, whether it’s ground or green or green, I think is just a political question. We need to be energy independent. We’re not, we’re not even close to energy independent utility infrastructure, right. Everybody in California is hyped on electric vehicles, but nobody’s figured out that the grid can’t support that. Maybe a better investment theme is the industrial companies are going to build out California’s electric grid as opposed to the EV companies themselves, right? United States ranks last in shipbuilding, last in infrastructure among major economies. Not first, second, third, last. So imagine we went from last to like 5th. That would be a pretty good investment theme.