Yahoo Finance

John Stoltzfus is with us now. He is, of course, the chief investment strategist at Oppenheimer. Oppenheimer reduced his target for the S&P 500 this year to 5950. That was from 7100, making it one of the lowest on the street. John, it is always good to see you. Uh, let's start with earnings, John, 'cause we got a bunch of names about to hit the wires at any moment here. Of course, also this week, I got Amazon, Apple, Microsoft, Meta. What have been your general takeaways, John, of this earnings season?

Uh, Josh, great to be on, on Yahoo Finance with you today. Uh, happy to say that when we look at earnings season, Q1 earnings season, again surprising to the upside, uh, looking at my Bloomberg right now, sales growth up 3.65%, modest, uh, but the earnings growth overall 15.14%. Uh, that's not the blended earnings of the FactSet which still includes not only what actually has been reported, but looks forward, uh, looks at the forward estimates that are still going to be tested by results that, uh, so the one that I'm looking at really tells you where it's coming in right now. Then up 15% is a heck of a lot better than expectations for earnings growth in Q1 of about 6.5%.

And John, to your point, it's Julie, it's good to see you. To your point, we got to focus on the future, as well, right? And the effects that these tariffs could potentially have. We were, uh, talking to Larry Adam, of Raymond James earlier, and he said, he thinks that estimates for this year are gonna have to come down. You know, we've had a lot of companies cutting or pulling their guidance. Do you agree, and how's that factoring into where you think stocks are going to go?

Well, uh, uh, you know, Julie, I'd have to say that looking at this, uh, the reality is that not all stocks will be hit by the effects of the tariffs. But we would have to say we were very surprised at just how draconian the, uh, the tariff rates were when it came out on April 2nd. Uh, that's why, you know, we feel comfortable with our reduced target. But when we put our target was looking when we put it in the 7100, we put it in December of last year at that time the market had still not reached its February 19th peak of this year. Uh, but when we looked at it, we were looking for about 17% upside. When we downgraded the target to 5950, we were looking for about 17% upside from that new downgraded target. So, we're positive on stocks. Uh, we think that stocks will likely continue to outperform expectations, because analysts are cutting that forward view, and nervousness, and they also generally, uh, cut, uh, expectations ahead of earnings season. It's almost a tradition with, uh, with consensus analytics. Uh, but beyond that, uh, one thing you're beginning to see is and I think, uh, Secretary of the Treasury Yellen made it pretty clear today, that, you know, what you hear is not necessarily what you get, in terms of the tariffs. And I think what the President, uh, apparently, and I haven't I was in a meeting at the time that he was speaking, uh, uh, in Michigan, but my expectations would be, is that the there'll be a certain refinement of the tariffs which originally looked pretty horrendous in what they were looking for. And a recognition that this is very traditional to, uh, to President Trump's, uh, strategy of of what is it, the art of the deal, which is shock and awe. It's sort of a brutal chess game at the beginning, and then it becomes more convivial as you going forward, or at least to levels at which some agreement can be achieved.

Well, John, considering how much the market was taken off guard by the first salvo here, what's the potential for unpredictability from here on out? I mean, the market has really lifted from, say, April 10th or so. What has really changed?

Yeah, well, the the low came in. What was it? It was on April 8th was the low, and the market is up from that point. Looks like it's, uh, up by rallied about 11.6%, uh, which cut into the original decline from February 19th, uh, down to that low on, uh, when was it? I'm looking at my screen right now, on on on April 8th. Uh, it was at 18.9% downside. I think essentially what it's showing is that the market can most certainly bounce, and not a I hate the term 'cause I love cats, it's not a dead cat bounce. It's a very much a live cat bounce, uh, which shows energy and good health. And I think it's based on fundamentals which include a modest revenue growth in times of a pretty, uh, uh, level of uncertainty. Uh, but at the same time, it shows the effects of experienced leadership and corporations which have been dealing, you know, no one mentioned it, but we hit a a 17-year anniversary from the from when the financial crisis started. And most corporations that are successful, profitable companies have undergone incredible stress. Uh, if you consider since, uh, the the beginning of 2008, then you had the pandemic, then you had the trade, uh, uh, this global supply chain disruption. Uh, all of this stuff has been, uh, tough to deal with, but I think it's technology, uh, which has enabled, uh, companies across the board, as well as consumers to manage in tougher times better than they would have in a more analog era. It's one of the things that we feel very confident about.

John, gotta leave it there and get to some breaking earnings. Thank you so much. Good to see you.

Thanks, Julie.