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Let's turn to the market action this morning. US stock futures falling amid the back and forth between the US and China on trade. Our next guest says stocks leveraged to economic growth are the most at risk amid the ongoing geopolitical uncertainty. Joining us now, we've got Brad Newman who is the Algiers director of Market strategy. Great to have you here on set with us. What are those stocks from your perspective, those plays that are most exposed here?

Yeah, thanks for having me. Uh so, you know, I think investors need to move from reacting to tariffs to kind of having some kind of opinion as to how they'll play out and um I don't know exactly uh when they'll go into effect. Maybe they'll be wrapped up with the uh budget reconciliation in the spring, but I do think um tariffs are going to be a uh an unsettling force for the market. And so, I think companies um materials companies, industrial companies, heavy machinery, um some consumer discretionary companies, those companies that uh really need the economic wind at their back are susceptible. So, value type stocks, I think.

How much of this risk has been priced in?

Certainly some has, you know, particularly uh overseas. Everyone's worrying about that and there's a lot of positioning to try to get into domestically oriented companies that uh don't have exports, you know, say from Europe or or China to the US. So there's certainly uh some there, but I, my feeling is that um in the US, the consensus is that it's more bark than bite and uh the market is priced for very placid type type of um economic outlook and I think tariffs could throw wrench in that.

And so with tariffs throwing a wrench in that, then would there be dip buying opportunities that could could appear that that seem appetizing?

Well, yes, certainly. I think it's going to be a very volatile situation. I mean, we just saw that in the past uh, you know, 24 hours that um markets reversed significantly, not only equity markets, but currency markets. So there's there's going to be um a lot of opportunities for investors who have strong opinions as to what companies will gain market share over time, grow their earnings, you know, throughout this and, you know, who's on the right side of um uh of this tariff war.

How much does the stronger dollar complicate that picture, the investment picture right now?

I think the stronger dollar is uh headwind for multinationals and I think it's one of the reasons why midcaps may be a better idea than large caps. Uh to the extent that uh tariff war escalates, you're going to see kind of a race to depreciation. You're going to see central banks in other countries look to offset some of the headwinds from tariffs by reducing interest rates that will cause their currencies to decline and that will take some of the brunt off of um, you know, the tariffs. And so, the US will be left with a stronger dollar and that will negatively impact the uh uh ability to sell overseas or the translation from profits overseas back into US dollars.

Factset was looking for the S&P 500s to see calendar year growth and earnings of about 15%. It seemed like that was largely the consensus. Do you think that tariffs kind of throw a wrench in that as well in that projection and are we due for some recalibration?

Well, the tariffs that um just went into effect probably don't throw a big wrench in it. It's, you know, it's probably on the order of just a percent or two, maybe headwinds. Uh but if it escalates, I I think it does throw a um a wrench in that. Um first of all, the the strong dollar is one of the best um correlations to earning surprises and negative correlation. So a stronger dollar means weaker uh earnings surprises and um yeah, I think it it puts at risk that uh that double digit earnings growth rate.

Brad Newman, thanks so much for taking the time to join us. Appreciate it.

Thank you.