Latest / Markets with Megan: A Quick Financial Markets Update / 5 Questions Driving Markets This Summer | S3 E152 | 06-22-26

Transcript

5 Questions Driving Markets This Summer | S3 E152 | 06-22-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: We're starting to reflect on the first half of 2026.
• 0:04
  Megan Horneman: It's Monday, June 22nd, and this is Markets with Maiden.
• 0:07
  Megan Horneman: If you like this podcast, please subscribe, hit that alarm bell, share with your friends, family, colleagues, anyone who's interested in that economic data, what it means for investments, and what it means for the market.
• 0:19
  Megan Horneman: Today we're going to focus a little bit differently.
• 0:21
  Megan Horneman: We're going to address the top five questions that we've seen in investors' minds right now.
• 0:27
  Megan Horneman: First of all, is this it for the US and Iran war a peace deal?
• 0:32
  Megan Horneman: We have an interim deal.
• 0:33
  Megan Horneman: It's basically a ceasefire for 60 days.
• 0:36
  Megan Horneman: There's still three things that we want to get more clarity on.
• 0:40
  Megan Horneman: It's the Strait of Hormuz, how quickly, how um how how efficiently this will move through to bring those supply and production.
• 0:48
  Megan Horneman: Secondly, um, the Iran nuclear program, will that be completely stopped?
• 0:53
  Megan Horneman: What is the deal on the moratorium?
• 0:56
  Megan Horneman: And then, third, what is the situation between Israel and Lebanon?
• 1:00
  Megan Horneman: Are they coming a part of this peace deal as well?
• 1:03
  Megan Horneman: The second question is: when will we see the relief in energy costs?
• 1:07
  Megan Horneman: We've already seen gasoline prices come down about 10%, but at the same time, crude oil prices have come down 30%.
• 1:15
  Megan Horneman: This takes time.
• 1:16
  Megan Horneman: Production and transportation will take time for us to see an ongoing decline in gasoline prices.
• 1:23
  Megan Horneman: Third question is when will the Fed raise rates?
• 1:26
  Megan Horneman: We do think that inflation is sticky at this point.
• 1:29
  Megan Horneman: We will get a lot of volatility between with inflation because of the up and down in gasoline and energy costs, but the underlying inflation is still there.
• 1:38
  Megan Horneman: We do think that this will lead the Fed to likely raise interest rates in the second half of this year.
• 1:44
  Megan Horneman: The exact month, we're not sure.
• 1:46
  Megan Horneman: We think they'll start with 25 basis points to give them a little bit of leeway.
• 1:51
  Megan Horneman: The fourth question here is are equities expensive?
• 1:54
  Megan Horneman: We've seen equities making record highs.
• 1:56
  Megan Horneman: Are they expensive at these levels?
• 1:58
  Megan Horneman: From a price to earnings valuation multiple, no.
• 2:02
  Megan Horneman: We've seen basically flat PE expansion this year, but yet earnings are very optimistic for every quarter from here on out.
• 2:10
  Megan Horneman: You're looking at 20% plus year-over-year earnings growth for every quarter through the rest of 2026.
• 2:17
  Megan Horneman: This might be a little optimistic given the anticipation that the Fed may need to raise interest rates in the second half of this year.
• 2:25
  Megan Horneman: The last question is it kind of surrounds earnings season.
• 2:28
  Megan Horneman: Will this Q2 earnings season that starts in July, will that support this rally?
• 2:33
  Megan Horneman: First of all, the big thing is that earnings have been driven by technology, financials as well.
• 2:38
  Megan Horneman: But from a technology standpoint, investors are going to want to look for real revenue that comes out because of the excessive spending from an AI standpoint.
• 2:48
  Megan Horneman: That has continued, their tolerance for this has continued to decline in recent quarters.
• 2:55
  Megan Horneman: So we want to see if there is some real revenue that's tied to this excessive spending.
• 3:00
  Megan Horneman: So bottom line, we are still on the buy on the weakness, not sell on the weakness mentality because we're constructive about the US equity market long term.
• 3:10
  Megan Horneman: But we are very patient and very diligent on what we're looking at within that equity market.
• 3:16
  Megan Horneman: Right now, we do think there's too much optimism priced in.
• 3:20
  Megan Horneman: There's not enough reward for the risk that's in the market right now.
• 3:23
  Megan Horneman: We're staying patient.
• 3:25
  Megan Horneman: We'll look for opportunities, and we may get that through the summer months.
• 3:28
  Megan Horneman: Remember, we are approaching a period where we may encounter some seasonal weakness from an equity perspective.
• 3:35
  Megan Horneman: Thank you very much.
• 3:36
  Megan Horneman: That's all we have today.
• 3:37
  Megan Horneman: If you want a history of our podcast, please go to marketswithmegan.fm.
• 3:40
  Megan Horneman: Thank you.