Caroline Woods: Joining me now, Michele Schneider, Chief Strategist at MarketGauge. Michele, great to have you here at the desk.

Michele Schneider: So great to be here and see you in person. Thanks for having me.

Caroline Woods: Yes thank you for joining us here in person. So a lot going on this week. Markets have been bouncing back and forth across the unchanged line. Sort of a mixed picture right now. Talk to us about the biggest market catalyst you’re watching right now?

Michele Schneider: Well when you say catalyst I’m assuming you mean a good thing right. Because there’s some headwinds in there, some tailwinds. So if we’re looking at the tailwinds right now, we would have to say earnings is probably number one tariff reduction or at least talk of some more sanity in terms of tariffs. Number two interest rates and yields going lower. Number three so I think that’s really right now what’s keeping us near these all time highs. Sticking with the tailwinds. And then we’ll get to the headwind. I think despite the fact that we do have those tailwinds, the market also has pretty high valuations at this time.

Caroline Woods: So is this still a market that you want to invest in or do you want to wait for better entry points?

Michele Schneider: Well, I’m a trader primarily. So generally I am not one who suffers from FOMO, right? I dips, I like to see weakness against major support areas to get in. So I know of my risk is. So for me, this is a happy time that we might get some correction.

Caroline Woods: OK, so a happy time if we get some correction. Let’s talk about what could potentially cause a correction. What are the biggest risks or headwinds to the market right now?

Michele Schneider: Well, a couple of things. Number one is you mentioned overvaluation. And I love this quote by Mae West. Too much of a good thing can be wonderful. And so I think it was that incredible optimism at high valuations situations that can create a topping pattern. You know, maybe we’re in the seventh inning of this bull market anyway. We don’t know. But the other really more specific things would be the regional banks. They had their little mini flush last week because of the scare. However, that Cre, which is the ETF, still not really performing well. The consumer area, which I like to look at it for, SRT is still under the 50 day moving average, which means caution. So those are two areas I think you have to watch. And those small caps are going to be tied to both. So if you look at just those three areas alone, they’re not really doing what we’ve been seeing particularly with the mag seven.

So easier to make the case that this is a market that moves higher or lower. I would say right now we’re in a getting into a strong seasonality of up. But if we cannot see the consumer in particular really going out there and spending ahead of the holiday a season, then it could be a pretty good correction on the way. Pretty good correction 10% or so. Well, barring any credit default or, you know, some other sort of geopolitical situation, some kind of a supply chain issue, I would say probably 10% to 15%

Caroline Woods:  OK all right. But that would make you happy because you would say it’s a buy opportunity. We’ve seen a really impressive comeback in Apple shares. It’s approaching $4 trillion in market cap. Talk to me about the significance of that. Make you a believer in Apple?

Michele Schneider: Well I’ve always been a believer of Apple. I mean everything I have is Apple right. And actually, you know, thinking about upgrading the phone again because the new apples are getting better and better, particularly if you like taking pictures like we do. But the bigger thing to me is that Apple is very much a cyclical stock. Related to the consumer. And that’s one of the areas with AI. We have to watch because outside of the meatus. And the Google’s and the Amazons, those OpenAI and those smaller companies need the consumer to buy. And so Apple would be one of those examples. And if the consumer is in there buying the technology and a believer in the future of Apple related to AI, then that would be a very positive thing for the stock and most likely another tailwind for the market overall.

Caroline Woods: Do you think that consumer is strong enough to keep spending a lot of money on Apple products?

Michele Schneider: We’ll see. I wouldn’t make that statement boldly, but right now at least, it’s better than what I would have expected.

Caroline Woods: We have Netflix on tap tonight when it comes to earnings. What are you expecting there. What should we be paying closest attention to?

Michele Schneider: Well, Netflix I just read actually is potentially looking at Warner Brothers, which would put them in a tremendously strong situation. And it’s interesting because as a subscriber forever of Netflix, I’ve had my periods of being frustrated and then also elated at the content. But yet their subscription base keeps growing and growing and growing. It really is the granddaddy of streaming, so I would assume that the earnings will be good. It’s going to be more of how much they can grow, and that’s why this Warner Brothers deal could be huge for them.

Caroline Woods: Tesla reports tomorrow. Are you trading Tesla ahead of results. Will you be a trader after possibly after we’re flat Tesla right now?

Michele Schneider: Again, I know that Tesla is much more than just a car company. I’ve read today about tariffs being rolled back that could be good for Tesla. Obviously situation with China still being dicey, we don’t know. But from a technical standpoint it’s a highly technical stock. If it gets through for 65, I think that would be compelling to see new highs.

Caroline Woods: Talk to us about what you are buying right now. What looks attractive to you?

Michele Schneider: Well, on my shopping list, one of them has been long bonds. It was the unloved to the loved REIT. Yields I still believe will go lower. And tilts traded around 92 today. So that’s a big breakout area. Secondly, in terms of the infrastructure, we actually got into an ETF called alerian MLP which does pipeline. And then I read Phillips and Kinder Morgan are looking at expanding pipelines which is necessary. That type of infrastructure for energy movement just like natural gas is taken a bit. I’m also still looking at my vanity trade. I’m just expanding out. So the impact of the diet drugs. What are consumers going to buy as they go forward. So we’re long Stitch Fix, which is a company that was left for dead. But they’re being smart in their marketing, talking to people that may have fashion confusion, if you will, because now they’re changing their look. Looking at match.com, it had a big sell off, but now it looks like it could be basing again. We’ve been in Novo Nordisk looking at and we’re in Viking therapeutics, but we always trade with a stop to protect our profits. Number one. And number two is if we’re getting in, we need to know what our risk is. And that’s why I mentioned those two stocks Stitch Fix and match because I think the risk is obvious.

Caroline Woods: And what about hard assets. Because I know you called gold’s bottom at 2000 called silver’s bottom at 24. We’ve seen huge impressive run UPS since then. Are you comfortable getting in now or are you waiting for better entry points. What are those entry points?

Michele Schneider: Well, we’re happy we may have gotten out a little bit early, but considering we rode this from almost a double in silver and in gold, I’m happy to be a little patient. So here’s what I’m looking for right now. I mean, we’re seeing a massive correction as you and I are speaking. And that also always happens with commodities. They go parabolic and then they crash. So for gold it’s trading at around 4,200 right now. I’d like to see what happens around 4,000 just sort of as a good psychological point. And with silver which got back down to 4868, I’d like to see what happens at 45 if we even get there. If we don’t get there, that’s a good sign. And if we do get there, then I would like to see some buyers coming back in and just finally energy.

Caroline Woods: How does energy fit into a balanced portfolio right now?

Michele Schneider: Well, we’ve had a lot of buzz this year, obviously, about nuclear energy. We were a big buyer of uranium. Lithium has gone up. Coal has gone up. And I do believe that some of those got a little ahead of themselves in terms of practical usage. And that’s why we started looking at natural gas and now not necessarily oil in and of itself, although that could be bottoming as well as everybody gets bearish. But like I said, this infrastructure idea of how we’re getting the energy to the AI and data centers, and there’s a lot of different things to look at. I kind of like to keep it old school. Like I said, that’s why I like that alerian ETF.

Caroline Woods: OK we’ll leave it there. Mish always a pleasure, especially when you’re in person. Thank you so much for joining us.

Michele Schneider: Thank you so much for having me. That’s Michele Schneider, Chief Strategist at MarketGauge.