As earnings season rolls on, the U.S. stock market keeps climbing higher even as the U.S. and China engage in a trade dispute, and there are no definitive signs of a looming recession.
"Considering where interest rates are now, which is what I look at most, by definition we're at least 12 months away from even a specter of a recession," Portfolio Wealth Advisors Chief Investment Officer Lee Munson told TheStreet.
Even though the U.S. and China are in a tit-for-tat trade spat, these headwinds have been adequately priced into the market, said Munson, noting that the market correction in February was the result of inflation scare, not a trade war.
"I think the only thing that we're not really pricing in right now is the upside as we see continued earnings going double-digit increases year over year," Munson said.
Munson also explained why investors are buying small-cap stocks as a means to avoid the effects of a trade war and take advantage of the looser regulatory environment.
Meanwhile, as investor consider whether FANG has reached its peak, Munson said it hasn't yet. But he cautioned investors to take a "pause" as the acronym for tech stocks gets longer, with the addition of BAT, which refers to Chinese tech giants Baidu Inc. (BIDU) , Alibaba Group Holding Ltd. (BABA) and Tencent Holdings Ltd.
"Everyone loves Amazon (AMZN) , but here's the thing, the acronym is getting longer," Munson told TheStreet. "We have [FANG] plus BAT on it, and now we've started to bring in the international crowd."
"I think as that alphabet soup gets longer, I think you have to take pause," Munson said.
Regarding Tesla Inc. (TSLA) , Munson questioned how long Wall Street will tolerate the electric automaker given that it continuously overpromises and underdelivers, and has yet to be profitable.
"I would say if you really believe in it, I'd say great, I have magic beans to sell you," said Munson.
That said, Munson believes the cars are "phenomenal."
To watch the full interview with Lee Munson, click here.