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Jacob Sonenshine: 00:00 Is trade no longer a risk. We have JJ Kinahan, chief market strategist at TD Ameritrade. Thanks for being here.

JJ Kinahan: 00:05 Good to be here, Jacob.

Jacob Sonenshine: 00:06 So that is my question, is trade at this point really not a risk anymore?.

JJ Kinahan: 00:10 A trade is always going to be a risk until you, you know, this is one of those things you have to be really careful. Uh, and there's an old expression when I was on the trading floor, don't count the trade until it's cleared. And that's exactly how I feel about trade. Yes, the momentum is there 100% but until we have something solidly on paper and you know, we know everyone's agreed on it, you still have to count it as a risk to the market. We see days where a statement has made that things aren't going as well, whatever. And what immediately happens, S & P futures fall, rest of the markets fall. So, uh, an until something is signed, never counted.

Jacob Sonenshine: 00:44 And that's actually my next question until something is signed, then we have hard details and then you can start breaking down by sector what's going to happen. And then you have analysts updating their valuations in between now and that time. What are investors doing? What are you advising people to do?

JJ Kinahan: 00:57 Well, I would say to people, you know what, you still buy good companies. At the end of the day, You buy good companies that have good earnings that we just came off earning season. Um, most companies have already reported, we still have some left, but not very many. And they've given you guidance what they think about it. I was actually a little surprised at the lack of fear, if you will, or the lack of guidance around the tariffs or what the companies thought of tariffs. So that's fine. So that tells you, you know, the companies are considering it, but they're still making their normal business plans. So you have to go with those companies that you believe in for a bit of a longer term story. And this is the time when solid companies will perform well. And what we've seen is some of the pressure has come off, particularly the chip makers in terms of what we're seeing, as far as tariffs.

Jacob Sonenshine: 01:45 When you talked about good companies. What's really the definition there? Are you talking about low Beta or are you talking about other types of companies?

JJ Kinahan: 01:50 Well, our clients had been certainly going to low Beta stocks. You know, we just released our IMX today and what it showed is that our clients have actually gone to a lot of bond funds and ETF type funds, which tend to be lower, lower Beta, uh, rather than some of the more individual stocks. But what I am talking about for the individual companies is, A. Are they making money? Of course and B, they give guidance. Is the guidance positive? And we saw a lot of companies come with positive guidances this quarter. And are they saying, hey, we see a future where we're still going to continue to make money and most importantly to grow our business.

Jacob Sonenshine: 02:22 I want to ask quickly about the autos. Uh, I in, in the Wall Street Journal story, uh, mentioned a lot of, you know, the audio, there's going to be reduced, uh, hopefully reduced tariffs on American and it was going into China. Um, so are you moved to on the autos at all there?

JJ Kinahan: 02:35 Well, what's interesting is I just talked about our IMX would chose what our clients do and our clients actually we bought for last month as one of the stocks that sort of stood out from a normal pattern buyers of Ford. And a stock like that kind of makes sense if you think about it from a retail point of view, a relatively inexpensive on lever say cheap, but it's inexpensive, trading, you know, right around $9. So people can take a view on the automakers doing well, not taking a big portion of their account. I think that the auto makers have done an amazing job over the last few years adjusting the new technologies at the same time, streamlining their costs. So this is sort of the third leg of what they need in order to really increase their business. So we will see if it works out at the same time he did have Ford announced last month that they've gone out of this, uh, heavy truck business in some areas of Asian, not China, but some other areas of Asia. So we'll see, you know, sort of what happens there and how that works out over the next couple of years.

Jacob Sonenshine: 03:36 You don't let a net buying of Fords. And then one of my questions is, because it wasn't there in the last, you know, Sunday, when the news came out about trait, there wasn't much talk about reduced tariffs on metals, steel and aluminum coming in from China into the US. So, do you think that these auto makers really need to see that in order to, in order to have those better margins again?

JJ Kinahan: 03:57 Well, you know, again, some of it is speculation as to what actually gets done also. So we'll see what does, what does happen with steel and we still have a big steel supply from Canada also. So, obviously if you can, any product you can make where your input costs are reduced is going to help your bottom line significantly.

Jacob Sonenshine: 04:16 All right. Thanks a lot.

The news that the U.S. and China are close to a comprehensive trade deal is a great sign of progress, yet not at all a certainty. 

The market initially rose this week on reports that the U.S. and China are getting closer to reaching a long-awaited trade deal, which could be announced by the end of March. 

With several details to be worked out, both from a diplomatic and contractual standpoint, and a tariff standpoint, "Don't count the trade until it's cleared, and that's exactly how I feel about trade [tariffs]," said JJ Kinahan of his days on the trading floor. Kinahan is the chief market strategist for TD Ameritrade. 

Related. Jim Cramer: 5 Reasons to Buy Any 'Sell the News' Reaction on China

With that uncertainty in mind, here's how investors should think about decision making at this juncture:

"Still buy good companies," Kinahan said. "At the end of the day you buy good companies that have good earnings." 

Related. It Isn't Surprising That There's Some 'Sell the News' Action Taking Place

Another way to remove risk from one's portfolio is to buy low beta stocks or funds.

"Our clients have been certainly going to low beta...our clients have actually gone through a lot of bond funds and ETF type funds, which tend to be lower beta, rather than some of the more individual stocks," Kinahan said.