Hawks Take Flight | Joseph Wang on Fed’s Hawkish Hike and Warsh’s Gameplan – Monetary Matters with Jack Farley

Hawks Take Flight | Joseph Wang on Fed’s Hawkish Hike and Warsh’s Gameplan – Monetary Matters with Jack Farley — Transcript

Market views

Bullish

TLT— Joseph Wang expresses strong conviction on long bonds (30-year Treasuries and TIPS), citing equity bubble risk, potential AI-driven deflation, and attractive real yields at 3.1% on 30-year TIPS. He believes Fed will cut rates when equity bubble pops, creating flight to safety.
MPC— Refining stocks identified as trade of the year, outperforming semiconductors with 73% returns vs 45%. Marathon Petroleum highlighted for extremely wide crack spreads due to Strait of Hormuz closure creating refined product shortage, with strong near-term earnings outlook.
VLO— Valero identified alongside Marathon Petroleum as a top refining play benefiting from extreme crack spreads and Strait of Hormuz closure, with similar fundamental drivers.
LRCX— Jack expresses high conviction that Lam Research earnings estimates are 'criminally too low' given the memory boom and increased fab capacity needs, expecting substantial revenue growth beyond consensus 17% estimates.
TANKERS— Tanker stocks identified as outperforming even refining stocks this year, benefiting from Strait of Hormuz closure and Middle East conflict disrupting shipping routes.

Bearish

EQUITIES— Joseph Wang believes the stock market is in a 'tremendous, tremendous equity bubble' with overwhelming low-information investors who are levered up, creating dangerous conditions. Fed hiking cycle expected to pressure risk assets.
HOUSING— Housing market deteriorating with 7% mortgage rates impacting both high-end and lower-end markets. Even high-end real estate with cash buyers now faltering, suggesting bottom not yet in.

Not investment advice.