About this Video

• Video Title: It's not as easy as just buy stocks because the president told us to, says Trivariate's Adam Parker
• Channel: CNBC Television
• Speakers: Adam Parker
• Duration: 00:05:14

Introduction

This CNBC interview features Adam Parker, discussing his less optimistic outlook on the stock market. He analyzes recent market rallies, considering factors like tariffs and their lagged effects on earnings, and cautions against solely relying on presidential pronouncements for investment decisions.

Key Takeaways

• Market Rally Analysis: Parker attributes recent market rallies to technical factors (VIX decline), optimism surrounding negotiations, and better-than-expected earnings, but believes underlying damage from tariffs remains.
• Lagged Effects of Tariffs: He emphasizes the time lag between tariff implementation and its impact on company earnings, predicting a broader slowdown.
• Caution Against Blind Following: Parker strongly advises against basing investment decisions solely on the president's statements, citing the president's past business track record.
• Defensive vs. Offensive Strategies: He suggests a defensive investment strategy focusing on tariff-free, pricing-power companies, while acknowledging the need for some offensive plays in a potentially volatile market.
• Uncertainty Remains: Parker highlights ongoing uncertainty regarding trade resolutions, particularly with China, as a major factor influencing market behavior.

Adam Parker mentions several examples of companies that he believes are positioned well defensively: companies that are "tariff free, China free, [and] have pricing power." He specifically cites waste management companies and aggregates companies such as Martin Marietta, Knife River, and Vulcan. He also mentions drug distributors as another example of a sector that might be less affected by the current economic climate.

Parker believes that while the fact that trade talks are happening is positive ("the second derivative of the conversation is positive"), the market is still down 3% year-to-date, and damage has already been done. He hasn't seen a lot of progress in the trade negotiations, particularly with China, and believes that resolution on tariffs (especially with China) is crucial for greater market clarity. Until there is such resolution, he anticipates continued market volatility.