The stock market, how we got here

So, number one, if you look at the chart behind me, you can see that the stock market is near an all-time high. Now, the low was April. Since April, the market has rallied approximately 30%. So have our accounts here at Cantu Tactical Wealth Management. The problem is that when it fell, it fell 26%. So you can see it’s just now really barely recovering from that fall of 26%. We really need the market to move up 35 to 37% for the public in general to get to the previous February highs. Now it is my belief if you’ve been watching my other videos; I said that we would achieve that most likely by July 31st. And in fact, we are on track to achieve that. If you also look at my earlier videos, I mentioned that May would be the biggest month for the market to move. It in fact did move as such. If you actually listen to the economist and the rest of Wall Street and the media, they were telling you that June is the month that the tariffs are going to hit. June is the month that you’re going to see all prices fall – in terms of stocks, but you’re going to see prices rise in terms of products, and you’re going to see jobs deteriorate in June. That never happened. The economists were totally wrong. Matter of fact, the tariff items actually went down in price, upsetting the economist who predicted just the opposite. And then in June, we had a spectacular jobs report. So it was 100% one-eighty-out of what the economists were predicting. My predictions were in fact more correct. I said we would rally in May and then the market would continue and we’re on track to achieve this July 31st date of reaching the previous February highs. 

Will the stock market go higher?

So, there’s also three catalysts that could possibly cause the stock market to move higher. Let me answer this question. I do believe the stock market is moving higher. I do believe that the stock market has long legs. Now, right now, we the United States is the envy of the world only because we have the best stock market in the world currently. But things could change and then we want that to flow over into more international markets. But let’s talk about three of the possible catalyst. 

     1.) the fact is that July is one of the strongest earnings months of the year and I believe it’s going to start on Monday when most earning reports are going to start flowing out and then it will go all the way until about August 15th. But because the earnings are so strong, we just need one report, just one report, and then that could cause the market to just rally significantly moving the market higher. 

     2.) Now, in addition, another possible catalyst could be interest rates. If interest rates are lowered, that could also be another catalyst to the market. And of course, that’s up to the Fed if they’re going to lower rates. But there are some numbers that have been coming out. We know that the economy is slowing. That’s not a bad thing. It just means that it’s like you’re going 70 miles per hour and then you pull your foot off the gas pedal to go 65 miles per hour or 60. So the economy is still growing, but we’re just moving at a little bit of a slower pace. Now, that’s a good thing because that means we don’t have runaway inflation. And that’s good for the economy and that’s good for the United States. 

     3.) The third thing that could possibly be a catalyst is the Big Beautiful Bill, but the tax cuts, corporate tax cuts, corporate tax cuts could cause the corporate earnings to be more profitable looking into the future. And it’s possible that analysts will give a higher price target for the future price of stocks. If they give a higher price target for the future price of stocks, then you’ll see the stockmarket continue to rise. 

It is our belief here at Cantu Tactical Wealth Management that the economy is in good shape and we are looking at earnings numbers and we do believe the stock market will move higher. 

One industry that is currently rallying in the market

Now, let me talk about one industry as a treat to you that’s currently rallying. And when you think about it, it’s going to make sense. So, here we are in the middle of the summer. My wife and I, we just finished one of our anniversary, a long extended anniversary vacation. We went to the Mediterranean and then we were in Italy. What was amazing is how many Americans were traveling abroad. Most of the hotels are full. The cruise ships were obviously packed. And that’s the industry I’m going to talk about is the travel industry. If you look across the board of the travel industry, if you look at, for example, airlines, they’re on a 7-day run, I believe, seven or eight days of run. The airline stocks are moving up. Look at Royal Caribbean. And look at the cruise ship stocks NCL and Carnival Cruise Lines, they’re also rallying as well. As a matter of fact, Royal Caribbean just hit a new high. Perhaps, many of you out there may want to sell your Royal Caribbean stock because it hit an all-time high. But, you know, one of the beauties of having a professional money manager such as Cantu Tactical Wealth Management is that we look behind the scenes and we analyze the stocks. We currently have a price target, a one-year price target on Royal Caribbean of $382 a share. That’s right,$382 a share. So, even though the stock is at an all-time high around $334, we believe it’s going higher. Now, could it go higher into the 400s? Absolutely. With the next earnings report, if the earnings are strong, then the price targets across the board of many analysts could move the price target up of all the cruise ship stocks and move them up. But actually, you just got to look at all travel stocks in any travel area: transportation, hotels, cruise ships, and that’s kind of a little secret out there of stocks that are rallying. But many of you would not buy them because they hit an all-time high. But that’s the whole beauty about knowing where a stock’s going is that you look at the numbers and you see where it’s trading. What’s interesting about Royal Caribbean, it’s actually undervalued compared to the rest of the stock market. It actually should be trading above $375 a share. And it’s not. It’s just trading at $334 a share. Now, I’m not recommending this stock. And as a matter of fact, investing in the stock market, you can lose money and you will lose money at some point because the market goes up and down. Anyway, this concludes my video.

To watch the video: Stocks High, But Will They Go Higher

Disclaimers

I have some disclaimers at the end. Please take a listen. Joe Cantu, Chief Investment Officer of Cantu Tactical Wealth Management, is your host and has over 30 years of experience in the retirement money management profession. He is a West Point graduate with a master’s in business administration and has worked for three of the largest Wall Streetfirms as a stock broker and portfolio manager. Over 10 years ago, he created Cantu Tactical Wealth Management, which actively balances and selects investments based on a tactical approach rather than the traditional strategic management method. Instead of the buy and hold philosophy, he believes in the pursuit of finding investments showing momentum performance regardless of the direction of the market. His experience includes IRA accounts, 401k rollovers, trusts, endowments, defined benefit plans, 403b’s, and 401k plans. Additionally, he served as a night college instructor for seniors teaching high net worth retirement and estate planning for 14 years. Podcast views and personal opinions are for educational and entertainment purposes only and does not constitute a recommendation. Investing has risk of loss and you should consult with your own advisors for any financial decisions. Cantu Tactical Wealth Management and Joe Cantu are a fiduciary firm and registered investment advisor in the states of California, Florida,  Georgia, and Texas providing pure independent advice and money management.