How Trump's meeting with Putin impacts investors
Slatestone Wealth chief market strategist and host of Yahoo Finance's Trader Talk, Kenny Polcari, shares his expectations for the meeting and how it could move markets, while Nomura's chief economist David Seif examines the potential economic impact of the meeting's outcome.
To watch more expert insights and analysis on the latest market action, check out more Opening Bid.
Kenny, I want to go over to you here. This is a market that is still inclined to trade on economic data rather than geopolitical events, but this meeting between President Trump and Vladimir Putin could that change the tone of the market, do you think?
Listen, it can change the tone temporarily. Geopolitical stuff can cause chaos, short term chaos in the market because it doesn't really price stocks in the long term. So on a day like today, everybody's gonna be paying attention. They want to see how long Trump stays in the room or not in the room, right? He's already made it very clear. If he stays in there less than five minutes, there's no deal, he doesn't want to talk about it. And there's going to be more more threats and sanctions on Russia. If the if the if the meeting goes longer than five minutes, then we can all assume that maybe they're making some progress. And that should help to settle things down. So yes, while it's not gonna price stocks in the long term, people should be paying attention although it's not going to hit until 3:00 this afternoon just because of the time difference. So the market may not have a lot of time to react.
David, good to see you here this morning, David. What What
Hey, how are you?
Good. What are the economic ramifications of a meeting like this?
Well, you know, I think that the the Russia Ukraine war, of course, is is sort of a travesty, um, from a humanitarian basis. It's not a first order importance to the United States. And I actually think that if there were to be some sort of a solution, either coming out of this meeting, or or in the near future, uh, one of the biggest beneficiaries at least in sort of the developed world would actually be Europe. Europe has this war on its on this war on its doorstep. And, um, solving it would unlock a lot of the potential that, uh, or undo a lot of the hit that occurred in 2022 when the war began. Uh, In addition, I think other countries could benefit such as India because that would allow them to avoid these, the the tariffs that Trump has talked about from trading with Russia. And so relief from those could also be a benefit to, uh, to India in particular, which is is one of the main trading partners with Russia that's also been a historic US ally.
Ali, I've been making the argument all week, the market has totally forgotten about geopolitical risks, so focused on corporate earnings, what's happening with interest rates, but look, any bad headline from this meeting will likely dent stocks. Full stop.
Look, Brian, geopolitical risks are always lurking around the corner, and you often don't know when they're going to hit. And I referenced earlier that Israel-Iran escalation, and that really took markets by surprise. We saw that intense spike in oil. We saw equities fall. There was a lot of concern whether we could be heading into a World War III situation. So that's always something that you have to keep in mind. But I totally agree with you. There's just a lot of momentum in stocks right now. There's a lot of risk trading. We are looking at Big Tech cap companies continuing to outperform. Crypto stocks have surged. And like you were saying, earnings have really been a big driver for that. And across the board, we've seen analysts raise their forecast for the S&P 500, specifically citing earnings. And it's not just earnings expectations for 2025. It's really for 2026 and beyond as well. So that is where the optimism is stemming from that this rally has legs and that it can also continue to trade higher from here. And I've been speaking to a lot of sources about whether or not we are overbought in this market. And they tell me no, that we're really at a fair value considering where earnings are and how the fundamental story has largely remained intact. Of course, we saw those hotter than expected inflation reports this week. TBD on the impact of that will have on the Fed and equities and trade policy moving forward.
Kenny, I originally met you eons ago down the New York Stock Exchange trading floor. So let's pretend we are back there right now. What trades do you put in or put on going into the close, knowing that this meeting with Trump and Putin will happen likely 30 minutes before the market closes?
So I think you have to decide on where you stand, right? I'm more optimistic. I actually think that there's going to be a deal. So if that were the case, then I'm gonna I'm going to go long the market, right? I'm going to be I'm going to buy bets. I'm going to be in the market. If you're on the side of the case that you think there's not going to be a deal and the market's going to back off, then you want to get short the market or at least maybe you want to get short parts of the market, right? You'd want to go long oil. You'd want to go long gold if in fact, you think that there's not going to be a deal. So it depends on who you are is gonna dictate how you set yourself up or how you how you get ready for what this may be. I'm optimistic. I think there's going to be a deal. I think oil's going to go lower. I think gold's going to go lower. And I think stocks will continue to move higher.
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