VIDEO: Why These Tech Stocks Are Moving Higher

In today’s Daily Rundown video, Chris Versace explains TheStreet Pro Portfolio’s stance near term and the rebound in several of our tech positions, including Nvidia NVDA and Marvell Technology MRVL, following investor conference presentations.

He also discusses the psychological impact of falling gas prices and why it’s an incremental positive for a few of our holdings.

Transcript

CHRIS VERSACE: Hey, folks. Chris Versace, Thursday, September 12. And we've gotten the week's inflation data. And if you saw our comments earlier, then you know that we continue to think that the Fed will deliver a 25 basis point rate cut next week. But we continue to see the risk that what the Fed delivers in terms of its economic projections that will signal further rate cuts for 2024 and 2025, that there is room for the market to be disappointed.

We say this having amassed not only this week's inflation data that showed a sequential tick higher in core CPI and core PPI, but also the other data that we've gotten in recent weeks. So from our perspective, we are going to remain somewhat cautious with the portfolio. However, we are continuing to mine and dig into investor conference presentations. And if you saw our comments from yesterday, there are a number of positive data points being put out by various companies, some in the portfolio, some not.

But all in all, they are rather reassuring for the positions that we do have in the portfolio. And we can see that as folks have digested comments not just from Cisco, but also from Jensen Wang, CEO at NVIDIA at Goldman Sachs Communicopia Conference, that demand for AI chips remains very robust. That has led to a rebound not only in our NVIDIA shares, but it, along with other comments that we've shared with you, have helped prop up and accelerate the rise in our positions in Marvell.

We're also seeing that flow through to Eaton. But a number of other rate-cut-sensitive positions are also starting to rebound as well. That includes the shares of Builders FirstSource. I think some of that has to do with mortgage rates continuing to fall. And if you've been paying close attention to 30-year mortgage rates, it has been a very nice move lower. CEO of Toll Brothers yesterday said that as we look forward to rate cuts starting, perhaps we can even see mortgage rates hit into the 5% level sometime in the first half of the year.

That would be a very big positive for homebuilding activity. And of course, we like our, as I like to say, buy the bullets, not the guns approach that we have with Builders FirstSource because it touches the vast majority of public home builders. So this is a position that we will continue to hold in the portfolio. And we'll continue to share positive data points as well as ones that have us rethinking it. Because we don't want to be biased. We want to let the data talk to us.

We're also seeing gas prices continue to move lower. Remember that we recently cut our position and exited fully the position in the Xcel Energy ETF. We are going to keep it on the back burner. Because at some point, we might want to reenter that. I don't see that near term.

But when we think about follow through, we think about connecting the dots, weaker oil prices is going to translate into falling gas prices. And yes, that is what we've seen, particularly if we look at AAA's gas prices not only over the last week, but really over the last month. And yes, they are down year over year. There is some thinking out there that we could even see gas prices fall below $3.00.

Now, is this important? Certainly from a psychology perspective. Because people tend to vote with their pocket and think about the economy when it comes to their pocket. And when they're filling up a car, shelling out $40, $50 for a tank of gas, it weighs on them. But there's also a psychological factor as well for when gas prices fall, even though if you really think about it, it is not necessarily providing a significant lift to disposable income. But psychologically, it is something that we do once, twice, for some folks even three times a week. So there is that implied benefit of falling gas prices that helps perhaps at the margin loosen wallets.

That would be good, obviously, for our positions in Amazon and Costco, but also for Dutch Bros. And we continue to like that. The shares have run up a little bit. There is still room for newer members to get in. But if the shares continue to climb much past that $34, $35 level, we'll have to rethink that position in terms of committing fresh capital to it.

We continue to like the Dutch Bros story because it is that classic expansion that we've seen play out before, whether it's Chipotle, Starbucks, Dunkin Donuts, even McDonald's back in the day, that as Dutch Bros moves from west to east and grows its footprint, the stock should continue to perform. So again, that's one that we continue to like over the longer term. But if we see it continue to accelerate in the near term, we might may not be as enthusiastic as we are at this current moment.

We do have far more presentations being given at the Goldman Sachs conference and others today. So we're going to continue to mine what managements have to say for constructive data points for the portfolio, companies that we're also contemplating as it relates to the bullpen. So please be sure to continue checking your emails, your alerts.

We want to make sure that you're getting our latest thoughts and if we make any moves with the portfolio. Granted, we expect to be on the cautious path ahead of the Fed's policy meeting next week given the risk that I started talking about at the start of today's video. Even though we expect to be cautious, we do like to be opportunistic-- so another reason.

Please be sure to check your emails and your alerts. And that, my friends, is today's video. Thanks for watching.

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At the time of publication, TheStreet Pro Portfolio was long NVDA and MRVL.