Nvidia Shares and U.S. Stock Market Prospects (Full Transcript)

Speaker 1: financial advisors. Liz, thanks a lot for joining us. What do you think of this DeepSeek story? One way to look at it is that many investors have waited for a pullback in Nvidia shares, perhaps before buying. Well, it looks like this morning that pullback is coming.

Speaker 2: Yes, it does. The DeepSeek news is really interesting in both the short-term and the long-term. So I think we all know it, but it's coming out. You know, it launched not that long ago. Its activity and its processing seems to be on par with other chatbots getting a lot of attention from users. And it turns out it was built at a much lower cost with Nvidia chips, but very old ones. Of course, we limited technology to China, and this is showing the workaround they used of using very old chips and still coming out with a viable competitive product. In the long run, this is fantastic for AI. It shows that there's a path to gain and grow forward at a lower cost. In the short run, we're going to see corrections. To me, this still means Nvidia is a great beneficiary, again, using their GPUs and their technology. In pre-market, that stock is down. I was just looking at about 127. And just to put this in context, that's where the stock was in October. So we're not talking about a real reversal here. It may just be, as we use in

Speaker 1: classic terms, a correction. Is this, in fact, a buying opportunity for investors interested in initiating or adding to positions in Nvidia? It's a great opportunity to get started and

Speaker 2: look carefully. We've been long-term holders, and yet we've said all along to our clients, look, it's inevitable there's a pullback from this stock. This stock has a 30-year history of extreme volatility at times, a lot of expectations about where things could go, and then pullbacks when it looks very different. So we're still very positive on the company, but I'm not going to predict what kind of overall move we could see in any pullback.

Speaker 1: OK. What is your view more broadly of U.S. stock markets in 2025? They are off to a red-hot start.

Speaker 2: They are, and this is consistent with a little bit of the start of a pop we saw after the election. Investors never like the uncertainty going into election. We typically see that strong move coming out of an election. And then at the start of the year, just as we saw ahead of inauguration, where you start wondering, well, what will policies really look like? So in the first week, we see investors already starting to try to make conclusions about what the policies will be like. We're really focusing on the underlying economic moves. The economy is strong. Earnings should continue to grow next year. And we think that inflation will be relatively flat. We aren't really predicting a big move down, but we think even at current rates and at current inflation levels, the economy is poised for continued growth, and that's positive for markets.

Speaker 1: About 40 percent of revenue from S&P 500 companies comes from non-U.S. economies. And if I understand correctly, you favor the other 60 percent, the companies that get the majority of their revenue

Speaker 2: at home in the U.S.? Yes, we do. When you look at the economy and you look around the world, the U.S. is right now about the only economy with growth and with foreseeable growth. Europe is really struggling. Asia is really struggling. It's not clear the U.S. growth is strong enough to bring the whole world along, but it should be good for domestic industries. So we do have a slight tilt towards that in our portfolio. And there's a number of industries that we like for

Speaker 1: that. And you also like smaller cap stocks. In fact, there's an ETF that tracks the S&P 600. We don't often talk about the S&P 600, but that is a list of smaller cap stocks and there is an ETF

Speaker 2: through which investors can invest. That's true. We often talk about the Russell 2000. We like that too. I just thought we would talk about one we don't that often, ticker IJR. The S&P 600 is the small cap. Small caps tend to be more domestically focused and then tend to have slightly higher growth. And they look poised to benefit this year. What's your take on the U.S. health care sector? Well, the sector in the U.S. for health care has really gotten beaten up going through the fall. We see lots of opportunities there. One in particular that has grabbed a lot of headlines is United Health Care. Really the tragedy this past fall of losing a senior executive. But again, in the long run, even with some of the policies being thrown about in Washington, we do think a company like United Health Care, completely domestic, current pullback that it's at, is at an attractive valuation and a really good place to be investing for the next couple

Speaker 1: of years. Liz, thanks a lot for this conversation. Liz Miller is president of Summit Place Financial Advisors. Coming up next, we're going to talk a little bit more about the U.S. health care