MoneyLife with Chuck Jaffe
Glenview's Stone: 'Earnings Are the Fuel that Sends Stocks Higher'
Why It Matters
Understanding why earnings can outpace inflationary pressures helps investors stay focused on fundamentals rather than reacting to headline risks. This perspective is especially relevant now, as markets navigate war‑related oil spikes and a 4.2% YoY inflation rate, making the episode timely for anyone looking to position their portfolio for continued growth.
Key Takeaways
- •Earnings remain shockingly strong despite geopolitical tensions
- •Oil prices above $100 influence inflation but not market decline
- •Bill Stone expects economy resilience, watches Iran conflict resolution
- •Space-themed ETF UFO surged 170% this year, adding SpaceX soon
- •Investors allocate up to 10% portfolio to thematic strategies
Pulse Analysis
Bill Stone, CIO of Glenview Trust, opened the June 11 Money Life interview by confronting a year that seemed destined for market decline. Despite a surprise war with Iran that pushed crude above $100 a barrel and lifted headline inflation to 4.2 % year‑over‑year, corporate earnings have stayed “shockingly strong.” Stone argues that the U.S. and even global economies are showing unexpected resilience, and that investors are pricing in a relatively quick resolution to the geopolitical shock. He cautions that a prolonged conflict would quickly erode margins, but for now earnings fuel the market’s upward trajectory.
The show then turned to thematic investing, spotlighting the Procure Space ETF (ticker UFO). Todd Rosenbluth of Vetify explained that the fund, now over $1 billion in assets, has delivered a 170 % gain since the start of the year, driven by companies such as Rocket Labs, Globalstar, and the imminent addition of SpaceX. While SpaceX’s private valuation may exceed $1 trillion, its public float is expected to sit around a $75 billion market cap, representing a mid‑single‑digit weight in UFO. Rosenbluth recommends limiting thematic exposure to roughly 10 % of a portfolio to balance growth potential with risk.
The conversation closed with reflections on Warren Buffett’s recent Berkshire Hathaway annual meeting and broader market signals. Stone noted that betting markets show less than a 20 % chance of a U.S. recession, but warned that persistent core inflation—especially if it climbs past 4.5 %—could trigger a slowdown. He emphasized watching the Fed’s response and oil price trends as early warning signs. For professional investors, the takeaway is to stay disciplined: rely on solid earnings, keep thematic bets modest, and monitor macro indicators that could shift sentiment from optimism to caution.
Episode Description
Bill Stone, chief investment officer at Glenview Trust, says that the stock market "continues to price in that the Iran conflict is going to be over [soon]," which has kept the focus on blockbuster earnings numbers, which have been so strong that they have overcome virtually all economic and stock market concerns. He expects that earnings trend to continue, powering the market through some summer doldrums to where it finishes the year on a positive note. "Stocks don't go up short-term always with earnings but, long-term, earnings are the fuel that sends stocks higher," Stone says; with the earnings trend in place, he says long-term investors should be less concerned about worrisome headlines about inflation, war and more.
Todd Rosenbluth, head of research at VettaFi, looks at the Procure Space ETF (ticker: UFO) as his "ETF of the Week," noting how the fund has been a rocket ship this year, and that it will be worth watching as the SpaceX IPO launches this week and markets adjust to having that big-name stock joining the space-race sector.
In the Market Call, Hank Smith, head of investment strategy at The Haverford Trust Co., discusses the benefits of companies that pay growing dividends and that have an A-rated balance sheet.
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