Money Map Press Chief Investment Strategist Keith Fitz-Gerald joins Yahoo Finance’s Seana Smith to break down his outlook on the markets amid the coronavirus.

Video Transcript

SEANA SMITH: So for more on today's market, I want to bring in Keith Fitzgerald, chief investment strategist at Money Map Pricing. Keith, help me make sense of what's going on in the markets. What do you think investors are focusing on at this point?

KEITH FITZGERALD: Well, you know, this is actually a good type of market action right now. It's a little bit muted for what I'd like to see at this stage of the recovery, but the narrative has shifted from doom and gloom to positive to what's going to happen when we come out of this. Psychologically, that's very important. Financially, that's very important. Because the support you're seeing key among sectors, you know, tech, medicine, some of those types of things.

SEANA SMITH: Keith, what do you-- what are investors, or how are they making sense of what we saw in the oil market, the turmoil recently in oil? How do you think investors are digesting that, and how is that affecting their outlook here, at least for the short term?

KEITH FITZGERALD: Well, I tell you, there's sort of two answers to that. The first is, is the world of high finance. It's not readily apparent to the average investor because what happened was largely a technical screw-up in the futures markets. As that affects our markets, oil, what that really says is there's simply too much of it going around. So if you went to the service station to take a drive, and service station would be paying you to fill your car up.

But again, even that's not so bad because when the recovery hits, there's plenty of gas available. That means consumers are going to benefit. As we go and we start running around and spending money, that's going to be a good narrative.

SEANA SMITH: Keith, it's interesting. When we focus on today's market move in the S&P, the range today was less than 1%. It's the lowest that we have seen since the all-time high that we hit back in February. What do you think-- are you reading into this at all, and do you expect us to be range bound here, maybe at least for the short term?



KEITH FITZGERALD: Actually, no, I think the computers are building up energy to figure out what's going to happen next. Investors are trying to figure out whether we're going to revisit the lows or run to new highs. The answer to that is not yet seen, but what we do see, this is technically called compression. And when we get this type of phenomenon, we know the market is building up energy to move.

Now the president has made it very clear which way he wants to see things go. The Fed has made it very clear which way they want to see things go. Now it's all up to the traders and the sentiment. I think it's going to push higher, but we're going to have a little bit of turmoil coming into next week.

SEANA SMITH: Keith, what do you think investors are focusing on, just in terms of why there's still so much optimism in the market? Because I know you're saying that you expect markets to continue to push higher, but when you drill down into some of that economic data that we got out this week, it just simply does not look good.

We had that consumer sentiment number out this morning falling in April, that jobless claims number out yesterday, 4.4 million more people filing for unemployment. How are investors able to kind of wrap their heads around this and put it on the backburner and move on?

KEITH FITZGERALD: Well, you know, funny enough, this is one of the few areas where individual investors have the advantage, watching professionals have to continually cycle money through the markets, which means they have to keep it moving. Individual investors can concentrate on CEOs, on the best companies with a clear path to profit, those that have huge piles of cash, and they can pick and choose very carefully.

So I actually, the folks I'm talking to around the world are very, very calm, believe it or not. Because they understand the CEOs have to play this game, regardless of what happens in the markets themselves. That, to me, is a source of profits and optimism.

SEANA SMITH: Keith, when you're taking a look at the market right now, what looks attractive to you? What are you buying?

KEITH FITZGERALD: Well, there's certain tech companies, for example, Micron and Nvidia that are critical. The coronavirus actually improves their bottom line a quarter or two from now. I'm very keen on other companies. You know, Apple, for example, earnings is coming out on Microsoft. Those are a lot of the companies I'm watching very, very closely because they have the potential to ride right through this and strong enough balance sheets to do it.

SEANA SMITH: Keith, you just mentioned earnings there. What are your thoughts on what we've seen so far? Because this week, we had just around a fifth of the companies in S&P 500 early reporting earnings. From what we've gotten this week, what do you think that tells us about what lies ahead for earnings season?

KEITH FITZGERALD: Well, you know, I'm less concerned about the earnings themselves because it's kind of like betting on a horse race after you know the results. You know, Wall Street is going to have to do its homework. I think yanking guidance, as some of the companies have done.

But the big thing, to me, the critical takeaway is that we've seen a number of companies report solid numbers. So that says to me that not everything is broken, that we will get through this, and again, being an optimist at heart and in my capacity as chief investment strategist, I don't have the luxury of being right or wrong. What I have to do is look for the profitability, and again, that is a good takeaway for me.

SEANA SMITH: Keith, I was reading through your notes, and the one thing that stuck out to me was what you said about the retail sector and how you've remained very concerned by the tsunami of retail failures ahead. What do you mean by that, and what do you think the broader implications of this could be?

KEITH FITZGERALD: You know, this is really, if there's a negative here, it's millions of investors have been hurt. Millions of people are out of work. The retail sector, you've got Neiman Marcus, Gap. You've got other retailers who maybe are not going to be able to pay their rent, certainly not going to be able to pay their employees. I think we're going to have a huge number of stores that are going to go out of business, never to return again.

That has implications for shopping space, for malls, for office rentals. There's a lot of blowback that we haven't yet accounted for I think remain ahead. So that, to me, is the real negative here.

SEANA SMITH: Keith, real quick, on monetary and fiscal policies that have been put in place over the last couple of months trying to stem the economic fallout from the coronavirus, do you think they go far enough? And do you think that we'll need some more aggressive action from either the Fed or from Congress?

KEITH FITZGERALD: Well, I'll tell you what. I wish I was smart enough to figure that out. It strikes me as, you know, if we come out of this, if we really get a path to recovery, we start opening the country. And you know what? It's probably OK.

But if we have to extend the lockdown for any reason, if we have to stay in our homes, we have to shelter in place, and we get a secondary infection blown, then I don't think it is enough. I think we're going to have to have more extreme action, as unthinkable as that is.

SEANA SMITH: All right, Keith Fitzgerald of Money Map Press, thanks so much for joining us this afternoon.

KEITH FITZGERALD: Thanks for having me.