Live on Bloomberg TV

00:00SHERY: U.S. FUTURES TRADING EARLY SEEING SOME UPSIDE. WE ARE SEEING A LOT OF ANXIETY OUT THERE GIVEN THAT WE ARE HEADED TOWARDS A FED DECISION. MARKETS PRICING HIM 75 BASIS POINT RATE HIKES ON WEDNESDAY. THIS WOULD BE THE LARGEST SINCE 1994, ALSO COMING ON A DAY WHEN WE SAW THE MAY PPI NUMBERS. NASA 100 OUTPERFORMING TODAY WITH THE LIKES -- NASDAQ 100 OUTPERFORMING TODAY, WITH THE LIKES OF ORACLE AND FEDEX OUTPERFORMING. OUR NEXT GUEST EXPECTS HIGHER RATES TO CAUSE DEMAND DESTRUCTION. WITH US NOW IS BARBARA ANNA BERNARD, FROM WINCREST CAPITAL. WHAT ABOUT THE FACT THAT SOME PEOPLE HAVE SAVINGS, ESPECIALLY DURING THE PANDEMIC, WOULD THAT HELP UPSET THE PRESSURE ON DISCRETIONARY STOCKS? BARBARA: THAT IS THE POPULAR NARRATIVE, BUT THOSE SAVINGS ARE NOT EQUALLY DISTRIBUTED. A POLL REPORTED THAT 17% OF HOUSEHOLDS EARNING LESS THAN 40 THOUSAND DOLLARS A YEAR ARE NOW CONCERNED ABOUT NOT HAVING ENOUGH MONEY TO PAY THEIR NORMAL BILLS. WHEN YOU TALK ABOUT EXCESS SAVINGS, THEY ARE SKEWED TOWARDS THE MORE WEALTHY SEGMENTS OF SOCIETY WHO ARE LESS IMPACTED BY FIVE DOLLAR GAS AND DOUBLE-DIGIT INFLATION ON FOOD ITEMS. SHERY: TODAY WE SAW THAT TECH NAMES GAINING GROUND. WHERE DO YOU SEE TECH STOCKS GOING, ESPECIALLY WHEN YOU HAVE YIELDS CONTINUE TO SURGE? BARBARA ANN: INNOVATION, THERE IS ALWAYS ROOM FOR IT, BUT THESE COMPANIES NEED TO BE PROFITABLE. PROFITLESS PROSPERITY IS DONE. YOU HAVE OVER 600 COMPANIES IN THE U.S. THAT ARE ZOMBIES, WHICH MEANS THERE IS NOT ENOUGH TO. IT ONLY GETS MORE EXPENSIVE. TO FUND THIS THAT IF YOU ARE A TECH COMPANY AND IT IS SUSTAINABLE, THAT IS FANTASTIC, BUT THERE ARE A NUMBER OF COMPANIES THAT BENEFITED FROM AN ERA OF FREE MONEY THAT IS OVER, AND I DO NOT SEE THEM REINFLATING. SHERY: YOU SAY THAT GIVEN MARKETS OVER VERY PRICED IN 75, THEY SHOULD JUST GO FOR IT. HAIDI: SHOULD DATE JUST GO FOR 100 AND GET IT OVER F AND 10 WITH? BARBARA ANN: I DON ' T SPEND A LOT OF TIME THINKING ABOUT THIS, BUT WHAT I DO KNOW IS THAT RATES ARE GOING HIGHER. THE FED BELIEVES, RIGHTLY OR WRONGLY, THAT RAISING RATES IS THE WAY TO GET AHEAD OF INFLATION. THEY ARE DOING A GOOD JOB OF DEMAND DESTRUCTION, I AM NOT SURE THAT RAISING RATES WILL SOLVE ALL THE SOURCES OF INFLATION TODAY. THE TRAJECTORY IS DEFINITELY UP. HOW QUICKLY THEY DO IT, DO THEY FRONT A-END LOAD IT, I DON ' T KNOW, BUT CERTAINTY IS BETTER THAN UNCERTAINTY. THAT IS WHAT YOU SAW IN THE MARKETS. MARKETS HATE UNCERTAINTY. SO THE SOONER THEY CAN BE CLEAR ABOUT HOW QUICKLY THEY WILL RAISE RATES, AND WHAT IS AN ACCEPTABLE RATE OF INFLATION FOR THEM, THE SOONER MARKETS WILL CALM DOWN. HAIDI: HOW MUCH UNCERTAINTY DO YOU HAVE OVER THE UPCOMING EARNINGS SEASON? WE HAVE SEEN INCREASINGLY INVESTORS DEMANDING MORE, EVEN IF REASONABLE SET OF STOCK OUTPERFORMANCE ANYMORE. HOW MUCH ARE WE GOING TO SEE THE PUNISHMENT PLAY OUT IN THE NEXT EARNINGS SEASON? BARBARA ANN: UNFORTUNATELY, THAT IS WHY I AM STILL REALLY BEARISH FOR MARKETS. EVEN THOUGH WE HAVE SEEN THE S & P CONTRACT 8.4%, WHAT YOU HAVEN ' T YET SEEN IS EARNINGS ESTIMATES COME DOWN. FOR EXAMPLE, IF YOU LOOK FOR Q3 AND Q4 OF THIS YEAR, EARNINGS ESTIMATES ARTERIAL 10% OF THE S & P. AND THAT IS COMPING A + 37% AND 28% Q3 AND Q4 RESPECTIVELY. IT IS NOT GOING TO HAPPEN. PARTICULARLY IN THE RETAIL SECTOR, YOU JUST SEE ANALYSTS ASSUMING THIS DOUBLE-DIGIT GROWTH IN PERPETUITY. I DON ' T SEE IT. THIS IS THE NEXT LEG TO FALL ON THE MARKET. EVERYONE A SECOND BOTTOM? RECESSIONS CAN TAKE 20 MONTHS ON AVERAGE. THE ONE-MONTH RECESSION DURING COVID WAS THE ANOMALY. MARKETS NORMALLY BOTTOM OUT AT

No schedule data available.

Wincrest Capital CEO on Markets, Inflation

Barbara Ann Bernard, CEO and CIO at Wincrest Capital, discusses her outlook for markets and inflation. She speaks with Shery Ahn and Haidi Stroud-Watts on "Bloomberg Daybreak: Australia." (Source: Bloomberg)