Buying Stocks Right Now Feels Scary... But That's The BEST SETUP

0:00Jamie Dimon:Hello, everyone. A big Wall Street analyst thinks that stocks are very attractive right now. Jamie Dimon, he believes the best is yet ahead for the U.S. economy. And we're going to break down how the United States of America is profiting from higher energy prices. We're live today from the desk of Anthony Pompliano.

0:25Jamie Dimon:Before we get into today's episode, I need your help. We currently have 45 ,715 subscribers on this channel. That's the exact number, but I need you to hit the subscribe button so we can get to my goal of 1 million. We're going to get there together. Let's get into today's episode. All right, ladies and gentlemen, Tom Lee, the GOAT of Wall Street analysts, he went on CNBC this morning and he was sounding the alarm. He said the risk reward is quite good for stocks right now. He's not worried about the war in Iran. He's not worried about what happens with the Fed. Tom likes stocks and he thinks investors should be paying attention.

0:56Jamie Dimon:Take a listen to what Tom had to say. March unfolded. The war looked like not to be a short war, but one that was longer. And I think markets have been adjusting to that. But as you know, we're still in the midst of this fog of war because we don't know when it ends. But we did look at the past seven major war events, and the stock market adjusts pretty quickly. Within the first 10 % of the entire duration of a war, the stock market usually bottoms. So World War II was almost five years, and the market bottomed five months into that war. So I do think as bad as March was, we've probably seen a big part of that adjustment.

1:42And now I think the risk-reward is quite good for stocks. And 90 % to 95 % of the weakness is behind us, in your view. Yes. And I think people are kind of torn because if someone sold in March and the market, they may have sold three or four percent off the highs and we're just five percent off the highs. They've got a dilemma because the market's only a little bit lower than where they might have sold, but it wouldn't take a lot for the markets to begin to recover. So I do think investors who go into cash really have to start to think about how war, as much as it's a crisis, people focus on the negatives initially, but then they need to start thinking about the opportunity.

2:28Jamie Dimon:Now, it's interesting to hear Tom talk that way, because I also spoke with Jordy Visser this weekend. And Jordy had a lot to say about the Fed facing a very difficult path between inflation potentially coming back and a slowing growth profile for the U.S. economy. He also believes that there's a lot of market confusion amid the rising oil prices, geopolitical tensions, and mixed economic signals. Jordy's one of the smartest people I know in Wall Street, and he had a lot to say. So take a listen to Jordy's thoughts as well. We know inflation is going higher. It probably means growth is gonna be weakening because we have oil prices around the globe.

3:01Forget the futures prices. Where we closed yesterday, spot oil, like the physical oil, was at$140. So futures are kind of paper trading and it's people gambling and it's people on future things. But the current price today is$140. And so you're going to see a growth impact in Asia. You're going to see a growth impact in parts of Europe. Maybe it won't be as big in the US, but you have to start to reassess. So when you hear the word stagflation, rather than kind of go through the differences, that is a state of confusion because normally when growth gets higher, you get worried about inflation.

3:34But when growth is going down, inflation is going on. Guess what? But Fed's got a tough battle.

3:39Jamie Dimon:Now, my general take is these two guys, they're smart and they're both right. Stocks do look quite good here. They've sold off a lot and the companies are still good underneath. But Jordi's also right that the Fed does face a difficult path. They got some big decisions to make and there's a lot of chaos and uncertainty in the market. And so maybe actually the conclusion is that whenever there's chaos and uncertainty, the investors who have courage, who can think clearly and can stay unemotional, those are the ones who are able to capture that risk reward that Tom was talking about. Jamie Dimon, the CEO of the world's largest bank, dropped his annual letter this morning.

4:12Jamie Dimon:And I gotta tell you, it was filled with noteworthy comments. You gotta go read it. It is definitely worth the time investment. But maybe the most interesting part to me is that Jamie decided to use the letter as a vessel for reinforcing the American values. Not exactly what you expect someone to do in this letter. And he called out the country for a countrywide recommitment to the ideals that built the greatest nation on earth. Now he wrote specifically, this is now the perfect time to rededicate ourselves to the values that made this great nation of ours, freedom, liberty, and opportunity. He says the challenges we all face are significant.

4:43Jamie Dimon:The list is long, but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China. Even in troubled times, we have confidence that America will do what it has always done, look to the values that have defined our singular nation and sustained our leadership of the free world. Now, this optimistic message, you know, basically people are allergic to it right now, but this optimistic message from one of the country's most important business leaders comes in stark contrast to the mainstream media headlines in recent weeks.

5:16Jamie Dimon:Now, those headlines make it sound like the world's ending and the catastrophic recession's right around the corner. They promise. Oil's spiking, bombs are dropping, the strait is closed, gas prices are surging, and sky-high inflation will be here any day now. They promise. But a very different story emerges if you zoom out and you actually just look at the data. Simply, the conflict in Iran is not breaking the U.S. economy, no matter what the headlines say. Instead, that conflict is reinforcing just how dominant America has become. Let's start with the fact that the United States is no longer an energy-dependent country.

5:48Jamie Dimon:According to the EIA, America has been an energy net exporter since 2019. It's a complete reversal from decades of vulnerability in the past. There's a wide margin between what we export compared to what we import. And that's mainly driven by the pesky detail that U.S. crude production is running approximately 13.6 million barrels per day. This simply makes America the largest energy producer in the world. We're the big dogs now. But now, does the U.S. still import some crude oil? Yes, but it's mostly due to edge cases related to refining efficiency and logistics. But what really matters is the net position, and America exports far more petroleum products than it brings in.

6:24Jamie Dimon:And it's important to understand because when global energy prices rise, the United States counterintuitively profits at the national level because of the upside of higher energy prices. Now, it's a dramatic change from those situations, how they used to play out. If we go back to the 1973 oil embargo, the U.S. was dependent on formal oil. Supply shocks led to long gas lines, soaring inflation, and a real hit to economic growth. And energy was a weakness, and market commentators rightfully were worried. But in the modern economy, energy is much closer to a strategic asset though. Greg Ip over at the Wall Street Journal explained how this new position of leadership atop the world of energy has empowered the current administration to make geopolitical moves that were previously thought unwise or impossible.

7:06Jamie Dimon:He writes, Trump's revamping of the US role in world security and trade now extends to oil. No longer does the US see itself as the guarantor of international stability and norms, but rather as a self-interested actor using control of oil to enhance its own power. The U.S. became an energy superpower through serendipity and policy. The shale revolution vastly increased domestic oil and gas production, while federal and state policy and the construction of liquidified natural gas facilities made that output available to the world. In the process, oil and gas became key contributors to U.S. economic growth and prestige.

7:40Jamie Dimon:The U.S. earns more from exports of LNG than of corn and soybeans, and twice as much as it does on movie and TV content. Fossil fuels are foundational to Trump's vision, not just of domestic prosperity, but international clout as well. He created a National Energy Dominance Council shortly after taking office and his National Security Strategy, well, that issued last November, calls American energy dominance a top strategic priority. But now here's the thing, you're an investor, who cares? Well, this is where you really need to dig into the data. Even with tensions around the Strait of Hormuz and oil pushing above 100 bucks, the impact on the US economy looks surprisingly contained.

8:18Jamie Dimon:Estimates from firms like Goldman Sachs suggest that every$10 increase in oil prices reduces U.S. GDP growth by about 0.1 to 0.3 percentage points, and it adds only a modest bump to inflation. It's not nothing, but it is manageable, especially when you compare it to Europe and parts of Asia, where economies are still heavily dependent on imported oil and they feel these shocks much more directly than the U.S. But now let's zoom out to the broader economy and the resilience becomes even clearer. Forecasts still call for around 2.2 % real GDP growth in 2026. It's slightly lower than where it was at the start of the year, but it's nowhere near recession territory.

8:53Jamie Dimon:The headlines are just wrong. Unemployment remains in the low 4 % range. Consumer spending continues to be strong, and nothing in the labor market suggests catastrophes on the horizon. Even the feds remaining calm, and they're not signaling panic. The central bank's expectation is that the conflict may nudge inflation higher, but it's unlikely to materially derail growth unless oil prices spike to extreme levels. And most Wall Street analysts view that as a low probability scenario, as do I. So this brings us to a very weird second order effect from the current geopolitical uncertainty. While everyone's focused on the short-term impact of oil, gas, and potentially inflation, the United States is gaining immense leverage on the global stage.

9:30Jamie Dimon:I said, we're the big dog now. I know it's not popular to talk about this, especially when we're still striking Iran, but it is essential to recognize what's happening so that you can allocate capital appropriately in the coming years. America is now one of the world's largest exporters of LNG and refined petroleum. That gives us real economic and geopolitical power. Many of our European allies, they now rely on American LNG and they're increasingly tied to U.S. supply for their own stability. Higher global prices reinforce that relationship and it accelerates the shift away from less reliable or hostile energy sources.

10:04Jamie Dimon:And at the same time, the domestic U.S. economy benefits from relatively abundant and cheaper energy. that matters much more than people think. And it's not something that I'm seeing anyone widely talk about. Manufacturing, data centers, AI infrastructure, all of that depends on consistent, affordable power. And while other regions are dealing with higher input costs, the U.S. remains better positioned than almost anyone to scale due to our lower sensitivity to the higher energy prices. But before I get a barrage of responses saying, look at gas prices, the gas pump's so expensive, or just flat call me an idiot, None of this analysis means that there's not downsides.

10:41Jamie Dimon:Of course there are downsides. Consumers feel higher gas prices at the pump in the short term. Sentiment goes down. And discretionary spending gets tighter as well. These microeconomic factors are not immune to realities and commodities. But at the macro level, the picture is much stronger than the headlines suggest. This is a classic case of macroeconomics versus microeconomics. And it begs the question, what is the administration optimizing for? Frankly, I don't have that answer. but they've continued to say that it is Main Street's turn to enjoy economic abundance because they believe that Wall Street's captured enough.

11:14Jamie Dimon:The problem with that statement is that you have to balance the nation's economic health with the everyday experience of American citizens who struggle to pay an extra dollar per gallon of gas each week. It's a hard decision and there's no perfect answer. But this is where so much of the debate gets lost in my opinion. It's very easy to write articles about the price of gas or the promised impact on higher inflation reports but those reports haven't surfaced yet and those details are unlikely to drown out the macro benefits accruing to the United States. The Iran conflict is not exposing cracks in the system.

11:44Jamie Dimon:It will not crash the US economy and it will not deliver sky high inflation similar to what we saw during COVID. Instead, the current situation is revealing just how much more resilient and dominant the American economy has become. And over a long period of time, that is a great development for Americans, even if we don't feel it on a day-to-day basis. So remember, things are never as bad as they seem and things are never as great as they seem. The truth is usually somewhere in between. And yes, gas at the pump is higher. That doesn't feel good for me, you, or anybody else. And yes, is there potentially short-term inflation impact?

12:18Jamie Dimon:Yes. But that doesn't mean that the United States is not accruing more power and much more longevity and resilience with higher energy prices on the global stage. In a weird way, we're suffering less than the next country. and therefore that's a net positive for the US. Does it make it feel better on a day-to-day basis? But that's just the reality. And I'm here trying to do my best to better understand what's happening on the geopolitical stage, what's happening in the domestic economy and what it means for your and my portfolio. And so ultimately the US in a weird way may be asking Americans to take a little bit of pain in the short term to accrue long-term value and power that ultimately will make it better and more economic abundance for all of us.

12:59Jamie Dimon:that's it for today's show thank you guys so much for watching please remember to subscribe on YouTube and I'll talk to all of you tomorrow live from the desk of Anthony Pompliano