U.S. economy to continue recovery ‘faster than people think’: Salt Financial President

Alfred Eskandar, Salt Financial President & Chief Operating Officer, joins Yahoo Finance to discuss the outlook on the Fed, the economic recovery, and moves in crypto.

Video transcript

KRISTIN MYERS: I want to keep this market conversation going. We're joined now by Alfred Eskandar, Salt Financial President and Chief Operating Officer. Alfred, always great to have you here with us. I want to start with what we're seeing in this huge rally right now. The Dow has pulled back a little bit from its gains, but it's up just about 575 points right now.

Of course, we had seen a huge sell-off in the markets on Friday. Curious to know how much you see the Fed itself really as being, in a way, a risk to equities, or was the market reaction last week perhaps a little bit overblown to some of those more hawkish tones that the Fed struck?

ALFRED ESKANDAR: Well, Kristin, good to be with you again. Always fun. Yeah, I think last week was just the market's way of showing that it got a little bit flat-footed. No one expected the mark and the conversations coming out of the FOMC meeting. And it was more hawkish than the market was hoping for. So when you move interest rate hike potentials up by almost a full year, there's going to be a bit of overreaction.

What should also be mentioned was Friday was also triple witching. So you had a lot of futures options, and indice expirations all happening at the same time, which also didn't make the market any easier to trade. And we had a big spike in volatility on Friday. So it all made for a pretty tough day.

And today, what we're seeing is just the market collecting itself over the weekend and coming back and recognizing that some of the comments were incredibly positive for the economy. Certainly, the GDP estimates were initially thought would be 4 and 1/2 and now looking more like 6% GDP growth for the year.

ALEXIS CHRISTOFOROUS: So Alfred, you know, we're looking at the sectors today. And all 11 of them in the S&P 500 are in the green. And we spoke to a market strategist the last hour, who said, you know what? I think we've reached peak earnings, at least for now. Because the economy is really going on all cylinders when the Fed starts to take its foot off the gas. We're going to have to see the effects play out in the bottom lines of companies. Do you believe that earnings have indeed peaked? And what do you expect in the next couple of quarters?

ALFRED ESKANDAR: I certainly can't challenge that. But when you look at the overall economy in general, and you've got unemployment trending down the way it is, you have demand and certainly a ton of cash on the sidelines, there is still a lot of tailwind here for this economy to continue to recover faster than people think. Obviously, the big question is overheating.

You know, and the comments last week showed that inflation was a little bit ahead of what they had expected, hence the comments. So at 3%, yeah, it could cause us some jitteriness in the market, certainly some additional volatility. But I think overall, the number of positive signs for growth versus any kind of headwind is in favor of investors being-- having equity exposure right now.

KRISTIN MYERS: Alfred, I would love to ask you about cryptocurrency. Jared led with it when we were talking about what's trending. We're seeing Bitcoin falling after some of the headlines around China. It's actually been many of the reasons that Bitcoin has fallen quite a bit over the last couple of weeks. If it's not that, it's always a tweet from Elon Musk. How do you think investors right now should be approaching cryptocurrencies, Bitcoin, and some of the others, like Ethereum, Litecoin, perhaps even Dogecoin, considering how volatile these assets get, sometimes not so much around the technicals, but just around some of these headlines?

ALFRED ESKANDAR: Yeah, I agree. I mean, put the technicals aside for a second. And let's understand who's really involved in crypto, whether it's retail or institutional. Certainly corporate treasuries and long-term institutional investors will have a problem with the volatility. You've got an asset class that's down 20% in the last five or six trading days, down 50% from its high, which was about 3 plus months ago. It's just simply too volatile to hold on your balance sheet. So that's another challenge for it.

Kristin, you and I have spoken about crypto a number of times on and off the air. I don't have a crypto as part of my portfolio. We-- at Salt, we don't look at that even personally. But it is attracting a ton of attention. Obviously, there's even more retail investment boards. Even some of the institutional portals, like [INAUDIBLE], has a dedicated section just to crypto. So it is capturing the imagination. But I do believe the volatility is too much to handle for long-term institutional guys at the moment.

KRISTIN MYERS: All right, Alfred Eskandar, Salt Financial President, Chief Operating officer, always great to have you with us. Thanks so much.