JD DURKIN: And a very good Monday morning to all AAP members. Chris Versace and I are back to get ready for the week ahead. But before that, let's take a look backwards. Chris, thank you for being here. I hope you had a weekend.

CHRIS VERSACE: Oh, I had a great weekend. A lot of good movies. A lot of good fun.

JD DURKIN: A lot of good movies. A lot of good fun. A lot of busy news items in the business world for the week ahead. I tried to thread that needle.

Last week, we wrapped up with a lackluster reaction to strong earnings from John Deere. Let's start there, Chris. Why did Deere stock plunge Friday despite beating expectations across the board, as well as raising guidance. What happened?

CHRIS VERSACE: So you're 100% correct. The company from, our estimation, delivered a simply wonderful quarter, improving volume, supply chain issues continue to fade, the benefit of pricing, and they really reiterated our thesis about continued favorable prospects for farmer income. So with all of that, why did the shares trade-off? My best sense on that, JD, is it's the realization that some things are starting to normalize in the farm economy.

What I mean by that is Deere did give annual guidance. But on the earnings call, they kind of alluded to the fact that we're going to see normal seasonal patterns happen and start to unfold. Typically, the summer tends to be one of the weaker months. Typically, the spring selling season and the fall season are the stronger ones. And that's exactly what the company communicated. And I think the market's kind of wrapping its head around the sense that, oh, things are actually getting back to normal here.

For us in the portfolio, that's an opportunity. The shares did pull back. We're slightly positive in the overall position. As I shared in the AAP Roundup on Friday, Deere shares are on our shopping list. And I think we'll be doing some of that in the coming days.

JD DURKIN: If a day ends in why, it's a day to check in on charge points. More or less, that company also had a difficult end to the week, Chris, marking a fresh 52-week low. What happened there?

CHRIS VERSACE: So we talked about this in an Alert with members, but I think it's great to call out once again just to make sure that everybody's crystal clear on exactly what happened. Was there any big developments on ChargePoint itself? Not really.

The bigger issue was competitor EVgo, pricing and offering of shares that, as we like to say in the business, it priced it in the hole. And what I mean by that, it was way below the recent share price. And remember, folks, when we were assessing which EV charging company we wanted to add to the fold, we liked ChargePoint for a number of different reasons, including its balance sheet. We had warned folks that EVgo and a couple of others might need to raise some capital.

That was reason why we steered clear of those. And sure enough, that's what's happening. On the positive, however, we had some other developments that came out late over the weekend, early this morning. That is Volvo.

Here, what I'm referring to is they got an order for 1,000 heavy duty electric trucks. And remember part of our thesis is not only the adoption of passenger cars in terms of EVs, but the growth in other products, whether it's medium duty trucks, heavy duty trucks, ATVs, buses, what have you, because it all drives demand for EV charging stations. So we see that as a positive, reaffirming our thesis just like the other items that I rattled off rather quickly in our May members-only call.

JD DURKIN: Rattled off rather quickly, but professionally I might add there, Chris. Applied Materials made quite a few appearances in last week's Members Call. Any other highlights for members who may have missed the live show?

CHRIS VERSACE: So we had a note out ahead of Applied's earnings last week saying the shares were priced to perfection. Given the strong move particularly in the last couple of weeks, that the management team was going to have to deliver both a stellar quarter and raise guidance. They did half of that. They kind of gave some wiggle room in there. But the reason being that they are a little concerned about the memory market, the logic market. Not surprising given what we heard earlier in the earnings season from Micron and others.

From our perspective, that's going to allow probably a little drift lower in Applied shares, give us a great opportunity to pick them up. The other thing that I would point out that is happening today, the White House is going to bang the drum on the Chips Act. I believe Vice President Kamala Harris will be actually at Applied Materials making some nice comments about the dollars that are starting to flow from the Chips Act. We see that as rather reaffirming behind our decision to add Applied to the portfolio.

JD DURKIN: And of course, speaking of the live show, if anyone did miss it, please head on over to the Videos tab on the AAP homepage for a full replay. Now before we head into this week, Chris, looking back at last week, you know I love to ask you this question, my friend. Is there anything you would change with a second chance if you had one of those infinity stones. You can go back in time and redo something. What are we talking?

CHRIS VERSACE: So what would I do? On the one hand, I probably would have tried to pick up some shares of cyber, maybe some shares of Trinity Capital. Those are on our buy list. But I have to be very clear on this, given what we saw unfold on Friday regarding the debt ceiling, which is kind of playing out, as you and I have talked about JD, that this is going to go down to the wire, I'm actually kind of relieved we didn't make any trades last week.

But I think that we'll get the opportunity to pick up those shares, as well as others on our shopping list-- Bank of America, and as I mentioned, Deere shares, and maybe one or two others in the days ahead.

JD DURKIN: All right, moving on to everyone's favorite topic, which is, of course, the debt ceiling. A bit more on the debt ceiling, anyway. Chris, we have a member wondering if it would be prudent to sell some stocks now to hedge against a potential, let's say, default-related sell-off in the case that, for whatever reason, in this particular political climate, cooler heads cannot prevail and we do not get a deal?

CHRIS VERSACE: Yeah, it's a great question. This speaks to managing risk. Obviously, this is something that's been on our radar and intensifying as I just alluded to, really over the last several days. Could we sell some stocks? We could. But there is then the possibility that a deal gets done.

I think the smarter move here is simply to hang on to the inverse ETF positions that we have in the portfolio, especially given that last week we kind of bumped up against that 4,200 level on the S&P 500. It clearly rejected it. So the question is, what's the catalyst to get us to break through that level on a sustained basis?

I think given what we've got going on in the next day, couple of days with the debt ceiling more, Fed heads making the rounds, I don't really see us doing that near term. So again, if you're concerned about potential defaults with the debt ceiling, I would say insulate the portfolio, insulate your holdings with some of the inverse ETFs that we have-- SHPSQ.

JD DURKIN: All right, we do have a bit of a quieter week as we head into a 3-day holiday weekend, something you and I both know every trader on the floor of the Stock Exchange eagerly loves. What do you have on your radar for the days ahead?

CHRIS VERSACE: Well, I'm not so sure we actually had a quiet day. We've got a foreign capital markets meeting today. We've got Nvidia that's reporting later this week. And what we learn will tell us to what degree a handful of stocks that have been driving the market might be out over their skis because of AI headlines.

We've also got Costco reporting. We've got Marvell reporting. We have some key economic data not. Only the flash May PMI data that we'll get in the next couple of days, but also the Fed's third inflation metric. That, of course, will be the April core PCE index out later in the week. So it may seem like it's going to be a slower week, but it's going to be a big one. And remember, too, on top of all of that, the debt ceiling.

JD DURKIN: Happy PCE Week to everyone who celebrates. Anything else Chris, do you think members should be paying attention to?

CHRIS VERSACE: Yeah, I do. I kind of alluded it to it a few minutes ago. But following last week's gaggle, as I said, of Fed heads making the rounds, we have four more today. And already, we're getting signals from Bullard that rates may need to go higher. And I believe Kashkari is saying that even though he thinks we could pause at the June meeting, it doesn't mean that the rate hiking cycle is over.

My sense on this is that they are really trying to get those expectations for rate cuts further pushed down. As I shared in a note this morning following last week's comments, we started to see them move lower. The probabilities depicted by the CME Fed Watch tool. But I think they want to get it even lower. Because the message is there are no rate cuts coming in the back half of the year. And the market simply won't accept that just yet.

JD DURKIN: I was going to say despite what the market has wanted to believe for many months up until now. Of course, we had similar comments there from Laurie Logan last week as well. So we will continue to listen because of course, when Fed heads speak, we all listen, especially you. The great Chris Versace, thank you. As always, nice to have you.


JD DURKIN: All right, folks, that's going to do it. That man, Mr. Versace, will be back tomorrow with his latest take on the market. Thanks for tuning in. We'll see you then.