JD DURKIN: Good morning, subscribers one and all. Chris Versace and I are now back to answer some of your biggest questions of the week. Chris, thank you for being here as always.

There's no better place to start than with the news of the day. I don't if you've heard, but there is this whole debt ceiling thing that's trying to get worked through in the hallways of the US Capitol. You've been clear with members you ultimately expect a deal to make its way through Congress despite all of the drama, and there's no shortage of drama. So we have a member wondering what happens next. Chris, do you expect a deal to have any impact on inflation specifically?

CHRIS VERSACE: Oh, that's an interesting question. You know, inflation really is a big factor that we have been watching, we're going to continue to watch, because as we've discussed with members of late, it has simply been moving in the wrong direction. We saw that with the core CPI over the last several months for which we have the data.

We saw it also last week with the April core PCE index, and it seems to suggest that the Fed could potentially do a little bit more. But in terms of the debt ceiling, I really think that's a very separate issue. I don't really see a lot of inflationary pressures tied inside of that, if you will, especially as spending looks to be somewhat restrained. So I would argue that those are kind of apples and oranges, but both have been influencing the market, no question about it.

JD DURKIN: While we're talking about the debt ceiling, Chris, can you give us a quick rundown of how the club is prepared for any potential volatility?

CHRIS VERSACE: So we ultimately expect a debt ceiling deal to be had. It's certainly looking increasingly like that. We shared that in our morning comments this morning. But you know, there's always a lot of things that could go wrong at the last minute.

We've seen it before. But in case that does happen, we have ample cash in the portfolio. We still have our inverse ETFs.

And you know, those are going to add some nice cushion should that happen. But ultimately, I think if a deal does go kind of sideways, it could give us an opportunity to buy some stocks that we've been eyeing, some that are perhaps either in the bullpen or ones that we want to see a pullback given the market in that trading range 3,800 to 4,200 pretty much. Should they move down to the lower end of that trading range for their individual stock prices, again, that could give us some opportunity. So we're prepared on several fronts should it go sideways. But again, I really don't think that's going to happen.

JD DURKIN: All right, fair enough. Chris, share with us, if you can, your latest thoughts on the yield curve and how does it play into your thinking currently. What should we know?

CHRIS VERSACE: So, let's understand what the yield curve is. It's really a collection of interest rates for various instruments depicted on a graphic presentation, you know? And when we try to look at this, the big question a lot of people tend to focus in on-- is the yield curve inverted, meaning that short term interest rates are higher than long term interest rates?

The reason people tend to focus on this is historically, it's indicated a high probability of a recession. And when I say high probability, 9 of the last 10 recessions have been preceded by an inverted yield curve. And yes, we currently have an inverted yield curve, and folks are understandably concerned about an eventual recession, a question being how long, how deep.

And a couple of things to think about. First, you know, we have just talked about the debt ceiling. That could very well be a factor that is tamping down those longer term interest rates just given some concerns that the US might have defaulted.

And again, that's increasingly off the table. And I think we'll need to revisit the yield curve once we pass the June 5 deadline and we have formal confirmation that the US is not going to default. But we also want to pay attention to the economic data that's unfolding.

And again, so far, we have yet to see signs of a recession. But we always want to continue to update our forward view as more data becomes available. And we're going to get a snoot full of it in the coming days. So we're on guard in June to watch the yield curve.

JD DURKIN: Sorry. What was that? Snoot full?

CHRIS VERSACE: That's correct. Technical term there-- snoot full.

JD DURKIN: Technical term. Just wanted to make sure. OK, over the ChargePoint-- I like it. I'm going to use that.

Let's talk ChargePoint. How does ChargePoint's charging footprint stack up to Tesla's. What do you think?

CHRIS VERSACE: Now, this is a wonderful question because the convention is that Tesla tends to drive a lot of headlines when it comes to the EV space, and they tend to be rather vocal. But when you look at it, they exited the March quarter with just under 5,000 EV charging stations, and they've got about 45,200 or so super charging connectors. That's the actual connection that you use to charge your EV.

So, OK, that's Tesla. But let's look at ChargePoint. When they last reported their earnings-- and remember, we're going to get an update after Thursday's close-- they had about 225,000 active points-- if you factor in their roaming agreements, about 465,000 roaming ports. And of that, that's about 18,900 super charging points.

So they have a far greater footprint than Tesla, no question about it. But for at least for now, Tesla has the lead in fast charging stations, which is, of course, what a lot of people are focusing in on. Do I expect ChargePoint to continue to lean into fast charging stations? You bet I do, and I think we'll continue to see some progress on that over the coming quarters.

But JD, let me just give you some other context there because there are some other players out there. EVgo, Blink Charging-- EVgo has about 3,100 fast charging stalls-- so, way below that for ChargePoint. And then we look over at Blink Charging.

They've got overall about 67,000 chargers-- again, way smaller footprint than ChargePoint. And in their most recent quarter, they shared, hey, we're going to deliver 700 fast charging stations in all of 2023. So I think when we parse the data,

If we want to say that ChargePoint has a very impressive footprint, I think that's extremely fair. Is it working on the DC charging station footprint? It absolutely is.

JD DURKIN: All right, we also have a follow up on a question from last week, Chris, where we discussed Deere versus Caterpillar. Dive a little to-- the companies, that is, not the creatures. Dive a little deeper into why you consider Deere an infrastructure play.

CHRIS VERSACE: Now, this is a great question, and it really ties back to know what you own. So, let me be as crystal clear as I possibly can. Does Deere benefit from infrastructure spending? It does.

But its construction equipment business is only about 20% of its overall revenue stream, close to that on its profit generation. Deere is really more purely stated an agricultural equipment play, and that's the reason that we own it. You know, farmers continue to be flush.

They are replacing aged equipment. There is an upgrade cycle that's also benefiting from the move to precision ag. So, first and foremost, Deere is an ag equipment play, but it does have a little bit of a tailwind, we can say, related to infrastructure.

So, if we were to look inside the portfolio, what are our real infrastructure plays? Those, of course, are going to be United Rentals, which is holding an investor day today, Vulcan Materials as well. And again, when we look inside the infrastructure spending bills, we do see dollars for EV charging stations. So we could also kind of layer ChargePoint in as well.

JD DURKIN: All right, that's the great Chris Versace with a snoot full of information to start your day. Chris, thank you as always.


JD DURKIN: All right, folks. That's going to do it for today. Members, please continue sending us all of your questions to aapclub@thestreet.com. Have a great day. We'll see you next time.