Kudla on Commodities, Defense, and Market Upside

David Kudla, CEO and Chief Investment Strategist at Mainstay Capital Management, argues that the current geopolitical turmoil around the Strait of Hormuz is creating a rare market opportunity—despite short-term volatility. He contends that while headlines about war and supply disruptions have pressured stocks, the fundamentals remain strong, with earnings expectations rising even as valuations contract. Kudla sees a powerful rally coming once the crisis resolves, pointing to commodities like gold, silver, and oil as key beneficiaries. He highlights the FEC Harbor Commodity All Weather Strategy ETF as a top-performing, diversified play on this environment, noting its strong year-to-date gains and underallocation in most portfolios. On defense, he maintains that aerospace and defense ETFs like WAR and PPA remain compelling due to sustained military demand and depleted stockpiles requiring years to replenish. He also dispels AI hype fears, emphasizing AI’s real, productivity-boosting impact across industries and its inevitability as a transformative force—despite limited early adoption across corporate America.