Market Madness: Why JPMorgan, McDonald's are slam dunk stock picks

Tipping off Yahoo Finance's "Market Madness" bracket tournament, Winthrop Capital CIO Adam Coons joins Julie Hyman to make the case for the first round of corporate match-ups, which includes JPMorgan Chase (JPM) vs. TJX (TJX) and McDonald's (MCD) vs. Disney (DIS).

Yahoo Finance has started our own competition for March Madness. We're calling it market Madness where we're pitting 32 companies against each other in a tournament bracket. Who wins you ask? We're letting our guests decide, stock pickers. Adam Kunz is joining us now. Win from Capital, Chief investment officer, joining us now for market Madness brought to you by Everpure. Our first contestant, I guess is what we're calling it, our first match ups that we're taking a look at today. Adam, thanks for playing. So we're going to run through these pretty quickly and then we're going to kind of zero in on a few of them. So I believe we're taking the right side of this bracket first here. Um so I'm going to um take it I think from the top bottom here and then we'll dig into a couple of them. So first on the match up, we've got JP Morgan Chase and TJX, the retailer. Which one of these would be your pick?

Yeah, here I'm picking JP Morgan. I think just deregulation is uh on the horizon. I think we got some news today. So I think that's really the propellant here for for large banks.

All right, we're going to come back to JB Morgan in a minute but let's get straight to the next one. Boeing and Netflix. This is an interesting one.

It really is. but right here, I think you got to pick pick Netflix. Uh they're going to emerge from this uh kind of uh bust of a merger acquisition and I think they just have more that they can do with their cash flow. Bowen just keeps screwing everything up.

Gotcha. So not a lot of optimism for the upside there. Um Exxon Mobile and Amazon. As we know, Exxon Mobile's been having quite a year so far, but where do you think they both go from here?

Yeah, and that's the reason why I picked Amazon over them. I think you've kind of seen the most you're going to get out of increased oil prices being priced into Exxon. So there's probably more downside than upside there. So Amazon, a lot of different stories you can play into there that that makes it the winner for me.

Okay. Um next up we have Delta and Apple.

Another interesting pair up here. I, you know, I think Apple is just one of those companies where it it's kind of hit a wall, having to use Google for their AI, uh, kind of tells the story there. So, for Delta, I think you you're looking at more business travel, the consumer remains very resilient, so travel's going to maintain, so that's why I picked Delta.

Okay, that's an interesting one. Um Nvidia and Paramount.

You got the the behemoth here, Nvidia. I think look, Paramount and and Warner Brothers, I think you've got two sinking ships. just because you tie them together doesn't make anything any better. So uh here that's why you're going to pick Nvidia just sticking with the the classic AI story here. I think uh there's still more upside for him.

All right. Um next up, we were just talking about Walt Disney and the new CEO Josh tomorrow. They're getting matched up against Mickey D's McDonald's here. Who do you like?

Yeah, so this is a tough one. I think, you know, if you look at uh what can kind of be the uh upside story, it would be um Disney, I think it has more upside potential, but there's just a lot of execution risks. So I think, you know, to play it safe here in the bracket, I'm going to go with McDonald's. It's tried and true, kind of can stay, stay the course through an economic downturn if we see that.

Okay, next, we've got Microsoft and Coinbase.

Yeah, so this is what I'm calling my uh Cinderella story in the bracket. Obviously, Microsoft uh again, similar to Nvidia is a behemoth in the AI story. Um but I think being tied to open I open AI uh is going to hurt them. And so again, I think it's it's a tough one. This is kind of the outlier, but I think Coinbase, it's obviously highly levered to uh crypto, which is very volatile, but I think if you're going to pick a Cinderella story in the bracket, this is it.

Oh, interesting. Okay. And then finally, um and as I mentioned, we're going to go back to a couple of these. Finally, Ford and Nike.

Yeah, a couple of American brands that are just really struggling. Um, I think the the reality here is that uh Ford has more downside, just just having a hard time uh executing on the EV story. Uh Nike obviously has a lot of headwinds, but it's a really strong brand. I think that they can make a comeback here. Uh so that's why I like Nike.

All right, as promised, I want to come back on a couple of these and sort of double click if you will. Um first of all, JP Morgan, you mentioned the deregulatory situation. I mean, we ought to say also, all the financials have not been doing well this year. There's been concerns about private credit, right? There's the rate outlook for cut for cuts to rates being pushed out. Um so what do you think turns turns things around here?

Well, I think it's just that. I think you've you've kind of overblown several different stories in the market when it comes to banks and their exposure, especially someone like JP Morgan, uh similar to some of the kind of software sell off. Uh what you're seeing in banks is that they're all being kind of thrown out here. Uh but but JP Morgan is fairly, uh, you know, uh fenced off from private credit massively unlike, you know, a bank like Jeffries that's that's highly levered to to private credit. So, I think that they're removed from that. I think the the risk of interest rates coming down uh significantly, I think is a little bit overblown. Actually, after yesterday's meeting, you saw the probability of rate cuts uh in the futures curves uh move to 0% that we're going to see any more cuts this year. So, I think the market's starting to rethink that. And then like I said, the the bigger story here is you're going to see more MNA activity, uh just broadly, but also in the banking sector.

As you kind of obviously there's been some distractions of some sort from from the Trump administration but one of the platforms they ran on was deregulation and we do think that's on the horizon. Like I said, we got a little bit of news on that today. And so I think those things unlock earnings potential for JP Morgan. So that's just why we like it right now.

All right, let's uh and the other one we want to double click on is um McDonald's. Those shares are okay year today they're up about two and a half percent here. Um so, so what do you think? What why does that look good to you?

Yeah, as I said at the beginning, this would be more of a safety play, more defensive. McDonald's is obviously in in just different kind of economic volatility regimes can outperform because it's just stickier, stickier revenue. Uh they've struggled outside of the US lately. Um but overall, we think that, you know, it is kind of that tried and true type name. And so that's why we're picking it here. It definitely is the safer way to go. Um I I think that there's just too many unknowns when it comes to Disney. I think it's, you know, obviously a great brand, a great platform, uh but they've just had some too many missteps lately. And so I think that they can get it turned around but like I said, there's a lot of execution risk there. So Disney definitely has more upside potential than McDonald's, uh but it also has a lot more downside potential. So that's why we went with the safe play, McDonald's.

And you're okay with the way Chris Kepski eats a burger? I guess?

You can't can't escape that, you know, seems to make these little faults, but yeah

No, I guess. I guess All press is good press, maybe. All right. Adam, thank you so much for playing. Really appreciate it.