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Growth in the Neutral Rate Era · The SPY Trader

• 0:00
  Hello everyone and welcome back to the Spy Trader podcast!
• 0:03
  I'm your host, Barnaby Bullseye, and boy, do we have an interesting afternoon to dive into.
• 0:07
  It is currently 2:30 pm on Friday, October 23rd, 2026, out here on the West Coast.
• 0:13
  We are wrapping up another week in this LateCycle Expansion phase we have been talking about.
• 0:19
  The wild ride of the mid2020s seems to be in the rearview mirror, and we are now looking at a market that cares more about real work getting done than just big promises.
• 0:27
  The Federal Reserve has finally settled us into what we call the Neutral Rate era.
• 0:32
  Interest rates are sitting pretty at about 3.25 to 3.5 percent.
• 0:36
  Today's inflation data showed the PCE holding steady at 2.3 percent.
• 0:41
  It is a little above the target, but not enough to make the Fed reach for the panic button.
• 0:46
  In the job market, it is a tale of two cities.
• 0:49
  While factory and office admin roles are cooling off, if you are in highskill tech or healthcare, you are still the belle of the ball.
• 0:57
  The 10year Treasury yield is around 4.1 percent, which is making longterm bonds like the iShares 20 plus Year Treasury Bond ETF, or TLT, look very attractive again.
• 1:07
  Over in the tech world, we are moving from the building chips phase to the implementation phase.
• 1:12
  The Tech Select Sector SPDR Fund is up 12 percent this year, but growth is getting selective.
• 1:17
  Microsoft just announced Copilot 4.0, which is already boosting productivity by 30 percent in trials.
• 1:23
  Meanwhile, NVIDIA is feeling a bit of pressure as companies like Amazon and Google start using their own inhouse silicon for 40 percent of their workloads.
• 1:32
  The Financial sector, tracked by the XLF ETF, is one of our top performers this month.
• 1:37
  Banks like JPMorgan Chase are reporting record earnings because corporate uncertainty has vanished.
• 1:43
  Even Real Estate is making a comeback.
• 1:45
  The Vanguard Real Estate ETF is finally recovering, driven by data centers and residential demand.
• 1:51
  And if you like the shiny stuff, Gold is sitting at 2,700 dollars an ounce as central banks diversify.
• 1:58
  Now, for some strategic moves.
• 2:00
  First, keep your core in growth but be smart.
• 2:03
  I recommend maintaining a position in the Invesco QQQ Trust, specifically looking at Alphabet as they lead in AI search.
• 2:11
  Second, look across the ocean.
• 2:13
  The Vanguard FTSE Developed Markets ETF, or VEA, is a great way to find deals in Japan and Europe where stocks are cheaper than here in the U.S. Third, the bond bear market is over.
• 2:24
  Allocate some funds to the iShares Core U.S. Aggregate Bond ETF.
• 2:27
  It provides a solid 5 percent yield with low risk and acts as a vital ballast for your portfolio.
• 2:34
  Finally, let's talk healthcare.
• 2:36
  The XLV ETF and UnitedHealth Group are fantastic defensive plays.
• 2:40
  As our population ages, the fundamental demand for health services remains strong regardless of the economy.
• 2:46
  Just remember to keep at least 50 to 60 percent of your money in the basics like the SPY or VTI to keep your portfolio steady.
• 2:53
  That is all for today's edition of Spy Trader.
• 2:56
  I am Barnaby Bullseye, wishing you a great weekend and happy investing!