Latest / HPK Provident Advisors: The Weekly Bull / A Market Reality Check On Inflation And Pullbacks

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A Market Reality Check On Inflation And Pullbacks · HPK Provident Advisors: The Weekly Bull

• 0:05
  SPEAKER_01: Welcome to Friday Live.
• 0:06
  SPEAKER_01: Every Friday, some of the partners at HPK Provident get together and discuss what we're seeing going on in the markets, the economy, and talking about some of our blog posts, which usually revolve around financial planning topics.
• 0:16
  SPEAKER_01: So we'll keep this one short today.
• 0:18
  SPEAKER_01: I've caught a little bit of a bug this week, um, but I'll I'll do my best to get through it.
• 0:23
  SPEAKER_01: Um, and with us today is Mr.
• 0:25
  SPEAKER_01: David Harper.
• 0:27
  SPEAKER_01: Good to be here.
• 0:28
  SPEAKER_02: I've been gone a couple of times.
• 0:30
  SPEAKER_02: Um, I enjoyed uh my time away.
• 0:33
  SPEAKER_02: I got to be on a cruise, and then I went up to saw my granddaughters, and I did not get sick.
• 0:39
  SPEAKER_02: Um, Mike unfortunately got had his bug probably from Sierra Aurora.
• 0:45
  SPEAKER_02: Yeah, I guess I guess it's true.
• 0:46
  SPEAKER_02: Little kids are always breading.
• 0:49
  SPEAKER_02: Those daycare factories are uh are are just germ factories.
• 0:54
  SPEAKER_02: Okay, yeah.
• 0:55
  SPEAKER_01: I was asking my sister, I was like, is anyone have a bad cough over there and caught a bug?
• 1:00
  SPEAKER_01: And was like, oh no, not currently, but um, you probably still did get it from them.
• 1:05
  SPEAKER_02: Yes, you do, and on all the if you've been on a cruise, you've seen all those art pieces, and I am thrilled.
• 1:13
  SPEAKER_02: I I have a number of those art pieces, but I picked up my very first Romero Brito piece of work.
• 1:20
  SPEAKER_02: Okay, now don't get too excited about it because it's a very small gotta contain myself.
• 1:26
  SPEAKER_02: Okay, it's my it's my happy.
• 1:30
  SPEAKER_02: Um this seems like backward to me, but happy.
• 1:34
  SPEAKER_02: Uh and that's my uh Romero Brito foray.
• 1:38
  SPEAKER_02: Um, this one only cost me 10 bucks.
• 1:40
  SPEAKER_02: Um, a thousand times that won't even get you a uh one of his um paintings.
• 1:46
  SPEAKER_02: So I was pretty I was pretty happy, pun intended, uh picking that up.
• 1:54
  SPEAKER_01: So well, that'll get you some better returns in the stock market so you can buy that.
• 1:58
  SPEAKER_01: Good, good.
• 2:00
  SPEAKER_02: Uh I'm sure everyone is appreciating watching their uh account go up.
• 2:04
  SPEAKER_02: Okay, uh, and we're giving some of that back today.
• 2:09
  SPEAKER_01: Yeah, but I mean that's that's healthy.
• 2:12
  SPEAKER_01: Like, let me switch over to the SP 500.
• 2:16
  SPEAKER_01: Like, we're we're very extended in the short term.
• 2:19
  SPEAKER_01: This is a daily chart, and I mean the weekly looks the same.
• 2:21
  SPEAKER_01: I really like RSI as an indicator of overbought oversold conditions.
• 2:25
  SPEAKER_01: Now, it's not necessarily a great timing mechanism.
• 2:29
  SPEAKER_01: Um, you can remain over overbought for some time, but the I was I saw some stat that was like the time that it took us to recover the 10% loss was really unprecedented.
• 2:42
  SPEAKER_01: We really had such a run, and I mean I flagged the SP, but like look at the triple Q Nasdaq right here.
• 2:50
  SPEAKER_01: It's like even I think we hit 85 on RSI, so it'd be healthy for I mean, being this extended, it it and I mean even on the weekly chart, it could lead to more of a pullback than just before I was talking about a consolidation, but we'll see.
• 3:05
  SPEAKER_01: I mean, it's so we're still so headline driven.
• 3:08
  SPEAKER_01: Um, I think I mean they're kind of flagging today the lack of uh like anything material coming out of the the Chinese US talks.
• 3:20
  SPEAKER_01: Um, but I think it just kind of like you know, we had a good run and we're just you know having a de-risking day.
• 3:28
  SPEAKER_01: Um, whether that leads to something greater, we'll have to keep you updated.
• 3:32
  SPEAKER_01: Um, we are seeing a big spike in the 10-year yield today.
• 3:35
  SPEAKER_01: Um, that tends to not be good for stocks.
• 3:38
  SPEAKER_01: And then crude we're still sitting around$100 a barrel, so way too high.
• 3:43
  SPEAKER_01: And obviously, that's a concern for people, um, especially in terms of spending power.
• 3:49
  SPEAKER_01: Wage growth has been okay.
• 3:51
  SPEAKER_01: Um, but we did get a lot of that inflation data this week.
• 3:54
  SPEAKER_01: And you know, it wasn't uh wasn't that great, but um it really didn't throw the market, I guess just because we're expecting it right now.
• 4:03
  SPEAKER_01: Um, Tuesday we got the CPI data.
• 4:06
  SPEAKER_01: We are seeing that kind of seep in uh on a headline basis.
• 4:10
  SPEAKER_01: We're at 3.8.
• 4:11
  SPEAKER_01: The monthly figure was roughly in line, and then uh core was at 2.8.
• 4:17
  SPEAKER_01: Um, so well above the Fed's target.
• 4:21
  SPEAKER_01: Uh, I would love to say that PPI was better, which is the wholesale inflation numbers, but it was not.
• 4:27
  SPEAKER_01: Um, the headline came in at six percent on an annualized basis, which is 1.4% on the month, and 5.2% on a core basis.
• 4:37
  SPEAKER_01: So we're starting to see that really seep in.
• 4:39
  SPEAKER_01: On the good news though, um, we did get retail sales yesterday, and it remains pretty healthy.
• 4:44
  SPEAKER_01: Um, we're sitting at for the control group, uh, about a half a percent.
• 4:50
  SPEAKER_01: So deceleration from last month, but still relatively a good reading there.
• 4:55
  SPEAKER_01: Um, but yeah.
• 4:59
  SPEAKER_01: Besides that, it's just a lot of uh, I mean, we're wrapping up earnings season, um, not much progress going on with the war, but it I I did see that there's some movement in the Strait of Hormuz.
• 5:09
  SPEAKER_01: Um, Iran's letting some of the Tyran ships go through.
• 5:13
  SPEAKER_01: And I don't know who comes up with these uh these these uh taglines, but I think the latest military efforts by the US is uh did you see this one?
• 5:25
  SPEAKER_01: I'm trying to think of what it was.
• 5:26
  SPEAKER_01: It was like sledgehammer.
• 5:30
  SPEAKER_01: Those taglines are rather creative.
• 5:34
  SPEAKER_02: Um I I I always fascinate I'm always fascinated by how how they come up with a name, like especially uh automakers.
• 5:48
  SPEAKER_02: Good for them.
• 5:50
  SPEAKER_02: Um it's it's hard to come up with names.
• 5:54
  SPEAKER_02: Um and these taglines for these different military operations.
• 6:00
  SPEAKER_02: Um I'm very I'm very thankful that I don't have to come up with them.
• 6:06
  SPEAKER_02: Uh it would I have a hard enough time changing my passwords.
• 6:14
  SPEAKER_01: Very true.
• 6:16
  SPEAKER_01: Uh turning to over over to some of the blog posts for the week.
• 6:20
  SPEAKER_01: Um we have one on gifting on Tuesday.
• 6:23
  SPEAKER_01: Um, you want to touch on this one, David?
• 6:25
  SPEAKER_01: I know you talk to clients about this quite often.
• 6:28
  SPEAKER_02: Gifting is is a very it's good for the soul, it's good for the individual, and it's good for the the one that receives the gift.
• 6:36
  SPEAKER_02: Okay, but there's certain some parameters that you need to pay attention to.
• 6:42
  SPEAKER_02: One, um anybody can gift to any other person in the in the US$19,000 in 2026, and that will probably go up in 2027.
• 6:55
  SPEAKER_02: Okay, for those uh elderly persons that um it's it's a good way of reducing the the size of your estate.
• 7:04
  SPEAKER_02: Um some states will charge an inheritance tax uh if for anything that's under your estate.
• 7:12
  SPEAKER_02: Well, if you gift$19,000 to you know your three children or four children or whoever, okay, that saves you um for lineal dissent in Pennsylvania, that saves you anywhere from four to six percent Pennsylvania inheritance tax.
• 7:30
  SPEAKER_02: Um, and if it's a non-lineal, that saves upwards of 15%.
• 7:35
  SPEAKER_02: Okay, uh that's money that you can see benefit the person receiving the gift during your during your lifetime.
• 7:43
  SPEAKER_02: That's not a bad strategy, okay, but there are some very clear rules of thumb, okay.
• 7:50
  SPEAKER_02: And one of that is make sure you can afford it.
• 7:53
  SPEAKER_02: Okay, don't be gifting away your retirement.
• 7:57
  SPEAKER_02: Uh, yes, a lot of our children, Mike.
• 8:00
  SPEAKER_02: Um uh I put you I put you in there um as my as my step stepson, but uh but you're still not getting any gift from me because I can't afford to give you anything.
• 8:13
  SPEAKER_02: All right.
• 8:13
  SPEAKER_02: But come on, dad.
• 8:16
  SPEAKER_02: Uh but to let you know that uh a lot of our a lot of our uh younger couples and young individuals are having a tough time, especially with the rise in the gas prices and so forth.
• 8:30
  SPEAKER_02: Gifting is not a bad idea, okay.
• 8:33
  SPEAKER_02: If you have more than what you need, okay, but be careful, don't give it as a loan.
• 8:40
  SPEAKER_02: You do not really want to loan uh monies to friends, especially not friends, um relatives, um, because it it puts a a stigma between you.
• 8:53
  SPEAKER_02: Um if if they never pay back their loan, uh you might have lost your friendship.
• 8:59
  SPEAKER_02: Um so if you if you plan on uh giving someone some money, do it as a gift because you can afford it.
• 9:08
  SPEAKER_02: And if you receive anything back from that uh from the individual, then you receive it as a gift.
• 9:14
  SPEAKER_02: Okay, but if you cannot afford it as a gift, don't give it.
• 9:18
  SPEAKER_02: Do not give it, uh, because relationships are so much more important than money.
• 9:24
  SPEAKER_01: Um Mike, I your relationship to me is a very important thousand figure.
• 9:33
  SPEAKER_01: Um, but it it really comes down to the the lifetime gifting max, which most people don't really ever get close to.
• 9:44
  SPEAKER_01: Is that correct?
• 9:46
  SPEAKER_02: Yes, yes.
• 9:48
  SPEAKER_02: Uh gifting three thousand, five thousand dollars is pretty much more than norm.
• 9:54
  SPEAKER_02: Okay.
• 9:55
  SPEAKER_02: Um, but if you can afford more, talk to us.
• 9:59
  SPEAKER_02: Let's um don't don't talk to your friend at the bar.
• 10:03
  SPEAKER_02: Uh talk to a um financial professional that can help you think through that correctly.
• 10:08
  SPEAKER_02: Okay, and this next blog is phenomenal.
• 10:12
  SPEAKER_02: It's a great segue into all the uh rises and falls that we've experienced this year um and last year and and ongoing.
• 10:24
  SPEAKER_02: Um if you want to try to tie the market, you know, looking back, uh we all have 2020 vision, but uh looking forward is a lot difficult.
• 10:37
  SPEAKER_02: So if you if you can, you know, theoretically, if you sold the stock for your assets at its highest peak, and then turn around and bought it back at its at its low, street, uh, you know, theoretically, yeah, you can make money, okay?
• 10:59
  SPEAKER_02: You can make a lot of money on that.
• 11:01
  SPEAKER_02: Uh, you don't even need Nancy Pelosi's uh uh special uh special knowledge to to to make money on that, but uh it you cannot uh uh make that in reality.
• 11:15
  SPEAKER_02: It's just not possible.
• 11:17
  SPEAKER_02: If you miss just one day the the best day, if you miss April 9th of 2025, okay, you're 17.
• 11:27
  SPEAKER_02: What is that eight eight?
• 11:28
  SPEAKER_02: 17.88 percent.
• 11:31
  SPEAKER_02: If you just if you were on the market on April 9th, you were down to 7.65 percent.
• 11:36
  SPEAKER_02: You gave up over 10 of your return in that year just by missing out on one day.
• 11:46
  SPEAKER_02: So when you uh when you try to tie the market, you have to be correct twice.
• 11:52
  SPEAKER_02: You gotta be correct when to sell it, and then you have to be correct when to buy it back.
• 11:58
  SPEAKER_02: Now, I'm very thankful that uh that Mike, our our partner here, has a charter financial analyst, okay, and they do the they have the fundamental um background to decide which companies are best to buy, but he also has the technical analysis piece, okay, where it tells him when to buy it, when to sell.
• 12:21
  SPEAKER_02: All right, and Mike can go a whole lot more detail about that, but he's a trained professional, and not even Mike would do this strategy of trying to time the market.
• 12:33
  SPEAKER_01: The market is a piece.
• 12:36
  SPEAKER_01: I I do a pretty good job of it, but um, I'm never all in and all out, which is the key.
• 12:42
  SPEAKER_01: Like I'll just do incremental changes.
• 12:44
  SPEAKER_01: Um, for example, I got out of one of our tactical positions on uh Wednesday in our mostly in our retirement accounts, just because I didn't want to cause any undue tax consequences.
• 12:56
  SPEAKER_01: Because uh overall, I think this is a healthy bull market until the narrative changes.
• 13:01
  SPEAKER_01: Um, but like I said, we got pretty pretty extended in the short term, had such a rally from the lows, and why not take a little uh tactical opportunity and take some of that exposure off the table and hopefully get a chance to buy back at a lower level.
• 13:16
  SPEAKER_01: So we're always doing that kind of thing.
• 13:18
  SPEAKER_01: We bought um pretty much, I think, on the low of this of this last uh downturn.
• 13:25
  SPEAKER_01: But like I said, it it is tough to anticipate without a crystal ball.
• 13:30
  SPEAKER_01: So um, in terms of that position, we ended up getting out after three days because the rally was strong and waited a couple more days, and it looked like the downtrend was was uh over, so we got back in the position.
• 13:44
  SPEAKER_01: So just being able to be nimble also helps with that.
• 13:47
  SPEAKER_01: But yeah, like I said, we're we're never going all in and all out.
• 13:50
  SPEAKER_01: It's very difficult to time the market, almost impossible.
• 13:55
  SPEAKER_02: Yeah, not not a not a very good strategy and certainly not tax efficient.
• 14:03
  SPEAKER_02: Okay, so you don't want to give all your all your gain away to to the to to paying taxes on it either.
• 14:13
  SPEAKER_02: Okay, easier done in retirement accounts that Mike alluded to, uh, but still you got to be careful.
• 14:19
  SPEAKER_02: That's your that's your lifeline through the end of your end of your years when you retire.
• 14:25
  SPEAKER_02: Okay, right.
• 14:26
  SPEAKER_02: You don't want to be taking undue risk on something that you need to live off for the rest of your life.
• 14:32
  SPEAKER_02: Okay, so uh that's all I've got for you, Mike.
• 14:37
  SPEAKER_01: Okay, well, we got a new Fed chair, so we'll be hearing from him in the next meeting.
• 14:46
  SPEAKER_01: But besides that, yeah, that's all I got on the economy and the markets.
• 14:49
  SPEAKER_01: You got any exciting plans this weekend?
• 14:52
  SPEAKER_02: Yes, I actually might be going to uh Disney on Sunday uh with the grandsons and uh my wife and daughter and a son-in-law.
• 15:02
  SPEAKER_02: So uh having been there for a while.
• 15:07
  SPEAKER_02: Um take it to pieces, but I plan to do a lot of walking.
• 15:17
  SPEAKER_01: So that's all I got.
• 15:20
  SPEAKER_01: All right, I hope you have a good time at Disney.
• 15:22
  SPEAKER_01: And before we go, I will flip on the financial disclosures, and we will see you next week by 1230 Eastern Time.
• 15:30
  SPEAKER_00: Supervisor through LPL Financial LLC, member FINRA and SIPC.org.
• 15:35
  SPEAKER_00: Advisory services offered through LPL Financial LLC, a registered investment advisor.
• 15:41
  SPEAKER_00: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 15:47
  SPEAKER_00: Content discussed is for informational purposes only and not intended as an offer or solicitation to buy or sell any security or investment strategy.
• 15:56
  SPEAKER_00: Any opinions expressed are those of the authors and do not necessarily reflect the views of LPL Financial or its affiliates.
• 16:02
  SPEAKER_00: All investments involve risk, including the possible loss of principal.
• 16:07
  SPEAKER_00: This communication may include links or references to third-party websites.
• 16:10
  SPEAKER_00: These links are provided as a convenience only.
• 16:13
  SPEAKER_00: LPL Financial and its representatives are not responsible for the accuracy or content of such sites.
• 16:18
  SPEAKER_00: Brian, Mike, and David, and HBK Provident Advisors may only transact business in states where they are properly registered or exempt from registration.
• 16:27
  SPEAKER_00: Please contact us directly for information regarding licensing and registration status.
• 16:33
  SPEAKER_00: Past performance is not indicative of future results.
• 16:37
  SPEAKER_00: You should consult with your financial advisor, tax professional, andor attorney regarding your specific situation before making any investment decisions.