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Weekly Market Snapshot · HPK Provident Advisors: The Weekly Bull

• 0:05
  SPEAKER_01: Welcome to Friday Live.
• 0:07
  SPEAKER_01: Every Friday, some of the partners of HPK Provenant get together and discuss what we're seeing going on in the markets, the economy, and time in some financial planning topics.
• 0:14
  SPEAKER_01: So uh just me today, and I'm gonna keep it short because I am also um taking a long weekend.
• 0:22
  SPEAKER_01: I am on the coast off of San Francisco right now, might do a little surfing if it clears up, but right now it is quite foggy.
• 0:29
  SPEAKER_01: So we'll touch on the markets and get into some of our financial blog posts, and then um we'll get along with the weekend.
• 0:36
  SPEAKER_01: So uh not much in terms of economic data this week.
• 0:40
  SPEAKER_01: We had some housing numbers like the pending home sales and housing starts, both came in a little weaker than expected.
• 0:46
  SPEAKER_01: Fed minutes, you know, as always, they're kind of dated.
• 0:49
  SPEAKER_01: Um, claims remain low.
• 0:52
  SPEAKER_01: Uh we did get some retail earnings, which uh investors were particularly interested in seeing what that looked like after the weak retail sales we got last week.
• 1:02
  SPEAKER_01: Um and I'd say overall, minus maybe one or two.
• 1:06
  SPEAKER_01: Overall, they were pretty weak.
• 1:08
  SPEAKER_01: Um, especially uh there's some disappointment in the Walmart earnings.
• 1:13
  SPEAKER_01: Uh if you strip out the pharmacy readings on that, though, it's really not as bad as it showed, but still on the weaker side.
• 1:21
  SPEAKER_01: Um, I think besides that, um one of the highlights was you know, we've been hearing about the new Fed chair, and he wants to, you know, really explore the different mechanisms they have for bringing inflation down.
• 1:34
  SPEAKER_01: Um, he did something this week.
• 1:37
  SPEAKER_01: I don't know if it's necessarily going to do anything for inflation, but they raised their cap on uh bond buybacks to 4 billion from 2 billion, and that's mainly on the 10 to 20 year uh duration treasury bond and the 20 to 30.
• 1:54
  SPEAKER_01: So the initial reaction in the bond market was you saw a big drop in the the 30 year, but then you know that that kind of quickly got reversed.
• 2:02
  SPEAKER_01: I think, you know, there's really some different dynamics to having the the long end of the yield curve being so high.
• 2:11
  SPEAKER_01: One uh government debt, it's very, very high.
• 2:15
  SPEAKER_01: We're having we're starting to see for the first time in a long time, um corporate investment grade debt offerings are really on the rise.
• 2:25
  SPEAKER_01: So now we have more competition um for government bonds from the corporate sector.
• 2:31
  SPEAKER_01: So I really don't think that's you know, the long end is also high because inflation expectations are high.
• 2:39
  SPEAKER_01: So by manipulating that, and it's such a small scale in comparison to the overall um treasury bondholding, and it's really not a big factor.
• 2:50
  SPEAKER_01: Um looking at next week, we'll get a little more data.
• 2:53
  SPEAKER_01: We'll get uh the second read of GDP.
• 2:57
  SPEAKER_01: Um, you know, it's it's coming in at 2.1% expectations, same as the the prior read on that.
• 3:06
  SPEAKER_01: And then I mean the main headline will be I think Thursday we get the PCE deflator.
• 3:11
  SPEAKER_01: Um on a monthly basis, core is gonna come in at expected to come in at 0.18%, uh, which is slightly higher than last month.
• 3:19
  SPEAKER_01: Um, and then the headline number is gonna tick back up into positive positive territory, but still pretty benign number on the annualized basis.
• 3:30
  SPEAKER_01: We are still looking at a 3.2 percent on the core reading and 3.6 percent on the headline.
• 3:36
  SPEAKER_01: So obviously too high.
• 3:38
  SPEAKER_01: Um turning to the markets.
• 3:41
  SPEAKER_01: After, I mean, we had a a nice rally two weeks ago, and then last week was more of a consolidation.
• 3:48
  SPEAKER_01: This week we did start the the week lower.
• 3:51
  SPEAKER_01: Um, but today uh we're seeing a little uptick.
• 3:55
  SPEAKER_01: You know, this pattern was looking like it was going to be a bull flag formation, but we look like we're breaking down here.
• 4:01
  SPEAKER_01: Um, so you know, overall, I think this is still a pretty healthy chart.
• 4:07
  SPEAKER_01: I wouldn't be surprised if we got back down to the 50-day moving average here, just in a period of consolidation.
• 4:13
  SPEAKER_01: Momentum indicators, at least on the RSI, still remain in the buy territory.
• 4:18
  SPEAKER_01: MACD, which is another momentum indicator, did flip into sell signal.
• 4:22
  SPEAKER_01: But um, you know, and unless something material happens, I don't see any major drawdown here.
• 4:28
  SPEAKER_01: Uh, as I mentioned earlier, you know, we saw a brief, very brief uh downtick in treasury yields.
• 4:35
  SPEAKER_01: This is a 10-year treasury, but we are back to all-time highs.
• 4:39
  SPEAKER_01: Um, if this, if we see a definitive breakout above this 475-ish level, I mean, it couldn't mean a lot more upside in rates on the longer term end.
• 4:51
  SPEAKER_01: Um turning to crude oil also remaining elevated.
• 4:55
  SPEAKER_01: We are above that line in the sand number,$85 a barrel.
• 4:59
  SPEAKER_01: Um, so hopefully that shows some deceleration in the coming weeks, but it doesn't seem like there's a whole lot of progress going on with the the war and all that.
• 5:08
  SPEAKER_01: Um, no Fed meeting this month.
• 5:10
  SPEAKER_01: We do get the Jackson Hole Symposium.
• 5:12
  SPEAKER_01: Um, I think it's a week from today.
• 5:15
  SPEAKER_01: And then odds of a September rate cut are now down to 30%.
• 5:19
  SPEAKER_01: So we'll have to just see where the data goes with that.
• 5:22
  SPEAKER_01: We will get more inflation readings and more job numbers before that happens.
• 5:26
  SPEAKER_01: So we could see a substantial change.
• 5:29
  SPEAKER_01: Um, but overall, you know, we're economy's in an okay spot.
• 5:34
  SPEAKER_01: Um, some of the numbers are decelerating.
• 5:37
  SPEAKER_01: We did get that non-farm payroll number being negative.
• 5:40
  SPEAKER_01: Um, retail sales was also pretty poor.
• 5:43
  SPEAKER_01: Um, inflation, you know, too high, but the recent numbers have been on a monthly basis at least, pretty decent, but it's highly subject to the the price of crude oil.
• 5:55
  SPEAKER_01: So we'll just have to keep an eye on that.
• 5:57
  SPEAKER_01: Um, turning to our blog posts uh for the week, we didn't have too much out there.
• 6:02
  SPEAKER_01: Um, one in terms of social security, just you know, give us a call if you have questions about social security.
• 6:09
  SPEAKER_01: Brian is uh an expert in the subject.
• 6:12
  SPEAKER_01: Uh, if you have been married for 10 years, you may be entitled to spousal benefits.
• 6:16
  SPEAKER_01: So uh make sure you talk to us about that.
• 6:19
  SPEAKER_01: And then um there's a plan for tariffs on generic drug pricing.
• 6:24
  SPEAKER_01: Um, it seems like uh the administration is giving a little leeway in timing into that.
• 6:29
  SPEAKER_01: It's gonna jump, I believe, 100% in the in a year from now and then going to 200%.
• 6:34
  SPEAKER_01: Now the generic space has pretty thin margin, so uh it's unclear whether they would be able to pass along or I mean absorb those, likely passing it along to the consumer.
• 6:45
  SPEAKER_01: Um, but there is enough time or at least to get a start on building manufacturing plants in the United States, but we'll see if any of that really comes to fruition or not.
• 6:57
  SPEAKER_01: Um, outside of that, you know, we'll just uh keep you updated next week.
• 7:01
  SPEAKER_01: Um, we'll have some blog posts coming out, and then as always, we'll be back next Friday, uh September or August 29th, and then we'll be getting ready for our annual client appreciation baseball game.
• 7:14
  SPEAKER_01: So I hope everyone has a wonderful weekend, and we will see you next week.
• 7:20
  SPEAKER_00: Security is offered through LPL Financial LLC, member FINRA and SIPC.org.
• 7:25
  SPEAKER_00: Advisory service is offered through LPL Financial LLC, a registered investment advisor.
• 7:31
  SPEAKER_00: Brian Peluto, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 7:37
  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.
• 7:46
  SPEAKER_00: Any opinions expressed are those of the authors and do not necessarily reflect the views of LPL Financial or its affiliates.
• 7:53
  SPEAKER_00: All investments involve risk, including the possible loss of principal.
• 7:57
  SPEAKER_00: This communication may include links or references to third-party websites.
• 8:00
  SPEAKER_00: These links are provided as a convenience only.
• 8:03
  SPEAKER_00: LPL Financial and its representatives are not responsible for the accuracy or content of such sites.
• 8:08
  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.
• 8:18
  SPEAKER_00: Please contact us directly for information regarding licensing and registration status.
• 8:23
  SPEAKER_00: Past performance is not indicative of future results.
• 8:27
  SPEAKER_00: You should consult with your financial advisor, tax professional, andor attorney regarding your specific situation before making any investment decision.