Latest / HPK Provident Advisors: The Weekly Bull / Why Markets Hit New Highs Despite War And Inflation Fears

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Why Markets Hit New Highs Despite War And Inflation Fears · HPK Provident Advisors: The Weekly Bull

• 0:05
  SPEAKER_01: Welcome to Friday Live every Friday and sometimes on Thursdays like today.
• 0:09
  SPEAKER_01: The partners of HPK Provident get together and discuss what we're seeing going on in the markets, the economy, and tie it in some financial planning topics.
• 0:17
  SPEAKER_01: So uh we're doing it today because I am starting a cross-country road trip tomorrow.
• 0:22
  SPEAKER_01: So with me is David Harper.
• 0:25
  SPEAKER_02: Good morning, good afternoon, and wow, what a difference uh a couple of days make.
• 0:34
  SPEAKER_02: Mike and I were talking before uh before we started, and last Friday live's um uh our thing, that's about as that was a little bit depressing.
• 0:47
  SPEAKER_01: And yeah, yeah, I'd always like we're talking about the potentially weak consumer and the impact energy price they're gonna have, and the wars just not seeing any resolution.
• 1:01
  SPEAKER_01: And I I found this, which is a pretty good summary of the type of reaction we had.
• 1:10
  SPEAKER_01: Relax the third price in.
• 1:12
  SPEAKER_01: So we're looking past the geo geopolitical drama and uh yeah, back to all all-time highs.
• 1:19
  SPEAKER_01: So we had I think 11 or 12 days in a row, and based on the companies that are above their 20-day moving average, it it represents this pattern called uh a breath thrust.
• 1:32
  SPEAKER_01: So, I mean, we are getting a little over overbought here, but typically these moves are met with further gains to the upside.
• 1:42
  SPEAKER_01: So turning to the SP 500, we did get to record high close yesterday, above 7,000, which we remain today.
• 1:52
  SPEAKER_01: Um, so I'm thinking at this point the move's probably higher from here.
• 1:58
  SPEAKER_01: Um, but I would have liked to see a little better follow through today.
• 2:02
  SPEAKER_01: Um, this kind of pattern's always a potential for maybe a false a false breakout, but uh I'm optimistic.
• 2:10
  SPEAKER_01: Um biggest rule in technical analysis, you don't fight the trend.
• 2:14
  SPEAKER_01: And right now, momentum and the trend is moving higher.
• 2:18
  SPEAKER_01: So despite my concerns over the economy and uh the war escalations, the market doesn't care.
• 2:25
  SPEAKER_01: So I'm I'm on board at this point, but we're uh we're ready to be nimble if need be.
• 2:32
  SPEAKER_01: On the oh go ahead.
• 2:34
  SPEAKER_02: I'm sorry.
• 2:35
  SPEAKER_02: You can go ahead.
• 2:37
  SPEAKER_02: Um I was gonna say uh as the as the when the calendar turned and we're looking into January, I I was a solidly cautiously optimistic, you know, and we've been cautiously optimistic for a while.
• 2:50
  SPEAKER_02: Last Friday it turned into cautious.
• 2:54
  SPEAKER_02: And now I'm back to the highest cautious optimistic that I've been in quite some time.
• 3:00
  SPEAKER_02: I'm still cautious.
• 3:02
  SPEAKER_01: I'm short-term optimistic.
• 3:04
  SPEAKER_01: Okay, I don't know what the summer months will bring with higher energy prices, and typically the summer months are pretty bad in a midterm year.
• 3:13
  SPEAKER_01: Um, but yeah, the I mean, everything like the 10 years being pretty stable at this point or hovering, we've been hovering right around the 430 level.
• 3:25
  SPEAKER_01: So um, as long as that doesn't go higher, and hopefully crude prices don't go much higher because today we are seeing an uptick to 95 a barrel.
• 3:36
  SPEAKER_01: Um, but with that said, the stock market's still marginally higher.
• 3:40
  SPEAKER_01: So um it's kind of looking past that at this point.
• 3:44
  SPEAKER_01: And this is the high yield spreads, they're pretty tight, they've come back down quite a bit.
• 3:49
  SPEAKER_01: Um, so that's a positive sign.
• 3:51
  SPEAKER_01: Um, economic-wise, we didn't get a whole lot this week.
• 3:54
  SPEAKER_01: The focus is kind of shifting to earnings.
• 3:57
  SPEAKER_01: Um we got the PPI data, which headline came in hot, but not as hot as expected.
• 4:03
  SPEAKER_01: I think it was a half a percent for the month versus consensus of 1%.
• 4:07
  SPEAKER_01: So on an annualized basis, it ticked up to 4%, which is pretty high, but again, below expectations.
• 4:15
  SPEAKER_01: Core was actually pretty muted for PPI.
• 4:18
  SPEAKER_01: It came in at 0.1% and uh remained the same as last month on an annualized basis at 3.8.
• 4:26
  SPEAKER_01: Um, besides that, we got uh small business survey was pretty negative.
• 4:32
  SPEAKER_01: Um just a lot of uncertainty out there.
• 4:36
  SPEAKER_01: So they're kind of pausing on their hiring and spending plans right now.
• 4:40
  SPEAKER_01: A couple of the like the Philly and New York uh what you call it, survey.
• 4:48
  SPEAKER_01: I'm blanking on the name of it right now, some sort of survey.
• 4:52
  SPEAKER_01: The Fed the Fed survey.
• 4:54
  SPEAKER_01: Um they were both good on the headline number, uh, although prices paid was quite a bit higher.
• 5:00
  SPEAKER_01: And the Philly saw a contraction in employment, so some weakness there, but um overall, just kind of hanging in there.
• 5:08
  SPEAKER_01: Jobless claims remain low that came out today.
• 5:11
  SPEAKER_01: Uh earnings were just starting out pretty much this week, but so far it's been pretty solid.
• 5:18
  SPEAKER_01: Banks haven't raised any red flags.
• 5:21
  SPEAKER_01: Um the next couple weeks, it'll really pick up.
• 5:25
  SPEAKER_01: I think not next week, but the following week is when it really, really heats up.
• 5:29
  SPEAKER_01: But I mean, earnings growth is expected to be 12.6 percent for the quarter, and the highest revenue growth in a few years, I think 9.1%.
• 5:40
  SPEAKER_01: Um productivity remains strong, margins are stable.
• 5:45
  SPEAKER_01: Um, so the the big the big corporate corporations are doing well.
• 5:51
  SPEAKER_01: Um and that's what ultimately leads the stock market.
• 5:54
  SPEAKER_01: So off to a good start.
• 5:57
  SPEAKER_02: Yes, yes.
• 5:58
  SPEAKER_02: Uh and on yesterday was the end of tax reckoning day.
• 6:04
  SPEAKER_02: Yeah, it good day for record high, right?
• 6:08
  SPEAKER_02: Record high for the SP 500 uh seems to be near, if not higher, record uh amount of people that are getting returns and even higher returns.
• 6:19
  SPEAKER_02: Uh I believe it to be 11% higher than it was uh a year ago.
• 6:25
  SPEAKER_01: Uh yeah, I think it I think it's below what we were anticipating, though.
• 6:31
  SPEAKER_01: But any money back is good.
• 6:34
  SPEAKER_02: Yes.
• 6:35
  SPEAKER_02: Yeah.
• 6:36
  SPEAKER_02: Um you you want to move on to the uh financial planning topic?
• 6:40
  SPEAKER_01: Yeah.
• 6:41
  SPEAKER_01: So we had uh one talking about just kind of like the importance of making pretty much aligning your um investments based on your risk tolerance and return expectations, needs.
• 6:59
  SPEAKER_01: And there's two main components to that.
• 7:01
  SPEAKER_01: It's um from a risk standpoint, you have your ability to take risk, which is pretty much have a portfolio appropriate to meet your liquidity needs throughout your lifetime, and then you have your willingness to take risks.
• 7:14
  SPEAKER_01: So you might have$50 million and you freak out every time your portfolio drops 100,000.
• 7:22
  SPEAKER_01: So your ability to take risk, as long as your spending needs aren't that substantial, is great.
• 7:28
  SPEAKER_01: So you could potentially take on a lot of risk, but your willingness is not there.
• 7:33
  SPEAKER_01: So um we we tend to kind of lean toward the more conservative one for the clients' ability and willingness, but as long as it doesn't deter them from reaching their financial goals.
• 7:46
  SPEAKER_01: Is that uh appropriate to say, David?
• 7:52
  SPEAKER_02: It's it's sometimes uh uh people need a reality check.
• 7:57
  SPEAKER_02: If they if they want to be at point B and they're investing as if they're in point A, say, you know, um you can afford more risk.
• 8:06
  SPEAKER_02: Look at your entire portfolio, not just not just your one account.
• 8:10
  SPEAKER_02: Uh so you can either do a balanced portfolio for your IRA and then your Roth and your joint tent account, and you know, ongoing, ongoing, or you can look at the whole picture, the whole portfolio, um, which it's your choice.
• 8:28
  SPEAKER_02: Um, and by doing that, I think you can um you can weather storms much better.
• 8:33
  SPEAKER_02: You can uh you can accommodate risk to um and you need to take on some risk to be able to get the potential return that you want for your futures.
• 8:44
  SPEAKER_02: Okay.
• 8:47
  SPEAKER_01: Yeah, that's well said.
• 8:48
  SPEAKER_01: And then I I like this post that we did.
• 8:51
  SPEAKER_01: It's uh you want to go over this one, David?
• 8:53
  SPEAKER_02: I think this is phenomenal.
• 8:55
  SPEAKER_02: Um, a lot of a lot of seniors have concerns about this.
• 9:00
  SPEAKER_02: Will I run out of money?
• 9:02
  SPEAKER_02: Is the number one concern, and the number two concern is what would cause me to run out of money?
• 9:09
  SPEAKER_02: If what happens if I'm in a a skilled facility, uh a nursing home, you know, what does that happen?
• 9:17
  SPEAKER_02: Well, we need to be realistic and understand that Medicare only covers about the first month, and then the then the rest of the hundred days is a just a portion, like a very small portion.
• 9:33
  SPEAKER_02: So if you are planning on Medicare paying for your long-term care, no, that is not gonna happen.
• 9:40
  SPEAKER_01: Okay, yeah, and based on a statistic, as you can see here from a couple years ago, for assisted living facilities is$5,900 per month on average, and for private nursing home, it's over$10,000 a month.
• 9:53
  SPEAKER_01: So quite high, and surprising to a lot of people once they get in that that age or that need circumstance.
• 10:03
  SPEAKER_02: It's also pretty important to keep in mind that even while you're in the assisted facility, you know, the costs keep going up.
• 10:13
  SPEAKER_02: Uh last year was 10% on average.
• 10:17
  SPEAKER_02: Um that's a that's higher than inflation.
• 10:21
  SPEAKER_02: Not quite as high as the college as uh college expenses, uh, but and healthcare, I think, is higher too.
• 10:28
  SPEAKER_02: But uh long-term care is is very pricey, and and here I got a little ahead of myself.
• 10:34
  SPEAKER_02: Here's where it talks about the Medicare will only pay a very small amount.
• 10:40
  SPEAKER_02: Um how about the next slide, Mike?
• 10:44
  SPEAKER_02: Um, if you feel caught off guard about this, you're not alone.
• 10:50
  SPEAKER_02: There's a lot of people uh that uh that come to realize boy, these expenses are a lot higher than I thought.
• 10:57
  SPEAKER_02: So understanding how those change by by location and so forth, um, it's not about predicting the future, it's about knowing what's possible at that very bottom one.
• 11:08
  SPEAKER_02: And uh also understand uh there's a there's a huge difference in uh skilled care and long-term care and uh uh assisted living when you have both spouses still alive.
• 11:24
  SPEAKER_02: A lot of times, if um if the husband is able to be 50% functional and the wife is able to be 50% functional, well together you're 100%.
• 11:35
  SPEAKER_02: You can do things together that could extend your maybe your time at home.
• 11:42
  SPEAKER_02: Okay, uh long-term care issues become much more prevalent after there's a a death of a loved one and and you're a widow or a widower, um, that's where the long-term care becomes more much more pronounced.
• 11:57
  SPEAKER_02: Um and there are if you have some questions about maybe some strategies that can be used, um, please reach out to us because there are uh we we've got a lot of different options out there.
• 12:12
  SPEAKER_02: There are.
• 12:13
  SPEAKER_02: And yes, and long-term care insurance isn't necessarily um isn't necessarily um that's it's tough.
• 12:23
  SPEAKER_02: Um in my experience, again, that's my experience, the long-term care insurance.
• 12:29
  SPEAKER_02: Uh, the people that can afford it don't really need it, and the people that need it cannot afford it.
• 12:36
  SPEAKER_02: Um but but that's my experience.
• 12:39
  SPEAKER_02: There are other options available that are very viable, uh, that can that may not pay all of the long-term care expenses, but can certainly uh uh assist greatly in in and making it manageable.
• 12:55
  SPEAKER_02: Okay.
• 12:56
  SPEAKER_02: Uh good topic.
• 12:58
  SPEAKER_02: And I suggest you spend some time discussing it uh among family members.
• 13:03
  SPEAKER_02: And if you need professional advice, uh reach out to your financial advisor or reach out to us, and we'll be happy to uh go over some options available to you.
• 13:14
  SPEAKER_01: Yeah, well said, and we have our blog post coming out in the thematic fashion, and then we should be back on Friday uh this next week for our next Friday live video.
• 13:26
  SPEAKER_01: Um, you have anything else to add, David, before I flip?
• 13:30
  SPEAKER_02: I got one more thing.
• 13:32
  SPEAKER_02: Um, I'm a big fan of redemption stories.
• 13:35
  SPEAKER_02: Um, make myself an American.
• 13:37
  SPEAKER_02: Uh give me the Cinderella.
• 13:39
  SPEAKER_02: Um, you know, the poorer person that goes through and and has a rough time, but boy, she comes up on top.
• 13:45
  SPEAKER_02: Well, I love those redemption stories.
• 13:47
  SPEAKER_02: And uh I got this quote from Jelly Roll.
• 13:50
  SPEAKER_02: Um Jelly Roll is a um a musical artist that I like a lot.
• 13:56
  SPEAKER_02: Uh, and I think a lot of other people like him.
• 13:59
  SPEAKER_02: And boys, he has a story.
• 14:01
  SPEAKER_02: Um uh he's he's probably um he probably did very well in in living out Martin Luther's uh um dictum that says, you know, if you sin, sin boldly so that grace may abound.
• 14:14
  SPEAKER_02: And I think Jelly Roll is pretty good on that one.
• 14:17
  SPEAKER_02: Okay, he has quite a story path.
• 14:19
  SPEAKER_02: Well, he has this quote, and I like it very much, and I think it applies to a lot of things in life, including the stock market.
• 14:26
  SPEAKER_02: I want to tell, and here's his uh quote I want to tell you that the windshield is bigger than the rear view mirror for a reason.
• 14:33
  SPEAKER_02: What's in front of you is so much more important than what's behind you.
• 14:38
  SPEAKER_02: Unquote.
• 14:39
  SPEAKER_02: Jelly roll.
• 14:41
  SPEAKER_02: That's that quote it's a good one.
• 14:44
  SPEAKER_02: All right.
• 14:45
  SPEAKER_02: Well, thank you, Mike.
• 14:47
  SPEAKER_02: Uh, thank you all for joining us, and we look forward to seeing you next week.
• 14:53
  SPEAKER_00: Securities offered through LPL Financial LLC, member FINRA and SIPC.org.
• 14:58
  SPEAKER_00: Advisory services offered through LPL Financial LLC, a registered investment advisor.
• 15:04
  SPEAKER_00: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 15:10
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• 15:18
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• 15:25
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• 15:29
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• 15:33
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• 15:41
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• 15:56
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• 15:59
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