Latest / Financial Survival Network / Rosy Job Numbers Give Fed More Wiggle Room -- Eddie Siddell #5832

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Rosy Job Numbers Give Fed More Wiggle Room -- Eddie Siddell #5832 · Financial Survival Network

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  Those were the jobs that were lost, all close to one hundred and thirty
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  thousand versus two hundred and eight thousand that were gained, mainly in the hospitality
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  and retail. So what that's telling me is you can't just look at the
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  base number. It's telling me the types of jobs that are added are those
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  second and third jobs that don't have benefits, that are lower paying because people
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  cannot afford to take care of their bills. You're listening to Carrie Letz's Financial
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  gift. Financial Survival Network now more than ever, and welcome. You are
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  listening to watching the Financial Survival Network. I'm your host, Carrie Lutz.
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  Well, hey, what can you say about these job number? As men,
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  we're living in the best of all possible worlds. We should be grateful
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  that the economy is being shepherded stewarded so well by so many responsible politicians in
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  the United States and throughout the world. But consumer credit continues to boom.
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  What does it mean? We got Eddie Saidell with us now e SI Financial.
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  Eddie, great to have you back on the show. So we should
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  be excited about these job numbers, huh, because that means more interest rate
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  increases coming down the bike. Well, first of all, thanks for having
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  me back in. You know what, it all depends on how you interpret
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  the data. You know, first of all, if you listen to what
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  Biden said, he added thirteen million new jobs since he started as president.
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  So you know that that by itself says, you know what, Ed's got
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  to keep going up because we have a thriving economy. However, you know,
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  when you look at the jobs that were added, the types of jobs
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  versus the types of jobs that were lost during that exact same time period,
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  I mean we went from you know, manufacturing and IT and financial services and
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  education and healthcare. Those were the jobs that were lost all close to you
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  know, one hundred and thirty thousand versus two hundred and eight thousand that were
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  gained, mainly in the hospitality and retail. So what that's telling me is
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  you can't just look at the base number. It's telling me the types of
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  jobs that are added are those second and third jobs that don't have benefits,
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  that are lower paying because people cannot afford to take care of their bills,
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  which leads right into you know, the the consumer credit. You know,
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  where we hit new historical highs. I think we're over one point two five
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  trillion dollars in credit card debt right now. Defaults are up, you know,
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  month over month, quarter over quarter, year over year. So um,
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  you know, I think this may be what the fits are looking at
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  to say, uh, you know, maybe maybe we can take a pause,
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  all right, perhaps perhaps so uh yeah, obviously, more uber drivers,
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  more bartenders. At one time, I remember a few years ago,
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  new hires of waite staff and bartenders were driving the economy forward, right Yeah,
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  you're absolutely right, um. And you know, and it's the same
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  thing. You know, it almost seems like out of sheer will. Um.
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  You know, the the consumer, the American consumer, we're we're kind
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  of spending our way out of this. Um. But you know, there
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  also seems to be a huge disparity between the haves and the have nots,
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  um. And you know, the those that have in working class middle America,
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  they're they're really struggling. Um. And you can tell when you're looking
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  at the not not just what's being added on the on the revolving credit cards,
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  you know, the credit card debt UM, but the the amount of
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  defaults. I mean, it's gone up almost one percent just over the last
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  year, from you know, the end of twenty twenty one through the first
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  quarter of this year. So you know those are again it all depends on
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  how you look at and interpret the data. And you know what that's telling
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  me right now is you know that the economy may not be as strong as
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  what people are pounting it to be UM. And you know, again,
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  depending on how Pale and the Feds look at it, it may be enough
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  to say, ah, you know, we may take a pause or at
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  least skip, you know, take a pause and and maybe you know,
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  increase it in July. UM. But I think a lot is going to
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  depend on the CPI that that comes out this week. All right, So
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  what's your take on the CPI? As long as we're talking about it,
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  You know what UM inflation is still here. I think it's going to be
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  UM maybe a little bit lower than than what's expected UM. And people get
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  very excited about that. That a it's it's uh, it's getting lower.
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  But remember it's compounding year over year. That's what that means. It's compounding
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  year after year after year. Or so you know when the inflation that we're
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  seeing right now, you know, we're not going to see the effects of
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  this for months to come. Just like with the rates, I mean,
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  and they were we raised raids five hundred basis points in a little over a
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  year and we're just now seeing the effects of that rate raise, you know,
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  from last fall, um right now, and so you know what happened
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  earlier this year, we're not going to see those effects until the you know,
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  um, middle to late fall of this year. So I you know,
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  are we going to be in a recession? Um? Are we already
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  in a rolling recession? Uh? You know, it remains to be seen.
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  Honestly, I really thought by now that that we would be in a
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  recession or at least pushing towards it, you know, going into the third
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  quarter. But um, you know, again out of sure will I don't
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  know, I really am am shocked that the economy is still pushing forward the
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  way that it is. Hey, it's like that old trustee reliable model t
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  forward, you know, built around the turn of the last century. And
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  with enough chewing gum and bobby pins and paper clips, you can keep that
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  baby running forever, right, yeah, exactly exactly. And you know,
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  and and here's the other thing, you know that's just a touch on this.
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  You know, the the SMP UM for you know, the first time
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  um, you know, actually got out of their territory and and was officially
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  a bullmarket last last week. Um. And when you look at the nastac
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  um it's really strong, but you know, it's it's so narrow. Um.
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  You know, it's a very narrow market. You've got seven companies and
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  the nastac that are really driving it again, that are skewing the numbers.
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  And then when you look at the SMP, it's less than twenty companies um
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  out of the SMP five hundred that are really pushing that up this year.
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  So it's a very narrow marketing, which which makes me nervous from an economic
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  standpoint, from a market recovery standpoint, even though it's a leading you know
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  indicator for the economy. The last time we kind of saw this was you
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  know, right right before the tech belt. So you know, I think
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  there's uh, I think it's important to be cautiously optimistic, you know,
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  all the way around. But you know, cautious is the operative word.
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  Boston is the operative word for sure. And the yeah, so things aren't
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  as bad as they could be, but how good are they really? That's
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  exactly it. Yep, that's a great point, you know, and it
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  really depending on what the FEDS do. It could put us in the tail
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  spend from an economic standpoint. You know, if if Ballard really does push
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  forward and say, hey, you know we're going to hold true and you
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  know we're we're going to raise rates and make sure that you know, inflation
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  doesn't come rowing back. Um, you know that that could kind of crush
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  the economy going forward. You know, if they raise it a couple more
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  times. I don't think that they will. Um. I think in the
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  in the back of their minds they're looking at, you know, all the
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  data and saying, Okay, it's starting to work, it's starting to work.
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  I don't think they're going to lower rates um anytime soon, and if
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  at all, it will be in twenty twenty four um. But again,
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  you know, having that impact, you know, as we start to see
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  loans coming do commercial real estate you know over you know, traillion dollars coming
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  do just this year. I think you know, this is going to continue
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  to see negative impact on the economy going forward. Okay, so so happy
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  days maybe aren't here so much? Huh. You know again, I'm not
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  sure yet. I don't think that they are. UM. You know,
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  I let's talking to a colleague of mine and he said, you know,
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  now's the time really to to to start selling into the selling off into the
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  rally. UM. And I'm not sure I agree with that either. UM.
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  You know, I think, you know, if you have cash on
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  hand, keep cash on hand and really hedge you know, on everything that
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  you're doing from an investment standpoint, and really look to those areas that are
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  that have struggled over last year, um, and even currently manufacturing energy utilities
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  you know that have really taken a hard hit as of late. Um.
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  You know, because as as things get a little rougher, those are going
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  to be the things that really are going to hold true, especially if those
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  companies are our value companies with with strong balance sheets, because I do think
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  a lot of the tech companies are you know, way over value, um,
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  you know, multiples, way way higher than what they should be all
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  right? So do you think it is going to be a come to Jesus
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  moment here with these valuations, Eddie? Or are we just going to continue
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  on, you know, the old saying the market can remain irresh no longer
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  than you can remain solving. You know, Actually I was just getting ready
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  to say that. Um. And and that's the whole thing. I mean,
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  out of sure will I there's a lot of things that from a dollars
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  and cents fundamental standpoint that aren't making sense, and out of sure will you
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  know it may just push through it. Um. You know we've seen it
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  before. UM. But I don't know. I'm really cautious. Um.
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  You know, I'm hedging a little bit, you know in those sectors that
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  we talked about, you know, those companies that we have that are strong
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  balance sheet type companies, value stocks. You know, we're not getting rid
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  of, but we're not willing to redeploy a whole lot more capital right now
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  until we really see what's going on. We're we're being again cautious operative word
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  for good reason too, right, Caution is a word, right, So
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  absolutely how cautious? Like what does your portfolio look like now? So depending
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  on the client we're anywhere from. You know, UM twenty two is you
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  know, as much as you know, forty percent in the market and the
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  rest is either in cash and in money markets FDIC in sure um. And
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  you know, those that are have the appetite and can afford to take a
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  little bit more risk um and have more of those value stocks. We we
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  just we bought in a little bit during the dips, but you know,
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  those that are close to our retirement. I think it's you know, why
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  risk what you have for something you don't, right, I mean, just
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  you know, pause, take a pause, be a little cautious, and
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  you know, if you're getting five percent in a money market right now,
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  why why take the risk. We've got enough in there so that if the
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  if the market really is a bowl market, we can take advantage of and
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  start to redeploy that capital back in. But if it does tank, you
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  know, then then we're protected on the downside as well. All right,
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  well, I think you've given us a lot to chew over here, Eddie.
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  You appreciate your coming on as always. Just tell us where we find
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  you these days, eg SI Financial dot com. That's the best place to
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  find us. All right, and that link is in the show notes on
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  Financial Survival Network dot com. Make sure when you go there you sign up
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  for a free newsletter. Got one coming out, a big one this week.
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  Really appreciate it as always, Eddie, You'll be well. Talk to
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  you soon, all right, YouTube, Gary, thanks for having me,
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  Thanks for listening to Carrie Lenz's Financial Survival Network, your solution to today's trying
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  times. For the latest, go to Financial Survival Network dot com. Financial
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  Survival Network now more than ever,