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We Break Down The S&P 500 Bounce And Why We’re Still Not Calling A Bottom · HPK Provident Advisors: The Weekly Bull

• 0:05
  SPEAKER_01: Welcome to Friday Live.
• 0:06
  SPEAKER_01: Every Friday, the partners of HPK Provident get together and discuss what we're seeing going on in the economy, the markets, and tying in some financial planning topics.
• 0:14
  SPEAKER_01: So with me today, Mr.
• 0:15
  SPEAKER_01: David Harper.
• 0:16
  SPEAKER_01: David, how are you doing on this fine Friday?
• 0:19
  SPEAKER_02: I am looking forward to a weekend.
• 0:22
  SPEAKER_02: I'm looking forward to uh it's been a good week as the uh as the markets go.
• 0:28
  SPEAKER_02: Um there is a lot of activity in the Middle East and around the world.
• 0:34
  SPEAKER_02: Uh a lot of there's a lot of people with a lot of hope.
• 0:39
  SPEAKER_02: Um some good things happen, Mike, and some things maybe are still good happening, um, but obviously uh uh it's still a very volatile area that every one of us seems to be watching on a regular basis.
• 0:56
  SPEAKER_02: And uh we're not out of the we're not out of the woods.
• 1:00
  SPEAKER_01: Uh I agree with that assessment.
• 1:03
  SPEAKER_01: And I think we're looking at currently at 1020 a.m.
• 1:07
  SPEAKER_01: uh eight straight day of gains for the SP, which was really exacerbated by that lack of uh fulfillment on the threat from the president that he would completely destroy Iran on the Tuesday 8 p.m.
• 1:25
  SPEAKER_01: deadline, which did not happen, which is of course a good thing, but um we're in a ceasefire, two-week ceasefire right now.
• 1:35
  SPEAKER_01: Um, a lot of question marks with that, though.
• 1:37
  SPEAKER_01: It doesn't seem like many ships are getting through the strait.
• 1:41
  SPEAKER_01: I know there's a lot stuck in that region right now, and if they are allowed to pass through, I see them getting out and not going back in.
• 1:51
  SPEAKER_01: Um but yeah, we had that big, big update.
• 1:54
  SPEAKER_01: There's supposed to be some talks tomorrow with between the nations.
• 1:59
  SPEAKER_01: Uh, I think we have our vice president going over there.
• 2:02
  SPEAKER_01: Uh, we'll see.
• 2:03
  SPEAKER_01: Um Israel, I think, continues to bomb Lebanon, which is another point, and seems like there's just a lot of uh a lot of points we're not matching up on between us and Iran.
• 2:16
  SPEAKER_01: We want the opening and control of the strait, they're not willing to give that up.
• 2:21
  SPEAKER_01: We want them to give up their nuclear capabilities, they're not willing to give that up.
• 2:26
  SPEAKER_01: So I don't know.
• 2:27
  SPEAKER_01: We'll see where this goes.
• 2:29
  SPEAKER_01: But turning to the markets, um, as you said, it's been a good week.
• 2:33
  SPEAKER_01: Uh, we had that nice gap up on Wednesday, and we are above the 200-day moving average, and above uh actually today, we're both above the 50-day and the 100-day.
• 2:46
  SPEAKER_01: I'm not saying we're out of the woods yet.
• 2:49
  SPEAKER_01: If you this is the downtrend line from the end of January, early February, we're still below that.
• 2:56
  SPEAKER_01: Um, so this could be an area where we reject and go lower.
• 3:00
  SPEAKER_01: Uh, a lot of people are saying the bottom is in.
• 3:04
  SPEAKER_01: I'm more of a well, let's see at this point.
• 3:08
  SPEAKER_01: Um, it's not uncommon for to have these counter turn rallies if if you look at uh let's see here.
• 3:19
  SPEAKER_01: This is the bear market of 2022.
• 3:23
  SPEAKER_01: You know, we dipped below the 200 day, got back above it for a few days, and then drop back below it.
• 3:29
  SPEAKER_01: So certainly not out of the woods yet.
• 3:31
  SPEAKER_01: Um, this could be the start of something good, though.
• 3:35
  SPEAKER_01: So we'll be optimistic, but we're staying a little more cautious with our positioning.
• 3:40
  SPEAKER_01: Uh, the 10-year back, just barely above 430.
• 3:44
  SPEAKER_01: It's kind of been that line in the standpoint.
• 3:47
  SPEAKER_01: We need to definitively go beyond that for stocks to do well, in my opinion.
• 3:51
  SPEAKER_01: Uh, crude remains elevated at 98 a barrel.
• 3:56
  SPEAKER_01: Um, and we really saw that reflected in some of the economic data this week.
• 4:01
  SPEAKER_01: Uh, we got the headline CPI number today, which I came in at 3.3%, uh much higher than last month.
• 4:11
  SPEAKER_01: Uh we had a 10% increase in energy prices, 20 per 20 plus percent increase in gasoline prices.
• 4:19
  SPEAKER_01: So it's starting to see some of the effects of the war.
• 4:23
  SPEAKER_01: Uh, where we're not seeing increased recession risk is the high yield spreads have really come back down from a level of close to three and a half to below three.
• 4:32
  SPEAKER_01: So that's a good sign from the bond market.
• 4:36
  SPEAKER_01: Um, but yeah, we're just gonna have to wait and see if we get above this level um uh sustainably, or we reject it here.
• 4:45
  SPEAKER_02: Um the reason for caution is not uh misplaced.
• 4:49
  SPEAKER_02: Uh uh, so uh let's uh let's take a wait and see attitude.
• 4:55
  SPEAKER_02: And I uh as a long-term investor, this yes, this too won't pass, uh, but for the short term, it's gonna be rocky, it's gonna continue to be rocky.
• 5:05
  SPEAKER_02: So, Mike, um again, yeah, you're you're right.
• 5:08
  SPEAKER_02: You're spot on.
• 5:09
  SPEAKER_02: The the caution is there's good reason for it.
• 5:13
  SPEAKER_02: Uh, let's keep our fingers crossed.
• 5:15
  SPEAKER_02: If we come to a resolution with the geopolitical, hallelujah.
• 5:20
  SPEAKER_02: Hallelujah.
• 5:20
  SPEAKER_01: Yeah, and I mean, some of my skepticism comes from one, you hear anyone talking about this, they're saying bottoms in, we're good from here.
• 5:31
  SPEAKER_01: Earnings are increasing still, double-digit growth for the year.
• 5:35
  SPEAKER_01: We'll start to get those coming out next Friday with the banks.
• 5:40
  SPEAKER_01: Um, but I mean, we're kind of we're at a point where the labor markets, the employment situation is kind of stalling out.
• 5:48
  SPEAKER_01: Um, although we did see a strong payroll number, 185 or so.
• 5:54
  SPEAKER_01: Um, and unemployment ticked down to I think what, 33?
• 6:00
  SPEAKER_01: Um, a lot of the unemployment rate decline was due to a decrease in labor force.
• 6:05
  SPEAKER_01: A lot of those 65-year-old plus are getting out of the labor market, at least what this data was showing.
• 6:12
  SPEAKER_01: I'm also kind of concerned about um when the college year ends.
• 6:17
  SPEAKER_01: The jobs that those age demographics typically get are kind of being replaced to a sense by AI.
• 6:24
  SPEAKER_01: So I think that could add some further pressure along with the overall AI theme, increasing productivity.
• 6:31
  SPEAKER_01: Um, I think I mean the the non-farm payrolls have been so volatile.
• 6:37
  SPEAKER_01: It's been 160,000 increase in January,$1,70,000 or$170,000 decrease in February, and then another really strong reading in March.
• 6:50
  SPEAKER_01: So three-month average, we're looking at about 68,000.
• 6:54
  SPEAKER_01: Historically, these numbers tend to be revised lower.
• 6:57
  SPEAKER_01: So I'm thinking we're probably closer to like the 30,000 a month in payroll, which is kind of on the on the arena of flirting with, you know, this this could decline into negative territory.
• 7:09
  SPEAKER_01: Um, besides that, we got us another, I mean, ISM services remains really strong, did come off a little from last month's reading.
• 7:16
  SPEAKER_01: Uh, some cracks in that report were employment uh contracted for the fourth time or for the first time in four months, and then the prices paid component was the highest level since October 22nd.
• 7:31
  SPEAKER_01: So some potential concerns there.
• 7:34
  SPEAKER_01: We got the final read of GDP for fourth quarter, revised lower to half a percent.
• 7:39
  SPEAKER_01: So kind of it's pretty weak.
• 7:42
  SPEAKER_01: Um we'll just have to see where we go from here.
• 7:46
  SPEAKER_01: But yeah, we're remaining cautious.
• 7:48
  SPEAKER_01: Um you have anything to add to add any the economic data?
• 7:54
  SPEAKER_02: Well, you know, uh we had talked earlier about this, Mike.
• 7:58
  SPEAKER_02: Um if if we took the the the conflict in Iran is is the gorilla in the room.
• 8:07
  SPEAKER_02: Uh it's hard to look past that to really anything of substance.
• 8:12
  SPEAKER_02: Uh the economy is not in as rough shape as we may think, uh, certainly long term, okay.
• 8:21
  SPEAKER_02: Um, but that gorilla in the room is occupying not just the US attention, but the world attention, and namely because of the issue with the oil.
• 8:32
  SPEAKER_02: Um that's it's created uh an issue for the entire world.
• 8:38
  SPEAKER_02: Will that resolve?
• 8:40
  SPEAKER_02: Uh there, I'm not sure if there's many people in this world that don't want it resolved.
• 8:45
  SPEAKER_02: Um will it be will it be satisfactory?
• 8:50
  SPEAKER_02: We'll see.
• 8:51
  SPEAKER_02: Um for the time being.
• 8:55
  SPEAKER_01: It's it's let's be on our pay grade, Mike.
• 8:59
  SPEAKER_01: Uh and to add to the negativity this fine Friday morning, uh midterm years tend to be the weakest of the four-year presidential cycle.
• 9:10
  SPEAKER_01: So that's particularly bad in quarter two and quarter three, and then quarter four tends to be a nice rebound.
• 9:17
  SPEAKER_01: So we'll see if that uh repeats itself or at least rhymes.
• 9:22
  SPEAKER_01: Um typically in this period, July is only up month, so just another potential headwind out there.
• 9:29
  SPEAKER_01: Um, but this is why you you know have a plan in place, and if we do get a decline for a month or two, you're able to cover your short-term liquidity needs.
• 9:42
  SPEAKER_01: Um, typically, though, these geopolitical things do get worked out.
• 9:46
  SPEAKER_01: Um, the longest one we've seen lately was the 2022 bear market.
• 9:51
  SPEAKER_01: It lasted about nine months.
• 9:52
  SPEAKER_01: Um, usually there's shorter result than that, sometimes longer though.
• 9:57
  SPEAKER_01: Um but yeah, we'll get to uh get to some of our blog posts for the week.
• 10:03
  SPEAKER_01: Uh Tax Tuesday, just giving you a a heads up that you do have until April 15th to make your IRA and HSA contributions.
• 10:13
  SPEAKER_01: David, this is a subject that you really like to talk about budgeting.
• 10:17
  SPEAKER_01: I love budgeting.
• 10:19
  SPEAKER_02: I survived on budgeting.
• 10:22
  SPEAKER_02: Um, and when you don't have much uh to scrape together, a spending plan.
• 10:28
  SPEAKER_02: Some people don't like the word budget.
• 10:30
  SPEAKER_02: I love the word budget.
• 10:32
  SPEAKER_02: Uh some people say, Oh, let's let's turn it into a spending plan.
• 10:37
  SPEAKER_02: Okay, I don't care what you call it, it's it's a tool that we need to utilize so that our money doesn't control us, but we control the money.
• 10:49
  SPEAKER_02: So if you don't know where your money goes, uh writing down a ledger, write it down where your money goes, and you'd be surprised where you might be able to cut some things.
• 10:59
  SPEAKER_02: All right.
• 11:00
  SPEAKER_02: Uh, the budgeting is a there's there's some wonderful online tools that you can use to assist you again.
• 11:08
  SPEAKER_02: You be the master of your money, don't let the money master you.
• 11:12
  SPEAKER_02: I love that commercial, um, and I forget which company would do that.
• 11:17
  SPEAKER_02: They would have they would be a family on a family vacation, and they would have this big old guy in the back seat between the two kids, and he was a real uh irritant to the whole family.
• 11:29
  SPEAKER_02: Well, he was he was the budget guy, he was the the if your spending is out of control, you don't have control over your life.
• 11:38
  SPEAKER_02: Uh, and you've got this weird guy sitting in the back seat.
• 11:42
  SPEAKER_02: I thought that was a very good image.
• 11:44
  SPEAKER_02: Um, you don't want that.
• 11:46
  SPEAKER_02: Get your budget under under wraps, use these great online tools.
• 11:51
  SPEAKER_02: And if you have some other questions about it, give us a call.
• 11:55
  SPEAKER_01: Um, we'll lead you.
• 11:57
  SPEAKER_01: Yeah, and the and the country needs you right now with that advice because personal spending in the month increased 0.5 percent while personal income declined a tenth of a percent.
• 12:08
  SPEAKER_01: So they need some budgeting help.
• 12:10
  unknown: Okay.
• 12:10
  SPEAKER_02: Uh begin with the spending plan.
• 12:13
  SPEAKER_02: So uh let it be a release for you.
• 12:17
  SPEAKER_02: So the first time the first way to correct the problem is to recognize that it is a problem.
• 12:23
  SPEAKER_02: Uh, so many people believe that um that if if I work harder and I can make more money, uh that way I can support the the lifestyle I've chosen.
• 12:35
  SPEAKER_02: Really and in reality, about less than 20% of the US population can do that.
• 12:41
  SPEAKER_02: You can't just ramp up your ramp up your work and ramp up your income uh to live a to live a lifestyle that you're that is too expensive for you.
• 12:51
  SPEAKER_02: That's where the spending plan, that's where the budgeting comes into play.
• 12:56
  SPEAKER_02: Uh most people um need to utilize a budget, need to control their spending.
• 13:03
  SPEAKER_02: Um that's upwards of 70 percent.
• 13:07
  SPEAKER_02: Um so enjoy that.
• 13:10
  SPEAKER_01: Um tying into that is our Thursday post that talks about that 50% of cardholders are currently carrying debt on their credit cards, which is elevated from the previous couple years.
• 13:22
  SPEAKER_01: So that just kind of goes along with this theme of people potentially spending above their means.
• 13:29
  SPEAKER_02: There's a there's a great image, Mike, of uh uh I used to do for these um uh seminars I did for uh for budgeting and for other places.
• 13:39
  SPEAKER_02: And the seminar was um I started off with a pitcher, and if you could do a metal pitcher, there's this this dragon uh enjoying himself under a tree, leaning up against a tree, and he has a lance, he has a lance from a knight picking his teeth, as you know, smoke is coming in the nostrils, and you see a castle in the foreground, then you see pits of uh armor of the knights around.
• 14:02
  SPEAKER_02: He had eaten the eaten the knight, and he's just enjoying himself.
• 14:06
  SPEAKER_02: And the the caption is sometimes the dragon wins.
• 14:13
  SPEAKER_02: If you're if if your money situation call it what it is, okay, the dragon won this time, but he doesn't have to win the war because there are no more dragons out there, um mythically, yes, uh, and uh allegorically, yes, there are dragons, but in regard to physical dragons, with a plan, you with a spend plan with a with a piece, um, the war is not lost.
• 14:45
  SPEAKER_02: Recognize that you can make some very good steps uh to get yourself out of debt, to get yourself other pieces, to draw some resources and live a life that you enjoy.
• 14:58
  SPEAKER_02: Okay.
• 15:00
  SPEAKER_01: Uh that's my that's my take, Mike.
• 15:03
  SPEAKER_01: I like it.
• 15:04
  SPEAKER_01: That's good advice.
• 15:05
  SPEAKER_01: Uh next week, uh kind of light on the economic data.
• 15:09
  SPEAKER_01: I think PPI will be the headline Wednesday.
• 15:12
  SPEAKER_01: Um, that's a wholesale inflation number.
• 15:15
  SPEAKER_01: Besides that, it's just going to be focusing on market movement um and what's going on with the latest developments with the war in Iran.
• 15:23
  SPEAKER_01: And then, like I said, earnings season kicks off on Friday with the big banks.
• 15:28
  SPEAKER_01: So I'm interested to hear what they say, particularly around um like consumer spending and credit card usage.
• 15:35
  SPEAKER_01: Uh, I'm sure we'll hear more from Jamie Diamond, who may be more bearish than I am, and just normal rhetoric.
• 15:46
  SPEAKER_01: Well, um, his his pay's a little bit higher than ours, Mike.
• 15:50
  SPEAKER_01: So yeah, but I mean that's what he's paid to do.
• 15:53
  SPEAKER_01: Like he he needs to make sure they're positioned to sustain any potential environment.
• 16:00
  SPEAKER_01: So that's why he's one of the most successful successful CEOs of maybe of all time in terms of banks.
• 16:09
  SPEAKER_02: Yeah, yeah.
• 16:11
  SPEAKER_02: Um well, thank you very much, Mike, for your insights.
• 16:15
  SPEAKER_02: Uh folks, uh enjoy yourselves.
• 16:20
  SPEAKER_02: The sun will come out tomorrow.
• 16:22
  SPEAKER_02: Okay.
• 16:24
  SPEAKER_02: Enjoy it.
• 16:25
  SPEAKER_02: Good.
• 16:26
  SPEAKER_01: All right.
• 16:27
  SPEAKER_01: Well, everyone have a good weekend and keep an eye out for our blog posts, and we'll be back here next Friday by 1230 Eastern time.
• 16:34
  SPEAKER_00: Security is offered through LPL Financial LLC, member FINRA and SIPC.org.
• 16:40
  SPEAKER_00: Advisory services offered through LPL Financial LLC, a registered investment advisor.
• 16:46
  SPEAKER_00: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 16:52
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• 17:00
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• 17:07
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