Latest / Financial Survival Network / No Rate Hikes: The Bullish Market - Ted Thatcher #6416

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No Rate Hikes: The Bullish Market - Ted Thatcher #6416 · Financial Survival Network

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  Speaker 1: You're listening to Carrie Let's's Financial Survival Network, where you
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  Speaker 2: Welcome, this is Financial Survival Network. I'm your host, Carrie Let's. Well,
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  Speaker 2: we got inflation numbers out, we got we got a
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  Speaker 2: lot of info here. Is it all comes down to?
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  Speaker 2: Is the Fed going to raise rates, cut rates, or
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  Speaker 2: do nothing? Ted Thatcher is here to opine on this subject.
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  Speaker 3: Here. What do you think of the numbers today?
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  Speaker 4: You know, obviously, Kerry, coming into this week after all
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  Speaker 4: the jobs data we got last week, eyes I think
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  Speaker 4: have been fixed on the inflation data, which it seems
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  Speaker 4: like it you know, almost always is. But you know,
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  Speaker 4: obviously we saw a decrease here over here CPI three
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  Speaker 4: point four percent. Core number is down as well, just
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  Speaker 4: one tenth percent, although the month over month number increase
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  Speaker 4: point two. Fundamentally, I think it's a good thing for
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  Speaker 4: the Fed.
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  Speaker 3: You know, if we double click.
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  Speaker 4: Actually, nobody likes to see the core number go up,
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  Speaker 4: and I think, honestly, I was a little hesitant when
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  Speaker 4: I first read that print this morning that we saw
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  Speaker 4: a core number go up byero point two percent. But
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  Speaker 4: when you pop the hood and look under there, what
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  Speaker 4: really drove that increase was two things. It was healthcare
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  Speaker 4: services and transportation services, which specifically on the transportation services
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  Speaker 4: side is driven heavily by airline fares. And we know
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  Speaker 4: how much you know the price of barrel of oil
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  Speaker 4: has gone up, and how that affects jet fuel, and
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  Speaker 4: so I think the market was willing to sort of
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  Speaker 4: shrub that off a little bit, which is why you
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  Speaker 4: see the futures markets up this morning.
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  Speaker 2: Yeah, So what is FED gonna do? Are they going
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  Speaker 2: to cut or are they not going to cut?
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  Speaker 4: You know, I think that what this report shows me
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  Speaker 4: is that it's basically slammed the door on any hiking discussions.
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  Speaker 4: You saw some weakening in the labor numbers last week.
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  Speaker 4: When you put this with that, I don't necessarily see
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  Speaker 4: a lowering at the September meeting. I think so much
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  Speaker 4: of what I read into how worsh has come out
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  Speaker 4: these first couple of meetings, it's really like he's trying
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  Speaker 4: to win the credibility of the markets and really try
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  Speaker 4: to stay a political and so I think that him
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  Speaker 4: kind of holding steady in September because of that is
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  Speaker 4: what I expect.
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  Speaker 2: I wrote an article basically said in worsh we trust
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  Speaker 2: you trust them?
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  Speaker 3: Uh, you know, I do. I think that he has.
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  Speaker 4: I mean, I actually think when I look at his background,
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  Speaker 4: it's really strong and fundamentally when I think about, you
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  Speaker 4: know that the tact he's taken, you know, he has
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  Speaker 4: not tried to get out over his skis. But there
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  Speaker 4: was a lot of this, I think discussion last couple
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  Speaker 4: of weeks about the potential of a hike, and I
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  Speaker 4: thought that that was overblown. And so you know, I
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  Speaker 4: think the market is coming back to that belief, which
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  Speaker 4: is that it is in fact overblown, probably just going
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  Speaker 4: to stay steady, although that's certainly been my perspective, you know,
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  Speaker 4: for a while.
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  Speaker 3: So what does it.
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  Speaker 2: Mean for investors? You know, like, let's drill down. You're
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  Speaker 2: you know, obviously you're at different points in your life,
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  Speaker 2: so different actions get taken. For somebody who's approaching retirement,
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  Speaker 2: probably doesn't mean much because they're probably reallocating already.
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  Speaker 3: What if you got ten twenty more years in the workforce.
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  Speaker 3: What are you going to do? Yeah, well, you make
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  Speaker 3: a really good point.
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  Speaker 4: Depends on the stage of your investing career that you're in.
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  Speaker 4: But I think it's ultimately bullish for investors when you
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  Speaker 4: pair the type of earnings that we have seen coming
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  Speaker 4: out of Q two with a you know, a cooling
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  Speaker 4: sort of hiking and vironment right, I mean, we're not
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  Speaker 4: going to get the hike, so we When you think
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  Speaker 4: about equity valuations, obviously, fundamentally, first and foremost, it has
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  Speaker 4: to be driven by profits. It has to be driven
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  Speaker 4: by earnings, which we are seeing you know, over almost
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  Speaker 4: all the SVP companies that report earnings almost ninety percent now.
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  Speaker 3: With huge beats.
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  Speaker 4: We're talking eighty five percent of companies are beating on
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  Speaker 4: earnings margins of twenty five twenty seven, thirty percent. When
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  Speaker 4: you put all that together, you know, and then you
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  Speaker 4: pair that with what the Fed's doing. You know, if
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  Speaker 4: obviously that we're going to hike, that can tamper valuation multiples.
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  Speaker 4: But I don't expect that obviously, as we just discussed,
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  Speaker 4: and so again very much I think bullish for.
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  Speaker 2: Investors here, all right, So what other numbers we got.
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  Speaker 2: The job numbers really weren't so great, but they weren't
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  Speaker 2: that bad. Most of the declines in the jobs came
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  Speaker 2: from the public sector, so you could argue that those
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  Speaker 2: people basically weren't doing anything anyway.
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  Speaker 4: Yeah, you know, obviously, when you read a that goes
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  Speaker 4: down four point two percent to four point one percent unemployment,
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  Speaker 4: you think right away, hey, that's a good sign. And
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  Speaker 4: to your point, you're right, most of the job loss
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  Speaker 4: with public sector. But really, what I think stood out
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  Speaker 4: to me when I pop up it on that figure specifically,
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  Speaker 4: carry is the labor force participation rate. We saw literally
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  Speaker 4: an exodus of almost a quarter million jobs, and so
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  Speaker 4: when you see that kind of fall off, that is
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  Speaker 4: really what I'm I would say, more concerned with in
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  Speaker 4: the labor market right now. That brought the labor force
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  Speaker 4: participation rate to sixty one percent, which really is as
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  Speaker 4: low as it's been since COVID, And so that's really
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  Speaker 4: you know, what I would say I have my I
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  Speaker 4: on right now when it comes to the label market.
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  Speaker 2: Is that a lot to baby boomers like my generation,
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  Speaker 2: retiring faster than they can be replaced. Is it AI
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  Speaker 2: getting rid of jobs? Is what are you attributed to?
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  Speaker 4: You know, I think that there is this push and
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  Speaker 4: you can see this in some interesting recording and data
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  Speaker 4: that's coming out now where, because we've seen equity valuations
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  Speaker 4: go up so substantially the last you know, several years.
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  Speaker 4: Actually it's pushing those later in their working career to say, oh,
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  Speaker 4: I actually might be able to retire a little bit
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  Speaker 4: earlier than I initially expected. And so obviously that comes
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  Speaker 4: down to everyone's specific financial needs, how much assets they've
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  Speaker 4: built up in their nets day compared to how much
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  Speaker 4: you know, of course they need to spend every month.
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  Speaker 4: But it's an interesting dichotomy because as the market, the
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  Speaker 4: financial markets have done so well, it sort of affected
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  Speaker 4: main street and the everyday you know consumer in a
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  Speaker 4: very different way.
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  Speaker 3: Yeah.
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  Speaker 2: Well, we follow a unique index here in Florida. It's
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  Speaker 2: called the Palm Beach Trophy Wife Index, and the initially
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  Speaker 2: it was flashing warning signs. But now in the past
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  Speaker 2: couple of weeks, the pbt WI as we call it is,
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  Speaker 2: seems to be positive.
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  Speaker 3: Now it seems to be green.
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  Speaker 2: We're seeing more private jet landings at the airports.
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  Speaker 3: In the area.
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  Speaker 2: And well now we no longer have pom Beach International.
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  Speaker 2: It's now President Donald J. Trump International. But putting all
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  Speaker 2: that aside, the index is seems to be flashing bullish.
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  Speaker 4: Yeah, I was gonna say, you have to send me
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  Speaker 4: that one. I'll have to put that on my weekly readout.
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  Speaker 3: I like that new new monitoring.
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  Speaker 2: Yeah, we we we we track list pendence filed in
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  Speaker 2: Palm Beach on the Island three three four eight oero
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  Speaker 2: is the ZIP divorce petitions, UCC filings, bankruptcies because if
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  Speaker 2: it's if it's going south there, if it's going bad,
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  Speaker 2: and then we try to get traffic estimates. Now that's
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  Speaker 2: seasonal obviously, but the the index has a basis in fact.
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  Speaker 2: So any of you out there want more information and
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  Speaker 2: on the Palm Beach Trophy Wife Index, just shooting an
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  Speaker 2: email kl at carrie lets dot com and we will
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  Speaker 2: we'll start publishing a dashboard and we'll hook you into
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  Speaker 2: a tip.
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  Speaker 3: I like it.
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  Speaker 4: You know, obviously there's so many ways you can read
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  Speaker 4: the markets and a lot of that type of metadata
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  Speaker 4: that's harder to track bringing it in one place. It's
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  Speaker 4: obviously a funny name, but can actually inform a lot.
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  Speaker 2: Hey, it's a if those people aren't spending, and they're
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  Speaker 2: going to know if things are heading south.
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  Speaker 3: They know before anybody. Yeah, it's like it's.
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  Speaker 2: Like gazelle's out in the field. The second the tigers
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  Speaker 2: starts sneaking up, they're all on red alert. They're all
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  Speaker 2: looking around for the threat. And that's what the trophy
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  Speaker 2: wife index indicates to us. So hey, but we got
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  Speaker 2: some other indexes we're working on as well. We got
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  Speaker 2: the marital counterparty risk index, because you know, counterparty risk
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  Speaker 2: is a very real threat in this day and age.
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  Speaker 2: Just getting back to crude though eighty three bucks. We've
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  Speaker 2: seen it higher, we've seen it lower. Obviously, it was
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  Speaker 2: down in the sixties. Back when President Trump captured Nicholas Madura,
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  Speaker 2: he had Exxon and a bunch of oil companies in
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  Speaker 2: there to subtly or not so subtly twist their arms
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  Speaker 2: to basically drill and produce out of Venezuela. And the
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  Speaker 2: head of Exon said, you're crazy. You know, we can't
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  Speaker 2: make any money in Venezuela of oil is under sixty
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  Speaker 2: five dollars a barrel. Well, we seem to have cured
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  Speaker 2: that problem. And then the production in Venezuela has more
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  Speaker 2: than doubled your tip.
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  Speaker 4: Yeah, I mean, obviously, I think all eyes really have
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  Speaker 4: been on the price of oil. It's such a consequential commodity.
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  Speaker 4: It's obviously so much of this and again off again
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  Speaker 4: again off again relationship with we've had with Iran just continues.
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  Speaker 4: Fundamentally from a consumer standpoint, I do think that the
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  Speaker 4: straightest line for consumer relief, certainly in their day to
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  Speaker 4: day expenses, is going to be that coming down a
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  Speaker 4: little bit to your point. Of course, the oil companies
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  Speaker 4: and the productivity out of Venezuela is a lot more
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  Speaker 4: profitable and across you know, the globe is more profitable
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  Speaker 4: when oil is high. But obviously the punishes the consumer
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  Speaker 4: in a way that I think that the administration would
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  Speaker 4: like to see relieved, especially going into the selection cycle.
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  Speaker 3: Right.
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  Speaker 2: So, yeah, you know, but eighty dollars oil adjusted for inflation.
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  Speaker 2: You know, obviously it's higher than where they would like,
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  Speaker 2: but it's spurring production in the United States and in
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  Speaker 2: countries all over the world such as Venezuela with higher
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  Speaker 2: per barrel production costs.
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  Speaker 4: Yeah, you know, I think that you know, the energy
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  Speaker 4: independence we've seen out of the United States during the
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  Speaker 4: conflict that Iran broadly has been actually a highlight. You know.
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  Speaker 4: The truth is is this has affected the United States certainly,
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  Speaker 4: but a lot less than a lot of other countries.
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  Speaker 4: And I think it's part and parcel of the importance
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  Speaker 4: and argument for why we need to be independent on
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  Speaker 4: some of the other high you know, technological manufacturing capabilities.
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  Speaker 4: You know, we saw all the announcements around Tara fab
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  Speaker 4: elon Musk you know, build out to essentially go from
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  Speaker 4: raw materials all the way to high fab semiconductors and
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  Speaker 4: chips at the other end of it. That's a really
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  Speaker 4: great example I think of how hopefully we can more
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  Speaker 4: and more on shore of those type of technologies because
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  Speaker 4: of situations like this. It's Iran today, but who knows
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  Speaker 4: what it's going to be tomorrow, obviously.
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  Speaker 2: And the you know, just the idea that they're going
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  Speaker 2: to bypass the strait of horror moves with pipelines, which
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  Speaker 2: will greatly lessen the world's vulnerability. They should have done
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  Speaker 2: this before. They did take certain measures like the pipeline
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  Speaker 2: across Saudi Arabia and others, but now the time is
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  Speaker 2: do these mega projects bypass it and then let Iran
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  Speaker 2: rot And one trend. I feel ted that is really
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  Speaker 2: being ignored by the mainstream financial press is the impending
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  Speaker 2: collapse and hopefully eventual freedom of Cuba. That's going to
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  Speaker 2: have dramatic ramifications for the Southeast, all of the logistics
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  Speaker 2: ports and Puerto Rico. You know, it's been completely ignored
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  Speaker 2: by the financial press because the United States by necessity,
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  Speaker 2: is going to have to jump in there and do
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  Speaker 2: some serious infrastructure rebuilds on Cuba. My sources tell me
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  Speaker 2: they're already prepositioning a lot of the supplies, the emergency supplies,
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  Speaker 2: the initial water purification systems and electrical systems, microgrids to
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  Speaker 2: restore those people because they're living in a world of
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  Speaker 2: hell right now. This is a bullish thing, especially for
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  Speaker 2: the state of Florida, that nobody is seems to be
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  Speaker 2: taking account of.
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  Speaker 4: Yeah, you know, it's almost like it's that old adage, right,
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  Speaker 4: if it bleeds, it leads, because it's not like the
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  Speaker 4: acute fixation of the headlines that maybe it's not covered
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  Speaker 4: or ignored even you're absolutely right though, it's a super important,
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  Speaker 4: very critical area from a logistics standpoint, and you know,
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  Speaker 4: obviously we'll see what happens there, but you could absolutely
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  Speaker 4: read that into it. If those things were to change
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  Speaker 4: in the US had to step in, it could be
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  Speaker 4: a you know, very critical area kind of a very
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  Speaker 4: different way. You know, obviously the administration has talked about
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  Speaker 4: all those headlines with Greenland and why you know, you know,
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  Speaker 4: that would be a strategic area as well. Obviously, again,
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  Speaker 4: very different situation in Cuba, but you can only pray
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  Speaker 4: for those humanitarian needs in crisis. It's unbelievable. Yeah, that's
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  Speaker 4: like they're going full medieval. Yeah, you know, but Cuba
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  Speaker 4: is very strategic. It's location on shipping.
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  Speaker 2: Routes, and you know, obviously they haven't done much to
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  Speaker 2: hinder them, don't.
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  Speaker 3: They really can't.
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  Speaker 2: But it is a strategic choke point that no doubt
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  Speaker 2: is figured into the President's thinking.
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  Speaker 3: Ed appreciate your coming on here.
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  Speaker 2: Just tell us out here where we find you, how
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  Speaker 2: we connect with you on the web.
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  Speaker 4: Sure, absolutely, you can find me online. Just underscore Ted
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  Speaker 4: at your underscore on like Twitter and Instagram and those things.
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  Speaker 4: Bright Lakewealth dot com is our website if you ever want.
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  Speaker 4: Anyone's trying to do their retirement plan.
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  Speaker 2: All right, Hey, and I've got a question for Ted
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  Speaker 2: and myself and I'm sure you will, especially about the
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  Speaker 2: Palm Beach Trophy Wife index. Shoot me an email kl
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  Speaker 2: Atcarrie LUTs dot com. We back tested the index and
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  Speaker 2: it's uncanny.
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  Speaker 3: It's accuracy.
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  Speaker 2: Ted appreciate you coming on and we will talk to
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  Speaker 2: you real soon.
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  Speaker 1: Thanks Garry, thanks for listening to Carrie Letz's Financial Survival Network,
• 15:09
  Speaker 1: your solution to today's trying times. For the latest, go
• 15:13
  Speaker 1: to Financial Survivalnetwork dot com. Financial Survival Network now more
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