Latest / Financial Survival Network / 2024 Special Edition: Making Money in the Market with Anthony Sacarro #5978

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2024 Special Edition: Making Money in the Market with Anthony Sacarro #5978 · Financial Survival Network

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  The fact is that geopolitical events all the way around have an economic impact on
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  what's going on. I'm actually surprised that there hasn't been a greater effect on
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  the stock market from the geopolitical events, especially from the Israeli war that's going
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  on as well too. It's almost like our stock market shrugged it off.
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  Now we're pushing record highs. But the reality is is that the Israeli war,
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  I mean Israel, doesn't you know it is no small part in the
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  United States stock market. You are listening to Carrie Let's's Financial Survival Network where
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  you get valuable information. You just can't find anywhere else to thrive in today's
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  trying times. You need the Financial Survival Network now more than ever. Go
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  to Financial Survivalnetwork dot com and get your free newsletter and gift. Financial Survival
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  Network now more than ever. And welcome. But you are listening to and
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  watching the Financial Survival Network. I'm your host, Carrie Lutz. Well,
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  our good friend Anthony Sakaro is back with us. Anthony. Happy twenty twenty
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  four. Ope, it's a great year for you guys and all of you
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  out there. The Man twenty twenty three was something else. But since we
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  last spoke, Anthony, we got the Powell pivot. What do you think
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  that's going to mean to the market and what do you think that's going to
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  do for twenty twenty four. Yeah, Carrie, good to be back here.
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  Happy New Year's to you and your guests as well. You know.
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  Interestingly enough, twenty twenty four ended up really well twenty six percent. I
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  think on the broad market it can be a little bit deceiving because the Magnificent
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  seven carried a lot of that. But the fact is that you Powell at
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  this point is talking about keeping rates where they are. I think that's probably
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  the right move. There's really no reason for them to move rates. If
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  you look at the consensus across the board, there's no one that thinks that
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  they're going to raise rates anymore. I see it potential twenty five or fifty
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  BIPs raise in there, although I don't think it's going to happen. I
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  could see it. It doesn't mean I think it's going to happen. I
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  don't think it's going to happen. There's really no reason for them to do
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  that. If anything, I think the markets have forecasted a drop in interest
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  rates over twenty twenty four, and yet at this point I don't see any
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  reason for them to do that either. So, you know, unlike where
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  they were behind the eight ball when it came to inflation, I think they've
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  actually done an extremely good job, maybe a better job than any other fed
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  out there is. You know, as far as getting inflation where it needs
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  to be, they've brought the core inflation break down, it's not where it
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  needs to be, So I want to be clear, they still want it
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  to be down on a couple more percent, But the fact is they've done
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  a great job of creating this soft landing, if you will, And is
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  it possible you know that we don't have a recession. Well a year a
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  year and a half ago, a lot of your guests, including myself,
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  were saying, no, we're going to have a recession up some point,
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  whether it's just going to be, whether it's a hard landing or soft landing,
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  or how deep it's to be. But now all of a sudden,
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  there's a possibility that we don't have overcession. I think we do still have
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  a mild recession. I think the inverted yield curve is telling us that,
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  and that's still possible. But I think now two years ago, we wouldn't
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  have said there's no possibility of it. Now there is a possibility that we
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  don't have a recession. And if we do have a recession, the Fed's
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  got the bullets and the gut and the way of high interest rates now to
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  be able to lower those interest rates and fight off a recesion pretty quickly.
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  If that's something they've ben decided to do. All right, it's well,
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  hey, you know what they say, economists have called you know, five
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  out of the last two recessions. That's right, Yeah, that's all right.
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  So we don't know for sure that that's going to happen, you know.
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  But at the same time, the inverted yield curve has been a pretty
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  pretty good predictor of recessions. I want to say, you know, out
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  of the last number of recessions, I think in the last one hundred years,
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  there's been something like a dozen and a half recessions or somewhere around there.
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  And I want to say that the inverted yield curve or we've only had
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  two recessions where there was no inverted yield curve, and inverted yield curve has
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  preceded most of those recessions, So it would be very, very unusual to
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  have it inverted yield curve for a year and a half and have no recession
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  follow it, but it definitely could happen, all right, So looking ahead,
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  So twenty twenty three, the Magnificent seven carried them. We had this
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  huge Santa Claus rally. If we didn't have that rally, things would have
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  looked so good, would they have? Yeah, No, they wouldn't up
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  for sure. And you know what we have to understand is that the economy
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  is in fact still soppening. The unemployment rates a little bit higher than it
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  was a year ago, but not much. It's still on a magnificent level.
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  I think it's at three point seven percent. The labor market though,
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  the jobs openings they're used to be two years ago, No, not two
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  years ago, maybe a year or year and a quarter. A year and
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  a half ago, it was almost a two to one ratio of jobs available
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  per worker. Now that's come down to about one and a half. So
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  that's a good news. As far as the softening of the economy, and
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  you want the economy to be soft that's the thing. You want the economy
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  to soften up, So inflation continues to come down, that's not bad,
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  but the fact is that the labor number is coming down a little bit.
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  So yeah, the Sabathlaus rally helped carry the market for sure, and who
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  knows what's going to happen this year? All right, So what about interest
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  rates and housing? You know what I find really ironic here, Anthony,
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  is that housing definitely took a hit in many parts, but it was still
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  up for the year, and around the beginning of December, all the housing
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  stocks hit new highs, new all time highs, your lenars, your toll
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  brothers, all of them. What do you make of housing for the coming
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  year? You know, it's been much more resilient than I think a lot
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  of people thought, but more resilient than I thought. With interest rates going
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  from you know, virtually zero up to five over five where they are now,
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  and mortgage rates now in the seven percent range, I think maybe they'd
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  come down to six or real between six and seven. There are a lot
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  of people that thought that the housing market was going to take a major dip
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  last year, and that didn't happen. It seems to be pretty pretty resilient.
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  Same thing with the labor market. The labor market, although we just
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  talked about it, is still very very resilient. As long as the housing
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  market stays resilient and as long as the labor market stays resilient, I think
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  we don't have any concerns about a recession. And it also does not give
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  the Federal Reserve any reason to lower interest rates. So it's those two things
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  are very big when it comes to taking a look at what's going to happen
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  in twenty twenty four. But the Federal Reserve can lower interest rates if in
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  fact, the inflation number doesn't change, If in fact, the housing markets
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  stays strong and the labor markets stay strong. The labor market's probably the biggest
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  factor that the Federal Reserve has to consider, all right. So you know,
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  like the sixty million people out there, me included, that have three
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  percent mortgages out there, and you know, even if you wanted to downsize,
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  you can't downsize because you wind up downsizing your house but paying more for
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  it. Uh, what's going to cause those people to move? What's gonna
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  you know, we're gonna it seems to me we're just gonna have a perpetual
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  inventory shortage in housing. Well, we could and I don't think anything's gonna
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  cause those people to move. I'm in the same situation. I've got a
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  couple of rental properties at very low interest rates. My own primary residence.
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  I think I'm at three in a quarter. I'm not going anywhere. If
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  I do go somewhere, though, it will be to rent out my current
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  residence. Let's say an added to rental and then and then move somewhere else.
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  And I don't mind to pay a higher interest rate initially because I know
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  when rates come down, I can always refined. So I don't want to
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  get another place. Uh. I don't want to not get another place with
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  the idea that the only reason is because rates are high, you'll always be
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  able to revi later. Now, are rates ever going to go back to
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  zero? That's a good question. I was working with a strategist the other
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  day for Memo Bank. We were golfing together, and he was saying,
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  someone that's very well schooled in the economic world, and he was saying that
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  he doesn't think rates are ever going to go back to zero. I can
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  agree on one side, but on the other side, they were just at
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  zero two years ago, and I could see scenarios where they go back down
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  to very low levels. If the vetereral reserve lowers even half of what they
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  are now, that's going to cause mortgage rates to come down. That may
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  free up some of the inventory that is in the or some of the real
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  estate that's not an inventory for people that would like to move, but the
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  lower interest rates are keeping them from moving. That may be the impetus that
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  causes them to want to move. So in California, where we are where,
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  you know, the fact is that everybody wants to get out of California,
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  and the interest rates are just going to keep them here until they get
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  low enough to a point to where Governor kho some chases them out. And
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  I think if interest rates get cut in half, there'll be a lot of
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  people fleeing California. Even though in my be a little more expensive, a
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  higher interest rate in another state is still going to be a whole lot less
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  expensive than a lower interest rate in California. I gotcha, makes a lot
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  of sense. So we've also got a presidential election coming up. Without touching
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  upon the politics, because this is after all a family show, you know,
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  but politics definitely affects economics, right A hundred percent. Yeah, I
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  hate to throw in the politics here in California, And of course, you
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  know, you and I are the attorney. So when you talk about everyone
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  and no one, that usually doesn't make sense either, you know, So
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  I can't really say everyone wants to move out of California. I think from
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  a political standpoint, there's just a lot of people that aren't happy with what's
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  going on. I'm one of those individuals as well. And as an employer
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  here, it's even hard to run a business with all the laws and then
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  the gun control laws that they're trying to do it. It's nuts. So
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  we'll try to keep politics out of it. But a presidential election, you're
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  absolutely comes into play when it comes to fight dances. Most presidential years,
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  I want to say, from the top of my head, I want to
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  say, like two out of three presidential years tend to be good years,
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  which means one out of three tend to not be good years. And the
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  reason is because people are hopeful for change. People are looking for change.
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  That's always seems to be what they're looking for, and so generally all a
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  presidential year is a good year. Challenge, though, is that we just
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  came off of twenty six percent year on the upside on the S and P
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  five hundred, and is you know, a year like that usually is not
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  followed by another duplicative year. You know, it doesn't mean it won't be
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  up I don't think anyone's forecasting that we're going to have another twenty six percent
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  rise on the upside on the S and P five hundred. But I could
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  see us having a you know, four or five or six percent rise still
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  on the S and P five hotter that I would still be very much in
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  line with UH, with what's going on in the economic world. So,
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  yeah, political events and the election definitely comes into play to your money,
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  and so do you political events as well. Yeah, it's oh, it's
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  always a room for a couple more wars, right, exactly right. Yeah,
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  we have no shortage of things to talk about in the geopolitic. I
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  mean, even Venezuela wanted to invade Guyana, but evidently they're having second thoughts
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  about it because the rest of Latin America is up in arms, you know,
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  which look good. Latin America has always been an politically unstable area,
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  but it wasn't war torn other than when we moved in there to protect the
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  American interests. There really were never any wars in Latin America between the countries.
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  Yeah, Argentina and Great Britain. But look, you know, you
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  see this even there. So and then we got China. What's your feeling
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  about China with its economic implosion which seems to be approaching a crescendo. Is
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  that something an American investor has to be concerned about, besides the fact they
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  say they're going to invade Taiwan, which I don't believe. Yeah, there's
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  so much going on over there, you know, and the reality is,
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  I'm not even sure what to believe with China with what they put out.
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  So the fact is that geopolitical events all the way around have an economic impact
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  on what's going on. I'm actually surprised that there hasn't been a greater effect
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  on the stock market from the geopolitical events, especially from the Israeli war that's
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  going on as well too. It's almost like our stock market shrugged it off.
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  Now we're you know, pushing record highs. But the reality is is
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  that the Israeli war, I mean Israel doesn't you know, there's no small
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  part in the United States stock market you know, there there are a lot
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  of Israeli companies in that stock market. So the fact is that it really
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  has shocked me that they haven't come into play. I think we are just
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  one geopolitical event away from having some negative ripple effects in the stock market.
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  I hope it doesn't turn out to be a black Swan event, like a
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  terrorist event that happens on US soil, like another nine to eleven, or
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  something that then, you know, causes the stock market to get into recession
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  or even worse. I think that's out there. I think it's a risk
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  that you have to pay attention to. And the old definition of blocks one
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  is you don't see it coming. But the fact is, I think that
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  there could be a black Swan event geopolitically related, whether it's the China,
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  Taiwan, whether it's you know, something happening here in you know, here
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  in the United States, or whether something with Iran and oil you know that
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  could be you know us a stock market ripple effect. Two. All right,
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  Well, like, so when we sit down the July eighth, twenty
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  twenty five, where do you think things will be. Well, I'm hoping
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  that the market is at least at the level that it's at now. I
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  think if we do have a recession, and if we do have a recession,
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  I would hope that the market would bounce back. I would think if
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  we're at the level that we are now or up, I think, of
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  course that would be good. I don't think we're going to have a repeat
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  of the last year that we had with twenty six percent, But I also
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  don't think that we're going to have a major crash either. I think we
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  can take this twenty six percent we had digest it. I'd like to see
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  the market a little more fully involved instead of just the magnificence of in carrying
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  it. But right now, and you know me, Carrie, I hate
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  to make predictions because, like you said, most of the times they're rollin.
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  But if we're flat or slightly up in the next year, year and
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  a half, I'd be very happy. All right, Well, I think
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  we'll leave it at that. Anthony, tell us where do we find you?
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  How do we connect with you on the web? Yeah, there's a
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  couple of ways to do that. My financial firm is Providence Financial Providence Financial,
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  Inc. Dot com, or you can search up. My personal web
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  page is Anthony Scaro dot com. And if you don't remember any of that,
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  just search for Providence Financial in Los Angeles and we come up all over
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  the place. You'll find us. Well, you don't have to worry about
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  that because link will be in the show notes to this interview on Financial Survival
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  Network dot com. And make sure you sign up your free newsletter when you
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  do it to We've got a good one coming out tomorrow, Anthony. Always
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  a pleasure. Thanks for stopping boy, Thank you for having me. Great
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  to be here, Thanks for listening to carry Lenz's Financial Survival Network, your
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  solution to today's trying times. For the latest, go to Financial Survivalnetwork dot
• 15:18
  com. Financial Survival Network now more than ever