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A SpaceX Day With A Side Of CPI · HPK Provident Advisors: The Weekly Bull

0:04
SPEAKER_02: Welcome to Friday Live.
0:06
SPEAKER_02: Every Friday, the partners of HBK Provident get together and discuss what we're seeing in the markets, the economy, and talk about our financial planning blog posts.
0:12
SPEAKER_02: So with me today in audio only form is Mr.
0:16
SPEAKER_02: David Harper.
0:17
SPEAKER_01: It is good to be with you all.
0:19
SPEAKER_01: I apologize.
0:21
SPEAKER_01: Um, I'm sure it's operator error, but my camera is not working on my laptop.
0:27
SPEAKER_01: So uh you get to hear my voice, and I'll do my best.
0:31
SPEAKER_01: Mike, we've got a lot going on uh this week.
0:36
SPEAKER_01: The blog posts have been really good, and then on top of that, there's been some news about Social Security uh trust fund running out of money, supposedly, in 2034.
0:48
SPEAKER_01: Well, uh folks, don't don't despair.
0:51
SPEAKER_01: It's not like we haven't heard this before.
0:54
SPEAKER_01: So we'll get um Mike, we'll get our our resident expert, Brian Peluso, to give us some insight on that.
1:02
SPEAKER_01: Okay.
1:02
SPEAKER_01: Uh, but we're not gonna discuss much about that today.
1:06
SPEAKER_01: We are aware of it and we'll get an answer for you.
1:08
SPEAKER_01: Uh and Mike, uh our markets go up, they go down, and we had a nice blow up and down on the same day.
1:17
SPEAKER_01: Yeah, yeah, yeah.
1:20
SPEAKER_01: Um a 400-point drop is wiped out before noon, and then it goes down another 300 points and comes back up.
1:29
SPEAKER_02: So yeah, we were like hovering the flat line yesterday, and then news was that we weren't gonna attack Iran last night, and we shot straight up.
1:41
SPEAKER_02: So I think we got down to about four percent and change drawdown on the SP 500.
1:48
SPEAKER_02: Um, but now we've gained back probably about a percent of that.
1:52
SPEAKER_02: Let me pull up the chart here.
1:56
SPEAKER_02: And we are up about half a percent today, but there's still plenty of trading to go on.
2:01
SPEAKER_02: Um, looks like we're getting back into the buy signal on RSI, and uh MACD hasn't really flipped yet, but we've seen good support at the the um 50-day moving average, so that's a good sign.
2:18
SPEAKER_02: Uh, we'll see if we can build from here.
2:19
SPEAKER_02: I think it's uh it's gonna be a volatile day.
2:22
SPEAKER_02: We have uh SpaceX IPO coming out.
2:26
SPEAKER_02: Um they're raising 75 billion, and that's expected to put them at a market cap around 1.77 trillion, which flips them into the top 10 stocks by market cap in the market.
2:39
SPEAKER_02: So a little different than when we had IPOs 20 years ago where they would enter small caps.
2:44
SPEAKER_02: Now we have they wait public and they're big.
2:50
SPEAKER_02: So uh institutional support for the offering was very strong.
2:55
SPEAKER_02: So retail, I think, came in around 20%.
2:59
SPEAKER_02: They were hoping for closer to 30%.
3:03
SPEAKER_02: So I think that'll start trading probably in the next hour or two.
3:07
SPEAKER_02: So that should be very interesting.
3:09
SPEAKER_02: Now, IPOs tend to be pretty choppy, especially in the beginning, and then they have the the opening where the insiders can sell at a certain period of time.
3:20
SPEAKER_02: Um, so typically you see a lot of volatility in the first six months as it just kind of tries to find its its fair value.
3:28
SPEAKER_02: Um so we will be keeping an eye on that.
3:32
SPEAKER_01: Um Mike, but also there's a great quote from from Henry David Thoreau said his quote the question is not what you look at, but what you see.
3:46
SPEAKER_01: As an IPO goes, um, I think that's spot on.
3:50
SPEAKER_01: And SpaceX isn't the only IPO coming out in the near future.
3:54
SPEAKER_02: Uh yeah, we have some big AI ones coming out um this year, so that'll take some uh some volume or take some uh buying power away.
4:06
SPEAKER_02: It's like today, I'm looking at some of the Mag 7 stocks are seeing a down day, and and as a whole, that group is actually negative on the year.
4:15
SPEAKER_02: And I did hear a stat that even though the market's up eight percent, 40% of the SP 500 individual stocks are down on the year.
4:22
SPEAKER_02: Um, so it's been uh more of a stock picker's market, but a lot of the the positive stock market performance has been related to AI, whether it's uh technology or the infrastructure build out, like industrials or materials.
4:38
SPEAKER_02: So um, but overall, um yields are kind of in the same range we've seen.
4:44
SPEAKER_02: Uh 10 years at 4.85, the two-year drop to about 4.08.
4:50
SPEAKER_02: Um, we will get our first Fed meeting next week with the new Fed chair.
4:54
SPEAKER_02: I don't think we're gonna see any move as of yet, uh, but you know, the the process picking up a little bit, but so is the inflation data.
5:05
SPEAKER_02: We got some metrics this week.
5:07
SPEAKER_02: Um, core CPI uh wasn't bad on the month.
5:10
SPEAKER_02: It came in at 0.2%.
5:12
SPEAKER_02: That's kind of in the range you want to see.
5:14
SPEAKER_02: On an annualized basis, that's 2.9%.
5:17
SPEAKER_02: And the core reading excludes food and energy.
5:20
SPEAKER_02: So um when you look at those, uh, we came in about in line at a half a percent on the headline number.
5:27
SPEAKER_02: Um, and on the annualized basis, 4.2%.
5:31
SPEAKER_02: So way too high.
5:33
SPEAKER_02: Um, PPI was uh a little worse than that.
5:37
SPEAKER_02: X food and energy, we came in at 0.4% for the month and 4.9% annualized, and then the um headline number, which includes those components, was up 1.1% on the month, which was about double consensus and 6.5 percent on an annualized basis.
5:55
SPEAKER_02: So yeah, it's getting kind of elevated.
5:58
SPEAKER_02: We're seeing the highest readings in quite some time now.
6:02
SPEAKER_02: Um, jobless claims were a little higher than expected, came in at 229,000.
6:07
SPEAKER_02: That's also the highest we've seen in at least three or four months.
6:11
SPEAKER_02: Um, so we'll just keep an eye on those metrics.
6:15
SPEAKER_02: I I'm starting to think that the next move is gonna be a rate hike.
6:20
SPEAKER_02: Um, but you know, I don't know when they're I can't give an accurate um prediction of when that will happen, if that happens.
6:28
SPEAKER_02: I mean, if if they end up, I think with inflation where it's at, they need to either come out like heavy in the beginning, say, you know, we're gonna do 50 basis point rate hike, and then we're just gonna see.
6:42
SPEAKER_02: Or, you know, I think they just are on pause for a while.
6:46
SPEAKER_02: Otherwise, I don't unfortunately, I think a lot of times the Fed will say, Oh, let's just see another four months of readings, and you know, inflation's still high, so now we're gonna gradually do it.
6:57
SPEAKER_02: Inflation overheats, and then eventually they hike too far and the market corrects.
7:02
SPEAKER_02: So we'll see.
7:04
SPEAKER_02: We don't know how the new Fed chair will interact with the committee.
7:08
SPEAKER_02: It is based on the committee vote, not just one individual Fed chair.
7:13
SPEAKER_02: So should be interesting.
7:15
SPEAKER_01: I heard a um, I was at a conference many years ago, uh, and it was the Invesco uh Mr.
7:23
SPEAKER_01: Gunlatch that he was talking about uh Fed rate hikes.
7:27
SPEAKER_01: Jeffrey Gunlatch.
7:29
SPEAKER_01: Yep, and he said that the only um um the the last rate hike is always the mistake.
7:36
SPEAKER_01: Uh that's when the pushes it pushes the market into a bear market.
7:40
SPEAKER_01: So the last rate hike is always always the mistake.
7:44
SPEAKER_01: Um so and I don't see that here.
7:47
SPEAKER_01: We don't see a bear market, um, but we certainly see challenges, and that's why we have you, Mike.
7:54
SPEAKER_01: Thank you.
7:56
SPEAKER_02: Um, yeah, Jeffrey Gunlock's a big believer of the Fed follows the two-year, which is trading about 408.
8:02
SPEAKER_02: Um, upper end of the Fed funds rate right now is 475.
8:06
SPEAKER_02: So that would indicate uh potentially one rate hike.
8:09
SPEAKER_02: The odds of a full rate hike were getting more priced in by the market, but with the um news that you know we might be close to an IRN deal, which I'm not believing until it happens, um, those odds came down a little bit.
8:24
SPEAKER_02: So now I think it's priced in just like a half a rate hike, which the Fed doesn't do, but um you just see that the market's rethinking all those things.
8:34
SPEAKER_02: I don't know.
8:36
SPEAKER_02: Yeah, I don't know with the war headlines.
8:38
SPEAKER_02: It's it's hard to even see whether, you know, there's so many different parties giving their two cents in Iran.
8:46
SPEAKER_02: Um, so who actually has control?
8:48
SPEAKER_02: I'm not really sure.
8:49
SPEAKER_02: And I think that question remains.
8:52
SPEAKER_02: Um, but we're just gonna keep an eye on all these developments.
8:55
SPEAKER_02: But um overall, job growth is picking up a little bit.
8:58
SPEAKER_02: Uh, we'll get retail sales next week, which um are expected to come down a little bit, but still overall healthy.
9:06
SPEAKER_02: And then we'll get that Fed meeting on Wednesday.
9:09
SPEAKER_02: Um, so I'm very interested.
9:11
SPEAKER_02: I'm assuming we still get a press conference.
9:13
SPEAKER_02: I know he wants to be a little um less transparent than the former Fed, but I'm hoping I get to hear from him at least.
9:23
SPEAKER_01: Yeah, yeah.
9:24
SPEAKER_01: Um maybe this is a maybe a good segue, Mike, and uh managing risk, which was a nice uh blog post that came out.
9:33
SPEAKER_01: Okay.
9:34
SPEAKER_01: And and I like the analogy they they used on this.
9:39
SPEAKER_01: Um, but as you know, um as risk you can uh manage it in four different ways.
9:49
SPEAKER_01: One uh you can avoid it, you can uh um you can uh manage it on your own, you can uh uh transfer it.
10:03
SPEAKER_01: And then the last one, you you know, you just stick your head in the stand.
10:08
SPEAKER_01: Okay.
10:09
SPEAKER_01: So that analogy, uh did you find that yet, Mike?
10:14
SPEAKER_02: I I don't know what's going on with uh our Facebook page, it's not letting me move over.
10:19
SPEAKER_01: I've heard that Facebook was having problems, okay.
10:23
SPEAKER_02: So uh yeah, but I mean that's the basic, the basic essence of the the blog posts.
10:29
SPEAKER_02: Um, you can retain it.
10:30
SPEAKER_02: Um, in terms of market risk, that's you know, you're gonna just go in the SP 500, ride it out, retain the risk.
10:41
SPEAKER_02: Um, you can manage it, active management, being tactical, taking advantage of different um opportunities, whether that's taking risk off the table when things are overvalued or buying stuff when uh there's fear in the market, or you can transfer it, which um in our instance we um use annuities in that place and insurance products, where if a client's not really wanting to participate in the full up and down of the market, um there's vehicles to reduce some of that risk.
11:11
SPEAKER_01: So that's the blog post or you can or you can avoid it, stay out of the stock market.
11:16
SPEAKER_01: So I found yeah, I found the the the blog post.
11:19
SPEAKER_01: So it and it used a nice analogy of a car, okay.
11:22
SPEAKER_01: You can ignore the risk.
11:23
SPEAKER_01: If I crash, I'll just buy a new car, just dismiss it.
11:29
SPEAKER_01: Um, you can avoid risk.
11:31
SPEAKER_01: I won't drive at all.
11:33
SPEAKER_01: I'll walk everywhere.
11:35
SPEAKER_01: You can manage it.
11:36
SPEAKER_01: I'll drive defensively with my hands at 10 and 2.
11:40
SPEAKER_01: Uh, and I'll I'll be careful.
11:43
SPEAKER_01: I'll stop, I'll make a short of a full stop.
11:46
SPEAKER_01: Um transfer the risk is I'll buy car insurance.
11:51
SPEAKER_01: That's good.
11:54
SPEAKER_01: So uh and then the the going to the next blog post is you know custodial Roth IRAs are very beneficial.
12:06
SPEAKER_01: If you have a young person, uh your your child has a summer job, okay.
12:13
SPEAKER_01: Even if they're uh even if they're uh only 16, they can still do a Roth IRA.
12:21
SPEAKER_01: Um sometimes you don't have to wait until 59 and a half to access those funds, okay.
12:27
SPEAKER_01: Um so it's not like it's they set it and they can't touch it again until they're uh 50 years older.
12:34
SPEAKER_01: Okay, you can use it for first-time home purchase, you can use it for other pieces, and you have access also to your contributions, not your growth without penalty, but that part.
12:47
SPEAKER_01: Okay, so um uh I know that when I when my kids were young, I used to hire them to file papers when we still had those, and I would pay them.
13:00
SPEAKER_01: Well, the portion I would pay them, I would put into their Roth IRAs.
13:04
SPEAKER_01: And Stephen, so Colin had a Roth IRA when he was 12, and Justin when she was 10.
13:11
SPEAKER_01: And now Colin used his to buy to purchase a first-time home, uh, which was a nice amount.
13:17
SPEAKER_01: Um, but don't uh don't dismiss the value of using uh Roth on any kind of earned income.
13:25
SPEAKER_01: Again, the iris doesn't care whether it's the child's earned income to buy the they just want to know, make sure that the client that the the child has earned income.
13:36
SPEAKER_01: The parents could use could uh fund the Roth with a gift or so forth, but it can only be as much as they earn.
13:44
SPEAKER_01: So be careful about that.
13:46
SPEAKER_01: Okay.
13:47
SPEAKER_01: Uh, but if you have other questions about that, feel free to uh talk to your financial advisor or or give us a call.
13:54
SPEAKER_02: Um and then uh I believe the other one was just talking about going into some more details about what we talked about last week with the Trump accounts.
14:03
SPEAKER_02: Um so that contribution period is about to start next month.
14:07
SPEAKER_02: Um, but if your child is born between January 1st of 2025 and December 31st of 2028, um, they are eligible to get the thousand dollar uh contribution from the government.
14:20
SPEAKER_02: So I hope everyone takes advantage of that.
14:23
SPEAKER_02: It's a cool vehicle.
14:24
SPEAKER_02: And may, like I discussed a couple of weeks ago, that may um you know be a tool to take some of the burden off Social Security in the future.
14:35
SPEAKER_01: Yes, it's it's a great idea.
14:38
SPEAKER_01: Uh and don't go in um without uh researching it.
14:44
SPEAKER_01: Okay, it's easy to sign up, and by all means, you should everyone should take advantage of that free thousand dollar uh government contribution.
14:55
SPEAKER_01: Okay, absolutely.
14:56
SPEAKER_01: And I hear a lot of corporations are gonna be adding to their employees uh children's accounts or some kind of a match.
15:04
SPEAKER_01: Uh so if you uh never turn down free money, okay.
15:09
SPEAKER_01: Um now you any person, any child under under seven, seventeen or eighteen can contribute up to five thousand dollars a year.
15:21
SPEAKER_01: Uh uh, but uh um don't uh take um can make some research on that, because sometimes uh is it if it's meant for education, well, the 529 college savings plan is probably a better option for you than these Trump accounts, um because it can pay for the educational costs tax-free.
15:44
SPEAKER_01: Okay, whereas the Trump accounts will not be tax free.
15:47
SPEAKER_01: Uh, but on the other hand, if uh if you want to have them to have access to that money uh unencumbered, well then maybe the Trump account is the better vehicle for you.
15:58
SPEAKER_01: Um it just takes some investigating on your part or to talk to a trusted advisor, okay.
16:04
SPEAKER_01: Um but I uh but what Mike and I would say certainly take advantage of of the free money that's offered.
16:14
SPEAKER_01: Okay that's in your situation.
16:18
SPEAKER_01: All right.
16:19
SPEAKER_01: And our we had we had another blog post.
16:25
SPEAKER_01: We had a lot going on, didn't we, Mike?
16:28
SPEAKER_02: Yeah, another one was just about windfall.
16:31
SPEAKER_02: If if you come into a large sum of money, um, you know, take some time to think about it, don't tell a lot of people.
16:37
SPEAKER_02: Um family and friends, but um, sometimes they can be taken advantage of.
16:45
SPEAKER_02: So make sure you're taking care of your own needs and um first make sure you take care of your needs and then your wants.
16:53
SPEAKER_02: Um so if all of your expenses are covered, uh maybe you want to travel a little bit and and take advantage of the extra money.
17:01
SPEAKER_02: Um, but yeah, that's another that's another scenario that we can walk through with you with our financial planning software.
17:07
unknown: Okay.
17:08
SPEAKER_01: And you know, uh people usually don't regret uh maybe perhaps the first 90 days, uh, the advice was that don't do anything.
17:17
SPEAKER_01: Assemble your team of professionals uh and get some good professional advice.
17:24
SPEAKER_01: Um, and no one's regretted waiting on waiting with their windfall monies, uh, but too many people have regretted uh taking action too quick without a plan.
17:37
SPEAKER_01: Um once the money's spent, it's not coming back.
17:41
SPEAKER_02: So if you it's an interesting scenario for a lot of people, like you hear about the lotto winners or the the former athletes that had a ton of money and they end up going bankrupt at some point, um, just because they're really unfamiliar with having that sum of money and being able to manage it.
18:00
SPEAKER_02: It's not even though it's a large sum of money in many cases, um, it it's not infinite.
18:09
SPEAKER_02: So some of these athletes go out and buy five ten million dollar houses and all these cars, and at some point the the income stops coming in and they continue to spend the same and find themselves out of money at some point.
18:25
SPEAKER_01: Mike, uh in my in my history of financial advising, uh so my career span 34 to 35 years.
18:35
SPEAKER_01: Um I've had three clients that have won uh lotteries, two of which ended uh bankrupt, uh filing for bankruptcy.
18:44
SPEAKER_01: Okay.
18:45
SPEAKER_01: Um well um so uh a windfall is a blessing, uh, but with blessing comes responsibility and uh seek out help uh if you want to learn how to handle that stewardly and and what works best for you and your family.
19:06
unknown: So that's good.
19:08
SPEAKER_02: All right.
19:09
SPEAKER_02: Well, I think we'll just keep this one on the shorter side this week.
19:12
SPEAKER_02: Any uh any weekend plans?
19:15
SPEAKER_01: Okay, well, I think um I'm going to a stamp bourse tomorrow.
19:20
SPEAKER_01: Uh I'm looking forward to that.
19:22
SPEAKER_01: Uh we're taking care of uh the puppy dogs while uh my daughter's family is away.
19:28
SPEAKER_01: And Mike, you have a a new uh member to your family, don't you?
19:34
SPEAKER_02: I do.
19:34
SPEAKER_02: I stopped at the Humane Society this weekend and obviously I came back with the dog.
19:39
SPEAKER_02: So I got a five-year-old husky mix.
19:42
SPEAKER_02: Um, she's a sweetheart.
19:44
SPEAKER_02: I'm still kind of working out her getting along with my existing dog, but overall they've been doing pretty well.
19:50
SPEAKER_02: Um but yeah, it it's it's been fun.
19:54
SPEAKER_01: Great, great.
19:55
SPEAKER_01: Um guys, have a great week.
19:59
SPEAKER_01: We'll look forward to uh looking forward to next Friday.
20:04
SPEAKER_01: Okay.
20:04
SPEAKER_01: In the meantime, um uh what's what's the the financial headlights coming up?
20:10
SPEAKER_02: Uh retail sales and Fed meeting, I think both on Wednesday.
20:14
SPEAKER_02: And then I believe the market is closed next Friday for Juneteenth.
20:19
SPEAKER_02: Um, so there's a chance we may record this on Thursday afternoon.
20:23
SPEAKER_02: Um, but just keep an eye out for that and we'll discuss what's going on in the Fed meeting.
20:28
SPEAKER_02: Hopefully, like I said, we get a press conference where we can kind of dive into what the the new Fed chair is saying and then go over retail sales.
20:36
SPEAKER_02: So and then after that, we'll be uh getting into earnings season pretty soon again.
20:42
SPEAKER_01: Yay! Well, you all have a good SpaceX day.
20:48
SPEAKER_01: Keep your feet too, David.
20:51
SPEAKER_02: We'll see you next week.
20:54
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SPEAKER_00: Advisory services offered through LPL Financial LLC, a registered investment advisor.
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SPEAKER_00: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
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