In today's episode, Tyler breaks down today's market activity and looks ahead to what we can expect from stocks as we head into the final months of 2024. Additionally, we'll explore why the market reacted the way it did today and what the potential implications of tomorrow's Jackson Hole speech from J Powell. Tune into today's podcast to learn more.

Dont look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herriage here with you for Todays VRA investing podcast. Hope you all had a great day out there today. The market had a little bit of the J. Powell jitters here today ahead of his Jackson hole speech tomorrow morning. So we’ll cover that here today. We’ll also cover some great stats looking forward from here from what we expect for our major indexes, some stats and analytics about what the market was telling us when we’ve been in situations like this as well.

And we’ll cover the latest from our sector watch and of course, precious metals and the miners here. So let’s go ahead and jump right in. Kip discussed this yesterday as well, that Jay Powell does not like to be front run. Remember, it was just about a year ago where Jay Powell and one of the FOMC pressers, a reporter, mistakenly told Jay Powell that the market was rallying. The market had already turned lower on his hawkish comments at the time. And Jay Powell, he took that personally. And he really had to go after the market after that because this isn’t what he wanted the market to react like. So when he thought the market was higher, he doubled down on that hawkish rhetoric, sending the market much lower on the day, that day.

[00:01:35]:
So we weren’t too shocked to see a lower market today. Kip talked about this in his podcast yesterday as well. And it could continue into tomorrow morning as they’ve already started and may have had an impact on the market’s reaction today. They’ve already started floating the idea here that Jay Powell won’t be too dovish tomorrow. Right. We had another Fed speaker out today saying that, yes, the Fed is restrictive, but I don’t see it as overly restrictive. So again, the market interprets that as kind of a wishy washy, you know, not too dovish, not too hawkish type of view there, but leaning on towards the hawkish side of the higher for longer theme that the Fed has been running with here. So yes, it could continue into tomorrow.

It certainly does seem like it’s by design. And then if Jay Powell can come out tomorrow and be dovish, he’ll look like the hero of the day, know, coming to the rescue to save the market on a Friday of all days. Our view here has been and remains unchanged, that we do expect a dovish Jay Powell tomorrow. And then we’ll head into the September FOMC meeting where the rate cutting cycle will begin. Now, there’s still a lot of people out there, surprisingly calling for Jay Powell to cut rates tomorrow, a mid meeting rate cut. We’ve talked about this here at length as well. But for our newer listeners, I’ll go ahead and restate it. While it might sound like a good idea, like Jay Powell should go after this, I can’t tell you how many messages I got from people saying, oh, is the Fed going to cut rates at their August meeting?

And that most people believed that they should cut rates then. But there is one thing that Jay Powell has done consistently and he’s not very consistent, but he has done this consistently and that has been that he has telegraphed what his moves are going to be at the FOMC meetings. Outside of his coronavirus response. No one was shocked really for the emergency rate cuts then. But we would be shocked. The market would be shocked to get a rate cut tomorrow. Right. A mid meeting cut we think would be a mistake because it would be a shock to the market.

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Real investors out there, people who spend their full time doing this, aren’t expecting it. The market isn’t expecting it.

So if you were to cut rates tomorrow, it would send a signal to investors about the economy that the Fed is seeing something very worrisome that would scare the market. That’s a message the market wouldn’t like. There’s something that we can’t see, that the Fed can see, and they’re reacting to it. Right. You don’t want a reactive Fed. You do want the telegraph style of communicating well in advance of at least generally what they’re going to be doing. So stay tuned here. We’ll be reporting on this tomorrow.

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And I will say this as well. As far as the telegraphing side of things go, I think that you can expect Jay Powell to all but confirm that the first rate cut will be coming in September. But I wouldn’t expect any clarity on whether or not that will be a 25 basis point cut or a 50 basis point cut. After the jobs revisions downward yesterday, that really ramped up the calls for a 50 basis point cut, but the reaction has not been seen in the CME’s Fed watch tool. As a matter of fact, the odds for just a 25 basis point cut have continued to increase this week. So I don’t think he’ll push back against either option there. And more so he’s not going to confirm for anybody what it’s going to look like. But I would expect a dovish tone, almost a confirmation that rate cuts will begin in September.

So stay tuned. His speech takes place tomorrow morning at 10:00 a.m. eastern time. Again, we wouldn’t be surprised to see a bit of a lower open ahead of that that allows Jay Powell to come back to the rescue here. Remember, I saw a whole lot of people today talking about a double top in this market and that it’s basically a false breakout, false move to the upside, but it’s been a fantastic move. I don’t know what people are complaining about here. Yes, it was a bit of an ugly session today. We finished at the lows of the day, but we just had a v shaped recovery from the sell off that we got just a couple weeks of a sell off really from the mid July all time highs from our major indexes like the Nasdaq and S and P.

And then since then, our bottom from early August has been an absolute v shaped recovery. The Nasdaq is already up over 12.5%, and that’s including today’s losses as well. And when you look at charts from our major indexes, they’re almost spitting images of one another. Yeah, we’ve got the s and P closest to an all time high. We got the Dow Jones also very close to its all time high as well. I couldn’t, one of the things that was just cracking me up earlier where people bears specifically shouting from the rooftops, the Dow just went negative on the month. Again, though. We started off the month and going into a sell off here, the Dow is already up nearly 6% from those lows.

[00:07:29]:
Also essentially a v shaped recovery here as well. So no concerns for us about this market. As a matter of fact, we just hit short term overbought levels. That’s about when you get a pause, maybe a little bit of a shakeout, nothing like we saw from July to August. That’s not what we expect here, but that’s not shocking to us here, especially with all of the news, economic data, Jackson hole meeting, all of these things. And of course, one of the biggest ones out there is everyone’s on edge about tensions in the Middle east once again here as well. So with all of the uncertainty out there, we don’t really have any concerns about this market right now. Yes, we’ll enjoy some clarity tomorrow with Jay Powell.

We’ll also get Nvidia’s earnings next week, which we see as a positive catalyst for this market. And our view remains unchanged that dips must continue to be bought. And if we get a little bit of a dip here, we’ll continue to do that as well. So let’s take a look at our market action on the day to day. We did finish lower across the board here, and again finishing pretty much at the lows of the day today. Not across the board, but, by and large, at the lows of the day to day, which is not what you want to see from this market. But again, no big concerns for us here. We were led lower by the Nasdaq, down 1.67% to 17,619.

The semis, I will point out, did lead lower today, down nearly 3%. After that, though, we had small caps, down less than 1% to 21 50. And next up here, the s and P 500, down, excuse me, nine tenths of 1% to 5570. But I’ll pause here for a second because the s and P here, like I mentioned earlier, is the closest major index to an all time high. And two pieces of analytics to share here today. The first from Ryan Dietrich. August. All time highs really aren’t all that common from the major indexes.

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Historically, the end of summer, a weaker time of the year. But when the S and P 500 has hit an all time high in August, the final four months of the year were higher. Eleven out of twelve times. That is the kind of action we expect from the end of this year. We think it’s gonna be a strong, a very strong end to the year. Even with the presidential election cycle. Now, there’s always the possibility of a black swan event, but that risk really never goes away. It could happen.

They call them black swans for a reason. It could happen at any time. No one would expect it.

That’s always a risk. But we don’t see those risk as being severely elevated here, more so than it has been already this year. Then the really big one here that is most interesting is that the S and P 500 has now just completed more than 200 days above its 200 day moving average. Now, that sounds like a lot, right? How much longer can this go on for? That would be the question on many a novice’s mind. But if you’ve paid attention to this market, if you followed the major indexes for some time, you would know it’s actually very bullish for the market. The last three times that this has happened, it went from 200 days and stayed above the 200 day moving average for an additional 277 days. An additional 242 days, and third and final, another 195 days. So, based off of those stats, we’re not even halfway through this massive rally from the S and P.

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And again, you know, we think that this market has a long way to go. We are only not even yet in year two of this bull market. To say that we’re halfway through it, I think, would be an overstatement. I think we’re still in the early innings here of this bull market. All right. And lastly here for our major indexes. The Dow Jones performing the best today, still down four tenths of 1% to 40,712. Yields did get a bump today after some of the more, I would hesitate to say hawkish rhetoric as much as it is just the higher for longer theme.

But yields were higher on the day, up over 2%, still only at a 3.861 point that we haven’t made here quite as often. At least I haven’t is we’ve equated this period in time as most, similar to the 1995 to 2000 dot melt up, where the Nasdaq rallied 575%, all with yields in the five to 6% range. So, yeah, the ten year at a 3.86 is a nothing burger here, right? This is inconsequential on so many different levels, and we’ve said this before as well, that the higher for longer theme has never bothered us, you know, but the market has this idea right now that the Fed is overly restrictive and needs to cut rates. And that’s on the Fed, right? They’re the ones who are communicating these messages. If they had gone in with a more hawkish approach, they are overly restrictive right now. Excuse me, at five and a quarter to five and a half percent on the Fed funds rate, if they knocked off those last, I don’t know, two, three rate hikes that they completed that they shouldn’t have done, they wouldn’t have to do anything right now. They could just take off for the rest of the year. They probably could take off the rest of the year now, and the market would love it, right? Just get the fed out of the way.

Get these fed speakers off the air, get the microphone out of these people’s hands and stop making them celebrities. Geez, it’s exhausting to have to watch these self righteous individuals who think they know so much more than everybody else because they’ve got an economics degree, right? These elitist, smarmy people. You know, every name in the book out there. You know, I try to stay away from insults like that. You know, let’s stick to the facts. Let’s stick to the numbers here. But it is, it can get exhausting having to listen to these people. And now we’ve got to do it again tomorrow with Jackson Hole, right? The city that’s been ruined by the billionaires, if you talk to any of the locals from Wyoming.

[00:14:26]:
They always, you know, Jackson Hole is such a beautiful area. I haven’t been, been to Wyoming. Haven’t been to Jackson Hole. But the people who have moved out of there in Wyoming, you know, basically the, the kind of local saying is that the billionaires came in and kicked out all the millionaires. That’s the kind of city that it is now. Unfortunately for the people of Wyoming, where most of the billionaires who live there, they’re not from there. They don’t care about your state.

They just like the beauty of Jackson Hole. Anyway. All right, onto the next topic here. We’ll be reporting on Jackson Hole, though, so stay tuned. Again. We do expect a dovish fed, dovish J. Powell tomorrow. All right, so next up here, the internals on the day today.

[00:15:11]:
You know, early in the session this morning, our major indexes were fractionally higher on the day, but the internals were negative. That kind of was a tell right there how the rest of the market action was going to go. So we did get some negative readings on the internals today. Nothing overly concerning here, though we did come in roughly two to one negative on both the NYSE and the Nasdaq, with more declining stocks beating out advancing stocks. 52 week highs, lows were our bright spot on the day to day, coming in strongly positive for both the NYSE and the Nasdaq. And that concludes the positive portion of the internals today, as volume was lower as well. Over two to one negative on the NYSE, slightly better for the Nasdaq today. Looking at our sectors here, we finished with three out of our eleven sectors higher on the day to day.

Mostly defensive names here. The real estate sector led the way, and this might surprise some people hit a 52 week high today, the highest level since August of 2022. Now, you know, if you’re a regular listener, we prefer to track the home builders, which did finish lower on the day today, and we like to follow them because that gives a better feel for the actual housing market. The real estate sector is mostly made up of reits, but still, hey, we’ll take it here. That is a 52 week high. And as we say here all the time, new highs beget new highs. We also had the financials finishing higher on the day to day just shy of an all time high there. And lastly, energy, which has been one of our lagging names.

Oil has been beaten up this year. I’ll get to that here more in a second. And then for our laggards on the day, tech did lead the way lower, followed by consumer, discretionary and communication services. Finally here for today, our VRA commodity watch. Some red on the screen here. Gold still above $2,500 an ounce, but down 1% now to $2,000 $520 an ounce. Silver now down 1.8% to $28.99 an ounce. Copper down 1.2% to $4.13 a pound and oil here trying to catch a little bit of a bid after coming off some of its lowest levels on a price per barrel per for 2024.

[00:17:39]:
We started out the year in a similar range to where we are right now. Let me make sure I get this quote right here. Yeah, the low of the year was 69.28. The low recently we got down to 7146. So we’re not too far off of that. But again, trying to get a little bit of a comeback here. Oil now up one and a half percent to $73 a barrel. And finally here for today, bitcoin, working hard to hang on above $60,000 of bitcoin now down 1.3% to $60,443 of bitcoin.

Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcasts every day at the market close. You can sign up at vra letter.com, click the podcast link at the top and we’d love to have you with us. You can also find our transcripts and notes on our website there as well, so hope you come join us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.