In today's episode, Kip gives us an inside look at why he believes we’re in the midst of a "Teflon bull market" that just won’t quit, despite nonstop headlines about geopolitical risks and trade drama. As the market continues to surprise the skeptics, Kip dives into the powerful forces driving stocks higher from the resurgence of “animal spirits” and booming corporate earnings, to a flood of cash waiting on the sidelines and a new rush of tech IPOs. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. What’s going on the markets today? It’s going higher. Imagine that, right? This market has, we’ve been saying this for some time now. This market has a magnet on it, back to all time highs. And we don’t think that’s where it’s going to end, but that’s where we’re going.

Nothing hits this market. There was news that broke this morning that, that the trade talks with China were ending and all of a sudden, boom, here came the sellers. Oh, they’re ending. Must be bad news. No, not at all. There was no news. The news was that Scott Besant, Treasury Secretary, was only going to be tending today and now he’s leaving. But the talks are going to continue.

[00:00:44]:
I just don’t think it matters. Every sell off we get is bought. Every sell off is a buying opportunity. This is a Teflon bull market. Again, reminder, uh, this, as we’ve been saying, this reminds us the most of the bull market in 2020 following the plandemic. This is exactly what happened. We had a V shaped bottom. We got back to all time highs and the market just kept going.

Here’s what happened in 2020 after that v shaped bottom, back to, to all, back to fresh, all time highs. The market did jump. S P 500 jumped another 42% in the next 5015 months. Nasdaq jumped 75% in the next 15 months. This, folks, is corporate earnings. And it’s something nobody’s talking about. Everyone’s talking about the downside risk. Everyone’s talking about Trump’s tariff policies.

Everyone’s talking about all the this again wall of worry risk that this market has, geopolitical risk, et cetera. But guess what’s happening in the meantime? Q4 earnings. Now, granted, Trump wasn’t president in the fourth quarter, but he had been elected in November, so animal spirits were coming back. Fourth quarter earnings came in with growth of 16.9%. That’s the best earnings growth since the second quarter of 2021. Is anyone, do you remember anyone saying that to you? Right. Basically 17% earnings growth, the best we’ve had in four years. No one’s talking about that now.

[00:02:09]:
With 90% of companies earning reporting in the first quarter, we’re already looking at gains of close to 4%. Earnings growth of close to 14% in this quarter. We may even get to 15% by the time it’s all Said and done. So these are exceptionally strong quarters, yet rarely rare you hear anyone talk about it. And the bigger picture we think is again, we’re in Trump 2.0. Trump did this in his first term. He kind of shocked the market with trade and tariff policy. Bull market was rocking and rolling and here came this.

Now he’s done the same thing in the second term, but after that it was it. And then of course we had the plandemic. Otherwise Trump’s presidency would have been an extremely successful one as it compares to the stock market. Anyway. But what we also I wrote with this this morning, what’s really happening also is that the animal spirits are coming roaring back again. No one’s talking about this. We know the stock market’s been surging that, that’s clearly animal spirits. We’ve got investors piling into equities, especially the millennials.

Right. Retail investors have been supporting this market from day one. They’ve been exactly right. While institutions have been out, they’ve been short on the wrong side of the market. Now they’re having to come back in and play catch up. And folks, we still got $7.3 trillion sitting in money market accounts. By the way, Europe’s got $12 trillion and that 7, 7.3 trillion sitting in US money markets. That doesn’t include bank money markets account.

[00:03:38]:
You add that up, we’re at close to $14 trillion sitting in cash. So yeah, red pilled America is driving the market. And that, that is, that is without question animal spirits. Number two, consumer confidence. How about all these consumer confidence surveys we’ve been forced to hear and list said that consumer confidence is the worst in history. It’s never been this bad and it just didn’t make any sense. That is soft data, if you will. While at the same time the hard data has continued to hold up.

Matter of fact, the Atlanta Fed now has the, their, their estimate for Q2 economic growth is just updated to 3.8%. Not, not exactly a reason to be concerned now is it? They were at 4.6%, so they’re in that 4% range for the second quarter. Again, the soft data is not being confirmed by the hard data. And now the soft data is starting to change as well. The Conference Board’s consumer confidence index was just released last week and it jumped to 98. That’s a 12.3%, 12.3 point increase from April, making it the best monthly gain since again March of 2021, four years ago. 3. Have you noticed the IPOs coming public? The red hot ones.

Have you seen the filings where you hear, you probably haven’t. Let me fill you in. We’ve had a rush of companies just filed to go public. Now 73 new IPOs have been, have been filed. We’ll see how many of those go public over the rest of this year. My guess is probably 60. 70% of those companies will go public. There’ll be new filings as well.

[00:05:25]:
But that is up 38% from this time last year. Again, that is animal spirits returning when IPOs start coming out, especially these are mostly tech IPOs that screams risk on behavior, that screams animal spiritual back. And finally there’s about five more, but I’ll give you the last one for now. Volatility. We’ve just had one of the fastest collapses in volatility, the VIX index in history. It’s the third fastest collapse in history. Remember, the VIX just in February hit 53. All right, it’s 16.95 today.

All right. Again, when volatility collapses, that tells you confidence has returned. That tells you animal spirits are returning. It also represents a very rare buying opportunity because we haven’t had the collapse we’ve had in the VIX should have come with a move higher, even greater than we’ve had in equities. But that’s, the market’s playing catch up and we believe that move is coming. So again, our view remains, it’s unchanged. So this market has a magnet to all time highs. We’re only 2% away now for the S500, only 3% away from NASDAQ from all time highs.

And then we’re off to the races again because there’s so much money, it’s on the wrong side. This is exactly how, when these animal spirits return like this. And again we’re seeing it case after case. This is when big breakouts take place, especially when so many people are still bearish. There is folks, there are still people that are on television that happen to be getting airtime, that are still calling this a bear market rally. I, I know, I, I don’t know. I’ve said it before. I’ll say it again.

[00:07:03]:
We’re trend followers for one clear reason. I don’t like the abuse of being on the wrong side of the market. Who does if the market’s going higher, guess what? I’m going to be long. I don’t, I don’t care. I don’t care how I feel. I don’t care what my feelings are. I don’t care if he’s got it. I’VE had to admit I was wrong.

If the market’s going higher, I’m going to be long. If the market’s going lower in a bear market, guess what? We’re, we’re, we’re pulling money off the table. We’re going short some things because again, we’re trend followers. That’s what we do here. So I don’t know how anyone could miss the entirety of this rally and still go on tv, no less, and say we’re still in a bear market rally. That is, that is behavior I do not understand. All right, so being a trend follower makes your life a lot easier, lets you go to bed, sleep a little better, surely makes you wake up in the morning and feel a lot better about, about the way you’re approaching the markets. All right, so again, you know our views.

The trains left the station. This market’s going higher, all time highs, and then it’ll keep going. By the way, we’re not even at, at extreme overbought levels yet. Even with this move we had, you know, every time we get there, we have a shakeout the last two or three days and it removes the overbought nature. Now we are heavily overbought, but it feels like we’ve got one more really nice big push before we get to extreme overbought. And then we still have to get to extreme rebot on steroids, our most overbought designation, before we’re even thinking about taking profits. Right now we’re still buying, okay? We’re still, we’re not even in the stage yet where we’re just pausing our buying. We are, as far as the broad market’s concerned, we are long and strong and adding to positions we’ve been adding to.

[00:08:46]:
Tesla, by the way, let’s talk about that for a moment today. This is a fascinating story. Tesla today, of course. Look, we know what happened last week. It was either. I don’t know what happened last week. If someone could explain to me, I would appreciate it. Elon Musk either lost his shit, you know, accusing your friend, the President, who by the way, happens to be the President, accusing your new best friend, who your kids been hanging around with, right, ex President Trump, of being a pedophile.

How do you do that? How does that happen in a matter of, you know, relationship falls apart. Next thing you know you’re tweeting out he’s in the Epstein list and that everyone knows it and that’s why it hasn’t gone public. But everyone’s going to find out. I mean, you know, strong Accusation. How do you, how do you make. What’s wrong with Elon was the question, right? What drugs is he on? Is he, is he going through some kind of a breakdown? I mean, that’s, that was my first concern is. And then I was like, you know what? This feels choreographed to me. And I think it, I don’t understand it.

But I’m also, you know, again, I’m not worth $150 billion. So, you know, maybe these guys think differently than I do. I’m sure they do. I can’t think of a single reason, a good reason that you want to come out and say he’s against the president. But it just didn’t make. It doesn’t make any sense. So that’s why I say it feels choreographed. Now why they want to do it again, I got no clue.

[00:10:13]:
I can’t figure that out. But if you see what the stock has done since stock hit a low of $273 last week. Excuse me, was up 7% yesterday, up another 6% today, up 19 bucks a share right now at 327 share. Just as three Wall street brokerage just in the last day and a half, downgraded the stock. Right? Downgraded the stock, recommending people put their money elsewhere. And now here comes this move. You’re wondering why today? Well, today we had the robo taxi launch not just in Austin, but there’s also video in Dallas of robo taxis. Again, these are, you know, these are fully autonomous vehicles.

There’s no driver sitting in the, in the driver’s seat and passengers are just taking rides. So happening in at least two cities. And it won’t be long, folks, until it’s everywhere. Look, I’ve said, you’ve heard me tell my story about fsd. We’ve had, I’ve had my Tesla now for right, about five, six months. And one of the reasons I bought it couldn’t wait to use fsd. Excuse me, I’m going to drink water here. Couldn’t wait to use fsd.

Full self driving. And it is not disappointed. It drives me anywhere, everywhere. I’ve had a lot of people in the car. Everyone’s just amazed by it. Okay, is it perfect? No, it’s not perfect. There are times I’ve had to intervene. But again, this is not the final version, right? So that’s probably the final version where it’s going to be launched all across the country, fully unsupervised, right? Not just special vehicles, okay, that have software that the rest of us don’t have.

[00:11:53]:
Yet that’s now being tested, as Elon admitted today. Anyway, we’re looking at probably a year from now before that’s all over the country and this rollout is full and complete. But right now, it’s all through races. We’ve heard no negative stories. And, you know, we would have heard them. Right, but. So that’s what’s driving this move higher. Because this is the future.

The future’s arrived. Fully autonomous vehicles. You got to remember, it’s not just going to be Tesla. I think that every automaker, as most every automaker on the planet, is going to wind up signing a licensing agreement with Tesla because there is no other technology that can do what Tesla. Waymo, please. All right. LIDAR is no comparison to actual Vision cameras. It’s so much less expensive.

My God. There’s just really is no comparison. Okay, so Tesla is the play. As Elon said again today, other automakers are going to realize that they’ve made a mistake and they should have partnered with Tesla long ago, but that’s going to happen. So there’ll be licensing fees. It’s hard to put it to a number with the hundreds of billions of dollars this is going to bring in a revenue for the company. And we haven’t even talked about Optimus, the robotics division, or the energy division. Of course, EVs certainly the staple of the business that’s been hit so hard because of Elon’s, you know, again, is now addiction to politics, apparently.

[00:13:24]:
But bottom line is the company’s moving to being purely an AI company. That’s the future. That’s why we buy the stock now. Could care less about any of that other news. These dips are always a buying opportunity. And again, I think that. I think the lows are in now. And again, our price target for year end is $500 is 327.

Right now, I price target 2028 is $2,000 a share. I think we’ll be on the low side in 2028. And then we’re talking Crazyville in 2030 when all the Optimus robots are talking about millions of them being out on the market. And I can promise you we’ll be one of the first households that has one in their home. And we’ll talk about that at the time, too. But great company, and it’s been a wild ride, for sure. Do I like these big swings up and down? No, I hate them. But I also like to buy low.

And so that is what we’ve been doing here. Anytime there’s a big dip In Tesla, my hand is up in the air. I can promise you we’re among the group that is buying the stock. Okay, start with the market today again. Good comeback today. Same song, second verse. This is what the market does. Every dip is being bought today.

[00:14:35]:
NASDAQ led the way again, textbook up six tenths of 1% today. That was again our leader as far as the major index concerned. But guess what, once again the semis up 2% today. SMH semi ETF at 2%. Nasdaq up 610 to 1%. This is textbook bull market behavior. And it just continues. We shared the chart this morning in our very letter.

The Semites have now been leading the market higher in a relative stream chart that we like to focus on. Semis have led the market higher from exactly the April 7 lows. The semis, if you get the direction of the semis. If you know the direction of the semis, then you know the direction of the market. That’s just how simple it is folks. It’s not any more complicated. And this has been the case since the birth of quantitative easing in 2008, 2009 and again, semis have been leading since, since April 7th. That’s the bear market bottom and they’ve been leading Nasdaq, Nasdaq leading the market.

This is textbook behavior. This market only wants to do one thing and that is go higher today. Also again gains today. SPF 100 up half percent rose 2000 half percent. Dow Jones up a quarter of a percent. Very firm action today as well in the internals today which I just had in front of me. Here we go, quick refresh. Yeah, let me just run this quick number here.

Just basically I’ll tell you, essentially two to one advanced declines for both NYC and Nasdaq. This NASDAQ volume this late. Refresh here, let me, this is a big number here. Yeah, 80, 79.8% up volume day for NASDAQ. This is about a 62% up volume day for NYSE. We also had about 200 stocks. More stocks in 50 week high then 52 week low. The internals continue to broaden.

[00:16:32]:
Remember we’ve had multiple breath thrust, multiple breath thrust that have given us buy signals. So everything we look at, analytically speaking, all the data tells us this market wants to do one thing only and that is go higher. So we are, we are, we are. We’re loving this wall of worry for this Teflon bull market sector. Watch 10 of 11 sectors finish high on the day. Interesting. Energy stocks led today. Top performing sector up 1.8%.

Oil prices were down 70 cents a barrel. Energy stocks again, we focused on this relative strength chart as well. We went long energy stocks for the leveraged ETF last week. And because this reason like, like the gold miners have been leading gold for the entirety of the last year. Energy stocks now have been leading. Energy have been leading oil. This is a buy signal for the group. We saw it again today.

Again, energy the top Performing sector up 1.8% again 10 of 11 sectors finished higher. The only thing to the downside was industrials only down by 4/10 of 1%. Sector watch, excuse me. In our commodity watch today, commodity’s been taking a little bit of break as far as gold goes today. Down 10 bucks an ounce. Again taking a little bit of a breather, you know. Look at the stair step pattern. Pull up a chart, look at the pattern.

[00:17:51]:
Gold surges to new highs. Then it takes a maybe a day or two or three off. It just pauses and then the next move, higher, higher is coming. That’s what’s happening here folks. This is a chart pattern that is among the most bullish you ever find. Gold today done. 10 bucks an ounce at 33.44 now puts it what it right. $165 an ounce from all time highs.

Silver’s been hot. It’s cooled off a little bit here. Good to see silver playing catch up though. It won’t surpass gold, but it should play catch up. It is undervalued compared to gold here. Gold today though, however, silver down 4 cents 1% last trade, $36.65 an ounce. Copper today down 3 pennies a pound at 488. Crude oil as I said a minute ago, down 60 cents a barrel at 64.72.

And finally the day bitcoin getting ready to really break out again. I think when this breakout really takes place, you’re looking at a move to 130, 140, $150,000. Bitcoin. Right now we’re just below 110,000. Last trade, 109,594. That is down 3/10 of 1% in the last 24 hours. All right folks, that’s it for today. Hope you had a great day and even better night.

[00:19:02]:
We’ll see back here again tomorrow after the close.