In today's episode, Tyler breaks down this morning's latest look at inflation data with the Consumer Price Index (CPI). We also saw the tech sector bounce back big today, fueled by better-than-expected economic data and good news for the semiconductors. Additionally, he covers likely upcoming Federal Reserve Policy changes and the potential for a big move higher in stocks. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Wednesday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great day out there today. We got, you know, a little bit of bounce back action much needed from our markets here today. It’s always nice, especially when we’ve had a pullback like we’ve seen recently. Really just the last month. It’s nice to get a bounce back day.

I’m not that accustomed to that. I usually get the big down day. So, you know, Kip, thank you for taking those for me here this week. I mean, for example, Monday’s sell off, what was that the worst day? I mean, definitely the worst day of the year so far. I think it was the worst day here. I got it in my notes here somewhere. Why not get it right? The worst day since September 13, 2022. So again, hey, thanks for covering that one for me there on Monday.

[00:01:07]:
It’s nice to get a rally back here. Day like today. Again, much needed. So I’m grateful for that as always. But it helped with the latest look at inflation that we got this morning. So the latest look for economic data here helped send our markets a little bit higher. And I’ll get to some charts here in a little bit on the podcast, but I mean we’ve seen the down sessions like we’ve seen and you get to extreme oversold on steroids. You get bounces like this in there.

You know, Kip and I have said time and time again that our view does remain unchanged here, that this is an opportunity to buy the dip. Now bottoms are messy. We’ll cover that here more in the podcast today day. But again, our view remains unchanged here, that the buy the dip remains the smart money move and we saw some good constructive action here today. So again, it began with the inflation data from this morning. CPI here for the US month over month coming in below expectations, even if just slightly and well below the previous month as well. So year over year coming down from expectations of 2.9% down to 2.8. So lower than expected as well.

[00:02:24]:
And sorry, that was for headline cpi. Then for core CPI also coming in below expectations as well. So you know, we talk about this year often with inflation, whether it’s to the upside or the downside. You know, we’re always trying not to take too much from any one report. We like to look at the longer term trend and as you might expect with the lower than expected reading, the the trend remains firmly intact of disinflation here in the US and we think will continue and ultimately lead to a deflationary environment here. We’re starting to get more and more evidence. I mean, over the weekend we just got more evidence out of China that they are seeing more deflation here. Their PPI has been in deflationary territory.

CPI was there, got back out of it briefly and is now back into, you know, negative inflation deflation in China. And we continue to expect China to export that deflation, not just here in the US but globally as well. And you know, a pause on that note there, that with that, you know, we would expect the Fed to start changing their messaging now around the pause and more clarity towards when the next rate cuts will be. We’ll have to wait and see for the Fed here. But with that, I mean, when you think about what’s happening in China and the rally we’ve seen in their markets as well, not just in China, we’re seeing it in Europe, you know, the right at or near all time high. So we think this sell off continues to look like a US specific event. You know, a little bit uncertainty, which the markets never like specifically around the tariff topic. Again, I think most of that is not what the actual tariffs themselves are going to do.

[00:04:15]:
It’s the fear about what they could do and the uncertainty about the next steps forward from here. So as the market gets a little bit calmer around the tariff story, you know, we expect to be right back off to the races and much sooner than that really. If you look at the chart and I meant to share this on the podcast last week, if you look at the chart of Trump 1.0 and when he started the real tariff talks then versus Trump 2.0 which began on day one. Right. The S P 500 is almost on an identical path to before and once the bottom was in, it was a V shaped recovery like has really only been seen since coronavirus, you know, that March sell off from coronavirus insanity and then right back within a couple of months to all time highs. Right. It was a very similar looking V shaped recovery for the market. So you know, we very well could see that here.

[00:05:15]:
Again, Kip covered this in depth yesterday, that the move backs to all time highs, the snap back really to all time highs will be swift. And you know, at this point we’ve talked about not selling our positions and we really don’t want to miss out on, on that massive move higher which we do see coming here. So all of that considered, our markets for obvious reasons are very fearful here. We also Just saw record level put buying last week according to Zero Hedge as well. So we’re not just seeing it in the sentiment indicators but in actual in the markets as well in volume. Right. So, but the Fear and greed index, let’s go ahead and take a quick look at that one here. Foreign, let’s see, we’ll get to that chart, don’t you worry.

Still at a 20 here, you know, and it makes sense here. We’ll go ahead and just jump in to one chart here in a second. But I will say, you know, as contrarians here, we love to see this level of fear in the market. As Kip has pointed out here as well. When you see the AAII spread that we’ve seen two weeks ago, 40% spread, the market is higher 100% of the time in one, three, six and 12 months later from there. I believe that that is correct there, that 100% of the time later. So again as contrarians, we really like this setup here and I wanted to leave with the Nasdaq but we’ll just quickly touch on the S and P. Look, this chart is brutal.

[00:06:46]:
I get it. There’s a good reason why there’s so much fear. Look at, look at this right here. This is zoom in on just the last few trading sessions. We’ve now not had back to back trading sessions of gains in 15 sessions. So it’d be nice to get some follow through from here tomorrow. Obviously we want to reclaim the 200 day moving average as quickly as possible as well. But the main thing I want to point out here, look at this.

That is extreme oversold on steroids. Even Grok knows what that means now. Right? So all of our, you know, momentum, our technical momentum, oscillators, extreme oversold on steroids here. So that’s what we’re looking at again with this level of fear and that level of extreme oversold. Another reason why we remain so bullish at these levels here. So let’s take a look at the rest of our markets. As you saw there, excuse me, the S P up half a percent on the day, but our leader on the day. Exactly what you want to see.

[00:07:50]:
The NASDAQ leading today obviously has been the most beat up major index as well. The NASDAQ up 1.22% on the day to 17648. And exactly what you want to see is the semis leading up nearly 3% on the day for SMH. Big move in some of the semiconductor names. I, I’ll give you a few quotes for you here. So first and foremost the intel news that came out, intel you know likely going to be splitting up here up 17% that’s including after hours trading there on the day. But Taiwan semi today proposing a joint venture to operate Intel’s factories. They proposed an idea here for Intel’s foundry division to be operated by Nvidia, amd, Qualcomm and Broadcom.

I’m no real details here exactly yet on how that will be split up or exactly what the plan is here but that’s according according to Reuters today and that helped chip stocks lock Nvidia up 6 and a half percent on the day. Like I mentioned, intel up over 16 per 16 and a half percent now as well. The other chip names looking very strong here. So good to see the semis leading. We want to see more of that going forward from here. We think we will. I mean for all the fears out there, we can’t forget that just a month ago we were talking about spending half a trillion dollars in increased capex for tech companies in 2025. We still have that coming, right? We’re not even through Q1 here yet.

[00:09:29]:
You know I had a fantastic conversation on Charles Schwab’s network Yesterday on Trading 360 with Nicole. I’m, I’m sure I’m gonna butcher her name so I won’t try it here just, just yet. Excuse me Nicole, sorry Nicole, forgive me for that one there. I haven’t said it a whole lot of time so I’m not gonna gonna butcher here but we had a great conversation about where tech stocks are right now and the chart that we’ve gone through here. A lot of the comparison to the dot com melt up. You know of course these pullbacks do not feel good when we’re in the middle of them and a lot of fearful signs, a lot of good reasons to be fearful out there. But as contrarians you have to look at those as bricks in the wall of worry. And the wall of worry is you know exactly what it sounds like.

It’s, it’s tariffs, it’s inflation, it’s interest rates, it’s World War 3, you know, Russia, Ukraine, Israel, Hamas, Israel is all of those things, right? All very scary, very real things that are out there. But the market’s a discounting mechanism. It’s not reacting to today’s news, it’s reacting to the outlook what could happen in the next six to 12 months. So as contrarian again you look at those factors as bricks in the wall of worry and the market loves to climb A wall of worry. So again we want to get back to seeing more of that here and for a little while there we saw some reaction and lately where good news has not been reacted to quite as positively as it should have. Right. We want to get back to an environment where bad news is looked at as good news. All right, so to wrap up for our major indexes here on the day, the Dow was down on the day down 2/10 of 1% but small caps were able to finish higher on the day, up 0.14% on the day today.

[00:11:19]:
Next up here, looking at our internals on the day today. Oh, sorry, I did want to, I guess I did show the chart, the chart there of the S P. All right, so yeah, we’ve, we’ve taken a look at it. Extreme oversold. Good stuff there. The internals today, pretty good numbers here. Excuse me, no massive beats for the internals today, but solid really almost across the board. Advancing stocks, beating out declining stocks on both the NYSE and the NASDAQ.

52 week highs lows after a sell off like this as you might expect, did come in negative. This is a bit of a lagging indicator and also cumulative throughout the day. So we did see a little bit of a sell off this morning and rally back from our major indexes. So a lot of that could be from at the lows of the day. Again a cumulative number there but not as bad as we have seen recently. We wanted to see continued improvement there but then volume back to positive levels for both the N.Y.S.E. and the NASDAQ. NASDAQ just shy of 2 to 1 positive.

[00:12:24]:
But I would say that was our bright spot, the best factor there. And again we want to see, we’d like to get a nice, you know, 70, 80% upside volume days is really, that’ll be, you know, a sign of confirmation that the lows are just about in or, or are in there. All right, next up, taking a look at our sectors here on the day. We finished with five out of our 11 sectors higher on the day, one unchanged and so five negative as well. We were led by tech, as you might expect with that rally in the semis followed by communication services which is essentially a proxy for tech as well, made up in a big part by Meta and Google which had good days today as well. The magnificent seven, you know, outside of Apple, really, really had pretty good days today. They need it as well though. It’s time for the generals.

They’re, they’ve pulled back from overbought levels. Time for them to resume their leadership role as well. Next up for our lagging sectors on the day we had consumer staples, healthcare and materials. So again, not bad. Those are kind of the value names. These, this is a bit of a risk on look from our sectors here today, which was good to see. We did see a slight bounce back in yields today. Of course, it’s been a, you know, a good move lower from the highs in yields.

[00:13:43]:
Very similar move. We’ve talked about this here a lot. Very similar to move to what we saw in Trump’s first term from yields which peaked right before the inauguration and then moved lower. Same thing with the US Dollar, peaked right before the inauguration and then moved lower. We’ve seen the same thing as yields from that 4.8% on the 10 year in early January, you know, yes, we’ve seen a bounce back. We’re still only at a 4.31 here. Dollar again has been selling off here as well. Got a little bit of, you know, sideways action really here today.

We do expect the move lower in yields and the dollar to continue. All right, finally here for today, our VRA commodity watch. Let me get a quick refresh of my screens here. All right, so I do want to share a chart of gold here just to show really how good it looks on a chart here. So but we don’t get the latest numbers here in stock charts usually it usually updates, you know, a couple hours after the close or so. So gold right now is up from this is yesterday’s close, 2920 there. We’re now at $2943 an ounce for gold. But here’s what I wanted to point out in this very good looking chart here.

[00:15:06]:
Right up into the right, exactly what you want to see. But we are nowhere near overbought levels for gold. Or let me point out as well exactly what you want to see today. That was gold up 710 of 1%. Gold meers were up a little bit more earlier in the session. But same point here. Very good looking chart, nowhere near overbought levels. Right.

So good to see we remain very bullish on this group, both gold miners and gold as well over the long term. All right, so for our other commodities on the day today, silver higher on the day as well to 33.72 an ounce. Copper now up to $4 and 81 cents a pound. Let me see here where we’re at on copper. You know the Gazette. Let’s see here at the highs of the day today, it was a new high for 20, 25 in copper at 490 a pound. The other previous high for the year was 485 a pound. But you have to go back to May of last year to find a higher price in in copper.

[00:16:18]:
And again shows the strength of the global economy. Copper goes into so many consumer goods, industrial goods, Right. So they call it Dr. Copper for a reason. When it’s in high demand, prices are going up. Means people are making things. So good to see copper prices on the rise as well. Then oil, you know, higher today, but still below 70 a barrel at 67, 69 cents a barrel.

And finally here for today, let’s take a look at Bitcoin now, slightly higher on the day. Let me see if these numbers. Sorry, just messing with the new system here. You know, see all the ways of looking at things. So same numbers between the two here. Bitcoin now up 4. 10 of 1% on the day. $83,282 of Bitcoin. As you know, this is another group that we do remain very bullish on as well.

Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcast every day at the market close. You can sign up@ vraletter.com click the podcast link at the top. Again, that’s v r a letter.com Again, the podcast will be at the top. You’ll find our transcript and comments there as well. So thanks again for being here with us. Until next time, we’ll see you back here tomorrow for the close.