In today's episode, Kip Herriage is back from his trip to Las Vegas, kicking off the show with insights into the buzz about Las Vegas's booming economy. Kip also sets the stage for a discussion on the Federal Reserve's monetary policy and the tricky issue of interest rates – do they need a cut rates, or is the 'higher for longer' reality setting in?

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Kip Herriage here with the Daily VRA Investing Podcast.

Hope you had a good day today. I want to thank Tyler for staying in for me here for the last three days doing these podcasts. Good to be back. I was at a conference in Las Vegas and actually had some meetings with some due diligence, some of the companies we follow here, and you were looking to possibly invest in and recommend. Gotta tell you, just off, right off the bat, what a.

I was on Charles Payne show today on Fox Business. I talked about this. Las Vegas is on fire. Anyone that lives there just tells you it’s crazy. The locals that have lived there forever said they’ve never seen anything like it. But I think that’s a microcosm what’s happening around the country. And I know that’s still not a mainstream message. I think it’s going to be, and I think it probably speaks to the battle that the Federal Reserve has right now in trying to cut and trying to cut rates, because on the one hand, we don’t have 9% inflation anymore.

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Well, we have 3% ish inflation right now. So our rates are restrictive at these levels. Yeah, rates are restricted. They can come down. The innovation revolution that’s underway and the disruption that technology brings is going to bring disinflation. Long term, long term disinflation. But right now, we have this short term problem of should they cut? Well, you told me based on what the markets are doing, based on how the economy is doing, do you think they should cut rates? Do you think they need to cut rates? I know the housing market’s frozen up a little bit, but again, maybe it’s just a realization that we’re in a higher for a longer period. My first mortgage was 11%.

I did it because that’s what everybody did. So times have changed. Now maybe 7% is the new normal. But again, I think the longer term thing is what the market’s picking up. It’s very unlikely that there’ll be rate increases because inflation will continue to fall. Disruption will ensure that that’s the case. And so there won’t be a reason for the Fed stay here. And frankly, it is a little bit of a Goldilocks setup.

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It just is where we have a Fed easing even as the markets are marching higher and the economy is soaring. That’s a very unique setup. But it also sounds very much like the roaring 2020s, does it not? And that is where we are. That is the market that we’re in. Yesterday was ugly. Of course you got the bad CPI data. Today we got a bet. A small, just like yesterday was a small lost to the official.

In other words, it was slightly hot. Just slightly, just barely slightly. You take out shelter and insurance, which of course cost been raging. I think that cycle is almost over as well. We take those two out and you’ve got sub 2% inflation. Today’s PPI was a slight beat. The markets liked it. Let’s talk about that.

First, the Nasdaq today, a sharp reversal today, finishing up 271 points. That’s 1.7%. More importantly, of course, if you listen to us, you know where I’m going with this already. It’s a semis. Semis led again today, up 2.2%. So you get semis up 2.2, Nasdaq of 1.7. Everything else fell in line. This is what we talk about.

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We say textbook market action. That’s what today is. This is the overall theme of this bull market. It has been textbook now for what, 1617 months. And we believe it continues to be sf 100. Today was I came in second place behind Nasdaq, up seven tenths of 1%. Again at 38 points. Rose 2000 up seven tenths of 1%.

Good day for small caps. Dow Jones only indexed lower, held solid gains most of the afternoon. Still finished down just two points on the day. Not 2%, just two points. And the VIX. And now back to a 14.91. It was down almost 6% today. Ten year yield again, it’s marching higher, 4.57%.

But as I said on Charles’s show today, as you heard us talk about here often, we think perspective helps. We think perspective helps. And right now that perspective is telling us that in the 1995 to 2000 melt up, which is what we see this period is most similar to the average yield on the ten year was better than 6% with bouts higher than 7%. And it didn’t stop Nasdaq from going up more than 500% in that five year timeframe. So I don’t, I just, I think the evidence is, is telling us the markets don’t care. The markets have figured this out and they just don’t care about sticky inflation and sticky rates. This market’s going higher because of the economy is strong, earnings continue to grow. We can get a snapshot of that start tomorrow morning, of course, when banks begin reporting Q one earnings.

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And then of course, the star of the show once again is going to be tech. It’s going to be AI. And again, the innovation revolution powers on. And I was in Vegas, there was an AI conference going there, too, a Google AI conference going on at the same time. And I got a chance to talk to a lot of those guys staying at my hotel, and they’re like, things are coming that are so cool. And it might seem minor to some people, but it’s going to have disruptive change. There’s that word again, disruption. And they have 20 new, they have 20 new divisions.

Not the right word. 20 new subdivisions, if you will. That did not exist three years ago. That now exist at Google, and that’s happened all over the country. That’s job creation. Those are jobs being created that pay extraordinarily well. So when you hear someone talk about the job losses that this innovation revolution is going to bring with it and job losses from disruption, I think, don’t believe them. I think they’re going to be proven wrong again.

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There’s never been a period in this country, probably in the world, where disruption and innovation has created fewer jobs. Somehow it always creates more jobs. And again, I think the market’s telling us this, the price action is telling us something special is going on here, folks. We’re locked in. We’re going to stay locked in. We have a very unique. It’s a very unique time now. And like, for example, the viewer portfolio, you know, gold today, another all time high, almost $2,400 an ounce.

Matter of fact, just a couple dollars announced below it. Now, gold is a freight train. Silver, same thing. Bitcoin freight train. Right. Just under 71,000 as I speak here at the same time. So these are inflate energy prices, of course. Oil has been marching higher energy stocks doing very well.

So you’ve got all the signs that there’s inflation taking place at the site. At the same time, you have signs that show the economy is really in good shape. So it’s kind of a two pronged approach to beating the markets. Number one, we got to beat inflation, and number two, we got to beat. We got it. Which means you got to beat the money printers. Right, the money printers, Jay Powell and friends. So we got to beat them on one hand.

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On the other hand, we want to beat what the SPF hunter is doing. We want to beat these individual indexes. And to do that, you need exposure to individual securities and you need exposure to leverage. And that’s what we use here at the VRA with the various leverage ETF’s. As long as you can identify the major trend and you think you’ve got a good idea of what the game plan should be for the market. It is the perfect time to use leveraged vehicles like this and certainly to use growth stock specifically in the tech area. And that’s what we’ve been doing here. Let’s get right to the internals today.

These again, we had a major rally today from a bit of a sloppy open internals today. A little mixed, but still positive across the board as they had been of late. Advanced decline, slightly positive. NYC, also slightly positive. Nasdaq volume, pretty solidly positive on Nasdaq. Not two to one, but one and a half to one volume on the slightly negative four. NYSE. And we did have more 52 week lows than we had highs today.

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We don’t pay a whole lot of attention to that on a day to day basis. Of course, the trend has been much better, but it’s a mix of positive day today for our, for our sectors and for the internals of the markets and our sector watch today, slightly negative. We had five sectors finished higher, six finished lower. Led to the downside by financials down six tenths, 1% again, bank earnings start tomorrow. Healthcare, down half percent to the upside. Technology again leading the way, up 2.4% today. Communication services, which is essentially tech, up 1.1%. And consumer discretionary also up 1%.

Pretty solid day today, though, in our commodity watch. And this is where it gets a little fun, because here we go. The freight train. Gold, as I speak, up $44. Now, since almost 1.9% higher on the day, these are becoming a little more normal, which tells you gold has clearly broken out. As we’ve been telling you, the dips are going to be very short lived. Keep buying physical gold and silver. And the miners, of course, gold right now, last trade, 23 94 an ounce, again, up 1.8, almost 9% on the day.

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Silver today about the same, up 1.8% right now at 28.56. It actually has been outperforming gold. Long term. Gold bugs and precious metals. Bugs will tell you when silver is leading. You want to be long in this group. The other thing they’ll tell you is when the miners are leading the metal, and they have been by better than two to one many days. Three to four to one outperformance, that is another classic buy signal you want to check.

One thing I didn’t check before I started this podcast. What is the volume like on GDX? Listen to this. It’s still unbelievably horrible. Volume of GDX today is 22 million, 22 million shares. Here you have gold essentially going parabolic, had a little bit of a shakeout last week, this week on the CPI data, but gold essentially has been going parabolic now from the lows of the end of February, and yet there’s no volume. I cannot tell you how bizarre this is. When is the big money going to show up? Because it’s not here yet. What’s it going to take? It tells me the big money does not believe this move, or certainly they don’t think that the miners are cheap and that they’re going to play serious catch up.

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Because when you have volume of only 22 million shares a day, remember this conversation, because when GDX, the gold miner ETF, when GDX starts trading 50, 60, 70, 80 million shares a day, and that’s coming, we’ll be in true parabolic mode. That’s the VRA prediction for kip, heritage prediction for you today. And you absolutely want to stay long and strong in this group because the miners are dirt cheap, trading at something like 30 year lows to the valuation of gold. The miners are the place to be for superior returns going forward. Copper today off one penny a pound at 426 a pound. Just great articles out there from people like Bob Friedland, one of the top prospectors for base and precious metals and miners over the last, well, really, of our lifetime, Bob Friedland, it’s just literally pounding the table on copper now, predicting that prices are going to soar from here. Doctor, copper doing its thing also today, crude oil today took a little bit of breather back down to the 85 50 range. That’s down sixty seven cents a barrel in the day, just about seven tenths of 1%.

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And finally, on the day, crypto. Again, if you’ve been with us here, you know, we love cryptocurrency. We love bitcoin specifically. Last trade, 70,500, puts it just right at $3,000 of bitcoin from all time high. Got a market cap now of just under 1.4 trillion. I can just tell you the having now is, what, eight, nine days away? Approximately eight or nine, depending on how they finally work this out. And they do the having, which, of course, is going to make it twice as expensive for bitcoin miners to mine it. And it’ll produce only 450 new bitcoin a day mined versus the current 900.

And again, with the demand coming in, this is, again, another freight train. It’s a one way ticket higher, because this is, I think, a key point. Yes, we know about the SEC approving these bitcoin ETF’s of course, that was massive. Yes, we know about the upcoming halving. They’ve only had three days so far. This will be number four, one every four years. The end result has been massive moves higher immediately following these havings. Okay.

[00:12:38]:
I mean, several thousand percent average gain after these halvings. But I think the real story, frankly, is about who’s not buying yet. I talked about the miners a minute ago, almost no volume coming in. What’s going to happen to bitcoin demand when the approximately 80% of financial advisors, investment firms, hedge funds, sovereign wealth funds, governments, what’s going to happen with this with 99%? What’s going to happen when these 80% just in the US financial advisors are finally able to recommend bitcoin? They can’t right now. 80% roughly cannot. Not been approved yet by the compliance department. What I can tell you, and this is backed up by a lot of hard data and evidence, is that that approval process is underway. Small firms are getting the approval first, as always, big firms like Vanguard, like JPMorgan, these firms take, take longer and they make sure they get all their compliance and legal matters in place before they allow their invested advisors to start recommending it.

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But that’s coming, that’s pent up demand. That is just cannot wait to buy bitcoin. Patting the table, folks. As you know, we are long this group again, after taking pretty nice profits here in 2021, we’re back in from 28,800 again. I’ve on record saying I believe within 30 days of the having, bitcoin would be over 100,000. And folks, if that’s right, I think there was a possibility for a move to 250,000 this year in bitcoin. I think this move higher is going to accelerate as demand starts to really come rushing in here. Certainly following the bitcoin having.

All right, folks, hey, always appreciate you listening. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.