In today's episode, Tyler breaks down the stock markets reaction to the latest FOMC meeting and press conference from Fed Chair Jay Powell. He also covers the slew of big tech earnings, including beats from AMD, Qualcomm, and Meta that sent semiconductor and tech stocks soaring today. Tune into today's VRA 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.

It was a good, good day for our markets today, which started off up in a big way today after we had earnings yesterday, namely AMD, which was a big and after hours trading yesterday, finished up today as well after reporting a beat on earnings yesterday. And that led the semis higher as well. Semis rallying in a big, big way today as well. So we’ll cover that here.

We’ve also got more earnings that came out after the close here today that we’ll be covering. And of course, what all eyes were on going into the end of this month. The latest FOMC meeting which took place, wrapped up today, culminated in Jay Powell’s press conference today. Now, going into the meeting, we’ve said for some time here that the Fed was behind the curve. They’ve been behind the curve for going back a few years now. Remember the whole transitory debacle when they said inflation wasn’t really there, and they said, oh, inflation is here, but it’s a good thing. And then they said, oh, well, it’s higher than it should be, but it’s just transitory, right. They missed the mark on to the upside for raising rates.

[00:01:39]:
They waited too long. Now they’re making another major policy error here by waiting longer than they need to. And the proof that we have for this continues to be yields. We have a ten year yield down again today, hitting a multi month low, its lowest level since March of earlier this year, down now to a 4.1%. Essentially. If anybody thought that Jay Powell had any hawkish type of rhetoric out there today, then the ten year was calling his bluff. But that wasn’t what we got from Jay Powell. And even though we might be risking another major policy error here, he did what he needed to do today.

But at the end of the day, as we’ve seen them make mistake after mistake, you could tell that he really wasn’t too worried about making a mistake. It didn’t seem like at the end of the day, it’s not his job that’s at risk, it’s your job that’s at risk. Kip talked about this a little bit yesterday as well. You remember, you know, as the Fed was raising rates, saying that there’s a painful period ahead of us during this, this rate hike cycle for Americans. And what he’s saying is, in order for us to get the inflation that we caused under control. Sorry you have to lose your job. And no more emotion than saying it just like that, you know. So we have no problem calling out yet another major policy error under the Federal Reserve, under the leadership in tutelage of Jay Powell here.

[00:03:19]:
But today we’ll focus for the rest of the podcast on his performance today, because, like I said, not a bad performance from Jay Powell today. I mean, he didn’t really have that hard of a job to do, so you can’t give him too much credit. But what was surprising is that as Jay Powell began speaking, the market actually went higher. He usually has the opposite effect on the market. It was when he stopped speaking that we had seen our highs of the day, which I’ll get to in our market action here in a little bit. But during the press conference, you know, there were some revisions to the statement, you know, identifying that we have seen some weakness in labor market inflation is trending in the right direction. And then the real notes came from his press conference, which overall was more dovish than the press statement really was, you know, saying that downside risks to their employment mandate are real now. So, yes, rate cuts are possible.

Potentially several rate cuts are possible. One other factor as well, they’ll be interesting to see. We’ll get the Fed minutes back in August, and we’ll be able to see the latest look at the Fed’s dot plot. Because what he didn’t say today was whether or not the decision was unanimous. He said that, you know, there was a real discussion back and forth. So, you know, now that not all of the voting members were on board with staying put here today, it’ll be interesting to see how many of them argued for a rate cut at this meeting. So that’s what most people will be looking for as we head forward from here. We’ve got Jay Powell speaking at Jackson Hole in August, and then the next Fed meeting will be in September.

Tyler Herriage [00:05:15]:
That that meeting will wrap September 18. As of right now, the odds sit for a 100% chance of a rate cut, at least according to the CME’s Fed watch tool. And what’s interesting about that is that, yes, it’s 100% chance of a rate cut. That’s an 87.5% chance of a 25 basis point cut. But there’s also a larger and increasing probability for 50 basis points worth of cuts happening in September. Now, I think that it’s been telegraphed enough to where 50 basis points wouldn’t freak out the market too much. We think it will probably be kind of a slow and controlled type of move from Jay Powell. He’s not big on surprises.

When they, at least when they’re making policy decisions, they telegraph him pretty well while in his press conferences is where he can be unpredictable. So at the end of the day, he said that they’ve made no decisions as of right now for future meetings, including September, that they will remain data dependent and not data point dependent. But that’s a point I think deserves a little bit of talking about here because we do make that point here often as well. Jay Powell took a page out of our book on this one. You know, we’re looking at the trend here when it comes to inflation, when it comes to yields. We said it from the very beginning, inflation was never going to go down in a straight line, just like yields aren’t going to come down in a straight line. So it’s tough, especially with all of the manipulation in government data out there. It’s tough to take too much from any single data point.

[00:07:01]:
We want to zoom out and take a look at the trends now. We don’t mind getting a good data point, though, and getting a nice market rally from it. No problem here with that at all. But when asked why not just go ahead and cut rates today, you’ve all but told us they are going to cut rates in September. And he didn’t really have a great answer for it, just kind of repeated himself. You know, they’re, they’re getting closer to the point, but they’re not at that point yet. And basically said that, again, data dependent. They want to see inflation continue moving in the right direction and that the labor market, what was interesting is he kind of, he didn’t say that.

Well, what, here’s what he did say, basically, is that the labor market is weakening and if it were to remain weakening, then they would cut rates. It was, the interesting part about that was he turned away from saying the labor market has remained strong, resilient, all of those things that we’ve heard him repeat so many times in his meetings, he at least didn’t hone in on that as much as he has in the past. So overall, this was about what we expected from Jay Powell. If you listen to my podcast on Monday or Kips yesterday, you know that he would come across with the dovish tone, likely would say that they would remain data dependent. And again, he didn’t explicitly say that they would be cutting rates in September, but kind of gave a little bit of the wink, wink, nod, nod kind of look there that we’re going to do it. And again, the CME’s Fed watch tool agrees to with a 100% chance probability, excuse me, of a rate cut in September. So now we look to the jobs number on Friday. We’ve seen time and time again here in jobs numbers weakening.

[00:08:53]:
Right. We’re not seeing negative numbers, but we are seeing a weakening in the jobs market. Again, heavily, heavily manipulated data. Where we’ve seen the increase in jobs is coming from government work. It’s coming from part time jobs, is coming from the services sector. You know, these aren’t all the jobs that people dream about here. So we’ve also seen average hourly earnings start to decline, still managing in the short term here to outpace inflation. We’ll see what we get on Friday, though.

That’ll be a big data point to watch, will be average hourly earnings. All right, so turning from there now, we don’t have to worry about Jay Powell. I’m sure in the next week or two we’re going to get all of the Fed speakers in front of us. You know, that’s more noise than anything. Yes, it has the ability to affect the market, but again, more noise than anything. So the next big move from the, from Jay Powell will be a speech at Jackson Hole in August. All right, before we get to our market action on the day, let’s take a look at some of these earnings because we are still in the thick of it here. Again, 34% of the s and p 500 reporting this week.

We did have AMD beating yesterday. We had Microsoft, which was lower in after hours trading, despite some good metrics in their earnings yesterday, was able to finish well off the lows. Very different kind of earnings day today. We had Qualcomm reporting right after the close, beating on both the top and bottom line, reporting revenue and earnings per share above expectations. Some pretty big beats. The stock was up 8% on the day to day. So that’s going in to earnings, was up 8.39% now. And after hours trading up another 6.6% right now.

[00:10:51]:
Hey, this makes up over 4% of the semiconductor ETF, smh. So we look for some, some continued good action from the semis tomorrow. Again, the semis were led by AMD today, finishing up a massive 7.6% on the day, or, sorry, they were led by AMD’s earnings. But Nvidia also really stole the show today. Up a massive 12.8%. Keep in mind, this is a nearly $3 trillion company, up 12.8%. That’s a massive move. And again, the semis up big our pick here at the VRA, we’re, if you’re a member here, you know that we love leveraged ETF’s.

So a little freebie here. SoxL up 19.76% on the day today. Really good action from the semis, but we’re not done yet after that. We had meta or Facebook reporting after the close today. Also beating on earnings per share and revenue. But the big number here, net income up a massive 73% year over year. The stock also up big and after hours trading. Let’s get a refresh, see where we’re at for meta, up 4.36%, adding on to the two and a half percent gains that it had today as well.

[00:12:18]:
So good earnings today and we’re not done yet. Tomorrow we’ve got a big day. You’ve got Apple, Amazon, intel and Coinbase and more all reporting after the close tomorrow. So stay tuned. We’ll be covering those here on the VRA investing podcast at the close tomorrow. All right, so let’s take a look at our market action on the day to day. A lot of green on the screen, finished higher across the board. Didn’t quite get the smart money hour we would have hoped for.

I mean, we had the dow at one point today, I believe, up over 400 points. We still finished up 100 points, a quarter of 1% at 400 or, sorry, 40,842. We’ll start from the bottom up here. After that, we had small caps, up half a percent on the day to 22, 54. The S and P 500 up one and a half percent on the day to day. Big update for the S and P today to 5522. And lastly, the Nasdaq also was up bigger earlier in the session, still finished up 450 points on the day, but it was up over 3% earlier, finishing up 2.64% at 17,599. What we really like here was, is that for the Nasdaq and the S and P and the semis, we are at oversold levels still here.

[00:13:48]:
This is, you know, when we talk about buying the dip, we’re in the throes of it right now. So really healthy looking charts now that we’ve looked to have bounced off of support, support levels here for the tech, for the semis as well. So good to see. And we’ll see what these earnings do for tomorrow’s action as well. Also today, I’ll point out a lot of people earlier in the week, Kip and I were talking about this as well. Last week was this spike we’ve seen in the VIX. The VIX down 7.5% today, now at a 16. We also saw the fear and greed index getting back to fear levels yesterday, still in neutral territory.

So we’ve seen a little bit more bullishness out of the sentiment indicators. Nothing, though that we would see is overly bullish here. We’ll get the AAII investors sentiment survey tomorrow morning as well. We saw a big decrease in bulls last week. We’ll see if we get more of that this week as well. All right. Also, I want to point out for the Dow today, the transports. One area that we’ve said we’ve wanted to see improvement from for some time, getting right back to a 52 week high today, finishing up just over four tenths of 1%, was up more earlier in the session, but that is its highest level since August of 2023.

[00:15:11]:
So just right at a 52 week high here. So yes, overall, good day today and a good time to reemphasize our VRA bottom line because this has been our base case here from the lows of the bear market of 2022. We saw the lows in October of 2022. We went aggressively long stocks at the time. It was right when we came out with our new book, or our latest book, I should say. It’s been about almost two years now since we came out with the big bribe, where we stated that we are in the roaring 2020s. We think that remains the case and that this is a structural bull market of size and scope, as you hear us say often. It’s led by the innovation revolution and, of course, our five big bribe megatrends.

You can go take a look at those. Join us for 14 days@vraletter.com. with your free trial, you’ll receive a digital copy of our book as well. If you want a physical copy, you can find it@bigbridebook.com. but to drive the point home about this generational bull market, this is the bull market that we see as having the potential to take the Dow Jones above 100,000, taking the Nasdaq above 40,000. Again, we wrote this two years ago when the Dow was at 24,000, not 40, when the Nasdaq was at 10,500, not 17,500. That’s how big of a move we see this being. And with that, buying the dip remains the smart money move.

[00:16:50]:
We’ve said it here again for two years now. Nothing has changed in that regard. All right. Next up, taking a look at our internals on the day to day. We got pretty good numbers here today, a little bit better earlier in the session before our markets peaked, but overall finishing with good numbers, we got more advancing stocks than declining stocks on both the NYSE and the Nasdaq. 52 week highs and lows coming in very strong today with the combined let’s see here. Excuse me, my numbers just got to usually get a refresh in about the last 30 minutes of the close or so. So we finished with 662 stocks hitting 52 week highs.

That is a combined NYSE and Nasdaq to just 119, hitting 52 week lows. Good readings today day. Lastly, volume was a little better earlier in the session. We had 78% upside volume on the Nasdaq. Earlier in the session we had over 70% upside volume in the NYSE as well. We finished a little bit below those levels, but still well over two to one. Positive on the Nasdaq today and positive on the NYSE as well. Next up, looking at our sectors on the day today, we finished with seven out of our eleven s and p 500 sectors higher on the day.

As you might expect, we were led by tech today, followed by consumer discretionary and then communication services, while our laggards on the day were healthcare, real estate and consumer staples. So not a bad way to see the trading play out today. The defensive sectors lagging as they should on a day with tech really rallying now. As mentioned, the real estate sector finished lower, but home builders did finish higher on the day today, even if just slightly hitting an all time high here. HGX, the housing index finished lower on the day, but Intraday hit an all time high as well. So good session all around there. And finally here for today, our VRA commodity watch. A lot of green on the screen here as well, including an all time high from from gold here or just about right at that level.

[00:19:12]:
My screens are telling me it is below it. But anyway, gold now up 1.7% at 24. $93 an ounce. Good day for gold. And just what you want to see, the gold miners leading the way up 2.6% on the day today. Next up, silver up even more, 2.23% at $29.16 an ounce. Copper now up 2.73% to $4.19 a pound. And oil with a big day today up over 5% to $78.61 a barrel.

And finally here for today. Bitcoin has spent some time in and out of positive territory today. Now down 2.2% to to 64,665 a 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 @ vraletter.com click the podcast link at the top, and we’d love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.