In today's episode, Tyler recaps an exciting week of market action. Whether it was earnings, the FOMC meeting, or today's jobs report, nothing seemed to be able to stop our major indices from going higher. Join us as we break down what we saw this week from our markets and, more importantly, what the VRA Investing System is telling us going forward.

Dont look back because the market is closed. Good Friday afternoon, everyone. Tyler Herriage here with you for todays VRA investing podcast. Hope everyone out there had a great end to their week this week. Hope you had a great Friday out there. If you were watching the markets, if you’re heavily invested in this market, you likely had a very good end to the week here as well. And what wrapped up a strong week here, another strong week, making back to back weeks here for our major indexes, at least that’s for the Nasdaq. After four weeks of losses, we’ve now got back to back weeks of gains.

The Dow three weeks in a row here. That is now a streak for the Dow. If three makes a streak, the Dow is there. So good end, higher across the board for our major indexes here and our favorite sectors as well. And the megacat names really the generals here, putting in some work, you know, really earning their stripes on a day like today. But that isn’t even the most bullish part of today’s action. As we talk about here often, it’s not the news that matters. It’s the market’s reaction to that news.

[00:01:23]:
And today would be the market reacting positively to a lot of people would say negative, I would say mixed news on the day. But if everyone else thinks it’s negative, it’s a sentiment aspect to it, then, yes, that is seen as bad news. So the market going up today on bad news is just another sign here of underlying strength and the fact that this is a new bull market. And we still say a new bull market because we’re only in year two here of this bull market, a stat that we’ve referenced a lot here going into this year. Kips talked about it some this week, but bears repeating here again that no bull market going back to World War Two that’s gone on for at least one year, did not go, did not go down in their second year. So every bull market that’s gone on for one year has gone on to complete a second year as well with significant average gains. I can’t remember them off the top of my head here, but today that somewhat negative news was the jobs report here. And now let me put a little disclaimer out there that as red pilled american patriots here, that we are at the VRA will never root for a weak jobs number because that’s like betting against America.

And that is the cardinal sin there. We don’t ever want to bet against America, our country, the greatest country in the world. And what will continue to make into an even greater country here. We, the people have the ability to do that, but we don’t bet against America here. So, you know, getting negative news on a jobs data is always a little bit bitter there. In this case, when we have the Federal Reserve reacting to data like this, you could at least call it bittersweet. And the bittersweet part aspect of it is, yes, the US job market is slowing, albeit at a slower pace than most people really think here because this is still growth. This wasn’t a negative jobs number, right.

We didn’t come in with negative 300,000 jobs on the month. No, we just missed expectations. And the expectations were for 238,000 jobs to be created. We came in at 175,000 jobs created on the year. But we’ve been talking about this for some time that job growth has been slowing. Yes. We still have a strong economy here in the US. So you might ask Kip Tyler, how can you say that? We’re going to continue to see softness in this economy, but it’s still rock solid? How is that possible? Well, it’s when we’re still creating jobs every month, we’re still seeing average hourly earnings increasing here as well and starting to outpace inflation, too.

[00:04:18]:
Right. But with that from whether it’s Biden’s economic policies or the restrictive stance of the Fed, we are seeing a economy that is starting to slow here. I just want to make it abundantly clear here that that doesn’t mean the same thing as an economy that is crashing. I think I’ve tried to make that point here a few times today. That’s kind of the takeaway point here. So nothing crazy here in this jobs report? Yes, it is another sign the economy is weakening. I remember what I was going to say is that have you been paying attention to the data, and not just the data for the month, but what they’ve been doing to previous reports. I believe it’s every single jobs report for about the last year now has been revised lower in the following month’s reading.

Right. So we’re seeing it in the data, if you really drill down in on it. But what we saw from today’s is that this is a Goldilocks number for the Fed. Not too hot, not too cold. And it was likely leaked. But ahead of this morning’s release, you heard Charles and Kip reference that in Kip’s interview on making money on Fox Business today. If you didn’t get a chance to see it, hopefully you recorded it. We’ll try to have a recording up on our Rumble channel channel here over the weekend as well.

But the reason why I say that is because going into today’s action, Dow futures were up big. The Dow was up over 300 points before the jobs number came out. And then after the jobs number came out, it was off to the races. Dow shot up to over 500 points. This is still in futures action. And yields just fell off a cliff here for their third day in a row. Now, they did get a little bit of those losses back still. The tenure down over one and a half percent on the day now at a 4.5.

[00:06:11]:
The vix collapsing here on the day, down 8% to a 13 now as well. So a lot of ramifications from this jobs report for now. And really what everyone’s looking at is what does this mean for the Fed looking forward. So first, let’s take a quick step back here just to yesterday. And really maybe two days back, we had Jay Powell’s FOMC meeting where we’ve given him an a for his performance there. You know, he stuck to the script. He didn’t go off on tangents, and he really seemed like he had control of the room, which is a rarity for Jay Powell. But yesterday’s strong session, even before Apple’s earnings, was the indicator that we needed from the market to tell us that investors didn’t mind anything that Jay Powell and the Fed had to say and even interpreted it as somewhat dovish.

Right. He really shot down the idea of the potential for future rate hikes. That was a big concern on everyone’s mind. Now, the financial mainstream media can take that away as a talking point because Jay Powell just said himself, not looking like the plan. And on that news we’ve seen, like I said, the ten year down, three days in a road. Now, the dollar also has been down recently as well. And yesterday we got outside days from both the ten year and the dollar outside days to the downside, which is a technical reversal signal, bearish one here, which is bullish for the rest of the market when it’s bearish for the US dollar and the ten year as well. So again, really a Goldilocks number here today.

And already with that right to start the week, we had people saying that the Fed was going to have to hike rates again this year. Now by the end of the week, we have people again calling in our camp of two to three rate cuts this year. And once again today, the probabilities for a rate cut actually rose from where we were at the beginning of the week. We just saw a steady increase. And now, once again, the expectation is for a rate cut ahead of, or, sorry, the odds of a rate cut ahead of the pin. The presidential election in November have started to increase. We’ve said it for some time that if you think the Fed is beyond goosing this market ahead of an upcoming election when their guy is on the chopping block here, you know, we’ve talked about this here. Often the Fed skews heavily democrats, say 80% of Fed board members are democrats.

[00:08:51]:
Right. This is no fair representation there at all. So if you think that they’re above that, if they’re too good for interference on that level, we’ll just say simply that you haven’t been paying attention. We know Jay Powell is very much rooting for Joe Biden here, thanks to a few leaks out from James Okeefe on that exact topic. Moving on here, though, let’s get off the Fed, because hopefully I said this last week on the podcast, that looking back on this week, you’d want to look at the Fed meeting as a nothing burger and the jobs number is nothing but positive. And really, the focus would be on earnings. Now it looks like in a few weeks, we’ll look back and see exactly that because we got some good earnings here to close out the week, Apple, a little bit weaker than expected, missed on iPhone sales, iPad sales, that kind of stuff. But the big news was the announcement of the largest share buyback of all time.

Apple gapped up big on the day today. Finished up nearly 6% on the day. Remember, going into the session, this was already a two and a half trillion dollar company. To be up 6% is a massive move here. You know, you’re really not going to see one of the 20% moves from a company like Apple. This is essentially a 20% move from Apple. That is massive, massive move from a company of this size. So what does a share buyback really mean, though? It means that we’re witnessing the financial engineering that we wrote about in the big bribe playing out in real time here.

We’ve seen multiple record breaking share buyback deals since coronavirus insanity. We’ve seen from companies like Apple, like Meta, like Google and more. Outside of just the tech giants as well, we’ve seen record breaking years of share buybacks. So again, Kip sent over a fantastic explanation of exactly how this is financial engineering. And I think that it bears repeating here on this podcast because we talk about it a lot. So here it is. What is a share repurchase program? Essentially, the shares that get bought back by a company right. From cash on their balance sheet.

[00:11:15]:
And then those shares are either retired or extinguished, which means they’re taken out of circulation. So less shares for the company on the market. Consequently, that means that each share that you have now represents a slightly larger ownership stake for everybody who is a shareholder of that company. So they’re a little happy about that. Oh, hey, I own more Apple now than I did before or whatever company it may be. All right? So that makes sense. Sounds like a good thing for shareholders, right? And you’d be right. It usually has been historically very good for share prices.

But the reason for that is not because, keep in mind, it’s not because they’re creating anything new. They’re not adding more value here, right. They are manipulating future earnings. Because what this does, when there are less shares on the market, your earnings per share rises, right. Your return on equity rises. It makes the company’s balance sheets look far better being divided in these metrics amongst fewer shares. Again, it does not change anything about the overall value of the company or total value of the shareholders equity. So these aren’t all bad things, right? That shareholder value will increase for nothing.

Right. Just basically out of thin air. But that’s the magic, right? It’s fairy dust of what’s really happening here. That is financial engineering, right? And you kind of think, man, if this were illegal, think about what these companies will spend it on. And I don’t mean they should be spending it more on taxes. Certainly do not think that most of these mega cap companies have big ways around taxes anyway. But if you were the CEO of one of these companies and you can’t spend that money on share repurchases, what might you spend it on? Right? Increasing employee salaries. Salaries, future R and D product projects.

[00:13:24]:
We’ve already seen Apple shut a lot of those down, right? But at the end of the day, what it does is send share prices higher. And our job here is to help you make money off of that. So regardless of how you feel about financial engineering, we want to help you make money off of it here. Because at the end of the day, we can feel any way we want about these practices. But at the end of the day, only price pays. But overall, again here, a great day for Apple, great day for our markets. And what’s really interesting about this, like I said, we just wrapped up four weeks in a row, now back to back, or three weeks in a row of gains, depending on which index you look at. And the fear and greed index now just wrapped up its 15th straight day in fear territory.

Where are investors looking right now? Right? This has been a fantastic buying opportunity, actually not the time to be selling positions. So as contrarians, we continue to look at this as a reason to add to positions. Now don’t get me wrong, there are a ton of very smart, very reasonable sounding reasons to be bearish on this market right now. I mean, I would blame no one, I mean, look who’s in office, right? But we also just had three bear markets in five years. The first one caused by the Federal Reserve. We know the Fed has the power to create bear markets to turn sentiment on a dime. They do have that ability depending on what they say. And so now when they’re the topic of discussion, the topic of most headline news, you know, that worries a lot of people.

I get that. The second bear market was during COVID What a wild ride that was. And printing 40% or adding 40% to our money supply, right. All of these economic concerns, the deficit, totally understand all of those reasons here. And just what happened overall with coronavirus insanity, then the most recent, 120 22 was a rough year for the market. But the key is that in each of these, all three, not only was it a bear market for our major indexes, but stocks under the surface took a 40% to 50% hit on average there. So I blame no one, we blame no one for not trusting the stock market, right? But folks, when you look at the history, the investing history books, you’ll notice that it’s at times like these when no one was interested in the market, right? Hey, I can go get 5% in a money market account. What do I need the stock market for, right? Those were not, I can, I can’t find a time in history where there was a moment like that that marked a top for stocks.

[00:16:13]:
They almost always mark incredible buying opportunities. If not incredible, still good buying opportunities. And we think that as we look back on this time period, the history books will show once again that this was an incredible time to be in the market. We’ve added two positions here aggressively and we’ll continue to look for opportunities as we ride this move, this bull market higher. All right, so that said, let’s take a quick look at our market action today. Like I said earlier, higher across the board here. Exactly what you want to see as well. We were led by tech with the Nasdaq up nearly 2% on the day and semi’s leading tech semis, the semiconductor is up nearly 2.7% on the day today.

So textbook what you want to see after that? We have the S and P 500 up 1.26% to 5127. After that, the Dow Jones finished up 450 points on the day, or 1.18% to 38,675. And lastly here, small capsule having a good day as well, even if they were laggard. Up just below 1% to 2035. Next up here, looking at our internals, we got a strong day to end the week here. Nothing superb. Nothing like an 80 90% upside volume day, but good positive across the board action. Advancing stocks beating at declining stocks for both the NYSE and the Nasdaq.

Coming in over three to one positive on the NYSE. Just over two to one positive on the Nasdaq. 52 week highs and lows. Also positive for both. Really good NYSE. Over six to one positive. Just under two to one positive for the Nasdaq. And lastly here, volume coming in strong as well.

[00:18:06]:
Just no, definitely over two to one positive for the NYSE. And right at about three to one positive for the Nasdaq on the day. So, again, no, you know, blow your socks off kind of numbers, but good numbers across the board. Looking at our sectors on the day, again, what you want to see here, tech leading the way, followed there by communication services, essentially a proxy for tech. Then we have materials and utilities, which I wanted to point out utilities here, because they have been on a tear. And while we don’t have any utility positions, really don’t have any interest. And looking for them, utilities did hit a 52 week high today, which was their highest level since December of 2022. And again, while we might not be exposed to this sector, and it’s probably not a sector you would expect to be hitting 52 highs right now.

But still, new highs beget new highs. And utilities are the largest borrowers in the nation. So yields being down today, it’s very good for utilities. That’s number one. Number two, the market is a forward looking mechanism. So what are utilities hitting 52 week highs telling you? It’s telling you that yields have peaked and will continue to move lower again, just like inflation. It won’t be a straight move down, but we’ve seen it time and time again, these rallies and yields. They come, they scare everybody out of the market, and then we start moving lower again.

As we talk about here, often, yields below 5%, even 6%, don’t, shouldn’t be high enough to derail this market. Our one lagging sector on the day was energy, just barely lower on the day, despite oil being lower, which I’ll cover here now in our VRA commodity watch. A little bit of red on the screen here today. Gold now pretty much flat on the day, up 0.03% to 2100 or 310. Next up, silver, pretty flat as well, down 0.15% to $26.79 an ounce. Copper now higher on the day today, coming off a 52 week high just a couple sessions ago. Now up 1.85% to $4.56 a pound. And lastly, your oil, as I mentioned earlier, taking another hit today, making further moves below $80 a barrel.

[00:20:31]:
There is a bright side to that. And yes, we do remain bullish on energy stocks going forward. It doesn’t mean we necessarily need a higher price of oil for these companies to continue to show a profit here, though. And what the key here is for oil that’s nice, is if oil were continuing to head higher, we’re above dollar 90 a barrel, and it looked like we had more upside to go. You’d start to say, man, maybe this Israel Hamas conflict is about to evolve into something else. The fact that oil isn’t higher gives us some hope and encouragement that that situation could potentially be resolved, hopefully be resolved. And lastly here for today, bitcoin. Having a great rally to finish out the week here.

As, as I started this podcast, it was up over 5%. Now up over 7%. Up $4,000 of bitcoin today at 62,894. Bitcoin still early in this move higher. We think we’ve seen a little consolidation here. And you know, the stats, the numbers don’t lie. After every halving, the returns twelve months later are phenomenal. We expect this case to be no different here, 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 hope you have a wonderful weekend, and we’ll see you back here on Monday for the close.