In today’s episode, Kip dives straight into the market action following a pivotal day for investors a fresh rate cut from the Fed and a press conference from Chairman Jay Powell that sent Wall Street into a tailspin. Kip breaks down why Powell’s comments weren’t as significant as the headlines suggest, emphasizing that the recent volatility is mostly a shakeout in an overheated market, with emotions running high and bullish sentiment everywhere. We also get a rapid fire review of earnings from tech giants Meta, Microsoft, and Google, with Kip giving his insight into why Meta and Microsoft shares dipped despite solid results and what Google’s historic revenue quarter means for investors. Plus, Kip shares his take on the ongoing government shutdown, its unexpected market boost, and eye-opening revelations about federal benefits distribution. Tune into today's podcast to learn more. 

Don’t look back because the market is closed. Good Wednesday afternoon everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Busy day today with the Fed meeting today. Talk about that along with their, their latest rate cut and what Jay Powell said that threw the markets into a little bit of a tizzy. Trust me, it was completely inconsequential.

But these markets are very overbought in the short term and kind of looking for a reason to shake out. And by the way, as a reminder, as you probably already know, when Jay Powell speaks, bad things happen. This is, this is his M.O. it’s what he’s known for. I think he takes a bit of, I think he, I think he likes it. You know, I think he wears it well because he wants what he wants to do and he gave a, a clearly rehearsed line that sent the market lower. I’ll cover that in a moment. Otherwise non event tell you the truth from the, from the chair Fed chair today.

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We also got today after the close today earnings for from big3 meta, Microsoft and Google and tell you how the stocks are doing right now. Shortly after these earnings have been reported. Meta is down 7% after hours because there was a big tax component of this. I guess a big tax payment was, was was owed to the EU caught them by surprise or something. Otherwise they beat on both top and bottom line. Microsoft today also beat top and bottom line. Stock is trading down 2.8% after hours. But remember stock’s been red hot all time highs yesterday little bit by the rumor sell the news today.

And Google also beat top and bottom line very healthy beat. Stock is up 8% after hours first quarter for Google that made they had 100 billion in revenue. So all in all you’ll have to go through these numbers a bit tonight. But this looks very healthy. No surprises here at all. Again these stocks had big moves. A lot of this is buy the rumor, sell the news. The markets come a long way in a short period of time.

If you look at a chart we had that one downdraft, right that one big down day that happened a couple three weeks ago. But besides that from the day they shut the government down, we’re now the 29th day of the government shutdown. From the day they shut the government down, the market has done nothing but go higher. I think they should just keep it closed, don’t you? We’re finding out so many good things too. We’re finding out about all the illegals and non non Americans, right? That are living here and that they’re taking almost all of our food stamp money. They’re taking massive amounts in Medicaid and yes, health care. Yes, they are getting it. Are you talking about, talking about legals? We’re getting data that we just would never have known before had it not been for the shutdown.

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So keep it shut. I don’t think anyone’s worried about this now. It’s, it’s about to become an issue, isn’t it? Because snap, snap payments, I think beginning next week, those stop going out. Was it 42 million Americans or 42 million people living in America are on a various SNAP program. And then of course we know that air traffic controllers aren’t being paid. We know that the military probably with its next paycheck will not be paid. And of course, but who does get paid? Yeah, that’s right. All of the elected officials, all the, all the D.C.

scum, they continue to be paid even though they’re not even really working right now. So it is, the whole thing is pretty sickening, is it not? What else today, I guess want to spend a minute on this because I don’t think there’s a reason to belabor this point, but again, we’ve come a long way in a short period of time and as bullish as we have been, as bullish as we are, as much as we call this a melt up bull market, as much as it has been, we’re now beginning to hit heavily overbought levels on the VRE investing system. This is not a reason to sell, not a reason to panic, but it is a time to be aware of investing discipline. The last thing any investor wants to do is take a big chunk of money that maybe they had in money market or a CD or maybe you’re reallocating, rebalancing your portfolio. Last thing you want to do is go, you know what? I got to be in this market. You know, it’s, it’s called, it’s called buy high and sell low for a reason. Because the emotions of investing typically control people. And the last thing you really want to do is buy at a top.

You know, even if, even if that top is short term and even if you’re going to make, if you, as long as you stay in the market, you’re going to make that back. Still, it’s a, it feels like you’ve been punched in the stomach when you buy and the market has a bit of a shakeout. And that is kind of where we are now. But again, it’s still A great setup, very bullish setup. One of the best, most bullish time of the year. Note about, no doubt about that. But it’s options. Investors by the way, have gotten incredibly bullish.

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Now as Tyler reminded me, that can often be a big buy signal, but it is also a contrarian signal when everyone’s buying calls. That’s typically a time that there is more risk in the markets. And the internals have not been great. They just have not been the last couple. They were not good at all yesterday and they were bad again today. I’ll cover that. Just a moment. Nasdaq did again, the Fed announced a quarter point rate cut.

Now the Fed, the, The range is 3 and a quarter, 3 and 3 quarters to 4% on the Fed funds rate. That was as expected. As expected. Also they announced the end of quantitative tightening, the roll off program for the bonds that they own that ends on December 1st. That again also is bullish and adds more liquidity to the system. There were two dissents today. One dissent, Steven Murin, the new, the new Fed governor or Fed member that, that Trump appointed, he believed instead of a quarter point it should have been a half point cut. And there was another dissenter that believed it should have been, there should have been no cut whatsoever.

So two dissents kind of rare and on both sides makes it even more rare. As Powell and team made clear, the lack of data, you know, because of the shutdown has made their job more difficult. But what got the markets going today? And again, this was scripted. You could tell because Jay Powell looked down at his script and said this exact line, a December rate cut is far from a foregone conclusion. And it’s like the markets the shorts were waiting on, the markets waited because the minute that happened, we went from gains of 150, 200 points on the Dow Jones, similar gains on Nasdaq to negative. Dow Jones at one point dropped to more than 200 points. Nasdaq went negative as well. But again that dissipated because in whose mind is that a big deal? First of all, the, the December rate cut wouldn’t happen until middle, middle of December anyway.

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That’s a month and a half from now. They hardly know what they’re doing day to day. They certainly don’t know today what they would have done there next in mid December anyway. But again, it was a scripted line. It was Jay Powell being Jay Powell. If I can be so candid, that’s what he likes to do. He does it for effect and he does it because they’re power hungry. Again, they’re now, in their eyes, our financial masters of the universe.

And they love the popularity, they love the notoriety. They are now the, instead of being the nerds, the economic nerds that they’ve been their whole life, they now think they’re the cool kids at the lunch table sitting together and kind of making fun of everybody else instead of what happened to them when they were growing up. Of course, that’s not the case, but our system has empowered them to feel that way. And that’s something that really has to change. These monthly meetings have to go bye. Bye. Hopefully you get a new Fed chair, which, by the way, can’t come soon enough. That’ll be in May.

Jay Powell will be gone then. He will not stay and serve out the rest of his term. He will be gone. Not just his fetch here, but he’ll be gone, period. And we got to get away from these monthly meetings. We have to get away from the Federal Reserve running so much of our lives. It’s just no need for this. Right? It’s just a button, honestly.

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It’s a bunch of monthly mental masturbation. That’s what it is. Because it just doesn’t matter. We saw it today, again with the volatility in the markets. Volatility. That didn’t need to happen, but Jay Powell scripted that line and he wanted it to happen. Watch the playback and you’ll see exactly what I’m talking about. I find that pretty disgusting, by the way.

Also, Jay Powell made a comment that was interesting. You could tell he didn’t want to make this comment. He said to one of the questions from the journalists in the room, if you want to call him that, he said consumer spending continues to be strong. Actually surprised a lot of us. It surprised consumer spending is good. Like they don’t want it to be right because of Trump’s tariffs and they want Trump as president. They all have TDS, you know, get 90% of all fed members vote as Democrats. They do not like Trump.

They don’t like Republicans. They don’t like conservatives. They certainly don’t like Trump and his ilk. Right. They don’t care for maga. Right. They want a globalist world. And thankfully, thankfully, we’ve gone another direction here.

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Yeah. But they had to admit consumer spending has been much stronger than we thought. He kind of said it in a raised voice. Like you could tell he really didn’t want to say it then. And then he got his dig in. And if I’m Trump and I hear him say this, I want to call Jay Powell and do what Linda Baines Johnson did to his fetch. I want to, I want to grab him by the neck and put him up against the wall. I want to get him, I want, I want to choke him out.

Because Powell had to say, yeah, the economy does continue to slow. We’re only looking at growth this year about 1.1.6%. Someone should tell Jay Powell to talk to his friends at the Atlanta fed which have third, third, fourth. A third quarter growth at 3.9%. So no, the economy is not slowing. Employment looks like it’s slowing because immigration has been completely reversed. Now we don’t have the jobs growth because we don’t have those people anymore. So the data does look different.

But the economy continues to power ahead. We’re on record as saying this and you know again when this happens I will look forward to reminding you all that I, that we got this wrong and J. Powell was wrong. We got it right. Jay Powell was wrong. World Record is saying about that by the end of the second quarter quarter of next year that US GDP growth will surpass 5% and it’s going to. And the economy is not slowing. GDP growth is not 1.6%.

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And Jay Powell is not an honest purveyor of the truth. He’s just not. I love finally, I love what Bloomberg said. Bloomberg said, just came out and said it. Jay Powell is irrelevant now because he’s clearly a lame duck. He’s a lame duck Federal Reserve chair and so he’s got to get these digs in. He wants to try to control the markets, remind people that he has some control over it and he doesn’t. He’s the worst Ted chair of our time.

He’s absolutely the most political Fed chair certainly of my lifetime. And you know, again he’s five major policy errors if you want to call it that. Maybe some of these are planned. Bottom line is today was pretty much a non event. I think the markets kind of figured that out by the close today. And I would look for again we are bought. Gotta, gotta stress that we are short term overbought. This is where you get volatility.

You got a lot of bullish people now. A lot of bears have flipped bull. So just be aware of that. That’s the point that I’m making. Again, not a sell signal. Again we’re in the most bullish time of the year and we do remain very, very bullish over the medium to long term. Just don’t want to put a whole lot of money to work right now in, in the market. And as far as the broad market is concerned, if we’re talking about VRA positions and our 10 baggers, that doesn’t affect that at all.

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Right. We buy those every month using monthly dollar cost averaging. And that’s a, that’s, that is a strategy that served us very, very well over the 22 years that, that I’ve had the VRA today. Let’s get to the internals today. Again, not great today. That, not as bad as they were yesterday, but they weren’t good. Advanced decline today for both NASDAQ and nyc. Excuse me.

Up. Sorry. Back to that advanced decline that was right the first time. Advanced decline today for both NYSE and NASDAQ came in right at 2 to 1. Negative volume was also negative today for both the, both of the, Both the indexes. 60% downside volume for NYC, 56% for NASDAQ. Again, these are not horrible readings, but you know, they, they are noticeable because again, Nasdaq finished up 130. Why are these internals negative? This is the kind of thing that happens when you get overbought.

This is, this is, these shakeouts we saw today. This is what happens when you reach this level of bought. My. If you want to imagine a guess is magic guesses, we may go through a bit of sideways action here. Of course, tomorrow’s earnings are very big. Apple, Amazon, I think of the two Apple probably will be the one that you should watch the most. Amazon is Amazon. Apple’s going through a bit of a, a bit of a changeling process.

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I think it’s gonna be very good for the company, by the way, because I think Apple, their 18 iPhone, I think is going to be a game changer for them and I think the beginning of a major upgrade cycle, of course that happens next year, but again, that’s, that’s the thing. We’re just overbought. I think we’ll probably have a bit of a pause here. I hope we do. Because the last thing I want to do is do what gold did in the month of September and what the miners did in the month of September. They just went parabolic. And you knew at the time that meant when we had the shakeout, it was going to hurt. And that’s what happened here for this group.

And I really don’t want to see that for the market. Certainly not in the months of November and December, certainly not in December because that’s, that’s, that’s Christmas season. That’s what we should be able to take some time off and enjoy our family. Instead of what we’ve seen in the past with some of these markets. Again, Jay Powell, a major reason that we had the December and fourth quarter from hell in 2018, all thanks to Jay Powell and his Federal Reserve. At least they’re not hiking rates. Now this, this should be a much more enjoyable holiday season. What else today? Yes, also Today we had 482 stocks, a new 52kais to just 285, hitting a new 52 week low.

So I think a bit of a pause here would be healthy and then we could resume our upward move. Just work out a little bit of these overbought readings that happen to exist in the very short term. Our sector watch today, also not great. We had seven sectors finished lower, four finished higher. Only one group really hurt today. Real estate. Again, when, when Powell made the comment about, you know, again, there’s, there’s, there’s, there’s a December rate cut is far from a foregone conclusion. All of a sudden interest rate sensitive groups got hit.

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Small caps, very interest rate sensitive got hit. Real estate, very interest rate sensitive got hit. Real estate finishing down 2.66% today. Didn’t need to happen. Powell didn’t need to make the comment. But that’s why the market saw a little bit of upheaval today. Leading the upside was technology of 1%. Again, the markets have figured this out.

We’re not going to have rising interest rates. It really doesn’t matter. It doesn’t really affect the broad market with these rate cuts. It affects small caps. It certainly affects the second America. But the broad market really doesn’t care. I mean right at this range of three and three quarters to 4% for the fed funds rate effective, what is that? 3.87% effective rate? That’s, that’s, that’s fine. Markets don’t care.

The second America, it matters too. Small cap stocks, it matters too. Jay Powell again, it’s a bur of my saddle because he didn’t have to say it. It was scripted and he’s a terrible actor. So you always know when he’s trying to send a message. He did it today. It fell flat. I think the markets have figured that pretty easily here in our commodity watch again we saw.

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I will share this from this morning’s letter because pretty, pretty, I think pretty important analytics here. We just had a big shakeout, right? We had a six day declining gold of 10%. That hadn’t happened a whole lot. Okay? But it’s, it’s happened five times in the last 40 years. Right, here’s the average. I’m sorry, not five times it’s happened. It’s like about 10 times in the last 40 years. And going back to 1981 in the past when gold has lost at least 10% in the span of six days or less over the next two months, gold was up 100 of the time all 10 times.

And with an average gain of 8.3%. This is extremely bullish. It means the dip should be bought. And again what we saw, as we’ve told you here often, obviously we’re big fans of a gold silver and the miners. This is a classic shakeout, classic textbook shakeout of the hot money and the weekends. They, they, they, they run when there’s a sign of trouble. They’re not here to be long term investors. They’re looking for the next hot group.

They want their money out and they want to take their toy and go home. And that’s what’s happened here. But again this is an opportunity for long term bulls for this group and position builders. That’s, that’s what we are and that’s what we’re using it as, as a, as an opportunity to, to add to our positions in this group. But again today gold really should bottom about here. Goals right now 3941. This $4,000 an ounce level, I, I think it’s going to be a floor for gold. Today it was down 41 bucks an ounce.

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That’s right at 1% silver today, barely down today down 1/10 of 1% at 4727. Looks about the same as gold does on the charts. Of course we’re 80, 20, 80% gold, 20% silver. That’s essentially how we’re positioned here. Copper today up a half percent, $5.20 a pound. Crude oil today up what is it, the 21 cents a barrel. And at $60.36. And finally the day Bitcoin, where is.

There you are, Bitcoin last trade. Quick refresh 111,532. Again, Bitcoin interest rate sensitive. It was doing just fine. JPAL makes this comment and then Bitcoin gets hit. Just tech. This is just technical trading. You got to understand it’s all computerized trading these days.

It’s ETFs and computerized trading. So when a comment’s made like this, boom. The whole group gets hit. There is really, there’s no, there’s no safe haven when this kind of a thing happens. Again, thanks to Jay Powell, that’s what happened today. Bitcoin down 1.2%. 111,545. All right, folks, that’s it for today.

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Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.