In today’s episode, Kip breaks down the latest action on Wall Street following another relatively quiet day in the markets. Kip recaps Federal Reserve Chair Jay Powell's Congressional testimony, calling it a “snore fest,” and discusses how ongoing high interest rates are impacting the economy and markets contrasting the Fed’s approach with Trump’s calls for lower rates. Kip dives into why the stock market continues to climb despite stagnant monetary policy, highlighting robust earnings expectations for Q2 and celebrating Nvidia’s surge to a new all-time high, making it the world’s most valuable company once again. 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. What happened today? Let’s see. We got to the honor of seeing Jay Powell again today testify for Congress today with the Senate Banking Committee. If you saw this, snore fest, complete snore fest. The questions were weak.

It was hard to believe some of these senators were asking them. And I was most disappointed in the fact that there was only one or two senators on the, on the banking, his banking committee that really took Trump’s request seriously and kind of drilled down and hit Powell on the damage he’s doing to America. Make a mistake about it, folks. That’s what’s happening here. Jay Powell and the Federal Reserve are doing significant damage to this country with rates where they are. Trump has said it before. I don’t know if the number’s quite right, but Trump has said this, costing America $800 billion a year in interest costs. I think that’s a little high, but.

[00:01:02]:
But how much? 400 billion rates should not be this high. The Federal Reserve, the fed funds rate again is still 4 point, an effective 4.33%. The 10 years of 4.29%, we should be at least 1 point lower. Trump has said more than 2, 2 to 3 points lower. And Jay Powell, when he was pressed today, went back to the same old thing. We don’t know the damage the tariffs going to do. If we could see through a little more, we would be able to justify a rate cut. But pressure starting to build, no question about it.

I think if we get a couple of light inflation data points here headed into the July meeting, there might still be time for a July cut, but likely that’s not going to be the case. We can hope, but I think that’s not going to be enough to do it. The good news for us though, as it pertains to the stock market is it just doesn’t matter. The market’s a discounting mechanism. The market sees what’s coming, folks. We have no war. We have no inflation. Q2 earnings are going to start here in two weeks and start bank earnings, of course, first, first Friday of the month.

And these are going to be excellent. Right. We’ve talked about this a lot here on this podcast. Fourth quarter SB 500 earnings came in at about phenomenal. Fourth quarter, a little bit lighter the first quarter, but still came in better than 12%, 12 and a half percent or so. And we think that Q2 earnings here are going to be really strong. There was a lot, a lot of front loading going, a lot of buying going in because of the tariffs and I would, I wouldn’t be surprised if we had at least 15 earnings. Matter of fact I expect it 15% earnings and that’s what the market’s key off of is all data driven, earnings driven.

[00:02:51]:
And that’s why the market’s going up here folks. This is again no war, no inflation. Great earnings coming now is looking increasingly likely that Trump’s big beautiful bill, the budget and tax bill may actually get passed by Trump’s goal of July 4th. Again rate cuts are nearing as I wrote this morning, the big points we are in Trump 2.0. It does feature the roaring 2020s. It does feature the innovation revolution which is driving most everything and our five big bribe mega trends. And as we’ve talked about here a lot, we are in the wild west of free market capitalism. It is go time for stocks.

Today was a little bit light but again yesterday was a dramatic day. Higher coming out of the war ending and a big reversal higher yesterday. Today we had actually kind of an uneventful day. Jay Powell was kind of the highlight. However Nvidia today, VRA Holding Nvidia today soaring back to a fresh all time high today on a intraday and a closing high basis. Nvidia now the most valuable company in the world once again. Stock closing today at $154 a share breaking the previous high. But about what was it about? About a buck a share.

NASDAQ led today, right. Nasdaq was up 6, excuse me, 3/10 of 1%. Let me see if that was a leader semis today. No, the textbook folks, I, I hadn’t checked this till now. Semi say SMH up 1.5%. The NASDAQ up 310 of 1% each other, each of the other indexes were lower, not by a lot but lower. Vix was also down today by the way Russ 2000 down just over 1%. Dow Jo up down a quarter percent and SP 500 down 610 of 1%.

[00:04:50]:
Excuse me SP hot. That is a bad quote. One second here. S&P 500 was well it was flat on the day. Okay. But again yesterday was, was, was a, a pretty dramatic day to the upside. So a little bit of a pause taking today. We’re also watching very closely what’s happening with the 10 year yield against now at 4.29%.

What happened to everybody saying the rates are going to go to keep going? I want to where did those people go? I’m curious, where did they go? All the people that said that we’re in trouble, Rachel. Once the 10 year blows through 5%, the market’s going to crash. They get very quiet when that negative reality that they continue to point these perma bears refuses to come to pass. I saw today Michael Burry. We haven’t talked about Michael Burry in a while. Of course, a big short fame. Michael Dave was the anniversary of Michael Burry telling us, I think it was about three months ago. Michael Burry put out a tweet that just said sell, sell everything.

And now we’re now up 50%, 50% in the markets from that date. So, you know, perma bears rarely get things right. This is just not, this is not that market, folks. This is just not that market. This is a, an inflationary driven market, meaning inflation, money printing driven where everything’s just got to be all assets. Inflationary assets are going to be worth more a year from now than they are today. And that’s going to continue until we start going the other direction with some very negative data which we don’t see happening at least till 2030. Again, we are on record now for three years saying that we’re in the roaring 2020s and that the market, with the entire decade the market was going to be, was going to soar higher.

[00:06:40]:
I think that, I think that’s still very much the case. Dips continue to be an opportunity to, to buy again. Like I say, kind of a quiet day today. I’ll cover this now so I don’t forget it later. Hearing from a lot of people, including some people that we like a lot, like a Rich Ross at Evercore who’s just fantastic. But you know, people like Rich Ross and others that are bearish on gold. And I wrote this up this morning as well. People say kit war risk is over with now.

Geopolitical risks aren’t in front of us. Why would you want to own gold? And I think that people that say that just don’t know why I’m a gold bug is because I don’t own gold for geopolitical risk. If that’s one of the side benefits of owning it, then I’ll take it as a hedge against state insanity. But we’re on gold because of currency debasement. 5,000 years, gold has been the only true currency. Currency debasement continues. Debt issuance continues to be wildly popular until and unless that changes this bull market. And precious metals, primarily gold, but silver as well is only in its infancy.

We’ve started to get our bull market started to get our bull market in the miners. GDX still the number one performing ETF of the year. GDX is number one sub sector and sub sector of the year had a little bit of a pause here but look this is, this is also a gift charter looks fantastic by the way. Wrote this up for Parabolic Options today. We’re very close to buying GDX calls again and our, our junior miners. We, we are, we’re very excited about so this is an opportunity here on the slight pullback. If you’re looking at chart at gdx I encourage you to there’s an ascending channel in GDX that is held up beautifully and we’re getting close to the lower the lower trend line of the ascending channel. If you bought GDX or your favorite miner or nugt, the two time leveraged minor etf you’d have done incredibly well from from the, from the birth of this last blast higher which was again started in January of this year.

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Also just an FYI, July is the most bullish month of the year going back 20 years. We’re almost there, aren’t we? Again, earnings begin just in just almost two weeks. It’s going to be, I think it’s going to be this market’s going to be jumping into that front running. It’s going to be a lot of front runnings into into Q2 earnings. Also Nasdaq seasonality is by the way gold. This is now this from now to the end of the year is the most bullish six months of the year to own gold. And turns out the same pretty much is true for Nasdaq. NASDAQ right now as of today.

This is thanks to JP Morgan. We entered the positive seasonality for the NASDAQ 100. Over the last 25 years the NASDAQ 100 has delivered an average of 2.1%. That makes it the third strongest month of the year, just behind October and November. And this is interesting. NASDAQ 100 has been positive 16 of the last 17 years during the month of July, averaging in those 16 and 17 years. 4.6% returns. That is.

That’s gangbusters right there. And of course we also share this chart this morning. Our favorite chart for a directional tell of the market is our semi TO S&P 500 relative string chart. This is something that we we’ve used for well over a decade now since the birth of quantitative easing. And there is no better tell than the direction of the semis. If you can just see, okay, what’s the direction of the semis right now to the, to the broad market. Then you’d be on the right side of the market. Not sometimes, but essentially all the time.

[00:10:42]:
Let’s take a look under the hood today. Let’s say kind of a quiet day today. Nothing much happening good today, frankly. Internals were not great. We had. NASDAQ was Negative by about 700 issues of its decline, 2 to 1 negative on NYSE volume today only slightly negative for NASDAQ. 3 to 1 negative however for NYSE. Not sure exactly what that’s from.

Today’s truth, we didn’t have that bad of a day but that’s, that’s, it’s a bit of an extreme reading for a day that was kind of as quiet as today was. We also had about 50 more stocks, 82 week high. The hitting a 52 week low. Sector watch was not good. We had three sectors lower, eight higher. Not a lot of damage done. Although real estate today for some reason, I think I know that reason. New York, New York, New York real estate getting slammed today, taking the entire market down with it.

Real estate, US real estate down 2.4% on the apparently high odds that New York City, the largest city in the country is going to have a socialist mayor, which. That’ll be fun to watch. That would be fun to watch if that happens. It took the whole market down. Companies will be fleeing New York City more than they even already had been just to get out of there. If this guy winds up becoming mayor. I can’t believe that would happen. By the way, consider me, consider me doubtful on that one, okay? But it is certainly scary to the upside today.

[00:12:13]:
Technology of 1.1% Again, not much helping happening anywhere else. And our commodity watch today also quiet today. Gold today did reverse higher finishing up $13 an ounce at 33.46 an ounce. Silver today, bigger even up 1.4% at 36.23. A copper today also up 1.1% at 4. Now getting back to close to $5 a pound there. 493 a pound as I speak. Crude oil today, rallying back a little bit.

Crude oil up 55 cents a barrel at 64.92. And finally today bitcoin. Pretty powerful comeback this stage here. From the depths of the war just three days ago. Bitcoin after dropping below 100,000 now back up to 107,818. All right folks, let’s say kind of quiet day today. We look for the rally to continue tomorrow. Again, we’ve hit all time highs now in NASDAQ live, of course, by Nvidia.

And we’ll look for the other indexes to mirror that and to get back to their own all time highs as well. Now, the small caps have some work to do to get there. Of course, they’re the furthest away, but at some point small cats are getting engaged. They would be a great investment. We think that’s going to be second half of this year, by the way. Okay, folks, that’s it for today. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.