In today's episode, Kip takes us through a rollercoaster day in the stock market. He discusses the intricacies of today's market movements, the impact of political strategies on economic forecasts, and the turbulence caused by potential trade wars. Amidst fears of recession and market declines, Kip remains firmly bullish, emphasizing the underlying strength of long-term megatrends like the innovation revolution. Tune into today's podcast to learn more.

Don’t look because the market is closed. Good Monday afternoon everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Hope your day was better than mine today. How about that? Today was not a good day. I will tell you a quick story. I went in today to Fox Studios to be interviewed by Charles Payne on his show Making Money.

By the way, it’s my 30th time to be on today, so making headway there. Charles is a great guy. I’ve always honored. They asked me back every couple weeks and, and you know, look, for the majority of time that I’ve been on Charles’s show, we’ve been in a bull market. We still are, but we’ve been in a fun bull market. You know, we call the bottoms the bottom to the day on October 13, 2022. For those that may be new to or forgotten, not that we let you forget. And we’ve been hyper bullish since we wrote the book the Big Bribe and we told you about 5 megatrends.

Everything, pretty much everything that we laid out for you in that book and from the, from the, from the bottom in 2022 has played out okay. So, you know, but, but it doesn’t stop shakeouts and market corrections from happening. But there’s more to this here. Okay, here’s what happened to me. So I’m in the studio and I do my, I do my segment with Charles went, all right. And then on the way out, not one, but two people stopped me and asked me individual questions about their investment situation. They’re nervous. One guy’s 401k is getting hit really hard.

[00:01:29]:
And again, I don’t know these people. They just know me from the studio. And the other guy owns Tesla. He knows I love Tesla. And he’s like, I don’t know if I can take this much longer. Do you think, how much worse is it going to get? Both were concerned, especially the 401 guy. And I bring that up because, and I wrote this up this morning. Messaging.

The animal spirits. Animal spirits came, can be turned off just as quickly as they’re turned on now. Is that happening here? Yeah, it is. It’s starting to happen. The messaging of the Trump campaign, of the Trump team, excuse me, is pretty piss poor if I’m being honest. All right, now what do what I think this means. Please don’t get me wrong. We haven’t changed our bullet case.

All right? It’s just there’s no reason to be going through this now. For those taking the flip side and going, Trump’s got a master plan. I’m sure you’re right. Okay. The master plan is probably, we gotta play hardball with these other countries on tariffs. We gotta take them right to the, you know, again, when Trump said, yeah, tariffs are definitely going on tomorrow, Mexico and Canada, China, that’s when the market began to tank. We dropped as much as 900 points on the Dow Jones. It’s a big number.

[00:02:44]:
And we finished down, you know what, 250 points off of that, down 650, but, you know, NASDAQ down 497 on the day. Yes, it was down 600, but still 497. That’s 2.6% on top of what’s been happening. So, look, I’m sure that’s what it is. Look, they’re early in this administration. You know, you want to get this crap out of the way. I get all that. I really do.

It’s just not necessary. And the messaging part of it is what I think bugs me the most. Because Scott Bessant, as an example, when in Trump’s first term, Steve Mnuchin, when anything like this happened, Steve Mnuchin was front and center. Steve Mnuchin was known for having private meetings with the media, having private meetings with important political people to keep everyone on the same page. And he was very good at it. And the media liked him. He was essentially one of them. You know, he’s a movie producer and a Goldman Sachs guy.

[00:03:40]:
Scott Besant, you know, I guess it’s, again, it’s early, but Scott Besant should be the one on TV explaining why Trump’s tariffs are a good idea. Scott Bessant should be one on tv. I’m not talking about once every weekend. I’m talking about, especially times like this. He should be on TV at least once a day on some network, talking about why tariffs are such a great idea for America. I think I know why they are. I think Trump’s exactly right. I think they will be.

But you see what’s happening here. The left, they now control the messaging. And that, that is the truth. Now, the American people are still solidly behind Trump. There’s no doubt about that. But I have a pretty good feel for this kind of thing. And I’m telling you that tomorrow’s State of the Union is really important. Trump needs to bring it.

He needs to bring it tomorrow night with some really good ideas that are well thought out, that have already been planned. They kept them secret. And here we go. Maybe, maybe, you know, today they announced the Taiwan, semi deal, 100 billion dollar deal. You know, I’ve already seen hole shot in that. It’s not really new money, they’re already going to do it, blah, blah, blah. It’s an example of how tariffs can work again. Manufacturing brought back to the U.S.

[00:04:54]:
20, 25,000 employees in the U.S. that’s fantastic. Right? And we need all that. We, we need to make more chips here. 90% made in Taiwan. But a great idea for tomorrow night, and Tyler and I talked about this this morning, would be the Chips act, which is $280 billion in size and very little of it was ever used because it was full of DEI and all kind of nonsensical stuff that just non starters, no one could figure out how to make it work. And so basically it just died. It was passed by Congress, it’s still there.

But I think tomorrow night the state of union, again, it’s not an official state of union, but that’s essentially what it is. First year, you don’t have those. But Trump is doing it tomorrow night and I think it’ll be extremely well watched. And I think something like that come out with a big replacement. The money’s already been approved by Congress. We need to make these chips in the United States. Right. Amazing number of jobs will come with it.

[00:05:50]:
High paying, you know, jobs that attract the kind of people that we want to keep in this country. And you know, so announcing something about a rejiggered chips act, something like that, but like four or five of those to really knock people’s socks off. I think that’s what he’s going to do tomorrow night. And are we concerned about the market? No, I’m really not. I just don’t, I don’t like giving up victories. And that’s what I think’s happened here. People are worried about this decline. You’ve got the people, the Atlanta Fed.

I was on the way in the studio today and Tyler called me and said, didn’t you see this? I go, what are you talking about? He goes, the Atlanta Fed just came out with their new weekly update. They’ve gone from a negative 1.5% GDP for the first quarter to negative 2.8%. I think that got that right. And again, four weeks ago they were at a positive 2.3. So they’ve gone, that’s a what, a 5% swing in a month from a decently growing economy to one that is now flashing serious recession signs. And that is what’s happening here. That is what that represents. So I don’t like Losing these easy battles.

[00:07:06]:
This should be child’s play for Trump and Bessant and team. At least we had over the weekend his commerce secretary. I wrote it up this morning and I’ve got his name now. Trump’s commerce secretary, Howard Ludnick, who is fantastic, Really a brilliant stock market guy. Cannot fit old guy. Matter of fact, most of his employees were killed. 9, 11. He wasn’t there that day.

A lot of people believe billions was created off of his character. He’s a very high energy, high profile guy. Loves the stock market. Huge bitcoin guy, right. Also believes tariffs should replace the income tax as they used to. Right. So these guys has great ideas and he’s, and he’s bold about it. He was out this weekend on Maria bar show.

[00:07:56]:
He should have been everywhere because this is what he said. This is a direct quote. This is going to be the best US Economy that anyone has ever seen. Inflation rates will come smash you down. Betting against what’s coming is foolish. And I think that is right. You know, I believe that very at a very deep level. But if people get nervous about this market and start selling and what if we do get really bad news? So let’s say something bad happens that, that we don’t even know about.

A black swan event and say all of a sudden we go down from being 6, 7, 8%. I guess Nasdaq today after today is down over 10%. Let’s say we go down and say we dropped 10 in two weeks. So now Nasdaq’s down 20%. Now all of our index is down 15, 20%. How much of that support is going to stick for Trump? And when that matters is Trump may not care about getting reelected, but guess what? The midterms in two years, that matters. That matters. So I don’t like losing easy battles.

[00:08:57]:
And that’s what I feel like is happening here. So I think tomorrow night Trump’s going to come out of the state of the union, got to come out just rocking and rolling with things that are already approved. He’s already talked to their buddies about this is going to be passed, right? Things to really get the shorts to now capitulate and realize they screwed up. They should never be shorting a Donald Trump stock market because right now they’re very confidently doing so. They’re piling into the shorts. The left thinks they’ve got Trump cornered. They believe this is his Waterloo. A few days ago, Wayne Root, our good friend Wayne Root sent me a video with James Carville, Bill Clinton, street hustler, who said that? Everybody he’s talking to says that the Trump’s administration is going to be over in a short period of time.

It’s over. It’s already a disaster. Economy’s crashing, markets are crashing. This is James Cardboard and I kind of laughed about it last week. Not so much now, because if you get people selling, and this is the key point here, if people start selling, they’re not going to buy back in. And then if the market does recover and now they’re forced to buy back at 10, 20% higher. Right. That’s a deep bruise.

[00:10:12]:
You feel that? So again, I don’t like losing any battles. And that’s where again, I’m sure Trump has got a master plan. I’m certain of it. I’d like to see it start to play out here because the tariff thing is either not been well explained or it’s not believed. And that’s what it is. We’ve talked about this video before and again, this is kind of flying the face of what I’ve been saying here, but I think it’s the truth. Anytime you get the majority of economists, especially like 90% of economists that say the same thing, they’re wrong. Doesn’t matter what they’re saying, I’ll play that hand blind.

They are wrong. That’s been the case in my career. We saw just a few years ago in 2021 when 100% of economists said that we were going to have a recession that year. Of course we didn’t. But now 90% of economists believe that Trump’s tariffs will be inflationary. There’ll be a drag on the economy and on the markets. That’s starting to get embedded now. That’s the Atlanta fed going to minus 2 point.

[00:11:07]:
I think it’s minus 2.8% for first quarter growth. That’s minus. Okay, we’re talking recession. I don’t think that’s what Trump wants in his first term, and I certainly don’t think it was. It’s needed. You know, look, I’m all, I’m all in favor of what they’re doing with Doge. I’m fine with the chair. Look, Trump and his team all believe this is really going to work.

Kip Herriage [00:11:28]:
In the first term. It did slow things down a bit because again, people were doubting, people were betting against him. It hurt the markets for a while. But I think if tariffs can bring our taxes down, if tariffs can maybe do away with the IRS one of these days, because everybody wants to do business in America. That’s why the concept of tariffs work and our trade deficit is so much larger than other. We import almost nothing, we export almost export nothing. We import almost nothing from other countries, excuse me compared to what we produce and export. So you know other countries definitely aren’t going to be, they’re definitely going to be hit worse than we are.

[00:12:11]:
This is overdone what we’re seeing here but I don’t like this. I don’t, I don’t care for it one bit. As you can probably tell now Tyler had a great point. Main street, the second America. The second America. They’re probably sell. They’re probably, probably clapping and celebrating right now. You know a lot of these folks have been the victim of Obama and Biden economy have never really been able to get their feet back on the ground.

Don’t own stocks, they’re like hey go get them. Keep crash this thing. Crash this thing. My gold will be worth more. My bitcoin may be worth more. Is crash it. So there’s a certain element to this that is being welcomed but I grew up in that I came from that element. I don’t want to go back to that element.

I was that element. I, I’m now in the first America and I worked hard to be here. I don’t like getting money back and I know, I know this smart audience here that I’m speaking to feels exactly the same way because it’s a, it’s self inflicted injury. That’s my opinion. If it was at least message better than this market wouldn’t be reacting this way and yet Lena Fed wouldn’t have us at minus 2 point something percent growth for the, for the first quarter of this year and again we still got a month to go so it’s kind of crazy you know that they’re even saying this and it’s all because the impact of tariffs. They don’t know like the Federal Reserve has said we don’t know, we don’t want to speculate. And then they speculate. Right.

[00:13:39]:
But you know on the flip side so again state of union tomorrow is important. How about this 10 year yields down broke 4.2% today smashed again as Howard Lutnick would say down to 4.18%. That is a new. Just pull that. I’m curious what is that? That is a new. That’s the lowest level since December 6th. But see this is, this is getting pretty key support here. We break here and you know then you’re talking about next major support is down to 3.7, 3.8% and the significance of that again, the left will tell you and the shorts, which are Wall street hedge funds, money managers don’t like Trump anyway.

They’re leftists anyway. They’re rooting for this. They’re piling on. They’re shorting. They want this to happen. This is the battle, folks. This is the battle that’s going on. The left would tell you and the shorts would tell you that the reason yields are plummeting is, is because, yeah, we’re going into recession.

[00:14:45]:
They’re going to keep going down. Well, we, we completely call bullshit on that. Rates are going down because they shouldn’t be here to begin with. All right, Inflation is, is, is, is, is going the other way. We shared this this morning with a great source called Truflation as Truflation.com is their website and make sure I get this right, they much more reliable than cpi. CPI is lagging. Right. This is real time inflation index work here.

Their current numbers on the, on the, on inflation have inflation at 1.44%. CPI is at 3%. That’s what the Fed’s always talking about. Of course, CPI, CB 3% plus. Right. But Truflation says it’s 1.44%. I think they’re much closer to being right. Matter of fact, I put a lot of money on it.

[00:15:43]:
This is why we’ve been telling you that we expect rates to plummet along with inflation. And the Fed is way too restrictive. They’re way far behind the curve. But look, the Fed is the unit party. I mean these are all the state capital s. They’re all in this together. Okay, that didn’t want to see Trump succeed. Why would they lower rates to help him? This is when Scott Besant should be fostering a really good relationship with Jay Powell so they get on the same page.

I have been impressed that Trump has mostly been silent about the Fed because you don’t win that battle. Trump found out hard way the first term. You do not win that battle. They’re the original. They’re the cartel. All right. The banking guys are the cartel. Most powerful on the planet.

They’ll crush you. They crush Trump. Eight straight rate hikes in 2018. The Christmas from hell. Again, we paid the price. I don’t know if Trump did. We did. That was a horrible quarter.

[00:16:46]:
Worse since the Great Depression. Worse than the Great Depression. It hadn’t happened even in the Great Depression. The pain we went through complete collapse in the market in the fourth Christmas. Collapse. Right. That matters to people. I don’t like seeing this.

It’s not necessary, self inflicted. It comes across to me as haphazard and a little lazy. But again, I do believe he’s got a master plan. I think it’s important that it’s unveiled tomorrow because the messaging now that’s winning is that we’re headed to recession. That’s the messaging that’s winning. And you get enough big hedge funds and central banks, US and global, they start believing that this market is going a lot lower. That’s none of us want to see this. It shouldn’t happen.

We’re in Sillyville now. We’re hitting Sillyville. But Sillyville is happening. Silly deal is happening because the messaging for the Trump camp has been so weak. So, you know, I don’t want to see a flush, I don’t want to see the markets fall another 10%. I know you don’t. Maybe, maybe you’re smarter than me, maybe you’re short, maybe you do. But yeah, rates being this low, the Fed should be getting back on the rate reduction plan.

[00:18:00]:
They should be right back, right back to. They were right the first time. Let’s go. Right, coming across the news now, Trump just signed the China tariff hike. I would imagine that right behind that are going to be, going to be Mexico and Canada. So trade, war. You know, Trump did tell us it might be a little rocky, going early, you know, but I don’t like, I don’t like self inflicted injuries, you know. Okay, let’s move on here.

What else today? Yeah, today the markets tank because we got the trifecta. We got Atlanta Fed. That happened. I was on the way to the studio. Tyler called and told me then the tariff news. Yep, he’s going to sign to today or tomorrow. And then Zelensky, the issues with Zelensky, now Zelensky saying, you know, I don’t see an end to this war for a very long time or something. Of course that’s not what Trump wants to hear.

And the markets don’t like it either because they don’t like surprises. They want this to end. Anytime you start talking about a possible World War iii, you know, it gets people very nervous. Imagine that, right? Nuclear powered countries. Can’t imagine why. On a positive note, and this is what I shared today with Charles on making money. The worst part of February, second of February is not a good time. It’s bearish, bearish seasonality.

[00:19:25]:
That’s over now. We’re in March. March and April are highly bullish months. And yes, that also applies in first, first year presidential cycle. March and April are very bullish. So we’ve got that didn’t show it today though, did it? We know that investor sentiment is an extreme fear that probably only got worse today. And we know that the innovation revolution, which is our primary. If I had to pick one megatrend that we’re banking on, although millennials are driving everything okay, Animal spirits had returned.

Whether or not they’re still here, we’ll find out soon enough. Housing boom, financial engineering. Yep, yep, yep. But the overriding one that’s the most powerful, I think, is the innovation revolution for what it represents and what we still know, even though the semis have been taken to the woodshed. I think selling here is a big mistake. But what we know is that the largest tech companies in America have committed over $2 trillion to CapEx in the next three years. I mean, that’s never, nothing’s ever happened like that, even close to that scale. So this is what’s going to drive longer term, this is what’s going to drive this bull market.

[00:20:42]:
If we can just get out of our own way in the short term, you know, and the reason is this long term mega trends, again, like the innovation revolution, the one underway right now, probably first, second inning, that’s what we think. They’re not impacted by short term counter trend moves in the stock market. And that’s what we’re seeing, short term counter trend moves, not the primary trend, not the innovation revolution, not the big picture, which is fine. All right. From the birth of the bull market, we’ve had seven shakeouts, S500 back to the 200 day. That’s where we just dip below that. Today we had seven. Seven of these have happened and we’ve had three shakeouts that took the NASDAQ down to its 208, which is also where it is today.

So we’re at those levels now. It is important that they hold. We can have a false breakdown or whatever and, and then rally from that. But again, I think tomorrow state, I think tomorrow’s State of the Union is going to be a pleasant surprise. Trump has got a great feel for things. He reads the room better than anybody anyone has ever seen. And he, and he, and he loves the markets, by the way. He may not be commenting on the markets because he hasn’t been.

[00:21:49]:
That’s kind of weird. Even I’d be commenting on the markets. But he watches them like a hawk. He loves the stock market. He knows this is direct correlation to his presidency and that matters to him as it would to any of us. Right. So, yeah, I think that he’s paying close attention. I think that he really wants these countries to go ahead and give up the ghost on this tariff so we can strike a deal.

And of course with that comes the fentanyl, et cetera. I open borders. That’s all pretty much solved now, isn’t it? That’s great news. But we gotta, we gotta deal with this negative backlash about the tariffs. And now it’s becoming a pervasive fear that we are gonna go into recession. And that’s, that’s, that’s what tech, tech stocks most, more than anything else, that’s what tech stocks don’t want to see. Now what, what groups do want to see that? Well, we happen to own those too. Thank God.

[00:22:46]:
You know, precious metals to a lesser extent, the miners, because after all they are a stock. So if the, if the market’s going to fall, unfortunately the gold mining stocks fall with them. But we just ran the numbers today. We didn’t get a chance to get into it today with Charles. But the miners are the number one performing group this year, up 20%. Gold’s up 10%. So miners outperforming 2 to 1. That’s what miners are supposed to gold mine are supposed to do in a bull market that like we’re underway today.

Remember last year gold was up 26%. Miners only up 10%. So now the miners starting to lead. We think this is the next stage of this bull market in precious metals. And miners feel very strongly about that. High confidence call. High confidence call. But yeah, these falling rates again can be great for housing.

Right. The Fed is going to have to come back in and restart rate cuts. Okay. Because again, we don’t believe that rates and inflation are falling because the economy is getting weaker. That’s going to be a passing thing. Yes, Doge is going to cut a lot of jobs, but let’s face it. And these, a lot of these jobs are. I’m not sure we want the government employed.

[00:24:00]:
Most of these people, they’re really, they’re really not friends of America. I’m not even sure how many people really even work. How many of these checks are going to the same address. We got to get those answers. And that’s what’s happening. So that’s going to create a short term hitch of the economy probably. I think we’re seeing that now. But let’s be honest about it.

These are primarily DC sycophants. They’re far left highly intolerant anti America leeches. As I wrote this morning, the larger need to go from their jobs Anyway, but instead of economic weakness that’ll be very short lived. We’re witnessing a long term era of economic and cultural growth because they’re removing a disease and the patient will be just fine. After all, it’s just a one time hit. It will be a one time hit and then the market totally forgotten about it. That’s probably what we’re paying the price for now and then we move forward with that cancer removed. So again, this is all part of Trump’s plan.

[00:24:57]:
I’m absolutely certain of it. But I’m not a patient person when it comes to making money in the markets when it just didn’t need to happen in my opinion. But I’m sure I’m not seeing the whole story. Definitely still in the Trump train. Don’t get me wrong. Very, very bullish, you know and, but, but, but again I don’t, I don’t like giving back money. I know you don’t. This needs to end now.

This needs to end now. Messaging Scott Bessant. Get to work my man. Howard Ludnick. Scott Bessant. All you guys get out there every day, be the face of the administration, let people know on the right track yet you got to find a way to fight back against these bears and these shorts that want Trump to fail and would love nothing more than a crash in the market and a serious recession to really wound him and wound the Republican Party for the midterms. This is not stuff to be trifled with here. We worked hard to get these animal spirits.

[00:25:59]:
You don’t want to lose them. You know, we want to keep them. So it’s time to go on the offensive. It’s time for Trump to strike back. I believe that’s what’s going to happen tomorrow at Stave Union. Okay, let’s move on. Take a look under the hood. Internals were not good today, but also not horrible.

Advanced decline, NYSE was 2 to 1 negative. No big deal there. NASDAQ 3 to 1 negative. We can live with that. A little bit worse when it gets to volume. 78% down volume day NYC 76% NASDAQ. You don’t like seeing more than 75% down volume. That that leads to bad things.

[00:26:35]:
And what we also don’t want to see is what happened today with new 52 week lows. 721 stocks hit a new 52 week low to just 197. Yeah. 550. I’m sorry, 515. New 50. Kai, wait a minute. My apologies.

I’ve got this wrong. Had it right to begin with. 721 stocks heading for two week low to just 197. Hitting a new 52 week high. You don’t like seeing you get numbers over 5, 6, 700. Where we are now again, this is how big snowball. It’s just, it’s no need for it. There’s really no need for it.

[00:27:11]:
And our sector watch, we had four sectors finished lower, seven finished higher. Downside, which you don’t want to see. Leading semis all right, down 3.5%. Excuse me, the tech down 3.5%. Semis down 3.9%. All right, this is. They’re going the wrong way and they lead. Got to get a handle on this.

Energy down three and a half percent. Oil prices down today. Consumer discretionary. You have a lot of groups down 2% or so today. The upside, real estate, as Tyler shared me again, real estate loves, loves falling rates. That’s going to be very good for housing and it was today. But no huge gains except for real estate. Up 8, 10, 1% in our commodity watch today.

[00:28:04]:
Pardon me one second here. All right, thank you for reloading. Here we go. Goal today again, gold. Loves the whole idea of recession. You know why? Here comes more money printing. Oh, we might have quantitative easing. Maybe that’s what the market’s telling us.

The central banks love qe. They absolutely love. And they love negative rates. I mean this is where they really, they were all this. You know, we had a reset. You know we’re going back to this, right? This is the game. They had a reset and so they could just start this whole thing over again. We start, we were telling that story two, three years ago. Gold stay up 55. Silver up 2.4%. 2904 on gold. Silver up 1.7% to 3169. Excuse me, 3000, 226 an ounce. Copper today up 1% to $4.59 a pound. Crude oil today again down a buck 29. Back below 70 at 68.47 a barrel.

That’s down 1.8%. And finally Bitcoin. Look, bitcoin had an amazing move. Of course we know why. Trump came out with a tweet. And again, their messaging was pretty good over the weekend, right? They had Howard Ludic out, they had Trump talking about this, the crypto strategic reserve. That was a great tweet that got bitcoin going. It had fallen below 70, below 80,000.

[00:29:34]:
Next thing you know, over the weekend, bitcoin is hitting 94,000. Okay. Now it’s falling back now to just below 87,000. But still it’s had a good move. Yes, Crypto reserve is coming oddly. He included ether in it and XRP and Solana Ada, which I don’t even know think I’d ever heard of. I don’t really follow the these shit coins or I don’t follow many of these. I’m a bitcoin purist, pretty much always have been.

Own a little ether, haven’t stolen a little bit, but not much. Or ethereum, but I’m a bitcoin guy. But again, 1886,400 still up from last week, but had really good gains this morning. And then, you know, then, then the dumpster fire struck, which was messaging about the US Economy going into recession. That’s it, folks. That, that is understand this. That is what’s being said now. And that’s the reason the markets are falling.

Time to take control of the messaging. Hopefully that begins, and I believe it will begin tomorrow night with the State of the Union. I think a lot of surprises are coming here. All right, folks, that’s it for today. 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.