VRA Investing Podcast: Q1 Earnings Outlook, Inflation Data, and a Glimpse at the Eclipse – Tyler Herriage – April 8, 2024

In today's episode, we unpack the day's mixed market close and look at the economic and earnings news that is set to shape the week. Our major indexes may have been mixed today, but under the hood we are seeing a market that is co ...

Posted On April 08, 2024Episode 1359

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About This Episode

In today's episode, we unpack the day's mixed market close and look at the economic and earnings news that is set to shape the week. Our major indexes may have been mixed today, but under the hood we are seeing a market that is continuing to broaden. Check out today's podcast to see what the VRA Investing System is telling us looking forward.


Don’t look back because the market is closed. Good Monday afternoon, everyone. Tyler herriage here with you for today’s VRA investing podcast. Hope you all had a great weekend out there and a great start to your week as well. And what an interesting day to kick off. An eventful week for our markets here may not have been the best day for our markets today. We finished mixed, but it wasn’t all negative out there. I’ll cover all of that here today.

We’ve got a lot of economic data coming up this week as well. And then we began the week today with a very interesting eclipse today. So I’m here in Austin, Texas, where we got a few minutes of the full totality of the eclipse today. So can’t lie, it was a bit of a distraction, I think, for the whole city here and really any city along the lines of the eclipse today. But it was really cool. A little cloudy out today, so tough to see at times. But what was so interesting is, you know, I’m out there, got my glasses on and everything a few minutes before the eclipse, so you can see the moon starting to move over the sun. And like I said, it was cloudy out, so every few minutes you might lose visual of the sun from there.

So when we’re approaching the eclipse, I’m sitting there in the backyard, got my glasses on, and it’s getting close, and all of a sudden I can’t see anything. So I think, oh, okay, just the clouds are in the way. I can’t see it. Probably when it comes back out, it’ll be the total eclipse, and I just continue to not be able to see anything. Then all of a sudden, I hear people in the neighborhood start hollering, screaming, you know, just excited about what was happening. And off of reflex, pulled down the glasses and there it was right in front of me, you know, very easy to see from the naked eye. I tried to look up a lot without the glasses, to be totally honest, and that will blind you. This was not the case.

You could look right at it, you know, for about 90 seconds or so. I wasn’t quite, it was a little further west of me where you get the extra time there on the totality of it. But, man, that was, that was an experience, you know, if you haven’t seen anything like that before. Actually, I had a few friends of mine before today. I had asked them about it. You know, they had any plans to go see it. A lot of people did. And then you got a few people who are like, oh, man, you know, we saw the partial one last year.

You know, big deal, whatever. I’m not that excited about it or whatever. I talked to some of them afterwards. They called me and we’re like, that was awesome. I’m so glad that I ended up being able to see it. So really cool. You know, there won’t be another one here in the US for around 20 years now, and it’s not going to pass through Texas next time. So had to take full advantage of that today.

So if you remember 20 years from now, if you couldn’t see it today, you know, I do recommend seeing that in person. It’s only a couple of minutes, sure. But that’s a unique experience. Yeah, yeah. Highly recommend it. If y’all have any thoughts on it, you know, send them in the comments here. I’d love to take a look as well, or email us always at support@vrainsider.com would love to hear what y’all thought about it if you were able to see it as well. So.

All right, that said, let’s take a look at and what we’re all here for today on the VRA investing podcast, the markets and what to look forward to in economic data coming up this week. And we’ve got the official slash unofficial start of Q one earnings coming in this week as well. But first, we’ll get the latest look at inflation data this week for the month of March. We’ve got the CPI data coming out on Wednesday, which is interesting. Here we have the expectations for inflation to continue to edge higher here. We had a 3.2% on the CPI from February. Expectations here are for 3.4%. You know, that means that the bar is really set low here.

No one’s expecting this to be a beat. You know, we’ve had a couple of rough readings, so a lot. The, again, the expectations here are extremely low at a 3.4%. So I think this sets up here for a potential surprise to the low side on inflation, which would then mean to the upside for our markets from here. As you’re looking at the major indexes, we’re nowhere near overbought levels, despite being right at all time highs. That is a really good recipe right there. If we were to get some good data coming back this week, we would be off to the races very quickly, if that’s the case. And again, just the fact that we’re not at overbought levels this close to all time highs is another bullish factor.

For once we get back into blue sky territory, and then on Thursday we’ll also get the PPI data. So stay tuned. We’ll be reporting on both of those here, and then we’ll really kick it off at the end of the week with Q one earnings with just a few names leading up. We got a few smaller names, you know, Delta on Wednesday and a few other smaller ones on Thursday as well. And then Friday, which is this is the usual unofficial start of earnings season, is the big banks. So we’ll take it up a notch on Friday with JP Morgan, Wells Fargo, BlackRock, and a few other big names out there as well. You know, the financials have had a good run here lately, kind of under the radar. You know, this isn’t a group that we follow here super closely.

You know, no real love for these big banks, but as a part of a healthy bull market, you do want to see them participating. Right now we’ve got the big banks like JP Morgan trading at 52 week highs, all time highs. Blackrock not far away either, Wells Fargo. So we’ll get all three of those coming up at the end of this week. We’ll be reporting on those here as well. But get excited. We’re coming in here for what we expect to be a strong quarter of earnings coming from Q one. So stay tuned with us here every day at the market close on the VRA investing podcast.

You can find it on VRA letter.com. We’ve got our transcripts and everything else for you there as well. And you can sign up for our daily updates from the VRA podcast every day at the market close if you want to stay tuned on the latest for Q one earnings and our market. And so before I get to our market here, I do want to cover one more piece of news. This time, an individual company, as you know here, we’re big fans of Tesla. I don’t think that it’s exactly a secret that we really like this stock here. It was out with some really big news over the weekend. And no, it wasn’t that they will be scrapping plans for their ultra low cost vehicles.

As Reuters reported over the weekend, Elon’s already come out commenting, saying that’s fake news lying once again. So another l there for the fake news media. I don’t know how they try to get that one past the guy who also owns a social media company. Not the brightest move there, but the really big news that came from the company is that they announced that they will unveil the robo taxi on August 8 of this year. Now, they’ve already announced this year the full self driving has entered another level of its testing and phasing in here. And the word is that they are getting an immense amount of data back from this that is helping fuel their systems for future incidents on the road. And that’s the biggest thing here that we talk about with TesLa is that, you know, so many people were fixated on how many cars that they delivered last quarter, which, of course, is an important metric for this company. I’m not trying to discount that at all.

But the people who make a big deal out of one delivery date like that are the same people who usually don’t understand this story, because Tesla is not a car company. We say this here often. Tesla is a tech company, right? Think about all of the hidden factors in this company from the software that’s all custom and in house, the designs, the patents, the electric side of things, batteries. And then you get into AI, which obviously would be autonomous vehicles. And you see how Elon has structured his companies in a way that they’re all betting on the future and so therefore benefiting one another. Tesla sending software and data back and forth between companies like SpaceX, right, and the technology they’ve gotten out of things like the boring company that are all fueling the thesis behind these tech companies. Again, Tesla is not a car company, but a tech company. And so now that they do have full self driving out, they’re getting massive amounts of data.

No other car company right now, or tech company, for that matter, because there are a lot of tech companies that don’t make cars, that are working on self driving. But what they don’t have, that Tesla does have is the real life user data and just massive amounts from every single vehicle they have out there on the road. So you can see how this just gets exponentially better. For that reason, again, that data side of things is just such a highly undervalued part of this story. And yet, you know, despite these anticipations of great technology coming forward, you know, the haters are always going to be out there talking about how Elon has these ambitions, ambitious projections on where he’ll be, you know, but usually might come up a little bit short. That’s fine. You know, he’s also nailed a lot of calls, too. But despite some of these innovations, investors want to continue to short this company.

Whether they hate elon or they hate the tech for some reason, they continue to do this despite the fact that short sellers lost more money last year betting against TEsLA than any other company in the world. So when these shorts start to get worked up again, which they have on this recent TesLA pullback. Right. They’re getting louder and louder. This is when we love to see the shorts getting louder and louder worked up. You know, we see that as more fuel to the fire for a potential short squeeze. And as long term investors position builders in this stock, you know, any downside has been just another opportunity to dollar cost average into Tesla. We don’t like dollar cost averaging down.

You really always want a dollar cost average up. But when you have a company like this that you really believe in, you know, we talk about that for people. You know, you really have to find your own investing style. And one of those things is investing in companies that you like, investing in companies that you believe in. And this is one of those for us. So on that note, I encourage everyone out there to go find companies that they can get excited about. You know, obviously, you still have to have the right, you know, story, the right earnings, the. The right CEO for that company, the right management.

All of these things are crucial, but there’s so many great opportunities by just looking around and saying, hey, what do I like that? Maybe some other people do, too. And let me just start buying these companies. That’s a great way to look at investing and also makes you even more of a fan of those companies in the long run. All right, that said, let’s take a look at our market action on the day to day. As I started off the podcast, we did finish mixed on the day today. We were higher across the board earlier in the session, and we got some selling pressure into the close today. Some of that could be a little hesitation ahead of inflation data coming out on Wednesday. We’ll see what the action is like tomorrow, though, because under the hood here, things really looked pretty good.

I’ll get to that with our internals. First, our market watch. Small caps leading the way. This is a group we’ve been pounding the table on for some time. Good to see them leading the way. Up half a percent to $2,073 for the Russell 2000. Next up, the Nasdaq. So tech did manage to finish higher on the day to day up.

I mean, really pretty much flat up 0.03% to 16,253. But good to also see Semi’s leading tech, even if they didn’t lead the whole market today. That was the small caps, but we’ll take it. Semis up two tenths of 1% just under that level still, you know, right in the range here of all time highs. Little, maybe a little work to do, but not far off it at all. Next up. We had the Dow also pretty much flat on the day, down, .03% or eleven points to 38,892. And finally here, the S and P 500 also down just fractionally, 0.04% to 5202 there.

One other factor, you know, again, talking about hesitation going into inflation data, you kind of got that signal from the market today with the ten year was up 1.6, or, excuse me, that is from Friday’s number. Let me get a refresh on my screens here. The ten year is now at a 4.42 on the day, up slightly there. And I’ll point out that during the session today, it did hit another multi month high here, highest level since November of last year at a 4.46. Now slightly off of that level. But that, that might have contributed to some of the hesitation. If we do get a hot inflation number, you’d expect yields to continue going higher as well. We’ll see.

But again, I think we’re set up here for a potential surprise. Lower on the inflation readings. We’ll see what we get. That being said, regardless of the number we get, we do think that inflation is going to continue lower from here, and that’s been our theme for a long time. It was just never going to be straight down. We got a lot of good readings of disinflation last year. Now we’ve seen a little bit of a creep up back in inflation, but again, no major concerns for us, just part of the process as inflation starts to normalize here. All right, next up here, let’s take a look at our internals on the day to day.

Again, not bad numbers here under the surface, really on a day we’re mixed and lower in some areas. Really very good numbers today. Positive across the board here, starting with advancing stocks to declining stocks. Positive for both the NYSE and the Nasdaq. No big beats here, but still positive. Firmly positive. Not flat numbers on the day. Again, on a day where you finish closer to the lows than the highs of the day, that is a win right here.

52 week highs and lows also coming in positive. Just 16 stocks hitting a 52 week low on NYSE to 131, hitting 52 week highs. Nasdaq a little closer to even, but still solidly positive. Lastly here, volume coming in positive for both the NYSE and the Nasdaq. Same story, no crazy beats, but good numbers. Solidly positive here. So really good across the board here from our internals. One other interesting factor I noticed today from sentiment, we did get a little rise in the fear and greed index, which got all the way down to neutral at the end of last week.

But the put call ratio, which is really a very good real time tell of where sentiment is, was above a one all day today. We’ve seen that more regularly through the first quarter and into April of this year. So this isn’t an abnormally high reading from what we’ve seen lately. But again, that is an elevated level here, showing you that there is a decent amount of fear in this market. Not everyone’s as bulled up as the bears think right now. There’s still so much money on the sideline as well. We set another record at the end of last week for money market funds or cash in money market funds. So that, again, contributes to our long term bullish view here.

That as that money now, it’s still probably earning between four and 5%, maybe a little bit less for some. You know, those aren’t bad returns, especially if you did get 5% in a money market fund. You know, a lot of people will take that. But as the market continues to outperform those types of funds, then cash will be coming off of the sidelines and back into the market. More fuel for the next move, higher again. And lastly, I’ll just say it one more time. We see this as the early innings here, and one more reason for that will take us right into our sectors on the day, where we finished with just five out of our eleven s and P 500 sectors higher on the day. But what was interesting is we were led by defensive names.

So right off the bat, you might not think that that’s a very good thing. But if you’ve tuned in with us here for the last few episodes, you know that this is a new theme for us, which we have been calling the incredible rolling bull market. And essentially what that is is that we’ll get a rally in one sector. Right. We saw it after the bear market lows of 2022. We saw the semis began to really lead this market. Then we saw it start to shift a little bit into the value names, into other areas. And more recently, we’ve seen that shift into small caps, precious metals and energy stocks, energy stocks and precious metals, gold in particular, at all time highs.

So this is the rotational aspect that keeps our market from overheating, reaching extreme overbought on steroids while limiting the downside moves. The pullback days that are keeping us out of overbought territory. Yeah, we had one big sell off last week. That was the first one in a long time. They’ve been really controlled down days for this market, a lot of days like today, where you finish just fractionally lower, but it keeps you out of overbought territory while in the range of all time highs. So this rotational aspect is another one here that tells us, hey, this is a structural bull market. And as people continue to come into it and continue to make money, that rising tide continues to lift all boats until it turns into an everything bull market, which we see. We’re only in the early innings here, really a long way to go.

We couldn’t be more. We couldn’t pound the table any harder on that. It’s been our view. It remains our view. But included in this rotational theme is not just our sectors, but also bitcoin. That’s a new factor, a new element in here. We’ve also seen this rotational aspect in housing. Real estate led the way today.

You know, we don’t love the real estate sector for the s and P 500 because it’s mostly made up of reits. We prefer to follow the home builders, but still good to see them finishing higher on the day. So let’s dive in to our sectors. Real estate led the way, followed by consumer, discretionary and utilities, which was interesting to see higher on a day with yields up as well. And then the financials higher as well. I wonder if some of that is front running some potential potentially good earnings numbers on Friday. And lastly here, another one of our rotational sectors, materials. Just up fractionally on the day, but right at all time highs, just barely away from those right now.

That’s kind of a been a sleeper pick of a sector that has just continued to move higher without a whole lot of fanfare. Then our laggards on the day have been some of our leaders recently. Energy heading lower, followed there by healthcare technology and industrials. No big losses here on the day, though, even from our sectors as well. Finally here for today, our VRA commodity watch. Exciting day here. Gold now up over half a percent to $2,358 an ounce. That is an all time high from gold.

Hit its all time peak now during the day today at 23 72. So we aren’t too far off of that now. And we do remain extremely bullish on gold in this era of what we’ve talked about in financial engineering. I mean, we are already about to hit our minimum price target for the year, which is 2400. You know, we’re just dollar 40 an ounce away from that level now. Our upside target is $3,000 an ounce. And we do like, we continue to like the miners here as well. They did pull back today, finishing down seven tenths of 1%.

But before that, they hit their highest level, roughly an 11th month high. Before that, they are hitting overbought levels there. But, you know, again, this is a group we would like to buy once we get out of overbought levels, if you don’t already have a position here. But again, going back to the financial engineering theme, we’ve seen gold before. We got all time highs in the US dollar. We got all time highs from gold in nearly every other currency. I think it is just about every other currency. You see it in the yen, the rupee, the Aussie, the canadian dollar, the euro, the pound, the swiss franc, the yuan, really everywhere, hidden all time high.

So we knew it was just a matter of time before we got it here in the US as well. Kip and I were on our usual post market call today, and I made this joke. I think about this here often, so thought some of you might enjoy it as well. If you’ve ever watched the show Parks and Recreation, Parks and Rec, then, you know the character Ron Swanson on the show, and he sums up pretty well how we feel about how we should treat gold right, how we want to own gold, which is that we want to own it with the goal of, you know, really never having to sell it right. It’s just going to keep appreciating, depreciating against the value of the dollar, which has just continued to devalue since the inception of the Federal Reserve in 1913. Since that time, the US dollar has lost 98% of its value versus what has gold done? You know, the old saying kind of goes, a gold coin in 1913 would have bought you a really nice suit. Today, in 2024, gold at $2,400 an ounce, roughly just below that, would still buy you a nice suit, but as Ron Swanson would say, and how you want to treat gold, going back to that topic, when somebody asked him how much money he has, he said, I don’t know how much money I have, but I do know how many pounds of money I have. That’s just such a.

That’s such an awesome representation of gold right there. It’d be pretty cool to say so. You know, that’s how we feel about gold here, and silver as well. We’ve recommended gold and physical silver, physical gold and physical silver since the inception here of the VRA in silver. Having another good day here of 1.7% now to $27.97 an ounce. But today, earlier in the session, we crossed above $28 an ounce for the first 1st time in silver since June of 2021. Again, we think this is early here. Copper also having a good day here, up 1.38% to $4.29 an ounce.

It did get up to $4 and 30, or, sorry, a pound, excuse me there, but that is its highest level again at $4.29 a pound there. There we go. But that is its highest level since January of 2023. Next up here, oil wasn’t higher on the day, but does continue to remain above 60 or $86 a barrel here, roughly its highest level since October, excuse me, since October of last year. Now down four tenths of 1% today to $86.57 a bit barrel. And one interesting piece today, we like Ed Yardini a lot here. He’s joined us in calling for a roaring 2020s, or at least outlined it as a potential theme for the decade as well. He likes tech stocks, likes gold here.

And this is one that I thought was interesting about oil. He shared a piece over the weekend from Steve Sokup that is stating that the Saudis specifically, but maybe the Saudis and the Russians are working together to reduce oil output and increase the price of oil leading up to the November election in an attempt to benefit Donald Trump. Now, I don’t know if that’s necessarily the case. Certainly an interesting theory there, and interesting one, considering that most of the time when you hear a theory like that, it’s always benefiting the Biden campaign. So interesting to see one for the other side there, and that the Saudis and the Russians might prefer a Donald Trump presidency versus another term for Biden. Lastly here for today, getting into crypto, bitcoin, getting right back to its all time high here today. It’s pulled back a little bit since then. Still up three and a half percent on the day at 71,736.

The high of the day was 72,710, which is just about $1,000 bitcoin away from its all time high as well. This is another group we continue to like a lot, especially as we’re now just roughly twelve days away from the bitcoin having, you know, leading up to be getting some front running right now. But the real bullishness comes in after that event as the record of bitcoin post having is just incredible. So stay tuned. We’ll be reporting on that here as well. But 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.

Podcast Newsletter

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Time Stamps

00:00 Economic data and eclipse observations in Austin.
05:04 Earnings season approaching with focus on financials.
07:13 Elon Musk announces robo taxi unveiling.
11:45 Great opportunities in investing, mixed market action.
16:16 Put call ratio indicates market fear level.
18:31 Rotational aspect prevents market overheating, promotes growth.
22:19 Gold's enduring value against devaluing currency.
25:24 Ongoing speculation about oil prices and election.
27:15 Thank you, see you tomorrow for the close.

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