In today's episode, Tyler breaks down the day's stock market action including an all-time high from the Dow Jones. Now all eyes turn to Wednesday's FOMC meeting, and Tyler breaks down the potential reaction from the market. Plus, we'll review the performance of our major sectors that are leading the charge to further all-time highs. Tune into today's podcast to learn more.

Dont look back because the market is closed. Good Monday afternoon, everyone. Tyler Herriage here with you for todays VRA Investing podcast. Hope you all had a great weekend out there and a great start to your week this week as well, as were coming off here of the best week of the year for the S & P 500 and the Nasdaq. And I should say the best week of the year so far as we expect a very strong into the year for our major indexes here. Have you been tuning in with us here for a while? You know that we’ve talked a lot about the August 5 lows on the recent pullback, especially in tech and the semis. We saw value names holding up much better during that time period. But as we see it going forward from here, those lows should hold through the rest of 2024 and we expect it to be a strong end to the year as well.

But we did start off the week on a bit of a mixed note here, really mostly positive. So I hesitate to even say mixed on the week. But excuse me, the Nasdaq and the semis did finish lower to start off the week, but we saw a lot, a lot of bright spots out there, including bright spots under the hood of the Nasdaq as well. So we’ll cover that all here today. But some of the trepidation today might have been due, or I should say is due to the fact that all eyes are now on Wednesday’s FOMC meeting. So the FOMC meetings will start tomorrow with, excuse me, a little sip of water here. Yes. So FOMC meeting does start tomorrow.

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We’ll get the press conference from Jay Powell at 01:30 p.m. that’s central time. So 02:30 p.m. eastern time on Wednesday. And again, all eyes are on that. The minutes come out at one. That’s when we’ll see the big jump, or big reaction, I should say, from the market in regards to what the Fed will do. And wow, have the odds changed heavily.

Just going back to Thursday of last week. Going into last Thursday, the odds for a 50 basis point cut were just 14%, and the week before that were even lower than that as well, with an 86% chance that the Fed was only going to cut by 25 basis points. Then we got the report from Nick Timoros, also known as Nikileaks for the Wall Street Journal, talking about the possibility of a 50 basis point cut. And in just a few sessions, we have now shifted to a 50 basis point cut being the majority view here. Big swing again upward today. On Friday it was 50 50. Right. 50% probability for 50 basis points.

50 for 25 basis points now today 50 basis points has firmly pulled into the lead with a 67% probability of a 50 basis point cut now and just a 33% chance of a 25 basis point point cut. So wow, again, what a big swing that has been. Have you been tuning in with us here? You know that we’ve been calling for a 50 basis point cut now on my podcast last week I said that really I thought at the time that it was unlikely that the Fed was going to go with 50, even though it’s what they should have been doing. Have you been tuning in? See it for a while? You know that we’ve said they should have started their rate cuts already. This should not be the first rate cut that they are doing. They are behind the curve. And you hear that a lot now all of a sudden. We’ve been saying this for months.

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We said it all the way going back to the last rate hike, that we said their final rate hikes were a mistake and only pushed up the timeline in which they were going to have to cut rates. And that has proven to be true here again. But this call was helped out today from a few senators led by, you know, I’ll leave out the opinions here, but led by Pocahontas herself, Elizabeth Warren, who are now calling for a 75 basis point cut on Wednesday, which I think the timing here is really interesting. Yeah, not a whole lot of people really care what she has to say. She’s just been so out there on her policies, on her calls, she’s really lost a lot of support. But in my opinion, this case here actually does help the Fed because now it looks slightly less politically motivated for them to cut by 50 basis points. At the very least they can say, well, the Dems were asking for more and we only gave them 50. Right.

Whereas that would have seen as highly politically motivated just a month ago. But make no mistake about it, this is a highly politically motivated move. The Fed is made up of. Roughly 80% of Fed members belong to the Democrat Party. You know, there’s definitely no lack of political bias here from the Federal Reserve. They’ll do whatever it takes to help their team win. But the good news is coming out of that is that this is the right thing to do. They should be cutting by a minimum of 50 basis point here.

And again, I think it kind of gives them the all clear to do so, you know, now the question will be, what does Jay Powell do in his question and answer side of things. We’ll be sure to be reporting on that here. So stay tuned for Wednesday after the close. But once again, we’ll see if it’s at least enough to help right this wrong, that the Fed has made another major policy error here, or if it’s little too little too late, although in our view, the economy remains rock solid. I’ve got some points on that here later in the podcast as well. And yes, we have seen job performance slowing, right? But we are not in a contraction, a contractuary period here for jobs growth. It has slowed, though significantly. So the Fed obviously wants to turn that around.

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But yields today, once again calling out the Fed here, yields heading lower, nearing a 15 or 16 month low here. It’s the lowest levels, are hovering around the lowest levels since June of last year. But regardless of what the Fed does on Wednesday, I want to make this point one more time, that we do remain extremely bullish on this market right now. We remain at ten out of twelve screens on the VRA investing system, bullish, which is extremely bullish, and it means that pullbacks should be bought. We’ve been saying that since the October 13 lows of 2022, it has proven time and time again to be the smart money move. And now that we’ve entered an environment where we have our major indexes still just right in the range of all time highs. As a matter of fact, I was going to get to this here in a second, but the Dow Jones did hit an all time high today. And as we say here, often new all time highs are not a bearish occurrence.

We’ve also got the s and P 500 just barely shy of an all time high here as well. So now that we’ve got the Fed looking to become less restrictive and in a rate cutting cycle, the old adage really applies here, don’t fight the tape and don’t fight the Fed. And the tape again when you hit all time highs is not a bearish occurrence. So both the tape and the Fed here are telling us we must be long stocks here. All right, so let’s take a look quickly at our market action on the day to day. We finished with three out of our four major indexes, positive on the day to day, led by the Dow Jones. Again, an all time high here, excuse me, at the highs of the day, getting to 41,733, finishing just slightly off of those levels at 41,622. And I’ll also point out that the transports of just did just barely, but led the way today much like you want to see semis leading tech, you want to see transports leading the Dow.

So good action there. Small caps also up on the day, just over three tenths of 1% to 21 89. After that, the S and P 500, you know, just slight gains on the day, up over one 10th of 1%. But this does make six positive sessions in a row here at 5633 for the S and P. And lastly, the Nasdaq was lower on the day. So our one low spot here, down half a percent to 17,592. And of course, I’ll go ahead and point it out. We don’t like to see it, but the semis were down 1.3% on the day today.

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But I’ll also point out that, yes, we finished lower for the Nasdaq and the semis today, but we had a pretty good smart money hour, which got us back to right in the range of the highs of the session. So, you know, we’ll take that as a small win for the close there today. We want to see a strong smart money hour, you know, and again, heading into the FOMC meeting on Wednesday, we wouldn’t be surprised tomorrow to get a little bit of kind of sideways action. Although, as I talked about last week and Kip talked about on Friday as well, this administration has been notorious for leaking what the moves are going to be, whether that’s jobs data, inflation data, or even what the Federal Reserve is going to do. So if the Fed is going to cut 50 basis points, we could get some more front running as well tomorrow. So stay tuned. We’ll be reporting on that here. Now let’s change the shift.

The page here looking at our internals on the day to day. This was our strongest market action for the day coming in positive across the board here. Even this morning when the Nasdaq was at its lows of the day today and the S and P was lower earlier as well. The internals were positive across the board here, and we closed and higher across the board as well. So really good day here from the internals. Advancing stocks beating out declining stocks just barely on the Nasdaq, but a certain beat there. But coming in over two to one positive on the NYSE 52 week highs and lows, which Kip pointed out on Friday was very strong. Over 600 stocks hitting 52 week highs last Friday.

Well, they were even stronger today with a combined NYSE and Nasdaq 748 stocks hitting 52 week highs to just 105 stocks hitting 52 week lows. Now, this is a bit of a pattern change from this market, and it started last week as well. But we’re now starting to see days where you have a lower, like, mixed market like today, but you’re getting positive internals, exactly what you want to see from the market now. Lastly, volume, not quite as strong as Friday’s volume, which saw 85% upside volume on the NYSE, but still a good day today, 71% upside volume. So that’s over two and a half to one positive on the day. And we did come in positive on the Nasdaq here as well. Not as big of a beat, but hey, we’ll take it for internals, positive across the board. When we’re seeing strong internals like this on a day where the markets are really, you know, not a whole lot of action, not a big action, at least to get strong internals like this.

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We look at that as another major buy signal here. Next up, looking at our sectors on the day to day, we finished with nine out of our eleven s and P 500 sectors higher on the day. And we saw a lot of all, all time highs or 52 week highs in the sectors that didn’t hit 52 week highs or all time highs today. We have a lot more banging on the door just fractionally away from all time highs. So we were led by the financials today, followed there by energy, which had a good day for oil today. Then materials, which is right, approaching an all time high. We also had. All right, so let’s dive into the all time highs here really quickly.

We had utilities hitting a 50 or an all time high today. Again, with yields lower like this, utilities are the biggest borrowers in the nation, so heavily affected by yield. So good to see. Next up, we also had industrials hitting an all time high today, consumer staples hitting an all time high, and then real estate hitting a 52 week high today. As you know, if you’re a regular listener, yes, we like to follow the S and P 500 sectors, but as far as real estate goes, we like to look at the home builders and the housing index. The housing index, HGX, just hit an all time high today as well. And so did the home builders. XHB, the home builder ETF, hitting an all time high today.

When you have housing and the home builders hitting all time highs, you do not want to be short the market. We talk about this here often, that housing is a leading economic indicator and one that we see telling us now again that the market has a long way to run to the upside. And we just found out over the weekend as well. We’ve been quoting now for some time. One reason we’ve been so bullish on the housing market is that one third of homeowners own their home outright. Right now. That is, I believe, an all time high. And we just broke into another one as that number is now up to 39.8% of homeowners now own their home outright.

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Certainly not a recessionary reading there. Then for our laggers. On the date we had two sectors lower, technology and consumer discretionary. Finally here for today, our VRA commodity watch. A little bit of a pause here from gold after hitting its all time high. Still not far away from it, really pretty much flat on the day at 26, $10 an ounce. We still remain extremely bullish on precious metals and the miners here. Silver now up to $31.08 an ounce here.

Copper up seven tenths of 1% to $4.26 a pound. And oil, as I mentioned earlier, having a good day today. Still struggling to get back above the $70 a barrel mark. Up 2.3% though, to $69.32 a barrel. And finally for today, bitcoin. Having a little bit of a pause now. Down 3% on the day to $57,840 of bitcoin. Folks, that is all we have time for here today.

Please be sure to subscribe to receive our VRA podcast 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.