In today's episode, Tyler breaks down the latest stock market movements and the economic data that is shaping our financial landscape. Despite a shaky start to the day, we got our third strong smart money hour in a row that helped the big 3 major indexes finish higher on the day. Tune in to hear the latest updates on market internals, sectors, and to see what the VRA Investing System is telling us looking forward.

Dont look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for Todays VRA investing podcast. Hope you all had a great day out there today. If you were watching the markets this afternoon, you know that we got another strong smart money hour here today as our major indexes. We’re really back and forth between positive territory all day today. The Dow managed to stay positive for just about all the day today, if not all of it. But before the close last hour of trading, the Nasdaq was negative and the S and P was negative.

And it wasn’t looking too hopeful because the internals were also not looking good. But we were able to buck that trend and finish higher for the Dow, Nasdaq and the S & P today on another good smart money hour. That makes three days in a row here, Friday, Monday and Tuesday, where we’ve seen strong smart money hours. That’s a trend that we do want to see continue. One other trend that we want to see to discontinue would be this internal action. We talked about it last week. We were seeing better signs from the internals last week. So we don’t want to see days like today continue from here going forward.

[00:01:30]:
But this morning, it didn’t help a whole lot that we got more economic data back. Economic data that we see will ultimately be bullish but stings a little bit in the short term. And I’m talking today here about the jolts data, the job openings, right, coming in at 8.06 million, roughly just under 400,000 jobs away from consensus at 8.4 million. So again, we’ve got jobs numbers coming out this Friday as well, which we see, and we’ve talked a lot about that. We expect Friday’s number to come in below estimates as well. So again, these are readings that sting in the short term here. And to really clarify, you know, we’re never rooting for the case to be a lower jobs number. Right.

We don’t want to bet against America in any way. We’re optimists here at the VRA at heart. So it does sting when you see people losing their jobs, people being underpaid or having to work three, four jobs to make the same as a one income household, household might be able to do. But with this data, we’re going to continue to see here and hear a lot of the r word recession, that as we start to get weaker jobs data, likely average hourly earnings dropping as well. We’ll look to see what we get on Friday. And we talk about this here often we don’t put too much emphasis on one month’s data, but we will be watching for emerging trends here. So again, we don’t want to see a lower jobs number, but to the long term bullish side of this is that it gives the Fed cover to cut rates sooner rather than later. And what’s so interesting about this jobs market is that we’ve seen for the last year, each report has been revised lower in who does that favor? Who has it favored? At least so far it’s been the Federal Reserve.

So we have a situation here where we miss estimates by a lot on Friday, and then next month these numbers get revised higher. But no one except for market watchers and economists see those revisions really. So in everyone’s head, it’s still a weak jobs market. So Goldilocks number for the Fed is the key point here. So we’ve still got a lot of data to go this week. We get more manufacturing data. We get the ism services data out tomorrow. And then, of course, the big may jobs report coming out on Friday.

[00:04:23]:
And after a weaker than expected jolts data from this morning, it’s got a lot of hesitancy leading up to Friday. A lot of people saying that this is kind of a tell of what should be a weak jobs number on Friday. You know, that’s not the outcome we want. I can’t make it clear enough that we want to see a thriving jobs market, and we think that’s where we’re headed as well. November’s election will have a big part to play in that. But regardless of who the president is, as long as they don’t derail what has been, what we’ve been calling this innovation revolution, then nothing but new jobs and prosperity should be created going forward. So, you know, comes in waves. We have economic cycles.

We don’t expect jobs misses to be around for long. And the key point here is we’re not talking about negative jobs numbers. Kip talked yesterday about the GDP expectations. Yes, they were lowered from, what was it? I don’t have the numbers in front of me from over 2%, though, down to about a 1.3% expectations now for GDP. So, yes, slowing, but these aren’t negative numbers. These aren’t contractionary numbers. So these are numbers we can handle here. And again, as long as we’re not in contractionary territory, these numbers coming in slower will be Goldilocks for the Fed.

And at the end of the day, who knows how much of this data is manipulated to benefit that narrative. So that being said, a little bit of a segue here, but is still directly affected by this topic. And that is central banks. I already talked a lot about them, but it is a big next two weeks and really next couple of months for central banks as they are now starting to make moves in easing monetary policy. And I’ll give you a little bit of a background on all of that. But first, in the next two weeks, we have five major global bank decisions, which includes the Fed next Wednesday as well. But before that, we’ve got some coming up this week. As Kip covered yesterday.

[00:06:39]:
The ECB is expected to announce their first rate cut this Thursday. The Bank of Canada will also be meeting tomorrow, where not long ago a cut was expected in their June meeting as well. Odds have fallen in the last few weeks of a potential cut from the bank of Canada. That sets up for a potential surprise here. And we’ve seen a couple of surprises recently, and I’ll get to those in a second. But we talk about this here often as well. Something that has been made abundantly clear since 2020 is that global central banks work in coordinated, closely coordinated efforts to set their policies. So if we did get a quote, unquote surprise cut on Wednesday from Canada, it would not be a surprise to the other central bank leaders.

They talk openly now about their meetings behind taking place, at least behind closed doors. We know that they’re speaking right, that we don’t get to see in the public arena. So point being here to remember that this easing cycle has actually already started. It actually began in March with the Swiss National bank. They were the first to cut rates. Then it continued in May. We had the swedish, swedish central bank cutting as well. This is orchestrated central bank planning.

And the real point here, the take home, remains, don’t fight the tape, don’t fight the Fed. We’re continuing to see, even if it’s not in our major indexes, I mean, we just saw all time highs within the last month. We’re still seeing individual names and sectors hitting all time highs. So we don’t want to fight the tape. And now if global central banks are quickly headed back toward easy money policies, then you don’t want to be fighting the Fed here as well. This is the time to keep some powder dry and be looking for opportunities in this market here. So that being said, it’ll be really interesting to see what comes out of the bank of Canada tomorrow from the ECB on Thursday. And last point here on central banks.

[00:09:01]:
We’ll take it home here to the Federal Reserve. And that is that the odds of rate cuts are once again increasing here on just a few pieces so far of not even bad economic data, but worse than expected economic data. Last week the majority view was firmly for no rate cuts in July, no rate cuts in September. I’m going to pull this up here as well to give you the exact numbers here. But last week it was the majority view, a 53.7% probability the Fed would have no action in this September meeting. In just one week, that number has dropped all the way down to a 34.2% chance. With now firmly the majority probability here is a 56.7% chance of a rate cut. Sorry, that number, even for the Fed staying put, dropped again during this session now at a 33% chance.

Just a week ago it was almost completely unexpected that the Fed would cut 50 basis points by their September meeting. Those numbers have doubled as well from 4% last week, now roughly a 10% this week that the Fed will cut 50 basis points by their September meeting. Nothing has changed in our view here at the VRA, the Fed will cut rates two to three times in 2024. And if you saw from our update yesterday the COVID where Jay Powell basically they’re saying no rate cuts for this year. That’s another contrarian signal here. When articles like Barron’s put something out like that, or the Economist put something out like that, we’ve seen it time and time again saw from the us dollar peaking. You know, talking about the us dollars, bull run on the COVID marked the top as well. You do see this time and time again.

But make no mistake about it, this economic data that we’re seeing now should give the Fed the COVID two cut rates. I won’t get into the whole manipulation topic here again, but make no mistake about it, the Fed and their ilk cannot wait to get back to easy money policies. And so we don’t put it past them, just like we don’t put it past them to goose the market in favor of their political views. We wouldn’t put it past them to goose economic data in order to get back to the policies that they prefer. That being said, let’s turn the page now and take a look at our market action on the day. It was an eventful day. We we had multiple attempts throughout the session to get into positive territory, and the smart money hour took us there to finish positive with three out of our four major indexes on the day. Today only the Russell 2000 was lower, but it was down 1.25%.

[00:12:05]:
So some big losses on the day to 2033 and we’ll start from the bottom here, excuse me, today, and climb the ladder. Next up was the S and P 500, finishing up 0.15% to 5291. After that was the Nasdaq up 0.17% to 16,857. And I’ll point out here that Nvidia hit another all time high today. And I know a lot of people out there have gotten a little hesitant, you know, taking some profits. I mean, it’s been an incredible run from Nvidia, right? And who knows where it goes next from here? We remain extremely bullish on the semiconductor space as a whole in Nvidia. Does seem to be the bellwether here. But point being, with Nvidia hitting another all time high, new highs beget new highs.

So it’s exactly what you want to see. Lastly here for our major indexes, the Dow Jones leading the way today, up 0.36% to 38,711. We’ve talked about this here often over the last week. The Dow really was the first to peak and begin its move lower. It hadn’t greatly outperformed our other major indexes, but to get a little bit of a rotationary aspect of this market would not only not be a surprise, it would actually be healthy for this market. And to that point, we’ve also seen a rotation here that we’ve talked about from the beginning of this bull market, that when the generals. Right, the FAANG names, if you will, you know, replace Facebook with meta, I guess, Google, Apple, Amazon, Nvidia, right? When these names get overextended, that’s when we’ve seen the other 493 stocks of the s and P 500 begin their moves higher. And over the last couple of months, we’ve seen the generals take a bit of a pause.

By and large, not all of them. So it’s interesting here is that now we have Apple, who’s made a sleeper move back to 52 week high. We’re right in range of a 52 week high here again, close today at a 194 per share. On Apple, the 52 week high is 199. That really flew under the radar. Apple was so unloved from the beginning of this year on that really everyone stopped talking about it. And so a lot of people might have missed this move here as well. We talked about it here for a trade and decided not to.

[00:14:41]:
We do like for tech, our leveraged ETF’s here and have a lot of exposure to tech in that regard. But point being is that that’s another rotational aspect, not just between major indexes, but when you see the generals starting to lead again. It allows the rest of the market to cool off from overbought conditions, and that might be a little bit of what we’re seeing in the internals here, where we’ve seen mixed to negative internals, but our market has been higher. A lot of that could give credit to the general. So we’ll see if they’re the ones that can take this market back to all time highs and really sustain the next move higher, while the rest of our market can kind of again get this rotational aspect out of its system, which is healthy for our markets overall. Also today, something that was really interesting continues to be the action in yields as the ten year made another move lower today, down one and a half percent at a 4.33 now. But at the lows of the day, today actually broke below the lows from mid May here as well. Now, we talked about a double bottom in the transports last week, so it doesn’t rule out a potential double bottom here as well.

Well, these things aren’t always perfect. This is when it might be a little bit more art than science like Kip talked about yesterday as well. That way you can get a slight violation of a double bottom making a new low, but it’s ultimately, in hindsight, a double bottom. So we would want to see this move lower, continue to really break through these support levels to tell us that yields are going to continue moving lower. But what we’ve seen since yields peaked, especially on the ten year, which peaked at a 4.99 in October, then fell all the way to a 3.78 by the end of December. Since that time has made a series of lower highs and lower lows going back to October of last year. So it obviously hadn’t taken out those lower lows from December, but now we’re starting to see again lower highs and lower lows in the month of June. Here are really the last couple of months now since rates peaked most recently at the end of April.

So we want to see that move lower continue in yields. And then if we were to see that, it would not be surprising if we got back animal spirits really returning to this market. You’re talking about the meme stock rally esque kind of moves. We’ve seen a few of those moves taking place already, right? We’ve seen, you know, the jump yesterday in GameStop. It pulled a GameStop. It pulled back today. AMD tried to do it a little bit in the month of May as well, and there’s going to be new ones out there now. And it’s going to spill over into crypto like it did before.

[00:17:40]:
We haven’t seen any of that yet, which tells us we are still very far away from a market top, you know, far away from those greed type of environments that you start to see show up. And the fear and greed index did fall back into fear territory today. Yesterday got all the way back to a neutral reading of 51. Today fell all the way down to a 42. So now back in fear territory here until we get to extreme greed, significant extreme greed, for weeks and months on end there. That’s the signs that we start to look for and say, okay, maybe we’re approaching a market top and we’re just nowhere near those levels right now. All right, next up, looking at our internals on the day today, not the readings you want to see here. Again, especially on a day where you have three out of our four major indexes, positive on the day.

And really the big three, most people don’t put the Russell 2000 into the major index category. We like to track it here because small caps reflect so much of the us consumer, of the us economy. So you want to see small caps acting well, so that’s why we treat it as a major index. I think a lot of analysts might just say it’s the big three. And today, then the big three all closed higher, but our internals were mixed to negative. Really only one reading here, positive on the day. So really not extremely negative, but a negative day. We had declining stocks beating out advancing stocks on both the NYSE and the Nasdaq.

But I will point out neither one of those were big beats. No two to one or three to one beats. Both below two, one negative, 52 week highs and lows. Had that one bright spot coming in positive on the NYSE, coming in just under three to one negative on the Nasdaq. We talk about this here often as well. This can be a little bit of a lagging indicator, so tough to read too much into that from one day’s action. But lastly here, volume was our weak spot for the NYSE coming in over two to one negative on the day today. Let me run a quick number here, see what the total percentage of downside volume was.

[00:19:56]:
Not, not too bad at all, 68% downside volume, again, just over two to one negative. Not the kind of bearish thrust day that you don’t want to see. And then coming in just barely below even on the Nasdaq. So could have been worse out there, although you don’t like to see negative internals on a day when you have the major indexes positive and a strong smart money hour. Let’s see here. One other factor that I wanted to talk about with sentiment as well, but I’ll bring it up now, has been something we’ve talked about here. It’s been a regular theme of our podcast for the last couple of months, and that has been the theme of resilience from this market, really seeing it. We haven’t talked about it as much in the last couple of podcasts, but we really have seen a lot of it, right? We’ve gotten back poorer than expected economic data, poorer than expected economic forecasts.

And still that should have given the bears an opportunity, right? We’re at overbought levels too, just not long ago. But the bears were not able to take down this market because dips are being bought so aggressively now. If the bears haven’t seized an opportunity yet, it’s getting harder and harder by the day, right? If we were to get some more bad economic data out and this market continues, continues to head higher, I mean, again, resilience here, and we really see it across the board, this move higher, and Apple that has been so unloved is really another kind of key telling point here behind this resilient move higher from our major indexes. Looking at our sectors on the day to day, we finished with six out of our eleven s and P 500 sectors higher on the day. We were led by real estate, then consumer Staples and tech, which tech, if I’m not mistaken, was just below, still just below a 52 week high. But we did get an all time high today from the communication services sector, which is a proxy essentially for tech names out there. So again, new highs beget new highs. So good to see our laggards on the day to day were the value names we’ve been talking about a lot recently.

Oil getting hit hard again today, so energy lower. We also saw materials, financials and industrials lower. Kip touched this on this yesterday as well. But Kre, the regional bank ETF, also down again today by 1.69%. Financial names really kind of taking it on the chin here. You know, you saw the report yesterday of these losses, the unrealized losses. I’ll make that note, make that clear. Unrealized losses are astoundingly high.

[00:22:50]:
A lot of that has to do with the move in yields that we’ve seen. But it’s hard to believe that the Federal Reserve is not paying attention to this, because unless they want another Silicon Valley bank type of blow up to happen, now’s the time to start recognizing this. Right. And we think that this also plays in to moving up the rate cut timeline. We said it last year a lot, that every one of those final little quarter basis point hikes, 25, excuse me, 25 basis point hikes that they did at the end of last year, we said it after each one of them. This only accelerates the timeline in which you are going to have to cut rates in the future. Rate hikes and cuts aren’t felt by the market fully for twelve to 14 months, which means we’re just now getting to the point where the market is starting to feel the impact of some of those final rate cuts. And now we’re seeing economic data starting to slow quickly here as well.

It’s not, you know, we’ll see what the Fed has to say about it next week in their Wednesday meeting. It’s going to be very interesting to see what the ECB has to say on Thursday with the bank of Canada has to say tomorrow. So stay tuned here. Come and join us every day at the close for our VRA investing podcast. Check it out at vra letter.com. you can also check out our 14 day free trial while you’re there, where you’ll be able to see and have access to everything we have to offer for 14 full days absolutely free. That includes our daily VRA updates for members only, our VRA core portfolio, and our special reports right now as well, one specifically geared towards this innovation revolution that we’re seeing. Also, one other free bonus in there.

You’ll receive a free digital copy of Kip and I’s book the Big Bribe as well, which, you know, came out two years ago now. Wow, that time really does fly. It’s hard to believe that came out two years ago, but a lot, all of the themes in there still remain true, and we remain extremely bullish for the next five and a half years leading up to 2030. Nothing has changed there. So come and join us. 14 free days at vra letter.com. finally here for today, our VRA commodity watch. Let me get a quick refresh of these screens here.

[00:25:22]:
Quite a bit of red on the screen here today, which you might not expect on a day where we had the the dollar was down for a large part of the session, finished fractionally higher. Yields down big, though. This is when you usually see a little bit of a rotation into precious metals. That was not the case today, though. Gold down just under 1% to $2,346 an ounce. Silver down big, 3.78% back below dollar 30 an ounce at $29.62 an ounce, copper down 2.65% to $4.54 a pound, and oil, as I mentioned earlier, getting hit again here today, down 1.75% to $72.92 a barrel. Finally here for today, bitcoin starting to rally along with the rest of cryptos. There’s an interesting interview today with the, the CEO of Ripple, which they built on the XRP platform, which wouldn’t be surprised if most people out there have not heard of the XRP platform, which is working to replace the Swift system.

Right. Take out those fees from cross border transactions and get them done much, much faster. So you can imagine there’s a lot of resistance against this right now. But he said today that he expects the SEC to approve a XRP ETF in 2025 as well. That news has a lot of crypto enthusiasts excited as well, and we’re seeing that in today’s prices. Bitcoin up 1.9% now back above $70,000 of bitcoin up $1,300 of bitcoin today at 70,428. Bitcoin again, a lot of green on the screen here for cryptocurrency names today. But folks, that’s all 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.