In today's episode, we will discuss a strong start to November despite a spooky end to October. All of our major indexes closed higher today, kicking off what is historically a robust three-month period for equities. We'll also discuss today's market performance, the surprising jobs report, and the potential implications of next week's election and Fed meeting. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Friday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great end to your week this week, great Friday out there and hope you had a great time celebrating Halloween last night as well. It certainly was a spooky end to the month of October yesterday as we got a pretty big down day yesterday, if I’m not mistaken, the only day in October that saw a 1% move in our major indexes to the upside or the downside. Unfortunately, it was to the downside to close out the month there. But the good news is is that now we are headed into or we are now in the strongest three month period of the year for equities and we kicked it off with a strong start to the month of November today. Our major indexes closing higher across the board here.

But just to give you an example of how strong the month of November can be going back over the last 70 years, November is one of the best months of the year with average returns of 4.4% for the S&P 500 again over the last 70 years. So it’s typically a very strong month and we expect it to be one here as well, namely for, I mean, for a lot of reasons out there. But you know, we continue to get back good earnings data. I’ll cover some of that here today. Of course, with the uncertainty with the election next week, there’s still going to be a little bit of hesitancy there, especially if we do get some kind of a contested election. I know that’s what everybody’s worried about at this point. We do think that Trump is going to firmly win this election on Tuesday. And from there we know what happened in 2016 after Trump was elected and we the stock market soared from there.

[00:02:08]:
So can’t, we can’t get there soon enough certainly. So we got a busy week coming up next week though. I’ll cover some of that here today as well. But first, this morning we got the latest looks at jobs number here with a big miss. The estimates were for a hundred thousand jobs to be created in the month of November, coming in at just 12,000 jobs in the month of November, the lowest in at least three years here. And we continue to see this time and time again. Previous months revisions lower. August and September were a revised lower by combined 112,000 jobs in just the last two months.

Now we’ve talked about this here often. These jobs revisions are getting outrageous. So far in 2024, the jobs numbers have been overstated and Revised lower by 422,000 jobs. Keep in mind, in 2023 jobs were revised lower over the course of that year by as much as 1 million jobs. Some estimates were even higher than that. How convenient is this for the Biden Harris administration? You know, it’s always, you see it out there often. But it’s so interesting how all of these, you know, seemingly accidental kind of data points, manipulation of statistics always seem to benefit one party. You know, how about that? But how convenient here again that in the Last year and 10 months jobs numbers have been revised by as much as one and a half million jobs in an election year, no less.

[00:04:01]:
That is unacceptable. Really. At the end of the day there should be an investigation into the bls, into these government statistic reporting branches of the government, right? These unelected officials who gather this data. Because there’s one of two things happening here. And I’ll give you a best and worst. The best case scenario here is that the Bureau of Labor Statistics or these other ones out there, one, the best case scenario, they are grossly incompetent at their jobs, obviously, right? In the last two years for jobs to be revised lower by a million and a half jobs, that’s a massive, massive miss. Right. And can probably be looked at no other way as just simple manipulation.

So that’s the best case scenario is that they’re just incompetent, right? The worst case scenario here is again they should be investigated into as possible election interference, right? Because if people think that the jobs numbers are looking good, that inflation numbers are looking better, that does affect votes, right? So if we’re having manipulated data going towards one party, that is election interference, right? It just, it absolutely blows the mind to think about how bad these jobs have been overstated. It’s absolutely insane. So on the news, bond yields were initially lower. Makes sense, you know, and, and major indexes were higher as well because they’re anticipating a, a dovish Fed in next week’s Fed meeting and a potential for a larger rate cut than expected. Now yields did bounce back and finish higher on the day, hitting their highest level since July here for the 10 year yield finished up 1.8% at a 4.36. Now I won’t dive into it once again here today because we do talk about this here often, but yields at this level still do not concern us here. And if you look at a chart right now, the 10 year yield is hitting right at the top end of its current downtrend channel and we are also at extreme overbought readings here for yields that is when based off the VRA investing system that you would expect a move lower to begin here. And remember, we do have not only the election next week but a Fed meeting as well where they’re expected to cut rates here once again.

[00:06:45]:
What was interesting this morning is if you looked at the CME’s Fed watch tool which puts in the probabilities of the Fed’s next move here that currently as of the close today, There is a 100% probability of a 25 basis point cut. But it wasn’t there all day today after this jobs number came out. We got a couple percentage points probability for a 50 basis point cut. Now it will likely be a 25 basis point cut. I just kind of thought that was interesting there. But the market is expecting that now here as well. So we’ll see what we get. We’ll be reporting on that here next week as well.

But keep this in mind for a Fed rate cut. Ryan Dietrich, who does phenomenal analytical work, just put this out. When the Fed cuts rates with the S P500 within 2% of an all time high, the market has been higher one year later, 20 out of 20 times 100% of the time. Now we’ll likely get a scenario like this next week as well. And we do fully expect, as we’re now just entering year three of this bull market, we expect the coming year to make 21 out of 21 here. Remember, bull markets typically last between five and six years. Our most recent bull market lasted 10 years here in the U.S. was only derailed by Covid as well.

[00:08:16]:
So yes, we do firmly expect that we are in the early innings of this bull market still. And as we’ve said here often, we’re in the midst of an innovation revolution combined with the roaring 2000 and twenties. We think it’s going to be a fun next year for this market. So stay tuned here. It’s going to be a busy week next week. Of course we got the election on Tuesday, Fed meeting Wednesday, more earnings as well. Although we have kind of gotten through the bulk of earning season so far. It’s been a phenomenal earnings season.

This is from before yesterday’s numbers. So this doesn’t include Microsoft, Apple and Intel’s reports yesterday among other big names as well or sorry, Amazon, Apple and Intel. But So far roughly 79% of companies have beat earnings per share estimates. That is phenomenal. 61% top sales forecast as well. So it’s been a good earnings Season very good to see here overall. All right, so that being said, let’s take a look here at our market action. On the day to day we were led by tech.

Exactly what you want to see. The NASDAQ up 810 of 1%. Although not enough, excuse me to get back to positive territory on the week this week breaking the Nasdaq seven week winning streak. You know incredible run here over the last seven weeks. It had to end at some point. This is not does not bring up concerns here longer term for us. And if it did start to sell off a little bit, our strategy remains the same. The smart money move here remains to buy the dip.

[00:09:59]:
Next up the Dow Jones. Sorry, let me just go ahead and give you this one as well. Tech led semis lead tech exactly what you want to see. Semis up 1.27 on the day. Today the Dow Jones up just less than 7/10 of 1% to 42,052. After that small caps up just over 6/10 of 1% to 2,210. And I’ve got to point out here that relatively speaking the small caps performed the best on the week this week. They managed to finish positive on the week while all of our other major indexes were in the red on the week.

It wasn’t a big beat but small caps were positive. Our one major index to finish positive on the week this week. Lastly here, the S P500 up just over 4/10 of 1% to 5728. I’ll also point out here sentiment continues to weaken here. We’ve got the fear and greed index at a 49. Yes we did get into fear yesterday it was at a 43. But remember just less than a month ago we got just about to extreme greed levels. So this is a big fall here.

And what has really been interesting, something we haven’t seen as much of is an increase in the put call ratio today. Today the put call ratio finished at a 1.16. Anything above a 0.7 is seen as bearish. Anything above a 1 excessive bearishness. So we’re getting the, the weak hands are shaking out here. Exactly what we want to see. And we will continue again to buy the dip. Next up here.

[00:11:37]:
Looking at our internals on the day to day, a bit of a mixed bag here but not too bad. All right, taking a look here we did have more advancing stocks than declining stocks on the Nasdaq. No two to one beats or anything but solid numbers. Slightly negative though on the NYSE 52 week highs and lows did come in positive just by one issue, but positive for the NYSE did come in slightly negative, roughly 2 to 1 negative on the Nasdaq today. And lastly here, volume did come in negative on the NYSE but managed to come in positive even if just barely on the Nasdaq. We’ll take it. So again, a bit of a mixed bag on the internals today. Looking at our sectors here, we finished with five out of our 11s P500 sectors higher on the day to day.

We were led by consumer discretionary and tech. And then our laggards on the day were utilities, real estate and energy. All right, finally here for today, our VRA Commodity Watch gold now slightly lower on the day to day, just down 1/10 of 1% to 2,746. Next up, silver down 0.66% to $32.58 an ounce. Copper now higher on the day, up 0.14% to $434 a pound. And oil just slightly higher on the day by 1/10 of 1% to $69.33 a barrel. Finally here for today, bitcoin is now back below $70,000. Bitcoin down 1% here.

[00:13:17]:
Rich Ross, the fantastic technician over at Evercore, echoed our views here for a $100,000 price target by the end of this year. That would be a big final two months of the year for bitcoin. We understand that if you get Trump in office the pro Bitcoin president, we could really begin to see a tear here. We remain extremely bullish on this group. As you can tell, Bitcoin now down just over 1% at $69,268 a bitcoin folks. That’s 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 at 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. Hope you have a great weekend out there. We’ll see you back here on Monday for the Close.