In today's episode, Tyler breaks down another eventful day of stock market action, and while the major indexes didn't finish higher, it was good to see the semiconductors leading the way and finishing positive on the day. He also discusses potential topics for tonight's State of the Union, and important breaking news on tariffs. Finally, stay tuned for the VRA Commodity Watch, where Tyler breaks down the VRA's increased price target for Gold. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great day out there today. As has been the case since Trump was inaugurated, really, even going back to his election, it was another eventful, exciting, action packed day here for the markets. You know, we’ve talked about this here a lot on the podcast, but the, the constant news flow almost makes it hard to keep up with all of the action that’s happening out there and the impacts that it might have on the economy or the market. Now, I will say a lot of those are good things that we’ve been talking about, even if the market reaction hasn’t quite liked them as much as we would have liked. Right? But it is what a change of pace it is.

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We got a few of those to cover here on today’s podcast, including some breaking news that I’m glad I caught right before we got on here that Kip and I caught at the last seconds of our daily end of market close call before we get on the podcast here with you. So to recap, a little bit of Kip’s podcast yesterday, if you haven’t had a chance to listen to it yet, I highly recommend it. But as was a key point of, of Kip’s podcast yesterday, was getting in charge of the messaging for the Trump administration when the inauguration first happened. I mean, as I said a second ago, the news flow was so heavy, so consistent that the Dems, the left, the mainstream media couldn’t really sink their teeth into any one story to kind of get Trump as we’ve seen them do time and time again. Now we’ve seen the messaging start to, you know, they’re getting a little bit more organized or maybe the Trump admin is spreading themselves pretty thin as well. The, the key point here being, though, is that they need to get back in control of the messaging because even if it’s just chaos, right, and uncertainty, the market doesn’t like uncertainty. People don’t like uncertainty in general. So the messaging going forward from him is going to be very important.

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And as we’ll see tonight, in his State of the Union, you know, I guess they’re calling it that now. But, but the kind of the theme of it will be the renewal of the American dream. You know, we think that’s a great point to, to be made and there are a lot of exciting topics that he could get not only the American people excited about, but the stock market once again excited about this, because we know one thing about animal spirits, they can be fickle. You know, they come as easily as they go. And so if you don’t get in control of it early and get keep those animal spirits riled up, they can fade quickly. So what are some of the exciting things that he could talk about tonight? You know, on the really exciting front of avoiding the topics that we’ve, we’ve done a lot of here, which we’ll get to in a minute, but whether that be the Ukraine, Russia, war, tariff topics. No, let’s talk about some of the internal stuff we can get excited about. Right.

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You know, is he going to talk about going even bigger on cutting taxes, both corporate and personal tap taxes? You know, we’ve already seen people in his cabinet saying that Trump wants to do away with the IRS and create the External Revenue Service. So there’s all kinds of exciting things that he could talk about from that point of view. You know, no taxes on Social Security, getting no tax on tips done, no estate or death tax or, you know, all kinds of tax cuts that he could be talking about without outlining a goal. If he could outline a goal of actually removing the irs, I mean, I think that a lot of people would really like that. It’d be a very popular decision. And then also the sovereign wealth fund, what exactly they’re going to be doing with that? You know, we heard the announcements on Sunday about the, the crypto strategic reserve, which Bitcoin and other cryptos saw a nice pop on those on that news. And you got a little bit, gave a little bit back during yesterday’s session into the evening and bounced back a little bit today. We’ll get to that on the podcast here as well.

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So he’s got a, a lot of exciting topics that he can go through and kind of rebuild those animal spirits. We don’t think they’ve lost control of the messaging by any means, you know, giving up ground to the left. But I mean, as far as what people are experiencing right now in the market, what we’re hearing from clients, what we’re hearing from other individuals that we talk to on a daily basis is that, you know, this is starting to get painful when you check your 401k and it’s, it’s being hit, that doesn’t feel good. Right. That’s kind of the experience that a lot of Americans are having right now. So while Trump’s, as Kip talked about yesterday, Trump’s policies and his commitments have been to the second America that we’ve talked so much about that. It has been left behind. The second America that is asset light, doesn’t own stocks, doesn’t own real estate.

those people are who Trump really wants to help here. So many of them are likely cheering on, you know, some losses in the stock market. They don’t mind seeing that. If the country’s direction is changing into a large extent, we can agree with that. But there’s also a big percentage of people who would be damaged, you know, from a bear market at this point, a recession at this point, as is obvious. Right. We don’t think that’s going to be the case, though. We continue to look at this as an incredible buying opportunity.

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And already we are seeing the light at the end of tunnel, at the end of the tunnel for a lot of different factors here. So let’s go ahead and dive into that because this was some exciting breaking news that we got here right before the close today. All right, so to recap, futures were lower this morning on the additional tariffs being implemented overnight on Canada and Mexico. These levies include a 25 fee on imports in incoming from Mexico, non energy goods from Canada, all kinds of different between 10 and 25%. Also an additional 10 was levied on China as well. Then we had Trudeau discussing increasing tariffs on us today, to which Trump had to respond. Right. Which when I get to his response, I think you’ll understand one of the big topics that Kip and I have been talking about has not even been that it’s the tariff news affecting the market is the uncertainty, the, the again the messaging around the tariffs.

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You know, not a clear cut plan as Kip has said a lot as well. Maybe some of these conversations should be taking place behind closed doors. I like the transparency, you know, but it does add a lot of volatility in the markets and, and just sentiment in general. So maybe it is unnecessary to do it in public. But I did enjoy this, this true social post from Trump after where he said please explain to Governor Trudeau of Canada that when he puts a retaliatory tariff on the US Our reciprocal tariff will immediately increase by a like amount. Stock market reactions to that aside, you know, I do love the negotiations through shrink there. I think it’s far better than what we’ve seen in the past. And then, you know, he went on to make a few more posts about some of the other tariffs that have been implemented by Canada.

But I think the real news here and why it’s tough to do the negotiations in the public has been the media’s reaction they’re making it a far bigger deal than it is. The percentage of our GDP that’s made up by importing and exporting to Canada is really not a huge amount compared to how the media has been making it. Right. So as I wrote these words that Trump need at the admin as a whole needs to get back into controlling the messaging here. Literally as I was writing those words at the close a few minutes later while I was on the phone with Kip, this is what came across. President Trump’s Commerce Secretary Lutnick says Trump may roll back Canada and Mexico tariffs tomorrow, says a tariff compromise announcement is likely tomorrow. So all of this fear about tariffs, you know, we’re seeing the negotiations through strength. Company or countries are saying, oh, Trump is serious about this and he wants us to change now.

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Okay, he’s serious. Let’s get to the table, let’s negotiate this. I we can’t deal with tariffs like this long term and they don’t even want to deal with it in the short term. Right. So you know again, how quickly the messaging does change around these things. So we’ll see some more comments on this tonight, I’m sure at the State of the Union with Trump. We’ll be tuning in here and commenting on it tomorrow as well. But let’s see if we can get those animal spirits back with this meeting tonight.

That would be great to see. And right on cue. We’ve talked about this being a contrarian environment here. From what we’ve seen in the sentiment indicators, obviously the sell off has hurt quite a bit, but it’s also hurt sentiment quite a bit. We’ve seen it in the AI. Now here once again is the fear and greed index. So it closed at a 20 today, but earlier in the session hit just a 14, I believe is the low that I saw earlier in the session, which is the lowest level since September 29, 2022, just days before the October 12 bear market lows. That’s the kind of fear that we’re looking at in the market right now.

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You know that that’s an astounding level of fear for some of the stats. I’ll share with you here in a minute. You’ll see why we’re not quite as fearful here. So let’s go ahead and take a look then at our markets here on the day today. So, so beginning before I even get to our major indexes on the day today, a few points that we’ve made pre trumping inaugurated and since is that we expected the US Dollar to fall and we expected yields to fall much like we saw in Trump’s first term, where both, excuse me, the dollar and yields peaked just days before his inauguration. We’re seeing almost an identical move to that here now. So take a look. Here’s a chart of the US Dollar, right? You see, that is a pretty big move lower there in dollar terms.

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Now, in percentage terms, that’s a 4% move lower in the dollar, but had in a 1% move lower today it was 3% going into the day. So 4% from these highs. Right. If you go from 110 down, we’re just at 4% losses. But that is a massive move in the US dollar. We do expect that to continue and won’t be straight down, much like yields haven’t been straight down. But we do expect them to continue the US Dollar to continue lower as well. Again, here’s the peak just before January 20, almost identical to what we saw from Trump’s first term yields.

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Same story here, the peak just before Trump’s inauguration. And now look at that drop in yields, roughly 13% drop in yields from those January highs. Wow. And we do expect this move to continue as well. Excuse me, we did rally on yields today to finish off of the lows of the day, but no concerns. Look, I mean, we’re at extreme oversold levels. This is about when you would get a pop that wouldn’t concern us, although, you know, it might freak the market out a little bit, or at least that maybe not the market as much as the talking heads out there. All right, so on this note, with yields falling, we’re also seeing a significant drop here for expectations in the CME group.

I’m not going to dive too deep into this here today because some of these do update just before the close. But the first rate cut, the probability keeps moving up here. Now it’s only up 3% from yesterday. It’s up 15% from where it was a week ago. The probability of the first rate cut being moved up to May. The probability of a second or a first rate cut being in June is now still the majority view after not being there too long ago. But the odds of the second rate cut, look at that, up 10% in just the last week. And as you zoom out on the year, the odds of a full percentage point of, of rate cuts, if we’re currently at 425 to 450, that would put us at 325 to 350.

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Look at that. Went from 6% odds a month ago to 17% probability today. Interesting. You know, we’ll keep an eye on that here as well. You know, I just like to it’s a tool that we use as a CME Fed watch tool so you can’t read too much into it. These odds do change as you can tell pretty quickly here. So again, just kind of pointing out that they’ve doubled. Quite a significant move there that we’ve seen.

So on the day for our markets today we saw, you know, a slightly higher open then the midday fall. We got a great rally into the afternoon and just could not hold on to those gains into the close. We saw the semis finishing up, you know, over 1% on the day to day. We had the Nasdaq though falling into negative territory just before the close. And you know, we had a roughly 3% swing higher in the Nasdaq earlier in the session. To give it up there at the close does not feel good. But again, I’m going to go back to this chart that I shared on Friday’s podcast. Let’s take a look at this.

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There we go. This is the NASDAQ again from 1995 to the 2000 peak where the NASDAQ rallied, you know, 585, 80, 575 to 8, 580% during that five year time frame. Now I covered this on Friday. I’ve got a few more facts here for you because the Nasdaq did fall now into correction territory, a technical correction over 11% here for the move. So from 1995 to 2000, as I pointed out on Friday, we had four corrections of more than 4 or more than 10% in one bear market during that time. So first and foremost in 1996 that was an 18% move lower before making all time highs. Wow. In 1997 we had a 14% move lower here, made all time highs.

Before the end of the year there was another 16% move lower. But you notice that’s a, a higher low there, right? We’re seeing a lot of similar moves in the current chart of the NASDAQ. Then in 1998 we got another 11% pullback. None of these feel good while they’re happening, but each one is a buying opportunity, right? Even if you’d been buying at the highs, each successive move higher, you’d feel better and better about it, Right? Especially if you’re a medium to long term investor. Then we had the 1998 bear market, 29% move lower in the Nasdaq again on the way to total gains of 580% for the NASDAQ, we think that’s the environment that we’re in here. That’s what we’re looking at. And we think that this bull market has the potential to surpass that kind of a move. We’re still in the early innings here, folks.

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We’ve just entered into year three from the October 12, 2022 lows. Not even two and a half years into this bull market yet. We think we’ve got a long way to go, which is why we do remain so bullish and we’ll continue to look at pullbacks like this as buying opportunities. All right, next up here, looking at our internals on the day today, about as you might expect, got some improvement from the lows of the days. We did finish well off the lows, even if we did finish negative on the day. We had declining stocks beating out advancing stocks on both the Nyse and the NASDAQ. 52 week highs to lows were likely the low spot on the day as we did see 1000 stocks hitting 52 week lows in total. NYSE and NASDAQ combined.

Not what you want to see there. But then on volume, we got our one bright spot on the day where we did see positive NASDAQ volume. Not pretty on the NYSE though. Again, you know, kind of look at this as a fight. Let’s see if we can get a final flush here and begin our march back to all time highs for the market. All right, next up here, taking a look at our sectors on the day or season. Let me take a look at this real quick. All right, so we finished with just one sector higher on the day.

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It was tech. Then our laggers on the day were the financials, followed by the industrials and consumer staples. Sorry, skipping around a little bit here today, but I do want to make sure I cover this on our VRA commodity watch. Let me get a quick refresh of my screens here because we have now updated our price target for 2025 on gold, which is now at $2,928 an ounce. We’ve now raised our price target on gold to $4,000 an ounce by the end of 2025. That’s a massive, you know, roughly 35% move from here, you know, as we continue to see whether, whether we get into Fort Knox or not, the actual video we’ll see. But we continue to see gold reserves moving rapidly around the world. We think the demand is really there for physical gold right now.

Again, this could be something that Trump talks about tonight in regards to the sovereign wealth fund, as Scott Bisson and others have talked at length about, is the potential to revalue gold from $42 an ounce up to somewhere near today’s level, even on the US Balance sheet. You know, that’s a huge move right there. We supposedly have roughly, you know, $800 billion in gold roughly in Fort Knox right now, allegedly, I guess I should say, you know, but as you know, just a kind of side idea out there once I think Kip and I were talking just on the podcast before the close here. What if they were to issue some kind of a bond backed by gold instead of backing the US Dollar by gold, Right. There’s all kinds of financial engineering. One of our big broad megatrends, right, that we continue to expect to see in good ways from this Trump administration. Gdx, I’ll point out as well, had a good day today too. Up, let’s see one, almost one and a half percent on the day today.

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Next up, silver at now at 32.57 an ounce. Copper essentially flat on the day at $4.58 a pound. Oil now continuing below 70 a barrel at $68 a barrel. Some of that due to drill baby drill, maybe a little bit of that due to recession fears. We don’t see that as the proper fear here. We don’t see a recession on the horizons. All right. So speaking of that, there is one other thing I wanted to point out here.

This Atlanta Fed estimate, I mean, these people can be wrong all the time. But look at this massive revision lower that we’ve seen. Kip talked about this yesterday as well. Ed Yardeni talked about it overnight that this just really isn’t adding up in the Atlanta Fed can be reactionary. This is likely meant to induce a little bit of fear here from the very, very liberal left winning Democrat side of the Fed. When you look at the number of Fed employees, it’s like 93% Democrat, right. So if they can do anything they can to help get Trump, you better expect that they’re going to do it. Finally here for today, bitcoin, as I mentioned earlier, continuing or trying to move higher, you know, after that nice pop yesterday, continuing its move higher, I should say now at $87,787 of Bitcoin.

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I got to point out a Great point by BlackRock. Regardless of how you feel about them, this is a great point. You know, there’s a max supply of 21 million bitcoin out there. There’s roughly 22 million millionaires in the US not including globally, that’s in the US alone. So if every millionaire in the US wanted to buy one bitcoin, they wouldn’t be able to. It would be impossible. Right, because there’s only 21 million of them. Not to mention the fact that some of these are considered essentially permanently lost on the bitcoin network.

Whether that’s somebody who, you know, lost their, their passkey, their chain, whether they lost the device, it was on all kinds of different reasons that bitcoin has been removed from the marketplace. So even when they are fully minted out, there’s going to be less than 21 million bitcoin out there ever. We’re also seeing some interesting stuff on the news side of tax. On the tax side for bitcoin is Ted Cruz just announced a bill to overturn the IRS DeFi broker rule, which, which essentially classified companies like Coinbase as under the same laws as you would a broker. So this will, you know, a lot of people have said this is decent, advised companies from building crypto companies from building crypto companies here in the US So we’ll see what happens there. A lot of interesting stuff here and, you know, some of it we’ll find out more about tonight in the State of the Union. Going to be very exciting. No doubt about it.

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We’ll be tuning in, but that is about all we have time for here today. Please be sure to subscribe to receive our V podcast every day at the market close. You can sign up@ vraletter.com click the podcast link at the top. We’d love to have you with us. Final point here. You know, I know days like today hurt. Obviously going from green back down to red like that never feels good. Going to continue to look at these as buying opportunities.

As I showed the chart from the NASDAQ from 1995 to 2000, each one of those were fantastic buying opportunities. So we’ll use them to add to our favorite VRA 10 bagger positions along the way.

Folks, that’s all we have time for here today. Thanks again for tuning in. We’ll see you back here tomorrow for the close.