In today's podcast, we explored market trends, highlighting a rally in the tech sector. While our major indexes finished negative on the day we continued to get all-time highs from the semiconductors. We also discussed the bullish outlook for the market and the potential impact of sentiment on investor behavior. Join us today's VRA Investing Podcast

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for today’s VRA investing podcast. We hope you all had a great day out there today and a great long weekend out there as well, as the markets were closed yesterday in honor of MLK Day. So after the long weekend, our markets looked a little sluggish today. Our major indexes opened lower this morning, but there were some bright spots out there today as well that we’ll cover into today’s podcast, namely, our markets did try to rally to get into positive territory. We saw it, especially in the tech sector today. And I was going to wait a little bit, but talking about the tech sector, we also saw some all time highs today, the semiconductors finishing at an all time high, as well as a few individual names as well, that we’ll cover here today.

So not a pretty day for our major indexes, but still some bright spots under the surface there. Then also of note this week, earnings continuing to come in here. This morning we had Goldman Sachs, Morgan Stanley and PNC. A few more after the close today. And then throughout the week, we’ve got mostly more of the financials here kicking off Q four earnings, some insurance names as well. But next week is when the real fun begins here as we start to get some of the big tech names as well. Like next Tuesday we’ll get Netflix, Verizon, some healthcare names as well, a few more financials. And then on Wednesday next week, we’ll have Tesla, and later in the week, Intel, American Express and many other big names.

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So stay tuned. We’ll be reporting on those here. We do expect to get good numbers from Q four earnings, so stay tuned again. We’ll be reporting on all of that here. But today the anticipation was not enough to get our market higher. As I talked about earlier, we did open lower across the board, although we finished off of the lows of the day for our major indexes and still just within range of our all time highs here. As I said earlier, the semis, one of our most important economic leading indicators, again hit an all time high today. As we say here, often new highs beget new highs, and we’ve still got the s and P just a little bit away from an all time high as well.

The Dow Jones right in that range, too, while the Nasdaq is roughly seven and a half percent away from an all time high. And the Russell 2000, a group that we think has a lot of catch up to play and a lot of good positions and opportunity in the Russell, 2017% away from an all time high. Now, we’ve said we’re in a new bull market since the October 13 lows of 2022. But as Kip is said here often as well, new bull markets don’t really begin until we’ve hit all time highs across the board. That’s when the party really starts. So yes, we’ve seen it. And if you are key sectors, including the Dow Jones as well, we’ve still got some work to do before we get into the real party mode. As far as the Nasdaq and the S and P 500 go, we see that as very bullish.

And the market really giving us a gift here to continue to buy below those all time highs. That’s what we’re using this as we’ll continue to do. Much of what we did in 2023 revolved around buying the dip. We don’t think anything has changed here for 2024. That said, let’s take a look at our market action on the day today. Nasdaq was our leader on the day, if you want to call it that, still down just under two tenths of 1% to 14,944. But as I mentioned earlier, I’ll say it one more time here. Semiconductors all time high today and this morning right out the gate led the way higher as well.

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We were positive in the semis after the open tech tried to go positive just about an hour into the day. Those were the highs of the day, but the semis still managed to finish up right, just about 1.6% on the day to day. Again, hitting an all time intraday high during the session today. So really good to see a big part of that here. AMD, one of the largest holdings in the semiconductor index, up a massive 8.3% on the day to day. That’s a 52 week high there. Again, new highs beget new highs. And Nvidia hitting an all time high in a big way today.

Up over 3% on the day. And continuing with the all time high. Note not a semiconductor name, but Microsoft, certainly a big tech name, up just over half or just under half a percent. Also an all time high today as well. Just want to run one more chart here. All right, next up, we had the S and P 500 down zero point 37% on the day to day to 4765. Believe that puts us right at about 30 points away from an all time high for the S and P 500. Next up, the Dow Jones down just over six tenths of 1% today to 37,361.

Makes sense as we had a couple of Dow components down big today. Boeing continuing recent losses down 7.9% on the day, and Nike down over 3% on the day to day as well. So considering those two, the Dow actually held up a little bit here today. What is interesting here from today’s action as well continues to be sentiment. No doubt there is a lot of optimism out there. We’re seeing in the AI investor sentiment survey, seeing it in the fear and greed index, seeing it in how hedge fund managers are positioned here as well. Majority bullish as we go into 2023. Again, that matches sentiment surveys of what we’ve seen.

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But already early here, it seems like we’re seeing a lot of bulls who are throwing in the towel. And a big indication of that is that for the first two weeks of 2024 now, money market funds have seen an inflow of $182,000,000,000. That is the biggest two week inflow ever recorded to start a year. Yet another high from money market funds as well. Now, with over $7 trillion sitting in money market accounts, we continue to look at that as nothing but bullish. Now, some people might look at it and see people pulling money out of the market. We’ll take a longer term view here because that money in money market accounts is performing pretty well, but undoubtedly underperformed the market in 2023. We expect that to be the case here again in 2024.

So as these investors continue to see their money market fund accounts underperforming the broad market, that is fuel to the fire. That money is going to leave money market funds and head back into the stock market. By then, we could be already back at all time highs. Right. And this money coming off the sidelines will only add more fuel to the fire to keep this market going higher. That’s what we see here. On one more note on the sentiment aspect, the put call ratio does remain elevated. We’ve seen this a lot over the last couple of weeks, but today, finishing above a one here, that is excessive bearishness there.

So just wanted to point that out. And lastly here for our markets, really, the overall broad market coverage, the ten year yield was up in a big way today, up nearly 3% now at a 4.6% on the ten year yield. That is still below its high from the year which was hit on January 5. I believe it was at 4.9%. I’ll just get the exact number for you here. Yeah, 4.9%, just on the cusp of 4.1. So ideally, we’d like you to see it stay below those numbers there. Now, we aren’t at extreme overbought territory here or anything, so if we didn’t, it wouldn’t be a huge shock.

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But that does not change anything about our medium to long term view here on the ten year yield. Our view here is that yield will continue to trickle lower. We’re targeting a ten year yield at or below a two and a half percent by the end of next year. So the end of 2025, which would mean from our point of view that we’re hopefully looking at a soft landing, no recession, no six rate cuts this year. Right. Because we said this year, often if we get six rate cuts this year, that means that something went wrong, something broke, that means we’re in a recession. Right. We don’t want to see that.

We’d like the higher for longer theme to actually be able to come to fruition. It means that we have a strong economy, a remaining strong economy, a continuing one that is here. So we’ve been saying that for some time. You don’t want to see that many rate cuts this year, but our overall target is for a continued move lower in yields. We’d like to just see it be a controlled move lower. And on that note today we had Fed Governor Waller out with comments against the six rate cuts this year, saying that essentially what I just said, and I’m paraphrasing very loosely here, this is kind of all around paraphrase of his comments today, that if we did get six rate cuts this year, you really wouldn’t like where that is. So we see that is exactly right. We’d be fine with one to two rate cuts because in an ideal world, again, you don’t want to see the Fed aggressively cutting rates.

We’ll also start to see, it was just released, I believe, yesterday from Nick Timorose, who’s kind of seen as the know guy out there to start front know, start giving hints as to what the Fed is going to do next. And he was talking about ending quantitative tightening, starting to bring down the roll off. I believe right now they’re rolling off $60 billion worth of assets off of their balance sheet. Monthly sees by March, that could be reduced to less than $30 billion. So another factor there that will come in as opposed to rate cuts. But on the news today from Fed Waller’s announcement, the rate probabilities have begun to decline. For the March meeting going into the week, there was a 77, I’m rounding up. It was 76.9% chance that the Fed would cut rates in March.

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That’s dropped by over 10% now to a 65% chance. So we expect to see more of that. We don’t expect the Fed to be cutting that quickly. Hopefully not at least. Again, you’ve heard our reasons for that here. But again, the ten year, finishing the day at a 4.6%. Next up here, looking at our internals on the day, we did get weak numbers to start off the week. Declining stocks, beating out advancing stocks.

Just over three and a half to one negative on the NYSE. Just under three to one negative on the Nasdaq. 52 week highs and lows managed to come in just barely negative for the NYSE, although over two to one negative on the Nasdaq today. And lastly here, volume was interesting, maybe at both our bright spot and our low spot on the day from this one indicator as the NYSE came in with roughly 87% downside volume today. That’s a big number. That kind of catches your attention there. We look at over 80% on the upside, to be a bullish breath thrust is what it’s referred to as. I believe.

You got to get back to back days of that, though, to really make it bullish. I think if you get back to back days after a big down day like today, it’s really bullish. So we’ll be paying attention to that here as well for the next couple of sessions. But the fact that the SP only finished down zero point 37% today on a day with 87% downside volume, at the very least, that is a testament to how strong the s and P 500 is and specifically tech within the SP. Here again, when we have those mega cap names like Navidea, AMD and Apple, sorry, Navidea and AMD hitting 52 week highs, all time highs today. And we also saw big fun flows into Tesla and Apple today. That helps some of the volume for the Nasdaq, which, sorry, I’m kind of jumping around here, Nasdaq volume, as far as our bright spot goes, managed to come in just at about even on the day today. So overall, not great readings from the internals, but we’re not overly concerned here.

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If anything, we will look at this as a nice buying opportunity before the next move higher again, the theme for 2024 remains by the dip here. Looking at our sectors on the day today, we had just one sector finish positive on the day today. That was our tech sector, which at the highs of the day actually was just $0.20 away from an all time high. So we’re right there as well. And then our laggards on the day, energy, materials and utilities. Finally here for today, our VRA commodity watch. We get a quick refresh of my screens here. A little bit of red on the screen.

Gold now down just under 1% to $2,031 an ounce. Silver down over 1% to $23.08 an ounce. Copper now higher on the day by three quarters of 1% to $3.76 a pound. And oil still hanging out in that lower 70s range, down just over 1% to $72 a barrel. And finally for today, bitcoin seems to be kind of finding a new base here above 40,000. It’s been managing to stay above that level here. Still above it at up now 1.69% to 43,449. We said for some time that the etfs could be a bit of a buy the rumor, sell the news.

But over the long term, we see it as very bullish for the group and bitcoin. We do remain very bullish on here as well. So, 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 at vra aletter.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.