In today's episode, Tyler wraps up an exciting week on Wall Street, where we saw record closes today from both the S&P 500 and the Nasdaq, despite this morning's less-than-ideal PCE inflation data. He breaks down the key trends to watch as this bull market rolls on. Tyler also shares sector and commodity updates and gives the VRA's View on the all-important question of whether it’s too late to jump into this market.

Don’t look back because the market is closed. Good Friday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Thank you for being here with us to close out the week this week. It was a great end to the week this week. Hope you had a fantastic week out there as well. Sorry I’m getting to you out this podcast out a little bit late today. I was playing around with some new tools in Grock and some other AIs, so got some cool charts here to share for you.

One of them I mentioned on my podcast last week as well. So we’ll go through that. But first and foremost, you know, if you’re a new listener, welcome here to the VRA Investing Podcast. We’re here every day at the market close. We also have our VRA newsletter membership which right now we have a 14 day free trial for. So come and join us@vra letter.com but I’d also love to hear your feedback on what AI systems you’re using right now. I love Grok for research, probably my most useful day to day AI right now. But I’ve also used Perplexity for some more complex projects that were probably a little bit beyond my developer capabilities.

[00:01:32]:
Really help me, you know, figure out some coding in different areas that I hadn’t used before. And Grok is the same way as well. So I played with all of them. Chat, GPT, Google’s, Claude and Gemini. Um, but I’d love to hear what’s working for you right now. All of these seem to have different strengths, different weaknesses. Some are better at image generation, some are better for pulling data. So yeah, I would love to hear and get some feedback on what’s working for you in your industry.

Maybe you’re not in the financial side of things, maybe on the engineering side of things, or just a small business owner. What are you using to automate tasks or to streamline processes? We’d love to hear more about it. We love getting feedback from you as always, so please keep it coming. You know, put it in the comments on this video or email us anytime at support v insider.com we always love to hear from you. So thanks again for being here with us this Friday. We’ll try to keep it short and sweet for you, but it was an exciting end to to the week this week. We started out with inflation data this morning, which I’ll get to more here in a second, but we got a new round of all time highs today from both the NASDAQ and the S&P 500 what a whirlwind it has been this year from the all time highs at the beginning of this year in in most of our major indexes to the tariff sell off the really one month bear market that we saw earlier this year. Now you’re not even halfway through summer and we’re back to all time highs.

[00:03:15]:
Very reminiscent of the March 2020, you know, bottom and subsequent V shaped recovery. So I’ve got a little bit more to share on that as well. And I got to give a special shout out to Kip on this one, our managing partner here at the VRA who’s absolutely nailed this move higher. I might even give a little snippet from our VRA update this morning because why not on on May 19. This is what we wrote to clients that this market has a magnet to all time highs. There’s a magnet on the market dragging it to new all time highs, then higher still. And I’ll point out this example or a similar one here in a little bit. This is exactly what we’ve been saying here for some time, that this is extremely reminiscent of March 2020 and not only from the lows to the ultimate all time highs that took place in 2022 or late 2021 depending on where you’re looking.

[00:04:19]:
The party really didn’t even start until we got back to this point. So we’ll dive into that here more in a minute. But great call there on that one, Kip, you know, absolute magnet to all time highs. And that remains true in a lot of areas. We are hitting overbought levels. We’ll go through some of that here today as well. But first let’s talk about where we started off. The day futures opened UP S&P 500 was at all time highs.

As we headed into the latest look at inflation where we got the Fed’s favored gauge of inflation, which is PCE data, coming in slightly hotter than expected but no surprises there. You know, we saw the year over year increase for PCE up from from 2.1% in April to now 2.3% this month. But Jerome Powell really telegraph graph that number so there’s really no surprises. And Brian Rich pointed this out. It’s a great point here that you’ll see here in a second when we get to the CME’s fed watch tool. That really proves exactly why Trump is right, that Jay Powell should be cutting rates. You know, on on the face value to say that the Fed chair should be cutting rates by 2% plus it seems like a big move, right? Let’s go ahead and show you this though right now and we’ll get more into this as the podcast goes on. So give you a little screen share here.

[00:05:47]:
This is the CME’s fed watch tool. So you can see current target rate four and a quarter to 450. But if the Fed’s benchmark is PCE inflation, which was 2.3%, right, that’s 200 basis points higher than the current Fed funds rate. So that’s where Trump really gets the 2% move from. They are 2% higher than than the rate of inflation. These two should track one another, right? So as Brian Rich pointed out, you know, this is restrictive policy. That is the definition of restrictive tight policy here, which puts downward pressure on the economy. As we’ve seen, you know, GDP may have come in, you know, a little bit lower than we would have liked to have seen.

As you know, we remain extremely bullish on the economy as a whole. You know, know we’re looking at future GD preprints in the coming years that are going to be massive in our view. So in the short term though, we need Jay Powell to really just get out of the way because the economy is still rolling.

Tyler Herriage [00:06:55]:
Right?

[00:06:56]:
We just need him to get out of the way now. The tariff uncertainty has cleared up. You know, what’s he waiting for? Here really is the question. And so with that, let’s go ahead and take a look at what inflation has done. So this is the chart I made with Grok here which is so super useful. I’m sure you can find this in a lot of places online, right? But it’s nice to be able to get the data as soon as you want it. You know, this is today’s latest data where we’ve got core PCE came in at 2.7% year over year. So we did get a slight little uptick here in inflation.

Look at this though. I mean, come on, that’s a serious trend lower of lower lows and lower highs. And this is what we’ve been saying from the peak in 2022 that inflation, you know, after this point when we had called the peak, we said it was never going to be straight down.

And now that we do have the money printer back on, you know, at least we’re going to see a continued devaluation of the dollar. Doesn’t mean that inflation needs to pick back up. But to just give you a bit of a timeline, you know, of course, here’s 2020. Inflation collapsed during the original parts of the COVID scare Lockdowns, all of that. And then they said, you know, supply chain issues. That was the thing, really. We all know that it was that we added almost 40% of new dollars to our money supply. That’s what really happened there.

[00:08:19]:
And Jay Powell knows every bit of this because they control monetary policy. He went on 60 Minutes and said, yes, we can digitally create dollars.

When they were talking about doing stimulus checks, he told them to go big. Because the previous decade before this, the Fed was so upset they couldn’t get inflation above 2% right before 2020, that was a story. The Fed was upset that they could not get inflation above 2%. And then, you know, then we get this. So just so you know, right around this time right here, March of 2021, I went back and checked some of my old podcast notes today. This is when Jay Powell first said that transitory, or that inflation was transitory. You know, I guess on a long enough timeline, everything is transitory technically, but that’s not what he meant and we all know that. So this is where he said transitory at 3.9% when we went up, obviously that’s PP.

[00:09:18]:
PPI, the producers price index was much higher and CPI topped out above a 9. But again, look at this series of lower lows and lower highs. We do expect this to continue. We think the market proved that today as well that inflation is a rear view mirror issue now. All time highs ahead of the data. Hotter than expected data couldn’t phase it either.

Because out of the gate this morning our markets got back to all time highs quickly. You know, we did get a little bit of a, we did get a lull at, at the midday point today. I’ll get to that here a little bit more when we get to our market watch. But again, we did finish higher really across the board on the daytoday. So last point here on inflation. Again, pretty cool tool here from grok. Not only do I get this great chart here to visualize it, but also the individual reads. Right, Just great information here.

[00:10:18]:
And this is something else that we talked about last week, that we think that China is exporting deflation. So they don’t have the same metrics that we do, but at least we can get CPI and ppi. And you know, really we don’t trust a whole lot of data out of our own government. I don’t trust anything out of the Chinese government.

So if this is what they’re showing us, you know, how much different could it possibly be to the downside? So check this out similar chart here from 2020. Again I, I haven’t double checked this data. This is from Gro, but this is what’s happening in China right now where we’ve seen, you know, they didn’t really have the same really high inflation stuff we had. I mean PPI went up obviously that’s massive. But look at where they are today. Negative 2.3, negative 2.2, March 22 point, negative 2.5, 2.7 all the way down to negative 3.3 there on their PPI CPI this during this period we had the dip. You know, I know this because I’ve followed macroeconomics for some time now. But last year you’re talking about, this is when we started talking about China exporting deflation to the US we got this little blip up of a 0.7.

[00:11:34]:
Everybody said oh, they figured it out. They turned on their money printers. They, they figured it out. And look, now we’re back into negatives here. The last three CPI prints, four have all been negative. We think that’s going to continue here from China. And so that’s why we see the Fed as being overly restrictive at this four and a quarter to 450 level. Now it was interesting again that this inflation data really didn’t affect the market.

No one’s talking about a July rate cut. That would be a surprise, right? No one’s really considered it. Look at the odds, 81% even going into this vast majority there, right. It only fell 2%. There’s still a chance there for a cut in July I think unlikely. But point is the market’s also looking at this the same way as we are, that this is a rearview mirror and that’s why major indexes finished higher today. You yes, yields were higher but we just hit a multi year low on the 10 year yesterday and now we’re continued expected for the first rate cut in September. You see that those odds have only increased.

[00:12:40]:
Look, they went up today as well. Again that tells you that this little slight uptick in inflation isn’t, doesn’t mean much to the market here at all.

So that being said, that’s kind of the, the inflation recap there. But again, you know, that’s why we think Trump is right here that Jay Powell should absolutely be cutting rates. So back into the news on the day again, the reaction from yields. I’ve got a chart somewhere in here for that. Well, we’ll get to these in a later. I don’t want to give away too much just yet. So again the Major news of the morning was the inflation data. Our major indexes continued their move higher today.

10 year yield, which maybe I’ll get to the chart here in a minute, was up slightly on the day but again yesterday hit its lowest level since May 2nd. So excuse me, not multi year low there, but one last point in the headlines before we get to our market action is that Nvidia just continues to be more on a tear here. Up another 1.6% today, now approaching a $4 trillion market cap. Absolutely incredible that we do have a buy wreck here on it for from the vra. Got really good gains in there so far as well. And now many people might think and, and be afraid of this. Is this unsustainable? Is this a sign of a top? Not only in our view is it a sign this is not a market top.

[00:14:18]:
All time highs are not a bearish occurrence. This is a sign in our view that the bull market is accelerating. Right from the creation of the New York Stock Exchange. It took, I mean, what, 200 years for the first company to cross a trillion dollar valuation. Now of course we can get into the semantics of money printing and devaluation of the dollar, but regardless, it took that long to get to a $1 trillion market cap that that took place in 2018. Okay, seven years ago. In the last seven years we’ve had a, a multitude of other Companies cross the 1 trillion market cap mark. Again, this isn’t slowing down, this is speeding up, this is accelerating.

And it won’t be long in our view. Really, you blink and you might miss it that a company will have a $10 trillion market cap in the coming years, likely well before 2030, especially at the the pace of acceleration in tech that we’re seeing right now. All right, so that being said, there’s so much exciting stuff to look at here in the market. Let’s quickly go through our market action on the day as this was the second to last day of trading for the month of June and for Q2. So we’re entering the share buyback blackout period, but we’re also now entering entering the period of end of quarter fund flows. So they kind of might cancel themselves out a little bit. And then once the share buybacks come back in, it’s off to the races. Right.

[00:15:49]:
As we’ve talked about here for some time, pullbacks will be buying opportunities because we are hitting extreme overbought levels now. But we’ll get into a few reasons why that’s not a long term concern here. And that dips Will continue to be bought. If we get any pullbacks, we’ll look at it as overbought pauses. So let’s take a look here. We’ve got a chart of the S P500 here today. Again, all time high. Good to see you’re not quite redlining like we’ve seen in the past on some of our.

Excuse me, Momentum oscillators there. So certainly could have some more room to run. And again, we’ve compared this period to 2020, right? The 2020 V shaped recovery at that move. V shaped recovery back to all time highs. This is a little more zoomed out, but take a look at this chart. So let’s go here first. This is from 2020, the beginning of 2020 through today, essentially. Where did my truck go that I.

[00:16:52]:
All right, so again, big pullback from coronavirus insanity. This is where we got back to all time highs in August of that year. So that’s where I say you are here. So we had more room to run there before they it peaked. But we did get slightly back below that low. No problem. We look at that again as a buying opportunity because look what happened after that. Of course that’s in hindsight, but if we got something similar to that today, again, that’s what we’d be looking for to buy the dip.

So take a look at this. Once it got back to all time highs. So not from the lows. This 3393 level. I’m just getting an approximate here. That’s 3406. So I’ll stop a little bit below this level. Look, that’s over 40% returns.

That’s after we hit the all time high. So if you’ve got fomo, you feel like you’re missing out. Take a look at this chart. There’s still so much more room to run.

Of course, if you wanted to be perfect about it, you could have sold it for the 2022 Joe Biden bear market. But even then, if you’re a long term investor and you were able to buy here, you know, you weren’t too miserable. You saw a great buy price in here and hey, now you’re pretty happy today. That’s just for long term investors. We’d like to be a little bit more active than that. But when you zoom out on these charts, it helps remove the emotion. So I had one more comparison here. All right, so this is all the way.

[00:18:14]:
This is just through the 22 top. There we go. So yeah, a little bit more zoomed in. Version Again to see that big move higher after we hit all time highs in the S&P 500. So great to see today. As I mentioned earlier we did get a midday pullback. Some of our major indexes did turn red on the day. You know maybe some of that was traders taking off the rest of the day after those all time highs.

Hey call it a summer afternoon but maybe a little bit. Also was Trump had some comments about additional tariffs on Canada that spooked the market a little bit. But again it was just a short term move and we were able to finish higher across the board on the day. So I don’t have a read here. My screen’s refreshed, but Russell 2000 finishing at 2172. After that we were led by the Dow up 1% or 430 points to 4043. 819. Good day today.

[00:19:14]:
Good day from the transports as well. Next up, NASDAQ and the S P both all time highs today closed at 6,173 for the S P 500 closing at 20,273 for the NASDAQ. So quick little view of that chart here as well. You know similar move here. That’s the V shaped recovery from COVID I know this is zoomed out or sorry there’s the V shaped recovery from COVID I know this is zoomed out. Maybe a little hard to see there. But also similar story once we got back to these all time highs again in approximate I might even be below where that level is. I mean look at that.

You’re looking at an over 60% move over that time to where the market peaked at anything. We’re looking at a similar move that might even have more room to run to the upside than this here. So again great day from our major indexes here today. Let’s take a look at our internals with that midday pullback. As you might expect, a little bit mixed here but no concerns. We did come back positive. Advanced decline on the NYSE slightly negative on the Nasdaq positive for 52 week highs lows both NYSE and NASDAQ and then for volume positive on the nyse. But NASDAQ volume has been a little all over the place with this really, you know all over the place action with some penny stocks as well.

[00:20:37]:
So tough to get a route a good read. But I’m also going to zoom out on it and try not to rationalize just one day’s data here. Next up, looking at our sectors on the day here today Let me just make got through some of these here. So the, the Trump news. I was going to share this with you. Yeah, I mean, nothing new, but Trump put out earlier today the threat of tariffs. So again, we’ll move on from that to our sectors. On the day.

We were led by Consumer Discretionary. Let me take a look at that chart real quick because that’s got to be. There’s some of these in here. Like communication Services did hit an all time high here today. That’s what I was thinking of. And that was our followup right there. So led by Consumer Discretionary, followed by Communication Services, all time high today. Our laggards on the day were energy and healthcare.

[00:21:34]:
Finally here for today, let’s dive in to our VRA Commodity watch also. I mean, one last thing. I know I’m jumping around here a little bit, but the semis had, you know, have had a great run and it’s very good to see hitting new highs. We’re almost at an all time high, which would be the first time since July 11th of last year. So good to see we got about one point away or so from that all time high today. All right, let’s take a look again at our VRA Commodity watch. Let me get a quick refresh of my screens here. Gold is lower on the day at $3,300 an ounce, down 1.3 per six 3%.

But I did want to share this chart here, you know. Yes. All right, maybe looks, you know, you don’t like to see that candle that we got here today, but look at this move. That’s an amazing move. Looks to have found some support levels in this area. We’ll look for those to hold because as Kip has talked about on his podcast this week as well, we don’t own gold for geopolitical reasons. We own gold as a hedge against currency devaluation.

[00:22:47]:
That’s why we want to continue to own gold. Look back on this chart here. Kip first recommended gold at the VRA at $350 an ounce in 2003. What I want to show you here was so interesting is that if you go to about $350 an ounce, right in this time frame, right to today, massive over 800% returns.

You can’t even see the pullback here on this chart that has outperformed the S&P 500 over the same time frame. Just an incredible move. And in an inflationary environment, not saying again, that means cpi, ppi, PCE are going to go up. But a devaluation of the dollar. We can’t talk about this enough that you have to own inflationary assets, which means owning stocks, real estate, precious metals, gold and silver.

Owning bitcoin as well. These are assets that, regardless of what’s happening in the market, will continue to increase in value while the purchasing power of the dollar is diminished. We just don’t see that really coming to an end anytime soon. We’ve said this often. President Trump never claimed to be the president of austerity. So don’t be excited or don’t be surprised when you see big budgets. All right, let, let’s wrap it up here. Silver now down 1% on the day at $36.20 an ounce.

[00:24:11]:
Copper higher on the day above $5 a pound at $59 an ounce. You know, not too far away from a 52E high there, Dr. Copper, you know, potential sign of an expanding global economy. Crude oil, you know, well below $70 a barrel. Now it’s 65.52 a barrel. And finally here for today, Bitcoin at 107168 a Bitcoin, folks. That is all that 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. Have a great weekend, everyone. We’ll see you back here on Monday for the close.