In today's episode, Tyler unpacks the current state of global stock market indexes and the effects of Trump's tariffs. Despite recent setbacks for stocks, the VRA remains ultra-bullish on the long-term potential for this market. We'll also interpret key economic indicators, including tomorrow's jobs data and its potential impact. Finally, stay tuned for insights into commodities, with a focus on gold, copper, and bitcoin. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great day out there today. I can’t sugarcoat it here today. It was not the kind of action we wanted to see from the market today, especially after, you know, yesterday’s good action. Two solid sessions in a row for the semis there as well, you know, and we gave a lot of that back here today. So not what you want to see, but, you know, as we’ve said here through the entirety of really the last, what, 11 sessions or so that it’s been since The S&P 500 hit an all time high.

You know, nothing has changed in our view over the medium to long term. And even in the short term, we are looking for the bottom to be very close, if not already in. For example, the semis have not gotten back to their lows of two days ago. So, you know, we’re still looking for that to be the case here. And I’ll go through a few reasons for that today, as we do here often on the VRA Investing podcast. But what has been interesting so far is that, you know, tech, regardless of the, of the, of the direction of the movement, very often is the leader to the upside and to the downside. Unfortunately, as we’ve seen here lately, that is the truth. The Nasdaq is in correction territory, down what, roughly 12 and a half percent now.

[00:01:36]:
Let’s get the exact number here for you. I don’t want to misquote it. You know, the all time high that we haven’t been able to get back to from December, you know, roughly down 11% from that time. Just an approximate, you know, eyeballing it here, little less than 11% it looked like. But the cues today, actually I thought was interesting that the NASDAQ 100 had not gotten to that level. It hit that level today, but we did finish slightly off the lows of the day. So it finished down, you know, it’s 9.9% from its all time highs, which was much more recent than the Nasdaq. It hit an all time high in mid February.

So a little bit of different action there. But again, point being here, you know, it’s very often that tech can lead to the downside and we’ve seen it from the semis as well. The good news of that is, yes, as I said at the beginning of the podcast, we remain extremely bullish here. So we do expect them to again lead to the Upside once this is over, semis and tech leading the way, first in, first out in a lot of ways as well. You know, you, there’s a few things to keep in mind and this more specifically about the tech industry as a whole, but also the market, US market as a whole right now, you know, nothing has changed on the fundamentals side of things. Companies still have fantastic balance sheets. We just had another quarter of phenomenal earnings which, you know, crushed estimates.

Estimates were for roughly 8%, 8 and a half percent earnings growth for Q4 of last year. So far we’re at 12, 13% growth. That’s a big beat there. And now we’re getting to the end of, you know, the week. Seasonal, seasonal period. It’s mostly the second half of December, but even the first part of March can be rough and March is another month that bottoms have happen in very often. Saw it the other day also it’s, it’s in the first year of a presidential term. I think marches have marked bottoms pretty often.

[00:03:39]:
Actually the most recent March, bottom of real magnitude was Covid. We might have seen another couple of sell offs have ended around that time frame. But regardless, here, back to the tech story again. Phenomenal quarter of earnings. Then we’ll get, you know, we’re almost to the end of Q1 already here. Then look at the level of CapEx expenditures or capital expenditures is CapEx. Look at the CapEx increases that companies have made, you know, a lot of it due to the AI and innovation revolution for the, you know, the AI areas. But it’s going to expand across tech as well in many different areas.

Some of these companies, you know, expanding capex by an order of magnitude compared to where they were before.

[00:04:28]:
And at the same time companies have some of the best debt to market cap ratios that we’ve seen in decades. They have cash on hand, which means not only are they going to be able to fund a lot of these capex increases with the cash they have on hand, but they have the ability to borrow money here as well. So we think American companies are really in a very good space and as we say here, often new highs to get new highs. So let’s talk global for a second because we’ve said it as well, this is not just going to be a U.S. golden Age, we’ll lead the way, but it’s going to be a global economic expansion. That’s what we want to see at least. You know, we’re obviously the tariff deal, which I’ll get to more in a second, seems pretty isolationist on the surface. I think a lot of the rhetoric we’re seeing in the public is negotiation.

I think if you talk to Trump, he may not actually feel quite as strongly about some of these things. Like he was saying today at Canada, we don’t need your lumber, we don’t need your oil, we don’t need, need these things from you.

[00:05:29]:
But at the end of the day, I think most Americans realize these are our neighbors and we’re sure we would love to welcome them in as the 51st state. I think a lot of Americans actually like that idea, even if Canadians don’t. But again, that’s a pretty hard line stance there to say that about Canada with the tariff topic. So again, I think that we’ve talked about this on the podcast as well. Some of these negotiations that are taking place in public, I love to see it. I think it’s fascinating. Insider baseball compared in transparency.

Compared to what we’ve seen really in most presidential cycles outside of Trump.

[00:06:11]:
He’s more transparent in this term than he was in his first and his first term blew away everybody else in recent history as far, excuse me, as transparency goes for all of the, the gaslighting, you’ll hear from the mainstream media about him not being transparent.

So you know, those kind of headlines do hurt the market. Absolutely. But again, we’re seeing global major indexes hitting all time highs. So we think this is an America problem right now. And again, short term problem in our view that ultimately this will lead to new highs because new highs as we talk about here often. So let me take a look here at the first chart of the day. Let me just make sure my screen is lining up here. It’s a little skewed.

There we go. Bear with me here. Thank you. Still getting used to the screen share stuff, you know, Would love to hear your feedback on it. I think I’ve been liking it a lot so far. Fun to talk to you about these things here. There we go. All right, so here we have a look at global major indexes versus the US here.

[00:07:25]:
So we have Germany leading the way. As Kip talked about yesterday, they just announced massive stimulus deals and that’s kind of taking place all over Europe right now. A big increase in their military expenditures. These are all things that will, you know, boost GDP if maybe not for all the right reasons, but it should boost gdp. In Germany, as Kip talked about yesterday, their GDP is a fraction, what was it, 1/4th, 1/5th of what ours is here in the U.S. right. But they have a phenomenal debt to GDP ratio which does give them the ability to lever up.

I heard some people talking about this this morning of like oh, you’re saying Germany and these other countries can take on more debt. What are you talking about? Right, well you got it exactly wrong. Look at our debt to GDP ratio now it does help that we have the world reserve currency of course but look at a lot of other like China’s is much bigger than ours, Japan’s much bigger than ours. So Germany again, small, smaller economy compared to ours. I wouldn’t say it’s like a boutique economy. Right. Still a major economy but such a low debt to GDP ratio they do have the ability to lever up. So we’re seeing it though not just in Germany but across the eu, uk you right, at all times.

These are returns here on the year by the way if I’m not mistaken the DAX is up even more now because it was up J. Here’s another all time high there today from the dax.

So we would look at this as encouraging. Yeah we don’t want to see the US selling off the way that it is but new highs beget new highs. Let’s see here again, I mean so for what we think we’re seeing here in the US this is again this is only the chart from the year here.

Over the longer term you can see much more action. We’ll go ahead and look at the S P here. We think this is a counter trend move to the longer trend bull move that we’re seeing here. So I will get back to this chart here in a minute Just to briefly cover here though know you see today we briefly dip below the 200 day moving average. We were able to finish it’s at 5730 as you can see there we finished at 5738, finished 8 points above the 200 day moving average. We want to see that be the low for the S and P And while I’m on the topic it might as well jump around a little bit. The semis did manage to hold above the low for Monday so we want to see that hold there as well. All right, I’m going to come back to this chart here in a minute.

[00:09:56]:
First and foremost though, if we were going to see a a much more sustained bear market potential recession you think, you know a lot of moves might say that you would at least see a bid for the dollar in panic.

That’s not what we’re seeing right now. Look at the dollar. This is one of the largest three day declines in years here that we’ve seen. You know, I was talking about this the other day on the podcast. If we annotated here, this is, you know, compared to some of the stocks we’ve looked at in the S P being down, you know, as much as it is, this may not seem like that big of a move, but for the dollar that’s big, 5.7% move lower. You can’t see that, huh? Oh, no, there it is. Okay, you can see on the left side of the chart there the percentage move there. So, yeah, about roughly you have going to today’s close, five and a half percent or so.

You know, again just eyeballing it there, this has been a big move lower in the dollar as Kip talked about yesterday as well. We do think that the Trump administration, as they’ve openly said many times, they’re looking for a weaker dollar.

A stronger and more resilient global reserve currency, but a weaker dollar.

And there’s interesting points of clarification there. So again, if we were expecting more panic, you’d likely see a bid in the dollar. You’d also likely see a drop in Yields if people fl safety is usually the U.S. you know, it has been interesting. Trump just said this. I saw it right before I got on the podcast here today. Another topic Kip talked about yesterday that Trump just, just essentially said it as well that the globalists are behind the stock market sell off here. And it very well, well may be the case.

[00:11:40]:
They know that one way to hurt Trump is economically. We talk, we saw it from the Federal Reserve and Trump’s first term there as well. So you’ve got to think, as we’ve talked about how smart Trump’s cabinet is and how capable and talented they are, that they’ll have some answer for this. But you know, we, we don’t want to see them waiting much longer on this here. You know, and with this move, one again contrarian aspect of it that we’ve talked about here at length and I’ve got a few stats for you here on it is sentiment continues to be extremely fearful here. So cnbc I guess ran another market in turmoil piece last night. Check this out. This is our this week.

I guess this is pretty incredible they’ve run for. I mean, look at this. This is a significant number of market and turmoil pieces. One year later, the s and P500 is higher every 100% of the time. Look at all these cases here now. A lot were in 2020. Look at that. I Mean the bulk, both of these columns, our 2020 and one to 2022, that was the COVID era era, right.

And coronavirus insanity as we refer to that time as. But point being, you know, going back to 2010, markets higher 100 of the time, one year later with 40% average returns, had to share that one there. That’s pretty incredible. So we’ve talked about the fear and greed index as well. Moving lower on my Tuesday podcast, it was at a 20, went up a little bit yesterday towards the fear mode. Let’s see, where did it close yesterday? 21, so slightly above Tuesday. Now back down to a 17 here. And it’s.

[00:13:23]:
This is not the only areas we’re seeing this. We talked about this one. We got this one in overnight. The AI Investor sentiment survey. So slight, slightly less bears than what we saw last week, but you know, even less bulls as well. So everybody moving neutral here from the bearish side, right? When the bull bear spread in AAII has gotten this far, like a 40% spread there, right, that we saw last week. Historically speaking, the market outperforms over the next 1, 3, 6 and 12 months from that, that moment. That is pretty incredible there.

Let me see if there’s one more stat in here. I think I had one more to go off of that as well. Well, anyway, you know, so historically if the average gain in the SB 500 is 9.8, 9.9% after a 40 spread like this or a 1st percentile spread like this in the bull to bear ratios, the market outperforms by 6% in the full year, following over average historical gains. So again, as a, as a contrarian, these are things that we don’t mind seeing. Obviously this is painful in the short term, right? Going back to this, this is not fun, right? But we do think that this is a short term opportunity to buy the dip, really. All right, next up here, economically speaking, we do have the jobs data coming out tomorrow morning ahead of the open. This will be an interesting one. You know, it’s gonna be February, so the first full month of Trump’s term.

And as we know, the government has become one of the largest employers in America. Doge is slashing government jobs by the thousands.

[00:15:16]:
So we’ve talked about this here as well. This could hit jobs numbers in the short term, specifically on the government side of things. And not only that, I mean, look at all these government funded non government organizations, right, that are, those are people that have, are professional money launderers that are going to be put out of business. You Know, can’t help but feel bad for them though. So yes, this will impact jobs data almost certainly.

But we think this will be a short term blip on what will send the private sector roaring back to life and will more than make up for with better quality higher paying jobs than what the government has to offer. Especially as we continue to get rid of these government bureaucratic oversight groups that do nothing but hinder progress really.

So you know, again, look at that as a short term blip. We’ll be reporting on that here tomorrow after the close though as well. All right, let me get back here. There we go. Okay, let’s take a look here at our market action on the day to day. As I mentioned earlier, all of our major indexes did finish lower on the daytoday. We were led by, if you want to call it that, the Dow down just shy of 1% on the day at 42,579. Next up was small caps down 1.6%.

[00:16:45]:
After that the S&P 500 down 1.78% to 5,738. Again 8 points above is 200 day moving average. I’ll just go ahead and show this one here quickly though as well. You know again what we talk about here often, extreme oversold levels that we’re seeing as well. You know and I’ll go ahead and show this one yield since I was talking about it earlier. This is one that I said about this time last week. You know, we were getting to extreme oversold levels. That’s about when you get a pop.

But look at that. I mean I have no concerns for us there in regards to yields especially if we get weak jobs data tomorrow we’ll see what that does to the likelihood of the CME’s Fed watch tool for potentially four rate cuts this year. Not necessarily always something that we’re, that we’re cheering for though there.

You know, you want to see a strong economy there. They can do a slow burn on rate cuts and we’re talking about 25 basis point cuts. We’re not talking about emergency 51% cuts here. All right. And then finally here the Nasdaq was down 2.6% on the day to 18,069. Again it is in correction territory. The S P though is only now down about six and a half percent from those all time highs there. So again we look at this as a buying opportunity at the end of the day.

[00:18:08]:
And the internals were much better than you might have expected on a day like today. Far Better than when I did the podcast on Tuesday.

Obviously yesterday was an update. So pretty decent numbers at least yesterday. So again, with the NASDAQ down 2.6%, these could have been much worse. We did have more declining stocks than advancing stocks. Roughly 2 to 1 negative. Just a little over 2 to 1 negative there then this was what was really impressive on Tuesday’s session. On that down session we saw 1000 over 1000 stocks hitting 52 week lows. Now today that number is only about 275.

That’s a big improvement from just two sessions ago on a rough session like this. So hey, we’ll take it. Volume a little worse than 2 to 1 negative on the NYSE, a little better on the NASDAQ. You know, none of the 70, 80% downside volumes that would really have you more worried over the medium to long term. Next up here, looking at our sectors on the day to day, we finished with just one sector higher on the day. It was the energy sector which has been hit pretty hard. A little bit of a bounce back there from some oversold levels, our leaders to the downside, the 10 sectors that finished lower, consumer, discretionary, real estate and tech. I do want to check.

[00:19:30]:
Let’s see one more chart here. The housing index though did finish higher. You know, we talk about that here often. We prefer home builders in the housing index over the real estate sector, both of which home builders finished up 8/10 of 1%. You know, that kind of tells you the direction that the home builders expect yields to go from here. All right, finally here for today, our VRA Commodity watch. Little refresh on my screens here. Excuse me.

Gold now essentially flat on the day at $2,920 an ounce. As you know, we remain very bullish here on Gold. Next up, silver. This I don’t have the, it’s too late after the close here to get the the move on the day at 33.21 an ounce. Copper flat as well, $4.77 a pound. Let’s see here. That’s got to be getting close to a. Yep, just about at that level.

Well, let’s take, I take that back at its highs of the day today. Let’s go ahead and give you a quick look at what I’m seeing here. Copper, Dr. Copper that at the highs of the day hit 485 at the highest. So that’s a breakout from there. Slight, you know, barely, but that means it’s its highest level since May of last year. For Dr. Copper, you know, again we are seeing international indexes hitting at or near all time highs, 52E highs.

[00:20:55]:
You know, China’s been performing really well as well actually. FXI, the large cap ETF for China, all time high today. Our 52E high today. Give you a quick little snippet of that one there as well. So there you go, you know, again seeing copper up, kind of the global reflation trade that we’ve talked about here as well. A rising tide lifts all boats. We that didn’t concern us here. All right, next up, oil at 66.27 a barrel.

And finally here for today, bitcoin managing to hang on now above $90,000 of Bitcoin on the day today it was up to almost 93,000. But again staying above 90,000 now was below it earlier today down 1/10 of 1% at $90,361 a bitcoin. We’ve got the White House Crypto summit tomorrow. So that’ll be an interesting one to watch for and what revelations come out of there, whether it’s about how bitcoin strategic reserve or, you know, we’ll see, it’ll be an interesting one for sure. We’ll report on it here next week with the V Investing podcast, because that’ll be after the podcast tomorrow. But of course, we’ll be back here with you tomorrow after the close. So thanks again for tuning in for today’s podcast. You can subscribe to receive all all of our VRA Investing podcasts@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.