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VRA Investing Podcast: Turnaround Tuesday as Tech Stock Surge – Kip Herriage – January 28, 2025

In today's episode, Kip discusses the strong market rebound after yesterday's sell-off in tech stocks. He will also explore the intriguing developments in the AI movement within the U.S. and the notable market bifurcations observe ...

Posted On January 28, 20251541
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About This Episode

In today's episode, Kip discusses the strong market rebound after yesterday's sell-off in tech stocks. He will also explore the intriguing developments in the AI movement within the U.S. and the notable market bifurcations observed recently. We will cover market strategies, emphasizing the importance of contrarian signals and how to leverage them to your advantage. Tune into today's podcast to find out more.

Transcript

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Kip Herriage here with the daily viewing investing podcast. Hope you had a good day today. It was a much better day than yesterday, wasn’t it? Now it is crazy if you’re a regular listener here again, thank you all very much for that. How insane is this Tyler? I mean it really is always he gets the bad days. Always. I’ve never seen.

We’ve even tried it. We even started. I started buying puts on the day his time to do the podcast just to see if we can make money off this because this cycle is incredible. And of course, what I didn’t do, I didn’t buy them yesterday, I didn’t buy them on on Friday. Right. It’s to take advantage of what happened on Monday. But it is insane how many times he gets the big down days and I get the updates. I got it today.

[00:00:44]:
Also, quick heads up, I’ll be on with Wayne Allen root and Real America’s Voice tonight at 10pm Eastern talking about going to a little more depth about Deep Seek and what people should understand about what about what just happened yesterday and what it means for AI, the AI movement, specifically in the United States. So if you can join us, join us tonight at 10:00pm Eastern. But again, very good day today. I had a couple of key people tell again. Tyler yesterday on this podcast said multiple times he was expecting a turnaround Tuesday. We got turnaround Tuesday. Today had a couple of other friends of mine that were saying this feel like a bear trap. You know, we got big earnings coming out beginning tomorrow to the close.

Tomorrow to the close we’ve got, this is when big tech really starts reporting. Tesla, Meta, Microsoft and IBM, those all tomorrow to the close. And Thursday after the close get Apple and Intel. And then the next week we get a whole slew of them. And then we don’t get Nvidia until, until, until next month. They report very late. But how, how interesting that we get this big down day on Monday. Again, don’t sell on a Monday.

[00:01:54]:
Right? That’s what my mentor Ted Parsons told me. This when I was probably 23, 24 years old. One of the first lessons, don’t sell money, don’t buy on a Friday. That’s the way he approached it. We saw that again yesterday. If you had sold yesterday, you regretted it today. I mean, not, maybe not every investment, you know what I mean? But, but by and large you regretted it today. Mondays are not the day to sell.

That’s absolutely. When you get over my career the best buying opportunities my career have come on a Monday on a, on a, on a, on a darkish blackish Monday, which yesterday was pretty scary day. But there’s something else here, you know, and again that’s the bear trap comment because it got so many people bearish again. It is, it is. Tyler, I’m just going through all this. I, I, in my career, I don’t think I’ve seen this again. We got an, it was incredible day yesterday. Not Nasdaq was down 600 points.

[00:02:43]:
But did you see what was up yesterday? Dow Jones was higher transport sharply higher. Close to 2%. Transports close to 2%. Housing plus close to 2% higher. Sorry, Dow was 1% but up 260 points or something 280 points. And that happened even as NASDAQ was down more than 3%. Market leader Nvidia down 17%. Nvidia is in the Dow Jones now until the Dow Jones finished up close to 300 points with its primary probably its most obvious.

Maybe it’s, maybe it’s most market leading holding Nvidia down 17%. What? That’s just, that blows my mind. And you know, we’ve been writing about these bifurcations in the market that just don’t seem to make sense. That, that, that action yesterday told us pretty clearly that this bull market is, is going forward. This is, this is a kind of a hallmark sign of a bull market action. We get this rotation, one big one, one group’s down big, another group’s up big. This is what we’ve been talking about here for a couple of years now, really from the time that we called the bottom in October 13, 2022, put the big bribe out from really from jump street. This has been the repeating pattern of this bull market.

[00:04:05]:
It’s been the rotational theme that is, that is uber bullish. But on the flip side, you know, again We Nasdaq is 500 points less than 500 points from an all time high. That’s, that’s nothing. Okay with Nasdaq was up 390 points today. To give you an idea. Okay, so Nasdaq’s a couple percent away. SB 501% away from all time high. But if you, if you, if you’re on social media, if you watch tv, if you read print media, it is panicville.

It is absolute pandemonium and panic bill out there, people. It’s interesting because it’s all the wrong if you notice. It’s always the same people, the ones that are always wrong. And I hate to say that I Mean I, but you know, let’s be honest here. These perma bears, these forever bears, they’re almost always wrong. But they’re so confident. Oh, it’s it. That’s the crash.

[00:04:59]:
The highs in for Mag 7. Everything’s all. Tech’s gonna crash. Can take the whole thing. You heard it like I did. They’re everywhere. All it takes is one day and they come out of the woodwork. I gotta say I’ve said this before, I’ll say it again.

I do not know how those people sleep at night. I don’t know how they get out of bed in the morning. Like if you, if you actually manage money, if people actually listen to your advice about the markets. But you’re wrong. Let’s call it 95, 97, 99% of this out. Which they are. How, how do you, how do you even show your face? How do you go on tv? How do you post anything on Twitter? I, I do not understand that. You know, I, I, we’re, we’re going to Texas boys here.

[00:05:42]:
And where we come from, if you don’t get stuff right, people stop listening to. Why would anybody listen to you if you’re always wrong, they just call you. That’s the definition of an idiot. That’s a. You know what I mean? And so I, I do not understand it. But I think we can use it to our advantage as contrarians. This is what, you know, I’ve done my entire career. When you, when you notice you kind.

I keep a list of my favorite 10 perma bears. I’ve never made it published. One of these days I should. Because when these people are saying the same things, mostly guys. When these guys are saying the same thing and they’re bearish, that’s a big old buy signal and it just holds up. And so again it’s another tool that we can I keep it at our disposal to kind of give us a good contrarian signal for turns. But again turn around Tuesday for sure. Dow Jones today up 390.

Excuse me. Nasdaq up 391 points again it was down 600 yesterday. Nasdaq up 2%. Dow Jones again up another 136 today. Three tenths of 1%. Rose 2000 up 210 SB 500 up 910 1%. And the semis important. Look, if you listen to us, you know how important sims are, are to us, okay? Semis are, are the market leading group and it’s very important that they re that they recapture the 200 day moving average.

[00:06:59]:
The semi today we’re up 2%. So this is textbook semis. And NASDAQ led, right? The rest of the market, that’s textbook. But you know, yesterday of course Semis were down 10%. Right. Again, market leader Nvidia down 17%. Soxl the free time leveraging TFSA down 25%. Brutal.

But again, it made, it really didn’t make any sense because all off this deep sea stuff which we’ve written and talked about, we’re very skeptical of this Chinese story. Not that they haven’t found a creative way to process information and data because they clearly have. It’s being admitted by the likes of Nvidia and others that have said, yeah, they’ve done something interesting here. Trump came out and said, you know what, that should light a fire to Silicon Valley. This should get their attention, you know, game on. And that’s what I saw a lot of Silicon Valley execs say is, hey, you know what? This had been pretty much an American story. AI, the AI revolution. It’s clearly clear that China’s been doing some things while we’ve been bragging about it.

[00:08:08]:
So at the end of the day, deep seq, I think that there’s no doubt about it, they’ve been not telling the entire story. They clearly haven’t spent just 10% of what American big tech companies have spent. They don’t have a 90% discount on finding the same answers and pulling the same processes and programs. Okay, there’s no way that’s true. Which means that they didn’t tell the truth about the Nvidia processors that they use, the number and the advanced nature of them, and that’s because their export controls in China. So they weren’t able, this Chinese money manager that funded this kind of a think tank, they weren’t even able to be honest about how they came up with it. That’s a big red flag. The other thing is again, how many people, how many American companies, let’s call it say Fortune 500 companies, how many are going to trust their data, their process, all their companies most important information as relates to AI, the AI build out, how many companies are going to trust China? Look at the TikTok story, right? This is, this is tick tock on steroids.

[00:09:23]:
On steroids, on steroids. So it’s that important. There’s been a lot of money committed to this and that’s of course that $300 billion just from the Magnificent Seven, only $300 billion been committed in Capex to artificial intelligence. Right. When you broaden that out across the Tech sector and just really a corporate America sector. Altogether that number grows from 300 billion to 2 trillion has been committed to capex in just the next three years. So there’s a lot of stake here. And again with earnings tomorrow we’re going to get some interesting guidance and comments on this from Tesla, Meta, Microsoft and IBM.

But folks, it looks very much like Monday was a buying opportunity. It looks like this may have well been a bear trap. This news came out of nowhere. Now it has been validated. So again it’s not a scam, Deep Seek is not a scam, but it is, it is a sign that it’s game on. And here’s my take on that. Look, I always think it’s a little crazy that we have companies committing hundreds of billions of dollars into the trillions of dollars in total for something where artificial intelligence supposed to make things less expensive, Am I right? Artificial intelligence is supposed to be disruptive and innovative. Spending record amounts of money on capex, that doesn’t sound very innovative to me.

[00:10:47]:
That sounds like you’re throwing money at the problem. So I think this is all in the medium to long term. Yeah, it was a shock to the system. The markets hate surprises more than anything. Which is why you saw the reaction we saw yesterday. But again only in certain stocks, right? The rest of the market did great. Internals were good. They were okay again today.

Really. Internals are really as Tyler covered really good yesterday. But the whole basis of this AI boom again we call it the innovation revolution. The whole basis of it is disruptive technology. Right? So what, what, what, what Deepseek has accomplished here apparently should just be business as usual. This is, we should get used to, this is my point. There’s gonna be a lot and that doesn’t mean that every time it happens we’re gonna see a big downdraft in these stocks. But I think it was a good wake up call.

Clearly was a buying opportunity. Right? We had a strong bounce back day again turn around Tuesday. Tyler nailed it yesterday and just all the wrong people are calling for market crash. It all adds up, you know. And then we’ll get the earnings tomorrow and Thursday. That of course will of course be very important. But finish my thought on smh, the key point for the semis because they do lead everything. SMH the semi etf, that’s what we key off of.

[00:12:01]:
You want to write this number down? The 200 day moving average on SMH right now is just over $242 for SMH the semi ETF. 242 it’s A. It closed at 240.46 today. So we’re just below. It was up basically 5 points today. It was just below. Just below the 200 day moving average. It spiked below it yesterday.

Of course that was the big down downdraft day. I shared a chart with our bureau subscribers yesterday that this is not new for the semis. The semis have dropped below the 200 day moving average five times in just. Just since August of last year. Just since August. They’ve been below the 200 day. But the key is they didn’t stay there. Right.

[00:12:42]:
It was a spike below like we saw yesterday and then within a day or two or three right back above the 200 day. We’re on track to do that assuming that the rally continues tomorrow. And I have no, I have no reason to think it won’t. Look we this innovation revolution. Look I think me I don’t know about Tyler. I think we’re in the first inning. I think this thing is going to last that we are so early on this innovative change is coming. Think about this.

We don’t even have autonomous cars yet. They’re coming. I’ve told the story about my Tesla and I drive everywhere I go. I put it on FSD full self drive and it’s. I very rarely do I have to take the wheel and it is, it is something everybody should experience. It is crazy. But we don’t. It’s not legalized yet.

[00:13:31]:
We still don’t have that yet. We don’t have the robo taxis yet. Right. We don’t have so many things that Tesla’s working on. Of course almost all of this falls under their umbrella is the optimist, the robots and those are still coming. So I believe that we are very early in the AI boom or the innovation revolution and that this is going to be we’ve said this now for over two years. This the most similar time frame to this is the.commelta 95 to 2000 that’s the most similar. But this we believe is going to be longer lasting, much broader.

It’s not just going to be.com, not going to be just Internet, not going to be just AI stocks. This is filtering down. This can be broad based innovation revolution and it’s going to last well past 2030. So I think we are in the first if it’s a nine ball game we’re in the first or second inning. That’s how early I really believe we are. And I’ll say I’ve said it before. I’ll say this again too. I think that everything I went through in the dot com melt up and everything that’s happened since has prepared me for this moment.

[00:14:39]:
And so nothing has changed. Our Mac, if you get the macro right, the rest is, the rest falls into place. Our macro call is that this is a bull market of bull markets. It’s a melt up bull market. It’s an innovation revolution. Is this is going to be the biggest bull market that we’ve ever seen. It will make the dot com melt up look tiny by comparison. Right.

And so obviously nothing that’s happened has changed that view. This is all part and parcel of disruptive technology doing its thing. It’s fantastic and it’s going to be a wild time to live. If you’ve been looking at some of the uses of the end result of the, of this AI, oh my God, this is going to be crazy. It’s going to be, again, it will be disruptive. There’ll be a lot of people that, that are kind of scared by what’s going to happen. We have massive change coming, not just in tech, not just in autonomous cars and in robotics, but across every industry. A change like we’ve never seen in this country.

[00:15:38]:
So it is a little scary to figure it all out again. I’m 62. I wasn’t born into the technology era like the millennials, most millennials were, and certainly Gen Z, et cetera. They get it, they’re born into it, they’re not scared by it, they welcome it. Right? That’s why I surround myself with younger people. But that’s why I’m so lucky to have Tyler here, because none of this frightens him. He just, you know, Tyler could do pretty much anything he puts his mind to when it comes to technology or otherwise. So that’s my advice to you.

Surround yourself with young people and they might not like it, but you know what? We’re their elders. They got to pay us respect, they got to help us. Right? And so I’m not ashamed at all to ask for help in that area. But I believe, even though I’m older, I believe I can see what’s coming, okay? Because change is coming and it’s going to be extraordinary. And as Tyler come yesterday as well, if the GDP growth, especially with Trump 2.0, we’re going to have a GDP growth of better than 5%, I think, this year. This year, or it’s going to be within 18 months of Trump getting sworn in. So it’s coming and there’s just no way the stock market doesn’t melt up. If that’s the case, there’s no way, I guess no one’s forecasting that right now.

[00:16:56]:
Right now the Atlanta Fed is at 3% growth for the first quarter, which is, you know, it’s already beginning to jump, already going up. But just keep an eye on that because it’s going a lot higher in our opinion. Tomorrow we have the Fed. By the way, I think this should be basically a non event. Remember, this is another point to consider. This yesterday I covered the day before. If in fact, if in fact that this is going to slow down the growth in tech, what does that mean for bond yields? It means bond yields are going lower. That’s been our call as well.

And by the way, Rich Ross is out of his. So we put that in our letter this morning as well. Rich Ross is standing by everything that he’s been saying. He’s been as bullish as we’ve been. Not as long as we’ve been bullish. He’s, he’s waffled a little bit. But I just, I’m just being honest. Rich Ross is fantastic.

He does amazing work and he’s not waffling now. That’s the key point. Rich Ross is full on bullish. He’s still buying, still believes the market’s going much higher and he likes a lot of the things that we like as well. Loves Tesla, by the way, semiconductors, et cetera. He knows this area. This 208 needs to hold. That is important, we believe.

[00:18:03]:
Of course it will. And he also thinks that rates are going dollars going lower. That’s been our call. Rates going lower. That’s our call again. That happened in Trump’s first term. We believe it’s going to happen again. Now.

We had $1 trillion of market cap wiped out yesterday, $1 trillion right now 60% of that was from Nvidia. But still yesterday was a brutal day. I believe that was the shakeout. It got everybody fearful and then now we’re ready to move higher into earnings. So we’ll see. We’ll make sure to join us tomorrow afternoon after the podcast title have it tomorrow and let’s we’re sitting positive vibes to again tomorrow. Tesla, Meta, Microsoft and IBM. Okay, let’s go and get to the internals.

And internals weren’t as good. Believe it or not, they weren’t as good today as they were yesterday with that big move lower. But again, Dow was up yesterday, big two, but they were good today. No problem here whatsoever. NASDAQ internals, negative by 200 issues not a huge problem. NYSE negative by 300. It’s advanced decline as well. Volume today, hugely positive for Nasdaq.

[00:19:14]:
Very close to 2 to 1 positive on volume. NYSE volume pretty much a push. 50, 50 on volume. And today we also had more stocks hitting a 52 week high than 52 week low. But not by much, by about 40 issues. But again that was a positive. We’re going to count this as a positive. Not trifecta, but a positive day from the internals.

Not quite the case with the sector watch Today we had eight sectors finished lower, three finish higher. Technology most importantly up 3.6% led the way. Communication services, that’s essentially tech as well up 1.2%. Good to see these really bounce back today. Consumer staples on the downside led the way down 1 1/2% and utility down 1.4%. And the commodity watch today again, big bounce back day for gold today. Love the chart, love the story. Gold is now 20 something bucks away from an all time high and no one’s talking about it.

[00:20:10]:
No one’s talking about. Love it. This is when your big moves happen. We love gold here. We’re on record as saying yes, we expect this year to be our forecast for 2025, a very bullish year again for equities. Looking for 20% gains in the SB 500, up to 30 to 40% in NASDAQ and the semis. And gold, what we’re looking for another 20% up here was up 26% last year. But I think the real money in this impression in the mining space is going to be made in the miners.

They’re only up 10% last year. Again gold up 26% going to bounce back here in the miners. They’re the cheapest group that we track and I think these CEOs are finally figuring things out. By the way they are seeing and I know this from multiple sources, the industry reporting on this is pretty clear. Inflation in the mining group is really starting to come down. And again if Trump is successful in getting his getting energy prices down and of course I believe he will be, that’s very, very good news for mining stocks. So I think it’s a great buy here. Gold today was up 32 bucks an ounce.

[00:21:13]:
That’s better than 1% at 2798. High today was 2800. Again we’re just 20 something bucks away from all time high. Silver today up 1.7% at $30.94 an ounce. Of course we love silver as well. Copper Today flat on the day at what is that slightly higher? I’m sorry, a 4 cents 1% copper at 425 a pound. Crude oil, West Texas Intermediate Black gold up 80 cents a barrel. Last trade here, 74, 396 a barrel.

And final of the day, bitcoin. You know, you know, if you’ve been with us at all, you know our views on bitcoin. It’s just ticked lower, by the way. So last trade now 100,000, 3 92. I spend most of the day around 102,000. It’s a, every dip is a buying opportunity. The charts are a little wishy washy here. That doesn’t concern me.

[00:22:10]:
But we do want to see this area hold 90 to 100,000, hold digital catapult to the next stage which is 150,000. But our target this year is 200,000. So we are very bullish on risk, on assets. And really these are inflation based assets, if you will. And the money train is not going to stop. They’re going to keep printing. And I love what Trump’s doing with Doge, but the money printing isn’t going to stop.

That’s just the way it is.Us or globally. All right, folks, that’s it for today. Hope you had a great day and even better night Again tonight at 10pm Eastern, I’ll be on with Wayne Root on the Real America’s Voice. Hope you can join us. We’ll talk about some more of these issues. And other than that, we’ll see you back here tomorrow after the close.

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Time Stamps

00:00 "Deep Seek AI Discussion Tonight"
03:19 Bull Market Dynamics and Rotations
08:08 "Chinese AI Transparency Concerns"
10:03 AI Investment: A Bear Trap Analysis
15:01 "Impending Disruptive Tech Revolution"
16:11 Embrace Change, Seek Youth's Help
20:40 Mining Stocks: Inflation Down, Great Buy
22:35 "Upcoming Show on Real America's Voice"

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