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VRA Investing Podcast – Tyler Herriage – December 07, 2023

Exciting market movements today in the latest VRA Investing Podcast! Big tech is back in the spotlight, with Google's AI system propelling their stock up 5.3%. The tech rally also lifted semiconductor giants like Nvidia and AMD, s ...

Posted On December 07, 2023Episode 1292
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About This Episode

Exciting market movements today in the latest VRA Investing Podcast! Big tech is back in the spotlight, with Google's AI system propelling their stock up 5.3%. The tech rally also lifted semiconductor giants like Nvidia and AMD, showcasing the power of AI and its impact on stock prices.

Transcript

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herridge here with you for today’s VRA investing podcast. Hope you all had a great day out there today. Certainly a good day from our markets today. A lot, a lot of green on the screen today. And a big part of that, that thanks to Big tech here once again after this little bit of a pause that we’ve seen from the highs in November, took a little bit of a pause to get out of those extreme overbought conditions today, really showing their true colors. Those AI was the talk of the day here once again, pretty often theme today, but that helped give a rise to tech stocks as well on the day as Google yesterday evening announced their new AI system.

[00:00:55]:

The stock took off today, up 5.3% on the day, just shy of its 52 week high and not far from its all time high there as well. As you might have seen earlier this week, Apple also crossed the 3 trillion valuation mark again. Apple also rallying on the day, really the generals taking off, having a good day today on the backs of this news from Google as well. But this is really one of our VRA megatrends we’ve talked so much about. We wrote about in our book the Big bribe. I mean, we were saying this over a year ago now and we continue to see it on a day to day basis. And what this hype, and it’s not just hype, there’s a lot of practical application here, but what that does to stock prices, we saw Nvidia and AMD up big on the day. I’ll cover some of those here soon, but back to some of the use cases here.

Some of these you might not even think of when it comes to AI, there’s so many cases, but one that we’re now using as well that you can see is on our new Vraletter.com website. If you go take a look at our new website again, vraletter.com. Go under the Resources tab and you’ll see our new podcast page there. Check it out. We’d love to get your feedback as well, but on that page you’ll see there’s now also a transcription of our audio podcast there. They’ll still be there in the future when we get back to doing video, which you’ll all be able to watch and read on our new website, vraletter.com. But the transcription for the audio is done through an AI system. What would have to take hours to do before to transcribe an audio podcast.

[00:02:42]:

There are systems out there, because we’ve been looking into this for years. There are systems out there where you could send off your podcast and have an actual person, believe it or not, to transcribe it for you, and you would get it back hours later. So four or 5 hours later for a 20 Minutes podcast transcription. Now, through this new AI tool that we’re using, we’ll get the transcription back faster than you can upload the podcast to a website. It’s crazy. A 20 minutes, 30 Minutes audio podcast can be transcribed in about 30 seconds on this platform. And not to mention the other tools that go along with it as well. It’s very cool.

[00:03:27]:

So take a look at it. You’ll notice there, maybe it’s not perfect, but it’s about at least 90% accurate to what we’re talking about in the transcription. It’s very impressive. Again, a 20 Minutes podcast fully transcribed in 30 seconds. So very impressive there. We’re glad to be adding that feature as well here for the VRA investing podcast. So stay tuned. We’ll be talking about some of our new features on the website here on the podcast as well.

But go take a look again, that’s Vraletter.com. And if you’re not with us already, you can find our 14 day free trial on that page as well to get a full glimpse of everything that we have to offer here at the vertical research advisory. So again, Vraletter.com back on to the tech rally today, though. NasdAq leading the way, and it helped again with Google’s rally today. And as I mentioned earlier, the chip names rallying AMD big winner on the day, up 9.84%, just shy of a 52 week high here as Meta. And Microsoft just announced yesterday that they will be buying AMD’s new AI chip as an alternative to Nvidia’s. Now you might think, well, then Navidea is probably down on the day today. Surprisingly not the case here.

[00:04:49]:

I guess the rising tide lifts all boats here. But Nvidia up roughly 2.4% on the day, on a day where their competitor could be taking away some market share. That’s just how garlic strong this rally is right now. And it has been really textbook to seasonality. We’ve seen it all year. We’ve talked about it a lot. We had a strong start to the year, which we called for at the end of 2022 after we called the bear market bottom of October 13, 2022 strong start to the year. We peaked out in July of this year, which right as we’re entering the weakest seasonal part of the year, August and September 2 of the worst months of the year.

[00:05:32]:

Even in a good year, those months tend to be lower. So we got a little bit of a pullback there. Then we started to see the tides turning, and we called again this year the bottom in October. And then we started to rally from there. And then, of course, we just had a massive, massive November from our market. So when you’re looking at seasonality, we typically do get that consolidation in the early part of December. We’ve seen that we’ve pulled back from the extreme overbought readings we saw after the November rally, and now we start to head in to the year end rally here. And so we got exactly what we want to see today.

Semis and tech leading the semis up 2.3% on the day today. Now, that doesn’t mean that we’re in the clear here to the end of the month. We’re really looking for a strong Santa Claus rally this year, which is the final five trading days of the year into the first two trading days of the following year. So that’s the real seasonal strength that we typically see on a typical year. Right? So we expect to see that as well. But overall, just textbook seasonality and we expect that to continue. We’d love to see the market just continue to rally year end to year end. But any pauses, if we dig it some more along the way to that ride, we’re going to continue to use them as buying opportunities here.

[00:06:59]:

As we’ve seen from this bull market in a situation during a seasonally bullish part of the year, those pullbacks are short and sweet. Now, I will point out that on the sentiment side of things, still a lot of bulls out there. The fear and Greed index is still in greed territory. It did pull back a little bit from what we’ve seen, but AAI also still a lot of bulls here. But I’m going to point out that this week we also saw a big uptick in bears as well. Bears going from 19.6% last week to 27.4% this week with bulls falling just 1%. So a lot of those coming out of the neutral category, but I really bring that up because I saw this just before the podcast. A lot of these sentiment indexes are from people involved in the market.

So we got to look at other sources to see what mom and pop investors are doing. And one of those sources, money market funds, which just hit another record high here, folks. That is cash on the sidelines, sitting there underperforming the market right now. That’s a whole lot of potential liquidity to come into the market. That would certainly add fuel to the fire. Again, that money sitting in the sidelines is underperforming the markets. So as we continue to hit 52 week highs, all time highs, that money has to come back into the market again. We call that fuel for the fire.

[00:08:33]:

As we continue to head higher from here, again, that money is going to be forced to come off of the sidelines. So it’s really the symptom. Indicators don’t tell the full story in this case scenario. So that’s why we look at things like money market funds and others as well. With that said, let’s take a look at our market action on the day today. As I mentioned earlier, Nasdaq leading the way up 1.37% to 14,339, again, getting back closer to 52 week high there as well. After that, just what we want to see, small caps continuing to play catch up here to our other major indexes. Our second best performing index on the day, up zero point 87% to 1868.

After that, the S and P 500 up eight tenths of 1% to 4585. And finally, the Dow Jones up 0% to 36,117 for the Dow. Next up here, let’s take a look at our internals on the day today because these were much improved from what we’ve seen over the last two sessions, which were fairly lackluster as far as the internals go. But today, advancing stocks beating out declining stocks. Over just right at just under two to one positive. Let me get a quick refresh here. Get a little update on these after the close. I think this one might have come in a little bit better.

[00:10:12]:

So yes, over two to one positive for the NYSE, not quite two to one positive for the Nasdaq, but still over 1000 stocks more advancing than declining. Next up, 52 week highs to lows. A little light today, but we did just get a little pause to get out of overbought territory. So no surprises as this is a lagging indicator. But coming in just under two to one positive on the NYSE and just slightly negative, just by 17 more 52 week lows than highs on the Nasdaq today. Finally here, volume coming in just shy of two to one positive on the NYSE and a little bit worse, but still positive on the Nasdaq as well. Looking at our sectors on the day today, impressive session here. Eight out of our eleven S and P 500 sectors finished higher on the day.

We were led by communication services. Google makes up a big part of that. So that makes sense. Followed there by tech. Also getting close to its all time high there again after that, consumer discretionary. Now, skip down a few and point out real estate on the day. Today we cover the housing market under real estate, but they’re not the same. The XLRE real estate sector is made up of a lot of REITs, but we like to focus on is the actual housing sector, which we’ve seen all time highs in yesterday for HGX, the housing index, the home builders, both XHB and ITB, those are two ETFs for home builders.

[00:11:44]:

Both of those hitting all time highs yesterday. Now, we didn’t quite get back to those all time highs today, but we saw a sell off into the close yesterday. So what we did see today are new all time closing highs. So still an all time high from HGX and the home builders as well, which as we look at from the VRA investing system, we look at tech and housing. It’s our two leading economic indicators, both of those continuing to lead the way here. Exactly what you want to see from this market. Another major reason why we continue to say buy the dip is the smart money move here for our laggards on the day. Energy continues to be a laggard here, as oil is still below $70 a barrel.

[00:12:33]:

After that, it was utilities. The ten year today up just two tenths of 1%, still hanging around. Multi month lows there. We’ve called for a lower move in the ten year for some time now. Now we’re starting to get it. After that, healthcare was our final laggard on the day today. Finally here for today, our VRA commodity watch. Gold, fractionally lower on the day, down just over one 10th of 1% to $2,045 an ounce.

[00:13:04]:

After that, silver down four tenths of 1% to $24.12 an ounce. Copper now up on the day, 1.75% to $3.79 a pound. And oil, as I mentioned earlier, below $70 a barrel, but up on the day, zero point 37% at $69.64 a barrel. And finally here for today, Bitcoin taking a little bit of a pause here after its nice rally. Above 44,000 now, just below that, down nine tenths of 1% today to $43,380 a bitcoin, folks, that’s 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 receive them sign up we’re still working on the sign up feature on Vraletter.com. So you can still sign up on Vrainsider, but go take a look@Vraletter.com to check out the full transcript and all of the new features behind the podcast as well.

So thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.

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Time Stamps

00:00 Stocks soar on positive news, tech drives surge.
06:13 Semis and tech leading, strong Santa rally expected.
06:59 Stock market sentiment remains bullish with uptick in bears.
13:04 Silver down, copper up, oil rises slightly.

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