In today's episode, Tyler takes a look at the stock market landscape following yesterday's FOMC meeting. We'll explore the ongoing bearish shift in market sentiment and discuss the bullish potential for a short squeeze in US equities. Additionally, we will highlight a few other exciting stories from the day (Hint: A potential political celebrity boxing match). 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. It was certainly another eventful day here for the markets. It seems like I’ve been leading a lot of podcasts off with that recently, but it was another one here today. Let’s go ahead and kick it off there. We’ve got a lot of great topics here, but first I do want to quickly cover the market action that we’ve seen since the FOMC meeting yesterday.

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If you tuned in to Kip’s podcast yesterday, he gave a fantastic recap of everything that we saw there. So I’ll add a few maybe minor highlights in there. But if you want a recap of the Fed meeting, I highly encourage you to go listen to that podcast. So it was a good day yesterday for our markets, right? We thought we’d see that continue into today’s action. But overnight futures were not looking very good overnight. NASDAQ futures got as lows down 240 did rally back ahead of the open this morning and then we got the market open and the markets were off to the races across the board. Quickly getting into positive territory again across the board, well off the lows from the morning and we thought, hey, all right, we are off to the races. You love to see a lower open be reversed.

That’s usually a very good sign of the day’s action. You know, the first 30 minutes is tough to tell. A lot of people call that kind of the rookie hour for versus the final hour of trading, the smart money hour. You know, just kind of tag names for them though. But it was good to see. We thought again thought it was going to be off to the races, but we the movement higher stalled along the way. Fortunately, the highlight of the day here is that the lows from this morning held across the board for our major indexes here. Again, though, we did finish lower even if just fractionally on the day today.

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So I’ll get to our full stock market action here in a little bit. We’ve got a lot of exciting news to go go over here today. We’ll cover a little bit more, as I mentioned earlier from the fomc. You know, commodities continuing to rally here. Got some really exciting stuff to look at there as well and one that I’ve got to lead it off here with a little bit that I think would be fun, exciting and ultimately uniting for our country. And if you don’t know our Good friend, Wayne Allen Root. Great friend here. The vra, we love his work as well.

Does phenomenal work, really, across the board, from the sports betting side, business side, to the political side as well. And if you didn’t see it yet, Tim Waltz came out, I guess, in the last couple of days saying that MAGA supporters, Trump supporters, were afraid of guys like Tim Waltz. You know, Democrats, strong guys like Tim Waltz.

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It’s tough to say that without a smile on your face.

As Wayne so greatly pointed out. So if you haven’t seen this clip yet from one of his latest shows, it’s on his Twitter feed. Go check it out again. Wayne Allen Root. It’s on his X feed. I’m sure it’s on True Social as well. It’s on Rumble, our video platform that we love here as well. We’re Wayne challenges Tim Waltz to a celebrity boxing match.

You know, Tim, put your money where your mouth is here, right. He thinks that Trump supporters aren’t up to it, but here’s your opportunity.

And the thing I love about it as well, and why I say that I think this is such a great idea and you uniting ultimately is that again, like Wayne said in there, all the proceeds would go to charity. It could be a big event as well, get other celebrity boxing matches involved, with the prime time fight being Wayne Allen Root against Tim Waltz. And afterwards, to be able to shake hands, have a conversation even after something like that, you know, something that both sides of the aisle would watch. Um, you know, this is, again, that’s just kind of our American culture. It might seem like a shock to other people, like, oh, the, you know, somebody’s. We have two people in your political arena challenging each other to fights. Well, yeah, that’s, that’s our culture. We’re competitive here in the U.S.

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right? We love that. That’s who we are. And at the end of the day, if they can shake hands and again, the money goes to charity, it’s a win. Win all the way around would be phenomenal. Wayne, let’s make it happen. This is such a great idea. We, we’d absolutely be there paying full price for front row, because that is worth it right there. That’d be a great, great event.

All right, so that’s a fun one there happening today, but again, you know, a lot of interesting stuff happening out there today. So I originally wasn’t going to cover a whole lot on the FOMC yesterday until Pip and I were having our post market close conversations, as we do every day here before the podcast and I know we’ve gone through the CME’s Fed watch tool quite a bit here on the podcast. You might be tired of me sharing it because it is, it is highly volatile, right? You can’t really learn too, too much from it, but you do get some insights. And when I looked at it earlier today and this was actually interestingly just a little bit after the close. We’ll go ahead and share it here now. Oh, hold on, I’m gonna wait a second because just after the close. I’ll get to it here in a second. All right.

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So Jay Powell yesterday, as Kip talked about yesterday, again, if you want a recap of the FOMC meeting, highly encourage you. It’s great podcast yesterday. Jay Powell though came out and the Fed has confirmed they’re looking at two rate cuts now for 2025.

So that takes a little bit of the uncertainty out of the air for this market, right? What’s the Fed going to do? Right on cue. Earlier today the CME Fed Watch tool shows that the market was had the probability of three rate cuts even after J. Pal just said it two days ago.

So no one’s really buying what the Fed is selling here. But just like I said just about an hour ago or so, it did refresh. So the May meeting here, which is nice, we don’t have to wait, it’s about a month and a half left until the next Fed meeting. Kind of nice. And especially after a meeting like that where we can take the concerns out of the air from the Fed and at least you know, until we get CLO into May into closer into that time. And we’ve got an exciting month of April coming up, of course, the beginning of a new quarter, new earnings season. And while I’m on that note, one other exciting factor today, Micron had good earnings after the close today. Last I saw the stock was up pretty nicely.

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Still up over 3% in after hours trading. Good for the semis there. So still getting some final Q4 earnings which have been phenomenal. Crushing expectations. And I talked about this on Tuesday’s podcast as well. A lot of these estimates companies have been revising lower in previous quarters. So we look for Q1 earnings to be strong, maybe not beating quarter over quarter quite levels because Q4 is always a very good quarter, typically one of the stronger quarters for earnings. But to beat estimates here, right.

Estimates aren’t too, too high at these levels. All right, so back to this chart here. Again, no rate cut movement expected for May. The first rate Cut is expected for June, but just earlier today, again, the probability, we’re at four and a quarter to 450 right now. The, the target rate earlier today. Oh, I mean, I guess we’re back to it here. This is how fast this thing can change. We’re back into three rate cuts again after Jay Powell just said yesterday they want to the market’s already calling their bluff.

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We all see the writing on the wall. We talked about this on my Tuesday podcast. The writing has been on the wall for some time now. The Fed has been overly restrictive for some time now, especially if you look at factors like truflation, which are forecasting much lower inflation numbers than the official headlines.

We’ve seen deflation in China. We think China’s deep exporting that deflation as well. So interesting to see again the probability shifting here to now, three rate cuts expected in 2025 for the market. I mean, look at this. Here’s what I found so interesting about this specifically was that just a month ago there was still a 16% probability the Fed was going to remain paused all year.

This is the roller coaster ride I’m talking about with yields that we’ve seen up. Let me get a refresh of this screen here for you. So look at this move, roller coaster ride in yields this year.

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The peak, much like we saw in 2016, Trump’s first term yields peak dollar peaked right before the inauguration. Same thing here. Then we got cascade lower right into the lows in March where we had hit extreme oversold levels. So you get a natural pop.

But now we’re back below the 200 day moving average. And remember at the beginning of January, people were talking about the potential of the Fed not just pausing, but pivoting back to rate hikes. Unbelievable, right? So point being here that we came into the year looking for two to three rate cuts on the year from the Federal Reserve. Despite all of the turmoil and ups and downs and changes of opinions from economists, wishy washy views from the financial mainstream media, nothing has changed here.

So that’s why we say it’s not the news that matters, it’s the market’s reaction to that news. And that helps us to remove some of our emotions from investing. If you look at a longer term chart of yields, you see nothing but lower lows and lower highs. Maybe a couple little pops in there along the way, but nothing that hasn’t continued that trend for yields of lower and to the right.

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Instead of up into the right like you want to See, from a stock. But for yields, we’re okay with that. We expect yields. We think that it, you know, allows for easy money policies within our system. We think it’s going to be a tailwind coming this year. But again, our point being, our view has remained unchanged even despite all the uncertainty around the Fed, and we remain at that level right now. Now the Fed is cut quantitative tightening as well, down from 25 billion to 5 billion a month. So really, I mean, all good things coming out of the Fed.

Let’s take a look at my notes here. I want to make sure I don’t miss anything on the Fed. Kip and I were a great discussion after the close today, even though, you know, again, after a day like yesterday where it looks like, all right, finally off, back off to the races here. You know, today’s really sideways action doesn’t concern us here. We still remain extremely bullish on this market. And so our view remains unchanged from that point of view here as well. And I think it’s just been such a common theme from this market trying to find anything wrong that they, that we can, we’ve said this time and time again, but I think it’s very true right now. Where you see fear and greed index remaining at extreme fear.

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I’ve got a chart on that here as well. AAI again this week coming in with a huge spread of bears over bulls. I mean, things like this as contrarians really wake us up here. And one thing that the bears and the skeptics continue to do here, which we think is a mistake, is to continue to overweight the bad news into underweight the good news.

We’re already the Fed’s concerns already proved not to be an issue. Right now we’re looking at the April 2nd tariff deadline. That’s kind of where all eyes are shifting to now.

Just two weeks away from this point. And if it turns out like we think, it’ll be another one of these where the concerns were way bigger than the actual news was.

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We talked about this on Tuesday. Kip talked about it yesterday as well. Sell the rumor, buy the news kind of event. You know, the rumor is that this is going to be chaos and a catastrophe. And it already is chaos in a catastrophe.

The news being that, hey, this is not as big of a deal as we thought. You know, there’s some easy wins here that Trump can get to and we can see if he can kind of stick to what, what he’s talked about. You know, hey, we’re using these as Negotiating tools. And I’m not going to talk about it anymore because I’m not going to negotiate in front of the media.

So if that is the case, and these are negotiating tools and the hard April 2 deadline is a negotiating tactic. Think about the wins. We’ve already seen, just as one example, that that could reverse these concerns come April 2nd. Going to the table, Trump announces Canada and Mexico. You’ve already complied in a great way. Look at the drop in illegal border crossings. Look at the drop in fentanyl coming into the United States. You know, we’re already in talks with U.S Manufacturers who are opening new plants or offshoring jobs to China or sorry, to Mexico and Canada.

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Bringing some of those factories and jobs back into the U.S. these things are being worked on now. So we can look at those and say, hey, these are a list of wins that we’ve had from my tough trade negotiations. Canada, you know, I’ll give you a little bit of a break for a little bit longer and an extended deadline.

Not just, hey, I’m waiting till May because then the chaos continues, but to take some wins and to be able to say, hey, again, highlight those wins that I just mentioned and point to those as good reasons to delay this. They’re working in good faith. We’re working in good faith. We’re going to push the deadline here on these and continue negotiating. Right. These are the things we wanted. These are the things I campaigned on. Now we can continue to focus.

We had to knock those out. Those are big deals. Got them out of the way in the first two months. It’s only been two months. It’s March 20th today. Hard to believe.

Tyler Herriage [00:15:08]:
They say that there’s sometimes years where weeks happen and sometimes weeks where years happen. I think we just had a couple of months where decades happened.

And so we’re moving quick. There are wins that we can highlight here. And the timing from a market point of view couldn’t be better. We just had a correction. Sentiment is extremely bearish.

There’s an incredible level of short action here. People have left this market and rotated into other markets as well. So the bear trap is set here for the potential for a massive move higher that Kip talked about yesterday. We continue to look at that as the the case here. So on the rotation theme as well, I wanted to point one other chart here. I got a few more for you today. Check this out, though. European stocks did finish lower today.

But I’m talking about. We were just talking about money leaving U.S. markets because of all of these fears that trade is looking like in what I said on Tuesday, like it’s ready to unwind and potentially quickly, right? Because if these fears are gone, there’s going to be no better place to put your money than into, into the United States stocks, right? There’s going to be no better place to put your money into the other than US Bonds. This is what we talk about at length here as well. You know, where else are you going to go in the global, you’re going to get yields this high in the backing and credibility like you have with the U.S. there’s, there’s nowhere to go, right? So it’s simple gravity that’s going to pull yields lower from here. So look at this rotation that we’ve seen though. Again part of our rotation theme though, it’s sometimes from sector to sector because those are massive international sectors, right.

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This time the rotation was out of US equities and into European equities. We think this will be a short term move. CTAs, look at this are now long 52 billion worth of European stocks. In short 34 billion worth of US equities. Again, prime scenario here for a short squeeze that I just mentioned mentioned. I mean that is, I mean decades lows. And I think I saw an updated number that it might have even been bigger at the open this morning. This is from yesterday’s data.

So again, prime setup here. And European indexes can remain healthy and I’m not saying they have to have a bear market. But again, this rotation has been overdone. We expect it to unwind. We look at this as a bear trap. You know, I know there’s a lot of people out there that are long term bulls. Some of those are perma bull. But there’s just so much fear out there by and large.

And we think that the setup here, it just continues to get better. All right, so let’s take a quick recap of our major indexes on the day. We were led by the Dow which actually finished flat on the day. And again across the board here, we finished well off the lows from the open. We never retested those lows either, which was good to see. So Dow flat on the day at 41953s and P500 down 210 of 1% at 5662. Next up, NASDAQ down just over 310 of 1% to 17691. Good to see that the semis held up a little bit better.

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Tried to go positive Just before the close. Couldn’t hang on to those gains though. And the small caps were our laggard on the day today. So, yes, not an ideal day here, but again, finishing above that lower open this morning and never retesting those lows we’ll take here as a minor win. All right, so one more point here on the sentiment topic before I dive deeper into today’s, into today’s market action. So you’ve seen the volume side, the rotation, the short interest in the this huge spread between European and US Equities. We’ve also talked about the B of A rotation out of U.S. stocks.

You know, largest drop in U.S. equity and allocation on record here. I’ll go ahead and share this here. I shared it on Friday. It’s a little blurry, but there you go. So as I mentioned, there we go at the top, record rotation out of US Stocks, biggest drop in US Equity allocation, second largest rise in macro pessimism, not good. But as a contrarian, this is lighting up all of our signals here, right? When this much money gets on to the other side of the trade, you at least have to look at the other side. And we think it’s pretty attractive.

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It remains attractive. Here’s another example. AII four weeks in a row of this massive spread of bulls. The Bears only happened three other times. Look at the returns, green across the board, 100% of the time. Look at these massive gains one year later, right? Average 36% move higher. I know it’s only three instances, but wow, that’s the kind of scenario and the kind of bearish sentiment that we’re seeing in this market. Acting like it is a full on bear market in a recession when it’s just been a 10% correction.

Again, if we can, if Trump can kind of pull that off with this trade deal coming April 2, it could be a massive short squeeze coming here. All right, next up, let’s take a look at our internals on the day today about what you would expect on a day like today. You’re not terrible, not great, pretty even. But we finished lower. So did our internals. We had more declining stocks than advancing stocks, but no big 2 to 1 beats or anything. 50, 52 week highs lows came in almost exactly even on the nyse, slightly more negative on the Nasdaq and last year volume negative on the nyc. But NASDAQ volume was almost even here on the day today.

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You know, that’s not, we’ll take that as a little bit of a win when you had the NASDAQ really leading the way lower for the big three today, you know down 310 of 1% again fractional day. Don’t would have loved to see some carry through from yesterday but nothing concerning in today’s action. And again seeing yields move lower, that yield move lower below the 200 day moving average is good to see. The dollar is still remaining at low levels here as well, much like yields peaked just before the inauguration. Looking at our sectors on the day, some yield sensitive, more defensive sectors, utilities leading the way, biggest borrowers of debt in the nation. Makes sense. Followed by energy and then financials which I’ll point out here, BKX, the baking index got back above its 200 day moving average. We want to see that hold on as well.

Then our laggards on the day, materials, consumer staples and tech where we really haven’t seen the magnificent seven performing here. Let’s see. I mean we had I think it was 4 out of the 7 lower on the day today. Yeah and the gains to the upside were really, you know, nothing too big there. Wouldn’t it’d be good to see the generals. This is when they earn their stripes. We talk about it here often and they continue to. So that trend has remained intact until it really breaks down.

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You know. We’ll look for it to continue here. Finally here for today, our VRA commodity watch. Let me get a quick refresh here because we’re right at some all time highs and 52 week highs. Let me get it. Those screens aren’t working here. Sorry, just one quick second. All right, gold, let’s see.

I got too late for the last read here. Looking flat on the day at $3,052 an ounce after hitting that all time high yesterday at three $3,065 an ounce. A little bit of a pillback in GDX today but nothing crazy there at all. So had had hit some roughly overbought levels. Silver is higher on the day at $34.12 an ounce. Copper which this is the one I was waiting on here, wanted to make sure just below its 52e high which would be an all time high on the day today at $5.11 a pound. We have crude oil. It’s been creeping higher here at $68.47 a barrel.

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And then finally here for today, Bitcoin got as high as 87,000 earlier in the session now at 84. 381

All right folks, that’s all that we have time for here today. Please be sure to subscribe to receive our VRA Investing 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. Until next time. We’ll see you back here tomorrow for the close.