In today's episode, Tyler Herriage covers a jam-packed day on Wall Street, celebrating a few all-time highs, and exploring what these milestones mean for investors. Tyler breaks down the accelerating rotations from our sectors, strong Q3 earnings, and how the "psyop of negativity" is affecting investor sentiment. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a fantastic day out there today. Hope your week has been off to a great start as well. You so far so good for the most part, at least for our markets to kick off this week. That might surprise you a little bit, considering that the NASDAQ didn’t lead today and actually finished down fractionally. But we’ll cover why today.

We don’t look at that as a huge negative on the day. As a matter of fact, we got some new highs on the day today that might even surprise you a little bit. And as we say here often, new highs beget new highs. So we’ll cover a bit of that, including a rotational theme that we’re seeing really starting to emerge from this market right now. And this is what happens in early bull markets, rotations from one sector to another, money not leaving the market, but finding new places to go in the market. So we’ll cover all of that and much more here today. We’ll also cover some of the latest from earnings data. You know, we’ve been covering a lot of Q3 earnings data here.

[00:01:30]:
Some of it Kip referenced yesterday, some of it in there might surprise you a little bit as well, especially on the sentiment side of things. I know when you think sentiment, I’m usually talking about the Fear and Greed Index or AII this is a different kind of look at sentiment. And, you know, we’ll touch on the scop of negativity that Kip and I have talked so much about since we released the big bribe in 2022. Here we are three years later, and yes, we are still talking about the scop of negativity that just pervades the financial mainstream media. Anytime that we’re starting to rally and or getting rallies and the market, they want to scare you out of the market. This is how Wall street has beat the individual investor year after year, really, going back to 1971. We’ve talked about that here before when we got taken off of the gold standard. One of the greatest things that ever happened for Wall street, one of the worst things that ever happened for the average American.

[00:02:36]:
But we’ll talk through some strategies of how individual investors can beat Wall street, really year in and year out, because that’s who we’re here for at the vra. That is our goal every day, to help the little guy, to help the mom and pop trader out there. And again, the retail investor, that’s who we want to help beat the market every year. That’s what we wake up every day excited to do here. So got some really exciting stuff to cover here also. Again, we’ll cover some of those new highs that we saw, some of those that will be surpr and some, some, you know, interesting news here from the energy sector as well. So I won’t dive too much into it right now, but let’s go ahead and dive into today’s action because as I said earlier, good day from our markets today. Three out of our four major indexes finished positive on the day and even with the NASDAQ lower on the day, still finished pretty close to the highs of the session today.

Also, when we get to the internals, I think that will impress many of you as well, especially if you’re a regular listener here or just a regular market watcher. We’ve heard so much about this deterioration and breadth in the market. Well so far this week, that is not what we have seen, including earlier today when our major indexes were flat to negative, especially when we had the Nasdaq down, what, 150 points or so, plus earlier in the session and the internals were looking pretty good. So let’s go ahead and jump right in here because we are seeing strong earnings growth. Again, Kip covered this yesterday that we had some of the highest estimates out there for Q3 earnings and we’re coming in right in line with those expectations. So I’ve got a chart here to share for you so far. Q3 earnings, companies reporting their strongest earning growth since 2021. Now, of course, you always see this 2020, that’s going to be an outlier in any statistic you see on the financial side because we had such a crazy year from coronavirus insanity, the plan right where we had the government shut down, of course, the massive sell off we saw in the market and immediate V shaped recovery, of course we’re going to see massive earnings growth quarter over quarter during that time and year over year as well because we ramped up so, so quickly there.

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But the really the quarter over our year over year number was from 2021, right. That I’m pointing to here. And because we had that wild, you know, Q1 beginning of Q2 move from earnings that just, you know, decimated earnings. When we had lockdowns, people couldn’t go into work, everything came screeching to a halt. So that’s a bit of an outlier there. So really you could probably look at this as one of the Best earnings, earnings growth year over year, numbers going back to 2018, going back to Trump’s first term here. And we do see this as early innings here for the Trump Economic Miracle 2.0 as you’ve heard us talk about here. Often we see GDP growth going to 5% and beyond, likely early next year for the 5% side of things in earnings growth or, excuse me, in gdp.

That’s an astounding number. Numbers that we really haven’t seen in a very long time. And we’re just one year into this Trump economic miracle 2.0. But two, the PSYOP of negativity, right? Everyone’s talking about, oh man, how long can this go on for? Valuations are stretched. Well, no, they’re, they’re really not. If you look at forward PE ratios, especially compared to the dot com era, we’re nowhere near those kinds of valuations. When we had, you know, Cisco trading at 130 plus multiples of their forward PE ratio, you had Oracle at 120. Right.

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Look at the largest company in the world, Nvidia, trading at 34 PE ratio. We’re just nowhere near those kinds of insane valuations that we saw. And if you happen to catch some of AMD their CEO’s comments, I believe it was from today, talking about, you know, their revenue estimates going forward, the massive growth they’re seeing, and it’s excluding China even, I think that would have surprised a lot of people going back to last year that they expect to grow so much without one of the world’s largest economies involved at all. They’re not even pricing it in. So on that note, and I’ll get to more of the sentiment side of things here in a second in the psyop of negativity from the consumer really is where we’re seeing it. You likely saw it today. But confidence in the economy from executives, look at this running high here. Economic slowdown mentions the lowest level since 2007.

Economic optimism during Q1 of this year during tariff mania. Okay? Mentions of an economic slowdown were over mentioned over 1400 times in Q1 earnings calls. That’s down now 84%. Look, that’s where we were. Excuse me, that’s where we were earlier this year. Well off from where we were during, you know, the Biden bear market of 2022. That’s all they could talk about, apparently. Right.

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And then here, of course, makes sense as well. From coronavirus insanity, economic slowdowns, of course it made sense. The economy was shut down now to this quarter just 221 mentions in Q3 so far. And we still have a little bit of a ways to go here. Of course, we’ve got Nvidia reporting on November 19th, so just eight days away from that call now. You know, we could be setting up for a major rally here end of year, and that’s what we’ve, we’ve looked for here. We’re in the most bullish six months of the year for, for our markets. We expect this year to be at least on par with our other bullish scenarios.

Now, here’s a reason, a major reason why the psyop of negativity, again, you couldn’t have escaped this today if you tuned into any financial media. And that is consumer sentiment hitting the second lowest reading ever for the University, University of Michigan survey. Really? I, I see that in yawn. I, I can’t say it any other way. That’s the truth. Because this has been such a terrible indicator of where things are going, has been this survey in particular, you know, and again, to the side up of negativity. First off here, that sounds scary. Of course it does.

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Right. Oh, consumers are hurting. Okay, well, where do these surveys really come from? First and foremost, these are terrible, terrible, terrible surveys. They’re done with just 500 households that are allegedly randomly picked. Okay, now if you’re a statistician out there, you could explain to me all of the reasons why you only need 500 randomly picked households to extrapolate that across the entire US economy. Okay, I get that. I understand where you’re coming from. I get that.

The Institute of, of Social Research oversees their work, so they must pick a good 500 households. Right. Okay, I get that. They say it’s random. You know, they pick people from this economic bracket, from these political affiliations. They even break it all down slightly a little bit in the, in the data that they allow you to look at. Beyond that, it’s a black box. There really is no way of seeing how transparent they’re really being with us here.

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I, I even tried to dive into it a little deeper than I usually do today, and there really is very little research that they show you that they say is so transparent out there. Kip has said this one for forever, and he’s been in the business obviously a lot longer than I have for being in it that long. You think you would find somebody who’s been surveyed in this. We ask the question all the time. Have you ever been surveyed by really any of these polls? Not just the University of Michigan poll. They do it by Calling people who answers numbers that they don’t have saved in their phone anymore, outside of maybe some people who work in sales. And you think it might be a sales call, maybe you pick up some of those. But the number of scam calls and spam calls are outrageous.

Most people don’t answer the phone for them at all anymore. Right. So if you have been pulled in some of these surveys, I would love to hear more. Okay. Now specifically this University of Michigan 1, because it’s five, only 500 homes. They say they’re being transparent, but who are they really pulling? This could be like mail imbalance. There’s no oversight, there’s no signature check here. They could just be filling it in themselves, saying, okay, yeah, that’s, that’s a believable amount of off from the previous one that, that people will buy this.

[00:11:53]:
Okay. I think, I think that probably is pretty close to what’s really going on. Who knows how exactly they’re asking the questions, not just questions being asked, but the way that they ask these questions, the order that the they ask these questions, are they leading people on to make things seem worse than they are? You know, we don’t, it’s not like we have the transcripts of these calls to go through ourselves. Right. So when you’ve got just 500 households being surveyed again, they can tell you, oh, they’re Democrat, independent, Republican. How can we verify that? There’s no way of doing it. We see all of this as part of a psyop of negativity. Oh man, things are worse than they’ve ever been out there.

Look, just look at what the consumer is saying. Consumers are hurting right now. You know that, that may be the case for a lot of households. And of course our sympathies and empathy go out to those people who are hurting in this environment. But as far as does that matter to the stock market? Well, we just hit new highs again today in the Dow Jones, an all time closing high for the Dow Jones today. So maybe it doesn’t matter for the market. We talk often about the first and second America. That’s not the way things should be, but that is the reality of the situation.

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And for the stock market, the second America isn’t quite as relevant as it used to be. You know, we’ve seen the top households spending continues to increase. So obviously things aren’t tough out there for everybody. Right. And we think things are going to get a whole lot better for both sides of America, especially if we can get more of the Trump economic miracle. These things like deregulation passed tax cuts which do benefit the the middle class and lower income households more than anybody. That’s what we need. We need more relief in the form of tax cuts, not in the form of government handouts.

And if we can get more of that, we’ll see a middle class boom here in America. Especially as we’re bringing manufacturing back, which I think is going to surprise a whole lot of people. You know, it’s tough to see those impacts while these plants are still, still being built. Whether it’s semiconductor facilities. Hopefully we get more like steel factories back here into the US A boom from the manufacturing side of things. I think if we can really all buy in to those factors, get products made here in the US once again, it’s going to be a golden age. That’s exactly what it will be. And as we’ve said here for some time, it’s not only the Trump economic miracle is the innovation revol which we believe is going to dwarf the dot com melt up from 1995 to 2000.

[00:14:47]:
Just imagine if we can get a fraction of what Elon Musk thinks we can get out of robotics, okay? Not just from Optimus Robotics, but robotics and manufacturing from 3D printing from other companies out there producing robotics as well. We think we can achieve a sense at least closer to a sustainable abundance of for everyone here in America. That’s what we think we’re headed towards here. And oftentimes the consumer is, it can be, you know, a counter trend indicator. Just before it was always darkest just before the dawn. If you do want to buy in to this University of Michigan sentiment surveys. All right, that being said, let’s take a look at our market action on the day to day where we did have the Dow Jones finishing up 1.18% on the day to day. An all time close closing high, not quite an intraday high, but we’ll take it here.

New highs beget new highs right after that we the S&P 500 not up nearly as much, up 210 of 1% but also finishing near the highs of the day today. Small caps also up on the daytoday into this rotational theme in the market. You’ll see it more here in our sectors where we had the NASDAQ leading yesterday and the Dow just you know, barely managing to finish positive on the day compared to the nasdaq. Well we had the reverse today. Dow leading even with the NASDAQ negative. Earlier in the day we saw great internals really for a negative NASDAQ day. Great internals overall here. You know, tomorrow we could see just the opposite once again with the Nasdaq leading, semi is leading overall here Though we look at Friday’s lows as potentially marking the lows into year end here for our markets.

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Next up, we did have the small caps higher on the day up 1/10 of 1%. So that’s why I say, you know, tomorrow it could be, we had the Dow leading today. Tomorrow it could be small caps and the Nasdaq. Now for the Nasdaq, you don’t want to see tech leading lower, but it was up 2.3% yesterday. Today we finished down a quarter of 1%. Now the semis did lead lower, but again lead yesterday up 3.2%. Massive move yesterday. So we look at this as more of a rotational aspect to this market because not this money’s not leaving the market, it’s finding other areas to get into.

And you do see that in the internals. At midday today with The NASDAQ down 130points, everything in our internals was positive except for for NASDAQ volume. And believe it or not, that’s still where we finished on the daytoday. So let’s take a quick look here. We finished almost 2 to 1 positive, just shy on the NYSE. And we did finish positive advances, more advancing than declining stocks on the NASDAQ today as well. 52 week highs lows coming in over 3 to 1 positive on the NYSE. Very good to see.

[00:17:48]:
And positive on the Nasdaq. Volume coming in over 2 to 1 positive on the NYSE. Slightly negative on the NASDAQ. No big beats here or anything. No 2 to 1 negative. So not a major beat. To the downside now to the sectors on the day is when you have a day where the NASDAQ is down. So many of these tech names dominate, not just the tech sector, but also communication services, consumer discretionary and other areas really as well, they make up some of the top 10 holdings in these other sectors.

Right. So on a day with the Nasdaq lower, We finished with 10 out of our 11 sectors higher on the day. So again we look at this as the rotational theme being in full swing here as we had healthcare leading the way. Really such an unloved sector. Unloved for all of the right reasons. As you know, we’re not huge fans of the, of the healthcare. Did I say tech sector. Healthcare sector leading the way.

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Unloved for so many reasons. Let me just restate that. You know, we aren’t big fans of the healthcare sector here for many reasons, namely what we’ve seen from Pfizer, from Moderna and these poison jabs that remain on the market here. So absolutely we’re not fans of those here. But XLV, the Healthcare sector ETF just hit a 52 week high today. Again, new highs beget new highs. Eli Lilly led the way. The largest holding in the sector up big on the daytoday, up 2.3% roughly on the day.

Next up there after that we had the energy sector and I’ve got some points I do want to get to here on energy here in a little bit as well and why it’s likely still early for this sector. After that we had consumer staples and real estate as we’re seeing rent prices nationwide dropping drastically. We saw it here in Austin, Texas where rent prices for apartments have dropped a ton. Okay, we think we’re going to see more of that as well, which again is a deflationary aspect for this market along with the innovation revolution that is a deflationary factor for our markets as well. So for real estate though we don’t really key off of the real estate sector in the S P. That is roughly XLRE is the closest thing there because it’s mostly rates. Okay, so we like the housing index, HGX or home builders, ITB, XHP, those, all of them. Well, ACX closed above the 200 day moving average today.

[00:20:28]:
You look at the homebuilders as well, almost perfectly rallying from their 200 day moving average. A key level here that we want to see hold. So some of our other sectors, I mean like I said, everything but tech finishing higher on the day. Again, looking at it as a rotational theme, not as tech has to lag, but tech did lag on the day to day. But we got more highs there as well. Google hit an all time high today. Apple up 2.16%. Okay, Nvidia gave back some of its gains today after its massive big gap up yesterday.

Big finish higher yesterday on news that SoftBank sold its Nvidia stake for 5.6 billion. I mean, what’s 5.6 billion to the largest company in the world? You know, $5 trillion valuation, roughly, you know, just below that level. But you get my point. But they did this again to rotate. Okay? They did this to free up funds to invest in open AI. It’s a private company, so not a publicly traded company. Still rotation into this market. Remember they’ve got a massive deal going on with Nvidia as well.

[00:21:39]:
Nvidia again reports eight days from Now. So we’ll be report on that here. Absolutely. I feel like I had one final point here to make for the tech sector. Well, I’ll make this one really quick. When you have a day where you’ve got tech names hitting all time highs, you got the Dow hitting all time highs. Fear and greed index, wow, closed right where it did yesterday at a 31. This again just is not the sign of a market top.

When you get to the point where we’re at extreme greed and we’re below, you have the Dow finishing instead of up 559 points on the day, finishing down 559 points. Nasdaq down even worse. And this remains an extreme greed. That’s when we’ll be starting to look for the signs of a top. All right, let’s go ahead and dive in here to our VRA commodity watch and I’ll wrap it up here for you on the day. Get a quick refresh here, get the latest quotes. Gold had a nice day. Higher today now at $4136 an ounce.

[00:22:44]:
And just what you want to see. The gold miners leading the way higher 3 to 1 outperformance on the day are just, just shy of that level but pretty close. It’s exactly what you want to see. Just like you want to see semis leading tech, you want to see the miners leading the commodity. We’re seeing the same thing in energy as well. Energy companies leading oil. So GDX up nearly 1% on the day to day after its, you know, recent pullback which we look at as a fantastic buying opportunity. Silver was up over 1 1/2% on the day.

Now making more moves ahead in after hours above 51 an ounce for the first time in a few weeks. Copper up was a little more than this I think during the day. But above $5 a pound at $5.07 a pound. Oil did briefly dip below $60 a barrel today now at $61 a barrel. And a little bonus here, natural gas just below or right at a 52 ekai here. Now part of that is seasonality as we enter the winter months. You know this has been a big move higher that we’ve seen from natural gas. And here’s probably part of the reason why.

[00:23:59]:
This is from last year from the Department of Energy finding that data centers consumed about 4.4% of total US electricity in 2023. Expected to I mean this could almost triple by 2028. Massive usage coming here now. Just a few stats here for you. You know Nuclear, which we’re big fans of here, would have to rally in a huge way to supply this kind of power. We need roughly 73 nuclear plants producing 8,000 gigawatt hours per year just to get to that. Now, as Elon has talked about, there’s other ways to get there with battery tech in our existing systems. But we know energy, energy, energy is the story for the data play, right? They’re building out all the centers.

Where are they going to get the power from? Well, a big part of that is going to be natural gas. So it may not all be the winter season. Coming here for this rally in natural gas. If you’ve been here with us for a while, you know we’ve got a big natural gas play, one of the largest discoveries in the last four decades here in Lost Soldier Oil and Gas, which is a private company. I shouldn’t talk about it here a whole lot on the podcast for that reason. If you’re a VRA member, you know what I’m talking about. But this alone has us very bullish on the energy sector here at the vra. Long term, we’ll use some trading opportunities in there as well, but long term here, wow, that’s an astounding number that we’re going to get to.

[00:25:36]:
Not even by the end of the decade, by 2028 to power all of these things. All right, there’s a covered oil, covered natural gas getting close to a 52 week high there. Might be right at it here in after hours. Lastly here for the day, bitcoin was as high as $107,000 of Bitcoin earlier in the session, now down about 3% on the day to day to $102,858 a Bitcoin as we do enter. You know, the final two months of the year here hasn’t been the historical average of Q4 where it does rally 57 and a half percent in the fourth quarter on average. Still got a long way to go here for bitcoin into year end and we do remain bullish on 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. Until next time. We’ll see you back here tomorrow for the close.