In today's podcast, Tyler breaks down what started as a rough market session but turned into a bit of a turnaround Tuesday. Despite a mixed finish across major indices, tech stocks continue to lead the pack. Tyler also addresses the prevailing fearmongering around yields and the dollar, debunking myths perpetuated by so-called gurus. Stay tuned for insights on upcoming earnings reports and what the market is anticipating from the November election.

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 great day out there today. What started off looking like it could be a bit of a rough session here today really turned into a bit of a turnaround Tuesday today. While we didn’t finish higher across the board, we still saw tech leading on the day today. The Nasdaq was our only major index to finish higher on the day. And while the Dow and the S&P 500 both flirted with positive territory before the close, they finished fractionally lower on the day.

But point being, they finished close to the highs of the day to day. So again, not quite the turnaround Tuesday you would look for there, but, you know, some good signs they’re finishing closer to the highs of the day, well off the lows from this morning. So, hey, we’ll take it here. But we started off the day and really the last few sessions here with some incredible fear mongering, whether it’s about yields or the dollar, those are kind of the two biggest topics right now from the fear mongers out there, right? They’re really running with this interest rate story and the increase that we’ve seen, which the ten year yield has now risen from its lows of mid September at a 3.6 now all the way up to a whopping 4.2%. Now, I am being facetious here because that is not a large number on yields by any means. But you got the so called gurus out there who are really just more of the fear mongerers that do it to get eyeballs, right? It’s an attention kind of business, and they’re list builders. That’s what they’re doing. At the end of the day.

[00:02:09]:
Almost never do they make people money. That’s not their goal. Right? Their goal is to monetize a list of people and sell them products, right? That’s not who we are. That’s not who we want to be out there. Our job is to make you money, and that’s what we want to do here every day at the VRA. But again, we’ll use this as an opportunity to talk about these kinds of risks and why we don’t see them as major issues for our markets right now. While they would tell you that these current risks are existential threat to our financial system, which someday there will be hell to pay for these kinds of deficits that we’re running, we don’t see that as in our near future here by any means, you know, looking at the yields here at a 4.2%, again, that’s not a high number. Remember, we talk about this here often, the time period from 1995 to to 2000, otherwise known as the.com melt up, where the Nasdaq rallied 575% during that timeframe, where were yields then? They averaged right at about a 6%.

Yeah, there was some 5% yields in there, but five to 6% range plus on top of that. So no ten year yield at 4.2%, that is also extreme overbought. And really, when you zoom out on the chart of yields, go look at a 40 year chart of yields. It’s been nothing but lower lows and lower highs from that time period. So in our view, this remains to be a dead cat bounce. Again, we’re at extreme overbought levels here. This is about the time, and we’re running into resistance here as well. If you look at the chart, this is about the time we expect to start to see a reversal.

[00:04:08]:
Very similar story in the dollar as well. Yeah, it’s been on a tear here from its lows in September, but you just zoom out a couple of years and you see also a series of lower highs and lower lows as well, which we do expect to continue. Now, we do agree here that some of this rise in rates, possibly even some of the rise in the dollar, is again a Trump trade kind of effect here, that if Trump gets elected, we’re going to have a far better economy. And in a stronger economy, rates do go higher. Now, many people forget Trump is a big supporter of a weaker dollar as well. So, no, we don’t see this as a long term trend that if, when Trump gets into office on January 20, we don’t see his policy actions as being, you know, further bullish for the dollar here or for yields, either. We think that those will both continue to come down, although we do expect to see a stronger Us economy here. But overall, we do expect a continued move in this disinflationary trend that we’ve seen from inflation peaking just a couple of years ago.

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Now, now, a lot of people will disagree with that. I understand this is very much a minority view here, which, as contrarians here at the VRA, we love taking. When you have all the biggest voices out there, all the talking heads talking about one side of an issue, we like to take the other side of that bet. Right? Most of the time, not going to say every time, because there are times where the consensus view does end up being correct, but there has to be really an overwhelming amount of evidence for that for us to join in on the consensus view. We simply don’t see the evidence here for that. Now, have you caught Paul Tudor Jones on CNBC this morning? You heard him repeat ad nauseam that all roads lead to inflation from here. Again, we disagree on this right here. If Trump can stick to some of his campaign policies here, right? Talking about gutting these government agencies, that now, the amazing sad is that basically since the inception of America, and really just over the last, since FDR, we have created two government agencies a year from the inception of America.

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Now, do you think that sounds like what our founding fathers envisioned for this country? A bureaucratic system? No. That’s what they were trying to escape from originally when they founded America. You know, and most of these have taken place since World War two and the FDR era. Most of these are. They might have had good intentions, some of them, very few of them actually. Um, but they’re nothing but a drain on our economic system, creating more red tape. Right? We’ve got to get rid of these things. And this is what is costing us so much money.

Wire deficit continues to increase. So if Trump can start to, you know, again, gut some of these government agencies that we have, like Javier Malil has done in Argentina, then that helps fix some of our deficit problem. At least get rid of some of this reckless and wasteful spending that our government continues to do. Basically laughing in our face about. Right. And then get to the deregulation side of things as well. These bring down costs and will help alleviate some of the us debt burden. Now, why I bring up Paul Tudor Jones, he mentioned it multiple times that in his view, the only way to do this was to actually increase taxes.

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Let Trump’s tax cuts roll off, actually increase income tax, increase corporate tax. For someone who’s made so much money in the investing space, this seems very foolish to me. Right. And I’ve got some questions about Paul Tudor Jones in general that I won’t dive in here to today, but one of them being that he was extremely close with Harvey Weinstein and had groups that he invested in with him. Right. So there’s just one. Right. Part of the elite, not part of somebody who wants to actually make America great again.

This isn’t somebody we want on our team. I don’t think so. Again, I don’t think that off roads lead to inflation. And we can’t forget about the fact that I think that Paul Tudor Jones neglected in his interview this morning that we are in the midst of an innovation revolution like we’ve never seen before. You know, if you thought the Internet of things really changed things over the last 30 years, this is going to be a whole different ballgame here. That’s what we expect. It takes time and it may not even happen as quickly as we think. But that is what is coming, and we do think it’s coming sooner rather than, than later.

And the key point about innovation here is that innovation brings down costs. Right? You know, I think often about the Henry Ford quote of, like, if he had asked people what they wanted more of, they would have said a faster horse, right? They couldn’t envision what, the people couldn’t envision what an automobile would do for the economy. And look what it has done now. Right? So simply put, again, innovation drives down the cost long term. Combine these with a smaller government, combine these with a deregulatory environment, especially on energy, and we’re looking at a continued disinflationary environment and potentially leading to a deflationary kind of environment now with debt levels at where they are now. I don’t disagree with Paul Tudor Jones completely that, you know, you’ve got to inflate away the debt, but that still didn’t solve the root problem. Right. It’s the government spending is our biggest issue here in America, and raising taxes doesn’t stop that.

[00:10:30]:
So I think he’s completely misguided on that. And the key story here needs to be that we lower the cost of our government and create a smaller government here in the US. So again, to wrap, no, yields do not concern us at these levels. The US dollar rising doesn’t concern us at these levels. One last point, I’ll agree with them here on, though, is you do want to own gold and bitcoin here. Absolutely agree on that front. All right, changing the page here a little bit. We did get some earnings after the close.

Our first major tech earnings of the week this week with Texas Instruments coming in after the close with beats and on both revenue and earnings per share. The stock is up slightly in after hours trading. Now. All eyes will be on tomorrow, at least here at the VRA. All eyes are on Tesla earnings after the close tomorrow. So stay tuned. We’ll be reporting on that here. We’ve got a few other earnings coming in later in the week.

However, not as many of the big tech names. We’ve got to wait, you know, until we really get into the thick of things over the next couple of weeks with the major tech names, you know, Meta, Apple, Google, Amazon. And we’ll be reporting on all of those here. We do expect continued strong earnings from the third quarter here. All right, so taking a look at our major indexes on the day to day, as I mentioned earlier, only the Nasdaq finished positive on the day to day, up 0.18% or 33 points, to 18,573. After that. Some red on the screen. But as I mentioned earlier, we finished well off the lows of the day and really pretty close to the highs of the day today.

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So we’ll take that as a win here, especially with all the fear out there right now. It’ll be interesting to see where the AAIII investor sentiment survey comes in at on Thursday. One other one I’ll pull up here is the fear and greed index does continue to fall here after getting to extreme greed levels just a couple of weeks ago. You know, we’re back down into just greed territory here, but a continued rally would likely increase that. Still no worries for us here until you start to get to the extreme greed level for weeks and weeks on end. It’s really not that big of a red flag, and especially when you have the AAIII investor sentiment survey decreasing last week in terms of bullish investors, it’d be interesting to see that continue to decrease as well. All right, next up, we had the Dow Jones essentially flat on the day to day, down just six points to 42,924. After that, the S and P 500 also down just fractionally, 0.05% to 5851.

Lastly here, the Russell 2000 was our lagger on the day, still not down by much, down 0.37% to 22 31. Next up here, let’s take a look at our internals on the day to day. You know, not great numbers here, but certainly not bad either. And much like our major indexes rallied to finish well off the lows of this morning, we did have more declining stocks than advancing stocks on both the NYSE and the Nasdaq. However, nothing worth writing home about, no big beats here or anything, just fractionally lower. 52 week highs and lows were our bright spot on the day, coming in positive on both the NYSE and the Nasdaq. And lastly here, volume did come in negative on the NYSE. Just barely, though.

[00:14:15]:
But a strong, strong beat here on the Nasdaq. Almost two to one positive on the day to day. So again, on a day with mixed action in our major indexes, certainly not bad internals here either. Looking at our sectors on the day, we probably had a few more positive sectors than you were expecting. We finished with five out of our eleven s and P 500 sectors higher on the day to day, we were led by consumer staples, followed by communication services, energy, real estate and tech management is higher on the day. As we say here. Often you want to see tech leading the way, and it’s exactly what we got today. And while the semis did finish lower on the day, this is one of the most constructive charts that we are looking at right now.

Kip talked about this at length on his podcast yesterday. We’re nowhere near overbought levels here. Starting to look a bit like a coiled spring, ready to go higher for our lagging sectors. On the day to day, it was industrials, materials and utilities. Finally here for today, our VRA commodity watch. Lot of green on the screen here. Exactly. If you’re a regular listener, you know that we love to see this because we’ve been so bullish on gold and so bullish on the miners here as well.

Gold hitting another all time high here today. And essentially right at those levels right now, up almost nine tenths of 1% at $2,763 an ounce. That is an all time high there. And GDX continued to hit over a decade. High here. Hitting its highest level since 2012 here today as well. And let’s see what they were up because it was more than, I believe, more than double what gold was up. Yep, up over 2% on the day.

[00:16:06]:
Did exactly what you want to see from this group are the miners outperforming the metal. Next up here, silver up 2.87%. Also its highest level since 2012 as well at $35.05 an ounce. Copper now up six tenths of 1% to $4.38 a pound, and oil managing to hang on above $70 a barrel at $71.31 a barrel. Lastly here, bitcoin is slightly lower on the day today, but does seem to have found support in the upper sixties range here. Still above 67,000 at $67,439 a bitcoin. The group that we remain very bullish on here as well. Folks, that’s all that we have time for here today.

Please be sure to subscribe to receive our Vra podcast everyday. Excuse me, at the market close. You can sign up at Vra letter, click the podcast link at the top and we would love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.