Welcome back to the VRA Investing Podcast! On today’s episode, host Kip Herriage dives into a turbulent Wednesday in the markets, sharing his candid take on the Federal Reserve’s actions, Jay Powell’s press conference, and the political maneuvering impacting both Wall Street and Washington. With markets tumbling and sentiment at extreme fear levels, Kip Herriage breaks down the macroeconomic picture—explaining why, despite the volatility, he remains optimistic and sees extraordinary buying opportunities ahead. We’ll explore the structural strength of the housing market, bullish economic indicators, and why seasonal trends could soon bring a powerful market rebound. Plus, Kip Herriage gives his take on political dynamics, the ongoing war’s impact on oil prices, and what all this means for investors as we move through one of the year’s most pivotal periods. If you’re wondering whether the market’s recent dip is signaling deeper trouble or setting up an exceptional opportunity, you won’t want to miss this episode.

Don’t look back, the market is closed. Good Wednesday afternoon, everyone. Kip Herridge here with the Daily Investing Podcast. Hope you had a good day today. Uh, some, uh, you know, I gotta say, I, um, the older I get, I, I tell myself this fairly often: Kip, don’t just become the old angry guy. You know, when I was younger, I knew guys like that that just got time just wore them down and they just wound up being frustrated by so many things. I never want to turn into that guy because I am an optimist. But today, and the recent actions we’re seeing, the Federal Reserve today, especially Jay Powell, really tries a person’s soul.

Because, and again, I think I’m a pretty objective person. A lot of you may know I’m a lifelong independent. I really do try to look at both sides of the issue, but I gotta tell you, Get Trump is out in full force, and it was out in full force in today’s FOMC statement, but especially in Jay Powell’s presser. Scripted, scripted, scripted. These are lines he had. He was excited. As Tyler said, he was feeling it today. He was this cocky, cocky Jay Powell, had a real bounce in his step today, because they think they got Trump.

They think they got him. And I’ll explain that in a minute, because if the Save America Act doesn’t pass, and I think that most people are skeptical it’s going to at this point, then there’ll be enough Republicans that have left the party, if you will, that just won’t vote, or won’t vote for certain people, that the midterms are going to be very difficult to win. I think probably highly likely that Republicans lose the midterms. And that means Trump’s going to be impeached again, and that he could even lose this time. Like, he could actually lose because they’ll make it sound— they’ll make the case so compelling. It’ll be 24/7 non-stop. They, they trapped Trump here, and they trapped him with the Federal Reserve too. And I’ll make that point now before I forget it.

At, at the presser today, Jay Powell, again, completely scripted. He stopped, he read his notes, and then, you know, someone ask a setup question. When are you going to leave, right? And his answer was threefold. Number one, I’m not going to leave until there’s a Fed chair that’s been, you know, approved by Congress. Number one. Number two, it means I can’t leave until this case against Lisa Cook, you know, the Fed governor charged with mortgage fraud, right, claiming a second purchase, a home, was a primary residence. And number 3, he said, “I’m not leaving until it’s fully adjudicated, until it’s finally over.” I don’t even know what that means. I guess appeal to the Supreme Court? So Jay Powell, unless Kevin Walsh somehow makes it through his congressional hearings, which means this case has to be over.

Tom Tillis, Republican, continues to make that case. I guess he runs the things here, right? Tom Tillis, Republican that’s resigning, by the way, it’s his last term, real Trump hater, has already said, “No, until this Lisa Cook thing is done with, I’m not even gonna allow Kevin Walsh to come up for a hearing.” And folks, that’s when the market started really going down today. We finished down about 700 points on the Dow Jones. One second. Yeah, 768 on the Dow, essentially at the lows of the day. NASDAQ down 327, S&P 500 down 91, uh, and the VIX up 12%. But the Dow Jones was down 375. It actually had rallied a bit, um, when the, when the Fed statement came out.

Again, the Fed did not change rates. There was only one dissent There was nothing really in the Fed statement that surprised. Matter of fact, I saw people saying, hey, that’s a dovish Fed statement. That should be good news for the market. And here comes Jay Powell. And the minute that he said, Tyler pointed this out, the minute that he said he was staying on, which means folks, he could be with us through the third quarter potentially as Fed chairman, not just on the Federal Reserve, which is also— his term doesn’t end for another couple years. He could stay on longer. But even as Fed chair, we may have this guy.

And that’s when the market started going down. That’s what the markets think of Jay Powell. If that evolves that way, that means they got Trump because They’re not going to allow a normal economy to unfold. Rates are far too tight. Let me, let me make a point about that. 4 years ago under Biden, oil was higher than it is now. It was $115, $118 a barrel. The Fed funds rate then was 1.5%.

[00:05:29]:
It’s 3.5% to 3.75% now. It’s a full 2 points above where it was 4 years ago. Oil is lower now than it was then. I haven’t checked the math on this yet, but by my count, just to be sure, Jay Powell used either oil shock or energy shock at least 20 times today. This was his theme. The oil shock, the energy shock, the oil shock, the energy shock. And again, that’s when the market started going down. So from the Federal Reserve point of view, it looks more and more like they got Trump on this.

I think if I were Trump and his team, I would just drop these charges against Lisa Cook. Let’s get— we got to get Powell. Let’s do what’s best for the country. Get Powell out of there. Drop these charges, because what they’re going to accomplish at the end of the day anyway, right? This seems like, like an obvious thing that should happen here. Drop these charges. Let’s get Jay Powell out of there on schedule in May. Because the truth is, as strong as the, the housing market is, structurally strong, because it just is— you, if you’ve listened here, you know all the facts here, just a couple 41% of Americans have no mortgage, they’ve paid off their homes.

Again, these are all-time highs. Average home equity now 71%. And all this is from a month ago, I have to run it again, I’m sure it’s higher now. So, you know, $39 trillion in home equity. Again, these are all all-time highs. Structurally speaking, structurally speaking, the housing market has never in history been stronger. But when you include the rest of America, the second America, which is now becoming more and more people, getting bigger, not smaller, I think it’s a very safe statement to say that we’re in a housing recession. I hadn’t said that before, but the Fed obviously sees this, and they should have been cutting rates.

This again is very much get Trump. This is a kneecap Trump. Presser today. Classic, classic Fed kneecap. But we, uh, what else today? While we’re on the Fed, might as well cover it now. Again, he’s not leaving till the whole case is over. Energy shock, energy shock, energy shock. I have not seen Trump post about this on Truth Social.

Uh, maybe at this point he’s like, you know what, it’s not done me any good. Maybe I should change strategies. And I do hope that’s the case, because again, nailing Lisa Cook to the wall is not going to change anything. Of course, what Trump wants to do is to be able to go through the whole process and say, oh, I do have the power, right, to, to, to, to fire someone that’s a Fed governor, etc. That’s, that’s what the goal— because then you’d have the power to file to fire Jay Powell. But, you know, we’re past that point now. Again, we want Kevin Warsh in as soon as possible. This is the most political Fed, certainly in my lifetimes, and I would think that means ever, because the Federal Reserve used to not have this kind of power and authority.

You know, again, this is the banking cartel we’re talking about, the most powerful cartel. The world’s made up of 7 cartels. That was G. Edward Griffin, one of my great friends and just longtime heroes, just spoke at about 20 of my events over the years. The author of “The Creature from Jekyll Island,” of course, the Bible on the Federal Reserve. And as he would say, and he gave two speeches at our events, right? The creature speech and the speech on the seven cartels. And he said the banking cartel is by far the most powerful. I think he’s right.

Who runs the banking cartel? Well, besides the planners, whoever these people are, Jay Powell and all of his bosses, right? The real rulers of the world, it is the Federal Reserve. It is the central banking system. So I think Republicans are gonna have to pull a real rabbit out of their hat to get to the midterms and have a chance to win. Save America Act’s got to pass. As I know, this, this is a depressing podcast and I hate saying it, but, um, it is— it does feel like one of those days, if I’m being honest. Now, as to the markets, if you’re going, well, Kip, are you turning bearish? No, I’m not. I’ll give you the reasons why in a minute. But here’s the primary takeaway for that.

By the way, we’re getting some very, very bearish— meaning bullish contrarian— very, very bearish readings. Uh, put-call ratio opened at 1.13, closed at 1.06. Above a 1 all day with the exception of 2 30-minute segments. We hadn’t seen that yet, right? These are, these are, these are bottom-like— not, not extreme bottom, but bottom-like indicators. Fear and Greed Index down to 18 now. Okay, we don’t want to see it get down to 3 or 4. We’ve seen that before. Well, that would mean another 10% drop, I would think.

And again, I don’t see that, and I’ll tell you why in just a minute. But the big takeaway, and this is a point that Tom and I have made for a long time, is that the largest owners of equities globally, of housing, of real estate, of bonds, the largest owners are the rulers of the world, the elite of the elite. And these people are pretty self-centered, and the last thing they want to do is hit themselves. So I think that— I think, again, today it’s today’s lows, uh, which is essentially the close. The S&P 500, NASDAQ, and small caps held their lows. Their lows, we’ll call it the war lows, right, of the last 3 weeks, held those lows. Matter of fact, we’re seeing in NASDAQ and small caps, two leaders that have been led this year. Certainly small caps led until again, the war broke out.

Excuse me. Been on the phone all day today. But we’re seeing higher lows actually in those. Again, that’s a bullish formation. So sentiment is certainly getting to extreme fear reading. That’s, that, that’s a very safe statement. And again, these are the things you look for in a turn. Uh, again, I’ll go over some more later about the economy because the economy is extremely strong.

Got some great data. Of course, you’re not hearing this in the media, uh, but, um, that doesn’t mean it’s not true. I’m going to share that with you in a minute as well. But as for the markets, and, and again, the Fed meeting today, I think if you’re a reasonable person, I think you see through this. Not that they care, but we are right now in one of the most bullish periods of the year. And that’s why, again, I continue to think we’re right at a very near right at a bottom here. The fear, you know, the fear is everywhere now. Seasonality really couldn’t be more bullish from this period well into May.

This is one of the most bullish 2-month periods of the year. And again, fear, put buying, you know, we got some great data we share with you this week on when, you know, when oil over a 2-day period, as it did at the beginning of the war, beginning the second week of the war, when oil spikes over 20% in just 2 days, and that happened, over the next, and this is really good data, going back 40-something years, over the next 24 months, excuse me, over the next 12 months, the S&P 500 was up on average 24%. We’ve seen a lot of other data like that that we’ve been sharing with you, and it’s all supportive of the markets. But I think at the end of the day, this decline is not about interest rates. I’m focused on today because it’s Jay Powell’s presser and a guy gets under my skin. But this is still about the war and this is still about oil prices, the Strait of Hormuz. That’s what this is all about now. Because as much as they like to, uh, to just to use oil shock and energy shock today, I mean, that all ends when this is resolved.

This is not, this is not something that’s going to cause inflation down there. As a matter of fact, higher oil prices aren’t inflationary, they’re deflationary, right? They hurt the economy, they hurt people. These are— they’ve got this completely wrong. So I think the markets see through this. I do think, as I wrote this morning, I do think it’s time for a pivot from Trump. I don’t really know what the mission statement, maybe some of you do, I don’t really know what the mission statement is. Do we wanna just eradicate Iran? Is that what the mission statement is now? Because I don’t see them surrendering, do you? These kind of, uh, cult-like people, the extremist, religious extremist, they, they kind of want to die. They want the 72 virgins and all that comes with it.

So I don’t think martyrs like this, to their soul, right, to their very being, they believe this. I don’t believe— Trump must know this— they’re not going to surrender. That is not going to happen. So I don’t know what a win looks like at this point, but I can tell you that everything that’s happening negatively in the market right now— not the economy, because again, this just started 2 and a half weeks ago— but everything happening in the markets right now is tied to the Strait of Hormuz and oil prices. And as I made the point this morning, I don’t want to go too far down this road, but maybe one of these days we’ll have that conversation. The country has turned against Israel. This— the country, the country is, is turning against Israel, and it’s happening right before our eyes. If you’re under 50, I think it’s like 80% are against Israel.

I’m telling you, I know, I know a lot of, a lot of young people because I’m friends with my boys’ friends, right? And I, I, and I’m around them, and I’m telling you, there’s, there’s, there’s real— there’s hatred, strong dislike against— not, not Jews, right? Not, not, not— is— this is not an anti-Semitic statement, okay? But there’s real hatred about their policies and about what they’re doing. And I think this is because Trump reads the room as well as anybody. I think it’s time for that pivot. It’s time. I’m not saying today or tomorrow, but he’s got to be thinking about an off-ramp. How do I, how do I end this and claim victory? Well, first of all, he already could, you know. And again, I wrote this this morning. I’m going to read this to you.

Trump said this just yesterday, and this is what he thinks, that we are nearing an off-ramp, which means oil prices are going back into the ’70s, and the markets absolutely skyrocket. Make no mistake, that’s near term. When Trump pivots, he pivots hard. Here’s what he said yesterday, direct quote, “The war could end very soon. It’s pretty well complete. We’ve achieved major strides. Some people could say they’re pretty well complete. Very soon.” That was a direct quote.

And I was glad to hear that because I don’t know that we’re gonna be able to finish off this country without killing a whole lot of innocent people. And again, that ain’t a good thing either. That’s not a good look. So I think the key takeaway here is that we know what we already knew, which is this most political Fed of our times, led by Jay Powell that’s just reading a scripted statement from his bosses. But what this really comes down to is the macro picture, and that’s what hasn’t changed. Look, I’ll run our, our screens tonight. Um, as long as we hold the lows from last week, that I, I don’t see the VRA system dropping from 9 out of 12 screens positive, right? The, the technicals, the technicals could force a, a, a change here. But again, we’re well above the 200-day in all our indexes.

Again, this is still a very average, as Tyler said yesterday, this is still a very average drawdown. You know, we’re looking at what, 8, 8, 8, 9% and 8% in NASDAQ, 6% S&P 500. So, you know, this is, this is not carnage. This is not pandemic type of environment. This is not a tariff mania type of meltdown. This is average at this point, and that means that we are looking at some extraordinary buying opportunities here because nothing’s changed with the economy. Let me give you some stuff today, uh, that I, I was— I researched this last night. I want to get it just right because the markets are forward-looking.

We all know that. And, and they’re very soon, as long as oil— you know, oil right now is $99, by the way, after hours. As long as oil’s not going to go to— I think it’s always the velocity of the move, right? If oil goes to $130 overnight, guess what? It’s going to be a bad day tomorrow for stocks. But the US economy, maybe not so much the global economy, not Europe maybe, but the US, maybe not China, but the US economy can easily handle $99 oil. Again, we stayed, we were greater than that level for extended period of time during Joe Biden’s administration. It’s the velocity of the move, so we don’t want to see that. But the markets are beginning to look through— again, the Fed meeting didn’t help today— but the markets are looking through because they’re looking through the Q1 earnings reports. You know, yesterday we heard from two, uh, leading airlines, Delta and American, that with revenue and earnings guidance, it was just incredible.

Uh, their direct quote was surging personal and corporate travel for forcing us to raise our guidance. And they, they beat up, you know, beat on top, bottom line. Again, stocks did really well. But I think the message from that for the rest of, as we get into Q1 earnings, is if the airlines are bullish on their own prospects in an economy, especially as fuel oil prices, jet fuel prices are rising That’s a very important tell, not just for the airlines but for the broader economy. A couple data points we’re looking at, things that, uh, a little bit, a little bit underneath, underneath the hood there. GDP growth is expected to rebound sharply. Again, we had a poor fourth quarter GDP because of the shutdown. We’re gonna see a strong bounce back this quarter.

Tech earnings, you know, have been sensational, even though a lot of tech stocks haven’t done that well of late, but they’ve been sensational. The CBO now believes that fixed business investment is gonna grow by 3.9%. That’s almost unheard of. That would imply a GDP growth of, north of 6% because again, it’s being powered by AI data center builds. And now we’ve got the, you know, the one big beautiful bill. This is the first quarter, of course, that it’s going to be fully in place. Also under the hood, and I think this is maybe the biggest thing, what we’re seeing in trucking, flatbed spot rates. This is the leading indicator for trucking.

So if you follow trucking and transportation This is the first— this is the one you look at. It’s like the way we, you know, track the semis, right? The semis are going higher, you got to own stocks. This is the same correlation, right, to the economy. And flatbed spot rates hit another high, all-time high today. Uh, load-to-truck ratios are at 70. I mean, again, this is, this is all-time high stuff. Tender rejections are near 43%. And because this segment, this segment leads all of the freight market, it matters.

And it’s right now signaling significant industrial economic acceleration. The manufacturing PMI, we got that last week, it’s above 50. That means expansion. That’s now been up 3 months. It looks— it’s, it’s building steam. And this is what drives the markets, right? It’s GDP growth and corporate earnings growth. That’s what fuels the markets, period. Both, you know, in both directions.

[00:23:32]:
And we continue to look for GDP growth to top 5% in the first half this year. Maybe not for a full quarter, but we’re going to get a month with better than 5% GDP growth. Right now it’s just— it is— it’s just about the war. That’s, that’s it. And I think with this high put-call ratio and these sentiment surveys getting down to extreme fear. This is the kind of bull market where we should not get to a 4 or a 5 in the, uh, in the Fear and Greed Index, right? This, this is, this is not a bull market that we should have to worry about getting down to freakout levels again, like the pandemic or like tariffs. This is just not that. This is, this is a generational bull market.

That is going to see dips. We’re seeing that now. But as we’ve been focusing on, the rotational strength that we’ve seen is textbook bull market action. Now Bitcoin was down today, but you know, Bitcoin has been leading higher since before the war. Bottom, let’s have software stocks, momentum stocks. We’re seeing all— look at all the bottoms they put in, significant bottoms. And again, that’s textbook bull market rotational action. So we’re seeing all the signs we want to see.

Again, not a fun day, uh, especially with Powell speaking today. But we see rates— and again, I was writing this last night and this morning, I’m going, okay, do we really want to share this this morning with the 10-year at 4.2%? You know, because we’ve been— we’ve, we’ve said our message for some time, uh, since Trump’s, uh, uh, uh, inauguration has been the dollar would fall. We got that right. And the rates would fall. We got that right. Now they’re up now. But again, The, the 10-year yield was at 4.8% when Trump got inaugurated just over a year ago, and now it’s 4.2%. So rates are falling.

So what we’re seeing now, I think it’s an important point, is that we’re seeing counter-trend moves. The primary trend, bull market primary trend, right? Counter-trend correction. Rates going higher now, counter-trend primary trend lower. US dollars rallied counter-trend. Primary trend lower. It’s now time for these primary trends to begin to kick back in because oil is extreme overbought on steroids. That’s when bad things happen. The 10-year yield is at extreme overbought on steroids.

[00:25:57]:
That’s when bad things happen— means lower rates. And the dollar is extremely bought on steroids. Again, these— they’re all trading there. So this is, this is about when you’d expect to see— right now is about when seasonality— this is when you expect to see reversal. So we’re positioned in, uh, a number of rate-sensitive sectors, right, that boom when rates go lower. Housing is one of those. We talk about this with you a lot here, right? We start getting lower rates You’re going to get refis, you’re going to get home equity usage, right? It’s not being used now. People are afraid to do it.

Fred, we’ve been through so much, people are afraid to do much anything. They’re keeping their money safe. But lower rates are going to unleash pent-up demand that we’ve not seen in the housing market since before the financial crisis. That, that’s what’s coming. We think it’s coming this year. And so we’re long housing. We’re long small caps because this is another highly rate-sensitive group that does very well when rates fall, because the small-cap companies typically have more debt and less access to it. Yeah, so it really matters to them when rates fall.

You know, they can refinance, their borrowing costs, if they’re, if they’re a variable, really begin to fall, and it’s much easier to get, to get financing. In, in a, in a, in a, in an era where rates are falling. So small caps do really well, and we own those. Semis and tech, right? Lower rates act as inflation-driven, uh, finality, if you will, for semis and tech. Valuations rise, it spurs even more CapEx. So that’s why we own the semis and tech. And again, Bitcoin was down today, but look, it bottomed at $59,700 just as the war is breaking out. And again, now it’s over $70,000.

And lower rates are highly bullish for Bitcoin and cryptos. The, the entire— yeah, we see like liquidity floods into this group, right? This is, this is a high beta group. And of course, precious metals and miners, we’re long there as well. You know, again, not a good day today. Oil got smacked today, as did silver and the miners. But look at the charts on these. I mean, again, they’ve had a stellar run now for over a year, but this is a— if I had to pick one group, I think one group that I’d really want to— matter of fact, I think that’s what we’re gonna be doing here. It’s time for us to do our monthly dollar cost averaging here.

But there are also times I just, I just add more because the charts say it, and my— at some point it’s my gut saying it because we’re just that oversold. We’re not quite there yet, you know, we’re not on extreme oversold on steroids in gold, silver, the miners, because again they’ve had such a big move. But we’re getting there on our momentum oscillators, right? We’re getting to— we’re getting— I’ll write it up tomorrow morning. We’re reaching extreme oversold levels on stochastics. And the charts support that as well. And this group does well because real yields, you know, when they fall, it slashes opportunity costs. And the entire investing community that understands this group, that’s when they flood into this. And one of the reasons gold is going down, and I guess the whole group, is people are concerned that if oil prices stay up and production falls in the Middle East, They own so much gold that that’s what they’re going to sell.

So there are people trying to front run that. I think that’s a rookie move because this is— we’re early in this bull market, very early in this bull market, especially for the miners. So these are great buys here, especially our two 10-baggers. All right, uh, we’ll get to the internals now. Again, not going to be a pretty picture today, uh, but let’s do it anyway. 4 to 1, uh, negative advance decline, uh, for NYC, 3.5 to 1 for NASDAQ. Jeez, um, volume actually could have been worse today. 70.6% downside volume, or down volume, for, uh, NASDAQ, 78.9% for NYC.

I thought both of those would have been in the 80% plus range today, to tell you the truth. Sector Watch, yeah, this is, this was ugly. All 11 sectors finished lower on the day, led the downside by Consumer Staples and Consumer Discretionary and Materials, all down more than 2%. No sector higher today, uh, 11-11 negative. Commodity Watch, again, not pretty. Gold down $184 at $4,823. That’s down 3.6%. Silver down 5.6%, $75.42.

[00:30:56]:
Copper, uh, down 29 cents at $5.47 a pound. And again, oil last trade now, uh, $99.05. And Bitcoin just holding in just over $70. All right, folks. Not the, not the funnest day to be in the markets, but again, this is when we focused on the macro. This is really when the VRE Investing System matters. And this is a generational bull market. That’s the primary takeaway.

And smart money is buying here. You know, it really, frankly, it’s just the Federal Reserve that set me off today. This is They, they, they run the show. I don’t know what else to say, that, that— but they do. And I think they got Trump with this Lisa Cook thing. I think he’s got to find a way out of this. All right, folks, that’s it for the day. Hope you had a great day, even better night.

We’ll see you back here again tomorrow after The Close.