Welcome back to the VRA Investing Podcast! In today’s episode, Kip Herriage is here to break down a whirlwind Thursday on Wall Street and share his unique perspective on what’s really driving the markets right now. After a quick shoutout to his son Tyler and a nod to his recent appearance with Grant Stinchfield on Real America’s Voice, Kip dives into some of the hottest topics affecting investors—from the surprising rise in interest rates during a time of war, to the rotational action in software and tech stocks, and the persistent strength of gold and silver despite today’s dip.

Kip Herriage [00:00:03]:
Don’t look back because the market is closed. Good Thursday afternoon, everyone. Kip Herriage here with the Daily VRA Investing Podcast. Hope you had a good day today. Let me first say that I made sure and I clicked the record button today. Yesterday I had to do the podcast twice because I forgot to do that. Then I realized during the second podcast that I didn’t have the microphone in front of me. So apologies for— it’s one of those days yesterday.

Uh, but congratulations to Tyler. Tyler is actually going to an afternoon wedding this afternoon, Thursday afternoon. Who does that, right? But it’s Texas, you know, it’s in the Hill Country, and these are, these are different kind of people over there. Uh, we love them, uh, but they, they, they, uh, they kind of beat to go to their own beat of their own drum. Uh, but today would have been Tyler’s podcast, Markets Down. He would have had this again. Maybe this will change the cycle for Tyler. Because if you’ve joined us here for years, he gets the bad days almost all the time.

It’s— it is— you could make a lot of money. Seriously, you could make a lot of money just betting on when Todd would have the podcast, buying puts the day before it. Um, so good, good. Congratulations to you, son. Um, also, I just finished up just before this doing a podcast with Grant Stinchfield, uh, who we’ve, uh, gotten to know really well over the last few months. Grant Stinchfield is the number one host of Real America’s Voice on their nightly shows. And I know most of you probably know him. Just a great guy, straight shooter, calls it like he sees it, and phenomenal.

He’s a professional. He’s like Wayne, a real professional. So great show with Grant. That’ll run tomorrow, and that’ll be on his website. We might even send it out as well to our group. But you watch it on Real America’s Voice. You can see all the shows there. So thank you again to Grant.

Uh, we talked about some of the things we get into today. Here are the topics today. We got a lot to talk about, gonna do quickly. Interest rates going up during a time of war— in my career, I’ve never seen this happen. This is a really important topic. We’ll talk about that. We’ll talk about FIFO, our first in, first out trades. IGV today, Software stocks in this down market, up 2% today.

What? How’s that possible, right? Is it because it’s first in, first out? This is textbook bull market rotational action. I think this is— of everything we’re seeing today, I think this is the smart money observation. And I know it’s my observation, so I’m not patting myself on the back, but I really do believe it is, right? Bitcoin’s been trading well. Now it was down today, but it was up 7% yesterday, right? Down 2.5% today. So that’s a net 4.5% in 2 days, uh, even in times of war. But those 2 are now leading higher. They led lower since last October, right? That, that, that’s, that’s an important— that’s an important sign. Uh, uh, today market was down, but what happened last hour of trading? Did you notice another good smart money hour? The Dow Jones had been down 1,200 points, still finished down 787.

That’s 1.6%. However, these other indexes weren’t barely down at all. NASDAQ down less than 0.3%. S&P 500 down 0.5%. Okay, so the Dow was down 1.6%. Why was that? Well, as Sam, uh, just reminded me, uh, he’s catching on quick here. Sam just told me, hey, there’s only 30 stocks in the Dow. There are a lot of retail stocks in there, a lot of interest rate sensitive stocks that get hit when rates are going higher, when oil’s going higher.

That’s why the Dow— if you just look at the Dow Jones, you think today was really ugly. Don’t look there. Look, look, look under the hood. And that’s what we’ll spend some time on here today as well. Good comeback today, the markets. Um, US dollar is going up. That explains gold going down along with rates. Again, we’ll come back to that.

Uh, gold and silver going down. Again, I shared the chart this morning. If you’re myopic, then you think something’s wrong. My God, something’s wrong with gold. Just remember, if you keep things in perspective, folks, just zoom out a little bit, look at a chart of 2 and a half years ago, and look at this— was 180% move higher in gold. Gold’s led everything, silver’s led everything. That’s what you want to keep in mind. And remember that it is buy low, sell high, right? We never recommend selling gold and silver because why would we? They’re going so much higher.

But if you’ve got money to put to work, these are the dips you do it in. I’m not, I’m not calling the low here in these, uh, but, uh, again, the long-term trend is firmly in place and it’s firmly higher. Uh, can talk about the trannies. Transportation index is on fire, and I’ll get into that in a minute. And of course The thing that every investor should talk about— I spent time with this on Grant Today— this is a structural bull market. Yeah, we’re in times of war. This is a countertrend move in the markets, uh, but the primary trend remains higher. And, uh, you know, again, this is— markets don’t always go up.

[00:05:09]:
It’s just a fact of life. Uh, but this, this is a buying opportunity, right? Yeah, I have zero doubt in my mind about it. This is a buying opportunity, or if you’re not going to put fresh cash to work, don’t overreact and sell these positions. My view on the war, and I’ll kind of kick off with this. My view on this war remains, it’s not going to last weeks. I mean, it could, you know, the cleanup, the final, I think the majority of this is going to be done fairly quickly. And of course, that’s what the objective is here with Israel. In the U.S., and that’s why they’re taking everything out.

Uh, and again, we’ve heard that there are, uh, backdoor conversations going on about ending this. Again, the market certainly didn’t show it, but again, oil hit $82 today. Okay, now that sounds high. It was $82, uh, 14 months ago. So let’s check in, keep things in perspective. This is not a ridiculous high price. It’s the velocity of the move. That’s what got the markets today, the velocity of the move.

And now you have so many people have to say, okay, oil’s going to $100. Look, could it? Sure. If things go sideways here, absolutely could. But does anybody listening to this think that Iran can hold off the US and Israel for an extended period of time? Because I don’t, unless they’re suicidal. Um, also If you’re Trump, you have to be thinking about the midterms. Look, I know with Republicans this is a popular deal, right? The war, the polls indicate it, but that’s it. Independents don’t like it and the Democrats don’t like it. This is a very, very political situation, not just a military situation.

And the midterms are coming up. I believe if the midterms were held today, without question, Without question, Republicans would lose. They’d lose the House and they might lose the Senate. They’d certainly lose the House. We’re still seeing no traction on the Save America Act. We’re seeing some possibly good signs, right? But now the word today, and I saw Wayne just wrote a piece about this, can’t wait to read this after the podcast, this would be the dumbest thing that Trump has done would be endorsing John Cornyn here in Texas. I understand the reasons to do so, but if you live in Texas and if you’re what I will call a common sense Republican, a common sense American, I don’t know a single one in Texas that likes this guy. He’s an old school neocon.

He’s an old school warmonger, and he’s not exactly been a friend to Trump. He said so many negative things about the president where he didn’t have to. He could have kept his mouth shut, but he didn’t. But I get it. You know, it’s going to cost a lot of money, be expensive race, all that. I know Ken Paxton’s got a share of enemies. I understand all of that. But Ken Paxton is going to win that election unless he drops out.

So what Trump floated today, or what Paxton floated today, to his credit, was that he would drop out if he got a commitment from Republicans that they would waive the filibuster act and pass the Save America Act. That’s the kind of guy that Ken Paxton is. Again, huge supporter of the president. So it’ll be interesting to see what happens here. Again, I think that if this war goes sideways and if they don’t pass the Save America Act, I think November’s gonna be really, really ugly. And I really have, honestly, I have no doubt about this. So the president, point is, the president, obviously knows all of this. I mean, this guy really is a 4D chess guy.

Not about everything, but about politics he is. And if, if things aren’t going well, I think Trump will look for an off-ramp. If he thinks this is going to go on like Gaza for months and months and months and months, and we’re going to just blow Iran to smithereens— that, that’s not what the purpose was here. So I, I think the markets— and again, we’ve still held the Monday lows on a closing basis. I think the markets are telling us— even today’s action was a little bit— again, NASDAQ down less than 0.3%, big comeback there. Smart Money Hour, it was just the Dow that was down today. I want to make sure you keep that in mind. Um, so again, structural bull market, that’s the most important thing to remember.

They’re the strongest kind and they’re based in fundamentals. All right, so let’s, let’s go back to the top of the list. Rates and Fed, I want to spend a minute on this. I don’t watch much media, tell you the truth. Maybe this has been a topic. If it’s not, why isn’t it? Why are interest rates going up at a time of war? The 10-year has jumped from just over 3.8% to 4.14% since this war started. In my career, in times of geopolitical stress like this, And certainly during a time of war, the Federal Reserve has flooded the banking system with liquidity, and they’ve done it religiously. That’s not happening now.

[00:10:19]:
I think this— the only thing that makes sense to me, because I’m not buying oil’s AD, so what, right? So what? That’s temporary in my opinion. But the banking system needs liquidity. That’s why these Dow Jones stocks were down. Interest rate sensitive groups, right? That’s why they’re going lower, because rates are going higher. That’s not normal. It’s not even close to normal. And I believe this is get Trump. We know there’s no love lost between Powell and Trump.

Kip Herriage [00:10:48]:
We know that the, the banking cartel is the most powerful cartel on the planet. Thanks again to G. Edward Griffin for teaching me that many, many years ago. Seven cartels. That rule the world, banking cartel number one. This is the way to either get Trump or control Trump. It’s exactly what— if you’re, if you’re questioning my logic here, it’s exactly what Jay Powell did in 2018 when he crashed the market in the worst fourth quarter since the Great Depression, worse than the Great Depression, crashing the markets on Christmas Eve, which is a half day of trading, hiking rates in December when no one’s around to buy the markets because they’re out skiing or whatever, right? The low liquidity time frame. And now it’s happening again.

If I was Scott Bessant— and I have to imagine he’s doing— I have to imagine he’s doing this— I would expect this to come public. I would expect, if this doesn’t change, it’s such an important issue, it’s so bizarre that they’re not— they’re not flooding the banking system liquidity. They do it through open market operations where they buy things on the bank’s books. They go to them directly, Federal Reserve does, and they buy their bonds. They buy things with cash. They just print the dollars. Federal Reserve just prints it out of thin air, and they go to the banking system and they buy it, and they give these banks cash. And all of us, again, the smart money, the insiders, they know what’s happening.

They know that’s a buy signal. This is why when bullets fly, stocks are a buy. That’s one of the big reasons, but it’s not happening now. I don’t know why. Maybe, maybe one of you can tell me. And thank you, always thank you so much for being here. Maybe some of you loyal listeners can tell me you’ve seen it somewhere. I haven’t seen one talking about it.

I don’t understand why. This shouldn’t be happening. It’s, it’s an extraordinary situation, and Scott Bessant should have Jay Powell up against a wall. All right, uh, we know he does— he’s not afraid of confrontations. Remember his deal with Elon Musk? Musk came away with a black eye if you believe the unofficial story from Bessant. This is one of those times with Guy Bessant, this is doing no one any good and it’s not doing the markets any good. Oil at $80, I believe, is a secondary reason for the market going down. Rates are going up, that’s got the VIX going up, it’s got the dollar going up, and it makes no sense.

Okay, that’s my very strong opinion. And high confidence call. Again, IGV software ETF up almost 2% today. First in, first out, that again I think is very smart. I think it’s a very important, uh, situation here. Oil, $82 hit today, right now about $80. I don’t think that lasts. It’s got the dollar going higher as well.

A lot of people buying puts. We cover this in our letter and a podcast a couple days ago with you. People buying puts at record levels in S&P 500, at all-time record levels, right, as far as nominal, you know, dollar amounts. And, uh, that’s a contrary buy signal is what that is. Same thing with short selling, okay? Uh, sentiment indicators are beginning to, uh, to shift quickly. Uh, people getting pretty bearish. Again, this is what happens near market bottoms. This is a buying opportunity, no two bones about it.

[00:14:04]:
This is a buying opportunity. If I’m right about this war, and let’s all hope that I am, let’s say it’s over in a couple weeks, there’s, there’s a, there’s a sign that this, this is winding down, at least to some large degree. This market’s going to scream higher. That is what’s going to happen. If it carries on and drags out All bets are off if oil goes to $90. I think at the crucial point for me is $90. $85 is going to get a lot of people talking. $90 is going to have us in trouble.

Obviously, Trump must know this. So let’s hope he’s reading the room and he pivots if necessary. Otherwise, get this thing over as soon as possible, right? Not popular. Not popular at all, in my opinion. Um, the trainees, just, I shared the chart this morning. The Transportation Index is up 27% from its— I’m working on memory here— October, November lows. And that’s a sign that manufacturing is coming back because we know the housing market’s not coming back yet, not with rates where they are, right? It’s another way they get Trump— control the economy, control Trump, and, and just kill the second America. Right, so these, these, these trucks and rails, right, they’re, they’re not— again, the train is going up 27%.

That’s a leading indicator. That’s supremely bullish for the economy when transportation— remember, we have a Dow Theory buy signal, right? It was kicked off 2 months ago, was initiated. That’s when the industrials and transports are hitting all-time highs at the same time. That’s been a classic historical buy signal for everything. If, if they’re not, if they’re not shipping housing material, building materials, what are they shipping? It’s coming from manufacturing. That’s supremely bullish for the economy and the markets. I think that’s a tell, right? Um, All right, I think those are the topics I wanted to touch on today. Let’s look under the hood today.

Uh, I mean, these internals, um, again, good comeback at Smart Money Hour. Internals weren’t great, but they kind of were. Listen to this. NASDAQ advance decline was 2.5 to 1 negative. That’s, that’s, that’s much better than I thought it would be. I would have thought today would be 4 to 1 negative, right? NYSE was better. 2.4 to 1. This is the one that stands out.

NASDAQ up volume beat down volume. NASDAQ up volume was 53.5%. Again, NASDAQ rallied. The sector was actually higher today as far as the sectors. Technology is up 0.3% today. That’s to tell. Uh, NYSE down volume was 69.7%, but again, I would, I would have expected worse. With the action today.

Anytime you have the Dow down 1,200 points, which it was, uh, about midday, you know, that gets people— it’s a big number, it gets people’s attention. It’s not a big percentage, but it’s still a big number, even with the Dow Jones at, you know, 48,000, if you will. All right, uh, sector watch was not pretty. Pull that up again, quick refresh. Yep, uh, 8 sectors down lower, 3 sectors higher. But again, it’s Energy up 0.4, technology up 0.4, consumer discretionary up 0.3. I’m sorry, but those are buy signals. Those are leading indicators.

Now, consumer staples were down 2.4%. Again, that’s rates. That’s oil. All right, materials down 2.2. Again, all of the things down are because of rates and oil. Okay. In our commodity watch today, again, we’re seeing a higher dollar and higher rates. That’s the damage here.

[00:18:06]:
Well, gold was down $41 an ounce, $5,092. Silver was down really just barely, $0.67 an ounce, that’s $8,250. Copper today down 1.3%, $5.82 a pound. And crude oil up, uh, 4.2% today. I’m sorry, up $4.23 a barrel today, is 5.7% right now, last trade $78.89. Remember though, it was $82 earlier. So I don’t have a problem with oil here. We were just here 14 months ago.

All right, so, um, again, I think, I think it’s a buying opportunity. All right, finally Bitcoin, $71,100, again down today. 2.8% last trade, but again, it was up 7% yesterday. So, uh, that’s still first in, first out. It’s still leading. I think, I think, I think the bids will continue to be in place for Bitcoin, uh, as it will for consumer— for the software stocks. Again, today in this market, close with this: IGV was up 2% today. I’m telling you, that is a tell.

All right, folks, that’s it for the day. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.