In today’s episode, Kip dives into the whirlwind market action following a volatile overnight session, discussing how sharp drops in the futures market turned on a dime thanks to positive war developments. Speaker A breaks down the resilient "smart money hour" rally, key earnings updates—especially the much-anticipated Nvidia report—and why extreme market reactions are actually textbook bull market behavior. You'll also get the latest forecast on GDP growth, insight into the Federal Reserve’s next moves under new leadership, and how rotational strength in market sectors continues to drive this unique bull market forward. Whether you’re an active trader or a long-term investor, tune in as Kip unpacks what’s moving markets, what’s ahead for rates and commodities, and why these dips may just be prime buying opportunities. Tune into today's podcast to learn more. 

Don’t look back to the market is closed. Good morning after everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. Hope your weekend was fantastic as well. Came back to a bit of a rough start today. Futures were sharp low overnight and then we all of a sudden turned on a dime when we got some fairly good news on the war.

It’s been a real seesaw, has it not, over the last couple of weeks now starting to heat up because Trump didn’t come back from China with what was perceived to be any real help and encouraging Iran to take the best deal they can get. We got a lot more news on that front today, though. Trump said publicly that he was set to resume military action against Iran tomorrow, but there was talked out of it by Mideast allies Qatar, UAE and Saudi Arabia. Excuse me. And so look, we bottom line is we had a very ugly day until like an hour before the close. And here we come again with another super strong smart money hour. Dow Jones rally from down 250 to plus 159. NASDAQ was down as much as just over 300 points, finished down just 134.

[00:01:16]:
SB 500 down a fraction of a percent. And small caps today down about a half percent on the day. So look, if you’ve been with us for a while, you know probably what I’m going to say here, bad things happen at extreme overbought on steroids. And that’s where we are, that’s where we’ve been. We had this amazing rally in the markets that began immediately after the ceasefire was put into place. And look, look at any chart, look at a chart of the semis, look at a chart of tech stocks, look at anything affiliated to AI and you see a parabolic move, a true parabolic move higher that’s taken place over the last month. Plus and at some point that’s going to end. And then come the fear mongers, right? And then come the bears telling you it’s over, it’s over.

And it just happened so fast. It takes. We had Friday, right, going into Friday’s action. Friday was not a good day. Going into Friday’s action, we’d had eight straight days where the SPF, SPF 100 had been up at least 1% a straight. And then Friday happens, ugly date, no doubt about it. We’ve had a lot worse, have we not? And then all of a sudden, here come the bears telling us that it’s over. I want to remind everybody, because this has happened a lot over the last two to three years, Nvidia earnings are Wednesday after the close.

How many times, if you watch the markets closely, this will ring a bell with you. How many times have we seen a sell off in the days leading up to Nvidia earnings? Right. It happened a lot and it’s happening now. And then Nvidia comes out. By the way, the report again, Wednesday after the close, Nvidia comes out and crushes it and we’re off to the races again. I don’t know that I’m gonna make that exact prediction here because again, we’ve come a long way. We are very overbought. But I can tell you this much, I would not be short this market.

[00:03:10]:
There’s, there’s, there’s no, there’s no way I’d be short this market. Earnings are growing. This is just this, this is, this is extraordinary. As we started the year, Q1 earnings by, by Wall street analysts, their estimate forecast was that earnings would come in between 10 and 11% higher. We were at 18 to 20%. And I, there was a part of me that thought that’s going to be way too high. Turns out we were way too low too. Right now we’re at Q and earnings coming in 27% higher.

I know no one that predicted that. But again, I don’t know anyone that was higher than we were. So here’s the thing about that. It’s not just Q1, Q2, Q3, Q4. Estimates are now all being raised sharply, as they should be. Because folks, this isn’t going to stop. There’s one thing that drives the, the markets more than anything else. That’s earnings.

Earnings and GDP growth. One tells you the other is coming. And that’s how we know GDP growth is getting ready to absolutely surge. We stand by our forecast. We’ll see a GDP for this year at some point, we’ll get a 5% print. I still think that happens in the second quarter. A little bit late in the first quarter for it to happen. But I think in this quarter we’re going to get a single month with a 5% GDP print.

[00:04:39]:
And again, that frankly, that’s all you need. You know, look, with our VR investing system and we structured this way purposely, it’s, it’s, it’s 12 screens, 70 fundamental, 30 technical. Granted, the technical side right now looks a little extreme overbought because it is. Right, but that’s the reason we only have the technicals at 30% because the fundamentals always matter so much more than the technicals do. And right now the fundamentals are screaming buy this market. We may look overbought now, but folks, when we get into later in the second quarter and then third quarter, fourth quarter, we’ll look back at this moment, mark your calendar. We’ll look back at a day like today again, good comeback today. We’ll look back on days like Friday and today with the SPF 100, you know, at 7,400, with the Dow Jones at 49,686, we’ll look back at these levels and realize just how cheap this market is like that’s been.

Our forecast continues to be our forecast. We believe with high confidence that we’re going to be right. And you know, a lot of this, I think much of this right now, besides being extreme robot on steroids, I think almost all of the uneasiness right now is coming from the war. Our war tells are flashing big signals, right? Start on Friday, got rates going up again the 10 year today, up big today again, 4.623%. That’s the highest level in a year. Still below Trump’s inauguration. Rates are 4.8% but we’re getting close. I think this level’s fine.

You start getting over 5%, it is going to make some people nervous. Look, it’s doing it now. Oil prices, this is the reason the straight Iran. Are we going to get any kind of closure on this? Oil prices 106 today, the, it’s, it’s, it’s oil prices and interest rates. These are the two reasons the markets are nervous. So that’s something Trump has got to deal with. Trump, Bessant and now new Fed chair Kevin Warsh. Our call has been and remains that the war is over.

[00:06:52]:
It’s over. We don’t have a final peace deal yet, but I do not see additional military action taking place. Look at it from Trump’s point of view. What is exactly is it going to accomplish, right? The IRGC is not going to surrender. We’ve killed their first three levels of leaders and they just, the next one just pops right up. We could keep going 10, 15 deep and they, they’d still pop right up. These are religious extremists, religious fanatics that in their core believe that, you know, dying as a martyr means you’re going straight to heaven and you’re going to have 72 versions right there with you. This is what this is, this is who they are.

So what’s Trump’s option? To kill a hundred thousand civilians? No, I think we know Trump’s not going to do that so the only way out of this. And Trump may have really hurt himself here, you know, making all these demands at the beginning of what he demanded from Iran. I think that’s, that’s going to hurt him more than anything. But the key now is getting this behind you, getting a deal you can accept, getting it behind you, because the midterms are coming up in six months. And folks, I think we know this about the president. When Trump pivots, he pivots hard. When Trump pivots, the past is the past and the future is all that matters. Trump has pivoted from this war.

Right. I, like a lot of you, I’ve watched Trump every chance I get. Yeah, you get a lot of repetitiveness. But, you know, we’re living very special times, right? We live in a time of Donald Trump and Elon Musk, I believe, arguably the two most consequential men of the last hundred years. And we get to watch these guys and listen to them speak pretty much every day. With Trump, it is every day, multiple times. And again, that makes Trump a little. If you follow him closely, it makes him more predictable.

[00:08:57]:
And that’s why I’ve made this call that I believe the war is over with. Trump has pivoted. And when he pivots, that’s it. I think it takes something extreme for this war to start again. If I’m right, and again, it’s a high confidence call. If I’m right, then rates are going lower because oil prices are going lower. And this is about the level that it really should and needs to happen again. Now, we have not just Trump and Bessant, but Trump beset and Wash.

Over the weekend, there were a number of pieces out about Kevin Warsh and the way he’s going to make some immediate changes at the Fed. I don’t even know how you do this technically, but, you know, Wash is a big believer that rates are too high and that the way we calculate is inflation is, is, is flawed. If you follow trueflation, which we’ve talked about live with you over the last many months, truflation, their CPI reading is like 1.8%, right? Maybe maybe 2% of the last report last week, not 3.8% where the CPI and core CPI just over that level should be just under that level, show that inflation is. And one of the things it is rumored that that was going to do is change the way that CPI is calculated. I think it’s a smart move. I won’t get into all the details here, but basically, the most Volatile components of the CPI would take a lesser role in the calculation of those. I think that’s exactly right because short term moves typically don’t last and there’s no reason the markets should be scared because of it. And there’s no reason that rates should be as high as they are.

We’ve covered this so often. Have we not? Look, Corporate America does not care about where rates are today. A 4.6% 10 year means nothing to Corporate America. They have more cash than ever and less debt than ever. Powerful combination for higher earnings by the way. First America, I won’t say they don’t care about higher rates. They barely care about higher rates. If you’re in the First America and I would say would think, I think people ask me what I mean by that.

[00:11:16]:
First America, I think is anyone that’s making over a couple, maybe $300,000 a year, that’s First America. Interest rates matter, but not a lot. However, if you’re in the Second America, interest rates really do matter. These are the folks getting crushed. These are the people that Trump, Besant and Warsh want to make changes to the way inflation is calculated and the fact that interest rates are so incredibly high and they must be brought lower. Our call remains, by year end, the 10 year yield will be at 3.5% and 30 year mortgages will be below 5%. That’s a, it’s a big call. There’s not a lot of time left for that to happen.

But I think wars are going to have an immediate impact on this Federal Reserve. I think we’re going to see it in the very near future. So we get the war resolved. Oil prices, rates come down, wars on. The Fed makes his changes again. Fed chairmen have a tremendous amount of power and they know how to utilize that power. And you’re looking at a market that is melting up. No, no, no mistake about it.

This is going to remain a melt up bull market year, which means these dips will remain buying opportunities we also have. And I think this is not as powerful as the fundamentals I just covered, but I think it is very powerful. This rotational theme that this bull market has had from its birth in late 2022. Rotational bull market theme. It is textbook bull market action. And right now, yeah, semis are down today, 1.8%. Don’t like seeing those move lead lower. Nasdaq down a half percent.

[00:12:54]:
Don’t like seeing that lead lower, lower. We want to see tech and semis always leading higher. But again, they’ve been going completely parabolic. You know, a breather is normal. But take a look at what’s happening in IGV. IGV is the, is essentially the software ETF today was up another 1%. Take a look at the chart on it. All right.

It’s put an incredible base on a selling climax. So all these software stocks that have been destroyed from last October on are now making their move higher. And it’s really is a sharp move higher. That’s, that’s the way these rotations work. One group moves lower, another moves higher. And we don’t have these big market declines folks. We’ve already had our 10% decline. Right.

We had a 10% correction if you will. That was the war. We’re not going to have another one now. That is our call. But you know, can you get a 2 to 3% pullback after move like we just had? Absolutely. That is completely normal bull market behavior and that is exactly what we see happening here. Again, strong smart money hour. That’s been a theme of this bull market and we absolutely saw it again today.

[00:14:14]:
All right, let’s take a look on the hood today. You know, eternals were actually pretty good today. NASDAQ had about just slightly more losers than decliners. Advanced decline NYSE plus 400. Both volumes were positive. Nasdaq volume 51 of volume NYSE up volume 59%. We did have about 70 more stocks at a 50 week low 50 Kai. But then we moved to the sector watch.

This one kind of surprised me. Eight sectors higher, three lower. I really was surprised by this. Energy led the way up 1.8% again energy stocks do look very good here. Consumer staples of 1.3. Financials up 1.2 to the downside down technology diddly lower today down 9 cents. It can be forgiven after the melt up move parabolic move higher than it’s had in our commodity watch today. Again gold opened sharply lower today and then that was it that the lows were in after that.

If I can find my commodity screen, here we go. And I wrote this up this morning about, about these gold miners which we continue to pound the table on. I’ll cover that more in a moment. Gold today finishing up $6 an ounce had been down as much as 65 at 45.68. Silver today up a very nice 7/10 of a percent had been sharply lower as low as 74 finished at just under $78 an ounce. Copper today continues to move higher up a half percent.633 a pound. Crude oil again had been as high as today. It’s one of just under 106 right now, trading at 101.69.

[00:16:01]:
That puts it up six tenths of percent on the day. And finally, Bitcoin 77,127. Again, our Wartails, you know, they, they always pop up, don’t they? Semis, bitcoin, gold, silver. And then you can say rates as well with this. Right. These are our wartels. Will continue to act, to follow. Yes.

Over the last couple of days, they have been hinting that a resumption of the military action might begin. As I covered earlier, I do not see that happening. I believe Trump has pivoted and the war is effectively over. All right, folks, that’s it for today. Hope you had a great day and you a better night. We’ll see back here again tomorrow after the close. It.