Episode Transcript
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(00:37):
Hello and welcome to this week's edition of The Big Money Report. I'm
your host, David Boothe, President and Chief Investment Officer at
BIG Investment Services. That's B-I-G, Boothe
Investment Group. We're a full-service financial advisory based out
of Dover, Delaware, serving clients all across America.
And you can read all about us at abigplan.com. That's www.abigplan.com. I
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like to put the show together once a week just to give you a recap of the week behind
and a peek at the week and weeks to come. Trying to
keep you up to speed with you and your money. And we're glad you're with
us today. It is Friday, August 15th,
2025. Some big time shout outs to all those folks showing us some love on
Google with the reviews. Our marketing director is very happy.
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She still wants more. She still wants more, but she's very happy. So big shout
outs to Aaron, Kevin, Deb, and Ed. Tim tracking us
over there on LinkedIn. And how about Landa down there in
Florida who says that when she gets her cup of coffee and she sits down
to listen to the show, her heart rate drops. And
that's good. We're not only helping you out with your financial health, but your physical health
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too, because the major news media has no interest
in doing any such thing. They want their heart rate up
as high as possible. Hey, let's go ahead and talk about the markets. Look,
last week, the word of the week was resilient. Yeah,
it's still the word of the week. I mean, this market is
hanging on like one of those Tupperware lids on
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your grandmother's Tupperware. Do you understand what I'm trying to talk about there? When you try to pull
it off, it would bend your fingernails back. Yeah, that's what this
market's doing right now, hanging on really tight now. I
think that could break next week. I think things could change towards the end of next week.
I'll tell you why in a minute. But overall, it's still
hanging in there. So for the week, Dow Jones up 1.7 percent,
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the S&P 500 up 0.9, the Nasdaq composite up
0.8, and the Russell small cap index up 3 percent this
week, had a ripping move this week, all because of
some inflation data. We'll cover that in just a moment. Volatility index,
the VIX, flat on the week. It's still at a 15. So I'm
going to just pause here for just a moment. We like to watch that volatility index
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when it spikes. It's usually trouble in the market. When
it's down here, complacent, things are usually calm. That's what we're seeing at the
moment. But there's a couple of technical indicator things
that we're seeing. One, on the stock market, things are
looking stretched, looking very stretched on a lot of our technical indicators.
And it looks like the market could absolutely run out of gas early
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next week based on some of the things that we're seeing. And then when you look at
the volatility index, it's the exact opposite. It's actually flashing
some buy signals. It looks like its downward move is over,
and it's about ready to head higher. So the volatility index goes
up. It probably means the market goes down and all the tentacles are
suggesting this could happen. And on top of that, we've
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got some news events that will be taking place next week that I think could
spur that to take place. Look, no one has a crystal ball. It
could very well not happen. But remember, we are slipping into
the most seasonally weak period of the year, the end of
August through September into October. It's traditionally the
worst period of the year. We've got stretched technical indicators. We've
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got some headline things are going to come out over the next week or
so. And we've also had some data this week that all put
things on a little bit of shaky ground here. And I think that if we're going to get a pullback,
From these April lows, this market's gone straight up. If it's going to
happen, I think that its time is drawing very, very close. So
we shall see how everything shakes out with that. Look
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at some other things. Long-term bonds as measured by the TLT. That's
an ETF that has long-term treasuries down 1.2% this
week. Long-term bonds still cannot get their act together
again because interest rates continue to remain stubbornly high
and push higher like they did this week. So we'll talk about the whys here in
just a moment. When you take a look at the sectors, pretty much a mixed bag.
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We saw some defensive areas like utilities and consumer staples go
down on the week. On another defensive area, healthcare ripped
higher this week. It was up 4.6% on the week. And
a lot of that happened today thanks to United Healthcare. A
story came out that Warren Buffett, and company have been buying
some United Healthcare shares. I've been watching that stock for a while, actually. I think
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it might retrace here after today's move. It might pull back down again.
But it's something that's been on my list, something I've been watching. Not going
to buy it now, obviously, with a spike, but could buy it if it drops back down
again. We'll see what happens. Looking at other things for the week, just
like I said, it's kind of a mixed bag. Communication services were really strong this week.
Facebook having some good news out on the things that they're doing. That's
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in our models. It was up 2% on the week, and that helped to drive the
communication services sector up 3.5%. So kind of a mixed
signals there from the sectors. No real clear messages based on
that aspect. And then gold down 1.8% this week and silver down
1%. So what is driving Mr. Market? Well,
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it was inflation data. That was the big story this week. So the first
piece of inflation data we got was a consumer price index, prices
that consumers are paying. And that number came in in line
and maybe even a little, just a touch cooler in some areas than what the
market was expecting. And the market responded incredibly
positively to that. Why? Because For
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the market, it sees cooler inflation data as
a sure sign that the Federal Reserve can lower
interest rates in September. So the market's taken for granted that
the Federal Reserve is absolutely going to cut rates in September. And
it responded in kind. It went up a lot. And that's why we saw small caps
just explode to the upside. Small caps have been lagging behind. They
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are a coiled spring. And if rate cuts are
coming to fruition, those things are going to move and move big. We saw
small caps up in a single day on that consumer price index
number, but not so fast. Like I told my team, we
had our Wednesday weekly meeting and I said, listen, this market is
getting ahead of itself. expecting these September rate cuts, and
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if for some reason something throws that off, if it doesn't happen,
it's going to get smacked in the face. Well, we got a little bit of a preview of
that because the very next day, or maybe it was two days later, the producer
price index number came out. Those are wholesale prices, and
those numbers were screaming hot. They were very,
very high. The market obviously did not like that. Their
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tariffs, the tariffs are pushing those prices up. We expected that would
happen. It's now starting to show up in the data. And I think it's going to
show for another quarter or two before it cools off. But
the numbers are really hot. The market opened up down
big time that day. It was down quite a bit. But here's what's amazing. The
market wants to continue to believe what it wants to believe because it
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clawed all of that back. It was down big time on the
open, off those hot numbers, and then it worked its way back
throughout the course of the day. So market participants still
hanging on to a lot of hopium. That's a drug made
out of hope that the Fed's going to cut rates in
September. So here's my concern, okay? I
think the Fed should cut rates. I absolutely think the Fed should cut rates because,
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because number one, the jobs numbers are horrific and
the Federal Reserve is always too late to cut rates and it always leads
to recession. I think they should cut now and cut substantially because
the job numbers look terrible. And I believe tariffs are a short-term
inflationary spike. I do not think there's going to be a long-term thing.
So look through it and cut rates, Mr. Powell. The other reason I
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think they should cut rates, corrugated cardboard. Yes, let me say that again. Corrugated
cardboard, sales are slumping big time. That's
one of these things that I just keep eyes on because it's not a very good sign for
the economy. And there's a lot of little things like that, these little precursors to
economic slowdown or worse. are starting to
creep up here and there, I think the Fed should make a move. All of
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that said, the Fed also has data that it
can just lean into and hang on to, like Grandma's Tupperware, if
it wants to stay obstinate, okay? Number one, the consumer
price index, although the number was good, the services number was
hot. The Fed will not like that. As a matter of fact, I heard one
Fed member talk about it earlier this week. The services number was
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hot, and that is not good because that's a stickier area
of inflation. In addition to that, like I said, the wholesale numbers were hot. They
can hang on to that. And look, we all know that Fed Chair
Jay Powell and President Trump, they do not get along. There's
a lot of friction there. And I don't trust Jay
Powell to make a move. I hope he does, but he may not. And
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look, we may get, again, let's talk about next week here.
We may get a preview of what's going to happen, because next week,
the Fed meets in Jackson Hole, Wyoming. They do this every year.
And coming out of that meeting, there's going to be some commentary. And
if Jay Powell does not set the stage for that September rate
cut, then we could start to see things roll over as soon as
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the end of next week, which would also kind of correspond with some of the technical
indicators we're seeing as well. So, hey, we'll just see what happens. It doesn't matter
to us either way. We're positioned beautifully. If the market wants to go higher, we're making
great money as it drifts higher. And we've got some cash on hand if
we get the pullback, right? We've done some trimming in recent weeks. We've got a little bit
of cash. I've got a shopping list. There's things I want to buy, things
I want to add to. And if we get those opportunities, We'll do
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it, right? So either way, we're in a good place. For all you new
folks or folks that have added cash to your portfolios in
the last few weeks, we've been working it in on any opportunities for
weakness, individual stocks are down or whatever, we're buying them.
So we're getting you worked in to be fully invested. We still hold on
to a couple of the really strong growth names. I'm waiting for a little bit bigger pullback
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for those. But everything's looking really good on all fronts in that regard.
So aside from that, Not a whole lot going on now. Earnings
season is winding down, and really it's going to be headlines
driving the markets. I will say one headline that got me a little bit this week, and
the market responded okay to it. I thought it would be a little bit worse. But
the Trump administration, which by the way, I must admit, I do support a
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majority of the administration's objectives. I think there's a lot
of things that need to be done that they're trying to do. That said,
they've made an announcement earlier this week that just blew my mind, okay? You
may know this, you may not, but it's been the U.S.
policy here for a couple of years that our chip companies like NVIDIA
and AMD are not allowed to sell high-end chips to
(11:03):
China for security reasons, okay? That's the reasoning behind
that. Well, it was announced earlier this week that they can now sell
some of these chips as long as they give 15% of the
revenue to the U.S. federal government. My question is
this, who's going to collect the revenue? Guido with a
baseball bat? What is this? Is this the mafia or
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is this communist China? If these chips are a security concern,
then they shouldn't be sold to China, period. If it's going to hurt our national security, don't
sell them. If they're not a security concern, Who do
you think you are, Uncle Sam, to take 15% of a company's
revenues? I think that is horrific. I think it's absolutely horrific.
You know, it takes me all the way back. I get flashbacks. Now, Landa's heart rate,
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poor Landa down there in Florida, her heart rate is now rising because
I am upset. It takes me back to the financial crisis in 08-09. When
President George W. Bush grabs ahold of the podium, looks into the camera and
says, we have to abandon free market principles to save
the free market. And then they proceeded to take my taxpayer money
and bail out one of our major competitors right here in town. Merrill Lynch
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was on the ropes. They were going down. I was looking at my chops. I thought
we could pick up some of their advisors, maybe buy their building. I was excited. Instead,
they got bailed out and they're still in existence. That's not supposed to work. The
free market, the bad actors go away, the good guys get to grow. Then
you move forward from there, COVID, government shutting down our
clients' businesses while they leave Walmart and Lowe's and Home Depot
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wide open. That wasn't fair. And now we're doing these sort of things. A
lot of things are happening that I think over the last
25 years or so are a little bit alarming when it comes to the free market. So I'm
sorry. I got on the soapbox. I went off on a tangent and I raised
Atlanta's heart rate. Let me calm back down. That happened this
week and that irritated me. But moving forward from here, there could
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be some good news with Russia and Ukraine. President Trump and Vladimir
Putin are meeting as we speak. As I speak into this microphone,
maybe some good things will come out of that. The market could like that. But I really think
moving forward from here, we're probably going to enter into a period where the market
is at risk to headlines. And there's
not a lot of good stuff to drive it higher. And things look a little stretched.
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It's a seasonally weak period of time. So we're ready for it. Bring it on, baby. Go
on down. Let us do some buying. And if not, no worries. Keep
going higher. We'll do well that way, too. We're in a great place right now. So between
now and next few minutes, you're thinking about your future, your long-term goals, all
the things you want to do with you and your money. Maybe
it's retire at 62 instead of 65, Dan. Maybe
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it is buy that second house, take that big trip, put those kids through
college. Hey, you know what your goals are. Don't just think about
it. Think big. Think BIG. And
Thank you for listening to this week's edition of the Big Money Report with
your host, David Boothe, President and Financial Advisor at
BIG Investment Services. For more information on BIG and
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how you can access their planning and investment management services, visit
them at abigplan.com. That's abigplan.com. Or
call them toll free at 866-946-PLAN. That's 866-946-7526. The
foregoing content reflects the opinions of David Boothe and Boothe Investment Group,
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Inc., and is subject to change at any time without notice. There's no guarantee
that the statements, opinions, or forecasts provided herein will prove to be
correct. Content provided herein is for informational purposes only and should
not be used or construed as investment advice or a recommendation regarding the
purchase or sale of any security. All investing involves risk, including the
potential for loss of principal. There is no guarantee that any investment plan or