September 27, 2024 • 9 mins
A little bit of good news and a little bit of bad news with the market this week. How so? TUNE IN TO FIND OUT!!!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:34):
Hello and welcome
to this week's edition of The Big Money Report. I'm
your host, David Boothe, President and Financial Advisor at
BIG Investment Services. That's BIG, Boothe
Investment Group. We're a full-service financial advisory based
out of Dover, Delaware, serving clients all across this great
(00:55):
country. And you can read all about us at abigplan.com. That's
www.abigplan.com. I
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, September 27th, 2024. And
(01:17):
before we get into it, I want to take a solemn moment to honor a
friend of mine who just recently passed away. So he was
a mentor to me. We worked together over 30 years ago.
His name's John Locken. And he got into this industry before I
did. And of all the folks that have given me advice and
guidance along the way, his was the most impactful to my career, from
the decisions I made getting into this business to how our
(01:40):
business model looks today. So really going to miss him. And
he's just a few years older than me. So it's quite sudden and quite a shock that
he passed unexpectedly last weekend. And our
thoughts and prayers are with his family and his practice and
his coworkers who he cared very much about and his clients. So give
us some thoughts and prayers to John. Let's go and jump into
(02:00):
the numbers here. Markets did hang in there this week. Dow Jones
up half a percent, S&P 500 up 0.6, the
NASDAQ composite up 0.9. The small cap index, surprisingly,
was a little bit down this week, down one-tenth of a percent. And normally,
small caps really tend to take off after that first Fed
rate cut. We had that first rate cut last week. So
(02:22):
I would expect small caps to start to show a little bit more enthusiasm here
in coming weeks. But this week was not the week for it to happen. Didn't
happen this week. Volatility index up 5% and a lot of
that happened today. It was up 10% today on
a relatively tame day in the market. What's that all about? Well, This
market looks tired right here. We mentioned last week we were getting really
(02:43):
close to some sell signals on the DeMarc indicators. The
S&P oscillator has been running hot as well. We're
getting ready to go into a seasonally very weak period of time, October,
during a presidential election year. Tends to be a pretty lousy month. All
of the stars are aligning to suggest that
the market is going to go sideways or down, and
(03:04):
I would guess down here, in the next few weeks. So
maybe the volatility index is getting ahead of that a little bit. We saw that bump up a
little bit today. Long-term bonds down 0.3%, so
they didn't do a whole heck of a lot this week. And we take a look at the sectors, kind
of a mixed bag, nothing really jumping out to make a bold statement.
I will say semiconductors are up quite a bit. Micron reported this
(03:25):
week, stock that we don't own, but I watch it, they make DRAM chips, which
are in everything, had a monster quarter, monster quarter,
and stock was up like 15% in a day. Semiconductors altogether
were up 4.1% for the week. So I mentioned last week
about Dow Transport Theory and how transports have not
been confirming the move of the market. but I tend to watch semiconductors
(03:48):
as a pulse on the economy. And up 4.1% sounds
like they are hanging in there at the moment. Other areas to
watch, financials are down 1.1%. Again,
doesn't make a whole heck of a lot of sense when we have the yield curve widening.
That should be good for banks, but they didn't really respond to that this week. Healthcare down
1.4%. That tends to be a defensive area. Staples, they were flat on
(04:10):
the week. That tends to be a defensive area. Discretionary was up 2.1%. Again,
mixed signals from the sectors. Gold was up
1.1 and silver up 1.5. So what moved the markets this week?
A couple of things. One, the economic data has been pretty good.
We had an update on GDP numbers. and they were
coming in at 3% GDP growth. That's
(04:33):
a big number. Economists are expecting in the twos, low twos,
and we're at 3%. So we're showing really good
growth for the US economy. And then today we've got the PCE number,
personal consumption expenditures number. That is the inflation metric
that the Fed pays the most attention to. This is the one they care
about the most. and it was way below expectations, low
(04:56):
twos. So we've got lower inflation, we've got
stronger growth, and the Fed just cut rates by
50 basis points last week. What is there not to love,
right? I mean, my goodness, that's just like Goldilocks. As
far as the economy and the stock market is concerned, it looks really,
really good. So the market is kind of hanging in there
(05:17):
with all of that. And then on top of that, China had some
monster news this week. So in response to our half a
percent rate cut last week, The Chinese Central Bank came
out, pretty much said they're gonna do everything and anything
it takes to get their economy moving again. Anything
and everything. And the market responded in kind. Chinese
(05:39):
market was up big time this week. We've got one Chinese
stock in all of our larger models. As a matter of fact, we've got it in every one of
our large models. It's Alibaba. It's China's version of
Amazon.com. So they do online retail, they also
have cloud services and things like that, just like Amazon has.
And we bought that stock last October. So we haven't owned it for quite
(06:00):
a year yet. And it's been hovering in the seventies right
around where we bought it. But boy, did it move this week up 21% this week. closing
the week at $107 a share. So big, big move there.
And all the Chinese stocks followed suit. They were all up quite a
bit. I think that area of the world can continue to show some strength. We'll
probably see a pullback just because this move was a bit parabolic. And
(06:23):
if we do see a pullback, I might be adding a little bit of Asian exposure
to some of our smaller models as well. Other than that, I
did make some moves today for those of you
that have taxable accounts and you're in high tax
brackets. So getting close to the end of the year, and
when we get to this point in the year, I look to try to manage
(06:43):
taxes the best that I can. We've got a lot of gains this year. So
we've got a couple of energy stocks that have been down, Devon Energy and
Chevron. So for those that have taxable accounts,
We sold those two today and we moved them into
Diamondback Energy and ExxonMobil. So by
doing that, what happens is we were able to capture the loss on
(07:05):
those two stocks, but still stay fully invested in that
sector of the market. Now, for those of you that are not
in a high bracket or have your money in IRA, you'll
notice that we didn't touch them because I love them. I think both stocks are great. Devon and
Sheppard are fantastic. I don't want to sell them. I'm just trying to
do some tax management. So for those of you that see those trades, that's
(07:25):
what was going on there. Other than that, look, we're in this limbo
period where there's no real big economic news that's
going to be coming our way. No big earnings reports coming our way.
So I don't know what the market will do. Maybe it'll levitate. Maybe
it'll start to work its way down. But as I mentioned earlier, I expect
October could be sloppy, but the good news is the market has
(07:47):
confirmed the breakout. It puts 5,900 to 6,000 on the S&P in play. The
market holding these big levels from last week has allowed
us to really set things up to finish the year strong. And
I think that can happen. We might have a little weakness here in October, but
I think that right now the end of the year is looking pretty
good based on what this market has done in the most recent weeks,
(08:09):
including this one. The holding these key levels this week was a really big
deal to set things up to go higher by year end. And
I think we're positioned for that. So I'm gonna go and wrap up. 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 a little early, take that big trip, pay for
(08:29):
that wedding or college for your kids or grandkids, whatever the case may
be. Don't just think about it. Think big. Think B-I-G. 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
(08:50):
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,
(09:11):
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
Hello and welcome
to this week's edition of The Big Money Report. I'm
your host, David Boothe, President and Financial Advisor at
BIG Investment Services. That's BIG, Boothe
Investment Group. We're a full-service financial advisory based
out of Dover, Delaware, serving clients all across this great
(00:55):
country. And you can read all about us at abigplan.com. That's
www.abigplan.com. I
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, September 27th, 2024. And
(01:17):
before we get into it, I want to take a solemn moment to honor a
friend of mine who just recently passed away. So he was
a mentor to me. We worked together over 30 years ago.
His name's John Locken. And he got into this industry before I
did. And of all the folks that have given me advice and
guidance along the way, his was the most impactful to my career, from
the decisions I made getting into this business to how our
(01:40):
business model looks today. So really going to miss him. And
he's just a few years older than me. So it's quite sudden and quite a shock that
he passed unexpectedly last weekend. And our
thoughts and prayers are with his family and his practice and
his coworkers who he cared very much about and his clients. So give
us some thoughts and prayers to John. Let's go and jump into
(02:00):
the numbers here. Markets did hang in there this week. Dow Jones
up half a percent, S&P 500 up 0.6, the
NASDAQ composite up 0.9. The small cap index, surprisingly,
was a little bit down this week, down one-tenth of a percent. And normally,
small caps really tend to take off after that first Fed
rate cut. We had that first rate cut last week. So
(02:22):
I would expect small caps to start to show a little bit more enthusiasm here
in coming weeks. But this week was not the week for it to happen. Didn't
happen this week. Volatility index up 5% and a lot of
that happened today. It was up 10% today on
a relatively tame day in the market. What's that all about? Well, This
market looks tired right here. We mentioned last week we were getting really
(02:43):
close to some sell signals on the DeMarc indicators. The
S&P oscillator has been running hot as well. We're
getting ready to go into a seasonally very weak period of time, October,
during a presidential election year. Tends to be a pretty lousy month. All
of the stars are aligning to suggest that
the market is going to go sideways or down, and
(03:04):
I would guess down here, in the next few weeks. So
maybe the volatility index is getting ahead of that a little bit. We saw that bump up a
little bit today. Long-term bonds down 0.3%, so
they didn't do a whole heck of a lot this week. And we take a look at the sectors, kind
of a mixed bag, nothing really jumping out to make a bold statement.
I will say semiconductors are up quite a bit. Micron reported this
(03:25):
week, stock that we don't own, but I watch it, they make DRAM chips, which
are in everything, had a monster quarter, monster quarter,
and stock was up like 15% in a day. Semiconductors altogether
were up 4.1% for the week. So I mentioned last week
about Dow Transport Theory and how transports have not
been confirming the move of the market. but I tend to watch semiconductors
(03:48):
as a pulse on the economy. And up 4.1% sounds
like they are hanging in there at the moment. Other areas to
watch, financials are down 1.1%. Again,
doesn't make a whole heck of a lot of sense when we have the yield curve widening.
That should be good for banks, but they didn't really respond to that this week. Healthcare down
1.4%. That tends to be a defensive area. Staples, they were flat on
(04:10):
the week. That tends to be a defensive area. Discretionary was up 2.1%. Again,
mixed signals from the sectors. Gold was up
1.1 and silver up 1.5. So what moved the markets this week?
A couple of things. One, the economic data has been pretty good.
We had an update on GDP numbers. and they were
coming in at 3% GDP growth. That's
(04:33):
a big number. Economists are expecting in the twos, low twos,
and we're at 3%. So we're showing really good
growth for the US economy. And then today we've got the PCE number,
personal consumption expenditures number. That is the inflation metric
that the Fed pays the most attention to. This is the one they care
about the most. and it was way below expectations, low
(04:56):
twos. So we've got lower inflation, we've got
stronger growth, and the Fed just cut rates by
50 basis points last week. What is there not to love,
right? I mean, my goodness, that's just like Goldilocks. As
far as the economy and the stock market is concerned, it looks really,
really good. So the market is kind of hanging in there
(05:17):
with all of that. And then on top of that, China had some
monster news this week. So in response to our half a
percent rate cut last week, The Chinese Central Bank came
out, pretty much said they're gonna do everything and anything
it takes to get their economy moving again. Anything
and everything. And the market responded in kind. Chinese
(05:39):
market was up big time this week. We've got one Chinese
stock in all of our larger models. As a matter of fact, we've got it in every one of
our large models. It's Alibaba. It's China's version of
Amazon.com. So they do online retail, they also
have cloud services and things like that, just like Amazon has.
And we bought that stock last October. So we haven't owned it for quite
(06:00):
a year yet. And it's been hovering in the seventies right
around where we bought it. But boy, did it move this week up 21% this week. closing
the week at $107 a share. So big, big move there.
And all the Chinese stocks followed suit. They were all up quite a
bit. I think that area of the world can continue to show some strength. We'll
probably see a pullback just because this move was a bit parabolic. And
(06:23):
if we do see a pullback, I might be adding a little bit of Asian exposure
to some of our smaller models as well. Other than that, I
did make some moves today for those of you
that have taxable accounts and you're in high tax
brackets. So getting close to the end of the year, and
when we get to this point in the year, I look to try to manage
(06:43):
taxes the best that I can. We've got a lot of gains this year. So
we've got a couple of energy stocks that have been down, Devon Energy and
Chevron. So for those that have taxable accounts,
We sold those two today and we moved them into
Diamondback Energy and ExxonMobil. So by
doing that, what happens is we were able to capture the loss on
(07:05):
those two stocks, but still stay fully invested in that
sector of the market. Now, for those of you that are not
in a high bracket or have your money in IRA, you'll
notice that we didn't touch them because I love them. I think both stocks are great. Devon and
Sheppard are fantastic. I don't want to sell them. I'm just trying to
do some tax management. So for those of you that see those trades, that's
(07:25):
what was going on there. Other than that, look, we're in this limbo
period where there's no real big economic news that's
going to be coming our way. No big earnings reports coming our way.
So I don't know what the market will do. Maybe it'll levitate. Maybe
it'll start to work its way down. But as I mentioned earlier, I expect
October could be sloppy, but the good news is the market has
(07:47):
confirmed the breakout. It puts 5,900 to 6,000 on the S&P in play. The
market holding these big levels from last week has allowed
us to really set things up to finish the year strong. And
I think that can happen. We might have a little weakness here in October, but
I think that right now the end of the year is looking pretty
good based on what this market has done in the most recent weeks,
(08:09):
including this one. The holding these key levels this week was a really big
deal to set things up to go higher by year end. And
I think we're positioned for that. So I'm gonna go and wrap up. 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 a little early, take that big trip, pay for
(08:29):
that wedding or college for your kids or grandkids, whatever the case may
be. Don't just think about it. Think big. Think B-I-G. 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
(08:50):
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,
(09:11):
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
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