Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Five to fifty three. Now Here in Houston's Boring News,
Richard rosso joins a certified financial planner. Stock market looks great,
so the economy must just be humming along, right, Richard,
everything's fine.
Speaker 2 (00:10):
Kennet Yellen, that's like sending the captain of the Titanic
to the Marine Military Academy to teach uh. I mean,
that's just crazy. Listen, let me explain how the market
can confuse everybody and how it delinks from the real
economy that we all live in every day. In nineteen
thirty three, unemployment was twenty five percent. What do you
(00:31):
think the stock market return was for that year? What
would you think it would be?
Speaker 3 (00:36):
We already think thirty three That was after the crash.
I mean, I guess maybe it was pretty good.
Speaker 2 (00:42):
Well, you're right, But unemployment was twenty five percent in
nineteen thirty three, and the market was up close to
fifty percent. So, in other words, there were periods of
time one the market looks ahead. It doesn't look at
the same things we do. It looks at the fact
that labor market is strong. It doesn't matter that the
the biggest employer is the government. It looks at most
(01:04):
important who is the real president to the market. Jerome Powell,
It's all about interest rates first. It's all about the
direction of those rates and how that can affect the economy.
And the market is always looking forward from where we
are today. Meanwhile, we all suffer because through the Trump years,
real wages were up over six percent. Through Biden Harris
(01:27):
one point four percent. So we all still suffer. But
the market does well looking ahead and saying well, listen,
inflation is already trending down. Inflation follows the White House mantra.
Speaker 3 (01:39):
Well, and the Dow. For instance, they tout the Dow,
how great the Dow is. Well, the Dow is based
on just the select group of stocks, and if you've
got a couple that are just storming around, doesn't necessarily
mean it translates to the stocks that you hold in
your four oh one k.
Speaker 2 (01:57):
Well, you know, again, the S and P, which is
a broader index, has done very well this year. So
it's not just the now, it's the broad market. And
again the broad market was really moved by seven stocks.
And we know the AI story, So this is you
bring up something very good, share very important. Market's also
moved by stories and narratives. The AI story has overwhelmed
(02:18):
the market, so we had seven stocks drive the market.
Now it's much broader based, and I will tell you,
based on traders, it looks like there's this, you know,
based on what they're doing, there's like a seventy percent
chance that Trump wins the election. So now you're seeing
more of a sector rotation in sectors and that Trump
would favor. So markets are believing right now that Trump
(02:40):
is going to win, So that could put a little
bit of a if that. If that doesn't happen, then
that's going to have to be an unwind of those trades.
So you just have to keep in mind as an investor,
the market works totally different than when the economy is
on something really bad is happening. Let's always follow this
at first.
Speaker 1 (02:57):
Let me ask you this, Richard, because I see stories
like this every day, and I'm wondering if if Wall
Street is noticing, if they're going to react to it,
if they already have reacted to it. Here's one Denny's
to close one hundred and fifty restaurant locations. Here's another
one major paint company in this case is Glidden, laying
off eighteen hundred workers. Shutting down facilities. The jobs market
(03:18):
that they're so excited about is pulling back some are
they noticing.
Speaker 2 (03:22):
Well, here's who's noticing, the Federal Reserve. That's why they
cut fifty basis points. They see a crack in labor.
But here's what the stock market looks like. Oh, people
are getting laid off. That's good news because that means
the Fed is going to lower rates, which is better
for us. So keep in mind again more counterintuitive, scratching
(03:44):
your head until you got a bald spot kind of
thing going on, right, Yeah, but you're absolutely correct. That
is why the Fed moved fifty basis points, in my opinion,
is because labor market is cracking. That has been sort
of the safety net for your own power, and now
it's starting to crack. So but what the market again
looks at, Oh, rates are coming down, good for stocks.
(04:09):
So we have some people got laid off, but who cares.
That's the market perspective, you know, it's like you got
to put on your market hat, take it off, put
on your economy hat. They don't move together most of
the time.
Speaker 1 (04:21):
So what is good for us is not necessarily good
for Wall Street and vice versa. I got it correct
all right, Richard nailed it. Thank you, Sarah. Always good
to talk to you. Thanks for getting up early. Richard Rosso,
Certified Financial Planner. It's five fifty seven.
Five to fifty three. Now Here in Houston's Boring News,
Richard rosso joins a certified financial planner. Stock market looks great,
so the economy must just be humming along, right, Richard,
everything's fine.
Speaker 2 (00:10):
Kennet Yellen, that's like sending the captain of the Titanic
to the Marine Military Academy to teach uh. I mean,
that's just crazy. Listen, let me explain how the market
can confuse everybody and how it delinks from the real
economy that we all live in every day. In nineteen
thirty three, unemployment was twenty five percent. What do you
(00:31):
think the stock market return was for that year? What
would you think it would be?
Speaker 3 (00:36):
We already think thirty three That was after the crash.
I mean, I guess maybe it was pretty good.
Speaker 2 (00:42):
Well, you're right, But unemployment was twenty five percent in
nineteen thirty three, and the market was up close to
fifty percent. So, in other words, there were periods of
time one the market looks ahead. It doesn't look at
the same things we do. It looks at the fact
that labor market is strong. It doesn't matter that the
the biggest employer is the government. It looks at most
(01:04):
important who is the real president to the market. Jerome Powell,
It's all about interest rates first. It's all about the
direction of those rates and how that can affect the economy.
And the market is always looking forward from where we
are today. Meanwhile, we all suffer because through the Trump years,
real wages were up over six percent. Through Biden Harris
(01:27):
one point four percent. So we all still suffer. But
the market does well looking ahead and saying well, listen,
inflation is already trending down. Inflation follows the White House mantra.
Speaker 3 (01:39):
Well, and the Dow. For instance, they tout the Dow,
how great the Dow is. Well, the Dow is based
on just the select group of stocks, and if you've
got a couple that are just storming around, doesn't necessarily
mean it translates to the stocks that you hold in
your four oh one k.
Speaker 2 (01:57):
Well, you know, again, the S and P, which is
a broader index, has done very well this year. So
it's not just the now, it's the broad market. And
again the broad market was really moved by seven stocks.
And we know the AI story, So this is you
bring up something very good, share very important. Market's also
moved by stories and narratives. The AI story has overwhelmed
(02:18):
the market, so we had seven stocks drive the market.
Now it's much broader based, and I will tell you,
based on traders, it looks like there's this, you know,
based on what they're doing, there's like a seventy percent
chance that Trump wins the election. So now you're seeing
more of a sector rotation in sectors and that Trump
would favor. So markets are believing right now that Trump
(02:40):
is going to win, So that could put a little
bit of a if that. If that doesn't happen, then
that's going to have to be an unwind of those trades.
So you just have to keep in mind as an investor,
the market works totally different than when the economy is
on something really bad is happening. Let's always follow this
at first.
Speaker 1 (02:57):
Let me ask you this, Richard, because I see stories
like this every day, and I'm wondering if if Wall
Street is noticing, if they're going to react to it,
if they already have reacted to it. Here's one Denny's
to close one hundred and fifty restaurant locations. Here's another
one major paint company in this case is Glidden, laying
off eighteen hundred workers. Shutting down facilities. The jobs market
(03:18):
that they're so excited about is pulling back some are
they noticing.
Speaker 2 (03:22):
Well, here's who's noticing, the Federal Reserve. That's why they
cut fifty basis points. They see a crack in labor.
But here's what the stock market looks like. Oh, people
are getting laid off. That's good news because that means
the Fed is going to lower rates, which is better
for us. So keep in mind again more counterintuitive, scratching
(03:44):
your head until you got a bald spot kind of
thing going on, right, Yeah, but you're absolutely correct. That
is why the Fed moved fifty basis points, in my opinion,
is because labor market is cracking. That has been sort
of the safety net for your own power, and now
it's starting to crack. So but what the market again
looks at, Oh, rates are coming down, good for stocks.
(04:09):
So we have some people got laid off, but who cares.
That's the market perspective, you know, it's like you got
to put on your market hat, take it off, put
on your economy hat. They don't move together most of
the time.
Speaker 1 (04:21):
So what is good for us is not necessarily good
for Wall Street and vice versa. I got it correct
all right, Richard nailed it. Thank you, Sarah. Always good
to talk to you. Thanks for getting up early. Richard Rosso,
Certified Financial Planner. It's five fifty seven.
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