June 18, 2025 • 30 mins
Today we received news that the Federal Reserve left rates unchanged at 4.25-4.50%, with a rough cocktail of lower growth and higher inflation expected in the intermediate term. Today at 3pm on the Jon Sanchez Show, we will discuss the reaction to this news and how it may affect your portfolio and the markets going forward.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Happy Wednesday, FED Day.
Speaker 2 (00:06):
Welcome to the John Sanchez Show here on News Talk
seven eighty koh. This is Jason Gaunt. I will be
filling in for you today. Unfortunately, John's father did pass
away this morning. Hearts are definitely with him and his
family and definitely wants to send a shout out to
everyone who's such kind wishes.
Speaker 1 (00:24):
Well.
Speaker 2 (00:24):
Man will be a big loss, but I will be
guiding you tonight. Give you a little update on what
we saw today as far as markets are concerned. A
little bit of a recap of the high points of
the FED meeting as well as the notes and SEP
projections from said FED meeting, but it was a bit
of a mixed bag unfortunately. The major takeaway was that
(00:49):
the FED sees slightly lower growth than they had seen
during their last meeting and slightly higher inflation potential than
they saw during their last meeting, noting we had increased
tariff issues, we had obviously a now Israel iran potential
(01:11):
US involvement from a war standpoint. Again, that wasn't a
big part of the meeting in terms of their inflation concerns,
but they are citing they've got a bit of a
mixed bag. But remember, the Fed is in a position
that they still think that they have time to wait,
that the economy is yes, slow, weing, but not stalling.
(01:35):
And while they continue to see just that a slowing
and concerns of inflation continue to be there with tariffs,
and they've really pressed that fact that they don't know
yet and even Powell today said he was not, you know,
to some extent, untested in dealing with tariffs like this
(01:59):
in such a quick way and in such a manner
that they're being deployed and then pulled off. And then
now we've got a couple weeks before deals need to
be struck that we don't have to re engage on
the tear of front.
Speaker 1 (02:12):
And so the Fed agreed to keep rates unchanged.
Speaker 2 (02:16):
They are at four and a quarter to four and
a half, which was very much expected. It was in
no way shape or form a shock to the market.
And while it did gyrate a bit today, it was
more I think due to the continued saber rattling, the
continued conversation around Israel and Iran and what the US
involvement is going to look like. But at the end
(02:37):
of the day, we saw the dial that closed lower
by forty four points point one zero percent to forty
two one seventy one. The S and P was down
just two points point zero three percent to.
Speaker 1 (02:48):
Fifty nine eighty.
Speaker 2 (02:49):
The Nasdaq was higher today twenty five points higher point
one three percent higher, nineteen five forty six.
Speaker 1 (02:57):
Gold down twenty.
Speaker 2 (02:59):
Dollars today thirty three eighty six. That's er point six
percent lower, and Oil up just a touch three whole
cents to seventy four eighty seven. That's seventy five level.
Seems to be pretty interesting resistance. We'll see again the geopolitically,
that'll be your balancing point. Do we see eighty do
we see lower prices? Time will tell clearly what happens
(03:21):
over the next couple sessions weekend tomorrow. Remember the market
is closed for Juneteenth. We'd expect that even Friday is
a fairly low volume day unless something happens tonight or
tomorrow over in the Middle East. Right, So that's going
to be an item to keep a close eye on.
Right comments today from Trump, he was saying that there's
(03:45):
still time for Iran to negotiate. The market rallied early
in the day.
Speaker 1 (03:49):
The S and P was up over half a.
Speaker 2 (03:51):
Percent, and then with more comments around patients wearing thin
and the double and tripling down of Iran not being
able to have a nuclear weapon and that later this
week or next week will be big as he was
saying that forty eight hour window is closing, that they
(04:13):
need to make a decision. And I think that's why
a lot of it is saber rattling, using words like
kill and such around the Ayatola in truth social posts
was intentional trying to get them to make a decision,
because I would certainly feel that they're backed into a corner.
(04:33):
I don't think you have many good choices in what
you're going to do. If your Iran, Yes, you could
be more of an aggressor and go after straight of
horror moves or go after us basis which comments were
made around those things, but I don't think that would
end very well. So those are really where the chess
pieces sit at this point. Got a fair amount of
(04:56):
economic data today. We had initial jobless claims came out
for the week this is ending June fourteenth. They decreased
by five thousand. It was two hundred and forty five
thousand job as claims. Expectation was for two fifty three,
so just to touch better. And the continuing claims number
was fairly tight, right around one point nine four million,
(05:20):
so not a big move on the jobless side. Housing starts,
those decline nine point eight percent month over month to
a seasonally adjusted rate of one point two five million.
The building permits number was down two percent month over month,
but the housing start number was so weak it's the
lowest level since May of twenty twenty. I mean, we've
(05:42):
had Corey, We've had Dwight on the show quite often,
and I've talked to many others, which I'm sure you
have as well, that if you're in the real estate game,
it's a tough game.
Speaker 1 (05:52):
Right now.
Speaker 2 (05:52):
There's a lot of let's say, I don't want to
say apathy, but there's much more stagnant movement on one
way or the other, buyers and sellers. You're seeing more
inventory come onto the market, people are waiting for rates
to come lower, and the buyers where it still felt
like a seller's market. I think it may start to
(06:13):
shift over the next six months into the back half
of the year as people are making changes. I mean,
you saw some layoffs at firms. I'll get into some
of those. Later Hasbro made comments about layoffs. Microsoft's had layoffs,
will have more layoffs. They're going to start to cut
the workforce if you start to see slowing economically.
Speaker 1 (06:36):
That is what the FED is dealing with.
Speaker 2 (06:38):
They know that you've got inflationary pressures that could come
from tariffs, but you've also got deceleration as I mentioned
earlier in the market, but they feel that they have
more time to make that decision. Crude today oil was,
as I mentioned, up above seventy five dollars earlier in
the day and then traded as low as seventy three
and a half. So it's moving around trying to find
(07:01):
a level with all of this commentary with Israel that
isn't going to change, unfortunately, anytime soon. And that's part
of I think the angst of this market and part
of some of the you know, indecision here as we
get it to the six thousand level on the S
and P five hundred, so from a data standpoint, as
(07:22):
I mentioned, a year to date, the S and p's
up one point seven percent, the nasdac's up just one
point two percent, Dow Jones Industrial average that's lower by
point nine percent on the year. The Russell two thousand
small caps actually had the best day, but they're still
down about five point three percent for the year, you know,
(07:44):
and it's still been a pretty darn good rebound off
of the lows. And that's the hardest part is you're
at a an inflection point. It doesn't feel like the
market's done a whole heck of a lot, because it hasn't.
It just depends on you know, where you started. If
you look a couple months ago, we were a heck
of a lot worse than we are now. Yet year
to date, SMP's annualizing darn near what treasuries are annualizing
(08:08):
with a substantial amount of volatility, And again, I don't
think that's going to change. Senate today they did pass
legislation around the stable coins. Right, there's recent IPO I
mentioned the other day on the show Circle CrCL thing's
gone parabolic IPO at thirty one dollars I think it
(08:28):
was north of one hundred and seventy bucks a share
two weeks later. Right, there's quite a bit of an
IPO frenzy in some of these names. You know, I
would say a caveatumn tour, Right, don't make too big
of bets in some of these positions, given how much
they've moved up. Right, that's investing versus trading. I think
(08:50):
you need to be cautious because this is does go.
Speaker 1 (08:53):
Hand in hand.
Speaker 2 (08:54):
We're mentioned a couple months ago, right, We're going to
see more and more IPOs. We've seen some biotech, We've
seen stable coin type IPOs. The more offerings that come
to the market, those do reduce desire to own other
areas because people want to redeploy capital. They're selling out
of large cap stocks they've owned for a long time
(09:15):
to move into some of the more speculative areas. As
tech has flattened out big move off the lows from April,
but it's gotten a little tired. The AI space has
calmed down a bit, despite some fits and starts. So
I just like to warn folks, and I'm not expecting
some massive decline in the overall market, but that fluff
(09:38):
has felt like it has moved back in in some
of these spaces. The nuclear stocks have been parabolic, likes
of Aclow and new Scale et cetera. Right, great long
term stories, but these things aren't going to have a
nuclear facilities on the ground for years and years and years,
and people are bidden them up, like you know, they're
(09:59):
free cash flows stories now, right, So you just got
to either know that these are going to be investments
and you don't plan to panic when it's down fifty
percent from here, which very much could happen. You these
need to size things appropriately. And so I think that's
the biggest takeaway as we get close to halfway through
(10:21):
the year and moving into the summer season, is you know,
take a look at that portfolio, take a look at
some of those names that have worked really well, maybe
trimming a third of them or even half of them
if they're up you know, fifty one hundred two hundred
plus percent. Trees don't grow to the sky. So just
a little bit of color, just a little bit of thought,
you know, allocate to some of the spots that may
have underperformed in your portfolio, the more defensive parts that
(10:44):
may be better suited to a probably more volatile summer
as we start seeing at least the tariff deadlines kick in.
But why don't we check in with Kristen snow in
the right now traffic center. Hey, Christin, welcome back to
the John Sanchez Show. Here News talk seven eighty kowits.
This is Jason Gaunt. Today, the Dow finished lower by
(11:04):
forty four points point one zero percent to forty two
one seventy one. The S and P it was lower
by just two points after being up almost half a
percent earlier in the session. Things sort of faded into
the close, a little bit of risk off again. The
market will be closed tomorrow for the Juneteenth holiday. The
NASDAK did finish higher by thirteen bases points, Gold down
(11:28):
at thirty three to ninety one, sixteen dollars lower. Oil
currently trading at the seventy four eighty three. That's down
about thirty cents here in the new session.
Speaker 1 (11:38):
Mentioned earlier.
Speaker 2 (11:39):
For the year, the S and P's up one point
seven percent, NASDAK higher by one point two percent. The
Dow Jones Industrial average it's lower by point nine percent,
predominantly lagging because of United Healthcare not helping a whole.
Speaker 1 (11:52):
Heck of a lot.
Speaker 2 (11:53):
Small caps down a little over five percent on the year.
Strength today was in some of the more defensive areas utilities,
real estate. Those were your leaders. Laggers, ironically were energy,
as oil prices ticked a bit lower, Materials, industrials, right,
The transports have not confirmed. While the Dow had made
(12:15):
a decent rally, you've seen the transportation area roll over.
It's been more than nuclear names and more of those
types of i'd say energy esque industrials that have helped
hold that sector up. So I think under the covers
one to keep an eye on, is the industrial sector
(12:35):
starting to slow down a bit. I'm sure the FED
will be looking at data coming from that area specifically
some of the other headline items. White House officials say
the next twenty four to forty eight hours are critical
to determine if a diplomatic solution with Iran is possible
or if President Trump will order US military action against Iran.
(13:00):
Many of the energy and oil ETFs have reacted to
that quite erratically. President Trump's considering a wide range of options,
including US air strikes against Iran. Again, that's also according
to Wall Street Journal, and Iran's preparing missiles on you
focused on US bases as well as the Strait of
(13:21):
Horror moves. And that is according to The New York Times.
Senate past the legislation on the stable coin bill, right,
people are probably like, what the hell are stable coin?
So we can do a whole show on that. At
some point, hopefully in July, we will focus on that
type of a show. But right now we are keeping
a close eye on things. But it's just the the
(13:46):
dollarization version of investing in the crypto market, right where
if you own stocks, you sell stocks, you're buying dollars.
In the case of crypto. If you're selling a crypto
asset and want to stay in the blockchain world, you're
buying state coins coins that ironically are pegged to the
dollar in lots of cases. So it seems a touch redundant,
But to each his own. President Trump extends TikTok deadline further.
(14:10):
That's according to The Wall Street Journal that TikTok clearly
is a bargaining chip with China.
Speaker 1 (14:18):
On the company side.
Speaker 2 (14:19):
Google Waimo confirms it applied for a New York City
Department of Transportation permit to drive autonomously with a specialist
behind the wheel. I'm sure if that's autonomous if there's
a specialist behind the wheel, But anyway, I guess you
need someone to be guarding things. Near term, Amazon, they're
increasing their robotaxi production as well. According to CNBC, there's
(14:43):
this called zookszo X Boeing they had around the Air
India crash. The Boeing Dreamliner was involved. See sort of
conflicting reports as to what caused the crash. We'll hear more,
but the emergency power system was likely active prior to
(15:04):
the crash, according to Wall Street Journal. Has Bro mentioned
earlier that they are going to be laying off three
percent of their global workforce. Microsoft as well, they're doing
additional workforce cuts in sales, and that's according to Bloomberg.
There was a really interesting interview this morning with Andrew Yang,
who had run for president I don't know last time,
(15:26):
not this time last time, and he was talking a
lot about AI and automation and robotics and flexing on
the fact that it's accelerating faster than he even thought.
If you get a chance, tune into our podcast from yesterday,
our show where we had two professors from NR who
(15:48):
focused on supply chain and economic Yeah, welcome back to
the John Sanchez Show here on News Talk seven eighty Koh.
This is Jason Gaunt. I disappeared for a moment there,
but we duct taped the wires back together and it
looks like everything seems to be working. We did have
a Dow that fell unfortunately forty four points today, not
(16:10):
a lot, but it was greener earlier in the day.
We ended up closing down ten bases points to forty
two to one seventy one. The S and P it
was down just three basis points to fifty nine eighty.
The Nasdaq did finish higher yer point one three percent
to nineteen five forty six. Gold here in the new
session is lower by sixteen dollars to thirty three ninety one.
(16:33):
Oil down just a third of a percent to seventy
four ninety two. So today we did get the results
of the FOMC decision. They left the rates unchanged but
made some changes to projections. They remain in what they
said was a weight in see mode, and this was
very much expected. We did not expect the Fed to
(16:54):
make any changes today. But the color from the post interview,
which I'll go through a lot of the notes as
to major takeaways, showed that things had changed in the
Fed's eyes, not necessarily for the better. Right. They see
more inflationary pressure and they see a potential additional drag
on growth, partially from tariffs, partially from demographics. But I
(17:21):
think the tariff angst has moved its way through and
they know these need to keep a keen eye obviously
on the geopolitical as well, but rates are still foreign
accorded to four and a half percent on the short
end of the curve. Then there was the Summary of
Economic Projections. That's where every other meeting the FED does
(17:42):
their dot plot. Right, they go through and they all
of the FED members say where they see rates going
over the next twelve months, and there was a pretty
wide range, and then they come to a median and
the median estimate is at three point nine percent for
twenty twenty five, continues to expect two rate cuts.
Speaker 1 (18:04):
Before the end of the year.
Speaker 2 (18:06):
I told you guys before keeping an eye on that
two year bond tends to be pretty darn helpful to
give you a sense of where the Fed things they're
going to be a year from now and the two years.
At three ninety four, the median estimate for the end
of twenty twenty six moved up from three point four percent,
so implying another fifty basis points of cuts over twenty
(18:28):
twenty six to now only three point six percent, so
only probably a cut in twenty twenty six, and you've
also got the median rate for twenty twenty seven at
three point four percent versus where it was at three
point one. So all of the averages moved up across
(18:49):
the board. Certainly for twenty six and twenty seven, the
median inflation estimate, according to PCEE increase to three percent
from two point seven percent, and core increased to three
point one percent from two point eight. On the flip side,
(19:09):
the median GDP estimate that's domestic production gross domestic product
for twenty twenty five, they lowered that to one point
four percent from one point seven. The median unemployment rate
increased to four and a half percent from what was
four point four percent, So more flation less growth not
(19:34):
the cocktail you typically want to see from the Fed. Right,
we don't want a stagflation situation where you have a
economy that isn't growing yet inflation is. And the policy
directed stated that inflation remains somewhat elevated. They dropped their
March directive inside the commentary, where they said the Committee
(19:56):
judges that the risks of higher unemployment and higher inflation
have risen, and the view that uncertainty about the economic
outlook has increased further, and they said, now just uncertainty
about the economic outlook has diminished. So I guess their
uncertainty has diminished, but it continues to remain elevated, right,
(20:19):
and that's important. So when we're looking at the FED
and at least dot plot wise where things are. They
went on and touched on some topics, right, GDP and
growth That headline GDP was lower in Q one due
to volatile swings and exports. Right, we had all the
issues with tariffs in front running. That was something that
factors into their concerns of what could happen in the future.
(20:42):
Consumers and businesses they're spending slowed. This is all from
the data that they reported as well as just data
that we see all the time. And business investment in
equipment and intangibles rebounded a touch but still continues to
be weak. The tariff effect related uncertainty peaked in April,
but still remains a drag. Powell in fact noted in
(21:04):
his presser that price pressures could rise and growth could
slow depending on the size and duration of tariff impacts
I mentioned earlier. He even said, I haven't done this before.
There aren't any living people that have really dealt with
this level of tariff increase if in fact they do continue.
(21:26):
They did say the tariffs could cause a one time bump,
though persistent inflation, while possible, most likely won't.
Speaker 1 (21:34):
Be a thing.
Speaker 2 (21:35):
It Probably the economy could look through it if it's
short term in duration. But they did acknowledge the risk
that inflation and unemployment goals may conflict. Right, that's the
Fed's job is to balance employment and price. Well, they
got to deal with both at the same time. And
he's been asked that question before, which one do you
(21:56):
deal with first? And he says, whichever one's worse. Right.
If employment's going up, lot will lower rates, right, If
prices are rising, a lot will raise rates and will
sort of make the decision from there. But they're sitting
in a spot now to say we don't know which
button to push, and that may read as the FED
being stupid or whatever Trump wants to call them. I
(22:17):
completely disagree. It could also say we don't think either
button needs to be pushed yet, right, And so until
they see a bit more of the whites and eyes,
they're not going to make a big decision to move.
And they've said they're well positioned to wait before adjusting rates,
emphasizing the current stance allows flexibility. They did say that
(22:40):
they are still moderately restrictive. The FED wants to get
to a neutral stance, as in, we're not pushing in
either direction. They think they're restrictive. They think that their
policy is in fact slowing the economy. That is what
they are aired to do, which means, on tilt, they're
more concerned about inflation than unemployment. So moderately restrictive means
(23:03):
we do have our pinky on one of the buttons.
We don't have our fist on it like they did
a couple of years ago, but we still have a pinky.
And they said that the backward looking view might suggest
moving to neutral, which again is sort of what Trump
is talking about. But forward looking risks, especially inflation, warrant patience.
So overall, the Fed expects a meaningful amount of inflation
(23:28):
potential to emerge over the summer if these tariffs persist,
and wants to assess the full impact before acting. Waiting
will allow smarter policy by observing the pass through to spending, hiring,
and margins. So the takeaway Fed didn't do a whole
heck of a lot today. They certainly touched on the
(23:49):
fact that they are concerned about a slowdown in the
economy hand in hand with a increase in price due
to tariffs, and they're willing to sit around and wait
given that the economy is still acting fairly well versus
adding stimulus to either side of the coin. Why don't
we check in now with Kristin Snow in the Right
(24:09):
Now Traffic Center. Welcome back to the John Sanchez Show
here on News Talk seven eighty koh.
Speaker 1 (24:20):
This is Jason Gaunt.
Speaker 2 (24:22):
Markets did close a touch lower today ahead of the
Juneteenth holiday. Tomorrow they will be closed. The Dow closed
today forty four points lower to forty two to one
seventy one. The S and P was down just two
points fifty nine point eighty, the Nasdaq higher by twenty
five points zero point one three percent. Gold's been volatile,
(24:44):
sort of trying to get through that thirty five hundred
level and having a difficult time. Certainly, again, you get
to track the dollar. The dollar has been weaker by
almost nine percent this year, but is looking like it's
strengthening a touch, so that could be negative for gold prices.
Can we have the FED decision today where the Federal
(25:04):
Reserve left rates unchanged. There were some questions during the
presser afterwards where one of the folks asked about obviously
Trump and the pressures and the comments, and I think
he called Powell dumb or something today, and Powell dismissed
the political attacks. He said they're noise. He said the
Fed's focus remains on delivering a strong labor market and
(25:27):
price stability. He said that the FOMC policy is in
fact designed to be responsive to data, not external commentary,
which I do think is the case where they're data monkeys, right,
That's kind of what they do. They have models, they
have testing. If things don't fit, they tend to wait
(25:49):
until they do. And that's what unfortunately created a situation
where they were late to react post COVID, and people
will say, eh, they were too late and such and
shut themselves in the foot, which in fact, they were late,
that's a fact. But it was also coming off of
generate you know, a stimulus bazuka like no one has
ever seen under an assumption of transitory inflation, right, and
(26:13):
that is a difficult spot which these tariffs sort of
as Trump had touched on you know, and Powell had
touched on are different than anyone has ever seen before.
So does the Fed put themselves in a situation that
could hurt them later?
Speaker 1 (26:29):
Right?
Speaker 2 (26:30):
Even though they may feel their right and that the
economy is on solid footing, they didn't want to make
any rash decisions. But there's a lag effect, right, there's
a six to twelve month lag effect from Fed making
rate changes. Right, If the FED cuts rates by twenty
five basis points tomorrow, I'm not going to go out
and hire three people for the firm. Right. It doesn't
(26:51):
work that fast. Right, You're like, well, okay, they cut rates,
and then how does it flow through? And then you know, wait,
money's cheaper, and then the firm down the street is
potentially looking to build something, and then they need to
go out and get loans and borrow and build, and
then they need to hire people. It's not something that
happens overnight. Right, So there's a lag effect. So could
(27:14):
they be too late? Are they going to in fact
wait too long? And the economy does decelerate? Right? If
the market turns lower, that'll have a deceleration on this economy.
You saw things really start to slow when We were
down in April, right, You saw a lot of data.
Things were slow and people were not going out. You
(27:35):
saw in a quick, quick, quick way, how fast this
market can slow down and this economy can slow down.
So who knows if the Fed's right, But for now
they are feeling that they don't see enough of a
signal to make a massive decision.
Speaker 1 (27:50):
So market's closed tomorrow.
Speaker 2 (27:52):
On Friday, we will get some economic data, not big, big,
big data, but the leading indicators for May. We will
get consensus is down one tenth for May. The prior
was also a full percent lower for leading indicators, and
l eis have been weak, right, All the leading indicators
(28:13):
for months and months have been signaling weakness on the horizon,
but the economy has stayed fairly resilient. We're going to
get June Philly Fed Index, which will at least go
through some other inflation indicators that go into the Fed's model.
Consensus for a increase of three tenths on Philly Fed
for Friday. So no massive economic news. This market's going
(28:36):
to be much much more focused on results out of Israel.
Iran volatility. The VIX index is still north of twenty,
which is a higher than normal number, So it is
poised to be reactionary if we see anything out of
the area, either positive or negative. Right, you get any
(28:57):
sort of positive news out of Israel and Iran, the
flow of funds would present itself to be a better
buyer in this market anyway, So sands bad news, your
risk is very much to the upside. Friday, we're going
to get excuse me, earnings from accenture in Kroger. So
(29:17):
no real big earnings here for the rest of the week.
I hope everyone has a good day Friday and a
wonderful weekend. From the office Sanchez Gaunt Capital Management, I'm
Jason Gaunt. Thanks for listening News Talk seven eighty kh.
Speaker 1 (29:37):
This program was sponsored by Sanchez Gaunt Capital Management, LLC.
The material in this program was intended as general information
only and should not be taken as specific investment, tax
or legal advice. None of the information on this broadcast
was intended to be a solicitation for the purchase or
sale of any security. Further information is available by contacting
(29:57):
John at Sanchez Gaunt dot com or seven seven five
eight hundred and one eight oh one. John Sanchez offers
securities and advisory services through Independent Financial Group LLC, a
registered broker dealer and Investment Advisor member FINRA SIPC Securities
offered only in States. John Sanchez is registered in Sanchez
Gaunt Capital Management LLC. In Independent Financial Group LLC are
(30:21):
unaffiliated entities
Happy Wednesday, FED Day.
Speaker 2 (00:06):
Welcome to the John Sanchez Show here on News Talk
seven eighty koh. This is Jason Gaunt. I will be
filling in for you today. Unfortunately, John's father did pass
away this morning. Hearts are definitely with him and his
family and definitely wants to send a shout out to
everyone who's such kind wishes.
Speaker 1 (00:24):
Well.
Speaker 2 (00:24):
Man will be a big loss, but I will be
guiding you tonight. Give you a little update on what
we saw today as far as markets are concerned. A
little bit of a recap of the high points of
the FED meeting as well as the notes and SEP
projections from said FED meeting, but it was a bit
of a mixed bag unfortunately. The major takeaway was that
(00:49):
the FED sees slightly lower growth than they had seen
during their last meeting and slightly higher inflation potential than
they saw during their last meeting, noting we had increased
tariff issues, we had obviously a now Israel iran potential
(01:11):
US involvement from a war standpoint. Again, that wasn't a
big part of the meeting in terms of their inflation concerns,
but they are citing they've got a bit of a
mixed bag. But remember, the Fed is in a position
that they still think that they have time to wait,
that the economy is yes, slow, weing, but not stalling.
(01:35):
And while they continue to see just that a slowing
and concerns of inflation continue to be there with tariffs,
and they've really pressed that fact that they don't know
yet and even Powell today said he was not, you know,
to some extent, untested in dealing with tariffs like this
(01:59):
in such a quick way and in such a manner
that they're being deployed and then pulled off. And then
now we've got a couple weeks before deals need to
be struck that we don't have to re engage on
the tear of front.
Speaker 1 (02:12):
And so the Fed agreed to keep rates unchanged.
Speaker 2 (02:16):
They are at four and a quarter to four and
a half, which was very much expected. It was in
no way shape or form a shock to the market.
And while it did gyrate a bit today, it was
more I think due to the continued saber rattling, the
continued conversation around Israel and Iran and what the US
involvement is going to look like. But at the end
(02:37):
of the day, we saw the dial that closed lower
by forty four points point one zero percent to forty
two one seventy one. The S and P was down
just two points point zero three percent to.
Speaker 1 (02:48):
Fifty nine eighty.
Speaker 2 (02:49):
The Nasdaq was higher today twenty five points higher point
one three percent higher, nineteen five forty six.
Speaker 1 (02:57):
Gold down twenty.
Speaker 2 (02:59):
Dollars today thirty three eighty six. That's er point six
percent lower, and Oil up just a touch three whole
cents to seventy four eighty seven. That's seventy five level.
Seems to be pretty interesting resistance. We'll see again the geopolitically,
that'll be your balancing point. Do we see eighty do
we see lower prices? Time will tell clearly what happens
(03:21):
over the next couple sessions weekend tomorrow. Remember the market
is closed for Juneteenth. We'd expect that even Friday is
a fairly low volume day unless something happens tonight or
tomorrow over in the Middle East. Right, So that's going
to be an item to keep a close eye on.
Right comments today from Trump, he was saying that there's
(03:45):
still time for Iran to negotiate. The market rallied early
in the day.
Speaker 1 (03:49):
The S and P was up over half a.
Speaker 2 (03:51):
Percent, and then with more comments around patients wearing thin
and the double and tripling down of Iran not being
able to have a nuclear weapon and that later this
week or next week will be big as he was
saying that forty eight hour window is closing, that they
(04:13):
need to make a decision. And I think that's why
a lot of it is saber rattling, using words like
kill and such around the Ayatola in truth social posts
was intentional trying to get them to make a decision,
because I would certainly feel that they're backed into a corner.
(04:33):
I don't think you have many good choices in what
you're going to do. If your Iran, Yes, you could
be more of an aggressor and go after straight of
horror moves or go after us basis which comments were
made around those things, but I don't think that would
end very well. So those are really where the chess
pieces sit at this point. Got a fair amount of
(04:56):
economic data today. We had initial jobless claims came out
for the week this is ending June fourteenth. They decreased
by five thousand. It was two hundred and forty five
thousand job as claims. Expectation was for two fifty three,
so just to touch better. And the continuing claims number
was fairly tight, right around one point nine four million,
(05:20):
so not a big move on the jobless side. Housing starts,
those decline nine point eight percent month over month to
a seasonally adjusted rate of one point two five million.
The building permits number was down two percent month over month,
but the housing start number was so weak it's the
lowest level since May of twenty twenty. I mean, we've
(05:42):
had Corey, We've had Dwight on the show quite often,
and I've talked to many others, which I'm sure you
have as well, that if you're in the real estate game,
it's a tough game.
Speaker 1 (05:52):
Right now.
Speaker 2 (05:52):
There's a lot of let's say, I don't want to
say apathy, but there's much more stagnant movement on one
way or the other, buyers and sellers. You're seeing more
inventory come onto the market, people are waiting for rates
to come lower, and the buyers where it still felt
like a seller's market. I think it may start to
(06:13):
shift over the next six months into the back half
of the year as people are making changes. I mean,
you saw some layoffs at firms. I'll get into some
of those. Later Hasbro made comments about layoffs. Microsoft's had layoffs,
will have more layoffs. They're going to start to cut
the workforce if you start to see slowing economically.
Speaker 1 (06:36):
That is what the FED is dealing with.
Speaker 2 (06:38):
They know that you've got inflationary pressures that could come
from tariffs, but you've also got deceleration as I mentioned
earlier in the market, but they feel that they have
more time to make that decision. Crude today oil was,
as I mentioned, up above seventy five dollars earlier in
the day and then traded as low as seventy three
and a half. So it's moving around trying to find
(07:01):
a level with all of this commentary with Israel that
isn't going to change, unfortunately, anytime soon. And that's part
of I think the angst of this market and part
of some of the you know, indecision here as we
get it to the six thousand level on the S
and P five hundred, so from a data standpoint, as
(07:22):
I mentioned, a year to date, the S and p's
up one point seven percent, the nasdac's up just one
point two percent, Dow Jones Industrial average that's lower by
point nine percent on the year. The Russell two thousand
small caps actually had the best day, but they're still
down about five point three percent for the year, you know,
(07:44):
and it's still been a pretty darn good rebound off
of the lows. And that's the hardest part is you're
at a an inflection point. It doesn't feel like the
market's done a whole heck of a lot, because it hasn't.
It just depends on you know, where you started. If
you look a couple months ago, we were a heck
of a lot worse than we are now. Yet year
to date, SMP's annualizing darn near what treasuries are annualizing
(08:08):
with a substantial amount of volatility, And again, I don't
think that's going to change. Senate today they did pass
legislation around the stable coins. Right, there's recent IPO I
mentioned the other day on the show Circle CrCL thing's
gone parabolic IPO at thirty one dollars I think it
(08:28):
was north of one hundred and seventy bucks a share
two weeks later. Right, there's quite a bit of an
IPO frenzy in some of these names. You know, I
would say a caveatumn tour, Right, don't make too big
of bets in some of these positions, given how much
they've moved up. Right, that's investing versus trading. I think
(08:50):
you need to be cautious because this is does go.
Speaker 1 (08:53):
Hand in hand.
Speaker 2 (08:54):
We're mentioned a couple months ago, right, We're going to
see more and more IPOs. We've seen some biotech, We've
seen stable coin type IPOs. The more offerings that come
to the market, those do reduce desire to own other
areas because people want to redeploy capital. They're selling out
of large cap stocks they've owned for a long time
(09:15):
to move into some of the more speculative areas. As
tech has flattened out big move off the lows from April,
but it's gotten a little tired. The AI space has
calmed down a bit, despite some fits and starts. So
I just like to warn folks, and I'm not expecting
some massive decline in the overall market, but that fluff
(09:38):
has felt like it has moved back in in some
of these spaces. The nuclear stocks have been parabolic, likes
of Aclow and new Scale et cetera. Right, great long
term stories, but these things aren't going to have a
nuclear facilities on the ground for years and years and years,
and people are bidden them up, like you know, they're
(09:59):
free cash flows stories now, right, So you just got
to either know that these are going to be investments
and you don't plan to panic when it's down fifty
percent from here, which very much could happen. You these
need to size things appropriately. And so I think that's
the biggest takeaway as we get close to halfway through
(10:21):
the year and moving into the summer season, is you know,
take a look at that portfolio, take a look at
some of those names that have worked really well, maybe
trimming a third of them or even half of them
if they're up you know, fifty one hundred two hundred
plus percent. Trees don't grow to the sky. So just
a little bit of color, just a little bit of thought,
you know, allocate to some of the spots that may
have underperformed in your portfolio, the more defensive parts that
(10:44):
may be better suited to a probably more volatile summer
as we start seeing at least the tariff deadlines kick in.
But why don't we check in with Kristen snow in
the right now traffic center. Hey, Christin, welcome back to
the John Sanchez Show. Here News talk seven eighty kowits.
This is Jason Gaunt. Today, the Dow finished lower by
(11:04):
forty four points point one zero percent to forty two
one seventy one. The S and P it was lower
by just two points after being up almost half a
percent earlier in the session. Things sort of faded into
the close, a little bit of risk off again. The
market will be closed tomorrow for the Juneteenth holiday. The
NASDAK did finish higher by thirteen bases points, Gold down
(11:28):
at thirty three to ninety one, sixteen dollars lower. Oil
currently trading at the seventy four eighty three. That's down
about thirty cents here in the new session.
Speaker 1 (11:38):
Mentioned earlier.
Speaker 2 (11:39):
For the year, the S and P's up one point
seven percent, NASDAK higher by one point two percent. The
Dow Jones Industrial average it's lower by point nine percent,
predominantly lagging because of United Healthcare not helping a whole.
Speaker 1 (11:52):
Heck of a lot.
Speaker 2 (11:53):
Small caps down a little over five percent on the year.
Strength today was in some of the more defensive areas utilities,
real estate. Those were your leaders. Laggers, ironically were energy,
as oil prices ticked a bit lower, Materials, industrials, right,
The transports have not confirmed. While the Dow had made
(12:15):
a decent rally, you've seen the transportation area roll over.
It's been more than nuclear names and more of those
types of i'd say energy esque industrials that have helped
hold that sector up. So I think under the covers
one to keep an eye on, is the industrial sector
(12:35):
starting to slow down a bit. I'm sure the FED
will be looking at data coming from that area specifically
some of the other headline items. White House officials say
the next twenty four to forty eight hours are critical
to determine if a diplomatic solution with Iran is possible
or if President Trump will order US military action against Iran.
(13:00):
Many of the energy and oil ETFs have reacted to
that quite erratically. President Trump's considering a wide range of options,
including US air strikes against Iran. Again, that's also according
to Wall Street Journal, and Iran's preparing missiles on you
focused on US bases as well as the Strait of
(13:21):
Horror moves. And that is according to The New York Times.
Senate past the legislation on the stable coin bill, right,
people are probably like, what the hell are stable coin?
So we can do a whole show on that. At
some point, hopefully in July, we will focus on that
type of a show. But right now we are keeping
a close eye on things. But it's just the the
(13:46):
dollarization version of investing in the crypto market, right where
if you own stocks, you sell stocks, you're buying dollars.
In the case of crypto. If you're selling a crypto
asset and want to stay in the blockchain world, you're
buying state coins coins that ironically are pegged to the
dollar in lots of cases. So it seems a touch redundant,
But to each his own. President Trump extends TikTok deadline further.
(14:10):
That's according to The Wall Street Journal that TikTok clearly
is a bargaining chip with China.
Speaker 1 (14:18):
On the company side.
Speaker 2 (14:19):
Google Waimo confirms it applied for a New York City
Department of Transportation permit to drive autonomously with a specialist
behind the wheel. I'm sure if that's autonomous if there's
a specialist behind the wheel, But anyway, I guess you
need someone to be guarding things. Near term, Amazon, they're
increasing their robotaxi production as well. According to CNBC, there's
(14:43):
this called zookszo X Boeing they had around the Air
India crash. The Boeing Dreamliner was involved. See sort of
conflicting reports as to what caused the crash. We'll hear more,
but the emergency power system was likely active prior to
(15:04):
the crash, according to Wall Street Journal. Has Bro mentioned
earlier that they are going to be laying off three
percent of their global workforce. Microsoft as well, they're doing
additional workforce cuts in sales, and that's according to Bloomberg.
There was a really interesting interview this morning with Andrew Yang,
who had run for president I don't know last time,
(15:26):
not this time last time, and he was talking a
lot about AI and automation and robotics and flexing on
the fact that it's accelerating faster than he even thought.
If you get a chance, tune into our podcast from yesterday,
our show where we had two professors from NR who
(15:48):
focused on supply chain and economic Yeah, welcome back to
the John Sanchez Show here on News Talk seven eighty Koh.
This is Jason Gaunt. I disappeared for a moment there,
but we duct taped the wires back together and it
looks like everything seems to be working. We did have
a Dow that fell unfortunately forty four points today, not
(16:10):
a lot, but it was greener earlier in the day.
We ended up closing down ten bases points to forty
two to one seventy one. The S and P it
was down just three basis points to fifty nine eighty.
The Nasdaq did finish higher yer point one three percent
to nineteen five forty six. Gold here in the new
session is lower by sixteen dollars to thirty three ninety one.
(16:33):
Oil down just a third of a percent to seventy
four ninety two. So today we did get the results
of the FOMC decision. They left the rates unchanged but
made some changes to projections. They remain in what they
said was a weight in see mode, and this was
very much expected. We did not expect the Fed to
(16:54):
make any changes today. But the color from the post interview,
which I'll go through a lot of the notes as
to major takeaways, showed that things had changed in the
Fed's eyes, not necessarily for the better. Right. They see
more inflationary pressure and they see a potential additional drag
on growth, partially from tariffs, partially from demographics. But I
(17:21):
think the tariff angst has moved its way through and
they know these need to keep a keen eye obviously
on the geopolitical as well, but rates are still foreign
accorded to four and a half percent on the short
end of the curve. Then there was the Summary of
Economic Projections. That's where every other meeting the FED does
(17:42):
their dot plot. Right, they go through and they all
of the FED members say where they see rates going
over the next twelve months, and there was a pretty
wide range, and then they come to a median and
the median estimate is at three point nine percent for
twenty twenty five, continues to expect two rate cuts.
Speaker 1 (18:04):
Before the end of the year.
Speaker 2 (18:06):
I told you guys before keeping an eye on that
two year bond tends to be pretty darn helpful to
give you a sense of where the Fed things they're
going to be a year from now and the two years.
At three ninety four, the median estimate for the end
of twenty twenty six moved up from three point four percent,
so implying another fifty basis points of cuts over twenty
(18:28):
twenty six to now only three point six percent, so
only probably a cut in twenty twenty six, and you've
also got the median rate for twenty twenty seven at
three point four percent versus where it was at three
point one. So all of the averages moved up across
(18:49):
the board. Certainly for twenty six and twenty seven, the
median inflation estimate, according to PCEE increase to three percent
from two point seven percent, and core increased to three
point one percent from two point eight. On the flip side,
(19:09):
the median GDP estimate that's domestic production gross domestic product
for twenty twenty five, they lowered that to one point
four percent from one point seven. The median unemployment rate
increased to four and a half percent from what was
four point four percent, So more flation less growth not
(19:34):
the cocktail you typically want to see from the Fed. Right,
we don't want a stagflation situation where you have a
economy that isn't growing yet inflation is. And the policy
directed stated that inflation remains somewhat elevated. They dropped their
March directive inside the commentary, where they said the Committee
(19:56):
judges that the risks of higher unemployment and higher inflation
have risen, and the view that uncertainty about the economic
outlook has increased further, and they said, now just uncertainty
about the economic outlook has diminished. So I guess their
uncertainty has diminished, but it continues to remain elevated, right,
(20:19):
and that's important. So when we're looking at the FED
and at least dot plot wise where things are. They
went on and touched on some topics, right, GDP and
growth That headline GDP was lower in Q one due
to volatile swings and exports. Right, we had all the
issues with tariffs in front running. That was something that
factors into their concerns of what could happen in the future.
(20:42):
Consumers and businesses they're spending slowed. This is all from
the data that they reported as well as just data
that we see all the time. And business investment in
equipment and intangibles rebounded a touch but still continues to
be weak. The tariff effect related uncertainty peaked in April,
but still remains a drag. Powell in fact noted in
(21:04):
his presser that price pressures could rise and growth could
slow depending on the size and duration of tariff impacts
I mentioned earlier. He even said, I haven't done this before.
There aren't any living people that have really dealt with
this level of tariff increase if in fact they do continue.
(21:26):
They did say the tariffs could cause a one time bump,
though persistent inflation, while possible, most likely won't.
Speaker 1 (21:34):
Be a thing.
Speaker 2 (21:35):
It Probably the economy could look through it if it's
short term in duration. But they did acknowledge the risk
that inflation and unemployment goals may conflict. Right, that's the
Fed's job is to balance employment and price. Well, they
got to deal with both at the same time. And
he's been asked that question before, which one do you
(21:56):
deal with first? And he says, whichever one's worse. Right.
If employment's going up, lot will lower rates, right, If
prices are rising, a lot will raise rates and will
sort of make the decision from there. But they're sitting
in a spot now to say we don't know which
button to push, and that may read as the FED
being stupid or whatever Trump wants to call them. I
(22:17):
completely disagree. It could also say we don't think either
button needs to be pushed yet, right, And so until
they see a bit more of the whites and eyes,
they're not going to make a big decision to move.
And they've said they're well positioned to wait before adjusting rates,
emphasizing the current stance allows flexibility. They did say that
(22:40):
they are still moderately restrictive. The FED wants to get
to a neutral stance, as in, we're not pushing in
either direction. They think they're restrictive. They think that their
policy is in fact slowing the economy. That is what
they are aired to do, which means, on tilt, they're
more concerned about inflation than unemployment. So moderately restrictive means
(23:03):
we do have our pinky on one of the buttons.
We don't have our fist on it like they did
a couple of years ago, but we still have a pinky.
And they said that the backward looking view might suggest
moving to neutral, which again is sort of what Trump
is talking about. But forward looking risks, especially inflation, warrant patience.
So overall, the Fed expects a meaningful amount of inflation
(23:28):
potential to emerge over the summer if these tariffs persist,
and wants to assess the full impact before acting. Waiting
will allow smarter policy by observing the pass through to spending, hiring,
and margins. So the takeaway Fed didn't do a whole
heck of a lot today. They certainly touched on the
(23:49):
fact that they are concerned about a slowdown in the
economy hand in hand with a increase in price due
to tariffs, and they're willing to sit around and wait
given that the economy is still acting fairly well versus
adding stimulus to either side of the coin. Why don't
we check in now with Kristin Snow in the Right
(24:09):
Now Traffic Center. Welcome back to the John Sanchez Show
here on News Talk seven eighty koh.
Speaker 1 (24:20):
This is Jason Gaunt.
Speaker 2 (24:22):
Markets did close a touch lower today ahead of the
Juneteenth holiday. Tomorrow they will be closed. The Dow closed
today forty four points lower to forty two to one
seventy one. The S and P was down just two
points fifty nine point eighty, the Nasdaq higher by twenty
five points zero point one three percent. Gold's been volatile,
(24:44):
sort of trying to get through that thirty five hundred
level and having a difficult time. Certainly, again, you get
to track the dollar. The dollar has been weaker by
almost nine percent this year, but is looking like it's
strengthening a touch, so that could be negative for gold prices.
Can we have the FED decision today where the Federal
(25:04):
Reserve left rates unchanged. There were some questions during the
presser afterwards where one of the folks asked about obviously
Trump and the pressures and the comments, and I think
he called Powell dumb or something today, and Powell dismissed
the political attacks. He said they're noise. He said the
Fed's focus remains on delivering a strong labor market and
(25:27):
price stability. He said that the FOMC policy is in
fact designed to be responsive to data, not external commentary,
which I do think is the case where they're data monkeys, right,
That's kind of what they do. They have models, they
have testing. If things don't fit, they tend to wait
(25:49):
until they do. And that's what unfortunately created a situation
where they were late to react post COVID, and people
will say, eh, they were too late and such and
shut themselves in the foot, which in fact, they were late,
that's a fact. But it was also coming off of
generate you know, a stimulus bazuka like no one has
ever seen under an assumption of transitory inflation, right, and
(26:13):
that is a difficult spot which these tariffs sort of
as Trump had touched on you know, and Powell had
touched on are different than anyone has ever seen before.
So does the Fed put themselves in a situation that
could hurt them later?
Speaker 1 (26:29):
Right?
Speaker 2 (26:30):
Even though they may feel their right and that the
economy is on solid footing, they didn't want to make
any rash decisions. But there's a lag effect, right, there's
a six to twelve month lag effect from Fed making
rate changes. Right, If the FED cuts rates by twenty
five basis points tomorrow, I'm not going to go out
and hire three people for the firm. Right. It doesn't
(26:51):
work that fast. Right, You're like, well, okay, they cut rates,
and then how does it flow through? And then you know, wait,
money's cheaper, and then the firm down the street is
potentially looking to build something, and then they need to
go out and get loans and borrow and build, and
then they need to hire people. It's not something that
happens overnight. Right, So there's a lag effect. So could
(27:14):
they be too late? Are they going to in fact
wait too long? And the economy does decelerate? Right? If
the market turns lower, that'll have a deceleration on this economy.
You saw things really start to slow when We were
down in April, right, You saw a lot of data.
Things were slow and people were not going out. You
(27:35):
saw in a quick, quick, quick way, how fast this
market can slow down and this economy can slow down.
So who knows if the Fed's right, But for now
they are feeling that they don't see enough of a
signal to make a massive decision.
Speaker 1 (27:50):
So market's closed tomorrow.
Speaker 2 (27:52):
On Friday, we will get some economic data, not big, big,
big data, but the leading indicators for May. We will
get consensus is down one tenth for May. The prior
was also a full percent lower for leading indicators, and
l eis have been weak, right, All the leading indicators
(28:13):
for months and months have been signaling weakness on the horizon,
but the economy has stayed fairly resilient. We're going to
get June Philly Fed Index, which will at least go
through some other inflation indicators that go into the Fed's model.
Consensus for a increase of three tenths on Philly Fed
for Friday. So no massive economic news. This market's going
(28:36):
to be much much more focused on results out of Israel.
Iran volatility. The VIX index is still north of twenty,
which is a higher than normal number, So it is
poised to be reactionary if we see anything out of
the area, either positive or negative. Right, you get any
(28:57):
sort of positive news out of Israel and Iran, the
flow of funds would present itself to be a better
buyer in this market anyway, So sands bad news, your
risk is very much to the upside. Friday, we're going
to get excuse me, earnings from accenture in Kroger. So
(29:17):
no real big earnings here for the rest of the week.
I hope everyone has a good day Friday and a
wonderful weekend. From the office Sanchez Gaunt Capital Management, I'm
Jason Gaunt. Thanks for listening News Talk seven eighty kh.
Speaker 1 (29:37):
This program was sponsored by Sanchez Gaunt Capital Management, LLC.
The material in this program was intended as general information
only and should not be taken as specific investment, tax
or legal advice. None of the information on this broadcast
was intended to be a solicitation for the purchase or
sale of any security. Further information is available by contacting
(29:57):
John at Sanchez Gaunt dot com or seven seven five
eight hundred and one eight oh one. John Sanchez offers
securities and advisory services through Independent Financial Group LLC, a
registered broker dealer and Investment Advisor member FINRA SIPC Securities
offered only in States. John Sanchez is registered in Sanchez
Gaunt Capital Management LLC. In Independent Financial Group LLC are
(30:21):
unaffiliated entities
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