July 30, 2025 • 35 mins
All eyes are on the Fed today—will they hold steady, hike, or hint at cuts ahead? The markets on edge, and your portfolio could be too. Join us this afternoon as we break down the decision, the market reaction, and what it means for your money—right here on The Jon Sanchez Show at 3pm!"
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Episode Transcript
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Speaker 1 (00:03):
Good Wednesday afternoon to you. Welcome to the John Sanchez Show,
a news talk seven to eighty k wait. It's a
pleasure to be with you in a poleasure to be
with my co host, mister Jason Sanche has gone capital management, Big.
Speaker 2 (00:13):
Jay, what a day it was.
Speaker 1 (00:15):
We had it all thrown at us today. But our
job is to make it all worthwhile and make sense
of it.
Speaker 3 (00:21):
Yeah, I'll defer to you.
Speaker 1 (00:23):
Oh gee, thanks.
Speaker 4 (00:29):
On an uneventful day in Wall Street, and then after
hours are pretty eventful as well.
Speaker 2 (00:33):
So yeah, yeah, yeah, no, it was.
Speaker 1 (00:34):
It was. It just wouldn't stop, right, it just wouldn't stop.
Fed interest, right decision, major earnings numbers after the close.
Speaker 2 (00:43):
A new a new what's.
Speaker 1 (00:44):
That tsunamis, tsunamis, Yes, we know about tsunamis very well.
Speaker 2 (00:50):
Yes, we understand that perfectly.
Speaker 1 (00:51):
Well, let's see a new four trillion dollar market valuation
club member after the after hours.
Speaker 3 (00:59):
Yeah, it's amazing.
Speaker 1 (01:03):
Yeah, yeah, I would have never in a million years
thought when I started this business that you'd be saying
that a company, and we'll tell you who this company
is momentarily.
Speaker 2 (01:11):
Is worth that we would have a company worth for
trillion dollars.
Speaker 3 (01:16):
Now there's two.
Speaker 2 (01:17):
Now there's two. That's right, that's right, and yeah, yeah, exactly. Well, folks,
let me tell you what we have lined up for
you this afternoon.
Speaker 1 (01:26):
Again, we have a lot of things that we're going
to be going over and again there's a lot of
things that happened in our direction today. As as we
highlighted again going into the show yesterday, it's all about
or it was all about the FED interest rate decision.
Right were they gonna hold steady? Were they gonna hike?
Or were they gonna hint? And this is probably the
most important thing. Were they going to hint at a
(01:47):
interest right cut? You know, no one, Jason, no one,
you know anticipated any take, any type of a cut
being announced today. But as always, it's always about Jerome
Powell and his news conference. And well, we've got some
great audio clips that we're going to share with you
on that news conference in regards to what the Fed's
next move is. But let me tell you, you know,
I did.
Speaker 2 (02:05):
I did a little stat for you, Jay, You ready
for this? Yeah?
Speaker 3 (02:08):
Absolutely?
Speaker 1 (02:08):
Okay, all right? When Jerome Powell began speaking right at
eleven o'clock or assume me right, ated eleven thirty our time,
the Dow Jones Industrial average was up forty six points
when he finished about you know, forty five minutes later,
we were down two hundred and twenty seven points, but
that doesn't count for we dipped, you know, down a
little over three hundred at the worst level as he
(02:29):
was talking. So once again, this market was just sitting there,
going back and forth and back and forth.
Speaker 2 (02:33):
It's so funny, folks.
Speaker 1 (02:35):
You got to see this sometimes, to watch how the
algorithms will move this market just with certain words that
he says. Right, it's it's absolutely fascinating. But then luckily
we got a little bit of buying interest going into
the clothes and hopefully this news that we'll share with
you what's going on the after hours, we'll propel us
higher tomorrow.
Speaker 2 (02:52):
But boy, it was a wild ride once again.
Speaker 4 (02:55):
Yeah, no, I think you know, to today, the market's
been fairly cautious leading into earnings from Meta and Microsoft,
which are up you know, eleven and eight percent respectively.
After hours the FED decision, by and large, everyone expected
what we got, which was nothing, but the fact you
(03:16):
had two dissenters again, neither of them were surprising.
Speaker 3 (03:19):
With Waller and Bowman.
Speaker 4 (03:20):
I think Bowman was knotted put in by Trump and
then Waller's out there trying to run for the job.
So you know, clearly to see the dissenters means that
you have a signal of eventually next direction is lower
as far as interest rates are concerned, which is not
dissimilar to what the market's already priced in with a
(03:42):
September rate cut being the plan.
Speaker 3 (03:45):
But it's just man, yeah, right, exactly.
Speaker 4 (03:50):
Right, you know, it's it's it's but to see the
leverage that Microsoft and Meta have as far as growth,
despite the massive amount of growth they've had over the
last you know, five to seven years, is just eye opening, right,
and the big keep getting bigger, and you know me, Microsoft,
(04:13):
it's it's for most people, it's impossible to get away
from that halo, right, And the fact that Meta can
continue to turn the screws and grow like.
Speaker 3 (04:21):
They are and guide higher and even.
Speaker 4 (04:24):
Talk about potential cost cuts into the futures, it's pretty impressive.
And so I think, you know, probably another catalyst for
a bit of a tech beta chase tomorrow on these
back of these numbers.
Speaker 1 (04:35):
Absolutely all right, since you uh teased on the Microsoft
and the metal. Let's jump right into that, and then
we're gonna get into again the pause, the hike, the pivot.
What does today's FED interest rate decision mean for you
and your money? That will be our topic. We've got
a lot of things we're gonna drill into in the
in the Fed interest rate decision, and most importantly with
Chairman Pal did have to say, uh that press conference.
(04:58):
So let's get into these. Let's get it these Microsoft numbers.
First of all, let me tell you what the what
the stock did in the normal session, what it's doing
in the after hours, and then we'll drill down and
debate a little bit on the earning side of things.
So regular session of Microsoft today stock closed up sixty
seven cents to five thirteen twenty four. Right now in
the after hour session it is up eight point five
(05:18):
to one percent, a forty three dollars and sixty nine.
Speaker 2 (05:21):
Cent game to five point fifty six ninety three.
Speaker 1 (05:24):
So just a mere forty three dollars game, Jame, Just
just a mere forty three dollars game, all right, folks. Now,
let's listen to the numbers. Earnings per share came in
at three dollars and sixty five cents. Expectation was three
dollars and thirty seven cents. Revenue seventy six point four
to four billion estimates seventy three point eight one billion.
So that is a big beat. I mean we're talking
(05:45):
billions here, Jason Oh, seventy six point four to forty
to seventy thirty pointy one those are billions.
Speaker 2 (05:49):
Right, differentials about hundreds of thousands or millions. It's just amazing.
Speaker 1 (05:54):
Revenue increasing eighteen percent in the fourth quarter which ended
June the thirtieth, up from sixty four points seven billion
a year earlier. That's the fastest growth in more than
three years. Net income twenty seven point three twenty seven
point two to three billion dollars net income, folks, think
about that, twenty seven point two to three billion in
(06:15):
one quarter, and that was an increase from twenty two
point zero four billion a year ago. Taking away on
Azure in some areas that made some of the strength.
Because this is really fascinating.
Speaker 4 (06:27):
And that's the big one is the Azure cloud growth,
where they had they were up thirty nine percent constant
currency versus expectation of thirty four to thirty five percent, right,
So seeing top line growth in an area that people
were concerned may start to stagnate is.
Speaker 3 (06:47):
You know again they're they're they're getting more wallet share.
Speaker 4 (06:50):
Companies like ours were a Microsoft shop. You know, they
make it very easy to be a customer, right. The
costs are not in any way overbearing for folks like us,
And there's lots of you know, companies that are.
Speaker 3 (07:04):
Moving more and more digital and more and more.
Speaker 4 (07:06):
Cloud based, and so you know this this I think
this growth can continue for for years to comp well.
Speaker 1 (07:12):
But yeah, but let's sort this one tidbit into there also.
As we know when we had doctor Des Sanchez on
the show with us on Monday for our AI segment,
you know, he former Microsoft employee, very much pro Microsoft,
but just their integration with AI and with their AI
does and how it can incorporate into teams and just
(07:32):
all of it becoming just one big, happy family, right.
Speaker 2 (07:35):
I mean, that's that's something unique.
Speaker 4 (07:37):
Right.
Speaker 1 (07:37):
There's no chat, GPT, Word or Excel or something, so
to be able to integrate in all of that under
one company. Yeah, it's it's just amazing with this company
not only is doing, but I think can do going forward.
Speaker 4 (07:51):
And Google's probably the only other one that how you
got as well, right, they have their I mean that's
a company that's been under some pressure. It's in a
bit recently, but you know, you'd be throwing the baby
out with the bathwater there given if you if you
like a Microsoft, you know the amount of schools and
(08:11):
kids that are being raised on the GG the Google
halo with Google slides and the really I mean, kids
aren't using Microsoft Office anymore. Where companies are you know,
legacy companies, but you know Google's really taking over in
that area too. So a bank shot on cloud growth
and integration with AI, like you mentioned Google is probably
(08:34):
another one to be to be looking at, maybe picking
up on the cheap.
Speaker 2 (08:38):
Absolutely, Yeah, it's funny. I didn't get a chance. But
looking at the earnings report here, I want to mention
this very quickly. We're talking about the AI.
Speaker 1 (08:45):
So Microsoft's in our artificial intelligence bet, which includes that's
open AI steak and billions worth of Navidio chips is
adding to the business. Software sales companies said adoption of
the Microsoft three sixty five copilot led to higher revenue
per user of Microsoft three sixty five commercial cloud projects
products such as office productivity software but there's my point.
(09:05):
I honestly I did not see that before I opened
my mouth. So there it is, right there. It's all
Copilot and Office all being bundled together. And that's going
to be a tough one because you know, I don't
know what the ratio is of how many people use
Microsoft Office compared to you know, the Google Docs and
so on and so forth. I'm sure you know Google
side is you know, a fraction of with people that
(09:27):
use the Microsoft products.
Speaker 2 (09:28):
But yeah, the.
Speaker 1 (09:29):
Company is sitting on all eight cylinders. And you know, remember, folks,
let's go back. It was just last month when they
announced nine thousand people, four percent of their workforce going
by the wayside. A month before that eight thousand people,
so you know what, three point nine percent of their
workforce at that point going by the wayside. And now
this is what happens, folks, And this is why we're
so very bullish on technology. You get a company like
(09:51):
a Microsoft that says, look at we've got the technology,
we can acts you know, thousands and thousands of people,
get them off the payroll. And what that's going to
be deal. Of course, it's going to add to the
bottom line revenue and increase the bottom line revenue. Right,
So it's unfortunately it's at the cost of human beings
losing their jobs. But at the same time, these these
(10:12):
these technology juggernauts are just going look at what we
can get rid of people. I read a great article
and I want to touch on it next Monday when
we have Dentis on a Jason. I read a great
article yesterday about how challenging it is right now for
a college graduate to get a job, because think about this,
you're a college graduate. We're all there. You're willing to
start at the bottom of the of the corporate ladder.
(10:35):
You know, you're going to do the drudgery work right
in the world of finance and business and stuff that's
usually you know, you're doing a lot of data entry
and so on and so forth. That's all being replaced
the AI now. And that's what all these companies are
talking about. It's like they interviewed a bunch of HR
managers and like, this is a tough position for not
only the college graduate but also for us in HR,
(10:58):
because you know, we got to being bring people up
through the ranks over the year. But we can't do it.
We can't justify paying some kid out of college fifty
grand when we can get it done with AI for
essentially no cost.
Speaker 4 (11:10):
So yeah, I mean, you're fascinating. You're you're hollowing out
your organic growth. And that's the part that I mean.
I was talking to the you know team down the
hall here, and you know that's for me. I it
it probably like a pendulum, right, everything's gonna be like, hey,
I's going to replace everything. But ultimately, you know, you
need people to to do a lot of these roles
(11:32):
and be wise down the line. And if you aren't
smart enough about hiring young, smart people to be your
ranks down the line, yeah, you may help your bottom
line now, but you could be in a tough spot,
you know, folks.
Speaker 2 (11:48):
So yeah, it's a it's a balancing act. There, definitely
a balancing act, all right.
Speaker 1 (11:53):
So that's one big company that reported again forty three
dollars and forty two cents after hours for Microsoft. How
about the other m that has metow I tell you
what that stock is doing, what happened in this market,
and then get into our topic, the pause, the hiker,
the pivot, what happened in today's FED decision to affect
your portfolio turn over to Christen Snow first of all,
in there right now traffic center. Hello, Kristen, welcome back
(12:13):
to the John Sanchez Show, Ony Stock seven eighty k
which with Jason gone, all right, here's how we finished
up in this volatile session today. One seventy one decline
on the dow, actually one seventy two, do it correctly,
point three eight percent loss with the Dow closing at
forty four thousand, four to sixty one, a small game
of thirty one on the NASDAK closing at twenty one
twenty nine, and the S and P five hundred down
(12:34):
eight points to close the day of six thousand, three
hundred and sixty two. On the oil side, we rose
eighty one cents on oil, seventy oh three a barrel
gold hired by twenty eight dollars and ninety cents three thousand,
three point.
Speaker 2 (12:46):
Fifty two eighty And you know what real quickly, Jason, what.
Speaker 1 (12:52):
Let's let's chat about gold right now, because we are
seeing some big moves mainly up, but we are seeing
some big days two up and wanting to chat with
you about you know, twenty.
Speaker 2 (13:02):
Thirty dollars moves is so very common nowadays.
Speaker 4 (13:05):
Yeah, absolutely, I mean gold's become you know, obviously a
pretty darn vall at a last class. I think, remember
wag the dog, right, Gold is more so just what's
the dollar doing?
Speaker 3 (13:18):
Right?
Speaker 4 (13:18):
And I had mentioned back when it was Darner thirty
five hundred that I thought we were going to pull
back and and it's merely because of watching the d
X Y index to say, you know, the dollar had
been you know, down almost ten percent on the year
every once and this is the worst year for.
Speaker 3 (13:37):
The dollar ever and blah blah blah.
Speaker 4 (13:38):
And I'm like, yeah, it's because the dollar was literally
at all time highs, you know, or at least range
highs on January first, right, So it's like where it
came from because it had a big back half of
the year. But you know, dollar chart looks like it
wants to break higher, as in stronger dollar aka weaker gold.
(13:59):
So I think we probably we still have more downside
in gold barring some geopolitical disaster of some kind, because
it was the most crowded trade on the board, like
more crowded than Nvidia, more crowded than.
Speaker 2 (14:11):
Well, everyone's piling into when the market was suffering.
Speaker 4 (14:14):
Yeah, after the and all the world is ending, you know,
folks of debt and again is going to be right
long term, but near term, I think that there's still
more downside to gold and even silver.
Speaker 3 (14:28):
So watching the dollar, that's that's what you're.
Speaker 2 (14:30):
Saying, You got it beautiful.
Speaker 1 (14:32):
And then finally to wrap it up on the day's recap,
five basis plenty increase on the tenure four point three
eight percent, and that fields bumped up right across all
ten years, two years up six basis points, thirty year
at four basis points, et cetera.
Speaker 2 (14:44):
So everything moved in relation to what happened with the Fed.
Speaker 1 (14:48):
And then on the economic front, we had the ADP
private sector jobs numbers come in pretty strong number one
hundred and four thousand jobs created according to ADP in
the private sector for the month of July. That was
a lot better than the month of June data where
we were at down twenty three thousand jobs. That revised
that one at the first rd on second quarter GDP
showing pretty good numbers of about three percent, which is
(15:11):
huge compared to the final read of the first quarter
which showed a about a half a percent of client there.
And then pinning home sales down about eight ten to
seven percent for the month of June, so not a
huge economic movers. All right, let's get back to before
we move to the FED, let's move over to the
other big mover in the after hour session, which of
course has Meta phenomenal numbers. Here's what happened with the
(15:33):
stock regular session and what we are watching right now.
You're smiling if you are a Meta shareholder. Stock finished
the day down four dollars and seventy nine cents point
six to eight percent loss to six ninety five twenty one,
or right now in the after hours it is up
seventy eight dollars and two cents eleven point two two
percent gain to a seven hundred and seventy three dollars
and twenty three cents should mention jay, I mean two
(15:55):
hundred and twenty six point gain right now in the
Nasdaq future thanks to the two names and few others
that reported.
Speaker 4 (16:02):
But if you're an S and P five hundred holder,
you're a seven percent holder of Microsoft and you're a
two point eight percent holder of Meta, so nice odds
are Everyone listening is an S and P five hundred holder,
so you probably are experienced and.
Speaker 1 (16:18):
Last time I checked, Microsoft is a member of the
Dow Jones, and.
Speaker 3 (16:22):
It might be it might be a select group of thirty.
Speaker 2 (16:27):
Hey's the elite group of thirty.
Speaker 1 (16:29):
By the elite group, you have to go through a
lot of hoops to get into that thirty group.
Speaker 2 (16:38):
Hey, whatever, we may make games, whatever way we can
to the now.
Speaker 3 (16:42):
Five hundred, does it too?
Speaker 2 (16:43):
Does it get smaller? That's right? That's right, all right?
Speaker 1 (16:48):
So what what is driving this big strength of seventy
eight dollars game plus? In the after our session on meta,
how about these earnings numbers, folks, listen to this earnings
per share seven dollars and fourteen cents, expectation of five
dollars in ninety two cents, revenue forty seven point five
to two billion, expectation forty four point eight billion. Then
a second quarter sales growing twenty two percent year over year,
(17:10):
which was the same growth rate as a year ago.
Advertising revenue for the second quarter forty six point five
to six billion. Wall Street was looking for forty three
point ninety seven billion. Zuckerberg on the call this afternoon
said the company is unlocking greater efficiency and gains across
our ad system. Third quarter sales going to be between
(17:30):
forty seven point five billion to fifty point five billion,
well ahead of ball Street's estimate of forty six point
one four billion. Capex capital expenditure sixty six to seventy
two billion, raising the low end of the company's previous
estimates of sixty four to seventy two. So there's those
data centers, Jason and so many other things are just
going to be the same thing.
Speaker 2 (17:50):
They're running lean and mean. And remember, remember you and I.
Speaker 1 (17:53):
Sat behind these microphones a couple of years ago, and
we kind of joked about Zuckerberg when you remember when
they went through all kinds of layoffs. It was like
it was almost like an Amazon back in the eighties.
It's like, we're going to give up growth and earnings
and so on and so forth for the next couple
of quarters. So we're going to get lean and mean,
and everyone kind of went, you know, dump the stock
and everything.
Speaker 2 (18:12):
Now look at it. How it's just paid off just speeds.
Speaker 4 (18:17):
Yeah, I mean, the earnings growth on these companies despite
the capex is just absolutely amazing. They're just cash flow machines,
and that's why they tend to be the port in
the storm.
Speaker 3 (18:26):
When things are bad.
Speaker 4 (18:27):
This isn't not the technology, you know, small cap tech
where interest rates matter at this point.
Speaker 3 (18:33):
It's just, you know, I don't even know what matters.
I mean, honestly, companies decelerating.
Speaker 4 (18:39):
I guess the overall global economy slowan could hurt them
on the ad spending side or on the tech spending.
Speaker 3 (18:44):
Side, But who knows.
Speaker 4 (18:45):
The company's redeployed more favorably towards a Facebook et cetera.
With they're trying to get customers, so they you know,
their darn near bulletproof at least with the data that
they have right now.
Speaker 1 (18:58):
Yeah, of course we can't to get out of this
break without mentioning how much money they're spending on AI.
The company kick off their AI hiring bonanza in June,
and they invested fourteen point three billion into Scale AI,
landing the startups CEO to co lead the new Meta
super Intelligent lab. Their finance chief on the call also
(19:20):
said they're related AI spending during the earnings call, saying
we quote also made fifteen point one billion and non
marketable equity investments in the second quarter, which includes our
minority investment in Scale AI, along with other investment activities.
You're between the lines, and that says is they spend
about fifteen billion investing in other companies AI stocks, right,
(19:41):
companies related to AI in their stocks. Yeah, that's what
I mean. My gosh, you look at you look at
some of these other companies in the amount of money.
You know, I think a lot of people will understand
the station real quick that a lot of companies will
invest in other companies. Right in na Vidia, for example,
(20:02):
they are invested in so many different companies. And that's
what these companies do, right, they got excess cash. Eight
they got to make money. Yeah, take a little bit
and go buy this stock or that stock, but they
usually not just a little bit, a few billions.
Speaker 3 (20:16):
We just learned, yes, you know, amongst friends.
Speaker 2 (20:18):
Amongst friends.
Speaker 1 (20:19):
Yeah, take it out of pitycash here absolutely so overall,
just great Ernance numbers out of met A, great Jarney's
numbers out of Microsoft. And hopefully these games hold me
overnight and then the pre market and then we're off
to the races tomorrow.
Speaker 2 (20:31):
That's the that's the goal.
Speaker 1 (20:32):
But in the meantime, we have to learn what happened
when the FED today, when Jerome Palell had his press conference,
with the Fed. Had to say, we're gonna give you
all the details when we come back of today's Fed
interest rate decision, but first let's turned over to Jack Saban.
Speaker 2 (20:43):
He's got news trafficking weather.
Speaker 1 (20:45):
Hey, Jack, welcome back to the John Sanchez Show on
Newstalk seven eighty k WAH with Jason gott We finished
down one seventy two on the DOW, a gain of
thirty one on the NASDAC, and a loss of eight
on the S and P five hundred. Well, this market
was all over the place, attributed to, of course, Jerome's
news conference. The Fed interest rate decision. As anticipated, the
Fed did leave interest rates unchanged between four and a
(21:05):
quarter to four and a half percent. As Jason mentioned
at the beginning of the show, Fed Governor's waller at
Bowman voted in favor of a quarter percent rate cut.
This was anticipated, surprised, did not have much influence on
mister Powell. And by the way, here's a little stat
for everybody you know this one, Jason, these two dissenting votes,
that is the first time two policy makers have dissented
(21:27):
going all the way back to nineteen ninety three.
Speaker 3 (21:30):
Wow, yeah, that's so yeah.
Speaker 2 (21:33):
That's like going against your CEO.
Speaker 1 (21:34):
You're sitting around a conference room table and the CEO says,
we're going to do this, and you got two people
out of normally there's twelve voters, they only had eleven
this time.
Speaker 2 (21:42):
Go no, mister chairman, you're wrong.
Speaker 4 (21:45):
And then they're politicking too, right, you know, of course
they mean of course, like I said, I think Bowman
was nominated by Trump, and I know that Waller is
one of the two or three people that are in
line for that spot for from Trump. So at this point,
and that was the fear that you have this shadow
fed where as soon as Trump sort of nominates someone,
(22:08):
it really does in fact neuter for lack of a
better term, Powell, right, And so why not start to
dissent now if you're someone who is running for that job.
Speaker 3 (22:20):
So, yeah, it is. It's pretty interesting.
Speaker 1 (22:22):
Always involve always, always, always, always, And you know, this
is one of those days I wish we could do
about a three hour show because there were so many
undercurrents in Powell's comments today that you could go so
many direct directions, Like I'm sitting here thinking to myself,
why does he even want to be in a hurry
so he can tell us, and you know, we'll go
through this. He wants the labor market to begin to
(22:44):
weaken before he really gets serious. Sort of, the FED
get serious about cutting rays, but you boil it down
to down this Jason. You got two very powerful the
two most powerful men in the world, Trump and un
Palell and Pal's I mean, you can't tell me the
man doesn't have an ego. He doesn't come across that way.
But you don't get to that position without a big ego.
And he's gonna be thinking to himself. You know, you
s ob You know you belittle k me in front
(23:06):
of the world. You you basically have told the world
I'm gonna be fired in May of twenty twenty six.
Speaker 2 (23:13):
Why am I going to do you any favors?
Speaker 1 (23:14):
I give you a interest rate cut, so you know
what I'm gonna throw Some bs comment out there like, hey,
I need the labor market to come down, and I
need this In other words, I want this perfect world
before we start cutting rates.
Speaker 2 (23:26):
What's his incentive? What's his incentive? Right?
Speaker 3 (23:29):
And I've thought about that a lot too.
Speaker 2 (23:31):
Right.
Speaker 4 (23:31):
The on the flip side, you have all the air
cover you need to cut rates, right, like if you
I mean, what do you mean that? So he cuts rates,
So they cut twenty five BIPs today, and clearly, you know,
as the leader, you can convince the crowd, right, so
he cuts rates and.
Speaker 3 (23:51):
Then inflation goes through the roof. I mean, is Trump
trump I want to time blaming the Fed?
Speaker 4 (23:59):
Yeah, and he's pulling him in a knucklehead and an
idiot and all this money that we'd make if they
cut rates, and right, so like, at this point, you
know they're gonna cut in September, and you know, really,
are you gonna get some data that's gonna change your
mind to not cut in September in the next two months?
Probably not so politically, isn't it just easier to just
(24:22):
be like all right, fine, you know it's at this
point not.
Speaker 1 (24:25):
Well, here's the other thing. If he if he would
have cut rates today, and I disagree with you. I
don't think they're going to cut in September. I mean
unless this data really weekends, which you know, the FED
futures contract dropped from a sixty four percent probability sixty
four point six yesterday to now as of today, forty
eight point one percent probability of a September cut. So
(24:46):
again back to the point, why you know, why, why
why does he want to take a chance?
Speaker 2 (24:50):
To your point, but I want to go back to it.
Speaker 1 (24:52):
I want to go back to an interesting point that
also I was thinking of today and you just start
my memory on this.
Speaker 2 (24:57):
Who really gives a damn about a quarter percent?
Speaker 3 (25:00):
You've said this before. I know nothing's gonna happen. It's
the act and the trajectory, right right.
Speaker 2 (25:07):
But but it's a trajectory. That's a great word.
Speaker 1 (25:09):
But more importantly, is it really going to impact inflation?
In other words, No, I think he's making the biggest
mistake right now. And I'm gonna go I'm gonna go
patriotic on you. We're paying what is it, one hundred
billion dollars? Is it a month or a year? I
think some stupid hundred billion and interest payments?
Speaker 3 (25:29):
Right, it's a month. No, it's a month. It's like
plus a year.
Speaker 2 (25:33):
Yeah, there you go.
Speaker 1 (25:34):
And like Trump has said, I forget the reduction. Just
just cutting rates a quarter percent? How many billions and
hundreds of billions of dollars it would save?
Speaker 2 (25:43):
But I.
Speaker 4 (25:45):
Only want to I'm going to disagree just because and
you know this, the FED doesn't control long term rates.
Speaker 2 (25:52):
That's my point, so why not just do it? Right?
But I agree, yeah, I mean from that, that's my point.
Speaker 4 (25:59):
Trump's whine about, oh, we're gonna this is costing us,
like that's not true.
Speaker 2 (26:03):
Agree, like it's political is what.
Speaker 3 (26:05):
It does exactly.
Speaker 4 (26:08):
And you know when when Bessent goes down there to
sell now five hundred billion dollars more of treasuries than
we thought we needed to.
Speaker 3 (26:18):
And he says I'm gonna sell the tenure.
Speaker 4 (26:21):
At whatever four percent, the market will say no for
ten or four twenty or who knows.
Speaker 3 (26:28):
Uh. That's how that part is decided.
Speaker 4 (26:30):
Is not like Powell lowers rates in the entire curve
movie exits across the board like he doesn't have that power.
He has the power of overnight. And yes there is
some linkages, but it's it's disingenuous to say he's the
reason that we're you know, we're over pain.
Speaker 2 (26:51):
So the bottom line, yes, yeah, right, So the bottom line.
Speaker 1 (26:53):
I'm getting to is is it truly an ego thing?
Now Trump versus Powell? And hence why Powell is not
being anxious whatsoever to give the street a rate cut,
even though again what we just said it doesn't really
make any difference. It's more psychological. Or is he truly
believe I've got to get closer to two percent? You know,
we're going to get the PCEE numbers tomorrow. Is it
(27:14):
Is it really that important that we get closer to
two percent his mandate or the fence mandate before they
start talking about doing it right now? My gut tells
me I think it's a political thing.
Speaker 2 (27:24):
I really do. I think I think you got two egos.
Speaker 1 (27:27):
And because if Powell would come out today, or would
have come out today, or he comes out in the
September meeting and cuts rates, you know, damn well, what's
going to happen. Everybody's going to go ha, you gave
in to Trump, and you know Trump is going to
take a victory lap, and that's going to upset Pwell
even more so.
Speaker 4 (27:44):
If he can get if he can get inflation to
two percent, right, just yeah, and if your Powell, at
least you can say I did what I said what
I was going to do, regardless of Yeah, there's politics,
but that's sort of the only saving grace he has
(28:04):
now is to just wait and wait and wait until
he gets it or he gets fired.
Speaker 2 (28:09):
Right, but he's not gonna get it though. What two
to eight right around there? Yeah, we'll see what. Yeah,
I mean to get get down to two. It ain't
gonna happen. The economy is too strong. It ain't gonna happen, as.
Speaker 1 (28:20):
The saying goes, And I just I can't wait to
when that cut, if it does happen under under Palaceton,
the victory left that Trump is going to take I
told you. He finally followed by, you know what I
told him should have been done a long time ago.
That that part's just going to be a classic. Real quickly, Jack,
let's go to go cut number one. I wanted everybody
to hear real quickly Chairman Powell's view on where we
sit from an economic standpoint, the condition of the economy.
Speaker 5 (28:43):
Despite elevated uncertainty, the economy is in a solid position.
The unemployment rate remains low, and the labor market is
at or near maximum employment. Inflation has been running somewhat
above our two percent longer run objective.
Speaker 1 (28:57):
Well, I'm not hearing that cut in my ears, so
supporting today the open So why don't we do this
let's go to commercial rate.
Speaker 2 (29:04):
We'll come back.
Speaker 1 (29:04):
Hear that audio cut from mister Powell turned over to
christ and Snow right now traffic center, Kristen.
Speaker 5 (29:09):
Wage growth has continued to moderate, while still outpacing inflation. Overall,
a wide set of indicators suggests that conditions in the
labor market are broadly in balance and consistent with maximum employment.
At today's meeting, the Committee decided to maintain the target
range for the federal funds rate at four and a
quarter to four and a half percent, and to continue
reducing the size of our balance sheet. We will continue
(29:33):
to determine the appropriate stance of monetary policy based on
the incoming data, the evolving outlook, and the balance of risks.
Speaker 2 (29:42):
So that was chairman apology. That's heard talking about the
labor market.
Speaker 1 (29:46):
And once again, one thing that I picked up today Jason,
that I haven't in the past is there was a
lot of emphasis on the labor market being the one
of the key drivers, one of the key denominators to
the FED getting serious about an interest straight cut.
Speaker 2 (30:02):
But that's my point, what I was saying before we
went to the break, labor market is strong.
Speaker 1 (30:09):
It's that's the challenging point, the labor market is very strong,
and if he waits for that is one of the
main ingredients to cut rates. That's what I'm saying. I
think that's why the FED futures dropped so as solo.
As far as the probability today.
Speaker 4 (30:22):
Well, I mean remember from the Beige Book, right, the
last couple of Beage Book releases, most if not all
of the districts were reporting deceleration and hiring, right, And
that's something that the Fed's going to keep an eye on,
you know, like they talked about before, we sort of
play whack.
Speaker 3 (30:39):
A mole and hit the mole that jumps up the highest.
And now that inflation.
Speaker 4 (30:44):
Is trajectory is towards two, they need to start staring
more at the you know, employment situation. And we had
Dennis on Monday. We've talked about Meta and Microsoft, like
the AI disruption of jobs and or potential stagnation in hiring.
Not to say there's a ton of firing, but just
(31:05):
companies holding off not knowing do given all the spend
we're doing, or you know, technology.
Speaker 3 (31:10):
Companies changing their staffing.
Speaker 4 (31:13):
With Microsoft at fifteen thousand jobs, they're probably not hiring
those back anytime soon.
Speaker 3 (31:17):
And then the second round effect.
Speaker 4 (31:19):
Of you know, the companies that utilize the AI create
agents that need less people to do the jobs that
they did before. The Fed's got a whole new problem
right of unemployment. Right, and so that could be part
of the signaling that you know, they're trying to maybe
move the market's eyes from what was an inflation problem
(31:41):
to now maybe more of a reason to cut with
a decelerating employment problem.
Speaker 3 (31:47):
Ultimately, the ADP today, which.
Speaker 4 (31:49):
Has been you know, not the most accurate of numbers,
but ADP was a strong number, and I think that's
partially the reason too why the futures moved like they
did with the.
Speaker 3 (31:58):
FED saying, hey, unemployments accelerted and then ADP was good.
Speaker 4 (32:01):
Yea, So we'll see what the big jobs number is
later and that yeah, you got it.
Speaker 2 (32:09):
Now.
Speaker 1 (32:09):
The other big thing everyone is anxiously waiting for from
Chairman Pal today is the impact of tariffs on inflation.
Speaker 2 (32:16):
Right. It's all boils down to that.
Speaker 1 (32:18):
Let's take a listen to what the Chairman had to
say about inflation, slash tariffs.
Speaker 5 (32:25):
Changes to government policies continue to evolve, and their effects
on the economy remain uncertain. Higher tariffs have begun to
show through more clearly to prices of some goods, but
their overall effects on economic activity and inflation remain to
be seen.
Speaker 2 (32:42):
Now, remember, folks, we have an August first.
Speaker 1 (32:46):
Deadline with many Minnie countries still have not come to
the negotiation table with the Trump administration. Jason, I saw
the list today, and again we don't have time to
go through it. There are still a lot of countries,
like he nailed Indian today on a number of things.
There's still a lot of decent sized economies out there
again that have not come to the negotiating table.
Speaker 2 (33:06):
And take it for what it's worth. Trump came out today.
Speaker 1 (33:09):
I think it was Hammer or Bessent or somebody said,
Oco is letting August first. It's not changing, We're not
we're not waffling. You know, we've heard that. But you
take it for what it's worth. But men, oh man,
if some of these countries do get nail with this
twenty thirty percent tariffs, and obviously the goods that we
import from them, that money is there, that that cost
is going to the consumer, and therefore, you know, we
(33:32):
got to watch that acceleration and consumer spending inflation, so
on and so forth. So it's an important thing there.
Speaker 3 (33:39):
Really is.
Speaker 1 (33:40):
Yeah, So you know overall, the takeaway once again is
very important to understand. No fed cut, no hint. That's
why the street got a little upset today. No hint
that September is going to be on the table again.
The probability is very low at this point, so we
don't have an August meeting. So when's the next cut,
next cut coming? Who knows, you know, it's really up
(34:01):
in the air. So our best advice focus on earnings
and make sure that you know you are well diversifyed.
That's one thing we're seeing with a lot of you
in those portfolio reviews we've been doing. You don't have
a lot of diversification. You got to have it because one
day one sector is hot, next day it's not, and
you got to have that diversified portfolio to take advantage
of it.
Speaker 2 (34:20):
Just have a little bit out there in a lot
of different areas. That was a lot of fun, my friend.
Speaker 1 (34:24):
We could spend three hours talking about pal but we don't,
so tomorrow we will move on to a new topic.
Have a great afternoon, everybody, God blesten, Thanks for listening
to us on the new STOG seven eighty k WITCH.
Speaker 2 (34:33):
This program was sponsored by Sanchez gone To Capital Management LLC.
Speaker 1 (34:37):
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
John at Sanchezgaune dot com or seven seven five eight
hundred and one eighth one. John Sanchez offers securities and
(35:00):
advisory services through Independent Financial Group LLC, a registered broker
Dealer and Investment Advisor member FINRA SIPC.
Speaker 2 (35:08):
Securities offered only in States.
Speaker 1 (35:10):
John Sanchez is registered in Sanchez Gaunt Capital Management LLC.
In Independent Financial Group LLC are unaffiliated entities.
Good Wednesday afternoon to you. Welcome to the John Sanchez Show,
a news talk seven to eighty k wait. It's a
pleasure to be with you in a poleasure to be
with my co host, mister Jason Sanche has gone capital management, Big.
Speaker 2 (00:13):
Jay, what a day it was.
Speaker 1 (00:15):
We had it all thrown at us today. But our
job is to make it all worthwhile and make sense
of it.
Speaker 3 (00:21):
Yeah, I'll defer to you.
Speaker 1 (00:23):
Oh gee, thanks.
Speaker 4 (00:29):
On an uneventful day in Wall Street, and then after
hours are pretty eventful as well.
Speaker 2 (00:33):
So yeah, yeah, yeah, no, it was.
Speaker 1 (00:34):
It was. It just wouldn't stop, right, it just wouldn't stop.
Fed interest, right decision, major earnings numbers after the close.
Speaker 2 (00:43):
A new a new what's.
Speaker 1 (00:44):
That tsunamis, tsunamis, Yes, we know about tsunamis very well.
Speaker 2 (00:50):
Yes, we understand that perfectly.
Speaker 1 (00:51):
Well, let's see a new four trillion dollar market valuation
club member after the after hours.
Speaker 3 (00:59):
Yeah, it's amazing.
Speaker 1 (01:03):
Yeah, yeah, I would have never in a million years
thought when I started this business that you'd be saying
that a company, and we'll tell you who this company
is momentarily.
Speaker 2 (01:11):
Is worth that we would have a company worth for
trillion dollars.
Speaker 3 (01:16):
Now there's two.
Speaker 2 (01:17):
Now there's two. That's right, that's right, and yeah, yeah, exactly. Well, folks,
let me tell you what we have lined up for
you this afternoon.
Speaker 1 (01:26):
Again, we have a lot of things that we're going
to be going over and again there's a lot of
things that happened in our direction today. As as we
highlighted again going into the show yesterday, it's all about
or it was all about the FED interest rate decision.
Right were they gonna hold steady? Were they gonna hike?
Or were they gonna hint? And this is probably the
most important thing. Were they going to hint at a
(01:47):
interest right cut? You know, no one, Jason, no one,
you know anticipated any take, any type of a cut
being announced today. But as always, it's always about Jerome
Powell and his news conference. And well, we've got some
great audio clips that we're going to share with you
on that news conference in regards to what the Fed's
next move is. But let me tell you, you know,
I did.
Speaker 2 (02:05):
I did a little stat for you, Jay, You ready
for this? Yeah?
Speaker 3 (02:08):
Absolutely?
Speaker 1 (02:08):
Okay, all right? When Jerome Powell began speaking right at
eleven o'clock or assume me right, ated eleven thirty our time,
the Dow Jones Industrial average was up forty six points
when he finished about you know, forty five minutes later,
we were down two hundred and twenty seven points, but
that doesn't count for we dipped, you know, down a
little over three hundred at the worst level as he
(02:29):
was talking. So once again, this market was just sitting there,
going back and forth and back and forth.
Speaker 2 (02:33):
It's so funny, folks.
Speaker 1 (02:35):
You got to see this sometimes, to watch how the
algorithms will move this market just with certain words that
he says. Right, it's it's absolutely fascinating. But then luckily
we got a little bit of buying interest going into
the clothes and hopefully this news that we'll share with
you what's going on the after hours, we'll propel us
higher tomorrow.
Speaker 2 (02:52):
But boy, it was a wild ride once again.
Speaker 4 (02:55):
Yeah, no, I think you know, to today, the market's
been fairly cautious leading into earnings from Meta and Microsoft,
which are up you know, eleven and eight percent respectively.
After hours the FED decision, by and large, everyone expected
what we got, which was nothing, but the fact you
(03:16):
had two dissenters again, neither of them were surprising.
Speaker 3 (03:19):
With Waller and Bowman.
Speaker 4 (03:20):
I think Bowman was knotted put in by Trump and
then Waller's out there trying to run for the job.
So you know, clearly to see the dissenters means that
you have a signal of eventually next direction is lower
as far as interest rates are concerned, which is not
dissimilar to what the market's already priced in with a
(03:42):
September rate cut being the plan.
Speaker 3 (03:45):
But it's just man, yeah, right, exactly.
Speaker 4 (03:50):
Right, you know, it's it's it's but to see the
leverage that Microsoft and Meta have as far as growth,
despite the massive amount of growth they've had over the
last you know, five to seven years, is just eye opening, right,
and the big keep getting bigger, and you know me, Microsoft,
(04:13):
it's it's for most people, it's impossible to get away
from that halo, right, And the fact that Meta can
continue to turn the screws and grow like.
Speaker 3 (04:21):
They are and guide higher and even.
Speaker 4 (04:24):
Talk about potential cost cuts into the futures, it's pretty impressive.
And so I think, you know, probably another catalyst for
a bit of a tech beta chase tomorrow on these
back of these numbers.
Speaker 1 (04:35):
Absolutely all right, since you uh teased on the Microsoft
and the metal. Let's jump right into that, and then
we're gonna get into again the pause, the hike, the pivot.
What does today's FED interest rate decision mean for you
and your money? That will be our topic. We've got
a lot of things we're gonna drill into in the
in the Fed interest rate decision, and most importantly with
Chairman Pal did have to say, uh that press conference.
(04:58):
So let's get into these. Let's get it these Microsoft numbers.
First of all, let me tell you what the what
the stock did in the normal session, what it's doing
in the after hours, and then we'll drill down and
debate a little bit on the earning side of things.
So regular session of Microsoft today stock closed up sixty
seven cents to five thirteen twenty four. Right now in
the after hour session it is up eight point five
(05:18):
to one percent, a forty three dollars and sixty nine.
Speaker 2 (05:21):
Cent game to five point fifty six ninety three.
Speaker 1 (05:24):
So just a mere forty three dollars game, Jame, Just
just a mere forty three dollars game, all right, folks. Now,
let's listen to the numbers. Earnings per share came in
at three dollars and sixty five cents. Expectation was three
dollars and thirty seven cents. Revenue seventy six point four
to four billion estimates seventy three point eight one billion.
So that is a big beat. I mean we're talking
(05:45):
billions here, Jason Oh, seventy six point four to forty
to seventy thirty pointy one those are billions.
Speaker 2 (05:49):
Right, differentials about hundreds of thousands or millions. It's just amazing.
Speaker 1 (05:54):
Revenue increasing eighteen percent in the fourth quarter which ended
June the thirtieth, up from sixty four points seven billion
a year earlier. That's the fastest growth in more than
three years. Net income twenty seven point three twenty seven
point two to three billion dollars net income, folks, think
about that, twenty seven point two to three billion in
(06:15):
one quarter, and that was an increase from twenty two
point zero four billion a year ago. Taking away on
Azure in some areas that made some of the strength.
Because this is really fascinating.
Speaker 4 (06:27):
And that's the big one is the Azure cloud growth,
where they had they were up thirty nine percent constant
currency versus expectation of thirty four to thirty five percent, right,
So seeing top line growth in an area that people
were concerned may start to stagnate is.
Speaker 3 (06:47):
You know again they're they're they're getting more wallet share.
Speaker 4 (06:50):
Companies like ours were a Microsoft shop. You know, they
make it very easy to be a customer, right. The
costs are not in any way overbearing for folks like us,
And there's lots of you know, companies that are.
Speaker 3 (07:04):
Moving more and more digital and more and more.
Speaker 4 (07:06):
Cloud based, and so you know this this I think
this growth can continue for for years to comp well.
Speaker 1 (07:12):
But yeah, but let's sort this one tidbit into there also.
As we know when we had doctor Des Sanchez on
the show with us on Monday for our AI segment,
you know, he former Microsoft employee, very much pro Microsoft,
but just their integration with AI and with their AI
does and how it can incorporate into teams and just
(07:32):
all of it becoming just one big, happy family, right.
Speaker 2 (07:35):
I mean, that's that's something unique.
Speaker 4 (07:37):
Right.
Speaker 1 (07:37):
There's no chat, GPT, Word or Excel or something, so
to be able to integrate in all of that under
one company. Yeah, it's it's just amazing with this company
not only is doing, but I think can do going forward.
Speaker 4 (07:51):
And Google's probably the only other one that how you
got as well, right, they have their I mean that's
a company that's been under some pressure. It's in a
bit recently, but you know, you'd be throwing the baby
out with the bathwater there given if you if you
like a Microsoft, you know the amount of schools and
(08:11):
kids that are being raised on the GG the Google
halo with Google slides and the really I mean, kids
aren't using Microsoft Office anymore. Where companies are you know,
legacy companies, but you know Google's really taking over in
that area too. So a bank shot on cloud growth
and integration with AI, like you mentioned Google is probably
(08:34):
another one to be to be looking at, maybe picking
up on the cheap.
Speaker 2 (08:38):
Absolutely, Yeah, it's funny. I didn't get a chance. But
looking at the earnings report here, I want to mention
this very quickly. We're talking about the AI.
Speaker 1 (08:45):
So Microsoft's in our artificial intelligence bet, which includes that's
open AI steak and billions worth of Navidio chips is
adding to the business. Software sales companies said adoption of
the Microsoft three sixty five copilot led to higher revenue
per user of Microsoft three sixty five commercial cloud projects
products such as office productivity software but there's my point.
(09:05):
I honestly I did not see that before I opened
my mouth. So there it is, right there. It's all
Copilot and Office all being bundled together. And that's going
to be a tough one because you know, I don't
know what the ratio is of how many people use
Microsoft Office compared to you know, the Google Docs and
so on and so forth. I'm sure you know Google
side is you know, a fraction of with people that
(09:27):
use the Microsoft products.
Speaker 2 (09:28):
But yeah, the.
Speaker 1 (09:29):
Company is sitting on all eight cylinders. And you know, remember, folks,
let's go back. It was just last month when they
announced nine thousand people, four percent of their workforce going
by the wayside. A month before that eight thousand people,
so you know what, three point nine percent of their
workforce at that point going by the wayside. And now
this is what happens, folks, And this is why we're
so very bullish on technology. You get a company like
(09:51):
a Microsoft that says, look at we've got the technology,
we can acts you know, thousands and thousands of people,
get them off the payroll. And what that's going to
be deal. Of course, it's going to add to the
bottom line revenue and increase the bottom line revenue. Right,
So it's unfortunately it's at the cost of human beings
losing their jobs. But at the same time, these these
(10:12):
these technology juggernauts are just going look at what we
can get rid of people. I read a great article
and I want to touch on it next Monday when
we have Dentis on a Jason. I read a great
article yesterday about how challenging it is right now for
a college graduate to get a job, because think about this,
you're a college graduate. We're all there. You're willing to
start at the bottom of the of the corporate ladder.
(10:35):
You know, you're going to do the drudgery work right
in the world of finance and business and stuff that's
usually you know, you're doing a lot of data entry
and so on and so forth. That's all being replaced
the AI now. And that's what all these companies are
talking about. It's like they interviewed a bunch of HR
managers and like, this is a tough position for not
only the college graduate but also for us in HR,
(10:58):
because you know, we got to being bring people up
through the ranks over the year. But we can't do it.
We can't justify paying some kid out of college fifty
grand when we can get it done with AI for
essentially no cost.
Speaker 4 (11:10):
So yeah, I mean, you're fascinating. You're you're hollowing out
your organic growth. And that's the part that I mean.
I was talking to the you know team down the
hall here, and you know that's for me. I it
it probably like a pendulum, right, everything's gonna be like, hey,
I's going to replace everything. But ultimately, you know, you
need people to to do a lot of these roles
(11:32):
and be wise down the line. And if you aren't
smart enough about hiring young, smart people to be your
ranks down the line, yeah, you may help your bottom
line now, but you could be in a tough spot,
you know, folks.
Speaker 2 (11:48):
So yeah, it's a it's a balancing act. There, definitely
a balancing act, all right.
Speaker 1 (11:53):
So that's one big company that reported again forty three
dollars and forty two cents after hours for Microsoft. How
about the other m that has metow I tell you
what that stock is doing, what happened in this market,
and then get into our topic, the pause, the hiker,
the pivot, what happened in today's FED decision to affect
your portfolio turn over to Christen Snow first of all,
in there right now traffic center. Hello, Kristen, welcome back
(12:13):
to the John Sanchez Show, Ony Stock seven eighty k
which with Jason gone, all right, here's how we finished
up in this volatile session today. One seventy one decline
on the dow, actually one seventy two, do it correctly,
point three eight percent loss with the Dow closing at
forty four thousand, four to sixty one, a small game
of thirty one on the NASDAK closing at twenty one
twenty nine, and the S and P five hundred down
(12:34):
eight points to close the day of six thousand, three
hundred and sixty two. On the oil side, we rose
eighty one cents on oil, seventy oh three a barrel
gold hired by twenty eight dollars and ninety cents three thousand,
three point.
Speaker 2 (12:46):
Fifty two eighty And you know what real quickly, Jason, what.
Speaker 1 (12:52):
Let's let's chat about gold right now, because we are
seeing some big moves mainly up, but we are seeing
some big days two up and wanting to chat with
you about you know, twenty.
Speaker 2 (13:02):
Thirty dollars moves is so very common nowadays.
Speaker 4 (13:05):
Yeah, absolutely, I mean gold's become you know, obviously a
pretty darn vall at a last class. I think, remember
wag the dog, right, Gold is more so just what's
the dollar doing?
Speaker 3 (13:18):
Right?
Speaker 4 (13:18):
And I had mentioned back when it was Darner thirty
five hundred that I thought we were going to pull
back and and it's merely because of watching the d
X Y index to say, you know, the dollar had
been you know, down almost ten percent on the year
every once and this is the worst year for.
Speaker 3 (13:37):
The dollar ever and blah blah blah.
Speaker 4 (13:38):
And I'm like, yeah, it's because the dollar was literally
at all time highs, you know, or at least range
highs on January first, right, So it's like where it
came from because it had a big back half of
the year. But you know, dollar chart looks like it
wants to break higher, as in stronger dollar aka weaker gold.
(13:59):
So I think we probably we still have more downside
in gold barring some geopolitical disaster of some kind, because
it was the most crowded trade on the board, like
more crowded than Nvidia, more crowded than.
Speaker 2 (14:11):
Well, everyone's piling into when the market was suffering.
Speaker 4 (14:14):
Yeah, after the and all the world is ending, you know,
folks of debt and again is going to be right
long term, but near term, I think that there's still
more downside to gold and even silver.
Speaker 3 (14:28):
So watching the dollar, that's that's what you're.
Speaker 2 (14:30):
Saying, You got it beautiful.
Speaker 1 (14:32):
And then finally to wrap it up on the day's recap,
five basis plenty increase on the tenure four point three
eight percent, and that fields bumped up right across all
ten years, two years up six basis points, thirty year
at four basis points, et cetera.
Speaker 2 (14:44):
So everything moved in relation to what happened with the Fed.
Speaker 1 (14:48):
And then on the economic front, we had the ADP
private sector jobs numbers come in pretty strong number one
hundred and four thousand jobs created according to ADP in
the private sector for the month of July. That was
a lot better than the month of June data where
we were at down twenty three thousand jobs. That revised
that one at the first rd on second quarter GDP
showing pretty good numbers of about three percent, which is
(15:11):
huge compared to the final read of the first quarter
which showed a about a half a percent of client there.
And then pinning home sales down about eight ten to
seven percent for the month of June, so not a
huge economic movers. All right, let's get back to before
we move to the FED, let's move over to the
other big mover in the after hour session, which of
course has Meta phenomenal numbers. Here's what happened with the
(15:33):
stock regular session and what we are watching right now.
You're smiling if you are a Meta shareholder. Stock finished
the day down four dollars and seventy nine cents point
six to eight percent loss to six ninety five twenty one,
or right now in the after hours it is up
seventy eight dollars and two cents eleven point two two
percent gain to a seven hundred and seventy three dollars
and twenty three cents should mention jay, I mean two
(15:55):
hundred and twenty six point gain right now in the
Nasdaq future thanks to the two names and few others
that reported.
Speaker 4 (16:02):
But if you're an S and P five hundred holder,
you're a seven percent holder of Microsoft and you're a
two point eight percent holder of Meta, so nice odds
are Everyone listening is an S and P five hundred holder,
so you probably are experienced and.
Speaker 1 (16:18):
Last time I checked, Microsoft is a member of the
Dow Jones, and.
Speaker 3 (16:22):
It might be it might be a select group of thirty.
Speaker 2 (16:27):
Hey's the elite group of thirty.
Speaker 1 (16:29):
By the elite group, you have to go through a
lot of hoops to get into that thirty group.
Speaker 2 (16:38):
Hey, whatever, we may make games, whatever way we can
to the now.
Speaker 3 (16:42):
Five hundred, does it too?
Speaker 2 (16:43):
Does it get smaller? That's right? That's right, all right?
Speaker 1 (16:48):
So what what is driving this big strength of seventy
eight dollars game plus? In the after our session on meta,
how about these earnings numbers, folks, listen to this earnings
per share seven dollars and fourteen cents, expectation of five
dollars in ninety two cents, revenue forty seven point five
to two billion, expectation forty four point eight billion. Then
a second quarter sales growing twenty two percent year over year,
(17:10):
which was the same growth rate as a year ago.
Advertising revenue for the second quarter forty six point five
to six billion. Wall Street was looking for forty three
point ninety seven billion. Zuckerberg on the call this afternoon
said the company is unlocking greater efficiency and gains across
our ad system. Third quarter sales going to be between
(17:30):
forty seven point five billion to fifty point five billion,
well ahead of ball Street's estimate of forty six point
one four billion. Capex capital expenditure sixty six to seventy
two billion, raising the low end of the company's previous
estimates of sixty four to seventy two. So there's those
data centers, Jason and so many other things are just
going to be the same thing.
Speaker 2 (17:50):
They're running lean and mean. And remember, remember you and I.
Speaker 1 (17:53):
Sat behind these microphones a couple of years ago, and
we kind of joked about Zuckerberg when you remember when
they went through all kinds of layoffs. It was like
it was almost like an Amazon back in the eighties.
It's like, we're going to give up growth and earnings
and so on and so forth for the next couple
of quarters. So we're going to get lean and mean,
and everyone kind of went, you know, dump the stock
and everything.
Speaker 2 (18:12):
Now look at it. How it's just paid off just speeds.
Speaker 4 (18:17):
Yeah, I mean, the earnings growth on these companies despite
the capex is just absolutely amazing. They're just cash flow machines,
and that's why they tend to be the port in
the storm.
Speaker 3 (18:26):
When things are bad.
Speaker 4 (18:27):
This isn't not the technology, you know, small cap tech
where interest rates matter at this point.
Speaker 3 (18:33):
It's just, you know, I don't even know what matters.
I mean, honestly, companies decelerating.
Speaker 4 (18:39):
I guess the overall global economy slowan could hurt them
on the ad spending side or on the tech spending.
Speaker 3 (18:44):
Side, But who knows.
Speaker 4 (18:45):
The company's redeployed more favorably towards a Facebook et cetera.
With they're trying to get customers, so they you know,
their darn near bulletproof at least with the data that
they have right now.
Speaker 1 (18:58):
Yeah, of course we can't to get out of this
break without mentioning how much money they're spending on AI.
The company kick off their AI hiring bonanza in June,
and they invested fourteen point three billion into Scale AI,
landing the startups CEO to co lead the new Meta
super Intelligent lab. Their finance chief on the call also
(19:20):
said they're related AI spending during the earnings call, saying
we quote also made fifteen point one billion and non
marketable equity investments in the second quarter, which includes our
minority investment in Scale AI, along with other investment activities.
You're between the lines, and that says is they spend
about fifteen billion investing in other companies AI stocks, right,
(19:41):
companies related to AI in their stocks. Yeah, that's what
I mean. My gosh, you look at you look at
some of these other companies in the amount of money.
You know, I think a lot of people will understand
the station real quick that a lot of companies will
invest in other companies. Right in na Vidia, for example,
(20:02):
they are invested in so many different companies. And that's
what these companies do, right, they got excess cash. Eight
they got to make money. Yeah, take a little bit
and go buy this stock or that stock, but they
usually not just a little bit, a few billions.
Speaker 3 (20:16):
We just learned, yes, you know, amongst friends.
Speaker 2 (20:18):
Amongst friends.
Speaker 1 (20:19):
Yeah, take it out of pitycash here absolutely so overall,
just great Ernance numbers out of met A, great Jarney's
numbers out of Microsoft. And hopefully these games hold me
overnight and then the pre market and then we're off
to the races tomorrow.
Speaker 2 (20:31):
That's the that's the goal.
Speaker 1 (20:32):
But in the meantime, we have to learn what happened
when the FED today, when Jerome Palell had his press conference,
with the Fed. Had to say, we're gonna give you
all the details when we come back of today's Fed
interest rate decision, but first let's turned over to Jack Saban.
Speaker 2 (20:43):
He's got news trafficking weather.
Speaker 1 (20:45):
Hey, Jack, welcome back to the John Sanchez Show on
Newstalk seven eighty k WAH with Jason gott We finished
down one seventy two on the DOW, a gain of
thirty one on the NASDAC, and a loss of eight
on the S and P five hundred. Well, this market
was all over the place, attributed to, of course, Jerome's
news conference. The Fed interest rate decision. As anticipated, the
Fed did leave interest rates unchanged between four and a
(21:05):
quarter to four and a half percent. As Jason mentioned
at the beginning of the show, Fed Governor's waller at
Bowman voted in favor of a quarter percent rate cut.
This was anticipated, surprised, did not have much influence on
mister Powell. And by the way, here's a little stat
for everybody you know this one, Jason, these two dissenting votes,
that is the first time two policy makers have dissented
(21:27):
going all the way back to nineteen ninety three.
Speaker 3 (21:30):
Wow, yeah, that's so yeah.
Speaker 2 (21:33):
That's like going against your CEO.
Speaker 1 (21:34):
You're sitting around a conference room table and the CEO says,
we're going to do this, and you got two people
out of normally there's twelve voters, they only had eleven
this time.
Speaker 2 (21:42):
Go no, mister chairman, you're wrong.
Speaker 4 (21:45):
And then they're politicking too, right, you know, of course
they mean of course, like I said, I think Bowman
was nominated by Trump, and I know that Waller is
one of the two or three people that are in
line for that spot for from Trump. So at this point,
and that was the fear that you have this shadow
fed where as soon as Trump sort of nominates someone,
(22:08):
it really does in fact neuter for lack of a
better term, Powell, right, And so why not start to
dissent now if you're someone who is running for that job.
Speaker 3 (22:20):
So, yeah, it is. It's pretty interesting.
Speaker 1 (22:22):
Always involve always, always, always, always, And you know, this
is one of those days I wish we could do
about a three hour show because there were so many
undercurrents in Powell's comments today that you could go so
many direct directions, Like I'm sitting here thinking to myself,
why does he even want to be in a hurry
so he can tell us, and you know, we'll go
through this. He wants the labor market to begin to
(22:44):
weaken before he really gets serious. Sort of, the FED
get serious about cutting rays, but you boil it down
to down this Jason. You got two very powerful the
two most powerful men in the world, Trump and un
Palell and Pal's I mean, you can't tell me the
man doesn't have an ego. He doesn't come across that way.
But you don't get to that position without a big ego.
And he's gonna be thinking to himself. You know, you
s ob You know you belittle k me in front
(23:06):
of the world. You you basically have told the world
I'm gonna be fired in May of twenty twenty six.
Speaker 2 (23:13):
Why am I going to do you any favors?
Speaker 1 (23:14):
I give you a interest rate cut, so you know
what I'm gonna throw Some bs comment out there like, hey,
I need the labor market to come down, and I
need this In other words, I want this perfect world
before we start cutting rates.
Speaker 2 (23:26):
What's his incentive? What's his incentive? Right?
Speaker 3 (23:29):
And I've thought about that a lot too.
Speaker 2 (23:31):
Right.
Speaker 4 (23:31):
The on the flip side, you have all the air
cover you need to cut rates, right, like if you
I mean, what do you mean that? So he cuts rates,
So they cut twenty five BIPs today, and clearly, you know,
as the leader, you can convince the crowd, right, so
he cuts rates and.
Speaker 3 (23:51):
Then inflation goes through the roof. I mean, is Trump
trump I want to time blaming the Fed?
Speaker 4 (23:59):
Yeah, and he's pulling him in a knucklehead and an
idiot and all this money that we'd make if they
cut rates, and right, so like, at this point, you
know they're gonna cut in September, and you know, really,
are you gonna get some data that's gonna change your
mind to not cut in September in the next two months?
Probably not so politically, isn't it just easier to just
(24:22):
be like all right, fine, you know it's at this
point not.
Speaker 1 (24:25):
Well, here's the other thing. If he if he would
have cut rates today, and I disagree with you. I
don't think they're going to cut in September. I mean
unless this data really weekends, which you know, the FED
futures contract dropped from a sixty four percent probability sixty
four point six yesterday to now as of today, forty
eight point one percent probability of a September cut. So
(24:46):
again back to the point, why you know, why, why
why does he want to take a chance?
Speaker 2 (24:50):
To your point, but I want to go back to it.
Speaker 1 (24:52):
I want to go back to an interesting point that
also I was thinking of today and you just start
my memory on this.
Speaker 2 (24:57):
Who really gives a damn about a quarter percent?
Speaker 3 (25:00):
You've said this before. I know nothing's gonna happen. It's
the act and the trajectory, right right.
Speaker 2 (25:07):
But but it's a trajectory. That's a great word.
Speaker 1 (25:09):
But more importantly, is it really going to impact inflation?
In other words, No, I think he's making the biggest
mistake right now. And I'm gonna go I'm gonna go
patriotic on you. We're paying what is it, one hundred
billion dollars? Is it a month or a year? I
think some stupid hundred billion and interest payments?
Speaker 3 (25:29):
Right, it's a month. No, it's a month. It's like
plus a year.
Speaker 2 (25:33):
Yeah, there you go.
Speaker 1 (25:34):
And like Trump has said, I forget the reduction. Just
just cutting rates a quarter percent? How many billions and
hundreds of billions of dollars it would save?
Speaker 2 (25:43):
But I.
Speaker 4 (25:45):
Only want to I'm going to disagree just because and
you know this, the FED doesn't control long term rates.
Speaker 2 (25:52):
That's my point, so why not just do it? Right?
But I agree, yeah, I mean from that, that's my point.
Speaker 4 (25:59):
Trump's whine about, oh, we're gonna this is costing us,
like that's not true.
Speaker 2 (26:03):
Agree, like it's political is what.
Speaker 3 (26:05):
It does exactly.
Speaker 4 (26:08):
And you know when when Bessent goes down there to
sell now five hundred billion dollars more of treasuries than
we thought we needed to.
Speaker 3 (26:18):
And he says I'm gonna sell the tenure.
Speaker 4 (26:21):
At whatever four percent, the market will say no for
ten or four twenty or who knows.
Speaker 3 (26:28):
Uh. That's how that part is decided.
Speaker 4 (26:30):
Is not like Powell lowers rates in the entire curve
movie exits across the board like he doesn't have that power.
He has the power of overnight. And yes there is
some linkages, but it's it's disingenuous to say he's the
reason that we're you know, we're over pain.
Speaker 2 (26:51):
So the bottom line, yes, yeah, right, So the bottom line.
Speaker 1 (26:53):
I'm getting to is is it truly an ego thing?
Now Trump versus Powell? And hence why Powell is not
being anxious whatsoever to give the street a rate cut,
even though again what we just said it doesn't really
make any difference. It's more psychological. Or is he truly
believe I've got to get closer to two percent? You know,
we're going to get the PCEE numbers tomorrow. Is it
(27:14):
Is it really that important that we get closer to
two percent his mandate or the fence mandate before they
start talking about doing it right now? My gut tells
me I think it's a political thing.
Speaker 2 (27:24):
I really do. I think I think you got two egos.
Speaker 1 (27:27):
And because if Powell would come out today, or would
have come out today, or he comes out in the
September meeting and cuts rates, you know, damn well, what's
going to happen. Everybody's going to go ha, you gave
in to Trump, and you know Trump is going to
take a victory lap, and that's going to upset Pwell
even more so.
Speaker 4 (27:44):
If he can get if he can get inflation to
two percent, right, just yeah, and if your Powell, at
least you can say I did what I said what
I was going to do, regardless of Yeah, there's politics,
but that's sort of the only saving grace he has
(28:04):
now is to just wait and wait and wait until
he gets it or he gets fired.
Speaker 2 (28:09):
Right, but he's not gonna get it though. What two
to eight right around there? Yeah, we'll see what. Yeah,
I mean to get get down to two. It ain't
gonna happen. The economy is too strong. It ain't gonna happen, as.
Speaker 1 (28:20):
The saying goes, And I just I can't wait to
when that cut, if it does happen under under Palaceton,
the victory left that Trump is going to take I
told you. He finally followed by, you know what I
told him should have been done a long time ago.
That that part's just going to be a classic. Real quickly, Jack,
let's go to go cut number one. I wanted everybody
to hear real quickly Chairman Powell's view on where we
sit from an economic standpoint, the condition of the economy.
Speaker 5 (28:43):
Despite elevated uncertainty, the economy is in a solid position.
The unemployment rate remains low, and the labor market is
at or near maximum employment. Inflation has been running somewhat
above our two percent longer run objective.
Speaker 1 (28:57):
Well, I'm not hearing that cut in my ears, so
supporting today the open So why don't we do this
let's go to commercial rate.
Speaker 2 (29:04):
We'll come back.
Speaker 1 (29:04):
Hear that audio cut from mister Powell turned over to
christ and Snow right now traffic center, Kristen.
Speaker 5 (29:09):
Wage growth has continued to moderate, while still outpacing inflation. Overall,
a wide set of indicators suggests that conditions in the
labor market are broadly in balance and consistent with maximum employment.
At today's meeting, the Committee decided to maintain the target
range for the federal funds rate at four and a
quarter to four and a half percent, and to continue
reducing the size of our balance sheet. We will continue
(29:33):
to determine the appropriate stance of monetary policy based on
the incoming data, the evolving outlook, and the balance of risks.
Speaker 2 (29:42):
So that was chairman apology. That's heard talking about the
labor market.
Speaker 1 (29:46):
And once again, one thing that I picked up today Jason,
that I haven't in the past is there was a
lot of emphasis on the labor market being the one
of the key drivers, one of the key denominators to
the FED getting serious about an interest straight cut.
Speaker 2 (30:02):
But that's my point, what I was saying before we
went to the break, labor market is strong.
Speaker 1 (30:09):
It's that's the challenging point, the labor market is very strong,
and if he waits for that is one of the
main ingredients to cut rates. That's what I'm saying. I
think that's why the FED futures dropped so as solo.
As far as the probability today.
Speaker 4 (30:22):
Well, I mean remember from the Beige Book, right, the
last couple of Beage Book releases, most if not all
of the districts were reporting deceleration and hiring, right, And
that's something that the Fed's going to keep an eye on,
you know, like they talked about before, we sort of
play whack.
Speaker 3 (30:39):
A mole and hit the mole that jumps up the highest.
And now that inflation.
Speaker 4 (30:44):
Is trajectory is towards two, they need to start staring
more at the you know, employment situation. And we had
Dennis on Monday. We've talked about Meta and Microsoft, like
the AI disruption of jobs and or potential stagnation in hiring.
Not to say there's a ton of firing, but just
(31:05):
companies holding off not knowing do given all the spend
we're doing, or you know, technology.
Speaker 3 (31:10):
Companies changing their staffing.
Speaker 4 (31:13):
With Microsoft at fifteen thousand jobs, they're probably not hiring
those back anytime soon.
Speaker 3 (31:17):
And then the second round effect.
Speaker 4 (31:19):
Of you know, the companies that utilize the AI create
agents that need less people to do the jobs that
they did before. The Fed's got a whole new problem
right of unemployment. Right, and so that could be part
of the signaling that you know, they're trying to maybe
move the market's eyes from what was an inflation problem
(31:41):
to now maybe more of a reason to cut with
a decelerating employment problem.
Speaker 3 (31:47):
Ultimately, the ADP today, which.
Speaker 4 (31:49):
Has been you know, not the most accurate of numbers,
but ADP was a strong number, and I think that's
partially the reason too why the futures moved like they
did with the.
Speaker 3 (31:58):
FED saying, hey, unemployments accelerted and then ADP was good.
Speaker 4 (32:01):
Yea, So we'll see what the big jobs number is
later and that yeah, you got it.
Speaker 2 (32:09):
Now.
Speaker 1 (32:09):
The other big thing everyone is anxiously waiting for from
Chairman Pal today is the impact of tariffs on inflation.
Speaker 2 (32:16):
Right. It's all boils down to that.
Speaker 1 (32:18):
Let's take a listen to what the Chairman had to
say about inflation, slash tariffs.
Speaker 5 (32:25):
Changes to government policies continue to evolve, and their effects
on the economy remain uncertain. Higher tariffs have begun to
show through more clearly to prices of some goods, but
their overall effects on economic activity and inflation remain to
be seen.
Speaker 2 (32:42):
Now, remember, folks, we have an August first.
Speaker 1 (32:46):
Deadline with many Minnie countries still have not come to
the negotiation table with the Trump administration. Jason, I saw
the list today, and again we don't have time to
go through it. There are still a lot of countries,
like he nailed Indian today on a number of things.
There's still a lot of decent sized economies out there
again that have not come to the negotiating table.
Speaker 2 (33:06):
And take it for what it's worth. Trump came out today.
Speaker 1 (33:09):
I think it was Hammer or Bessent or somebody said,
Oco is letting August first. It's not changing, We're not
we're not waffling. You know, we've heard that. But you
take it for what it's worth. But men, oh man,
if some of these countries do get nail with this
twenty thirty percent tariffs, and obviously the goods that we
import from them, that money is there, that that cost
is going to the consumer, and therefore, you know, we
(33:32):
got to watch that acceleration and consumer spending inflation, so
on and so forth. So it's an important thing there.
Speaker 3 (33:39):
Really is.
Speaker 1 (33:40):
Yeah, So you know overall, the takeaway once again is
very important to understand. No fed cut, no hint. That's
why the street got a little upset today. No hint
that September is going to be on the table again.
The probability is very low at this point, so we
don't have an August meeting. So when's the next cut,
next cut coming? Who knows, you know, it's really up
(34:01):
in the air. So our best advice focus on earnings
and make sure that you know you are well diversifyed.
That's one thing we're seeing with a lot of you
in those portfolio reviews we've been doing. You don't have
a lot of diversification. You got to have it because one
day one sector is hot, next day it's not, and
you got to have that diversified portfolio to take advantage
of it.
Speaker 2 (34:20):
Just have a little bit out there in a lot
of different areas. That was a lot of fun, my friend.
Speaker 1 (34:24):
We could spend three hours talking about pal but we don't,
so tomorrow we will move on to a new topic.
Have a great afternoon, everybody, God blesten, Thanks for listening
to us on the new STOG seven eighty k WITCH.
Speaker 2 (34:33):
This program was sponsored by Sanchez gone To Capital Management LLC.
Speaker 1 (34:37):
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
John at Sanchezgaune dot com or seven seven five eight
hundred and one eighth one. John Sanchez offers securities and
(35:00):
advisory services through Independent Financial Group LLC, a registered broker
Dealer and Investment Advisor member FINRA SIPC.
Speaker 2 (35:08):
Securities offered only in States.
Speaker 1 (35:10):
John Sanchez is registered in Sanchez Gaunt Capital Management LLC.
In Independent Financial Group LLC are unaffiliated entities.
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