August 13, 2025 • 34 mins
Despite all-time highs across the S&P 500 and Nasdaq — and markets betting on Federal Reserve rate cuts — the truth beneath the surface isn’t all sunshine. Today on The Jon Sanchez Show at 3pm, we’ll expose the cracks in the calm-looking market, uncover the risks lurking behind record numbers, and point you to the real opportunities.
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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 on News Talk seven eighty k wait. It's a
pole leasure to be with you, in a pole leasure
to be with my co host, mister Jason Gunt. It's Wednesday.
There's the bright spot. It's Wednesday.
Speaker 2 (00:16):
Last is half full? Yes, very full?
Speaker 1 (00:18):
Yes? Absolutely? How are you by, friend?
Speaker 2 (00:21):
I'm doing okay.
Speaker 3 (00:22):
You know, this market continues to climb the wall of worry,
and uh, I'm happily watching it happen.
Speaker 1 (00:29):
So it's amazing. It is amazing, right you you you
just sit here like you tell the clients. I tell
the clients, we tell the audience. It's amazing. You get
really nervous when this keeps happening. It's like he's too good,
too good to be true. Situation like really another record closed,
Really another almost five hundred point game on the down.
(00:50):
Ooh man, old man. But yeah, you know the old
surfing analogy. We're gonna ride the way while we can.
Speaker 3 (00:55):
But they're picking up, you know, they're picking up some
of the laggers. Right, Russell two thousand was hired by
two percent. Say whether that's short covering, and that's part
of what we're seeing across the market where you know,
those who were sitting on the sidelines are being forced
off of it.
Speaker 2 (01:11):
Right. You always hear those.
Speaker 3 (01:12):
Comments about managers and you know, firms alike that missed
the rally.
Speaker 2 (01:18):
I don't know who those people are, but they.
Speaker 3 (01:20):
Did, and you know now they're forced to get back
in and they're sort of chasing things. And that's usually
where you see small caps outperform or high beta outperform.
I think you're also seeing a market that's pricing in
rate cuts, right, you know that, right. We're always trying
(01:40):
to tell folks that it's a discount mechanism, right, And
so with the ten year now at four point two three,
where we were all worried about it going to five
point two three, uh, you know, the market is now
taking those rate cuts into account and saying, well, if
this happens and we get three rate cuts, and Bessin
was out talking about we may get two rate cuts
(02:01):
at the next meeting.
Speaker 2 (02:02):
I say no, but I was thrown around markets.
Speaker 3 (02:06):
The market's pricing it in, and that's why you see
banks picking up, You see financials broadly, you see small
caps just the areas of the market that will benefit
from lower interest rates.
Speaker 1 (02:18):
Absolutely, Yeah, it was a phenomenal day, folks. Of course,
we're going to give you all the details as to
what happened where these markets closed at. And this is
really what Jason's describing really ties in perfectly with our topic.
And we've titled today's show that we'll get to here
after the market recap of the day, calling it cracks
in the calm looking market. Now, that sounds kind of,
I don't know, kind of aggressive. It's like, oh, man,
(02:39):
are these guys going negative on us? And we're not.
I want to just tell you that right from the beginning,
we're not going negative by any stretch of the imagination.
But as we always like to say, when we have
to kind of, you know, bring everybody down to down
to reality, our job is to not be getting get
excited and get emotional about record closes and things like that,
but to always be looking like the market does ford looking,
(03:00):
looking to see what is really going on in the horizon,
what's going on in the underneath the surface of the market.
So again, today all time high for the S and
P five hundred today, an all time high for the
Nasdaq markets. Of course, as Jason has said, they're betting
on a Fed interest straight cut next month. They're counting
on another one. I mean almost one hundred percent probability
right now, Jason, almost one hundred percent probability of this
(03:23):
of the September rate cut as of yesterday. I didn't
see the numbers today, but yesterday was I think sixty
two or sixty three percent probability of an October rate cut.
And then now again after that CPI number yesterday, and
we'll see how things look tomorrow with PPI the wholesale
level of inflation. But as of yesterday, there was a
little over a forty percent probability, as you just said,
(03:45):
of that simber rate cut. And you know, Russ Mitchell,
this morning, when I was doing the stock up date,
I brought this point up, and I think it's a
really valid point to share with everybody. And that point
is this. He goes, do you want some We're saying
this morning, do you want a half a percent cut
at the September meeting? And I said, no, we do
not want half a percent cut, And he goes, well,
(04:05):
why because you know everybody's like, oh, but that'd be great. No,
it's not because you don't want the FED to jump
right into the swimming pool, you know, fully closed, right,
you want them to dip their toes in check the water,
Meaning give us a quarter percent cut, that would be phenomenal.
Give us another quarter percent cut when when October rolls around,
(04:26):
that would be phenomenal. But to give us a half
a percent, then the street's going to go, uh oh,
here's the problem. Uh oh, what's the problem lurking on
the horizon? Right, Jay? Yeah, the problem? What's the FED
seen in their crystal ball that the rest of us
aren't to go all the way in with a half
a percent cut?
Speaker 3 (04:46):
It would also signal probably the part that makes market
watchers angsty is that Trump is pressing things forward at
this clip. That is more of a president leading the
FED versus the FED leading the economy. And that would
be the thing that would spook me a bit. Right,
(05:07):
we're seeing I think it's up to eleven people now
that Trump potentially is looking to tap for a FED boss.
Zervos was thrown out today. That would be an interesting one.
Speaker 2 (05:20):
Reader.
Speaker 3 (05:21):
Yeah, if I'm Rick reader, I would use both middle fingers,
given how much money that guy makes a black rock
and be like, I'm good you can have that, right,
I borrow a middle finger from someone else as well.
Speaker 2 (05:37):
But yeah, I mean it's it. Uh.
Speaker 3 (05:39):
I think it probably is the the Wallers or someone
along those lines, But you're that would be the thing.
Speaker 2 (05:45):
I completely agree. Slow and steady.
Speaker 3 (05:48):
This is not a This is not an economy where,
oh my gosh, we need to really cut rates fast
because everything is going into the toilet. SMP at all
time highs, unemployment low four handle.
Speaker 2 (05:58):
Uh.
Speaker 3 (05:58):
You know, you're starting to see things accelerate, but they're
hardly in crash territory, and we need to do something traumatic.
Speaker 1 (06:06):
Absolutely. So back to the title of today's show. So
what we're gonna do is we're gonna kind of we're
gonna be like the inspector, the Foundation inspector. We're gonna
go in. We're gonna expose some of the cracks in
this what we call calm looking market. We're going to
uncover some of the risks that are lurking behind these
record numbers again day after day after day, and then
(06:27):
kind of point out again some opportunities that we see.
So I just want to be real clear, we are
not going negative on this market. We're not going to
embarrass on this market, but there are some things again,
and that's what our clients pay us to do, is
to be looking out into the horizon and start saying, Okay,
you know what can go wrong here? Right, That's what
any good portfolio manager does. They're always looking and looking
(06:47):
into the horizon and saying, all right, things are good today.
But again, one more time to emphasize, the market is
a forward looking indicator. So don't get so excited about
what's today. What's the market thinking for the next month,
two months, six months, so on and so forth. And
that's some of the things that we're going to talk about.
So again, some of the positives, some of the concerns.
Speaker 2 (07:04):
That we have.
Speaker 1 (07:05):
That's what we're going to do on today's show. So
listen closely. If you're kind of all giddy about this market, going,
oh my god, it's just going to continue to go.
I'm seeing you know, not to get out of the
gate with a negative, but I know you are too.
We're seeing some some i'll just call them shots across
the bow comments by a few Wall Street strategists and
(07:26):
so on and so forth that September could be a
nasty month, right, Yeah, I mean your favorites analysts at
bt I G today is that you know, historically, when
the small caps start running like this and on and
on and on, you know, we could we could have
some problems in the horizon.
Speaker 2 (07:41):
So yeah, it you know it does seasonally.
Speaker 3 (07:45):
August September tend to be week times of the year,
and you've already got a September that started out pretty well,
so yeah, it could lead itself to some weakness in
September October. Right, nothing goes up forever, and I think
that's the thing to be thinking of. You know, I've
mentioned this many many times over the five or so
years I've done the show. Is you know, use yourself
(08:06):
as a barometer, right, if you feel really giddy and
excited and like, wow, this is amazing, it oftentimes tends
to be pretty close to where markets start to act weak,
and same vice versa. When you're like thinking that the
sky's already fallen and oh my gosh, this is the
end of days, right, that's usually when things start to bottom. So,
you know, a pullback of three to five percent standard
(08:30):
it wouldn't surprise me in the least bit.
Speaker 1 (08:31):
So. But but you did not tell the audience when
you said, when you kind of get that feeling and
use yourself as a barometer, you did not give the
audience what you truly call the Jason got feeling.
Speaker 2 (08:42):
Oh, the spidy senses, the spicy right, yeah.
Speaker 1 (08:48):
My sign something thinking this.
Speaker 3 (08:55):
And sometimes the two of us disagree and we do
nothing and exactly think of a partnership.
Speaker 1 (09:01):
That's right, absolutely, absolutely, I'd say for the most part,
we always agree.
Speaker 2 (09:05):
Yeah, we do.
Speaker 1 (09:06):
Definitely we agree.
Speaker 3 (09:08):
Yeah, right, exactly, we agree until we don't.
Speaker 1 (09:11):
Until we don't. Perfect exactly, I always want to agree.
All right, let's go into today's market recap before we
get to break. Let's let's drill down into it.
Speaker 3 (09:20):
Yeah, I mean, you know, the sort of lack of
real data today. We had CPI yesterday, decent follow through
rates lower, which clearly helped.
Speaker 2 (09:29):
You know tomorrow we will get PPI again.
Speaker 3 (09:33):
Touched on the highlights Scott Bessant making comments of even
a fifty basis point cut being something that he would
think is a possibility, even though remember he's just Treasury,
he's not the Fed.
Speaker 2 (09:45):
He did add some comments from some.
Speaker 3 (09:46):
Non voting members that seem more balanced as far as
their view that inflation. Remember parts of CPI that we
saw yesterday were somewhat inflationary. They were not coming down. Yep,
you're over your side. So you know, today was a
little more excitement in the early part of the session,
(10:07):
died out later, Communication services, tech, both read on the day,
you had a bit of a rotation into healthcare, discretionary materials,
some of the lagging areas of the market. So it
feels more to me like folks picking out places to
maybe dip their toes that have really underperformed, like healthcare.
I mean, it seems like the most broken record of
(10:28):
whole time, where people keep saying by healthcare, by healthcare,
and it keeps going down, but at some point it won't.
Speaker 2 (10:35):
You saw the likes of UNH and.
Speaker 3 (10:36):
Lily up over three percent today, So yeah, those could
they could have some a little bit of rotation strength,
especially if you see weakness in tech and calm services
over the next couple of sessions.
Speaker 2 (10:49):
But quiet overall.
Speaker 1 (10:51):
And final point, I want to mention back to your
comment about Scott Assent, the Treasury Secretary, on this interview
that you're referring to on Bloomberg TV. He actually said
he actually said, I'm looking at the quotes right now.
He actually said that the FED funds rate again, folks,
that's the rate that banks charge one another when we
talk about rates, should ultimately ultimately be reduced by at
(11:11):
least one hundred and fifty basis points, so one and
a half percent reduction from where we are here. So
you know, could that that'd be what six quarter percent
cuts or some version thereof. So they want them a
lot lower than where they are. Maybe maybe they're going
to go back and try to shoot for that two
percent mortgage again, wouldn't.
Speaker 2 (11:29):
Sing, I hope not. It's going to be really bad.
Speaker 3 (11:32):
I don't think the Fed is going to be a
massive buyer of mbs.
Speaker 1 (11:35):
I don't think so. I don't think so. It's fun
to talk about it, though. All Right, we're gonna get
an early start when we come back. We'll touch on
the commodity side of things, and then get to our topic.
Crucks in the calm looking market. What are they? Well,
put together a list of about nine of them. We'll
tackle that when we come back, but first let us
turn it over to the wonderful Christen's note she is
in the right now traffic center. Hello, Kristen, Welcome back
(12:00):
to the John Sanchez Show on News Talk seven eighty
k Ohich with Jason gott all right, once again we
had a record setting day again. Will you take it?
We'll take it. We'll take it on the Nazak in
the SMB the now. Nothing just needs at four hundred
and sixty four point gain one point zero four percent
to close up forty four thy nine to twenty two
nazakro is thirty one to finish at twenty one thousand,
seven thirteen and a twenty one point gain er point
(12:21):
three two percent on the s and P five hundred
to finish at six thousand, four hundred and sixty seven.
Oil price is relatively calm, about a fifty five cent
loss to sixty two sixty two a barrel nine dollars
and thirty cent rise in gold three thousand and four
oh eight twenty. As Jason and I were just chatting
off air man, what a big move in the bond
market today, right across all the various maturities, ever so
(12:41):
important tenure down six basis points on that yield of
four point twenty four percent. You know, give me a secondary.
I want to see, do we get any bump in
the mortgage rate? It's just curious about that. Yeah, by
pretty nice move down five basis points six to fifty
three on the thirty. So I'm sure Dwight's smiling today.
Sure he likes that. Yeah, all right, let's hit real quick, Jay.
(13:02):
Some movers after ours, specifically Cisco, they reported after the
close today, and here's the numbers. Ninety nine cents of
shares what they reported. Estimates were ninety eight cents rev.
Fourteen point six to seven billion, estimates fourteen point six
two billion. So you know, a little bit of a
beaten you know, like you and I were saying off air,
this stock moving just a little bit in the in
(13:24):
the after hours. Nothing too major, down about a buck
twenty six or.
Speaker 2 (13:27):
So, right now, Yeah, nice com day.
Speaker 3 (13:30):
I mean, definitely their guidance was better than the street expected,
so I think that's enough to at least keep the
story going for some time. For Cisco, they're clearly going
to be very data center focused and AI beneficiary longer term.
Speaker 1 (13:45):
So absolutely, absolutely, all right, very good. A little trouble
on a Oracle today, nine dollars and forty one cent loss,
including some after hours movement.
Speaker 3 (13:54):
Yeah, I mean, Oracle, you know a lot of those names.
Software names have been under pressure quite a bit. Oracles
actually outperformed to the space but you know, things up
fifty plus percent this year, so not surprised to see
a little bit of weakness in Oracle today. Again with
other software names, Microsoft is down one point six percent,
So I would say it's more space relative than specific
(14:16):
to Oracle.
Speaker 4 (14:17):
You know, talking out of space, right, I may be,
I love it, I love it, giddy today it's Wednesday,
all right, let's get down to our topic today.
Speaker 1 (14:28):
Cracks in the calm looking market. Right, the old analogy,
I think you use it a lodg jas. I'll give
you the credit. You know, the ducks on the you'll
swimming across the pond and things look nice and calm,
but you look underneath and the feet are moving really
really fast. And that's kind of what we're talking about today, right,
the cracks in the calm looking market. So what are
some of the things that are going on, Just to
kind of give everybody an overview what once again, our
(14:49):
job is to look into the future, not what happened
today or tomorrow, but months, and you know, I'd like
to say years, but that's that's not true. We can
predict that that far who's as they can always gets
me when you get the the world you know IMF
and some of the big you know, world organizations. Well
we predicting two years the GDP. Right, yeah, all right,
(15:15):
so our nine talking points. Let's get down at number one,
the record market quiet anxiety. So it seems like again
if you turn on our show, you turn on the
stock up dates, you check your favorite website, you check
your brokerage accounts, et cetera, you're going, oh my gosh,
another record close, another record close. So Jason, let's kind
of give the pros and cons of a record close.
(15:37):
You you go the pros, I'll go the con side
of things.
Speaker 3 (15:40):
I mean, from a technical standpoint, it's a pretty darn
good hit rate over you know, three and five years
buying all time.
Speaker 2 (15:49):
Eyes on the market, Uh, you know you've got a
spot now.
Speaker 1 (15:53):
Contrary to human nature.
Speaker 3 (15:54):
I know it seems odd, but you know, objects in
motion tend to stay in motion unless act upon by
an outside force.
Speaker 2 (16:01):
Right, the you.
Speaker 3 (16:02):
Know, the market is richly valued. I don't think it's
not eight valued in terms of multiples, but I think
you know, or two thousand rather valued in terms of multiples.
But you've got a lot of positive priced in, right,
You've got a lot of the benefits of technology and
(16:23):
new things that are very shiny and exciting through AI
and big data machine learning that have created the biggest
part of the market, even before we talked about AI
was the biggest beneficiary of it. Right, So the metas
and microsofts and in videos, et cetera help power things higher.
(16:47):
But sixty four hundred and sixty five hundred on the
S and P is not nosebleed levels in terms of valuation.
Certainly from a forward looking standpoint, earnings were good. Market
by large is you know, in a pretty comfortable spot
of valuations overseas or even lower than the US, and
you've seen international markets benefit quite a bit. So a
(17:10):
diversified portfolio has done quite well this year, unlike yours past.
Speaker 2 (17:15):
Yeah, absolutely, we're.
Speaker 1 (17:16):
Still we're going to get to We're still somewhat concentrated.
Speaker 2 (17:19):
Though sure, Yeah, I mean, certainly investors.
Speaker 1 (17:21):
About the MAG seven world, but yeah a little bit.
Speaker 3 (17:24):
Yeah, you finally can uh spread your wings a little
bit and make money outside of the MAG seven is.
You know, people have done quite well of picking up
some of the newer companies that are out there, you know.
Speaker 1 (17:36):
The I had a joke. I had a joke with
the Ross this morning on was my six twenty three report,
you know, the pre market movers and shakers. I said,
I'm going to apologize because you're probably not going to
recognize about ninety percent of the names that I'm going
to tell you that are moving really big, either up
or down in the market session. And that's what's happening.
It's like you don't hear a lot about you know,
the major names a little bit in the tech, but
(17:57):
you really don't hear a lot about the major names.
But it's all of these young companies that and I
say young, you know, they've been around a while, but
they're not household names yet. But my god, some of
them just you know, getting massive moves. I mean, how
many of you know of Kava Group?
Speaker 3 (18:12):
I do?
Speaker 2 (18:12):
I own it. Yeah, it's fun on the way.
Speaker 1 (18:15):
Up, yeah, the way up, but not today.
Speaker 2 (18:17):
And I still like the name longer term. I mean again, like.
Speaker 3 (18:20):
Any Mediterranean yep, so like you're trying sort of like
the Chipotle or Mediterranean food. Yeah, but I mean I
thing been a monster. Yeah, down sixteen percent today, but
there's a lot of newer names that you know have
been monsters this.
Speaker 1 (18:37):
Year V to X today on my list of ten
and a quarter percent couldn't tell you've never heard of them.
I mean, you just go on and on and on,
and that's that's that's that's the fun part, right, that's
the fun part. So real quickly, let me kind of
give you so those those are the pros of the
record markets and you know, fairly quiet anxieties side of it.
Real quickly, here's the cons. As we said at the
beginning of the show, this is when people get nervous.
(18:59):
This one portfolio get nervous because you get to a
point where it is priced for perfection. It's almost like
you go to your favorite restaurant and you know the
chef and you know every time you sit down that
steak is this going to be cooked absolutely perfect? And
all of a sudden you come in one day and
the chef's not there, and it's like, oh man, this
wasn't good. I expected I expected it to be perfect.
And that's what we're right now. We're almost priced for perfection.
(19:20):
We got Trump behind this market, and this cabinet behind
this market, and the big beautiful tax bill and AI
and you know, future interest rate cuts and all of
these positives. But that doesn't mean again that we just
can't wake up one day and everyone goes, hey, you
know what's take a little bit of profit and before
you know it, you're down, you know, five percent loss.
That is very common. That is very very common. So
that's the negative, and that's what makes us nervous. When
(19:42):
we just set record high after record high, it's like, oh,
there's nothing wrong out there, and there is always something wrong.
There's always there's always a bear out there lurking, and
you just don't want it to be one of these
these massive hedge funds that you are really good and go, hey,
you know what, today we're gonna pull the rug out
from everybody and you know, dump our positions or whatever
they may do to drive things down. So that's his said.
You know, like I said, record markets are beautiful. I
(20:04):
love the comment Jason made, but doesn't mean again, do
not do not.
Speaker 3 (20:08):
Do bulls, bears and pigs, right, bulls, pigs get slaughtered exactly.
Speaker 1 (20:14):
All right, We're gonna come back to point number two
in our topic, crucks in the calm looking market. Let's
first turn it over to Jack Sabe and he's got news,
traffic and weather. Hey Jack showing news dogs seven eighty
k ways. You know you gotta love kids, Jason Financial Planning.
(20:37):
At Financial Planning, you want to you want to break
the myth of what we just what we just learned
from from one of my children. You'd think, after you know,
being the daughter of a broker for thirty six years,
they would understand the basic estate planning bulls. So we
should just verbally mention this that you don't have to
(20:58):
sign anything to inherit money. Right, So it's in the
trust that this person, this child's going to get this
amount of money or assets or something. But that person
receiving it doesn't have to sign anything. They just get
to back and they enjoy the fruits of their dad's labor.
Speaker 4 (21:14):
Wow.
Speaker 1 (21:14):
Yeah, and they they can.
Speaker 2 (21:17):
Turn them down. You can say no thank you.
Speaker 1 (21:19):
Right right. You can say no thank you and donate
it to your other siblings. You can do that. But
there's nothing to sign.
Speaker 2 (21:26):
Because it's not binding until they're dead, right exactly.
Speaker 1 (21:29):
It can be changed.
Speaker 2 (21:30):
They can change it.
Speaker 1 (21:32):
That's called the revocable trust. I believe yes, yes, yes, right.
Speaker 2 (21:35):
Or iras you can call us.
Speaker 3 (21:38):
Jason, I do believe it is, yes, exactly, I have
not seen it, but I believe it.
Speaker 5 (21:43):
Probably it is, and I guarantee I know it is.
All right, we're just giving a child a hard time,
a wonderful producer. All right, we're talking about once again
the cracks in the calm looking marketing.
Speaker 1 (21:58):
If you just joined us, it was a good session
for sixty four gain on the Dow, of thirty one
on the NASDAK, twenty one point gain on the SMP
the two aforementioned where a record finish is there. But again,
we got to be looking out into the future. What
are we looking at some of the pros and the
cons of what we see as far as market signals,
et cetera at this point. So first point, we got
to record markets, quiet anxiety. All right, let's go to
our second point. The VIX, the volatility index, you know,
(22:21):
fourteen point four nine, Jason, this is what pretty close,
if not right at the year low on this let's
talk about what the VIX is showing us.
Speaker 3 (22:30):
So fourteen point five sixteen divide implies a point nine
percent standard deviation around the market, So you know, really
the market makers the folks that are out there pricing
risk think that an average move is plus minus point
nine percent for the S and P five hundred, so
(22:52):
it is less than what is we'll call normal, which
is sixteen. So uh, you know, some people say you
sell the VI twelve and you buy it above twenty four.
Just some trading jargon which means you're, you know, selling
the calm and buying the fear.
Speaker 2 (23:09):
But we're you know, we're not at.
Speaker 3 (23:12):
Low, low, low complacency, nobody's paying attention levels, but certainly
seeing things slowly, slowly move in that direction.
Speaker 1 (23:20):
And again I think we're at our very close Yeah,
correctly the low of the year. So that's a good thing.
So they're not expecting a lot of volatility. But on
this flip side, you know, again, the VIX is just
one piece of the puzzle, isn't It's not the end
all indicator. But you know, let's just round it up.
A one percent move up or down on the S
and P. Yeah, I'd be thrilled with that, considering where
we are a year to date and so and so forth.
(23:41):
But yeah, that's that's a good number right there. That's
a very good Yeah, it really is handle all right,
it's going to our third point, rate cut hopes versus
underlying reality as well as we started the show with today,
a lot of things have changed in the last two
trading sessions. Once again, yesterday, as we said last night
on the show, or yesterday afternoon, at a very benign CPI,
i'mb up two tenths seven percent month over month, The
(24:02):
year over year was up two point seven. Expectation was
about two point eight, so we came in a little
bit better there. Tomorrow will be the wholesale side with PPI.
But now that we had those or had that one
benign CPI report and maybe tomorrow is going to be
the same, then of course the street started pricing in
the aggressiveness of the FED that once again I did look,
(24:24):
did find at the break there that we now have
a ninety seven point nine percent probability of a September cut,
so pretty much the same as yesterday. And I'm sure
the second probability of an October cut still north of
sixty and maybe a third cut north of forty. Those
were the numbers from yesterday and the latter two. But
you know, rate cuts versus underlined realities once again, folks,
(24:46):
you know, Jason, I think this is a really good
listen to kind of go over with everybody. I've said
this about four times today. I got to say it
one more time. The market is a forward looking indicator.
The street is already beginning, if not already there, pricing
in at least the September for a rate cut. People
always go, wait a minute, we just got the rate cut.
The market didn't rally today. No, A lot of times
the market will actually go down on the day of
(25:07):
a rate cut. Why sure, because it's already priced it in.
So don't If you're sitting on cash right now, you know,
I'm sorry, But if you are, you probably want to
be really careful getting into this market at this level.
If you think you're going in because the Fed's going
to cut rates, we all think that they're going to
The data is showing it, probability is showing it. But
don't commit a lot lot of capital at this point
(25:29):
just on the hopes that the Fed's going to cut
rates and this market's going to skyrocket because the market's
already priced it in.
Speaker 2 (25:35):
I completely agree.
Speaker 3 (25:36):
Yeah, No, I mean, if you're investing for two to
three years, sure, I think it's a great spot. If
you're investing for two to three months, you'll probably get
a chance to buy it lower. But yeah, the market, right,
like you said, a ninety eight percent probability priced in
safe to say that that is very much in the
(25:57):
s and P five hundred at these levels.
Speaker 1 (25:59):
You bet it's not a secret out there. Okay, So
we got rate hopes versus underlying realities. Let's go to
number four, the concentration risk. We also touch on this briefly.
We're not in a market Jason, where like last year
and even the years before where you were penalized as
far as performance, if you had a diversified portfolio, it
was all concentration risks. The MAG seven, right, No one's
(26:20):
talking MAG seven now because all of a sudden, we
have all of these AI names, like I said earlier,
that are coming around. You got a lot of things.
You still have the big ones going, but there's a
lot of other areas of technology that are making money.
So you know, if you are loaded up in technology,
you probably have done pretty well. But hopefully you're a
big boy or girl. And you know, if I'm loaded
up in any certain sector, I've got concentration risk. You know,
(26:42):
which is fine as long as you understand that risk
that is associated with that, So just be careful. That
is the market. It's almost like a funnel if it
starts to really narrow in, you know, purely on tech
or purely on whatever you want to pick. As far
as the sector, that's always a really really really really
risky time period because all it takes is a little
slip of that that sector where everyone's got all their
money into. Again text the most common, and then again
(27:04):
you can find yourself in a market correction.
Speaker 3 (27:06):
Real yeah, I mean you probably find names if you've
held them throughout the year, that are up two hundred
three hundred percent. You know, you can, you know, trim
you sell a third and either park it in cash
or put it in some of the names that you
still want to own that have been lagging.
Speaker 2 (27:21):
It's just you know, take a little bit of the
froth off the top.
Speaker 3 (27:24):
It will help you feel better and you know, maybe
get you allocated into some areas that have not worked
so long.
Speaker 1 (27:31):
That's right, all right, Just go to number five. The
makeshift price stability is we're calling it. Well, part of that,
of course, the cpis we've said a numerous times tonight,
the CPI came in really well, fueling the optimism. Hence
why we're up over five hundred yesterday, up almost five
hundred on the dow to day. But here's something else
that we've got to be obviously cognizant about. We're all
worried about this from a personal as well as a
(27:52):
business standpoint, and that of course is tariffs. Right, he
kicked the cant. Trump kicked the can down the road
again for another night. Days on China, so we don't
have to worry about that. But you know, uh, the
analogy we keep saying, these tariffs are becoming a very
I saw one article this morning, I forget who wrote it, saying,
look at Trump is bringing in so much money on
tariffs right now, Jason, it actually is now starting to
(28:14):
get to the point where it could have a positive impact,
meaning lowering the the uh, the nation's debt. Right. There's
that much money coming in at this point, and really
the terms had just started, and so you know, that's
going to be a like I said, that's gonna be
a hard drug to pull out of the arm at
some point. But you know, like I said, we still
have China to worry about. And a few others. And
(28:36):
let's not forget we're gonna throw into this, uh price
stability issue. You've got the president meeting with Vladimir Putin
this Friday on two days in Alaska, and you know
he's indicated on again, off again. Then you know he's
he wants the trade deal done. Zelenski, from what I
read today, is not going to be there. So he
(28:57):
wants to reach a deal with Putin and then brings
the lit skiing and that's gonna be the interesting point.
So I don't know. I think you and I were
mentioned this on the show on Monday. I don't know
if we see much of a market reaction either direction.
I mean, if a deal is struck or if it's not.
There's no one.
Speaker 2 (29:13):
Who's seen maybe energy reaction of something.
Speaker 1 (29:16):
Maybe some commodities a little bit, but for ex equity market, really, I.
Speaker 3 (29:19):
Don't think you're going to be able to be buying
any Russian stocks anytime. Some of the ones that is
zeroed in your portfolio will have a value again.
Speaker 1 (29:26):
But right, we'll see, yeah, you got it, all right.
We'll wrap up a point in six through nine in
our topic once again, which is the cracks in the
calm looking market. Let's wrap it up speaking of which
cracks in the highways now, No, no, not at all,
Christ and Stone, nice and smooth into that highways. Right,
(29:51):
Welcome back to the John Sanchez Show on Newstalk seven
to eighty k, which with Jason, Jason and I and
our team can be of service to you. Please don't
hesitate to reach out to us in our office seven
five eight hundre at eighteen oh one or online at
Sanchez Gaunt gaun T dot com. All right, once again,
a great session for sixty four gain on the Dow,
thirty one on the NASA, twenty one point rise on
the S and P. But we're just you know, doing
(30:11):
as we do and kind of saying, all right, what
could be some cracks that are out there in this
very nice and call market. Let's recap what we touched
on so far, record markets quite anxiety number one. Number two,
the volatility index what we call the VICS at a
year low. Number three, the rate cut hopes versus the
underlying realities. Number four. We wrapped up with concentration risk.
Now let's go into oh. Number five. We touched on
(30:33):
the price stability with via the CPI as well as
the tariffs. Now let's go to number six, macroeconomic fault line.
So I love this one Jason Week. Labor data yep,
cooling earnings outside of top sectors like AI and tech YEP.
Tariff pressures are still what we like to call a
stealth risk. No one really knows. I just love how
(30:54):
these economists are going back and forth. Oh, teriffs are
inflation ar Oh, tariffs are not. You know they may be.
I mean, no one knows. No one knows. I just
as I've said a million time, I'm not going to
waste time on it. I do not see in my
mind how tariffs cannot be inflationary because it's going to
cost everybody more money. That's that's just the bottom line.
(31:15):
But you know, labor data, I think probably the biggest point.
I'm more concerned. I think I'm more concerned right now.
I don't know about you about the labor data cooling
a bit than I am, even of the tariffs at
this point.
Speaker 3 (31:27):
Yeah, I would agree, Yeah, I think the labor data
are going to be the reaction function of tariffs right
where costs are too high, they need to cut costs.
You know, companies love to have excuses to lay off work.
So AI plus tariff could equal lower labor force over
the next two to three years. But you know, it's
just a matter of how quick the adoption is and
(31:47):
so on and so forth.
Speaker 1 (31:48):
Absolutely, our number seven point earning season reality check Again,
so far we've had really good results. We're getting towards
that end of the earning season. Obviously the tech giants
have done well some of the areas you know, like
today we're touching on conv in the restaurant sector, and
every once in a while you'll get some names, you know,
on a certain sector that just doesn't quite hit it
and it'll bring the whole sector down. So once again,
(32:10):
back to the point, this is why you have a
diversified portfolio. You're gonna. Earning season is always a great
test to see how your portfolio works in a market.
Right if if you're always gonna have some companies that
report better than expected, some that going to report worse,
but had your portfolio hold up, So it's a good
time to do a little earning season reality check. There,
(32:31):
let's talk about the global markets. Jay, we don't get
a chance on this show because we're so tight on time.
Every day to really go overseas, but kind of bring
everybody up to data on what we're concerned and watching
over there.
Speaker 3 (32:39):
Yeah, I mean international markets have been very, very strong, right.
We've talked about the dollar changes, the dollar moves that
have benefited non dollar markets, right, I mean, so I
think that's going to continue to be the case for
some time, and just valuation wise, globe markets, emerging markets,
(33:01):
so on, and so forth. I mean, looking at some
of the areas, you know, I mean Italy's up forty percent,
Germany up thirty five percent, UK up twenty five, France
up twenty three, Switzerland up twenty. I mean, you know
you've seen strength across broad Europe. But I mean Japan
up nineteen percent even last ham, looking at Chile, Brazil,
(33:22):
Canada all up over twenty percent.
Speaker 1 (33:24):
So and they're they're paying big tariffs.
Speaker 2 (33:26):
Yeah, well we're paying big tariffs. They're just I wish,
I wish that's a bit tariffs market.
Speaker 1 (33:33):
Yeah, very their markets should be affected because of the
two yes.
Speaker 2 (33:37):
Yes, yes, yes, yes, but no, it's it is.
Speaker 3 (33:41):
It's been a year of reversion and so, like we've said,
the reason you diversify is because you never know when
this is going to happen.
Speaker 1 (33:48):
Uh, you never get absolutely all right, gobles, everybody have
a great afternoon. We'll see tomorrow on The John Sanchez
Show News Tuck seven to eighty kachan as Gaunt Capital Management, LLC.
The material in this program was intended as general information
only and should not be taken as specific, investment, tax
(34:08):
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 Sanchez Gaunt dot com or seven seventy five
eight hundred one eight oh one. John Sanchez offers securities
and advisory services through Independent Financial Group LLC, a registered broker,
(34:30):
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 unaffiliated entities.
Good Wednesday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k wait. It's a
pole leasure to be with you, in a pole leasure
to be with my co host, mister Jason Gunt. It's Wednesday.
There's the bright spot. It's Wednesday.
Speaker 2 (00:16):
Last is half full? Yes, very full?
Speaker 1 (00:18):
Yes? Absolutely? How are you by, friend?
Speaker 2 (00:21):
I'm doing okay.
Speaker 3 (00:22):
You know, this market continues to climb the wall of worry,
and uh, I'm happily watching it happen.
Speaker 1 (00:29):
So it's amazing. It is amazing, right you you you
just sit here like you tell the clients. I tell
the clients, we tell the audience. It's amazing. You get
really nervous when this keeps happening. It's like he's too good,
too good to be true. Situation like really another record closed,
Really another almost five hundred point game on the down.
(00:50):
Ooh man, old man. But yeah, you know the old
surfing analogy. We're gonna ride the way while we can.
Speaker 3 (00:55):
But they're picking up, you know, they're picking up some
of the laggers. Right, Russell two thousand was hired by
two percent. Say whether that's short covering, and that's part
of what we're seeing across the market where you know,
those who were sitting on the sidelines are being forced
off of it.
Speaker 2 (01:11):
Right. You always hear those.
Speaker 3 (01:12):
Comments about managers and you know, firms alike that missed
the rally.
Speaker 2 (01:18):
I don't know who those people are, but they.
Speaker 3 (01:20):
Did, and you know now they're forced to get back
in and they're sort of chasing things. And that's usually
where you see small caps outperform or high beta outperform.
I think you're also seeing a market that's pricing in
rate cuts, right, you know that, right. We're always trying
(01:40):
to tell folks that it's a discount mechanism, right, And
so with the ten year now at four point two three,
where we were all worried about it going to five
point two three, uh, you know, the market is now
taking those rate cuts into account and saying, well, if
this happens and we get three rate cuts, and Bessin
was out talking about we may get two rate cuts
(02:01):
at the next meeting.
Speaker 2 (02:02):
I say no, but I was thrown around markets.
Speaker 3 (02:06):
The market's pricing it in, and that's why you see
banks picking up, You see financials broadly, you see small
caps just the areas of the market that will benefit
from lower interest rates.
Speaker 1 (02:18):
Absolutely, Yeah, it was a phenomenal day, folks. Of course,
we're going to give you all the details as to
what happened where these markets closed at. And this is
really what Jason's describing really ties in perfectly with our topic.
And we've titled today's show that we'll get to here
after the market recap of the day, calling it cracks
in the calm looking market. Now, that sounds kind of,
I don't know, kind of aggressive. It's like, oh, man,
(02:39):
are these guys going negative on us? And we're not.
I want to just tell you that right from the beginning,
we're not going negative by any stretch of the imagination.
But as we always like to say, when we have
to kind of, you know, bring everybody down to down
to reality, our job is to not be getting get
excited and get emotional about record closes and things like that,
but to always be looking like the market does ford looking,
(03:00):
looking to see what is really going on in the horizon,
what's going on in the underneath the surface of the market.
So again, today all time high for the S and
P five hundred today, an all time high for the
Nasdaq markets. Of course, as Jason has said, they're betting
on a Fed interest straight cut next month. They're counting
on another one. I mean almost one hundred percent probability
right now, Jason, almost one hundred percent probability of this
(03:23):
of the September rate cut as of yesterday. I didn't
see the numbers today, but yesterday was I think sixty
two or sixty three percent probability of an October rate cut.
And then now again after that CPI number yesterday, and
we'll see how things look tomorrow with PPI the wholesale
level of inflation. But as of yesterday, there was a
little over a forty percent probability, as you just said,
(03:45):
of that simber rate cut. And you know, Russ Mitchell,
this morning, when I was doing the stock up date,
I brought this point up, and I think it's a
really valid point to share with everybody. And that point
is this. He goes, do you want some We're saying
this morning, do you want a half a percent cut
at the September meeting? And I said, no, we do
not want half a percent cut, And he goes, well,
(04:05):
why because you know everybody's like, oh, but that'd be great. No,
it's not because you don't want the FED to jump
right into the swimming pool, you know, fully closed, right,
you want them to dip their toes in check the water,
Meaning give us a quarter percent cut, that would be phenomenal.
Give us another quarter percent cut when when October rolls around,
(04:26):
that would be phenomenal. But to give us a half
a percent, then the street's going to go, uh oh,
here's the problem. Uh oh, what's the problem lurking on
the horizon? Right, Jay? Yeah, the problem? What's the FED
seen in their crystal ball that the rest of us
aren't to go all the way in with a half
a percent cut?
Speaker 3 (04:46):
It would also signal probably the part that makes market
watchers angsty is that Trump is pressing things forward at
this clip. That is more of a president leading the
FED versus the FED leading the economy. And that would
be the thing that would spook me a bit. Right,
(05:07):
we're seeing I think it's up to eleven people now
that Trump potentially is looking to tap for a FED boss.
Zervos was thrown out today. That would be an interesting one.
Speaker 2 (05:20):
Reader.
Speaker 3 (05:21):
Yeah, if I'm Rick reader, I would use both middle fingers,
given how much money that guy makes a black rock
and be like, I'm good you can have that, right,
I borrow a middle finger from someone else as well.
Speaker 2 (05:37):
But yeah, I mean it's it. Uh.
Speaker 3 (05:39):
I think it probably is the the Wallers or someone
along those lines, But you're that would be the thing.
Speaker 2 (05:45):
I completely agree. Slow and steady.
Speaker 3 (05:48):
This is not a This is not an economy where,
oh my gosh, we need to really cut rates fast
because everything is going into the toilet. SMP at all
time highs, unemployment low four handle.
Speaker 2 (05:58):
Uh.
Speaker 3 (05:58):
You know, you're starting to see things accelerate, but they're
hardly in crash territory, and we need to do something traumatic.
Speaker 1 (06:06):
Absolutely. So back to the title of today's show. So
what we're gonna do is we're gonna kind of we're
gonna be like the inspector, the Foundation inspector. We're gonna
go in. We're gonna expose some of the cracks in
this what we call calm looking market. We're going to
uncover some of the risks that are lurking behind these
record numbers again day after day after day, and then
(06:27):
kind of point out again some opportunities that we see.
So I just want to be real clear, we are
not going negative on this market. We're not going to
embarrass on this market, but there are some things again,
and that's what our clients pay us to do, is
to be looking out into the horizon and start saying, Okay,
you know what can go wrong here? Right, That's what
any good portfolio manager does. They're always looking and looking
(06:47):
into the horizon and saying, all right, things are good today.
But again, one more time to emphasize, the market is
a forward looking indicator. So don't get so excited about
what's today. What's the market thinking for the next month,
two months, six months, so on and so forth. And
that's some of the things that we're going to talk about.
So again, some of the positives, some of the concerns.
Speaker 2 (07:04):
That we have.
Speaker 1 (07:05):
That's what we're going to do on today's show. So
listen closely. If you're kind of all giddy about this market, going,
oh my god, it's just going to continue to go.
I'm seeing you know, not to get out of the
gate with a negative, but I know you are too.
We're seeing some some i'll just call them shots across
the bow comments by a few Wall Street strategists and
(07:26):
so on and so forth that September could be a
nasty month, right, Yeah, I mean your favorites analysts at
bt I G today is that you know, historically, when
the small caps start running like this and on and
on and on, you know, we could we could have
some problems in the horizon.
Speaker 2 (07:41):
So yeah, it you know it does seasonally.
Speaker 3 (07:45):
August September tend to be week times of the year,
and you've already got a September that started out pretty well,
so yeah, it could lead itself to some weakness in
September October. Right, nothing goes up forever, and I think
that's the thing to be thinking of. You know, I've
mentioned this many many times over the five or so
years I've done the show. Is you know, use yourself
(08:06):
as a barometer, right, if you feel really giddy and
excited and like, wow, this is amazing, it oftentimes tends
to be pretty close to where markets start to act weak,
and same vice versa. When you're like thinking that the
sky's already fallen and oh my gosh, this is the
end of days, right, that's usually when things start to bottom. So,
you know, a pullback of three to five percent standard
(08:30):
it wouldn't surprise me in the least bit.
Speaker 1 (08:31):
So. But but you did not tell the audience when
you said, when you kind of get that feeling and
use yourself as a barometer, you did not give the
audience what you truly call the Jason got feeling.
Speaker 2 (08:42):
Oh, the spidy senses, the spicy right, yeah.
Speaker 1 (08:48):
My sign something thinking this.
Speaker 3 (08:55):
And sometimes the two of us disagree and we do
nothing and exactly think of a partnership.
Speaker 1 (09:01):
That's right, absolutely, absolutely, I'd say for the most part,
we always agree.
Speaker 2 (09:05):
Yeah, we do.
Speaker 1 (09:06):
Definitely we agree.
Speaker 3 (09:08):
Yeah, right, exactly, we agree until we don't.
Speaker 1 (09:11):
Until we don't. Perfect exactly, I always want to agree.
All right, let's go into today's market recap before we
get to break. Let's let's drill down into it.
Speaker 3 (09:20):
Yeah, I mean, you know, the sort of lack of
real data today. We had CPI yesterday, decent follow through
rates lower, which clearly helped.
Speaker 2 (09:29):
You know tomorrow we will get PPI again.
Speaker 3 (09:33):
Touched on the highlights Scott Bessant making comments of even
a fifty basis point cut being something that he would
think is a possibility, even though remember he's just Treasury,
he's not the Fed.
Speaker 2 (09:45):
He did add some comments from some.
Speaker 3 (09:46):
Non voting members that seem more balanced as far as
their view that inflation. Remember parts of CPI that we
saw yesterday were somewhat inflationary. They were not coming down. Yep,
you're over your side. So you know, today was a
little more excitement in the early part of the session,
(10:07):
died out later, Communication services, tech, both read on the day,
you had a bit of a rotation into healthcare, discretionary materials,
some of the lagging areas of the market. So it
feels more to me like folks picking out places to
maybe dip their toes that have really underperformed, like healthcare.
I mean, it seems like the most broken record of
(10:28):
whole time, where people keep saying by healthcare, by healthcare,
and it keeps going down, but at some point it won't.
Speaker 2 (10:35):
You saw the likes of UNH and.
Speaker 3 (10:36):
Lily up over three percent today, So yeah, those could
they could have some a little bit of rotation strength,
especially if you see weakness in tech and calm services
over the next couple of sessions.
Speaker 2 (10:49):
But quiet overall.
Speaker 1 (10:51):
And final point, I want to mention back to your
comment about Scott Assent, the Treasury Secretary, on this interview
that you're referring to on Bloomberg TV. He actually said
he actually said, I'm looking at the quotes right now.
He actually said that the FED funds rate again, folks,
that's the rate that banks charge one another when we
talk about rates, should ultimately ultimately be reduced by at
(11:11):
least one hundred and fifty basis points, so one and
a half percent reduction from where we are here. So
you know, could that that'd be what six quarter percent
cuts or some version thereof. So they want them a
lot lower than where they are. Maybe maybe they're going
to go back and try to shoot for that two
percent mortgage again, wouldn't.
Speaker 2 (11:29):
Sing, I hope not. It's going to be really bad.
Speaker 3 (11:32):
I don't think the Fed is going to be a
massive buyer of mbs.
Speaker 1 (11:35):
I don't think so. I don't think so. It's fun
to talk about it, though. All Right, we're gonna get
an early start when we come back. We'll touch on
the commodity side of things, and then get to our topic.
Crucks in the calm looking market. What are they? Well,
put together a list of about nine of them. We'll
tackle that when we come back, but first let us
turn it over to the wonderful Christen's note she is
in the right now traffic center. Hello, Kristen, Welcome back
(12:00):
to the John Sanchez Show on News Talk seven eighty
k Ohich with Jason gott all right, once again we
had a record setting day again. Will you take it?
We'll take it. We'll take it on the Nazak in
the SMB the now. Nothing just needs at four hundred
and sixty four point gain one point zero four percent
to close up forty four thy nine to twenty two
nazakro is thirty one to finish at twenty one thousand,
seven thirteen and a twenty one point gain er point
(12:21):
three two percent on the s and P five hundred
to finish at six thousand, four hundred and sixty seven.
Oil price is relatively calm, about a fifty five cent
loss to sixty two sixty two a barrel nine dollars
and thirty cent rise in gold three thousand and four
oh eight twenty. As Jason and I were just chatting
off air man, what a big move in the bond
market today, right across all the various maturities, ever so
(12:41):
important tenure down six basis points on that yield of
four point twenty four percent. You know, give me a secondary.
I want to see, do we get any bump in
the mortgage rate? It's just curious about that. Yeah, by
pretty nice move down five basis points six to fifty
three on the thirty. So I'm sure Dwight's smiling today.
Sure he likes that. Yeah, all right, let's hit real quick, Jay.
(13:02):
Some movers after ours, specifically Cisco, they reported after the
close today, and here's the numbers. Ninety nine cents of
shares what they reported. Estimates were ninety eight cents rev.
Fourteen point six to seven billion, estimates fourteen point six
two billion. So you know, a little bit of a
beaten you know, like you and I were saying off air,
this stock moving just a little bit in the in
(13:24):
the after hours. Nothing too major, down about a buck
twenty six or.
Speaker 2 (13:27):
So, right now, Yeah, nice com day.
Speaker 3 (13:30):
I mean, definitely their guidance was better than the street expected,
so I think that's enough to at least keep the
story going for some time. For Cisco, they're clearly going
to be very data center focused and AI beneficiary longer term.
Speaker 1 (13:45):
So absolutely, absolutely, all right, very good. A little trouble
on a Oracle today, nine dollars and forty one cent loss,
including some after hours movement.
Speaker 3 (13:54):
Yeah, I mean, Oracle, you know a lot of those names.
Software names have been under pressure quite a bit. Oracles
actually outperformed to the space but you know, things up
fifty plus percent this year, so not surprised to see
a little bit of weakness in Oracle today. Again with
other software names, Microsoft is down one point six percent,
So I would say it's more space relative than specific
(14:16):
to Oracle.
Speaker 4 (14:17):
You know, talking out of space, right, I may be,
I love it, I love it, giddy today it's Wednesday,
all right, let's get down to our topic today.
Speaker 1 (14:28):
Cracks in the calm looking market. Right, the old analogy,
I think you use it a lodg jas. I'll give
you the credit. You know, the ducks on the you'll
swimming across the pond and things look nice and calm,
but you look underneath and the feet are moving really
really fast. And that's kind of what we're talking about today, right,
the cracks in the calm looking market. So what are
some of the things that are going on, Just to
kind of give everybody an overview what once again, our
(14:49):
job is to look into the future, not what happened
today or tomorrow, but months, and you know, I'd like
to say years, but that's that's not true. We can
predict that that far who's as they can always gets
me when you get the the world you know IMF
and some of the big you know, world organizations. Well
we predicting two years the GDP. Right, yeah, all right,
(15:15):
so our nine talking points. Let's get down at number one,
the record market quiet anxiety. So it seems like again
if you turn on our show, you turn on the
stock up dates, you check your favorite website, you check
your brokerage accounts, et cetera, you're going, oh my gosh,
another record close, another record close. So Jason, let's kind
of give the pros and cons of a record close.
(15:37):
You you go the pros, I'll go the con side
of things.
Speaker 3 (15:40):
I mean, from a technical standpoint, it's a pretty darn
good hit rate over you know, three and five years
buying all time.
Speaker 2 (15:49):
Eyes on the market, Uh, you know you've got a
spot now.
Speaker 1 (15:53):
Contrary to human nature.
Speaker 3 (15:54):
I know it seems odd, but you know, objects in
motion tend to stay in motion unless act upon by
an outside force.
Speaker 2 (16:01):
Right, the you.
Speaker 3 (16:02):
Know, the market is richly valued. I don't think it's
not eight valued in terms of multiples, but I think
you know, or two thousand rather valued in terms of multiples.
But you've got a lot of positive priced in, right,
You've got a lot of the benefits of technology and
(16:23):
new things that are very shiny and exciting through AI
and big data machine learning that have created the biggest
part of the market, even before we talked about AI
was the biggest beneficiary of it. Right, So the metas
and microsofts and in videos, et cetera help power things higher.
(16:47):
But sixty four hundred and sixty five hundred on the
S and P is not nosebleed levels in terms of valuation.
Certainly from a forward looking standpoint, earnings were good. Market
by large is you know, in a pretty comfortable spot
of valuations overseas or even lower than the US, and
you've seen international markets benefit quite a bit. So a
(17:10):
diversified portfolio has done quite well this year, unlike yours past.
Speaker 2 (17:15):
Yeah, absolutely, we're.
Speaker 1 (17:16):
Still we're going to get to We're still somewhat concentrated.
Speaker 2 (17:19):
Though sure, Yeah, I mean, certainly investors.
Speaker 1 (17:21):
About the MAG seven world, but yeah a little bit.
Speaker 3 (17:24):
Yeah, you finally can uh spread your wings a little
bit and make money outside of the MAG seven is.
You know, people have done quite well of picking up
some of the newer companies that are out there, you know.
Speaker 1 (17:36):
The I had a joke. I had a joke with
the Ross this morning on was my six twenty three report,
you know, the pre market movers and shakers. I said,
I'm going to apologize because you're probably not going to
recognize about ninety percent of the names that I'm going
to tell you that are moving really big, either up
or down in the market session. And that's what's happening.
It's like you don't hear a lot about you know,
the major names a little bit in the tech, but
(17:57):
you really don't hear a lot about the major names.
But it's all of these young companies that and I
say young, you know, they've been around a while, but
they're not household names yet. But my god, some of
them just you know, getting massive moves. I mean, how
many of you know of Kava Group?
Speaker 3 (18:12):
I do?
Speaker 2 (18:12):
I own it. Yeah, it's fun on the way.
Speaker 1 (18:15):
Up, yeah, the way up, but not today.
Speaker 2 (18:17):
And I still like the name longer term. I mean again, like.
Speaker 3 (18:20):
Any Mediterranean yep, so like you're trying sort of like
the Chipotle or Mediterranean food. Yeah, but I mean I
thing been a monster. Yeah, down sixteen percent today, but
there's a lot of newer names that you know have
been monsters this.
Speaker 1 (18:37):
Year V to X today on my list of ten
and a quarter percent couldn't tell you've never heard of them.
I mean, you just go on and on and on,
and that's that's that's that's the fun part, right, that's
the fun part. So real quickly, let me kind of
give you so those those are the pros of the
record markets and you know, fairly quiet anxieties side of it.
Real quickly, here's the cons. As we said at the
beginning of the show, this is when people get nervous.
(18:59):
This one portfolio get nervous because you get to a
point where it is priced for perfection. It's almost like
you go to your favorite restaurant and you know the
chef and you know every time you sit down that
steak is this going to be cooked absolutely perfect? And
all of a sudden you come in one day and
the chef's not there, and it's like, oh man, this
wasn't good. I expected I expected it to be perfect.
And that's what we're right now. We're almost priced for perfection.
(19:20):
We got Trump behind this market, and this cabinet behind
this market, and the big beautiful tax bill and AI
and you know, future interest rate cuts and all of
these positives. But that doesn't mean again that we just
can't wake up one day and everyone goes, hey, you
know what's take a little bit of profit and before
you know it, you're down, you know, five percent loss.
That is very common. That is very very common. So
that's the negative, and that's what makes us nervous. When
(19:42):
we just set record high after record high, it's like, oh,
there's nothing wrong out there, and there is always something wrong.
There's always there's always a bear out there lurking, and
you just don't want it to be one of these
these massive hedge funds that you are really good and go, hey,
you know what, today we're gonna pull the rug out
from everybody and you know, dump our positions or whatever
they may do to drive things down. So that's his said.
You know, like I said, record markets are beautiful. I
(20:04):
love the comment Jason made, but doesn't mean again, do
not do not.
Speaker 3 (20:08):
Do bulls, bears and pigs, right, bulls, pigs get slaughtered exactly.
Speaker 1 (20:14):
All right, We're gonna come back to point number two
in our topic, crucks in the calm looking market. Let's
first turn it over to Jack Sabe and he's got news,
traffic and weather. Hey Jack showing news dogs seven eighty
k ways. You know you gotta love kids, Jason Financial Planning.
(20:37):
At Financial Planning, you want to you want to break
the myth of what we just what we just learned
from from one of my children. You'd think, after you know,
being the daughter of a broker for thirty six years,
they would understand the basic estate planning bulls. So we
should just verbally mention this that you don't have to
(20:58):
sign anything to inherit money. Right, So it's in the
trust that this person, this child's going to get this
amount of money or assets or something. But that person
receiving it doesn't have to sign anything. They just get
to back and they enjoy the fruits of their dad's labor.
Speaker 4 (21:14):
Wow.
Speaker 1 (21:14):
Yeah, and they they can.
Speaker 2 (21:17):
Turn them down. You can say no thank you.
Speaker 1 (21:19):
Right right. You can say no thank you and donate
it to your other siblings. You can do that. But
there's nothing to sign.
Speaker 2 (21:26):
Because it's not binding until they're dead, right exactly.
Speaker 1 (21:29):
It can be changed.
Speaker 2 (21:30):
They can change it.
Speaker 1 (21:32):
That's called the revocable trust. I believe yes, yes, yes, right.
Speaker 2 (21:35):
Or iras you can call us.
Speaker 3 (21:38):
Jason, I do believe it is, yes, exactly, I have
not seen it, but I believe it.
Speaker 5 (21:43):
Probably it is, and I guarantee I know it is.
All right, we're just giving a child a hard time,
a wonderful producer. All right, we're talking about once again
the cracks in the calm looking marketing.
Speaker 1 (21:58):
If you just joined us, it was a good session
for sixty four gain on the Dow, of thirty one
on the NASDAK, twenty one point gain on the SMP
the two aforementioned where a record finish is there. But again,
we got to be looking out into the future. What
are we looking at some of the pros and the
cons of what we see as far as market signals,
et cetera at this point. So first point, we got
to record markets, quiet anxiety. All right, let's go to
our second point. The VIX, the volatility index, you know,
(22:21):
fourteen point four nine, Jason, this is what pretty close,
if not right at the year low on this let's
talk about what the VIX is showing us.
Speaker 3 (22:30):
So fourteen point five sixteen divide implies a point nine
percent standard deviation around the market, So you know, really
the market makers the folks that are out there pricing
risk think that an average move is plus minus point
nine percent for the S and P five hundred, so
(22:52):
it is less than what is we'll call normal, which
is sixteen. So uh, you know, some people say you
sell the VI twelve and you buy it above twenty four.
Just some trading jargon which means you're, you know, selling
the calm and buying the fear.
Speaker 2 (23:09):
But we're you know, we're not at.
Speaker 3 (23:12):
Low, low, low complacency, nobody's paying attention levels, but certainly
seeing things slowly, slowly move in that direction.
Speaker 1 (23:20):
And again I think we're at our very close Yeah,
correctly the low of the year. So that's a good thing.
So they're not expecting a lot of volatility. But on
this flip side, you know, again, the VIX is just
one piece of the puzzle, isn't It's not the end
all indicator. But you know, let's just round it up.
A one percent move up or down on the S
and P. Yeah, I'd be thrilled with that, considering where
we are a year to date and so and so forth.
(23:41):
But yeah, that's that's a good number right there. That's
a very good Yeah, it really is handle all right,
it's going to our third point, rate cut hopes versus
underlying reality as well as we started the show with today,
a lot of things have changed in the last two
trading sessions. Once again, yesterday, as we said last night
on the show, or yesterday afternoon, at a very benign CPI,
i'mb up two tenths seven percent month over month, The
(24:02):
year over year was up two point seven. Expectation was
about two point eight, so we came in a little
bit better there. Tomorrow will be the wholesale side with PPI.
But now that we had those or had that one
benign CPI report and maybe tomorrow is going to be
the same, then of course the street started pricing in
the aggressiveness of the FED that once again I did look,
(24:24):
did find at the break there that we now have
a ninety seven point nine percent probability of a September cut,
so pretty much the same as yesterday. And I'm sure
the second probability of an October cut still north of
sixty and maybe a third cut north of forty. Those
were the numbers from yesterday and the latter two. But
you know, rate cuts versus underlined realities once again, folks,
(24:46):
you know, Jason, I think this is a really good
listen to kind of go over with everybody. I've said
this about four times today. I got to say it
one more time. The market is a forward looking indicator.
The street is already beginning, if not already there, pricing
in at least the September for a rate cut. People
always go, wait a minute, we just got the rate cut.
The market didn't rally today. No, A lot of times
the market will actually go down on the day of
(25:07):
a rate cut. Why sure, because it's already priced it in.
So don't If you're sitting on cash right now, you know,
I'm sorry, But if you are, you probably want to
be really careful getting into this market at this level.
If you think you're going in because the Fed's going
to cut rates, we all think that they're going to
The data is showing it, probability is showing it. But
don't commit a lot lot of capital at this point
(25:29):
just on the hopes that the Fed's going to cut
rates and this market's going to skyrocket because the market's
already priced it in.
Speaker 2 (25:35):
I completely agree.
Speaker 3 (25:36):
Yeah, No, I mean, if you're investing for two to
three years, sure, I think it's a great spot. If
you're investing for two to three months, you'll probably get
a chance to buy it lower. But yeah, the market, right,
like you said, a ninety eight percent probability priced in
safe to say that that is very much in the
(25:57):
s and P five hundred at these levels.
Speaker 1 (25:59):
You bet it's not a secret out there. Okay, So
we got rate hopes versus underlying realities. Let's go to
number four, the concentration risk. We also touch on this briefly.
We're not in a market Jason, where like last year
and even the years before where you were penalized as
far as performance, if you had a diversified portfolio, it
was all concentration risks. The MAG seven, right, No one's
(26:20):
talking MAG seven now because all of a sudden, we
have all of these AI names, like I said earlier,
that are coming around. You got a lot of things.
You still have the big ones going, but there's a
lot of other areas of technology that are making money.
So you know, if you are loaded up in technology,
you probably have done pretty well. But hopefully you're a
big boy or girl. And you know, if I'm loaded
up in any certain sector, I've got concentration risk. You know,
(26:42):
which is fine as long as you understand that risk
that is associated with that, So just be careful. That
is the market. It's almost like a funnel if it
starts to really narrow in, you know, purely on tech
or purely on whatever you want to pick. As far
as the sector, that's always a really really really really
risky time period because all it takes is a little
slip of that that sector where everyone's got all their
money into. Again text the most common, and then again
(27:04):
you can find yourself in a market correction.
Speaker 3 (27:06):
Real yeah, I mean you probably find names if you've
held them throughout the year, that are up two hundred
three hundred percent. You know, you can, you know, trim
you sell a third and either park it in cash
or put it in some of the names that you
still want to own that have been lagging.
Speaker 2 (27:21):
It's just you know, take a little bit of the
froth off the top.
Speaker 3 (27:24):
It will help you feel better and you know, maybe
get you allocated into some areas that have not worked
so long.
Speaker 1 (27:31):
That's right, all right, Just go to number five. The
makeshift price stability is we're calling it. Well, part of that,
of course, the cpis we've said a numerous times tonight,
the CPI came in really well, fueling the optimism. Hence
why we're up over five hundred yesterday, up almost five
hundred on the dow to day. But here's something else
that we've got to be obviously cognizant about. We're all
worried about this from a personal as well as a
(27:52):
business standpoint, and that of course is tariffs. Right, he
kicked the cant. Trump kicked the can down the road
again for another night. Days on China, so we don't
have to worry about that. But you know, uh, the
analogy we keep saying, these tariffs are becoming a very
I saw one article this morning, I forget who wrote it, saying,
look at Trump is bringing in so much money on
tariffs right now, Jason, it actually is now starting to
(28:14):
get to the point where it could have a positive impact,
meaning lowering the the uh, the nation's debt. Right. There's
that much money coming in at this point, and really
the terms had just started, and so you know, that's
going to be a like I said, that's gonna be
a hard drug to pull out of the arm at
some point. But you know, like I said, we still
have China to worry about. And a few others. And
(28:36):
let's not forget we're gonna throw into this, uh price
stability issue. You've got the president meeting with Vladimir Putin
this Friday on two days in Alaska, and you know
he's indicated on again, off again. Then you know he's
he wants the trade deal done. Zelenski, from what I
read today, is not going to be there. So he
(28:57):
wants to reach a deal with Putin and then brings
the lit skiing and that's gonna be the interesting point.
So I don't know. I think you and I were
mentioned this on the show on Monday. I don't know
if we see much of a market reaction either direction.
I mean, if a deal is struck or if it's not.
There's no one.
Speaker 2 (29:13):
Who's seen maybe energy reaction of something.
Speaker 1 (29:16):
Maybe some commodities a little bit, but for ex equity market, really, I.
Speaker 3 (29:19):
Don't think you're going to be able to be buying
any Russian stocks anytime. Some of the ones that is
zeroed in your portfolio will have a value again.
Speaker 1 (29:26):
But right, we'll see, yeah, you got it, all right.
We'll wrap up a point in six through nine in
our topic once again, which is the cracks in the
calm looking market. Let's wrap it up speaking of which
cracks in the highways now, No, no, not at all,
Christ and Stone, nice and smooth into that highways. Right,
(29:51):
Welcome back to the John Sanchez Show on Newstalk seven
to eighty k, which with Jason, Jason and I and
our team can be of service to you. Please don't
hesitate to reach out to us in our office seven
five eight hundre at eighteen oh one or online at
Sanchez Gaunt gaun T dot com. All right, once again,
a great session for sixty four gain on the Dow,
thirty one on the NASA, twenty one point rise on
the S and P. But we're just you know, doing
(30:11):
as we do and kind of saying, all right, what
could be some cracks that are out there in this
very nice and call market. Let's recap what we touched
on so far, record markets quite anxiety number one. Number two,
the volatility index what we call the VICS at a
year low. Number three, the rate cut hopes versus the
underlying realities. Number four. We wrapped up with concentration risk.
Now let's go into oh. Number five. We touched on
(30:33):
the price stability with via the CPI as well as
the tariffs. Now let's go to number six, macroeconomic fault line.
So I love this one Jason Week. Labor data yep,
cooling earnings outside of top sectors like AI and tech YEP.
Tariff pressures are still what we like to call a
stealth risk. No one really knows. I just love how
(30:54):
these economists are going back and forth. Oh, teriffs are
inflation ar Oh, tariffs are not. You know they may be.
I mean, no one knows. No one knows. I just
as I've said a million time, I'm not going to
waste time on it. I do not see in my
mind how tariffs cannot be inflationary because it's going to
cost everybody more money. That's that's just the bottom line.
(31:15):
But you know, labor data, I think probably the biggest point.
I'm more concerned. I think I'm more concerned right now.
I don't know about you about the labor data cooling
a bit than I am, even of the tariffs at
this point.
Speaker 3 (31:27):
Yeah, I would agree, Yeah, I think the labor data
are going to be the reaction function of tariffs right
where costs are too high, they need to cut costs.
You know, companies love to have excuses to lay off work.
So AI plus tariff could equal lower labor force over
the next two to three years. But you know, it's
just a matter of how quick the adoption is and
(31:47):
so on and so forth.
Speaker 1 (31:48):
Absolutely, our number seven point earning season reality check Again,
so far we've had really good results. We're getting towards
that end of the earning season. Obviously the tech giants
have done well some of the areas you know, like
today we're touching on conv in the restaurant sector, and
every once in a while you'll get some names, you know,
on a certain sector that just doesn't quite hit it
and it'll bring the whole sector down. So once again,
(32:10):
back to the point, this is why you have a
diversified portfolio. You're gonna. Earning season is always a great
test to see how your portfolio works in a market.
Right if if you're always gonna have some companies that
report better than expected, some that going to report worse,
but had your portfolio hold up, So it's a good
time to do a little earning season reality check. There,
(32:31):
let's talk about the global markets. Jay, we don't get
a chance on this show because we're so tight on time.
Every day to really go overseas, but kind of bring
everybody up to data on what we're concerned and watching
over there.
Speaker 3 (32:39):
Yeah, I mean international markets have been very, very strong, right.
We've talked about the dollar changes, the dollar moves that
have benefited non dollar markets, right, I mean, so I
think that's going to continue to be the case for
some time, and just valuation wise, globe markets, emerging markets,
(33:01):
so on, and so forth. I mean, looking at some
of the areas, you know, I mean Italy's up forty percent,
Germany up thirty five percent, UK up twenty five, France
up twenty three, Switzerland up twenty. I mean, you know
you've seen strength across broad Europe. But I mean Japan
up nineteen percent even last ham, looking at Chile, Brazil,
(33:22):
Canada all up over twenty percent.
Speaker 1 (33:24):
So and they're they're paying big tariffs.
Speaker 2 (33:26):
Yeah, well we're paying big tariffs. They're just I wish,
I wish that's a bit tariffs market.
Speaker 1 (33:33):
Yeah, very their markets should be affected because of the
two yes.
Speaker 2 (33:37):
Yes, yes, yes, yes, but no, it's it is.
Speaker 3 (33:41):
It's been a year of reversion and so, like we've said,
the reason you diversify is because you never know when
this is going to happen.
Speaker 1 (33:48):
Uh, you never get absolutely all right, gobles, everybody have
a great afternoon. We'll see tomorrow on The John Sanchez
Show News Tuck seven to eighty kachan as Gaunt Capital Management, LLC.
The material in this program was intended as general information
only and should not be taken as specific, investment, tax
(34:08):
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 Sanchez Gaunt dot com or seven seventy five
eight hundred one eight oh one. John Sanchez offers securities
and advisory services through Independent Financial Group LLC, a registered broker,
(34:30):
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 unaffiliated entities.
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