September 12, 2025 • 32 mins
The Nasdaq notched a new high today as investors took signs of weakening jobs report and tame inflation to mean the Federal Reserve will lower interest rates next week. But what are the possible market reactions with a quarter percent rate cut, one half of a percent or maybe nothing at all? We’ll share with you our opinion and recap the week on Wall Street, today on the Jon Sanchez Show at 3pm.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Good Friday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k which it's a
pleasure to be with you and a pleasure to be
with my partner, mister Jason got the aforementioned firm that
has his name in there. Yeah you do, my friend,
Thank you. I appreciate that.
Speaker 2 (00:16):
Yeah, it's uh doing well. I'm happy this week's over.
It felt it felt like we've been dealing with a
lot of news, a lot of color, a lot of
fed speak, a lot of rate jargon, et cetera. But
another one in the books and market continues to climb
that wall of worry, even though your dow unfortunately was
a bit in the it's a weird day.
Speaker 3 (00:35):
You had down and flat and how's that going?
Speaker 1 (00:39):
Yeah, yeah, exactly, yeah, my dat, you know, yeah, I'm her.
I mean, come on, man, we she she gave us
a couple couple of record closes this week and gave
a little bit back, you know today, and you know,
but you take it easy on my dubt jes take
it on my dat because you're stubborn Nasdac just won't
give up another record close for that son of a gun.
(01:00):
It's my god.
Speaker 2 (01:01):
Yeah, I mean just I mean, we've got that wave
of IPOs that have been starting named like Figure and
Via and you know it's.
Speaker 3 (01:10):
Not to be a bear.
Speaker 2 (01:11):
I don't want to just but things to think of
to put away in your mental quiver is when you
get this new liquidity for folks to reallocate too, with
this wealth of IPOs that are coming and more to come,
that tends to create a bit of a vacuum from
names that have worked, which are very top heavy in
(01:32):
the S and P to reallocate towards some of these
new fresh ideas, and that can cause some market gyration,
you know, down the line. And that's the thing that
you know, they tend to feed the ducks when they're
quacking the loudest. And now to see all these IPOs
come out, I'm just putting it into.
Speaker 1 (01:50):
Do they make you as nervous? Do they make you
as nervous as they do me?
Speaker 3 (01:54):
They do. I think there's some pretty cool names that
are coming to you.
Speaker 2 (01:57):
I won't speak to any specifics because we did buy
one in one of our portfolios, but I think there's
some interesting stocks out there that have some you know,
long term, good positive stories to them, and there's others
that again like open Door, which is a wonderful advertising venue,
and that's a name much like Reddit right where people
(02:18):
think of Reddit to why would I buy Stock?
Speaker 3 (02:20):
And Reddit.
Speaker 2 (02:20):
It's a lot of people just talking back and forth.
But remember always try to take a lens of does
this company provide data?
Speaker 3 (02:30):
Right?
Speaker 2 (02:30):
And things like when I first bought Meta years and
years and years ago for the kids, I don't have
a Facebook account, I never have, I never will. But
the fact is I bought it because of data like
Google and open Door and Reddit, like if you go
and look, I believe it was almost thirty percent three
zero percent of the data that is in all of
(02:51):
these large language.
Speaker 3 (02:53):
Models is fed by Reddit.
Speaker 2 (02:56):
Like all the conversations that all the people are having
with all their onions that is a like the top place,
so an open door, same thing, all these people arguing
about someone threw a cat over my fence like those
are all you know, it's a data provider and there's
probably a lot of demand for their content from lots
of folks into the future. So yes, it's interesting, but
(03:18):
there's you know, there'll be some there'll be some dogs too.
Speaker 1 (03:21):
Well, yeah, and that's my point. That's why I was
I posed that question. I was having this discussion with
a friend a few hours ago, and I said, we
were talking about how this market feels very similar to
ninety nine two thousand, right, It's just nothing will bring
it down. We're going into a declining insanstraight environment, which
we really didn't have that so much in ninety nine
two thousand. Rach were pretty strong. And actually, if I remember, right,
(03:42):
but every ipo just surges. Everybody wants to jump onto
everything and so on and so forth. And I think,
you know, again, by no means like you just said,
no means mean to be bullish or bearish. However, I
think it just requires a bit of caution because you
get all this liquidity slash around now and you get
everybody going, oh my god, I want that ipo and
I want that one, and da da da dad, And
(04:04):
you know, I mean the the Bullwinkle Twins today. How
much money did they make, you know? And their new yeah,
their new ipo. Yeah, you know, it's like, oh we
got the word crypto on it. Boy, I want to
buy that one. That seems to be the trend.
Speaker 2 (04:17):
Right Cardown or whatever his name is, that that you
know Schiller, he's got now a bitcoin house fund, like
you know, he's doing houses and things all the time.
You know, now he has one that's backed by bitcoin.
So again we're not professing to go buy it, but
I'm just saying that's that is a side of the time.
(04:39):
So I think you're right on the decade. I just
don't think we're ninety nine. I want to say ninety six,
ninety five. And I still think there's more room to
go in the story. But and I tell, literally robbing
the words from my client conversations, I say, I think
we're in the mid nineties. You've got demographics, right, the
average age in the US is thirty nine years old.
You back, the baby boomer's up thirty years. Same thing.
(05:01):
You've got Internet. Then you had all the sort of
excitement of technology. And remember these names, had you held
them through the boom or bust, a lot of them
would be gazillionaires. But it's just that same thing. Yeah,
you've got new technology, new excitement, new liquidity, new asset classes,
which probably you'd say the mid nineties new asset class
(05:22):
of the market. Sure you know, but yeah, I think
you're I think you're spot on with that. It's just
are we that close to two thousand? I'm hoping not,
but yeah, I think I think you're certainly looking at
the right way.
Speaker 1 (05:35):
I agree, Yeah, it's I mean, folks, it is fascinating.
We'll have doctor Sanchez back on the show on Monday.
He was traveling this last Monday for our AI segment
and and you know we were, he and I Jason,
as you know, we participated in a webinar yesterday and
it was it was mind boggling. The gentleman that put
on the webinar. He's a consultant for our industry, so
(05:59):
a lot of the data, the AI data that he
was sharing was in regards to our industry. But what
he went on to say, and he's very very well respected,
and he had, you know, other people's data to say.
This wasn't just his opinion, but the exactly as you
just said, what this world both financially and just how
(06:21):
it's changing our lives where we're going to be folks,
who we're not talking five ten years from now. As
far as how everything that we know it today is
in regards to the stock market, and again, I'll just
look at your entire both personal and professional life. It's
changing so fast, you have no idea, no idea with
Jason and I and doctor Sanchez are going through every
(06:45):
day with the amount of information that's coming our way,
just how our industry is changing. And you know, then
you throw in a whole other exciting class again not
recommending it, but the crypto side of things right again,
just so many different things coming our way. By the way,
which is going to be our subject this afternoon, which
is we got a fed that's becoming a really good
(07:05):
friend of ours here hopefully you know, next week and
you factor all that in and brother, you got you
got the ingredients of a Dow fifty thousand. I think
really realistically over the next I don't know if it's
even gonna take a year, to be honest with you,
I think we've got so much momentum right now that again,
back to ninety nine two thousand, it took us what
(07:26):
a year or two for you know, every company that
had dot com all of a sudden they're multi gazillionaires.
Took a couple of years for those to kind of
find their you know, who's the ones that are that
are gonna win? Who are the ones that are gonna lose.
It's gonna be the exact same thing with AI and
with crypto and everything else. You're gonna have a you know,
a small number that, uh that are gonna be the
real winners. And as Jason and I have said many times,
watch the balance sheets. Those who have the big balance sheets,
(07:48):
the Googles, the microsofts, et cetera. Those are gonna be
your winners. Are you going to have some that are
you know, their stockholl serge thousands of percent? Absolutely? But
again you've got to be very, very careful. And I
think this is a good time, Jason. You know again,
going back to ninety ninety two thousand, let's throw out
some advice that that I think was very relevant then
in you know, armchair quarterbacking that time period to now,
(08:10):
and that is, you know what, we all have a
bit of gambler inside of us. We all, you know,
want to roll the dice and try to get that
thousand plus percent return. That's cool, right again, we all
have that. But what you do, how do you do that?
Take just a slice of your portfolio, don't take any
money you can afford to lose. Whatever that percentage is,
five percent, ten percent, one percent whatever it is, and
(08:32):
have fun with it, right, build you know, your favorite
AI portfolio or crypto portfolio, whatever you want to do,
so you're you're in the game. Right that way, you
can you don't feel like an outsider when you go
to the you know, the barbecue or the cocktail party
or coming up the Christmas party and you know, everyone's
bragging about how much money they made in these crazy areas. Hey,
(08:53):
you can hopefully say, hey, yeah, me too, but they're
not going to ask you how much did you put
in there? You know, maybe five hundred bucks or something. Right,
But but but that's what I found, Jason, you know,
going back into that era that again, armchair quarterbacking, that
really would have been the best way to do it,
because you can make your money, like we're experiencing right now.
You can make your money in a very well diversified,
(09:15):
big quote blue chip type of portfolio, right because all
tides you know, are rising at this point and without
taking that risk. So keep that in mind as you're
looking at allocations and things. And we start, you know,
getting into this these final few months of the year.
Take a look at that and and and again, nothing
is wrong with that, but just don't bet the farm,
(09:35):
as the saying goes on again Crypto or some of
these hot IPOs, because it's easy, I'm telling you, folks,
even though that's being professionals doing this all day, it's
easy to get sucked into that enthusiasm. You know, you
turn on CNBC and it's like, oh, you know this,
this this ipo is up. You know well, I mean
look at look at open Door, Like you said, what
was that one day? Was it day yesterday or day before?
It was up? Like what fifty six percent? Just because
(09:58):
they're bringing on the former Shopify ceo. I mean, you know,
come on, that doesn't make fifty six percent in one day.
That stuff doesn't happen in normal times. And then again,
we're back to this other factor that that is real, legitimate,
and that is the FED. And that's exactly what we're
going to be talking about, and that is what are
we looking at with the potential market reactions to next
(10:21):
week's FED meeting. Okay, now we're going to go through
some different scenarios with you, because you know, Jason, yesterday
I just had Dwight on the show. Corey was traveling,
and you know, we went into a lot of discussion.
I think probably like you did with them last week
when in my absence, and that is there is no
no guarantee whatsoever that if we get which we all
(10:43):
think we will, if we get that Fed interest straight
cut next next Wednesday at eleven o'clock in the morning,
that you're going to see mortgage rates come down. Right.
It just hasn't worked that way. And Dwight said, hey,
you know, remember guys, last time we got a half
a percent cut by the Fed. What happened to mortgage rates?
They surged and you know, roughly a year later, thirty
year mortgage was you know, briefly touched eight percent. So
(11:03):
you don't really know what's gonna happen other than I'm
pretty confident it's going to be a very positive reaction
into the stock market. Maybe not initially because again we're
buying the rumor ie we think the Fed is going
to raise rates, i mean cut rates, and sometimes you
get to sell the news once it happens, like, oh okay,
so that's where that that Jason is united. Always pay
(11:24):
attention to that. That press conference by Jerome Powell at
eleven thirty, you know, half hour after the interest rate decision.
That's really where you're going to find out, you know,
where the hit the Fed's head is at at that point.
If he starts to give hints, as the street anticipates,
if he starts giving hints that, hey, guess what, you know,
this may be you know, I'm gonna make it really simple.
This is really one of many future cuts. Boy, you
(11:47):
could really see the market move. But if he says
we're just gonna kind of try this right now, we're
going to be data dependent. Yeah, market may not get
that excited. You can actually see a little bit of
a sell off there. So it's really a tough a
tough one to predict. But the bottom line is we're
gonna get into a declining interest rate environment, which will
be positive for equities and hence why we want to
talk about some of these market scenarios with you. And
(12:07):
then Jason, I came across a really great story on
CNBC just right before the show, and I need to
study it a little bit more before we h while
we're at the break, But folks, there is seven trillion
dollars sitting in money market money market equivalent type funds
out there. Guess what that money's gonna do, Jason, Well,
I'm not asking you, I'm Jason. Tell the audience what
(12:29):
that money's gonna do. If we start getting fed cuts,
where's it going?
Speaker 3 (12:32):
It's gonna go somewhere where it can find a better
rate over there.
Speaker 1 (12:35):
There you go, there you go exactly, I e. Maybe
the stock market. So another nice guest to wind at
our back. So we had a lot to talk about
it on this Friday afternoon. Let's turn over to Jack Saban.
First of all, he's got right now traffic for us. Jack,
welcome back to the John Sanchez Showing, News Talk seven
eighty koh. All right, let's get down to our topic today, Jason,
(12:55):
once again, the NAS that closing in a record of
again of ninety eight points point four to four per
cent to twenty two one, sloppy on the dow down
to seventy four, about a zero point five to nine
percent give up nothing major percentage wise, forty five thousand
and eight thirty four was our level and the SMP
down just three points to six thousand, five hundred and
eighty four. But it wasn't that amazing, Jason, when it
(13:18):
hit that sixty six hundred resistance level just binged right down.
How goes, well, boy, I'll goes yeah, no, Ki there,
Yeah for sure, Yeah, that's for sure. But again we're
gonna get into our topic now, potential market reactions to
next week's FED meeting. Once again, market on your calendar
eleven am next Wednesday, we'll have the decision eleven thirty
(13:39):
the press conference, and you know, Jason and I of
course will be going into great detail of the release
and what the FED had to say and so on
and so forth. But Jason, let's take real quick here.
Let's give you your your market recap, and then let's
get into the CNBC story about the seven trillion dollars
and what can happen, and then we'll get into our
topic bottom of the break.
Speaker 2 (13:58):
Yeah, I mean, we got the University Michigan confidence number today.
It does have some inflation information inside of it that
was fairly benign. Came out fifty five point four, say,
some fading economic views on the lower income side, which
is to be expected just given how expensive everything has been.
Consensus was closer to fifty nine, So I'd say those
(14:21):
who were surveyed were a little more bearish than anyone
who had thought they would be but again not to
be expected. We talked on the show on Thursday, as
you mentioned last Thursday, Last Thursday, Time's Fine with Corey
and Dwight about how the consumer is stretched, right, that
does du rates really mad or all that much in
(14:43):
terms of a big refie or push to go buy
a house, just given that things are so expensive, but
also that buyers are walking away from purchases because they're
realizing that they don't quite have the money that they
had thought they would. But I mean, I saw strength
in the Googles and Metas of the world, you know,
a little bit of a little bit of a rally
(15:03):
into the close, but the market seemed fairly range bound
around that sixty six one hundred level.
Speaker 3 (15:08):
As you mentioned.
Speaker 2 (15:09):
Healthcare was down a percent, you know, the vaccine stocks
that were under some pressure after continue trumb administration plans
to to you know, link deaths to vaccines and such.
So that was a heavy on healthcare on the.
Speaker 1 (15:21):
You're taking that one, really, you made that one, really,
so it was a lot worse than that. Yeah, they
came out and said, oh, yeah, those shots that we
gave our kids bad right for COVID.
Speaker 2 (15:31):
I'm going to stay away from that I know you
are the you saw some M and A in sky Dance,
Paramount Warner Brothers. Just more of that merger mania that
I think is going to continue to happen. As we said,
Trump's a much more favorable administration as far as mergers.
Speaker 1 (15:46):
Well, money's gonna get cheat.
Speaker 2 (15:47):
Yeah, I think this is money on the money side.
But it was like a hard no with anyone trying
to merge financially.
Speaker 3 (15:53):
Oh yeah, tack et cetera.
Speaker 2 (15:55):
And so you know, I think this at least the
view is that it'll be a little easy year to
merge companies, which I think makes a lot of sense
and also symptomatic of upper ends of markets too.
Speaker 3 (16:06):
So today was not a lot overall.
Speaker 2 (16:08):
I think the market's going to wait, as you very
well mentioned, until the Fed does something next week. Being
that the probabilities as high as it is, it's one
hundred percent of the time when we were this high
ever probability the Fed cuts, it's just going to be
more of are we going to get something in October?
Are we going to get something in December? And I
think the data will tell you that.
Speaker 1 (16:27):
So yeah, absolutely, all right, great job, there's always all right,
let's talk about start getting in some market reactions of
what can happen if we do get the interest straight
cut next next week. And remember, folks, this is the
street consensus right now is very I didn't get to
see the numbers today, but if I remember from yesterday,
we're getting like a you know, seventy percent probability of
(16:51):
an October cut. It was higher actually for December, up
around the low eighty percent mark. Again, I didn't see
where the numbers were today, but this street is expecting
not one, but at least three more cuts this year
unless we get a half a percent, which we'll talk
about half a percent next Wednesday, and then you know,
(17:11):
one one more quarter cut. So it's pricing in three
quarters of a percent cut between now and the end
of the year. However, the the math works out there.
But here's what's interesting, folks, there is this is according
to Crane data, there is roughly seven point six trillion
dollars setting in cash money market accounts. Okay, now, as
(17:35):
I tease Jason going to the break, Jason, tell the
audience what's going to happen if these rates start coming down?
And we'll touch again when we come back from the break.
How your personal life can be affected with these rates
coming down. Both the pros and there's some cons to it,
and this could be one of those. Right, you're going
to see money flow out, especially if we get a
half a percent cut, You're gonna see money, you know,
come out of this like water leaking out out of
(17:57):
a dam that just broke. People are not going to
stick around to those accounts where we've already we cautioned
all of you. How when we start cautioning Jason about
money markets and CDs like locking in your one years
was that three or four months ago? Yeah, when they're
a lot higher, So hopefully you listen to our advice
on that one. But when this, you know, these rates
come down. These money markets, remember they adjust every seven days, right,
(18:21):
and so you would probably, in my opinion, see rates.
If we get it again, let's just say a quarter
percent cut, you're going to see your favorite money market
account adjust probably within hours. Right, We've seen that many times,
saying those CDs they're probably going to just right away
because I'm sure the prime will come down, and so
on and so forth. So the bottom line is, if
(18:42):
you're living off you know, your savings account interest rate
at you know, you were in use to that four
percent plus mark. Get ready, you need to kind of
take a look at your budget and see, you know
where else you can start doing it. But the bottom
line is, yeah, we got seven point six trillion sitting
in there. That money is going to go find a
home somewhere. Matter of fact, we and we won't have
(19:04):
time to get into this. But I thought this was interesting, Jason,
this article that these mutual fund companies were. Again, you
have a mutual fund, they all have money market accounts.
These mutual fund companies waiting on a big decision from
the Security and excan Exchange Commission the SEC, which would
allow every asset management company to offer an ETF share
(19:25):
class of their funds. And the analysts know that there
are seventy applications right now with the SEC for exemptive
relief from the main mutual fund industry trade group ICI,
who's working with hundreds of fun sponsors to be prepared
to add an ETF share class if the SEC says go.
So this is you know, this is how serious this
(19:48):
money flow could be, folks. These mutual fund companies are
very concerned that you're going to just bail out of
money market accounts you know that you have in your
mutual funds, et cetera, and go into the stock market.
Now they I want you to go into one of
their funds, of course, but maybe you don't. Maybe go
buy some individual stock. So it's gonna be interesting. It's
gonna be really interesting. It will.
Speaker 3 (20:07):
And after the break we can talk all about it.
Speaker 1 (20:09):
Indeed we shall. Let's turn over to Jack Saban. He's
got news trafficking. What Ayjack? Welcome back to the John
Sanchez Show on NEWSTOK seven eighty k O, which with
Jason got Happy Friday to all of you, wishing you
a great weekend once again. We lost two seventy four
on the Dow, close to a record of a twenty
two thousand and forty one on the NASDAC that it
was a ninety eight point increase or point four to
four percent, and the SFP down three points or point
(20:31):
sixty five percent or excuse me, point zero five percent.
I shouldn't even said that. Let's go to oil thirty
one cent gain, sixty two sixty seven a barrel. Another
good day for gold twelve dollars and thirty cent rise.
Three thousand and six eighty six fifty and pronounce of course.
And on the ten year treasury up nickel five basis
points to yield a four h six but for the
week down three basis points. All right, big Fed interest
(20:53):
rate decision again coming our way at Wednesday at eleven
am Pacific standard time. What are the possible markets in
scenarios with what the street is pricing in? Again, as
Jason said, one hundred percent probability of a quarter percent cut,
a little bit of a probability of a half a percent,
and no one's talking about the Fed doing nothing. But
you know, our job is to look at all these
(21:14):
scenarios and be prepared and have you prepared in that scenario? Again,
let's start with the first one, Jason, I'll take this
first one, the one that's already priced in a quarter
percent cut. So this is out of the three scenarios
that we're going to go over with you, this is
by far the most expected outcome. As we've said for
weeks upon weeks now, the markets have this already priced in,
(21:35):
so the reaction is right, what can we look for?
I think we get a little bit of a rally
out of this thing. We've already again rallied into it,
because again the news is already built into it. Of course,
we know the stock market loves a lower interest rate environment,
but again it's already priced in. You're going to see
some rate sensitive sectors like tech, home builders, consumer discretionary.
(21:57):
Those can have some major benefits, as they always do
Bond Yealds. They may come down a little bit, but
you know, probably less dramatic than the cut. And then,
most importantly out of all of that, listen to what
Chairman Palell has to say, or better yet, listen to
our show, because we'll have that what Chairman Palell has
to say at that press conference at eleven thirty. You know,
is he hinting that this is one and done? Is
(22:19):
this one of many? So on and so forth, And again, Jason,
it's always a great reminder to everybody. You get two
market reactions, folks. You get one when you get the
the FOMC or Federal Open Market Committee decision that's at
eleven o'clock, and many times you will get much more volatility,
both up or down. When Chairman Pale starts talking. I
remember what he does. He starts talking, Oh maybe about
(22:41):
the first five minutes or so of his Usually it's
an hour long press conference reiterating what the Fed announced
at eleven o'clock, so it's kind of a reiteration of that.
Then usually at that point he'll start opening up the
Florida questions, and that's when things get really interesting. So
once again, quarter percent cut. As long as mister Powell
says saying, you know what, this is kind of one
of many, or something along those lines, I think we
(23:03):
could have one hell of a rally day that day.
What do you think would happen if we get a
half a percent? Let's some expect but not the majority.
Speaker 2 (23:09):
I think the market would freak out, right, I mean
it would mean that they're signaling something worse than.
Speaker 3 (23:16):
Expected, right.
Speaker 2 (23:17):
I mean, you've heard some of the folks who are
trying to get on Trump's good side. I think was
it the reader was on TV today. He's one of
the guys that they're talking to. I think he's just
talking to them in general. But you know, he said
he thinks they could cut fifty bases points. And if
you did the simple math and just said where rates
are versus where inflation is, yeah, they could cut fifty
(23:37):
bases points and still have lots of room to do so,
but I don't think they need to. Like nothing's collapsing,
nothing's decelerating. It would make them look bad.
Speaker 1 (23:46):
You got a terrible jobs market.
Speaker 2 (23:48):
Yeah, I mean again, like we said that, the tough
part with the jobs market too, is are people pausing
ahead of you know, AI adoptions like this couldn't And
I hate to always be like this time is different,
but like it kind of is right. This is a
new paradigm of It's not that companies are maybe not
(24:09):
hiring because they're afraid of slowing, but maybe not hiring
because they're excited about technology and innovation. I mean, we
had a great call today, not about laying people off,
but just all of the efficiencies of what technology can
provide for a lot of these folks. I mean, we're
already getting phone calls from clients now like rates are down,
what do we do next? And those are continuing to happen,
(24:30):
and like we said, it's going to create a chase
of some kind to higher yielding securities. But I think, yeah,
lower rates would not a bigger than expected cut would
probably be view to least initially.
Speaker 3 (24:40):
More of a oh my gosh, what's the FED.
Speaker 1 (24:43):
Looking out for is Yeah, my thought, what are they
worried about? Why are they getting ahead of this train
so much? Yeah exactly. Okay, so there's scenario number two.
First one quarter percent cut, which is what's priced in
half a percent, a little bit of a probability. Let's
go to the third one. The Fed does nothing. Oh boy, folks,
we don't want that. Let's tell you all right then
(25:04):
and there, we do not want that one. Why because, uh,
the street again is stopped its feet, you know, it's
had it's it's a tape or tantrum. And if the
Fed does not give it what it wants, watch out below.
You know, the way they're saying goes you would definitely
see yeah exactly, and boy, yeah Trump would you know, come,
(25:25):
I can't imagine what he would what he would say
or do at that point, but yeah, I mean, we
could really have a substantial market sell off on it.
You're can see interest rate names being affected. You're gonna
see bond yields. Prize traders are gonna have to reset,
you know, their thoughts and expectation. Investors are going to go,
oh my god, here we are again. The FED is
behind the curve. The Feds behind the curve. Then you're
gonna have the White House saying, you know, get rid
(25:46):
of pal Feds behind the curve. And yeah, no.
Speaker 3 (25:50):
No Fed either.
Speaker 2 (25:52):
I think they just want to exactly you know, he's
already been unless Powell.
Speaker 1 (25:56):
Wants to you know, wait a minute, unless wants to
really piss off Trump this last you know, last few meetings.
You know why he's chairman. You just never know it is.
Speaker 2 (26:06):
I think he's he's got all the air cover he
needs now, right, Like, yes, if the FED is worried
about cutting rates and then inflation happening, and this is
what we've sort of talked about before, like, if that's
your concern, get over it because you've got all the
air cover you need. If you cut rates and inflation
goes up, Trump can't be like you caused inflation, right Like,
(26:26):
there's no way you call him a knucklehead, and you
know what I mean. So it's just I don't I
see a very little probability of this happening.
Speaker 1 (26:34):
But it's discuss yep, absolutely, okay, folks. So there's our
predictions of market reactions. Again. Quarter percent ket probably have
a nice little rally. Half a percent ket could have
a big rally, but then they can go, uh oh,
this isn't good and not have that big rally, so
that one's really one direction or the other. No cut,
big sell off. That's that's our scenarios going into this
(26:54):
all right. Now, Let's get into another scenario that I
think is very very important for everyone to consider, and
that is what about you? Right? We care about you.
We don't care about anybody else. We care about you.
What how you know the reaction should you expect in
your life if we get this interest right cut as anticipated? Right? So,
(27:15):
we could put together a list of you know, what
could really we be looking at as far as the
impacts to your personal life with the beginning of this
interest rate cut again, don't expect much change if it's
just a quarter bit. Again, if pal says, hey, this
is you know, one and one of many that type
of thing, this is where we could start seeing some
reactions in your personal life, and we'll tell you what
those are when we come back. Let's wrap it up
(27:35):
a Jack Staban right now, traffic center, Hey, Jack, welcome
back to the John Sanchez Show on Newstalk seven to
eighty K which, as a reminder, if Jason and I
and our team can be of service to you and
your retirement planning needs. Please give our office a call
for a free consultation seven seven five eight hundred and
eighteen oh one, or go to our website Sanchez got
g A U n T dot com And don't forget
(27:57):
to check out all of our podcasts that are out
there floating around. There's, like I said, I counted over
a thousand of them available for you. So yep, there's
a time to It has added up over these years,
my friend.
Speaker 2 (28:08):
It has added up spent a fair amount of quality
time for sure.
Speaker 1 (28:14):
Just a little bit, just a little bit, all right,
We're gonna hustle through this last segment of our show,
talking again about our theme of the Fed cutting interest
rates next week. We're gonna break this down two ways.
We're gonna run quickly here, who tends to benefit if
the Fed starts this interra straight cut cycle? And who
does it hurt? So I'm gonna handle the I get
the good news side. Jason's gonna be the bad guy,
Like how I did that? I know It's like, come on,
(28:35):
I'm not feeling good. Let me have a let me
let me do the easy part. So who's gonna tend
to benefit well, of course, anybody that has a variable
rate type of debt, right, things like credit cards, helocks,
adjustable rate mortgages. You start getting interestraight cuts, you should
see those interest rates come down a bit. And of
course businesses, right, businesses need capital. Everybody wants to grow,
(28:56):
So if they're looking to get a line of credit,
borrow for capital, expenditures, operating expenses, whatever it may be,
they can benefit home buyers. Of course, will we touched
on this with Dwight yesterday. Again, home buyers are people
looking to refinance and don't need for further explanation on
that one. And then, of course, as we said, stock
market tends to generally do very well when the interest
(29:17):
rate cycle cut cycle begins. So again you take a
look at areas that are interest rate sensitive, like real estate, construction,
home builders, tech, consumer discretionary, etc. Those looking to buy
big ticket items. Another beneficiarrea of this, right, lower financing
costs for things like cars, big appliances, and home improvements.
All that. Hey, the government, that's why Trump's pressuring Pal.
(29:37):
The government wants us to come down because we got
a big thing called debt. And of course, interest rates
come down, the governments start servicing that debt at a
lower yield or lower cost, and then of course job
creation right phraates go down, spending tends to rise, which
of course boost higher demand. Higher demand equals more hiring,
improve business profits, etc. Etc. What's our bad news if
(29:59):
the rates get cut, Jason, I.
Speaker 2 (30:00):
Mean, I think people who are on like you mentioned
earlier in the show of fixed income, that utilize savings accounts,
high yield savings and the like for cash flow income, right,
you're gonna you're gonna see those things drop. And if
you haven't locked in longer term rates and extended duration
of portfolios, you're going to feel the effects of those
lower rates as you go to refinance or repurchase CDs
(30:22):
if you have you know, short time horizons. And other
people who were exposed to it are pension funds, right,
Insurance companies, institutions. They they do a lot of investing
their their their liabilities are typically longer and then they
you know, sort of have the exposure on the short end,
so you get a bit of a bit of a mismatch,
so they could be in a tougher spot where they're
not able to earn as much in quote unquote lower
(30:44):
risk investments against things that may have more longer term
high you know, pain to the upside it. You know,
it just depends on what type of exposure you have
in your bond portfolio. If you're really short dated, then
you're probably gonna see more of this in terms of
rates going down where you're losing income. If you've got
(31:05):
longer dated portfolios, you've actually done fairly well this year
as the market's priced in these lower rates. So always
places to be hiding and always places to be searching.
Speaker 3 (31:14):
But you know it'll be fun to watch.
Speaker 1 (31:17):
I will indeed, Yeah, it's gonna be very interesting week
next week, and get that behind us finally, and then
let's see, we have a couple of weeks with no
earnings yet and uh well no, we actually should start
earnings next Friday, if I remember right, right, No, no, no, no,
what am I doing? No, I'm one month behind that.
So yeah, we got a couple couple weeks before October
rulls around then earning real stuff, the real stuff. Yeah
(31:41):
we got yeah, a few. I should explain myself. That's
a little dribbling there, Yeah, exactly, all right, brother, I
will share a great weekend, same with all of you.
Be safe out there. We'll see on Monday and the
John Sanchez Show. God bless and have a great weekend.
This program was sponsored by Sanchez gone To Capital Management LLC.
Serial in this program was intended as general information only
(32:03):
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 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,
(32:27):
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 Friday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k which it's a
pleasure to be with you and a pleasure to be
with my partner, mister Jason got the aforementioned firm that
has his name in there. Yeah you do, my friend,
Thank you. I appreciate that.
Speaker 2 (00:16):
Yeah, it's uh doing well. I'm happy this week's over.
It felt it felt like we've been dealing with a
lot of news, a lot of color, a lot of
fed speak, a lot of rate jargon, et cetera. But
another one in the books and market continues to climb
that wall of worry, even though your dow unfortunately was
a bit in the it's a weird day.
Speaker 3 (00:35):
You had down and flat and how's that going?
Speaker 1 (00:39):
Yeah, yeah, exactly, yeah, my dat, you know, yeah, I'm her.
I mean, come on, man, we she she gave us
a couple couple of record closes this week and gave
a little bit back, you know today, and you know,
but you take it easy on my dubt jes take
it on my dat because you're stubborn Nasdac just won't
give up another record close for that son of a gun.
(01:00):
It's my god.
Speaker 2 (01:01):
Yeah, I mean just I mean, we've got that wave
of IPOs that have been starting named like Figure and
Via and you know it's.
Speaker 3 (01:10):
Not to be a bear.
Speaker 2 (01:11):
I don't want to just but things to think of
to put away in your mental quiver is when you
get this new liquidity for folks to reallocate too, with
this wealth of IPOs that are coming and more to come,
that tends to create a bit of a vacuum from
names that have worked, which are very top heavy in
(01:32):
the S and P to reallocate towards some of these
new fresh ideas, and that can cause some market gyration,
you know, down the line. And that's the thing that
you know, they tend to feed the ducks when they're
quacking the loudest. And now to see all these IPOs
come out, I'm just putting it into.
Speaker 1 (01:50):
Do they make you as nervous? Do they make you
as nervous as they do me?
Speaker 3 (01:54):
They do. I think there's some pretty cool names that
are coming to you.
Speaker 2 (01:57):
I won't speak to any specifics because we did buy
one in one of our portfolios, but I think there's
some interesting stocks out there that have some you know,
long term, good positive stories to them, and there's others
that again like open Door, which is a wonderful advertising venue,
and that's a name much like Reddit right where people
(02:18):
think of Reddit to why would I buy Stock?
Speaker 3 (02:20):
And Reddit.
Speaker 2 (02:20):
It's a lot of people just talking back and forth.
But remember always try to take a lens of does
this company provide data?
Speaker 3 (02:30):
Right?
Speaker 2 (02:30):
And things like when I first bought Meta years and
years and years ago for the kids, I don't have
a Facebook account, I never have, I never will. But
the fact is I bought it because of data like
Google and open Door and Reddit, like if you go
and look, I believe it was almost thirty percent three
zero percent of the data that is in all of
(02:51):
these large language.
Speaker 3 (02:53):
Models is fed by Reddit.
Speaker 2 (02:56):
Like all the conversations that all the people are having
with all their onions that is a like the top place,
so an open door, same thing, all these people arguing
about someone threw a cat over my fence like those
are all you know, it's a data provider and there's
probably a lot of demand for their content from lots
of folks into the future. So yes, it's interesting, but
(03:18):
there's you know, there'll be some there'll be some dogs too.
Speaker 1 (03:21):
Well, yeah, and that's my point. That's why I was
I posed that question. I was having this discussion with
a friend a few hours ago, and I said, we
were talking about how this market feels very similar to
ninety nine two thousand, right, It's just nothing will bring
it down. We're going into a declining insanstraight environment, which
we really didn't have that so much in ninety nine
two thousand. Rach were pretty strong. And actually, if I remember, right,
(03:42):
but every ipo just surges. Everybody wants to jump onto
everything and so on and so forth. And I think,
you know, again, by no means like you just said,
no means mean to be bullish or bearish. However, I
think it just requires a bit of caution because you
get all this liquidity slash around now and you get
everybody going, oh my god, I want that ipo and
I want that one, and da da da dad, And
(04:04):
you know, I mean the the Bullwinkle Twins today. How
much money did they make, you know? And their new yeah,
their new ipo. Yeah, you know, it's like, oh we
got the word crypto on it. Boy, I want to
buy that one. That seems to be the trend.
Speaker 2 (04:17):
Right Cardown or whatever his name is, that that you
know Schiller, he's got now a bitcoin house fund, like
you know, he's doing houses and things all the time.
You know, now he has one that's backed by bitcoin.
So again we're not professing to go buy it, but
I'm just saying that's that is a side of the time.
(04:39):
So I think you're right on the decade. I just
don't think we're ninety nine. I want to say ninety six,
ninety five. And I still think there's more room to
go in the story. But and I tell, literally robbing
the words from my client conversations, I say, I think
we're in the mid nineties. You've got demographics, right, the
average age in the US is thirty nine years old.
You back, the baby boomer's up thirty years. Same thing.
(05:01):
You've got Internet. Then you had all the sort of
excitement of technology. And remember these names, had you held
them through the boom or bust, a lot of them
would be gazillionaires. But it's just that same thing. Yeah,
you've got new technology, new excitement, new liquidity, new asset classes,
which probably you'd say the mid nineties new asset class
(05:22):
of the market. Sure you know, but yeah, I think
you're I think you're spot on with that. It's just
are we that close to two thousand? I'm hoping not,
but yeah, I think I think you're certainly looking at
the right way.
Speaker 1 (05:35):
I agree, Yeah, it's I mean, folks, it is fascinating.
We'll have doctor Sanchez back on the show on Monday.
He was traveling this last Monday for our AI segment
and and you know we were, he and I Jason,
as you know, we participated in a webinar yesterday and
it was it was mind boggling. The gentleman that put
on the webinar. He's a consultant for our industry, so
(05:59):
a lot of the data, the AI data that he
was sharing was in regards to our industry. But what
he went on to say, and he's very very well respected,
and he had, you know, other people's data to say.
This wasn't just his opinion, but the exactly as you
just said, what this world both financially and just how
(06:21):
it's changing our lives where we're going to be folks,
who we're not talking five ten years from now. As
far as how everything that we know it today is
in regards to the stock market, and again, I'll just
look at your entire both personal and professional life. It's
changing so fast, you have no idea, no idea with
Jason and I and doctor Sanchez are going through every
(06:45):
day with the amount of information that's coming our way,
just how our industry is changing. And you know, then
you throw in a whole other exciting class again not
recommending it, but the crypto side of things right again,
just so many different things coming our way. By the way,
which is going to be our subject this afternoon, which
is we got a fed that's becoming a really good
(07:05):
friend of ours here hopefully you know, next week and
you factor all that in and brother, you got you
got the ingredients of a Dow fifty thousand. I think
really realistically over the next I don't know if it's
even gonna take a year, to be honest with you,
I think we've got so much momentum right now that again,
back to ninety nine two thousand, it took us what
(07:26):
a year or two for you know, every company that
had dot com all of a sudden they're multi gazillionaires.
Took a couple of years for those to kind of
find their you know, who's the ones that are that
are gonna win? Who are the ones that are gonna lose.
It's gonna be the exact same thing with AI and
with crypto and everything else. You're gonna have a you know,
a small number that, uh that are gonna be the
real winners. And as Jason and I have said many times,
watch the balance sheets. Those who have the big balance sheets,
(07:48):
the Googles, the microsofts, et cetera. Those are gonna be
your winners. Are you going to have some that are
you know, their stockholl serge thousands of percent? Absolutely? But
again you've got to be very, very careful. And I
think this is a good time, Jason. You know again,
going back to ninety ninety two thousand, let's throw out
some advice that that I think was very relevant then
in you know, armchair quarterbacking that time period to now,
(08:10):
and that is, you know what, we all have a
bit of gambler inside of us. We all, you know,
want to roll the dice and try to get that
thousand plus percent return. That's cool, right again, we all
have that. But what you do, how do you do that?
Take just a slice of your portfolio, don't take any
money you can afford to lose. Whatever that percentage is,
five percent, ten percent, one percent whatever it is, and
(08:32):
have fun with it, right, build you know, your favorite
AI portfolio or crypto portfolio, whatever you want to do,
so you're you're in the game. Right that way, you
can you don't feel like an outsider when you go
to the you know, the barbecue or the cocktail party
or coming up the Christmas party and you know, everyone's
bragging about how much money they made in these crazy areas. Hey,
(08:53):
you can hopefully say, hey, yeah, me too, but they're
not going to ask you how much did you put
in there? You know, maybe five hundred bucks or something. Right,
But but but that's what I found, Jason, you know,
going back into that era that again, armchair quarterbacking, that
really would have been the best way to do it,
because you can make your money, like we're experiencing right now.
You can make your money in a very well diversified,
(09:15):
big quote blue chip type of portfolio, right because all
tides you know, are rising at this point and without
taking that risk. So keep that in mind as you're
looking at allocations and things. And we start, you know,
getting into this these final few months of the year.
Take a look at that and and and again, nothing
is wrong with that, but just don't bet the farm,
(09:35):
as the saying goes on again Crypto or some of
these hot IPOs, because it's easy, I'm telling you, folks,
even though that's being professionals doing this all day, it's
easy to get sucked into that enthusiasm. You know, you
turn on CNBC and it's like, oh, you know this,
this this ipo is up. You know well, I mean
look at look at open Door, Like you said, what
was that one day? Was it day yesterday or day before?
It was up? Like what fifty six percent? Just because
(09:58):
they're bringing on the former Shopify ceo. I mean, you know,
come on, that doesn't make fifty six percent in one day.
That stuff doesn't happen in normal times. And then again,
we're back to this other factor that that is real, legitimate,
and that is the FED. And that's exactly what we're
going to be talking about, and that is what are
we looking at with the potential market reactions to next
(10:21):
week's FED meeting. Okay, now we're going to go through
some different scenarios with you, because you know, Jason, yesterday
I just had Dwight on the show. Corey was traveling,
and you know, we went into a lot of discussion.
I think probably like you did with them last week
when in my absence, and that is there is no
no guarantee whatsoever that if we get which we all
(10:43):
think we will, if we get that Fed interest straight
cut next next Wednesday at eleven o'clock in the morning,
that you're going to see mortgage rates come down. Right.
It just hasn't worked that way. And Dwight said, hey,
you know, remember guys, last time we got a half
a percent cut by the Fed. What happened to mortgage rates?
They surged and you know, roughly a year later, thirty
year mortgage was you know, briefly touched eight percent. So
(11:03):
you don't really know what's gonna happen other than I'm
pretty confident it's going to be a very positive reaction
into the stock market. Maybe not initially because again we're
buying the rumor ie we think the Fed is going
to raise rates, i mean cut rates, and sometimes you
get to sell the news once it happens, like, oh okay,
so that's where that that Jason is united. Always pay
(11:24):
attention to that. That press conference by Jerome Powell at
eleven thirty, you know, half hour after the interest rate decision.
That's really where you're going to find out, you know,
where the hit the Fed's head is at at that point.
If he starts to give hints, as the street anticipates,
if he starts giving hints that, hey, guess what, you know,
this may be you know, I'm gonna make it really simple.
This is really one of many future cuts. Boy, you
(11:47):
could really see the market move. But if he says
we're just gonna kind of try this right now, we're
going to be data dependent. Yeah, market may not get
that excited. You can actually see a little bit of
a sell off there. So it's really a tough a
tough one to predict. But the bottom line is we're
gonna get into a declining interest rate environment, which will
be positive for equities and hence why we want to
talk about some of these market scenarios with you. And
(12:07):
then Jason, I came across a really great story on
CNBC just right before the show, and I need to
study it a little bit more before we h while
we're at the break, But folks, there is seven trillion
dollars sitting in money market money market equivalent type funds
out there. Guess what that money's gonna do, Jason, Well,
I'm not asking you, I'm Jason. Tell the audience what
(12:29):
that money's gonna do. If we start getting fed cuts,
where's it going?
Speaker 3 (12:32):
It's gonna go somewhere where it can find a better
rate over there.
Speaker 1 (12:35):
There you go, there you go exactly, I e. Maybe
the stock market. So another nice guest to wind at
our back. So we had a lot to talk about
it on this Friday afternoon. Let's turn over to Jack Saban.
First of all, he's got right now traffic for us. Jack,
welcome back to the John Sanchez Showing, News Talk seven
eighty koh. All right, let's get down to our topic today, Jason,
(12:55):
once again, the NAS that closing in a record of
again of ninety eight points point four to four per
cent to twenty two one, sloppy on the dow down
to seventy four, about a zero point five to nine
percent give up nothing major percentage wise, forty five thousand
and eight thirty four was our level and the SMP
down just three points to six thousand, five hundred and
eighty four. But it wasn't that amazing, Jason, when it
(13:18):
hit that sixty six hundred resistance level just binged right down.
How goes, well, boy, I'll goes yeah, no, Ki there,
Yeah for sure, Yeah, that's for sure. But again we're
gonna get into our topic now, potential market reactions to
next week's FED meeting. Once again, market on your calendar
eleven am next Wednesday, we'll have the decision eleven thirty
(13:39):
the press conference, and you know, Jason and I of
course will be going into great detail of the release
and what the FED had to say and so on
and so forth. But Jason, let's take real quick here.
Let's give you your your market recap, and then let's
get into the CNBC story about the seven trillion dollars
and what can happen, and then we'll get into our
topic bottom of the break.
Speaker 2 (13:58):
Yeah, I mean, we got the University Michigan confidence number today.
It does have some inflation information inside of it that
was fairly benign. Came out fifty five point four, say,
some fading economic views on the lower income side, which
is to be expected just given how expensive everything has been.
Consensus was closer to fifty nine, So I'd say those
(14:21):
who were surveyed were a little more bearish than anyone
who had thought they would be but again not to
be expected. We talked on the show on Thursday, as
you mentioned last Thursday, Last Thursday, Time's Fine with Corey
and Dwight about how the consumer is stretched, right, that
does du rates really mad or all that much in
(14:43):
terms of a big refie or push to go buy
a house, just given that things are so expensive, but
also that buyers are walking away from purchases because they're
realizing that they don't quite have the money that they
had thought they would. But I mean, I saw strength
in the Googles and Metas of the world, you know,
a little bit of a little bit of a rally
(15:03):
into the close, but the market seemed fairly range bound
around that sixty six one hundred level.
Speaker 3 (15:08):
As you mentioned.
Speaker 2 (15:09):
Healthcare was down a percent, you know, the vaccine stocks
that were under some pressure after continue trumb administration plans
to to you know, link deaths to vaccines and such.
So that was a heavy on healthcare on the.
Speaker 1 (15:21):
You're taking that one, really, you made that one, really,
so it was a lot worse than that. Yeah, they
came out and said, oh, yeah, those shots that we
gave our kids bad right for COVID.
Speaker 2 (15:31):
I'm going to stay away from that I know you
are the you saw some M and A in sky Dance,
Paramount Warner Brothers. Just more of that merger mania that
I think is going to continue to happen. As we said,
Trump's a much more favorable administration as far as mergers.
Speaker 1 (15:46):
Well, money's gonna get cheat.
Speaker 2 (15:47):
Yeah, I think this is money on the money side.
But it was like a hard no with anyone trying
to merge financially.
Speaker 3 (15:53):
Oh yeah, tack et cetera.
Speaker 2 (15:55):
And so you know, I think this at least the
view is that it'll be a little easy year to
merge companies, which I think makes a lot of sense
and also symptomatic of upper ends of markets too.
Speaker 3 (16:06):
So today was not a lot overall.
Speaker 2 (16:08):
I think the market's going to wait, as you very
well mentioned, until the Fed does something next week. Being
that the probabilities as high as it is, it's one
hundred percent of the time when we were this high
ever probability the Fed cuts, it's just going to be
more of are we going to get something in October?
Are we going to get something in December? And I
think the data will tell you that.
Speaker 1 (16:27):
So yeah, absolutely, all right, great job, there's always all right,
let's talk about start getting in some market reactions of
what can happen if we do get the interest straight
cut next next week. And remember, folks, this is the
street consensus right now is very I didn't get to
see the numbers today, but if I remember from yesterday,
we're getting like a you know, seventy percent probability of
(16:51):
an October cut. It was higher actually for December, up
around the low eighty percent mark. Again, I didn't see
where the numbers were today, but this street is expecting
not one, but at least three more cuts this year
unless we get a half a percent, which we'll talk
about half a percent next Wednesday, and then you know,
(17:11):
one one more quarter cut. So it's pricing in three
quarters of a percent cut between now and the end
of the year. However, the the math works out there.
But here's what's interesting, folks, there is this is according
to Crane data, there is roughly seven point six trillion
dollars setting in cash money market accounts. Okay, now, as
(17:35):
I tease Jason going to the break, Jason, tell the
audience what's going to happen if these rates start coming down?
And we'll touch again when we come back from the break.
How your personal life can be affected with these rates
coming down. Both the pros and there's some cons to it,
and this could be one of those. Right, you're going
to see money flow out, especially if we get a
half a percent cut, You're gonna see money, you know,
come out of this like water leaking out out of
(17:57):
a dam that just broke. People are not going to
stick around to those accounts where we've already we cautioned
all of you. How when we start cautioning Jason about
money markets and CDs like locking in your one years
was that three or four months ago? Yeah, when they're
a lot higher, So hopefully you listen to our advice
on that one. But when this, you know, these rates
come down. These money markets, remember they adjust every seven days, right,
(18:21):
and so you would probably, in my opinion, see rates.
If we get it again, let's just say a quarter
percent cut, you're going to see your favorite money market
account adjust probably within hours. Right, We've seen that many times,
saying those CDs they're probably going to just right away
because I'm sure the prime will come down, and so
on and so forth. So the bottom line is, if
(18:42):
you're living off you know, your savings account interest rate
at you know, you were in use to that four
percent plus mark. Get ready, you need to kind of
take a look at your budget and see, you know
where else you can start doing it. But the bottom
line is, yeah, we got seven point six trillion sitting
in there. That money is going to go find a
home somewhere. Matter of fact, we and we won't have
(19:04):
time to get into this. But I thought this was interesting, Jason,
this article that these mutual fund companies were. Again, you
have a mutual fund, they all have money market accounts.
These mutual fund companies waiting on a big decision from
the Security and excan Exchange Commission the SEC, which would
allow every asset management company to offer an ETF share
(19:25):
class of their funds. And the analysts know that there
are seventy applications right now with the SEC for exemptive
relief from the main mutual fund industry trade group ICI,
who's working with hundreds of fun sponsors to be prepared
to add an ETF share class if the SEC says go.
So this is you know, this is how serious this
(19:48):
money flow could be, folks. These mutual fund companies are
very concerned that you're going to just bail out of
money market accounts you know that you have in your
mutual funds, et cetera, and go into the stock market.
Now they I want you to go into one of
their funds, of course, but maybe you don't. Maybe go
buy some individual stock. So it's gonna be interesting. It's
gonna be really interesting. It will.
Speaker 3 (20:07):
And after the break we can talk all about it.
Speaker 1 (20:09):
Indeed we shall. Let's turn over to Jack Saban. He's
got news trafficking. What Ayjack? Welcome back to the John
Sanchez Show on NEWSTOK seven eighty k O, which with
Jason got Happy Friday to all of you, wishing you
a great weekend once again. We lost two seventy four
on the Dow, close to a record of a twenty
two thousand and forty one on the NASDAC that it
was a ninety eight point increase or point four to
four percent, and the SFP down three points or point
(20:31):
sixty five percent or excuse me, point zero five percent.
I shouldn't even said that. Let's go to oil thirty
one cent gain, sixty two sixty seven a barrel. Another
good day for gold twelve dollars and thirty cent rise.
Three thousand and six eighty six fifty and pronounce of course.
And on the ten year treasury up nickel five basis
points to yield a four h six but for the
week down three basis points. All right, big Fed interest
(20:53):
rate decision again coming our way at Wednesday at eleven
am Pacific standard time. What are the possible markets in
scenarios with what the street is pricing in? Again, as
Jason said, one hundred percent probability of a quarter percent cut,
a little bit of a probability of a half a percent,
and no one's talking about the Fed doing nothing. But
you know, our job is to look at all these
(21:14):
scenarios and be prepared and have you prepared in that scenario? Again,
let's start with the first one, Jason, I'll take this
first one, the one that's already priced in a quarter
percent cut. So this is out of the three scenarios
that we're going to go over with you, this is
by far the most expected outcome. As we've said for
weeks upon weeks now, the markets have this already priced in,
(21:35):
so the reaction is right, what can we look for?
I think we get a little bit of a rally
out of this thing. We've already again rallied into it,
because again the news is already built into it. Of course,
we know the stock market loves a lower interest rate environment,
but again it's already priced in. You're going to see
some rate sensitive sectors like tech, home builders, consumer discretionary.
(21:57):
Those can have some major benefits, as they always do
Bond Yealds. They may come down a little bit, but
you know, probably less dramatic than the cut. And then,
most importantly out of all of that, listen to what
Chairman Palell has to say, or better yet, listen to
our show, because we'll have that what Chairman Palell has
to say at that press conference at eleven thirty. You know,
is he hinting that this is one and done? Is
(22:19):
this one of many? So on and so forth, And again, Jason,
it's always a great reminder to everybody. You get two
market reactions, folks. You get one when you get the
the FOMC or Federal Open Market Committee decision that's at
eleven o'clock, and many times you will get much more volatility,
both up or down. When Chairman Pale starts talking. I
remember what he does. He starts talking, Oh maybe about
(22:41):
the first five minutes or so of his Usually it's
an hour long press conference reiterating what the Fed announced
at eleven o'clock, so it's kind of a reiteration of that.
Then usually at that point he'll start opening up the
Florida questions, and that's when things get really interesting. So
once again, quarter percent cut. As long as mister Powell
says saying, you know what, this is kind of one
of many, or something along those lines, I think we
(23:03):
could have one hell of a rally day that day.
What do you think would happen if we get a
half a percent? Let's some expect but not the majority.
Speaker 2 (23:09):
I think the market would freak out, right, I mean
it would mean that they're signaling something worse than.
Speaker 3 (23:16):
Expected, right.
Speaker 2 (23:17):
I mean, you've heard some of the folks who are
trying to get on Trump's good side. I think was
it the reader was on TV today. He's one of
the guys that they're talking to. I think he's just
talking to them in general. But you know, he said
he thinks they could cut fifty bases points. And if
you did the simple math and just said where rates
are versus where inflation is, yeah, they could cut fifty
(23:37):
bases points and still have lots of room to do so,
but I don't think they need to. Like nothing's collapsing,
nothing's decelerating. It would make them look bad.
Speaker 1 (23:46):
You got a terrible jobs market.
Speaker 2 (23:48):
Yeah, I mean again, like we said that, the tough
part with the jobs market too, is are people pausing
ahead of you know, AI adoptions like this couldn't And
I hate to always be like this time is different,
but like it kind of is right. This is a
new paradigm of It's not that companies are maybe not
(24:09):
hiring because they're afraid of slowing, but maybe not hiring
because they're excited about technology and innovation. I mean, we
had a great call today, not about laying people off,
but just all of the efficiencies of what technology can
provide for a lot of these folks. I mean, we're
already getting phone calls from clients now like rates are down,
what do we do next? And those are continuing to happen,
(24:30):
and like we said, it's going to create a chase
of some kind to higher yielding securities. But I think, yeah,
lower rates would not a bigger than expected cut would
probably be view to least initially.
Speaker 3 (24:40):
More of a oh my gosh, what's the FED.
Speaker 1 (24:43):
Looking out for is Yeah, my thought, what are they
worried about? Why are they getting ahead of this train
so much? Yeah exactly. Okay, so there's scenario number two.
First one quarter percent cut, which is what's priced in
half a percent, a little bit of a probability. Let's
go to the third one. The Fed does nothing. Oh boy, folks,
we don't want that. Let's tell you all right then
(25:04):
and there, we do not want that one. Why because, uh,
the street again is stopped its feet, you know, it's
had it's it's a tape or tantrum. And if the
Fed does not give it what it wants, watch out below.
You know, the way they're saying goes you would definitely
see yeah exactly, and boy, yeah Trump would you know, come,
(25:25):
I can't imagine what he would what he would say
or do at that point, but yeah, I mean, we
could really have a substantial market sell off on it.
You're can see interest rate names being affected. You're gonna
see bond yields. Prize traders are gonna have to reset,
you know, their thoughts and expectation. Investors are going to go,
oh my god, here we are again. The FED is
behind the curve. The Feds behind the curve. Then you're
gonna have the White House saying, you know, get rid
(25:46):
of pal Feds behind the curve. And yeah, no.
Speaker 3 (25:50):
No Fed either.
Speaker 2 (25:52):
I think they just want to exactly you know, he's
already been unless Powell.
Speaker 1 (25:56):
Wants to you know, wait a minute, unless wants to
really piss off Trump this last you know, last few meetings.
You know why he's chairman. You just never know it is.
Speaker 2 (26:06):
I think he's he's got all the air cover he
needs now, right, Like, yes, if the FED is worried
about cutting rates and then inflation happening, and this is
what we've sort of talked about before, like, if that's
your concern, get over it because you've got all the
air cover you need. If you cut rates and inflation
goes up, Trump can't be like you caused inflation, right Like,
(26:26):
there's no way you call him a knucklehead, and you
know what I mean. So it's just I don't I
see a very little probability of this happening.
Speaker 1 (26:34):
But it's discuss yep, absolutely, okay, folks. So there's our
predictions of market reactions. Again. Quarter percent ket probably have
a nice little rally. Half a percent ket could have
a big rally, but then they can go, uh oh,
this isn't good and not have that big rally, so
that one's really one direction or the other. No cut,
big sell off. That's that's our scenarios going into this
(26:54):
all right. Now, Let's get into another scenario that I
think is very very important for everyone to consider, and
that is what about you? Right? We care about you.
We don't care about anybody else. We care about you.
What how you know the reaction should you expect in
your life if we get this interest right cut as anticipated? Right? So,
(27:15):
we could put together a list of you know, what
could really we be looking at as far as the
impacts to your personal life with the beginning of this
interest rate cut again, don't expect much change if it's
just a quarter bit. Again, if pal says, hey, this
is you know, one and one of many that type
of thing, this is where we could start seeing some
reactions in your personal life, and we'll tell you what
those are when we come back. Let's wrap it up
(27:35):
a Jack Staban right now, traffic center, Hey, Jack, welcome
back to the John Sanchez Show on Newstalk seven to
eighty K which, as a reminder, if Jason and I
and our team can be of service to you and
your retirement planning needs. Please give our office a call
for a free consultation seven seven five eight hundred and
eighteen oh one, or go to our website Sanchez got
g A U n T dot com And don't forget
(27:57):
to check out all of our podcasts that are out
there floating around. There's, like I said, I counted over
a thousand of them available for you. So yep, there's
a time to It has added up over these years,
my friend.
Speaker 2 (28:08):
It has added up spent a fair amount of quality
time for sure.
Speaker 1 (28:14):
Just a little bit, just a little bit, all right,
We're gonna hustle through this last segment of our show,
talking again about our theme of the Fed cutting interest
rates next week. We're gonna break this down two ways.
We're gonna run quickly here, who tends to benefit if
the Fed starts this interra straight cut cycle? And who
does it hurt? So I'm gonna handle the I get
the good news side. Jason's gonna be the bad guy,
Like how I did that? I know It's like, come on,
(28:35):
I'm not feeling good. Let me have a let me
let me do the easy part. So who's gonna tend
to benefit well, of course, anybody that has a variable
rate type of debt, right, things like credit cards, helocks,
adjustable rate mortgages. You start getting interestraight cuts, you should
see those interest rates come down a bit. And of
course businesses, right, businesses need capital. Everybody wants to grow,
(28:56):
So if they're looking to get a line of credit,
borrow for capital, expenditures, operating expenses, whatever it may be,
they can benefit home buyers. Of course, will we touched
on this with Dwight yesterday. Again, home buyers are people
looking to refinance and don't need for further explanation on
that one. And then, of course, as we said, stock
market tends to generally do very well when the interest
(29:17):
rate cycle cut cycle begins. So again you take a
look at areas that are interest rate sensitive, like real estate, construction,
home builders, tech, consumer discretionary, etc. Those looking to buy
big ticket items. Another beneficiarrea of this, right, lower financing
costs for things like cars, big appliances, and home improvements.
All that. Hey, the government, that's why Trump's pressuring Pal.
(29:37):
The government wants us to come down because we got
a big thing called debt. And of course, interest rates
come down, the governments start servicing that debt at a
lower yield or lower cost, and then of course job
creation right phraates go down, spending tends to rise, which
of course boost higher demand. Higher demand equals more hiring,
improve business profits, etc. Etc. What's our bad news if
(29:59):
the rates get cut, Jason, I.
Speaker 2 (30:00):
Mean, I think people who are on like you mentioned
earlier in the show of fixed income, that utilize savings accounts,
high yield savings and the like for cash flow income, right,
you're gonna you're gonna see those things drop. And if
you haven't locked in longer term rates and extended duration
of portfolios, you're going to feel the effects of those
lower rates as you go to refinance or repurchase CDs
(30:22):
if you have you know, short time horizons. And other
people who were exposed to it are pension funds, right,
Insurance companies, institutions. They they do a lot of investing
their their their liabilities are typically longer and then they
you know, sort of have the exposure on the short end,
so you get a bit of a bit of a mismatch,
so they could be in a tougher spot where they're
not able to earn as much in quote unquote lower
(30:44):
risk investments against things that may have more longer term
high you know, pain to the upside it. You know,
it just depends on what type of exposure you have
in your bond portfolio. If you're really short dated, then
you're probably gonna see more of this in terms of
rates going down where you're losing income. If you've got
(31:05):
longer dated portfolios, you've actually done fairly well this year
as the market's priced in these lower rates. So always
places to be hiding and always places to be searching.
Speaker 3 (31:14):
But you know it'll be fun to watch.
Speaker 1 (31:17):
I will indeed, Yeah, it's gonna be very interesting week
next week, and get that behind us finally, and then
let's see, we have a couple of weeks with no
earnings yet and uh well no, we actually should start
earnings next Friday, if I remember right, right, No, no, no, no,
what am I doing? No, I'm one month behind that.
So yeah, we got a couple couple weeks before October
rulls around then earning real stuff, the real stuff. Yeah
(31:41):
we got yeah, a few. I should explain myself. That's
a little dribbling there, Yeah, exactly, all right, brother, I
will share a great weekend, same with all of you.
Be safe out there. We'll see on Monday and the
John Sanchez Show. God bless and have a great weekend.
This program was sponsored by Sanchez gone To Capital Management LLC.
Serial in this program was intended as general information only
(32:03):
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 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,
(32:27):
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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