September 26, 2025 • 36 mins
Wall Street closed the week on a steady note despite some mid-week volatility. Inflation data came in on target, jobs remain consistent, and investors are watching next week’s economic reports. The AI sector, however, showed signs of cooling, sparking new discussions about market direction. On today’s episode of The Jon Sanchez Show, we review the recent winners, highlight potential risks, and outline the factors that may influence markets as October begins. This conversation provides perspective for those interested in market trends, retirement planning, and wealth management in Reno.
👉 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.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Good Friday afternoons. You welcome to the John Sanchez Show
on News Talk seven eighty k oh. It's a pleasure
to be with you as we wrap up the weekend.
A pleasure to be with my partner, Jason Gunt. Happy Friday,
Jay T. Yeah, five exclamation points, maybe six.
Speaker 2 (00:21):
Yeah, all of all of the exclamation points. I am
very happy it's Friday for sure.
Speaker 1 (00:25):
Amen. Amen, Oh my goodness, what a show we have
lined up for you this afternoon. We had a lot
of moving parts of the market this week. We had
a couple things happening in the after hours that you
may not be aware of that we'll share with you,
and then wrap up the show by always answered the
question what is this market telling us right now? A
lot different this week than last week. Jay. We had
a lot of things to kind of kind of change
(00:46):
around a little bit here.
Speaker 2 (00:48):
Yeah, you know, concerns around in Vidia Open AI, the
circular reference area.
Speaker 3 (00:56):
Is there an error?
Speaker 1 (00:57):
What?
Speaker 3 (00:57):
What?
Speaker 2 (00:58):
What's the how do we take this? I think we
talked about it a little bit this week. The market
is also trying to figure it out, right are we
You know, you're starting to hear more of the the
bubble cries out there from the you know, the the
Citadels of the world again, Ken Griffin. Not uncommon to
talk his own book, but you know, uh, you're you're
(01:18):
at least people are poking some healthy holes in the
you know, this ride goes on forever. Thought that I
think is very much something that we should continue to discuss.
Not that we're calling for some impending crash, but that uh,
you know, balloons tend to inflate slowly and deflate.
Speaker 3 (01:36):
Quickly, so it's just something we want to keep. Yes,
it is. It just popped in him.
Speaker 2 (01:42):
I told you before the last shop that I worked at,
and this is no one can get a hold of
this because it's very tightly held. There was a list
of jg isms that the traders on the desk.
Speaker 3 (01:53):
Used to keep, and you know, some of them, I'm
proud of some of them.
Speaker 1 (01:57):
I'm not product, but somebody can be repeated.
Speaker 3 (02:01):
Always rich with analogies.
Speaker 1 (02:02):
Yes, so you manage twelve traders, multi billions, Yeah, I
bet there's a few things.
Speaker 3 (02:07):
Tons of some stressful situations.
Speaker 1 (02:10):
No, you never had any of those. Never.
Speaker 2 (02:12):
Never.
Speaker 1 (02:13):
You got to tell the audience it's Friday, we talk
about it. You got to tell the audience about some
of the stories, because I love getting Jason's old war
stories where you were there sometimes for twenty four hours.
Because we're a hedge fund, you were leveraged and crazy
things would happen, and right.
Speaker 2 (02:30):
It was crazy things. It was also just crazy timing.
And remember you're working with eccentrics in general. Like we
had a portfolio manager that you know, wonderful investor, but
he was Russian and literally on Russian time, and so
like he would kick off his optimizations and we would
know because we could see in our systems like late
(02:50):
in the afternoon. Inevitably it was like, you know, Thursday
at three o'clock, which means they're not going to be
done until six seven.
Speaker 1 (02:57):
Eight X optimization.
Speaker 3 (03:00):
Optimization's simple math.
Speaker 2 (03:01):
With a quantitative manager, everything's built by models. Right, They're
not out there kicking tires saying, hey, is Nike gonna
make some cool shoes next quarter? They're pulling in all
the data for Nike earnings growth and sensitivity to the
ruble and like is it raining on Wednesday?
Speaker 3 (03:20):
Like you name it.
Speaker 2 (03:22):
All these things were researched in quant land as to
was their.
Speaker 3 (03:25):
Efficacy to a signal?
Speaker 2 (03:27):
Right, and so they would create a model that would
you know, take certain things to say, these are my
top rank stocks, these are my bottom rank stocks, and
the subject to their benchmark, they would create a portfolio.
And so you know, their optimization is a lot of
numbers running up against borrow risk models, you name it,
(03:47):
and it would kick out a optimal portfolio. Well, the
analogy I always use, going back to the balloon we
talked about at the beginning, was they're trying to stuff
a balloon inside of a box.
Speaker 3 (03:57):
Right.
Speaker 2 (03:57):
Inevitably, you push in one area and you're overweight European technology,
and you smoosh that back in and now you're you know,
under exposed to the US large caps or you know.
So they're doing all this stuff and eventually at the
end you get an optimization that fits within the constraints.
And then it gets handed to the traders and we're
building portfolios and we got to strategize as to how
(04:19):
we're going to trade this thing because some things, you know,
cash settle certain days, and some stocks are less liquid
than others, and some are you know, need to re reported.
You need to go out and get a Chinese you
want bought first before you could go trade in China,
and so there was all these little.
Speaker 3 (04:38):
So yeah, so you were full on.
Speaker 2 (04:41):
Doing all the things, and we were actually just talking
about it here in the office this week. I was
standing in the operations team room over there and Shark
Tank came on. And shark Tank comes on it what
five here or something, you know, or six whatever. The
market's well closed by the time. Well on the East Coast,
shark Tank comes off at nine, right because the market's
(05:01):
closing it four bubba blah. So whenever I hear it,
I get these like visceral.
Speaker 1 (05:06):
Feelings of life, like a dog here in the siren.
Speaker 3 (05:09):
Yeah, and so we're like.
Speaker 2 (05:11):
You know, I won't say his name, but so and
so it's running optimizations, and.
Speaker 3 (05:15):
Yeah, we would be there, you know, giving out orders it.
Speaker 2 (05:18):
You know by the time he was done at eleven
thirty and we finally got it built, and you know,
we were there until two three whatever sometimes watching others
come in the morning, just getting these portfolios. Because we
had a really good team and all the traders would
kind of stick around because there's different parts and different
things and we'd work together on it. But yeah, I
was I've seen the same time on the clock the
(05:39):
next day more than one time.
Speaker 4 (05:42):
Wearing the same clothes. Right, that happened a few times. Yeah,
it's not a good feeling. Oh that's a great story.
Love those worst stories, Love those worst stories. All right, well,
let me tell you what we have lined up for you.
We put together a list of what we're calling four
takeaways from this week. Right, there were, as Jason was
alluding to at the beginning of the show, little little
air coming out of the balloon in the AI trade,
(06:03):
which again completely different than last week. We had some
inflationary data come out today, the Fed's favorite measure of inflation,
the PC. We want to talk about that because again,
this is all centered around where we everybody thinks the
FED is going to move on the next meeting in October.
So we'll get into that a little bit.
Speaker 1 (06:20):
Big announcement that we woke up to this morning, terriff announcements,
brand new, fresh terriff announcements like hey, how about fifty
percent on any heavy trucks that come in You know,
somebody's that coming from around the country. So furniture, upholstery, furniture, yeah, yeah,
some pharmaceuticals, so we saw some Yeah, I mean immediately
(06:42):
this morning in the pre market session, we saw some
of our US based companies that furniture companies that import
a tremendous amount, as most companies do, they import a
tremendous amount of their furniture from the likes of Vietnam
and some other countries, and all of a sudden, man,
they're just selling off like crazy, right because now they're
gonna be facing all these massive tariffs. So again, that
(07:03):
was kind of just came out of nowhere, right. I
didn't I don't know about you. I didn't see anything
that this was even being talked about. So we had
that to deal with today. So we'll go into a
little bit more detail. And then of course we're going
to look out into next week. Right, we've got the
non farm payroll numbers are gonna be coming our week
or our way next week. We got that'll be again
on Friday, of course, Wednesday, we get to EDP numbers.
(07:24):
And oh, by the way, Jason, this little tiny thing
called the government may shut down on the thirtieth at midnight.
And you know they're talking. You know, well, the last
government shut down, eight hundred thousand plus government employees got
fur load. You know, they get paid, but they get
for a load. So I got some stats for you.
I didn't get chance to even share it with you,
So it'll be surprised to you how the market reacts
in a government shutdown scenario. In case that happens, and
(07:46):
you know, Trump's kind of holding his feet, and then
Schumer is and no one's budget at this point, and
I think the Republicans are back on vacation, so I
or the the House side of things. Yeah, so it's
going to be cold.
Speaker 3 (08:00):
I mean, I have we had shutdowns, and I don't
know if you don't know, if.
Speaker 1 (08:07):
Part of my my my deck here, I'll look that up.
We've had actually quite a few. We've actually had quite
a few, and it's really really interesting enough how the
mark reacts to these, uh to these shutdowns. Right, everybody
always panics. You know, we've spent a lot of time
talking over the years when when we're faced with this
situation a lot of time over the years, I go,
(08:28):
oh boy, what's going to happen here? Technically, you know,
the market really doesn't get all that freaked out unless
it lasts for a period of time, uh, an extended
period of time. So you know, we will uh, we
will have to watch and see. Uh, you know, get
and and don't forget. There's a thing called a partial shutdown,
and then there's of course a full government shutdown. So
(08:48):
it could be one variation or another over that. But yeah,
I'm looking at this study. Well let's jump into what
the heck it's Friday, jump around here. So this is
a study from Bank of America that just came out
a few hours ago, and that winds a wide variation
of how the SMP five hundred has performed. So the
Bank said the SMP five hundred averages lost averages a
(09:12):
loss of five percent the week before and the week
after the government shut down. So SMP has averaged a
loss of five percent of the week before and the
week after a shutdown. Now that's according to data going
back to nineteen ninety, right, it's a pretty good data
set there. But when you shrink that period down from
twenty eighteen and twenty nineteen, the SMP actually rose six percent. Right,
(09:37):
So it just I think a lot of it depends
upon what's going on and the rest of the markets
and the economy will kind of tone are we in
at that point? But you know something I was kind
of surprised about our last shutdown. Jason was if we
go back to let's see twenty eighteen. Okay, So December
twenty second of twenty eighteen, we were shut down for
(09:59):
thirty five days, so it expired on January twenty fifth
of twenty nineteen. That was a partial shutdown. The SMP
gained six percent. Your VIX down down eight points, the
dollar index down two one before that January twentieth of
eighteen to January twenty second of twenty eighteen, so just
to wopping three days, SMP rose three points. Let me
(10:21):
see if I can all right, So then we had
one in October of twenty thirteen. That one was October
first to October seventeenth. SMP gained three d three points
three percent, and then we go all the way back
to ninety five and ninety six. So that was a
twenty one day shutdown. SMP lost three ninety five. For
five days November fourteenth through the nineteenth SMP gained three.
(10:45):
But here's an interesting one. October fifth of nineteen ninety
were you even born? Then? Through October ninth of nineteen nineties,
just three days of a shutdown, and the SMP lost
five percent, so I would say, you know, remember that. Ye,
So if we punched this into the data set, you'd
probably go, okay, you know, I'm going to rule out
(11:08):
from let's just say anything pre twenty thirteen that October.
Speaker 3 (11:12):
Yeah, when was the debt ceiling announced? I wonder is that?
Speaker 1 (11:14):
Like?
Speaker 3 (11:15):
How long? How long has that been around? I know
back that night, I don't think we had a debt ceiling.
I'll look at that.
Speaker 1 (11:22):
Yeah, that one has been a while. So if we
throw out the data set of you know, from ninety
five to you know, in prior, so we just focused
twenty thirteen and then the two shutdowns in twenty eighteen
and early twenty nineteen, you know, it can really vary.
So it looks like the longer it goes, I e
that twenty eighteen to twenty nineteen one where we lost
(11:44):
eight excuse me, gain six points. The market didn't get
too concerned on that one. I remember that time period too.
There was it was kind of one of those deals
I'm sure you remember where you kind of come in
it's like, well maybe today they're going to do it.
They dangled a carrot. I guess isn't like this is
it we're done. There was a lot of negotiations going on,
if I remember correctly, So yeah, you know, so you
(12:05):
look at okay, so we got six six percent gain
there during the shutdown, two percent gain in eighteen, three
percent gain in twenty thirteen, so to the point.
Speaker 3 (12:14):
We want shut here.
Speaker 1 (12:16):
Yeah, yeah, so the.
Speaker 2 (12:18):
Death Yeah, the death celling has been in place since
like nineteen seventeen, modern form since nineteen forty, but it
did say since the nineties it's become more of this
political looking which I'm sure everyone would assume.
Speaker 3 (12:30):
Yeap, that makes sense because they fight about everything. Yeah, yeah, everything.
Speaker 1 (12:34):
So back to our what we're going to watch out
for next week. That's obviously a major point that we
will see again on the thirtieth is the looming deadlight
midnight the thirtieth. All right, So that's what we got
lined up fore. We're just going to cover a lot
of different things. Sit back and relax. Its started out
to the wonderful Kristin Snow, Happy Friday, Kristin, Happy Friday,
(12:57):
and welcome back to the John Sanchez Show on Newstalk
seven eighty k. It's with Jason Gutt. Well, you know again,
before we get to some of the big happenings of
the day. Overall, it was a very good day. We
had our periods this morning where I was starting to
guess whether it was going to be a good day.
We started strong, and then we tried. They tried bringing
it down right, they tried rolling over the tech and
so on so forth. But man, all that matters is
(13:18):
where we are at one o'clock. Is I like to say,
how about a three hundred point gain on the doll
zero point sixty five percent to a close of forty
six two forty seven now zek ros ninety nine point
four to four percent, SMP up thirty nine or point
five to nine percent. On the commodity side of things,
we got a little bit of action going on there.
Oil prices, no action actually on that one. It was
(13:39):
gold though, one cent rise on oil sixty five sixty
nine a barrel. Jason, you got to take a pause here.
Thirty eight dollars and ten cent gain on gold three
thousand and eight h nine an ounce. It's just on
a tear. It's just absolutely on a tear.
Speaker 2 (13:53):
Yeah, and I mean again, momentum, right, that's what a
lot of these trades are. Silver even too, forty six
dollars and it's like a a magnet towards fifty a
few months ago. Absolutely, and that's just you know, I
mean again, momentum is your friend until it's not right.
There's a lot of commodity chasing some people who are
moving assets from growth in the s and p into
(14:14):
what they view as a better safe haven. You've got
that crypto versus gold pair that's gone on, with gold
strengthening recently against bitcoin that's been weakening. Solanas down fifteen
percent pretty recently. So there's a lot of i'd say
undercurrents in the alt space for sure right now. But
the dollar clearly is part of the reason you've got,
(14:36):
you know, pre big moves there.
Speaker 1 (14:37):
It brings up a conversation I had with our client,
one of our clients yesterday, and it was a husband
and wife and they were asking should we take some
money and put it into gold? And I think it's
a good reminder because are you getting any questions from clients.
Speaker 2 (14:51):
On that, Yeah, I mean it's always part of a conversation,
I would say most of the time.
Speaker 3 (14:55):
Sure.
Speaker 1 (14:56):
Yeah. So here's just a couple of things to to
remember if you're thinking about that, right, So, First of all, yes,
you have gold. It basically all time highs. Is it
going to continue to run anybody's guests? Maybe it will,
maybe a won't, who knows. But there's a bigger question
when you think about buying physical goal. And I'm not
talking about it, you know, through an ETF or anything.
I'm talking physically going out and buying it. And this
(15:18):
is the advice that I gave our client. I said,
look at I was about three years into this business
and I got into an argument with a client then
I regret to this day, but it was a very
valuable lesson. And being a young broker, I was all,
you know, cocky, and I'm like, he's like, I own
what I remember what it was, twenty percent of my
portfolio and gold or something. This is again early nineties.
(15:39):
And I said, you know, basically that's not very smart, right,
And I gave my reason. The goal doesn't pay a
year a dividend, and you know it's ill liquid in
a lot of cases and all this stuff. So we
went back and forth, and I finally realized, Okay, I'm
kind of pissing this guy off, so I better shut
my mouth. Right. I went home that night I'm like,
you know what, I really did a stupid thing by
doing that. And from that point for I made it
(16:01):
a personal rule that I would never argue with a
client when they want to own gold. And the reason
I say that, and it has served me well, is
gold is so unique. I mean, sure, human element, you
want to buy it because it's going up, you know,
human greed, right, but you got to look at it more, more,
more seriously. And it was funny because this client, Jason
said the same thing I heard from this guy back,
(16:24):
you know, thirty some odd years ago, and that is,
if you know what hits the fan, at least I've
got some gold and I can go to the grocery
store and I can buy a load for bread. Yeah,
Jason shake and said nope. And that's exactly it. So
I said to my client or our client yesterday, I said,
last time I checked, grocery stores, don't take gold. Number one.
And by the way, if things got that bad where
(16:44):
our dollar's worth nothing and so on and so forth,
do you really think your grocery's gonna take gold? No,
they're not. They're gonna they're gonna be shut down because
they're not gonna go pay their suppliers, you know, the
bread supplier, for example, the baker to bring in the bread.
So the whole system would just collapse on that side
of things. And so that kind of opened her eyes
a little bit. So those of you that want to
(17:04):
buy gold because you think it's the end of the earth,
you know, it's the one great thing you can have
from a leveraging and a barter standpoint, I would think
twice about it. We're not in the eighteen hundred, so
I just don't see how that that would work. Maybe,
But the bottom line is, as I told her, and
I told him thirty years plus years ago, I said,
look it, no one can tell you how much goal
to own. Right, most of us in the portfolio world,
(17:25):
you know, five ten percent, but you know probably no
more than that. If you want to physically own it,
great because it's a tangible asset. And she's like, well,
you know, you guys have done a great job, you know,
with our with our portfolios and everything else. And I
compliment her and I said, thank you very much. She goes,
but it's intangible, and I said, no, you're right. I
mean the stock market's intangible. You can't touch your stocks
(17:46):
and your investments and things like that, and she goes,
but I can with the gold, and I said, yes,
you absolutely can. So the rule of thumb is if
you feel it, you want it, you like to touch it,
get over whatever you want to. Just know you know
the cost buying it, the cost selling, as far as
the commission, so on and so forth, and you know, again,
it's kind of like and about the last thing I said,
It's very similar to when clients asked Jason and I
(18:07):
how much emergency cash should we have? And our rule
of them is, or what we say is Wall Street
says in our textbook the way we're a training you
should have three to six months of living expenses. But
what did Jason and I say? Whatever you're comfortable with right,
maybe a year, maybe two months, whatever. It is, same
type of thing. It's a personal decision.
Speaker 3 (18:25):
I don't have a lot to add. I think that
was very good.
Speaker 1 (18:28):
Yeah.
Speaker 2 (18:28):
The irony is I know who this client is and
they own gold in their portfolios because we built it
in there. But yeah, I completely And you'd literally use
a similar line like if you think we're going back
to the old timy days where it's going to be
like flipping little obscure coins on the table and be like,
give me a horse and a bath and a woman
like that's not what's gonna happen. But agreed on the
(18:50):
fact that ultimately gold is framed as a no bet right.
Speaker 3 (18:55):
So I saw your portfolio.
Speaker 2 (18:56):
You're worried about the markets, and theoretically by US dollars,
you still have exposure to inflation. You still have You
know your buying power can be eroded while you're sitting
in what you view as a safe asset. So owning
gold again in the way that people think of it
as it's a stable value item. It doesn't make more gold,
it doesn't pay more dividends. To your point, it's just
(19:18):
a shiny rock. And I don't mean that disparagingly.
Speaker 3 (19:21):
It's just a.
Speaker 2 (19:23):
Place to preserve your buying power. An ounce of gold
should buy a nice man's suit over time, is the
analogy that I was always told. So, you know, you
want to own things that go down when other parts
of your portfolio go up, but you never want to
be more concentrated. Then you feel comfortable with because very
much to your point, if the stuff does hit the
(19:44):
fan and you do need things to go purchase other
items with. You could also be in a situation where
you're a seller when everyone else is too right, and
so your buyer is going to be well aware of
that and they're not going to give you the price
with what that you think you're going to get, it
probably could be lower. So and physical gold too, is
also an asset that can move from person to person,
(20:07):
beneficiary to beneficiary with a I would say muddier connection
stream right versus stocks and things have capital gains associated
with every single transaction.
Speaker 3 (20:19):
So those are other reasons why I've seen people pitch
for owning those types of assets.
Speaker 2 (20:24):
But yeah, the last part I would add is when
you first started discussing it, oftentimes people view gold similar
to how they view religion right, they're either really rigid
on it or they're not right.
Speaker 3 (20:37):
Or politics.
Speaker 2 (20:38):
And so I thought you were going to go the
direction of don't fight someone over religion or politics, because
oftentimes gold ends up being something politics.
Speaker 1 (20:49):
Don't bring it up. Yeah at the Thanksgiving table, I
think that's gonna be.
Speaker 2 (20:53):
That's going to be somewhere on our website. We don't
care to fight you over those three things.
Speaker 1 (20:58):
Exactly exactly right. This' sart over to Jack Saban. He's
got news, traffic, and weather. Hey Jack, welcome back to
the John Sanchez Show on New Stock seven eighty k
waits with Jason Gott once again. A three hundred point
game on the down and now Z that grows ninety
nine SMP of thirty nine. All right, we're wrapping up
the week on Wall Street. We haven't got out of
today's events at Jayson. Let's looking forward, So do you
(21:20):
want to bring this up? This is interesting. I don't
know if we will see any any action. Let me
actually bring up the stock here real quickly before I
open my mouth and see if we got any action
in the after hours on this. And not really nothing negative,
just not long ago. A matter of fact, about two
thirty seven is when the news broke. President Trump demanded
(21:43):
that Microsoft fire Lisa Monaco. She's an executive who served
as the deputy Attorney General during the Biden administration. This
of course comes the day after the former FBI director
Comy being indicted. But here's what Trump said on true
socialtision followers. Imagine you think if you're having a bad
day to day, imagine if someone comes in and goes,
(22:04):
oh my God, you're on true social Here's what the
President said about this woman. He says, quote, she is
a menace to US national security security, especially given the
major contracts that Microsoft has with the United States government.
Because of Monaco's many wrongful acts, the US government recently
(22:24):
stripped her of all security clearances, took away all of
her access to national security intelligence, and blamed her for
all our banter excuse me, from all federal properties. Microsoft
is not responded to the request, So wow. Yeah, I
don't know what she did when she was under Biden,
but obviously it's something the President does.
Speaker 3 (22:46):
Not like or did not a fan of. Yeah, exactly.
Speaker 1 (22:48):
I was calling it for her to be fired. So yeah,
so that just happened. But yeah, no, no reaction to Microsoft.
All right, let's go back to last thing. I want
to mention the bond market side of things. We covered
old covered, Goal covered what the markets did a little
bit of this week. Jed two basis point today on
the tenure four nineteen, up five basis points for the week.
You're shorter into the curve, as you so correctly predicted.
It just keeps moving higher and higher. The two year
(23:10):
up seven basis points for the week, three year up nine,
five year up eight so and the thirty year only
up one basis point for the week, so as shorter
into the curve, so interes straight sensitive right now.
Speaker 2 (23:21):
Yeah, and you know, PCE, we got that data out today.
That was I would say, in line. It wasn't great,
it wasn't bad, it was good enough. I think jobs
next week are going to be even more important next Friday,
merely because you know, I think the Fed's looking at
that ball less than they're looking at the inflation ball
near term. But yeah, I mean, the bond market is
(23:41):
just toying with things a little bit to say, you know,
rates may not go down as fast as you think
they're going to go down, and people will bet with
their bet with their dollars and that's really that. That
bond market tells you more than what the Fed folks
can can jab own right now. But still pricing in
a cut and a half so far this the rest
(24:02):
of this year.
Speaker 3 (24:04):
Going forward.
Speaker 2 (24:05):
I'm just saying it's not one hundred percent for two cuts.
It's sort of you know.
Speaker 1 (24:09):
Yeah, we're fifty to eighty yesterday probability for both. Yeah, yeah, exactly.
All right, let's transition enough for today, Okay, so let's
move it on over to the week. Right. What were
some of the major things that we dealt with this week.
Let's go back to the beginning of the week. Something
that we have discussed literally every day on this program
this week, and that was the one hundred billion dollar
(24:34):
major deal announced between Navidia and open Ai. So the
big thing this week was from my perspective, I want
to get your take on it. First big thing for
me was that, you know, we saw a big bump
in Navidia. Obviously open Ai is not publicly traded, we
saw a big bump in Navidia throughout the week. I
didn't a chance to calculate how it did for the week.
(24:55):
But more importantly, it brought to light, as we've discussed Jason,
the circular accounting once again, for those of you that
have not you don't know what we're talking about, please
go back and listen to our podcast, especially on Monday.
But in a netshell, what it is is again, the
VIDIA signed this hundred billion dollar deal for open Ai. Again,
(25:17):
the parent of chat GPT to purchase you know, basically
one hundred billion dollars of Navidia chips. Now, wait a minute,
you just said Navidia is investing one hundred billion. Well,
the way the numbers worked out, this is called circular accounting.
Every roughly ten billion dollars that open Ai received from Nvidia,
(25:37):
they have to buy about thirty five billion dollars worth
of chip, so it's kind of a kind of three
to one ratio. So then everyone started going, well, wait
a minute, here is Navidia kind of buying its earnings. Right,
They're putting money in but saying you get a not
as an investment, but really to fund buying more Navidia chips.
So that's that's why they're calling it circular accounting. But
you know what is interesting, Jason, is that that really
(25:57):
raised a lot of eyebrows this week, not only in
this particular deal, but just really AI in general. Everyone's going,
wait a minute here, and you and I have discussed this,
where's somebody going to be making money? It just it
just made everybody a little bit nervous should agree.
Speaker 2 (26:10):
And yeah, I mean it probably like anything, you know,
we would go back to two thousand and people say, oh,
these names blew up and so on and so forth,
but they're a heck of a lot higher now than
they were then. It's just that there's a fifty to
seventy percent draw down in the middle that hurts a
whole heck of a lot. And many of these companies
will be ten x as big as they are now,
(26:31):
but many of them will be gone.
Speaker 4 (26:33):
Right.
Speaker 2 (26:33):
And I think, you know, we've talked again on that
Monday podcast that people should check out. We discussed the
simple math around Okay, well if it the data center
costs one hundred million dollars, for example, and every five
years you've got to spend another you know, thirty million
(26:53):
dollars to update it, yet it only has profit of
twenty million. I'm just making all these numbers up, like
it doesn't make sense. Like they're not going to make
enough money to even buy enough chips in the future
to keep themselves current. So how's this all going to
work together? And there's a lot of that, Ah, well,
you know, just wait right, And I think that's part
of where investors are sitting here, you know, many of
(27:16):
them holding a lot of these big names, the NVIDIAs,
the you know, the all of the bank shots on
AI and going Okay, now it's time to do math
and that's like anytime. That's when things get concerning, when
the dream part fades and you start going, wait a minute,
Tesla just makes cars, right, And that's when people start going, oh, well,
(27:37):
GM's valued at this and Ford is valued at that,
and then it swings back to well, no, no, no, you
got to think about robots and solar and this, that
and the other and self driving, and like, okay, let's
bit it back up. And then after a while people go,
wait a minute, they just make cars, right. It goes
and so we're in that Nvidia, you know, they just
(27:58):
make chips kind of phase. And then I'm sure months
from now it'll be, oh my gosh, they're all these
things in cancer curing, and all the medical device companies
are going to need them, and hospitals are all going
to need their own data centers because of all the
data that they have from all these and it's just
it's a very cyclical thing. That's what the market does.
But today it was, or this week, the skeptics were
(28:20):
more in charge. Not to say they're going to win,
but near term skeptics are certainly getting a little bit.
Speaker 1 (28:25):
That's a great point you bring up, and a good
lesson for those that were not involved in investing back
in the dot com era, right, This is we're about
a similar now of any other market periods between ninety
nine two thousand. There's really been nothing else like this
because we haven't had any great new technology like AI is.
So that's why you're hear us talk a lot about
the similarities between ninety nine two thousand rules called the
(28:47):
dot com era to now the AI era. Right, Just
a lot of similarities, some questionings, some accounting that's in question,
and so on and so forth, and what do we
learn from that? Exactly as Jason said, and have a
handful of winners, but you're gonna have a two handfuls
of losers, right, So you've got to be very careful.
And that's why we've said, you know we I mean
(29:08):
full disclosure. We do invest in many of the AI names,
but it's part of a diversified portfolio. And that's what
we recommend for people. Don't put unless you're you know,
a pure gambler. Don't put all your eggs in one basket.
You may hit a triple or you may strike out.
I mean, if that's the purpose of that bucket of money, cool,
that's your prerogative. But if you're doing it as far
as you know, building wealth for retirement or something like that,
(29:30):
just make it part of your your portfolio because or
your diversified portfolio. Because Jason said, you can wake up
one day like we did this week and this momentum
of video. This is an example. It just came to
an abrupt hole right. Everyone thought, oh my god, this
sem was just gonna rip higher, and then it just
struggled the rest of the.
Speaker 2 (29:45):
Week, pretty much traded sideways all week. It was just
up strong on Monday and faded throughout the look.
Speaker 1 (29:50):
At a Oracle right after the big the previous week.
It's just struggled ever since that. So, yeah, it's it's
just a it's a fun one. But yeah, don't miss
our Monday segments with my brother, doctor Dennis Sanchez AI doctor.
Really get into these these AI discussions in depth, and
again if.
Speaker 3 (30:06):
You missed the I enjoy those conversations.
Speaker 1 (30:08):
I have so much fun. I have so much fun.
It's just it's great talking about technology because something that
we all eat and breathe. All Right, when we come back,
a couple more things we want to mention that take
a peek at too. As Jason mentioned earlier, we have
non farm payable numbers. As we kind of went through
what the projection is there and wrap it up for
the week. Let's wrap it up, speaking of which, with
the wonderful Kristin Snow right now Traffic Center. Hello Kristen,
(30:31):
Welcome back to the John Sanchez Show on News Doc
seven eighty KO eight. All right, crowd, Yeah, we're getting
as you all know, Bailey produces. My daughter produces this show,
and she happens to be sitting with my other daughter, Brooke,
and they are just criticizing me the color of shirt,
my facial expressions. Now I'm getting the middle finger.
Speaker 3 (30:50):
Yeah, it's check out the podcast. Yeah, check out check
out our YouTube station. You can see us monks.
Speaker 1 (30:56):
Maybe my marketing director could come on and talk about
the the YouTube and social media.
Speaker 3 (31:01):
And everything technology.
Speaker 1 (31:03):
She's a little camera site. Today, it's Friday. Everybody's in
a slap happy mood, that's for sure. All right, my friend,
let's start to fast forwarding to next week. We've got
us non farm payrolls and unemployment of course coming our
way on Friday. Let us kind of tell you what
the street is looking for at this point all right, Jason,
here we go last month, meaning August, because this is
gonna be September's at US. So last month we had
(31:25):
twenty two thousand new jobs created. Economis are now looking
for a whopping fifty seven thousand jobs.
Speaker 2 (31:31):
Yeah, I mean that number is much more than what
we've been dealing with. I mean, jobs claims, job has
claims this week were better than feared, so the market
was actually unhappy. We're in a good news is bad
news phase right where the market is more excited about
interest rate cuts. So if we get a weaker than
expected non farm payroll number, it will be talked about, right,
(31:56):
will the Fed speed up? Will the Fed slow down?
You see, too good of a number, the market may
react negative to it to say, oh they're gonna you know,
inflation's happening, or jobs aren't as bad, we don't need
to cut rate.
Speaker 1 (32:06):
So yeah, exactly. Let's go to the private side. The
non farm pailes on the private sector. Thirty eight thousand
jobs is what they had in the month of September
or excuse me, August. Looking for that to jump up
to about sixty thousand. That'll be interesting when that's a
big jump up in the private sector. If that happens, Okay,
unemployment rate looking for und change, keep it at about
four point three percent. Other than that, it could be
(32:29):
kind of a boring report, you know, really could be.
Speaker 2 (32:32):
Yeah, but the market will key off it. I think
the market's going to be staring at it all weeks.
So we could, barring some outside thing geopolitically, it could
be maybe a doll week where jobs, jobs, jobs is
all we talk about.
Speaker 1 (32:45):
You know, well, almost like the PCE numbers, right is
like there was so much focus on the PCE numbers
this morning and didn't turn out to be much. Let's
hit that real quick. We just kind of hit the highlight.
So personal consumption expender sure PCEE we call it. That's
the Fed's favorite measure of inflation. That was released this
morning at five point thirty. So you always get personal
income personal spending. First, y'all are doing really good job
(33:05):
spending your spending more than you're making. According to the data,
personal income was up four tenths seven percent for the
month of August, personal spending up six tenths of a percent.
Now we move over to the PCE prices, and remember
the goal here is you want to fit with the
FED goal is they want to get this down to
around two percent. There are long ways from that because
if we look at the year over year numbers on
(33:26):
the PCEE prices two point seven percent year over year
on headline, you strip out and you get down to
the core up about two point nine. So regardless if
you go headline or core, we're a long ways away
from the FED goal of two percent. And I saw
I'm sure you did too. I saw a really interested
interview this morning on CNBC right when this report came out,
(33:46):
and these different economists were arguing, like, you know, this
two percent mandate or goal of the FED that's been
around for years, could it be time that they go
wait a minute here, this is something that's just not
going ever happen. And that's kind of what the economists
were saying, like, we don't see any way that this
number can get down to two percent.
Speaker 2 (34:08):
And that could be whatever the Trump appointee starts to
job own about right, that that mandate of hold is
not necessarily the new mandate, right, we'd rather see growth.
Higher inflation numbers you know, are are not our fault.
Speaker 3 (34:22):
Those were Biden And now we're in a now more
growth focused environment.
Speaker 2 (34:26):
Remember the Fed at four now at fourn to four
and a quarter percent versus PCE at two point seven,
they still have a lot of room to come down
and continue to be restrictive. So I still think they
cut twice this year unless this number goes the other way.
Speaker 1 (34:40):
Yeah, absolutely, all right, let's wrap it up with what
this market's selling us. You go two points, I'll.
Speaker 3 (34:44):
Go to Yeah.
Speaker 2 (34:45):
I mean, I think we'll probably be fairly range bound
over the next week or so into the jobs number.
Still concerned about the tech trade getting a little bit tired,
not to say that it can't continue, but I think
that's going to be a key focus next week for sure.
Speaker 1 (34:59):
Absolutely certainly. I think folks is going to be We're
going to be kicking off earnings numbers here in a
couple of weeks, so obviously we want to see what
that looks like, and continue to watch the real estate data.
This is another area of people are getting very frustrated.
Mortgage rates have not come down. They've gone up since
the Fed cut rates, and that's kind of keeping a
lid on some economic growth there. So we'll watch those factors.
All right, My friend, I wish you a great weekend.
God bless all of you. Thank you so very much
(35:20):
for joining us, Have a great weekend. John Sanchez is
a registered investment advisor, and the opinions expressed by Sanchez
Gone Capital Management, LLC on this show or their own
and do not reflect the opinions of News Talks seven
eighty or its pairing company, Cumulus Media. All statements and
opinions expressed are based upon information considered reliable, although it
(35:41):
should not be relied upon. As such, any statements or
opinions are subject to change without notice. Information presented is
for educational purposes only and does not intend to make
an offer or solicitation for the sale or purchase of
any specific securities, investments, or investment strategies. Investments involve risk, and,
unless otherwise stated or not guaranteed, information expressed does not
(36:04):
take into account your specific situation or objectives, and is
not intended as recommendations appropriate for any individual. Listeners are
encouraged to seek advice from a qualified tax, legal, or
investment advisor to determine whether any information presented may be
suitable for their specific situation. Past performance is not indicative
of future performance.
Good Friday afternoons. You welcome to the John Sanchez Show
on News Talk seven eighty k oh. It's a pleasure
to be with you as we wrap up the weekend.
A pleasure to be with my partner, Jason Gunt. Happy Friday,
Jay T. Yeah, five exclamation points, maybe six.
Speaker 2 (00:21):
Yeah, all of all of the exclamation points. I am
very happy it's Friday for sure.
Speaker 1 (00:25):
Amen. Amen, Oh my goodness, what a show we have
lined up for you this afternoon. We had a lot
of moving parts of the market this week. We had
a couple things happening in the after hours that you
may not be aware of that we'll share with you,
and then wrap up the show by always answered the
question what is this market telling us right now? A
lot different this week than last week. Jay. We had
a lot of things to kind of kind of change
(00:46):
around a little bit here.
Speaker 2 (00:48):
Yeah, you know, concerns around in Vidia Open AI, the
circular reference area.
Speaker 3 (00:56):
Is there an error?
Speaker 1 (00:57):
What?
Speaker 3 (00:57):
What?
Speaker 2 (00:58):
What's the how do we take this? I think we
talked about it a little bit this week. The market
is also trying to figure it out, right are we
You know, you're starting to hear more of the the
bubble cries out there from the you know, the the
Citadels of the world again, Ken Griffin. Not uncommon to
talk his own book, but you know, uh, you're you're
(01:18):
at least people are poking some healthy holes in the
you know, this ride goes on forever. Thought that I
think is very much something that we should continue to discuss.
Not that we're calling for some impending crash, but that uh,
you know, balloons tend to inflate slowly and deflate.
Speaker 3 (01:36):
Quickly, so it's just something we want to keep. Yes,
it is. It just popped in him.
Speaker 2 (01:42):
I told you before the last shop that I worked at,
and this is no one can get a hold of
this because it's very tightly held. There was a list
of jg isms that the traders on the desk.
Speaker 3 (01:53):
Used to keep, and you know, some of them, I'm
proud of some of them.
Speaker 1 (01:57):
I'm not product, but somebody can be repeated.
Speaker 3 (02:01):
Always rich with analogies.
Speaker 1 (02:02):
Yes, so you manage twelve traders, multi billions, Yeah, I
bet there's a few things.
Speaker 3 (02:07):
Tons of some stressful situations.
Speaker 1 (02:10):
No, you never had any of those. Never.
Speaker 2 (02:12):
Never.
Speaker 1 (02:13):
You got to tell the audience it's Friday, we talk
about it. You got to tell the audience about some
of the stories, because I love getting Jason's old war
stories where you were there sometimes for twenty four hours.
Because we're a hedge fund, you were leveraged and crazy
things would happen, and right.
Speaker 2 (02:30):
It was crazy things. It was also just crazy timing.
And remember you're working with eccentrics in general. Like we
had a portfolio manager that you know, wonderful investor, but
he was Russian and literally on Russian time, and so
like he would kick off his optimizations and we would
know because we could see in our systems like late
(02:50):
in the afternoon. Inevitably it was like, you know, Thursday
at three o'clock, which means they're not going to be
done until six seven.
Speaker 1 (02:57):
Eight X optimization.
Speaker 3 (03:00):
Optimization's simple math.
Speaker 2 (03:01):
With a quantitative manager, everything's built by models. Right, They're
not out there kicking tires saying, hey, is Nike gonna
make some cool shoes next quarter? They're pulling in all
the data for Nike earnings growth and sensitivity to the
ruble and like is it raining on Wednesday?
Speaker 3 (03:20):
Like you name it.
Speaker 2 (03:22):
All these things were researched in quant land as to
was their.
Speaker 3 (03:25):
Efficacy to a signal?
Speaker 2 (03:27):
Right, and so they would create a model that would
you know, take certain things to say, these are my
top rank stocks, these are my bottom rank stocks, and
the subject to their benchmark, they would create a portfolio.
And so you know, their optimization is a lot of
numbers running up against borrow risk models, you name it,
(03:47):
and it would kick out a optimal portfolio. Well, the
analogy I always use, going back to the balloon we
talked about at the beginning, was they're trying to stuff
a balloon inside of a box.
Speaker 3 (03:57):
Right.
Speaker 2 (03:57):
Inevitably, you push in one area and you're overweight European technology,
and you smoosh that back in and now you're you know,
under exposed to the US large caps or you know.
So they're doing all this stuff and eventually at the
end you get an optimization that fits within the constraints.
And then it gets handed to the traders and we're
building portfolios and we got to strategize as to how
(04:19):
we're going to trade this thing because some things, you know,
cash settle certain days, and some stocks are less liquid
than others, and some are you know, need to re reported.
You need to go out and get a Chinese you
want bought first before you could go trade in China,
and so there was all these little.
Speaker 3 (04:38):
So yeah, so you were full on.
Speaker 2 (04:41):
Doing all the things, and we were actually just talking
about it here in the office this week. I was
standing in the operations team room over there and Shark
Tank came on. And shark Tank comes on it what
five here or something, you know, or six whatever. The
market's well closed by the time. Well on the East Coast,
shark Tank comes off at nine, right because the market's
(05:01):
closing it four bubba blah. So whenever I hear it,
I get these like visceral.
Speaker 1 (05:06):
Feelings of life, like a dog here in the siren.
Speaker 3 (05:09):
Yeah, and so we're like.
Speaker 2 (05:11):
You know, I won't say his name, but so and
so it's running optimizations, and.
Speaker 3 (05:15):
Yeah, we would be there, you know, giving out orders it.
Speaker 2 (05:18):
You know by the time he was done at eleven
thirty and we finally got it built, and you know,
we were there until two three whatever sometimes watching others
come in the morning, just getting these portfolios. Because we
had a really good team and all the traders would
kind of stick around because there's different parts and different
things and we'd work together on it. But yeah, I
was I've seen the same time on the clock the
(05:39):
next day more than one time.
Speaker 4 (05:42):
Wearing the same clothes. Right, that happened a few times. Yeah,
it's not a good feeling. Oh that's a great story.
Love those worst stories, Love those worst stories. All right, well,
let me tell you what we have lined up for you.
We put together a list of what we're calling four
takeaways from this week. Right, there were, as Jason was
alluding to at the beginning of the show, little little
air coming out of the balloon in the AI trade,
(06:03):
which again completely different than last week. We had some
inflationary data come out today, the Fed's favorite measure of inflation,
the PC. We want to talk about that because again,
this is all centered around where we everybody thinks the
FED is going to move on the next meeting in October.
So we'll get into that a little bit.
Speaker 1 (06:20):
Big announcement that we woke up to this morning, terriff announcements,
brand new, fresh terriff announcements like hey, how about fifty
percent on any heavy trucks that come in You know,
somebody's that coming from around the country. So furniture, upholstery, furniture, yeah, yeah,
some pharmaceuticals, so we saw some Yeah, I mean immediately
(06:42):
this morning in the pre market session, we saw some
of our US based companies that furniture companies that import
a tremendous amount, as most companies do, they import a
tremendous amount of their furniture from the likes of Vietnam
and some other countries, and all of a sudden, man,
they're just selling off like crazy, right because now they're
gonna be facing all these massive tariffs. So again, that
(07:03):
was kind of just came out of nowhere, right. I
didn't I don't know about you. I didn't see anything
that this was even being talked about. So we had
that to deal with today. So we'll go into a
little bit more detail. And then of course we're going
to look out into next week. Right, we've got the
non farm payroll numbers are gonna be coming our week
or our way next week. We got that'll be again
on Friday, of course, Wednesday, we get to EDP numbers.
(07:24):
And oh, by the way, Jason, this little tiny thing
called the government may shut down on the thirtieth at midnight.
And you know they're talking. You know, well, the last
government shut down, eight hundred thousand plus government employees got
fur load. You know, they get paid, but they get
for a load. So I got some stats for you.
I didn't get chance to even share it with you,
So it'll be surprised to you how the market reacts
in a government shutdown scenario. In case that happens, and
(07:46):
you know, Trump's kind of holding his feet, and then
Schumer is and no one's budget at this point, and
I think the Republicans are back on vacation, so I
or the the House side of things. Yeah, so it's
going to be cold.
Speaker 3 (08:00):
I mean, I have we had shutdowns, and I don't
know if you don't know, if.
Speaker 1 (08:07):
Part of my my my deck here, I'll look that up.
We've had actually quite a few. We've actually had quite
a few, and it's really really interesting enough how the
mark reacts to these, uh to these shutdowns. Right, everybody
always panics. You know, we've spent a lot of time
talking over the years when when we're faced with this
situation a lot of time over the years, I go,
(08:28):
oh boy, what's going to happen here? Technically, you know,
the market really doesn't get all that freaked out unless
it lasts for a period of time, uh, an extended
period of time. So you know, we will uh, we
will have to watch and see. Uh, you know, get
and and don't forget. There's a thing called a partial shutdown,
and then there's of course a full government shutdown. So
(08:48):
it could be one variation or another over that. But yeah,
I'm looking at this study. Well let's jump into what
the heck it's Friday, jump around here. So this is
a study from Bank of America that just came out
a few hours ago, and that winds a wide variation
of how the SMP five hundred has performed. So the
Bank said the SMP five hundred averages lost averages a
(09:12):
loss of five percent the week before and the week
after the government shut down. So SMP has averaged a
loss of five percent of the week before and the
week after a shutdown. Now that's according to data going
back to nineteen ninety, right, it's a pretty good data
set there. But when you shrink that period down from
twenty eighteen and twenty nineteen, the SMP actually rose six percent. Right,
(09:37):
So it just I think a lot of it depends
upon what's going on and the rest of the markets
and the economy will kind of tone are we in
at that point? But you know something I was kind
of surprised about our last shutdown. Jason was if we
go back to let's see twenty eighteen. Okay, So December
twenty second of twenty eighteen, we were shut down for
(09:59):
thirty five days, so it expired on January twenty fifth
of twenty nineteen. That was a partial shutdown. The SMP
gained six percent. Your VIX down down eight points, the
dollar index down two one before that January twentieth of
eighteen to January twenty second of twenty eighteen, so just
to wopping three days, SMP rose three points. Let me
(10:21):
see if I can all right, So then we had
one in October of twenty thirteen. That one was October
first to October seventeenth. SMP gained three d three points
three percent, and then we go all the way back
to ninety five and ninety six. So that was a
twenty one day shutdown. SMP lost three ninety five. For
five days November fourteenth through the nineteenth SMP gained three.
(10:45):
But here's an interesting one. October fifth of nineteen ninety
were you even born? Then? Through October ninth of nineteen nineties,
just three days of a shutdown, and the SMP lost
five percent, so I would say, you know, remember that. Ye,
So if we punched this into the data set, you'd
probably go, okay, you know, I'm going to rule out
(11:08):
from let's just say anything pre twenty thirteen that October.
Speaker 3 (11:12):
Yeah, when was the debt ceiling announced? I wonder is that?
Speaker 1 (11:14):
Like?
Speaker 3 (11:15):
How long? How long has that been around? I know
back that night, I don't think we had a debt ceiling.
I'll look at that.
Speaker 1 (11:22):
Yeah, that one has been a while. So if we
throw out the data set of you know, from ninety
five to you know, in prior, so we just focused
twenty thirteen and then the two shutdowns in twenty eighteen
and early twenty nineteen, you know, it can really vary.
So it looks like the longer it goes, I e
that twenty eighteen to twenty nineteen one where we lost
(11:44):
eight excuse me, gain six points. The market didn't get
too concerned on that one. I remember that time period too.
There was it was kind of one of those deals
I'm sure you remember where you kind of come in
it's like, well maybe today they're going to do it.
They dangled a carrot. I guess isn't like this is
it we're done. There was a lot of negotiations going on,
if I remember correctly, So yeah, you know, so you
(12:05):
look at okay, so we got six six percent gain
there during the shutdown, two percent gain in eighteen, three
percent gain in twenty thirteen, so to the point.
Speaker 3 (12:14):
We want shut here.
Speaker 1 (12:16):
Yeah, yeah, so the.
Speaker 2 (12:18):
Death Yeah, the death celling has been in place since
like nineteen seventeen, modern form since nineteen forty, but it
did say since the nineties it's become more of this
political looking which I'm sure everyone would assume.
Speaker 3 (12:30):
Yeap, that makes sense because they fight about everything. Yeah, yeah, everything.
Speaker 1 (12:34):
So back to our what we're going to watch out
for next week. That's obviously a major point that we
will see again on the thirtieth is the looming deadlight
midnight the thirtieth. All right, So that's what we got
lined up fore. We're just going to cover a lot
of different things. Sit back and relax. Its started out
to the wonderful Kristin Snow, Happy Friday, Kristin, Happy Friday,
(12:57):
and welcome back to the John Sanchez Show on Newstalk
seven eighty k. It's with Jason Gutt. Well, you know again,
before we get to some of the big happenings of
the day. Overall, it was a very good day. We
had our periods this morning where I was starting to
guess whether it was going to be a good day.
We started strong, and then we tried. They tried bringing
it down right, they tried rolling over the tech and
so on so forth. But man, all that matters is
(13:18):
where we are at one o'clock. Is I like to say,
how about a three hundred point gain on the doll
zero point sixty five percent to a close of forty
six two forty seven now zek ros ninety nine point
four to four percent, SMP up thirty nine or point
five to nine percent. On the commodity side of things,
we got a little bit of action going on there.
Oil prices, no action actually on that one. It was
(13:39):
gold though, one cent rise on oil sixty five sixty
nine a barrel. Jason, you got to take a pause here.
Thirty eight dollars and ten cent gain on gold three
thousand and eight h nine an ounce. It's just on
a tear. It's just absolutely on a tear.
Speaker 2 (13:53):
Yeah, and I mean again, momentum, right, that's what a
lot of these trades are. Silver even too, forty six
dollars and it's like a a magnet towards fifty a
few months ago. Absolutely, and that's just you know, I
mean again, momentum is your friend until it's not right.
There's a lot of commodity chasing some people who are
moving assets from growth in the s and p into
(14:14):
what they view as a better safe haven. You've got
that crypto versus gold pair that's gone on, with gold
strengthening recently against bitcoin that's been weakening. Solanas down fifteen
percent pretty recently. So there's a lot of i'd say
undercurrents in the alt space for sure right now. But
the dollar clearly is part of the reason you've got,
(14:36):
you know, pre big moves there.
Speaker 1 (14:37):
It brings up a conversation I had with our client,
one of our clients yesterday, and it was a husband
and wife and they were asking should we take some
money and put it into gold? And I think it's
a good reminder because are you getting any questions from clients.
Speaker 2 (14:51):
On that, Yeah, I mean it's always part of a conversation,
I would say most of the time.
Speaker 3 (14:55):
Sure.
Speaker 1 (14:56):
Yeah. So here's just a couple of things to to
remember if you're thinking about that, right, So, First of all, yes,
you have gold. It basically all time highs. Is it
going to continue to run anybody's guests? Maybe it will,
maybe a won't, who knows. But there's a bigger question
when you think about buying physical goal. And I'm not
talking about it, you know, through an ETF or anything.
I'm talking physically going out and buying it. And this
(15:18):
is the advice that I gave our client. I said,
look at I was about three years into this business
and I got into an argument with a client then
I regret to this day, but it was a very
valuable lesson. And being a young broker, I was all,
you know, cocky, and I'm like, he's like, I own
what I remember what it was, twenty percent of my
portfolio and gold or something. This is again early nineties.
(15:39):
And I said, you know, basically that's not very smart, right,
And I gave my reason. The goal doesn't pay a
year a dividend, and you know it's ill liquid in
a lot of cases and all this stuff. So we
went back and forth, and I finally realized, Okay, I'm
kind of pissing this guy off, so I better shut
my mouth. Right. I went home that night I'm like,
you know what, I really did a stupid thing by
doing that. And from that point for I made it
(16:01):
a personal rule that I would never argue with a
client when they want to own gold. And the reason
I say that, and it has served me well, is
gold is so unique. I mean, sure, human element, you
want to buy it because it's going up, you know,
human greed, right, but you got to look at it more, more,
more seriously. And it was funny because this client, Jason
said the same thing I heard from this guy back,
(16:24):
you know, thirty some odd years ago, and that is,
if you know what hits the fan, at least I've
got some gold and I can go to the grocery
store and I can buy a load for bread. Yeah,
Jason shake and said nope. And that's exactly it. So
I said to my client or our client yesterday, I said,
last time I checked, grocery stores, don't take gold. Number one.
And by the way, if things got that bad where
(16:44):
our dollar's worth nothing and so on and so forth,
do you really think your grocery's gonna take gold? No,
they're not. They're gonna they're gonna be shut down because
they're not gonna go pay their suppliers, you know, the
bread supplier, for example, the baker to bring in the bread.
So the whole system would just collapse on that side
of things. And so that kind of opened her eyes
a little bit. So those of you that want to
(17:04):
buy gold because you think it's the end of the earth,
you know, it's the one great thing you can have
from a leveraging and a barter standpoint, I would think
twice about it. We're not in the eighteen hundred, so
I just don't see how that that would work. Maybe,
But the bottom line is, as I told her, and
I told him thirty years plus years ago, I said,
look it, no one can tell you how much goal
to own. Right, most of us in the portfolio world,
(17:25):
you know, five ten percent, but you know probably no
more than that. If you want to physically own it,
great because it's a tangible asset. And she's like, well,
you know, you guys have done a great job, you know,
with our with our portfolios and everything else. And I
compliment her and I said, thank you very much. She goes,
but it's intangible, and I said, no, you're right. I
mean the stock market's intangible. You can't touch your stocks
(17:46):
and your investments and things like that, and she goes,
but I can with the gold, and I said, yes,
you absolutely can. So the rule of thumb is if
you feel it, you want it, you like to touch it,
get over whatever you want to. Just know you know
the cost buying it, the cost selling, as far as
the commission, so on and so forth, and you know, again,
it's kind of like and about the last thing I said,
It's very similar to when clients asked Jason and I
(18:07):
how much emergency cash should we have? And our rule
of them is, or what we say is Wall Street
says in our textbook the way we're a training you
should have three to six months of living expenses. But
what did Jason and I say? Whatever you're comfortable with right,
maybe a year, maybe two months, whatever. It is, same
type of thing. It's a personal decision.
Speaker 3 (18:25):
I don't have a lot to add. I think that
was very good.
Speaker 1 (18:28):
Yeah.
Speaker 2 (18:28):
The irony is I know who this client is and
they own gold in their portfolios because we built it
in there. But yeah, I completely And you'd literally use
a similar line like if you think we're going back
to the old timy days where it's going to be
like flipping little obscure coins on the table and be like,
give me a horse and a bath and a woman
like that's not what's gonna happen. But agreed on the
(18:50):
fact that ultimately gold is framed as a no bet right.
Speaker 3 (18:55):
So I saw your portfolio.
Speaker 2 (18:56):
You're worried about the markets, and theoretically by US dollars,
you still have exposure to inflation. You still have You
know your buying power can be eroded while you're sitting
in what you view as a safe asset. So owning
gold again in the way that people think of it
as it's a stable value item. It doesn't make more gold,
it doesn't pay more dividends. To your point, it's just
(19:18):
a shiny rock. And I don't mean that disparagingly.
Speaker 3 (19:21):
It's just a.
Speaker 2 (19:23):
Place to preserve your buying power. An ounce of gold
should buy a nice man's suit over time, is the
analogy that I was always told. So, you know, you
want to own things that go down when other parts
of your portfolio go up, but you never want to
be more concentrated. Then you feel comfortable with because very
much to your point, if the stuff does hit the
(19:44):
fan and you do need things to go purchase other
items with. You could also be in a situation where
you're a seller when everyone else is too right, and
so your buyer is going to be well aware of
that and they're not going to give you the price
with what that you think you're going to get, it
probably could be lower. So and physical gold too, is
also an asset that can move from person to person,
(20:07):
beneficiary to beneficiary with a I would say muddier connection
stream right versus stocks and things have capital gains associated
with every single transaction.
Speaker 3 (20:19):
So those are other reasons why I've seen people pitch
for owning those types of assets.
Speaker 2 (20:24):
But yeah, the last part I would add is when
you first started discussing it, oftentimes people view gold similar
to how they view religion right, they're either really rigid
on it or they're not right.
Speaker 3 (20:37):
Or politics.
Speaker 2 (20:38):
And so I thought you were going to go the
direction of don't fight someone over religion or politics, because
oftentimes gold ends up being something politics.
Speaker 1 (20:49):
Don't bring it up. Yeah at the Thanksgiving table, I
think that's gonna be.
Speaker 2 (20:53):
That's going to be somewhere on our website. We don't
care to fight you over those three things.
Speaker 1 (20:58):
Exactly exactly right. This' sart over to Jack Saban. He's
got news, traffic, and weather. Hey Jack, welcome back to
the John Sanchez Show on New Stock seven eighty k
waits with Jason Gott once again. A three hundred point
game on the down and now Z that grows ninety
nine SMP of thirty nine. All right, we're wrapping up
the week on Wall Street. We haven't got out of
today's events at Jayson. Let's looking forward, So do you
(21:20):
want to bring this up? This is interesting. I don't
know if we will see any any action. Let me
actually bring up the stock here real quickly before I
open my mouth and see if we got any action
in the after hours on this. And not really nothing negative,
just not long ago. A matter of fact, about two
thirty seven is when the news broke. President Trump demanded
(21:43):
that Microsoft fire Lisa Monaco. She's an executive who served
as the deputy Attorney General during the Biden administration. This
of course comes the day after the former FBI director
Comy being indicted. But here's what Trump said on true
socialtision followers. Imagine you think if you're having a bad
day to day, imagine if someone comes in and goes,
(22:04):
oh my God, you're on true social Here's what the
President said about this woman. He says, quote, she is
a menace to US national security security, especially given the
major contracts that Microsoft has with the United States government.
Because of Monaco's many wrongful acts, the US government recently
(22:24):
stripped her of all security clearances, took away all of
her access to national security intelligence, and blamed her for
all our banter excuse me, from all federal properties. Microsoft
is not responded to the request, So wow. Yeah, I
don't know what she did when she was under Biden,
but obviously it's something the President does.
Speaker 3 (22:46):
Not like or did not a fan of. Yeah, exactly.
Speaker 1 (22:48):
I was calling it for her to be fired. So yeah,
so that just happened. But yeah, no, no reaction to Microsoft.
All right, let's go back to last thing. I want
to mention the bond market side of things. We covered
old covered, Goal covered what the markets did a little
bit of this week. Jed two basis point today on
the tenure four nineteen, up five basis points for the week.
You're shorter into the curve, as you so correctly predicted.
It just keeps moving higher and higher. The two year
(23:10):
up seven basis points for the week, three year up nine,
five year up eight so and the thirty year only
up one basis point for the week, so as shorter
into the curve, so interes straight sensitive right now.
Speaker 2 (23:21):
Yeah, and you know, PCE, we got that data out today.
That was I would say, in line. It wasn't great,
it wasn't bad, it was good enough. I think jobs
next week are going to be even more important next Friday,
merely because you know, I think the Fed's looking at
that ball less than they're looking at the inflation ball
near term. But yeah, I mean, the bond market is
(23:41):
just toying with things a little bit to say, you know,
rates may not go down as fast as you think
they're going to go down, and people will bet with
their bet with their dollars and that's really that. That
bond market tells you more than what the Fed folks
can can jab own right now. But still pricing in
a cut and a half so far this the rest
(24:02):
of this year.
Speaker 3 (24:04):
Going forward.
Speaker 2 (24:05):
I'm just saying it's not one hundred percent for two cuts.
It's sort of you know.
Speaker 1 (24:09):
Yeah, we're fifty to eighty yesterday probability for both. Yeah, yeah, exactly.
All right, let's transition enough for today, Okay, so let's
move it on over to the week. Right. What were
some of the major things that we dealt with this week.
Let's go back to the beginning of the week. Something
that we have discussed literally every day on this program
this week, and that was the one hundred billion dollar
(24:34):
major deal announced between Navidia and open Ai. So the
big thing this week was from my perspective, I want
to get your take on it. First big thing for
me was that, you know, we saw a big bump
in Navidia. Obviously open Ai is not publicly traded, we
saw a big bump in Navidia throughout the week. I
didn't a chance to calculate how it did for the week.
(24:55):
But more importantly, it brought to light, as we've discussed Jason,
the circular accounting once again, for those of you that
have not you don't know what we're talking about, please
go back and listen to our podcast, especially on Monday.
But in a netshell, what it is is again, the
VIDIA signed this hundred billion dollar deal for open Ai. Again,
(25:17):
the parent of chat GPT to purchase you know, basically
one hundred billion dollars of Navidia chips. Now, wait a minute,
you just said Navidia is investing one hundred billion. Well,
the way the numbers worked out, this is called circular accounting.
Every roughly ten billion dollars that open Ai received from Nvidia,
(25:37):
they have to buy about thirty five billion dollars worth
of chip, so it's kind of a kind of three
to one ratio. So then everyone started going, well, wait
a minute, here is Navidia kind of buying its earnings. Right,
They're putting money in but saying you get a not
as an investment, but really to fund buying more Navidia chips.
So that's that's why they're calling it circular accounting. But
you know what is interesting, Jason, is that that really
(25:57):
raised a lot of eyebrows this week, not only in
this particular deal, but just really AI in general. Everyone's going,
wait a minute here, and you and I have discussed this,
where's somebody going to be making money? It just it
just made everybody a little bit nervous should agree.
Speaker 2 (26:10):
And yeah, I mean it probably like anything, you know,
we would go back to two thousand and people say, oh,
these names blew up and so on and so forth,
but they're a heck of a lot higher now than
they were then. It's just that there's a fifty to
seventy percent draw down in the middle that hurts a
whole heck of a lot. And many of these companies
will be ten x as big as they are now,
(26:31):
but many of them will be gone.
Speaker 4 (26:33):
Right.
Speaker 2 (26:33):
And I think, you know, we've talked again on that
Monday podcast that people should check out. We discussed the
simple math around Okay, well if it the data center
costs one hundred million dollars, for example, and every five
years you've got to spend another you know, thirty million
(26:53):
dollars to update it, yet it only has profit of
twenty million. I'm just making all these numbers up, like
it doesn't make sense. Like they're not going to make
enough money to even buy enough chips in the future
to keep themselves current. So how's this all going to
work together? And there's a lot of that, Ah, well,
you know, just wait right, And I think that's part
of where investors are sitting here, you know, many of
(27:16):
them holding a lot of these big names, the NVIDIAs,
the you know, the all of the bank shots on
AI and going Okay, now it's time to do math
and that's like anytime. That's when things get concerning, when
the dream part fades and you start going, wait a minute,
Tesla just makes cars, right, And that's when people start going, oh, well,
(27:37):
GM's valued at this and Ford is valued at that,
and then it swings back to well, no, no, no, you
got to think about robots and solar and this, that
and the other and self driving, and like, okay, let's
bit it back up. And then after a while people go,
wait a minute, they just make cars, right. It goes
and so we're in that Nvidia, you know, they just
(27:58):
make chips kind of phase. And then I'm sure months
from now it'll be, oh my gosh, they're all these
things in cancer curing, and all the medical device companies
are going to need them, and hospitals are all going
to need their own data centers because of all the
data that they have from all these and it's just
it's a very cyclical thing. That's what the market does.
But today it was, or this week, the skeptics were
(28:20):
more in charge. Not to say they're going to win,
but near term skeptics are certainly getting a little bit.
Speaker 1 (28:25):
That's a great point you bring up, and a good
lesson for those that were not involved in investing back
in the dot com era, right, This is we're about
a similar now of any other market periods between ninety
nine two thousand. There's really been nothing else like this
because we haven't had any great new technology like AI is.
So that's why you're hear us talk a lot about
the similarities between ninety nine two thousand rules called the
(28:47):
dot com era to now the AI era. Right, Just
a lot of similarities, some questionings, some accounting that's in question,
and so on and so forth, and what do we
learn from that? Exactly as Jason said, and have a
handful of winners, but you're gonna have a two handfuls
of losers, right, So you've got to be very careful.
And that's why we've said, you know we I mean
(29:08):
full disclosure. We do invest in many of the AI names,
but it's part of a diversified portfolio. And that's what
we recommend for people. Don't put unless you're you know,
a pure gambler. Don't put all your eggs in one basket.
You may hit a triple or you may strike out.
I mean, if that's the purpose of that bucket of money, cool,
that's your prerogative. But if you're doing it as far
as you know, building wealth for retirement or something like that,
(29:30):
just make it part of your your portfolio because or
your diversified portfolio. Because Jason said, you can wake up
one day like we did this week and this momentum
of video. This is an example. It just came to
an abrupt hole right. Everyone thought, oh my god, this
sem was just gonna rip higher, and then it just
struggled the rest of the.
Speaker 2 (29:45):
Week, pretty much traded sideways all week. It was just
up strong on Monday and faded throughout the look.
Speaker 1 (29:50):
At a Oracle right after the big the previous week.
It's just struggled ever since that. So, yeah, it's it's
just a it's a fun one. But yeah, don't miss
our Monday segments with my brother, doctor Dennis Sanchez AI doctor.
Really get into these these AI discussions in depth, and
again if.
Speaker 3 (30:06):
You missed the I enjoy those conversations.
Speaker 1 (30:08):
I have so much fun. I have so much fun.
It's just it's great talking about technology because something that
we all eat and breathe. All Right, when we come back,
a couple more things we want to mention that take
a peek at too. As Jason mentioned earlier, we have
non farm payable numbers. As we kind of went through
what the projection is there and wrap it up for
the week. Let's wrap it up, speaking of which, with
the wonderful Kristin Snow right now Traffic Center. Hello Kristen,
(30:31):
Welcome back to the John Sanchez Show on News Doc
seven eighty KO eight. All right, crowd, Yeah, we're getting
as you all know, Bailey produces. My daughter produces this show,
and she happens to be sitting with my other daughter, Brooke,
and they are just criticizing me the color of shirt,
my facial expressions. Now I'm getting the middle finger.
Speaker 3 (30:50):
Yeah, it's check out the podcast. Yeah, check out check
out our YouTube station. You can see us monks.
Speaker 1 (30:56):
Maybe my marketing director could come on and talk about
the the YouTube and social media.
Speaker 3 (31:01):
And everything technology.
Speaker 1 (31:03):
She's a little camera site. Today, it's Friday. Everybody's in
a slap happy mood, that's for sure. All right, my friend,
let's start to fast forwarding to next week. We've got
us non farm payrolls and unemployment of course coming our
way on Friday. Let us kind of tell you what
the street is looking for at this point all right, Jason,
here we go last month, meaning August, because this is
gonna be September's at US. So last month we had
(31:25):
twenty two thousand new jobs created. Economis are now looking
for a whopping fifty seven thousand jobs.
Speaker 2 (31:31):
Yeah, I mean that number is much more than what
we've been dealing with. I mean, jobs claims, job has
claims this week were better than feared, so the market
was actually unhappy. We're in a good news is bad
news phase right where the market is more excited about
interest rate cuts. So if we get a weaker than
expected non farm payroll number, it will be talked about, right,
(31:56):
will the Fed speed up? Will the Fed slow down?
You see, too good of a number, the market may
react negative to it to say, oh they're gonna you know,
inflation's happening, or jobs aren't as bad, we don't need
to cut rate.
Speaker 1 (32:06):
So yeah, exactly. Let's go to the private side. The
non farm pailes on the private sector. Thirty eight thousand
jobs is what they had in the month of September
or excuse me, August. Looking for that to jump up
to about sixty thousand. That'll be interesting when that's a
big jump up in the private sector. If that happens, Okay,
unemployment rate looking for und change, keep it at about
four point three percent. Other than that, it could be
(32:29):
kind of a boring report, you know, really could be.
Speaker 2 (32:32):
Yeah, but the market will key off it. I think
the market's going to be staring at it all weeks.
So we could, barring some outside thing geopolitically, it could
be maybe a doll week where jobs, jobs, jobs is
all we talk about.
Speaker 1 (32:45):
You know, well, almost like the PCE numbers, right is
like there was so much focus on the PCE numbers
this morning and didn't turn out to be much. Let's
hit that real quick. We just kind of hit the highlight.
So personal consumption expender sure PCEE we call it. That's
the Fed's favorite measure of inflation. That was released this
morning at five point thirty. So you always get personal
income personal spending. First, y'all are doing really good job
(33:05):
spending your spending more than you're making. According to the data,
personal income was up four tenths seven percent for the
month of August, personal spending up six tenths of a percent.
Now we move over to the PCE prices, and remember
the goal here is you want to fit with the
FED goal is they want to get this down to
around two percent. There are long ways from that because
if we look at the year over year numbers on
(33:26):
the PCEE prices two point seven percent year over year
on headline, you strip out and you get down to
the core up about two point nine. So regardless if
you go headline or core, we're a long ways away
from the FED goal of two percent. And I saw
I'm sure you did too. I saw a really interested
interview this morning on CNBC right when this report came out,
(33:46):
and these different economists were arguing, like, you know, this
two percent mandate or goal of the FED that's been
around for years, could it be time that they go
wait a minute here, this is something that's just not
going ever happen. And that's kind of what the economists
were saying, like, we don't see any way that this
number can get down to two percent.
Speaker 2 (34:08):
And that could be whatever the Trump appointee starts to
job own about right, that that mandate of hold is
not necessarily the new mandate, right, we'd rather see growth.
Higher inflation numbers you know, are are not our fault.
Speaker 3 (34:22):
Those were Biden And now we're in a now more
growth focused environment.
Speaker 2 (34:26):
Remember the Fed at four now at fourn to four
and a quarter percent versus PCE at two point seven,
they still have a lot of room to come down
and continue to be restrictive. So I still think they
cut twice this year unless this number goes the other way.
Speaker 1 (34:40):
Yeah, absolutely, all right, let's wrap it up with what
this market's selling us. You go two points, I'll.
Speaker 3 (34:44):
Go to Yeah.
Speaker 2 (34:45):
I mean, I think we'll probably be fairly range bound
over the next week or so into the jobs number.
Still concerned about the tech trade getting a little bit tired,
not to say that it can't continue, but I think
that's going to be a key focus next week for sure.
Speaker 1 (34:59):
Absolutely certainly. I think folks is going to be We're
going to be kicking off earnings numbers here in a
couple of weeks, so obviously we want to see what
that looks like, and continue to watch the real estate data.
This is another area of people are getting very frustrated.
Mortgage rates have not come down. They've gone up since
the Fed cut rates, and that's kind of keeping a
lid on some economic growth there. So we'll watch those factors.
All right, My friend, I wish you a great weekend.
God bless all of you. Thank you so very much
(35:20):
for joining us, Have a great weekend. John Sanchez is
a registered investment advisor, and the opinions expressed by Sanchez
Gone Capital Management, LLC on this show or their own
and do not reflect the opinions of News Talks seven
eighty or its pairing company, Cumulus Media. All statements and
opinions expressed are based upon information considered reliable, although it
(35:41):
should not be relied upon. As such, any statements or
opinions are subject to change without notice. Information presented is
for educational purposes only and does not intend to make
an offer or solicitation for the sale or purchase of
any specific securities, investments, or investment strategies. Investments involve risk, and,
unless otherwise stated or not guaranteed, information expressed does not
(36:04):
take into account your specific situation or objectives, and is
not intended as recommendations appropriate for any individual. Listeners are
encouraged to seek advice from a qualified tax, legal, or
investment advisor to determine whether any information presented may be
suitable for their specific situation. Past performance is not indicative
of future performance.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.