October 11, 2025 • 33 mins
In this episode, Jon Sanchez and Jason Gaunt discuss the recent downturn in the stock market, driven by geopolitical tensions, particularly with China, and the implications of new tariffs. They analyze investor sentiment, the impact of AI valuations, and the upcoming earnings season, providing insights on how to manage portfolios in a volatile market environment.
Chapters
00:00 Market Overview and Initial Reactions
02:07 Impact of Tariffs on Market Dynamics
04:56 Concerns Over AI Valuations and Bankruptcies
07:33 Rare Earth Minerals and Their Significance
10:08 Presidential Announcements and Market Responses
10:52 Government Layoffs and Market Implications
11:45 Understanding Beta and Portfolio Management
19:16 Defensive Strategies in a Volatile Market
20:31 Government Shutdown and Its Economic Impact
26:26 Political Games and Economic Consequences
30:23 Earnings Season: A Potential Market Stabilizer
👉 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.
Chapters
00:00 Market Overview and Initial Reactions
02:07 Impact of Tariffs on Market Dynamics
04:56 Concerns Over AI Valuations and Bankruptcies
07:33 Rare Earth Minerals and Their Significance
10:08 Presidential Announcements and Market Responses
10:52 Government Layoffs and Market Implications
11:45 Understanding Beta and Portfolio Management
19:16 Defensive Strategies in a Volatile Market
20:31 Government Shutdown and Its Economic Impact
26:26 Political Games and Economic Consequences
30:23 Earnings Season: A Potential Market Stabilizer
👉 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 (00:00):
Good Friday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k H. It is
a pleasure to be with you. It is a pleasure
that it's TGIF and a great pleasure to be with
my partner, Jason Gott.
Speaker 2 (00:10):
How are you, my friend? Happy Friday?
Speaker 3 (00:12):
It is Friday.
Speaker 4 (00:13):
I don't know if I'm going to give you happy today,
but yes, happy.
Speaker 3 (00:16):
China, teariff.
Speaker 4 (00:17):
I'm really mad at you because you're mean to me.
I'm going to tweet something and make the market go
down a lot Friday.
Speaker 2 (00:24):
Yes, yes, yes, okay.
Speaker 1 (00:26):
In other words, you to summarize what happened today in
the normal session, and of course what's happening right now
as we speak in the after hour session.
Speaker 2 (00:32):
Yes, yes, yes, exactly.
Speaker 1 (00:34):
Well, folks, we're going to get right to it because
there is a ton of information going on that would
potentially impact your portfolios, and we want to bring you
up to date. Let you kind of calm down, get
an understanding what's happening, get you ready for Monday unless
something changes over the weekend. But right now things looking
a little bit rough. Mister got where are we at
in the futures in the after hours.
Speaker 4 (00:53):
Right now, I see the I look at the spy,
the spiders, the spy. They're down point seven percent post
the clothes. So market was down two point seven percent
today and down another sixty five seventy BIPs after the close.
It's you know, it's it's the bunny slipper traders. But
it's not based on futures. It's just based on people
(01:15):
buying and selling spiders out in the clothes exactly.
Speaker 1 (01:18):
Exactly, okay, folks. So here's what's going on. I'm going
to go back to a few hours ago this morning actually,
so out of the blue. Out of the blue, the
president posted on true Social that he's going to threaten
to raise the tariffs against China and impose export controls.
Also said, quote, there's no reason for me to meet
(01:39):
with Chinese President she after he has imposed new restrictions
on the rare earth materials.
Speaker 2 (01:46):
What did the market do.
Speaker 1 (01:47):
We're up a couple hundred points on the doll and
immediately we were down about three hundred points, and that's
how we continue to trade throughout the day, lower and
lower and lower. So the market reaction, it was a selloff.
But as an investor, of course, what the heck do
you do now? Well, that's what we're here for. We're
gonna help you make that decision today. Fill you with
(02:08):
the facts of what's going on, give you our opinion,
our fifty plus years of portfolio management experience, and let
you know exactly things that are going on. If your
advisor's not telling you all this stuff, you know it,
give us a.
Speaker 2 (02:18):
Call mon day. We'd love to talk. All right, mister Gunn.
Speaker 1 (02:20):
Do you want to tackle the regular session and I'll
tackle what happened after the close with the presidents, or
you just want to mix it all together.
Speaker 3 (02:28):
I think it's.
Speaker 4 (02:29):
A big bowl of oatmeal. To be honest with you today,
I don't think the University of Michigan sentiment reading that
was pretty good fifty five was much in terms of
the cannon fodder of headlines. I think we're also in
a place that you and I have talked about a
quite a bit over the last several weeks, that the
market is at a tenable, tentative spot, like you get
(02:52):
up to all time highs and guess what, you either
go high, yer or you fall. Like we said before,
Jason's always of analogies, but up an escalator down an elevator, right,
that is a bowl market. That is fine, This is okay,
you know, a get a out of the opinion that
this is the top and we're just going straight down
from here. But what is the market pricing in Again,
we'll get into the details. But you needed the best
(03:14):
case scenario for the market to go higher.
Speaker 3 (03:17):
Right. It doesn't mean that it.
Speaker 4 (03:18):
Wouldn't happen, but you needed all the good things to
continue to happen or needs to be good, so on
and so forth, a hugging and kiss in between China
and US and Gaza and Israel and all those things. Well,
we got a curveball, right, and so people tend to
shoot first and ask questions later. And that's why you
see those high beta names that we've talked about as well.
Speaker 3 (03:36):
Keep a tight leash.
Speaker 4 (03:37):
On them because they will move fast on you if
things go the other way. And I just think that's
a bit of what we got today. Throwing into that
the bond market is closed on Monday, so the market
maybe sands one of its rudders, so could be good
or bad, but at least something to pay attention to.
But overall, we got the news of the tariff commentary
or at least some of the angst around what China
(04:00):
did with our rarers, et cetera, and our market reacted
pretty aggressively on to the downside.
Speaker 1 (04:06):
Okay, let's go back two days ago. Okay, so actually,
let's go back a couple of weeks, because again, we
are never on this show to pat ourselves on the back.
We're here to tell you what we see each and
every day. Are we right all the time? Absolutely not.
But we told you two weeks ago there's something going on.
Remember that term that Jason and I like to use,
the spidy senses, and I use that term on the show,
if you remember, Jason and I said my spidy and off.
Speaker 4 (04:27):
The show, off the show, and off the show in
fact too. Well, yeah, you've been kind of of that
ilk that the big moves lower sooner rather than later.
Speaker 2 (04:36):
So yeah, kudos, yeah, yeah, thank you. Well you right
there with me.
Speaker 1 (04:39):
We started to see some underpinnings going on, as we
discussed so many times on this program. Let's let's go
back a couple weeks and then we'll build up to
where we sit right now. Friday, October tenth, three twelve pm.
Jason and I have been concerned we've been telling you
on the show. We again, we can't tell you exactly
what we did with some of our clients, but as
I've told you, we took We just don't talk, we
take action, right, So we took some defensive action a
(05:01):
few weeks ago, Thank god, we had AI valuations really
began to come to the surface. Kudos to Jason in
regards to private equity, a lot of money being lent,
a lot of money going to AI related companies' names, etc.
But also in other areas. Right, we have a massive bankruptcy,
two of them this month, in one of the automotive
parts industry and another in the auto lending industry. Well,
(05:25):
I'll let Jason explain that one if we get time
later in the program. But there's a bunch of money
like well over a billion dollars lent in the autoparts
bankruptcy by various firms, mainly in the private credit space.
Speaker 2 (05:37):
Right. As we've always tried to.
Speaker 1 (05:40):
Educate all of you, you've got to remember a couple
of things, especially if you're new to the market. Number one,
Wall Street never never remembers previous mistakes, right, you think
they would have learned that you give a bunch of
money to one area or to one lender, and like
this autoparts lender, they're now coming back and going.
Speaker 2 (05:58):
But we kind of held as collateral, you know when
we lent this money.
Speaker 1 (06:01):
Well they did it about two or three other times
to other banks. Gee, how many times have we heard
that story in our career?
Speaker 2 (06:06):
A Jason?
Speaker 1 (06:07):
Yeah, that's what companies do, right, You give them a
bunch of money, and in many cases, unfortunately they didn't
tell the truth.
Speaker 2 (06:13):
So that's going to surface.
Speaker 1 (06:14):
But the bottom line is a lot of money, you know,
like I said, at least all we know at this
point close to a billion dollars by various banks lent
to lent to the company. They're now bankrupt. Now the
investigations beginning. So now you've got these companies going, oh,
we got a problem. We've used an analogy for years
on this program called the cockroachs theory. Where there's one,
there's others. Where there's one bad news, there can be
(06:35):
many others lurking, right, And we think that that could
be one of the underlying problems also in this market
right now, that with these two bankruptcies, this shows now
that credit markets, credit lenders are exposed and exposed in
a big way. So that's probably a subject for another
show because other things, but that's just one of the ingredients.
So we've been worried about that. We've been worried about
again the AI valuation, the circular accounting that we've been
(06:58):
talking about, and another of other factors. But those are
the three primary ones. So we fast forward to today.
Everything's fine right looking at my notes right now, Jason,
I mean, heck, it was a nice quiet day to day.
We're up, you know, fifty sixty points right before the
open on the Dow features nazacs and smps were up
a few points.
Speaker 2 (07:17):
It looked like a nice quiet day. We open up.
Speaker 1 (07:19):
You and I were chatting it I don't know, sixt
thirty right on there, and said, you know, it's the
same thing market we've had. This pattern happened, market's quiet
and pre market opening bell rings shoots up that we
sell off. Right, It's happened almost every day this week.
Fortunately with the President, when he sent out this truth
social post, everyone went to your point, shooting now, ask
(07:39):
questions later right now. We got problems with China, and
so not only with this issue, but then he threatened
again he's gonna do more tariffs, which he did in
the after hour session. So he kept to his word,
and this is what made the market sell off significantly.
So I'm going to tell you right now before I
go any further, what the market did today. So we
lost eight hundred and seventy nine points on the Dow,
(08:02):
a one point nine percent loss to forty five thousand
and four to seventy nine. I can't remember last time
we've had to say this one Jason, eight hundred and
twenty point loss on the Nasdaq. I mean, that's that's severe.
That's a three point five six percent loss. Closed at
twenty two thousand and two oh four, and the SMP
down one hundred and eighty three points two point seventy
one percent to six thousand, five point fifty two. Okay,
(08:23):
So there was the there was the damage. Now, that's
what we've been talking about the last couple of weeks.
The other issue I want to throw in there this
rare earth situation, rare earth metals. And again we could
do hours on this whole subject. But bottom line, remember
during COVID, one thing this country learned is we rely
upon foreign governments too much. In foreign companies for semiconductors. Well,
(08:44):
then it began to surface. Hey, you know what, we're
kind of relying upon China. Oops, by the way they
produced you know, seventy eighty percent depend upon whose numbers
you look at the rare earth. These are rare earth
minerals that are used in things like magnets. You may
think remember Jason as a kid, I don't know atch
you i'd loved I had a big magnet man.
Speaker 2 (08:59):
I loved thee Yeah.
Speaker 1 (09:01):
But nowadays, of course, magnets are used in everything from automobiles,
electric vehicles, fighter aircraft, I mean, things that we need.
But China's got the key to the door, right. And
this started to surface not long ago when we started
going through the tariff situation back in April, and all
this rose and everyone.
Speaker 2 (09:17):
Like, oh whoa.
Speaker 1 (09:18):
We didn't realize that China produced the bulk of the
rare earth in the world, and that was one of
their negotiating tactics. Back to Trump, Okay, so now you
refresh there. Now let's fast forward very quick before we
go to break to two days ago, President Shei of
China said, hey, you know what, you guys aren't being
too fun and cooperating too much on the tariffs. You
and know all the other tariffs. So here's what I'm
(09:38):
going to do. I'm going to charge one tenth of
one percent for any company in China that exports rare
minerals to the US and essentially the rest of the world.
But we're getting we have to approve every application.
Speaker 3 (09:52):
We all know took the Nvidia thing right with all the.
Speaker 1 (09:55):
Yeah, right, I don't think that's going to happen. So
that's been brewing under the surface. If you've caught my
stock update, So I've been talking a lot, and we
did yesterday on the show with the boys the rare
earth stocks, right, they've.
Speaker 2 (10:05):
Been building up, They've been building up, they've been building up.
Speaker 1 (10:08):
Well, this was the reason why, because what happened two
days ago today, I think the President woke up and
went a you know what, mister she you don't know.
You know, you're not going to pull the strings on this.
We've got our own things that we're going to do
to you. And that's what he said today. So when
we come back, we're going to start with what the
President sent out in true social this morning. You saw
the market reaction that I just heard or you just
(10:29):
heard the market reaction. Now we'll talk about what's going
on in the after hours what he said then, because
it was kind of a two step process today, right, Jay, Really.
Speaker 4 (10:38):
Was it fed and fed throughout the session. It almost
felt as if someone had a sort of vendetta to
get this market lower, and hopefully that's the case.
Speaker 3 (10:46):
Yeah, we'll see you got it.
Speaker 1 (10:47):
You got it, all right, we got a lot of
things to talk about. Let's start it over to the
wonderful Kristin Snow right now traffic center. Hello, Christen, Welcome
back to the John Sanchez Show on News Talk seven
eighty KOH with Jason Gunn. Once again, we had a
tough day to day and we're explaining the reasons behind it.
Nine decline on the doubt one point nine percent now
is back down eight hundred and twenty points, three point
five eight percent in the S and B lower by
(11:07):
one hundred and eighty three are two point seventy one percent,
and again we're continuing to see further pressure in the
after hour side of things. All Right, So we built
up until this morning. Okay, So I saved what the
President said that started this market sell off. I saved
the President's comments. He said China is quote becoming very hostile.
(11:30):
He mentioned that dispute with rare earth minerals, says there's
now quote no reason to meet with Chinese president she
at APEX, which is a meeting that was scheduled at
the end of this month. By the way, he excuse me,
he said, one of the policies that we are calculating
at this moment is a massive increase of tariffs on
Chinese products coming into the United States of America. There
(11:52):
are many other countermeasures, but you got to hand it
to the man. Jay, he kept his word of what
he said earlier this morning in this social post, because
that is exactly what happened in the after hours that
we'll get to in just a moment. So what's going on.
So again, let's recap what I said before we went
to break what Jason said, right, started a couple of
days ago with these rare earth metal situations, right, we
(12:14):
need those for magnets and again whole another reason. But
in a day just again talking about a big market
sellof here's some of those rare earth names and they're
in different forms and fashions, different minerals and things. But
just to kind of give you an idea. Now, one
in our backyard that you've heard us talk a lot about,
we're not recommending these or anything else is the Lithium Americas.
(12:34):
And this includes a little bit of after hours action
when I tell you these that one actually sold off today,
down eight point seventy one percent. Ramco Resources up two
and a half percent today, MP Materials up seven point
six two, Trilogy Metals though down eight point eighty six.
US Rare Earth up eleven point nine to one. Energy
Fuels up three point sixty five. So in a day
where the markets down between almost two to almost three percent,
(12:58):
there it is. And that's why the stock shot up
today is because of again this rare Earth situation where
the President Shay a couple of days ago said basically,
you know, just read between lines, We're not going to
let anybody else have this, and that's his bargaining point.
That and then that then infuriated Trump today and hence
what happened with the President making that truth social post
(13:19):
today and kind of brought us to this point of
the market close and then after hours, you want me
to tackle the President's uh tariffs after ours?
Speaker 3 (13:30):
Jay, please no, go right? Ahead, you're all right swimming?
Speaker 2 (13:34):
Yeah, all right.
Speaker 1 (13:37):
So, not long after the stock market closed today we
find out from the White House the following the President
said he is going to hit China with a one
hundred percent additional tariff and impose new export controls on
critical software products after Beijing placed new restrictions on the
(13:59):
export of rare earth minerals. Okay, critical software, critical real earth.
See how it's tip for tat. Now listen to the details, folks.
The new one hundred percent tariff and oh yeah, by
the way, that's on top of other tariffs that I'll
tell you the total. Now new tariff with China. The
new measure is going to take effect just in a
few weeks November. The first export control would affect quote
(14:22):
any and all critical software, he wrote. The measures could
take effect even sooner, he added, depending upon any further
actions or changes taken by China. Jay, let's kind of
stop with that this next little quote that he said,
these measures could take effect even sooner. Jay, what do
you think the odds are that sooner is going to
be before November first?
Speaker 4 (14:42):
Ah, greater than fifty percent.
Speaker 3 (14:45):
I will give you.
Speaker 1 (14:46):
Exactly exactly, because we have seen when he gets upset
with other countries, and especially when it comes to tariffs,
which is his baby. He could wake up tomorrow morning. Again,
we don't know. We're speculating he could wake up tomorrow morning,
or they may not go to bed till two o'clock
tomorrow morning. And it's sent out a true social post
and going, you know what I told you It was
November refers, but it's really going to become effective on
(15:08):
Monday the thirteenth. Right, we've learned that we've seen that
happen in the past. Okay, so we got to keep
that in mind as investors. Okay, So now back to
what happened in the after hours. So now we have
a new one hundred percent tariff against China. Trump wrote
also the following it is impossible to believe that China
would have taken such an action, but they have, and
the rest is history with a capital H. The average
(15:31):
US tariffs right now as we sit before this new
one hundred percent, average UF tariffs, according to the Peterson
Institute for International Economics, currently stand at fifty seven percent.
So we take remember there's different tariff percentages for different
products and so on and so forth. So average it
all together. We're now looking right above one hundred and
(15:53):
fifty percent tariff pretty much for anything coming in from China.
Speaker 2 (15:58):
Day. What did Amazon do today?
Speaker 3 (16:00):
It went lower?
Speaker 4 (16:00):
John, Amazon Today, when all was said and done, stock
was down about five percent.
Speaker 1 (16:06):
There you go, There you go. There's your first warning shot.
Watch what you have in your portfolio. Take it away, Jay, Why.
Speaker 4 (16:12):
Apple was down at three and a half percent. Right,
there's sensitivities all over the place. You've got true sensitivities
to import export. Who's going to be hurt by tariffs?
Like you mentioned the sensitive folks, the Amazon's, the Apples.
You can almost rewind the playbook to April. April and
then high beta, right, people just de risking their portfolios.
(16:33):
It doesn't take a lot to move a high beta stock.
These thinner names that people have bid us just correlation
to the stock market. So a higher beta name tends
to you know, biotech. Some of these speculative AI stocks,
et cetera. They go up three percent on average when
the market's up one percent.
Speaker 3 (16:52):
That would be.
Speaker 4 (16:52):
A three beta stock, right, whereas a consumer staple like
a chlorox may be a point six beta stock, meaning
that when the market goes up a percent, Clorox goes
up a percent. Well, guess what beta works on both sides.
There's up and then there's down. It's so Clorox, Staples, utilities,
(17:13):
those types of things. Low beta stocks tend to outperform
on bad days. I guess when high beta stocks tend
to do much worser on bad days. And that's a
lot of what we saw here. And beta tends to
really get expanded. They go down more than their normal
up beta like you've seen. I'm sure if you look at.
Speaker 2 (17:31):
If I'm sitting out there listening to you.
Speaker 4 (17:33):
Right now, beta is in your everything you got. You
can go look in your ear.
Speaker 2 (17:39):
That's the point.
Speaker 1 (17:39):
Would this be a good time, Jason got to maybe
look at the beta of your whole.
Speaker 4 (17:44):
Yahoo Finance, Fidelity, you name it, any search Google. You
could literally go in your favorite chat, GPT, perplexity, AI
machine and say, hey, what's the three year average beta
to the S and P of all these names? Drop
them in there, He'd enter and boom, You'll get your
betas and you can create betadjusted exposure.
Speaker 3 (18:03):
That's what I do for our portfolios.
Speaker 4 (18:05):
I look at it all the time because remember, the
betas are not you know, add them up and divide
by total number of names. You have to look at
how big each name is in terms of notional versus
its beta. So if you've got a one hundred dollars
of one stock and three hundred of another, right, you
need to know that that three hundred dollars beta is
(18:28):
basically three acts. So you can look at your portfolio
and look at beta adjusted exposure, so you get a
sense of how should my portfolio act on a day
like this, and if it doesn't act like you think
something clearly is is that a whack with what you're doing?
And normally that's because of beta. You'll be like, WHOA,
I didn't realize I had so much beta inside of
my account. Like we've talked about before, it's hedged, it's diversified. Well,
(18:52):
you probably have a lot of the same things, or
you truly have a momentum tilt. You've got high beta
across lots of names, even though they aren't tech.
Speaker 3 (19:00):
It could be energy, et cetera.
Speaker 4 (19:02):
So just a little bit of a nerdy teach in beta,
go read about it.
Speaker 3 (19:05):
It's a simple way.
Speaker 4 (19:07):
There's lots of other ways we could look at correlation,
but beta is one that I tend to look at
quickly summarize.
Speaker 1 (19:12):
A beta of one means your holding is going to
move lockstock and barrel with the SMP right on average, yep,
on average. Beta greater than one means you're again, if
it's one point two, you're.
Speaker 2 (19:22):
Going to move more than both, more than the.
Speaker 1 (19:26):
SMP and the beta point seven you're going to move less, right,
So you have to look at your personal risk taunch.
This is why I said, I think it was what
Wednesday or not? Yeah, I think it was Monday, Jason.
Maybe it was Wednesday when you and I said, now's
a good time to start creating your defensive strategies.
Speaker 2 (19:42):
Right.
Speaker 1 (19:43):
That's one thing you need to do because beta is
to Jason's point, will always be changing in your portfolio.
Maybe when you bought your stock it was a point
seven beta and things have gone crazy and now it's
a you know whatever, one point two one point three beta.
So that's why you got to keep up on that,
got to keep up. So there's the next next lesson
from today's action. Okay, when we come back, we're going
to continue what has happened today and what specifically this
(20:05):
in this after hours announcement by the President. We're now
looking at again a one hundred and fifty plus tariff
against China. So it's just having fun. And oh, by
the way, government announced a bunch of a bunch of
massive layoffs today. And oh by the way, we're what
is this today, Day ten of the government shutdown, So
get a few headwinds. That's why you need us. We'll
be right back to the store of Jack Sapent News
(20:27):
Talk seven eighty K. Whitch right now traffics cent or
not right now, but news trafficking weather. Hey Jack, welcome
back to the John Sanchez Show on Newstalk seven eighty K,
which Happy Friday to all of you. And hey, you
know what Jason mentioned earlier. Do you want to kind
of throw this out there so there's no confusion. Obviously,
Monday is a Columbus date. The bond market will be closed,
many of you will have the day off. We will
be here. The stock market is open that day. Once again, Jay,
why don't they ever give us that data? No O,
(20:49):
every year I said the same thing. Oh goodness, yea.
This would have been a great weekend to have a
three day week and to do a little cooling off
period right afterday.
Speaker 2 (20:57):
Been a great weekend for that.
Speaker 1 (21:00):
Right, speaking of cool enough, we're helping you make sense
of the rare earth market sell off, as Jason and
I have dubbed today's market sell off, an eight seventy
nine loss on the down DAN, eight hundred and twenty
on the Nasdaq in a decline of one hundred and
eighty three.
Speaker 2 (21:12):
Once again, to kind of give you a brief.
Speaker 1 (21:13):
Summary, it started weeks ago, a lot of chatter about
the accounting practices with AI, a lot of chatter about
the market being over a value, the AI sector being overvalued.
We warned you pee watching this very very closely. We
fast forward to a couple days ago when President she said,
guess what, We're going to impose this new one tenth
of a percent tariff tax whatever you want to call it,
(21:36):
on any rare earth that are sent out of China.
By the way, China again produces seventy percent of the
world's rare earth, so they're not a little player. Trump
kind of resonated on this as my guess, and this
morning he smacked the market across the face with a
two by four and said, yeah, I don't think that's
the way it's going to be. First thing I'm going
to do is I'm going to cancel my medium I
(21:57):
was supposed to have with you at the end of
this month. So yeah, we're not going to meet, right,
So forget about that. Then he throws out on true
social that China is becoming very hostile. He mentions the
dispute with the rare earth medals. He says, there is
now no reason to meet with the President and she
and one of the policies we're calculating at the moment
is a massive increase of terrorists on Chinese products coming
into the US, and there are many other countermeasures. Well,
(22:20):
he was a man of his word today because that's
exactly what he did. Not long after the stock market
closed this afternoon, the President said he's going to hit
China with a one hundred percent additional tariff and opposed
new export controls on critical software products after Beijing placed
new restrictions on the export of rare earth medals our minerals. Now, remember,
folks again, we can do another show next week, Jason.
If this is still an issue on rare earth medals
(22:42):
where they use military Jason, semiconductors are those kind of important.
Speaker 4 (22:46):
Hey, yes, magnets, all that stuffy helpful for there you go, evs,
all those kind of TV's.
Speaker 1 (22:53):
Yep, that's that's all of it. So he didn't like
that this you know again she's using this as a
uh you know, bargaining chip with the President to get
what was fifty seven percent tariffs down at backfired. Now
China has a one hundred and fifty seven percent tariff
starting November the first, plus these other controls and things.
(23:15):
And like I said, I would be here's here's you know,
my personal opinion, Jay, I would be shocked, as I
was joking with you earlier, but you know me, you
read to be in between the lines. I would be
shocked if he doesn't increase that or create some of
the type of retaliation before November first, right, November first,
and the eternity for him. So don't be surprised again
if we do. You agree with me on that. You
didn't comment I was rattling when you.
Speaker 4 (23:35):
No, again, it came not it's out of left field,
because clearly China was doing things that sparked the incendiary reaction.
Speaker 3 (23:42):
But it seemed very.
Speaker 4 (23:44):
Aggressive, right, and China sparked to our part, our part
as far as like the tone and narrative, and you know,
I mean again, we've made comments about licensing things and
such with Nvidio and chips and but it seemed a
very big reaction, you know, even in his tone right,
more so than I, you know, would say, hey, if
the cert can change, et cetera.
Speaker 3 (24:04):
But this was like one hundred percent for sure.
Speaker 4 (24:06):
I'm not speaking for any other countries other than the US,
so clearly there's been some conversation on the back end
as far as others, right, but it seemed like there
was this was building for a while with this response.
Speaker 2 (24:19):
Absolutely, I'm glad you brought up Navidia. Let's hit that one.
We're going to go back to the news.
Speaker 1 (24:24):
Nine dollars and forty one cent lost today four point
eight nine percent declined to one eighty three sixteen, down
another seventy seven cents in the after hours to one
eighty two thirty two. Okay, again, rare earth minerals used
in everything, China controls seventy percent. That's the gist working out,
you know, going to tear off the one hundred and
fifty seven percent, as I said, but also said before
(24:44):
we went to break you know, there's other things that
we're going to get to that also impacting the market.
Speaker 2 (24:48):
I e.
Speaker 1 (24:48):
The tenth day of the government being shut down, people
are getting a little exhausted you And I said that
on Wednesday. People are getting a little exhausted. You're hearing
some military woman. C Span had Mike Johnson the speaker
on yesterday, and some woman called in and just bashed him,
started bawling and said because of you and the other
Republicans not opening the government, and she did throw in
(25:09):
the Democrats. From what I understand, she goes, I've got
two kids, special needs kids that need their medicine. My
husband's in the military. Were paycheck to paycheck, and my
kids may die if they don't get their medicine that
I now count afford because my husband's not going to
get a paycheck. So those are the human stories that
we're starting to hear. Johnson was very abrupt and basically saying,
not my problem, it's the Democrats problem, right, And that's
(25:31):
that's kind of where this whole mess in Washington, and the.
Speaker 4 (25:35):
Tough part with it, right is like an ugly game
of tennis. The Conservatives get to say it's the Democrat's
fault this time, right, But last time it was the
Republican's fault. Like the whole thing is both of these
moron's faults, right, and it's just a matter of no
one wants to fix it. They just want to use
it as a bargaining chip, a political lightning rod of
(25:57):
some kind. And like, that's the part that drives me
the most crazy, is that, I promise you, when it's
all Democrats at some point or whatever we elect next,
they'll be pointing at somebody else saying it's there. It's
just just frustrates me to no end. I feel bad
for that person, but you know, it tends to work
well for the political lens. But overall, it's just a
(26:17):
stupid situation that we got to figure out longer term.
And that's part of the whole debasement thing that's going
around right, people talking about why is gold acting so
well despite the fact currencies are moving the way they are,
Why are crypto is acting so well? And it plays
into that narrative of fiscal lack of discipline both here
and overseas, and you know, people moving away from the
(26:40):
currency of old, right, it just sort of plays into
that quite well.
Speaker 3 (26:43):
And this exactly is it.
Speaker 4 (26:45):
That's why they got down you know, us debt got downgraded,
you know, six eight months ago, and we all freaked
out about like this continues to play and we got
to figure out to you know, play play for real
and stop playing this game every single month and.
Speaker 1 (26:58):
Play with people lives, playing with people's lives or you're
playing with people's lives when it comes to this. And
like you and I criticize every time there's one of
these these debt ceiling discussions, and you know, you've coined
the phrase, they just keep kicking the can down. They
want to just get canned down the road to mid November.
They can't even get that done right, just so people
(27:20):
can start getting some paychecks. Well again, whole nother subject
or our job today is to let you enlighten you
on what's happened in the market today. Let's see, I
think we covered the main points of what happened. The
news is kind of light from the administration in regards
to specifically how many people. Now, you know, we still
(27:42):
haven't heard the threat from the president come true what
he said a couple of days ago, which is he's
also going to speaking of the Democrats going to use
this time period of the government being shut down to
permanently get rid of you know, we don't know. The number,
could be thousands, hundreds of thousands, who knows of government
workers that work for democratic in his mind democratic type
of programs. So I think that could be another nail
(28:04):
in the coffin if and when that happens. That was
one of the threats that market really didn't pay a
lot of attention to this week, but it's still alloming
out there, and especially now, I think what you're going
to see with him, Jays, I think you're going to
see a very very mad and angry president, more so
than he even was because now he know, I hate
to say this, folks, but now he looks like he
has egg on his face. That China got the best
(28:24):
of him. That's why he slapped this massive tariff, just
you know, off the cuff. Basically, now he's going to
seek out retaliation against them, and I think now this
is going to anger him, in my opinion, to do
even more damage against the Democrats. Hey, I think if
he maybe in his mind before this whole situation with China,
(28:46):
let's just do hypothetical. Let's say he maybe had A,
I don't know, sixty percent probability seventy eighty percent probability
that he was going to come to some agreement with
the Democrats to get the country because he's under severe pressure. Also, Yeah,
for sure, I think now, let's say it was seventy percent, right,
I would say, now, I bet that drops to forty
or fifty percent because.
Speaker 2 (29:06):
He's so angry.
Speaker 1 (29:07):
So now he's angry at China, and now he's really
going to be even more angry at the Democrats because
right now he's getting backed into the corner. Right he's
getting back into the corner, and one of the most
important aspects of our economy, the rare earth. She got
one up on him on that one. And now the
Democrats are just not budging Schumer and all them. They're
laughing at him right now. And so when he gets
(29:29):
this way, he's backed into the corner. Don't be surprised
what he does. So I think it's going to be
a really interesting weekend and see if he comes out
with more retaliation in some form or fashion.
Speaker 4 (29:40):
Yeah, I unfortunately agree with you, and especially like I said,
the bond market being closed on Monday, we lack some
of the big capability factor, right, big boy adults.
Speaker 3 (29:50):
Right, yeah, well said, well.
Speaker 2 (29:53):
Said, so your line? What are your MENI like you said,
acrodyms are things?
Speaker 1 (29:56):
All right, We're gonna come back and wrap it up
with some advice for you, which I think to be
thinking about this point. That's wrapping up a Christmas snot
right now, traffic center, hil Christ Welcome back to the
John Sanchez Show on News Talk seven to eighty k
which with Jason Gohn.
Speaker 2 (30:06):
All right, now, I'm even going to tell you what
we did today.
Speaker 1 (30:08):
You know, I want to leave you on a positive note.
Tough day to day bottom line, We've We've given you
all the reasons behind it. Jay, let's peer into next week.
We have this little thing starting called earning season next
week for the for the third quarter.
Speaker 3 (30:23):
Yeah yeah, decent amount.
Speaker 4 (30:24):
We get banks, right, JP, Morgan will be out on Tuesday,
Johnson and Johnson, Wells, Fargo, City Group, Goldman, Sachs, black
Rock companies you may have heard of. They will be
out before the open on Tuesday. Got Bank of America, Progressive, Morgan,
Stanley all before the open on Wednesday, post the close.
United Airlines. We saw Delta earlier this week. So it's
(30:47):
like their first class passengers were keeping things busy, but
a little deceleration overall, We'll get travelers, US Bank Corp.
Charles Schwab, Melon all before the open on.
Speaker 3 (30:58):
Thursday, and and what we.
Speaker 4 (31:00):
Got anything good on Friday, not much to speak of.
More banks, American Express, Slumberge. American Express will give us
a read through on how the affluent consumer is doing,
even though you have seen a millennial shift towards American Express,
which I've seen on last couple of calls from them,
State Street, et cetera. So all banks next week. It's
no longer Alcoa that kicks things off, it's JP, Morgan Chase.
Speaker 1 (31:24):
And I think interesting point too is Tuesday. They kick
off right Normally it seems to be on a Friday,
so and this could and by the way, folks, I'm
happy that it's going to be on Tuesday, because this
could be our savior. This could calm things down. This
could be a counteraction to the actions that we talked
about today if you start to get some blowout earnings
numbers from these banks. But again the opposite, if they miss,
(31:44):
which I don't think they're going to think. I think
they're I think everybody overall is going to have had
a pretty good quarter.
Speaker 2 (31:49):
I would expect it about the ernis yeah. Yeah.
Speaker 1 (31:52):
By the way, it was announced today with the government
shut down again day ten and not getting economic reports,
which is when you're sitting in our seats, is so
bizarre social when I do the Sotock up dates of
the morning's like man oh Man, I miss being able
to talk about this report of that one. But the
beer of Labor Statistics, which creates the CPI report on
top of our non farm paile numbers announced today. I
told you yesterday on the show they're bringing their employees back.
(32:14):
Why because they announced today that October twenty fourth, we're
going to get the read on CPI measure of inflation
for the month of Septembers. Don't know how they're getting
them back or whatever, but you know, at least we'll
get one government report, as it says, right now until
the government gets open.
Speaker 2 (32:29):
All right, finalize things. What do you need to be
doing right now?
Speaker 1 (32:32):
Look at the beta of the portfolio, Look at your
asset allocation, do an internal risk tolerance check with yourself.
Can you handle volatility? Can you and your spouse handle volatility?
Speaker 2 (32:42):
If not.
Speaker 1 (32:43):
Don't hesitate this, take some corrective action. Things are going
to be choppy, but as quickly as they fell today,
they can rebound.
Speaker 2 (32:49):
Who knows.
Speaker 1 (32:49):
We can come in on Monday and President she and
Trump are you know, shaking hands again like we've seen
in the past. Right now, just a lot of nervousness.
You need to manage accordingly. Any points on your side,
Jay No, I.
Speaker 4 (33:00):
Think it's spot on if you feel like your portfolio
is moving more than you wanted to. There's no shame
in taking a little bit of profit here at all
time highs.
Speaker 3 (33:06):
So it's absolutely always thinking about that.
Speaker 1 (33:09):
You bet him, you bet you? Alrighty folks, God bless
have a great weekend. Those of you that have a
three days. We'll miss you on Monday. But you know what,
you can always pick up our podcast, give us a
call in the office if you're not happy what your
portfolio is doing. Eighteen o one er online at Sanchez
gone to gaun t at dot com. Have a great weekend, Jake,
God bless everybody. We'll see you on Monday.
Good Friday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k H. It is
a pleasure to be with you. It is a pleasure
that it's TGIF and a great pleasure to be with
my partner, Jason Gott.
Speaker 2 (00:10):
How are you, my friend? Happy Friday?
Speaker 3 (00:12):
It is Friday.
Speaker 4 (00:13):
I don't know if I'm going to give you happy today,
but yes, happy.
Speaker 3 (00:16):
China, teariff.
Speaker 4 (00:17):
I'm really mad at you because you're mean to me.
I'm going to tweet something and make the market go
down a lot Friday.
Speaker 2 (00:24):
Yes, yes, yes, okay.
Speaker 1 (00:26):
In other words, you to summarize what happened today in
the normal session, and of course what's happening right now
as we speak in the after hour session.
Speaker 2 (00:32):
Yes, yes, yes, exactly.
Speaker 1 (00:34):
Well, folks, we're going to get right to it because
there is a ton of information going on that would
potentially impact your portfolios, and we want to bring you
up to date. Let you kind of calm down, get
an understanding what's happening, get you ready for Monday unless
something changes over the weekend. But right now things looking
a little bit rough. Mister got where are we at
in the futures in the after hours.
Speaker 4 (00:53):
Right now, I see the I look at the spy,
the spiders, the spy. They're down point seven percent post
the clothes. So market was down two point seven percent
today and down another sixty five seventy BIPs after the close.
It's you know, it's it's the bunny slipper traders. But
it's not based on futures. It's just based on people
(01:15):
buying and selling spiders out in the clothes exactly.
Speaker 1 (01:18):
Exactly, okay, folks. So here's what's going on. I'm going
to go back to a few hours ago this morning actually,
so out of the blue. Out of the blue, the
president posted on true Social that he's going to threaten
to raise the tariffs against China and impose export controls.
Also said, quote, there's no reason for me to meet
(01:39):
with Chinese President she after he has imposed new restrictions
on the rare earth materials.
Speaker 2 (01:46):
What did the market do.
Speaker 1 (01:47):
We're up a couple hundred points on the doll and
immediately we were down about three hundred points, and that's
how we continue to trade throughout the day, lower and
lower and lower. So the market reaction, it was a selloff.
But as an investor, of course, what the heck do
you do now? Well, that's what we're here for. We're
gonna help you make that decision today. Fill you with
(02:08):
the facts of what's going on, give you our opinion,
our fifty plus years of portfolio management experience, and let
you know exactly things that are going on. If your
advisor's not telling you all this stuff, you know it,
give us a.
Speaker 2 (02:18):
Call mon day. We'd love to talk. All right, mister Gunn.
Speaker 1 (02:20):
Do you want to tackle the regular session and I'll
tackle what happened after the close with the presidents, or
you just want to mix it all together.
Speaker 3 (02:28):
I think it's.
Speaker 4 (02:29):
A big bowl of oatmeal. To be honest with you today,
I don't think the University of Michigan sentiment reading that
was pretty good fifty five was much in terms of
the cannon fodder of headlines. I think we're also in
a place that you and I have talked about a
quite a bit over the last several weeks, that the
market is at a tenable, tentative spot, like you get
(02:52):
up to all time highs and guess what, you either
go high, yer or you fall. Like we said before,
Jason's always of analogies, but up an escalator down an elevator, right,
that is a bowl market. That is fine, This is okay,
you know, a get a out of the opinion that
this is the top and we're just going straight down
from here. But what is the market pricing in Again,
we'll get into the details. But you needed the best
(03:14):
case scenario for the market to go higher.
Speaker 3 (03:17):
Right. It doesn't mean that it.
Speaker 4 (03:18):
Wouldn't happen, but you needed all the good things to
continue to happen or needs to be good, so on
and so forth, a hugging and kiss in between China
and US and Gaza and Israel and all those things. Well,
we got a curveball, right, and so people tend to
shoot first and ask questions later. And that's why you
see those high beta names that we've talked about as well.
Speaker 3 (03:36):
Keep a tight leash.
Speaker 4 (03:37):
On them because they will move fast on you if
things go the other way. And I just think that's
a bit of what we got today. Throwing into that
the bond market is closed on Monday, so the market
maybe sands one of its rudders, so could be good
or bad, but at least something to pay attention to.
But overall, we got the news of the tariff commentary
or at least some of the angst around what China
(04:00):
did with our rarers, et cetera, and our market reacted
pretty aggressively on to the downside.
Speaker 1 (04:06):
Okay, let's go back two days ago. Okay, so actually,
let's go back a couple of weeks, because again, we
are never on this show to pat ourselves on the back.
We're here to tell you what we see each and
every day. Are we right all the time? Absolutely not.
But we told you two weeks ago there's something going on.
Remember that term that Jason and I like to use,
the spidy senses, and I use that term on the show,
if you remember, Jason and I said my spidy and off.
Speaker 4 (04:27):
The show, off the show, and off the show in
fact too. Well, yeah, you've been kind of of that
ilk that the big moves lower sooner rather than later.
Speaker 2 (04:36):
So yeah, kudos, yeah, yeah, thank you. Well you right
there with me.
Speaker 1 (04:39):
We started to see some underpinnings going on, as we
discussed so many times on this program. Let's let's go
back a couple weeks and then we'll build up to
where we sit right now. Friday, October tenth, three twelve pm.
Jason and I have been concerned we've been telling you
on the show. We again, we can't tell you exactly
what we did with some of our clients, but as
I've told you, we took We just don't talk, we
take action, right, So we took some defensive action a
(05:01):
few weeks ago, Thank god, we had AI valuations really
began to come to the surface. Kudos to Jason in
regards to private equity, a lot of money being lent,
a lot of money going to AI related companies' names, etc.
But also in other areas. Right, we have a massive bankruptcy,
two of them this month, in one of the automotive
parts industry and another in the auto lending industry. Well,
(05:25):
I'll let Jason explain that one if we get time
later in the program. But there's a bunch of money
like well over a billion dollars lent in the autoparts
bankruptcy by various firms, mainly in the private credit space.
Speaker 2 (05:37):
Right. As we've always tried to.
Speaker 1 (05:40):
Educate all of you, you've got to remember a couple
of things, especially if you're new to the market. Number one,
Wall Street never never remembers previous mistakes, right, you think
they would have learned that you give a bunch of
money to one area or to one lender, and like
this autoparts lender, they're now coming back and going.
Speaker 2 (05:58):
But we kind of held as collateral, you know when
we lent this money.
Speaker 1 (06:01):
Well they did it about two or three other times
to other banks. Gee, how many times have we heard
that story in our career?
Speaker 2 (06:06):
A Jason?
Speaker 1 (06:07):
Yeah, that's what companies do, right, You give them a
bunch of money, and in many cases, unfortunately they didn't
tell the truth.
Speaker 2 (06:13):
So that's going to surface.
Speaker 1 (06:14):
But the bottom line is a lot of money, you know,
like I said, at least all we know at this
point close to a billion dollars by various banks lent
to lent to the company. They're now bankrupt. Now the
investigations beginning. So now you've got these companies going, oh,
we got a problem. We've used an analogy for years
on this program called the cockroachs theory. Where there's one,
there's others. Where there's one bad news, there can be
(06:35):
many others lurking, right, And we think that that could
be one of the underlying problems also in this market
right now, that with these two bankruptcies, this shows now
that credit markets, credit lenders are exposed and exposed in
a big way. So that's probably a subject for another
show because other things, but that's just one of the ingredients.
So we've been worried about that. We've been worried about
again the AI valuation, the circular accounting that we've been
(06:58):
talking about, and another of other factors. But those are
the three primary ones. So we fast forward to today.
Everything's fine right looking at my notes right now, Jason,
I mean, heck, it was a nice quiet day to day.
We're up, you know, fifty sixty points right before the
open on the Dow features nazacs and smps were up
a few points.
Speaker 2 (07:17):
It looked like a nice quiet day. We open up.
Speaker 1 (07:19):
You and I were chatting it I don't know, sixt
thirty right on there, and said, you know, it's the
same thing market we've had. This pattern happened, market's quiet
and pre market opening bell rings shoots up that we
sell off. Right, It's happened almost every day this week.
Fortunately with the President, when he sent out this truth
social post, everyone went to your point, shooting now, ask
(07:39):
questions later right now. We got problems with China, and
so not only with this issue, but then he threatened
again he's gonna do more tariffs, which he did in
the after hour session. So he kept to his word,
and this is what made the market sell off significantly.
So I'm going to tell you right now before I
go any further, what the market did today. So we
lost eight hundred and seventy nine points on the Dow,
(08:02):
a one point nine percent loss to forty five thousand
and four to seventy nine. I can't remember last time
we've had to say this one Jason, eight hundred and
twenty point loss on the Nasdaq. I mean, that's that's severe.
That's a three point five six percent loss. Closed at
twenty two thousand and two oh four, and the SMP
down one hundred and eighty three points two point seventy
one percent to six thousand, five point fifty two. Okay,
(08:23):
So there was the there was the damage. Now, that's
what we've been talking about the last couple of weeks.
The other issue I want to throw in there this
rare earth situation, rare earth metals. And again we could
do hours on this whole subject. But bottom line, remember
during COVID, one thing this country learned is we rely
upon foreign governments too much. In foreign companies for semiconductors. Well,
(08:44):
then it began to surface. Hey, you know what, we're
kind of relying upon China. Oops, by the way they
produced you know, seventy eighty percent depend upon whose numbers
you look at the rare earth. These are rare earth
minerals that are used in things like magnets. You may
think remember Jason as a kid, I don't know atch
you i'd loved I had a big magnet man.
Speaker 2 (08:59):
I loved thee Yeah.
Speaker 1 (09:01):
But nowadays, of course, magnets are used in everything from automobiles,
electric vehicles, fighter aircraft, I mean, things that we need.
But China's got the key to the door, right. And
this started to surface not long ago when we started
going through the tariff situation back in April, and all
this rose and everyone.
Speaker 2 (09:17):
Like, oh whoa.
Speaker 1 (09:18):
We didn't realize that China produced the bulk of the
rare earth in the world, and that was one of
their negotiating tactics. Back to Trump, Okay, so now you
refresh there. Now let's fast forward very quick before we
go to break to two days ago, President Shei of
China said, hey, you know what, you guys aren't being
too fun and cooperating too much on the tariffs. You
and know all the other tariffs. So here's what I'm
(09:38):
going to do. I'm going to charge one tenth of
one percent for any company in China that exports rare
minerals to the US and essentially the rest of the world.
But we're getting we have to approve every application.
Speaker 3 (09:52):
We all know took the Nvidia thing right with all the.
Speaker 1 (09:55):
Yeah, right, I don't think that's going to happen. So
that's been brewing under the surface. If you've caught my
stock update, So I've been talking a lot, and we
did yesterday on the show with the boys the rare
earth stocks, right, they've.
Speaker 2 (10:05):
Been building up, They've been building up, they've been building up.
Speaker 1 (10:08):
Well, this was the reason why, because what happened two
days ago today, I think the President woke up and
went a you know what, mister she you don't know.
You know, you're not going to pull the strings on this.
We've got our own things that we're going to do
to you. And that's what he said today. So when
we come back, we're going to start with what the
President sent out in true social this morning. You saw
the market reaction that I just heard or you just
(10:29):
heard the market reaction. Now we'll talk about what's going
on in the after hours what he said then, because
it was kind of a two step process today, right, Jay, Really.
Speaker 4 (10:38):
Was it fed and fed throughout the session. It almost
felt as if someone had a sort of vendetta to
get this market lower, and hopefully that's the case.
Speaker 3 (10:46):
Yeah, we'll see you got it.
Speaker 1 (10:47):
You got it, all right, we got a lot of
things to talk about. Let's start it over to the
wonderful Kristin Snow right now traffic center. Hello, Christen, Welcome
back to the John Sanchez Show on News Talk seven
eighty KOH with Jason Gunn. Once again, we had a
tough day to day and we're explaining the reasons behind it.
Nine decline on the doubt one point nine percent now
is back down eight hundred and twenty points, three point
five eight percent in the S and B lower by
(11:07):
one hundred and eighty three are two point seventy one percent,
and again we're continuing to see further pressure in the
after hour side of things. All Right, So we built
up until this morning. Okay, So I saved what the
President said that started this market sell off. I saved
the President's comments. He said China is quote becoming very hostile.
(11:30):
He mentioned that dispute with rare earth minerals, says there's
now quote no reason to meet with Chinese president she
at APEX, which is a meeting that was scheduled at
the end of this month. By the way, he excuse me,
he said, one of the policies that we are calculating
at this moment is a massive increase of tariffs on
Chinese products coming into the United States of America. There
(11:52):
are many other countermeasures, but you got to hand it
to the man. Jay, he kept his word of what
he said earlier this morning in this social post, because
that is exactly what happened in the after hours that
we'll get to in just a moment. So what's going on.
So again, let's recap what I said before we went
to break what Jason said, right, started a couple of
days ago with these rare earth metal situations, right, we
(12:14):
need those for magnets and again whole another reason. But
in a day just again talking about a big market
sellof here's some of those rare earth names and they're
in different forms and fashions, different minerals and things. But
just to kind of give you an idea. Now, one
in our backyard that you've heard us talk a lot about,
we're not recommending these or anything else is the Lithium Americas.
(12:34):
And this includes a little bit of after hours action
when I tell you these that one actually sold off today,
down eight point seventy one percent. Ramco Resources up two
and a half percent today, MP Materials up seven point
six two, Trilogy Metals though down eight point eighty six.
US Rare Earth up eleven point nine to one. Energy
Fuels up three point sixty five. So in a day
where the markets down between almost two to almost three percent,
(12:58):
there it is. And that's why the stock shot up
today is because of again this rare Earth situation where
the President Shay a couple of days ago said basically,
you know, just read between lines, We're not going to
let anybody else have this, and that's his bargaining point.
That and then that then infuriated Trump today and hence
what happened with the President making that truth social post
(13:19):
today and kind of brought us to this point of
the market close and then after hours, you want me
to tackle the President's uh tariffs after ours?
Speaker 3 (13:30):
Jay, please no, go right? Ahead, you're all right swimming?
Speaker 2 (13:34):
Yeah, all right.
Speaker 1 (13:37):
So, not long after the stock market closed today we
find out from the White House the following the President
said he is going to hit China with a one
hundred percent additional tariff and impose new export controls on
critical software products after Beijing placed new restrictions on the
(13:59):
export of rare earth minerals. Okay, critical software, critical real earth.
See how it's tip for tat. Now listen to the details, folks.
The new one hundred percent tariff and oh yeah, by
the way, that's on top of other tariffs that I'll
tell you the total. Now new tariff with China. The
new measure is going to take effect just in a
few weeks November. The first export control would affect quote
(14:22):
any and all critical software, he wrote. The measures could
take effect even sooner, he added, depending upon any further
actions or changes taken by China. Jay, let's kind of
stop with that this next little quote that he said,
these measures could take effect even sooner. Jay, what do
you think the odds are that sooner is going to
be before November first?
Speaker 4 (14:42):
Ah, greater than fifty percent.
Speaker 3 (14:45):
I will give you.
Speaker 1 (14:46):
Exactly exactly, because we have seen when he gets upset
with other countries, and especially when it comes to tariffs,
which is his baby. He could wake up tomorrow morning. Again,
we don't know. We're speculating he could wake up tomorrow morning,
or they may not go to bed till two o'clock
tomorrow morning. And it's sent out a true social post
and going, you know what I told you It was
November refers, but it's really going to become effective on
(15:08):
Monday the thirteenth. Right, we've learned that we've seen that
happen in the past. Okay, so we got to keep
that in mind as investors. Okay, So now back to
what happened in the after hours. So now we have
a new one hundred percent tariff against China. Trump wrote
also the following it is impossible to believe that China
would have taken such an action, but they have, and
the rest is history with a capital H. The average
(15:31):
US tariffs right now as we sit before this new
one hundred percent, average UF tariffs, according to the Peterson
Institute for International Economics, currently stand at fifty seven percent.
So we take remember there's different tariff percentages for different
products and so on and so forth. So average it
all together. We're now looking right above one hundred and
(15:53):
fifty percent tariff pretty much for anything coming in from China.
Speaker 2 (15:58):
Day. What did Amazon do today?
Speaker 3 (16:00):
It went lower?
Speaker 4 (16:00):
John, Amazon Today, when all was said and done, stock
was down about five percent.
Speaker 1 (16:06):
There you go, There you go. There's your first warning shot.
Watch what you have in your portfolio. Take it away, Jay, Why.
Speaker 4 (16:12):
Apple was down at three and a half percent. Right,
there's sensitivities all over the place. You've got true sensitivities
to import export. Who's going to be hurt by tariffs?
Like you mentioned the sensitive folks, the Amazon's, the Apples.
You can almost rewind the playbook to April. April and
then high beta, right, people just de risking their portfolios.
(16:33):
It doesn't take a lot to move a high beta stock.
These thinner names that people have bid us just correlation
to the stock market. So a higher beta name tends
to you know, biotech. Some of these speculative AI stocks,
et cetera. They go up three percent on average when
the market's up one percent.
Speaker 3 (16:52):
That would be.
Speaker 4 (16:52):
A three beta stock, right, whereas a consumer staple like
a chlorox may be a point six beta stock, meaning
that when the market goes up a percent, Clorox goes
up a percent. Well, guess what beta works on both sides.
There's up and then there's down. It's so Clorox, Staples, utilities,
(17:13):
those types of things. Low beta stocks tend to outperform
on bad days. I guess when high beta stocks tend
to do much worser on bad days. And that's a
lot of what we saw here. And beta tends to
really get expanded. They go down more than their normal
up beta like you've seen. I'm sure if you look at.
Speaker 2 (17:31):
If I'm sitting out there listening to you.
Speaker 4 (17:33):
Right now, beta is in your everything you got. You
can go look in your ear.
Speaker 2 (17:39):
That's the point.
Speaker 1 (17:39):
Would this be a good time, Jason got to maybe
look at the beta of your whole.
Speaker 4 (17:44):
Yahoo Finance, Fidelity, you name it, any search Google. You
could literally go in your favorite chat, GPT, perplexity, AI
machine and say, hey, what's the three year average beta
to the S and P of all these names? Drop
them in there, He'd enter and boom, You'll get your
betas and you can create betadjusted exposure.
Speaker 3 (18:03):
That's what I do for our portfolios.
Speaker 4 (18:05):
I look at it all the time because remember, the
betas are not you know, add them up and divide
by total number of names. You have to look at
how big each name is in terms of notional versus
its beta. So if you've got a one hundred dollars
of one stock and three hundred of another, right, you
need to know that that three hundred dollars beta is
(18:28):
basically three acts. So you can look at your portfolio
and look at beta adjusted exposure, so you get a
sense of how should my portfolio act on a day
like this, and if it doesn't act like you think
something clearly is is that a whack with what you're doing?
And normally that's because of beta. You'll be like, WHOA,
I didn't realize I had so much beta inside of
my account. Like we've talked about before, it's hedged, it's diversified. Well,
(18:52):
you probably have a lot of the same things, or
you truly have a momentum tilt. You've got high beta
across lots of names, even though they aren't tech.
Speaker 3 (19:00):
It could be energy, et cetera.
Speaker 4 (19:02):
So just a little bit of a nerdy teach in beta,
go read about it.
Speaker 3 (19:05):
It's a simple way.
Speaker 4 (19:07):
There's lots of other ways we could look at correlation,
but beta is one that I tend to look at
quickly summarize.
Speaker 1 (19:12):
A beta of one means your holding is going to
move lockstock and barrel with the SMP right on average, yep,
on average. Beta greater than one means you're again, if
it's one point two, you're.
Speaker 2 (19:22):
Going to move more than both, more than the.
Speaker 1 (19:26):
SMP and the beta point seven you're going to move less, right,
So you have to look at your personal risk taunch.
This is why I said, I think it was what
Wednesday or not? Yeah, I think it was Monday, Jason.
Maybe it was Wednesday when you and I said, now's
a good time to start creating your defensive strategies.
Speaker 2 (19:42):
Right.
Speaker 1 (19:43):
That's one thing you need to do because beta is
to Jason's point, will always be changing in your portfolio.
Maybe when you bought your stock it was a point
seven beta and things have gone crazy and now it's
a you know whatever, one point two one point three beta.
So that's why you got to keep up on that,
got to keep up. So there's the next next lesson
from today's action. Okay, when we come back, we're going
to continue what has happened today and what specifically this
(20:05):
in this after hours announcement by the President. We're now
looking at again a one hundred and fifty plus tariff
against China. So it's just having fun. And oh, by
the way, government announced a bunch of a bunch of
massive layoffs today. And oh by the way, we're what
is this today, Day ten of the government shutdown, So
get a few headwinds. That's why you need us. We'll
be right back to the store of Jack Sapent News
(20:27):
Talk seven eighty K. Whitch right now traffics cent or
not right now, but news trafficking weather. Hey Jack, welcome
back to the John Sanchez Show on Newstalk seven eighty K,
which Happy Friday to all of you. And hey, you
know what Jason mentioned earlier. Do you want to kind
of throw this out there so there's no confusion. Obviously,
Monday is a Columbus date. The bond market will be closed,
many of you will have the day off. We will
be here. The stock market is open that day. Once again, Jay,
why don't they ever give us that data? No O,
(20:49):
every year I said the same thing. Oh goodness, yea.
This would have been a great weekend to have a
three day week and to do a little cooling off
period right afterday.
Speaker 2 (20:57):
Been a great weekend for that.
Speaker 1 (21:00):
Right, speaking of cool enough, we're helping you make sense
of the rare earth market sell off, as Jason and
I have dubbed today's market sell off, an eight seventy
nine loss on the down DAN, eight hundred and twenty
on the Nasdaq in a decline of one hundred and
eighty three.
Speaker 2 (21:12):
Once again, to kind of give you a brief.
Speaker 1 (21:13):
Summary, it started weeks ago, a lot of chatter about
the accounting practices with AI, a lot of chatter about
the market being over a value, the AI sector being overvalued.
We warned you pee watching this very very closely. We
fast forward to a couple days ago when President she said,
guess what, We're going to impose this new one tenth
of a percent tariff tax whatever you want to call it,
(21:36):
on any rare earth that are sent out of China.
By the way, China again produces seventy percent of the
world's rare earth, so they're not a little player. Trump
kind of resonated on this as my guess, and this
morning he smacked the market across the face with a
two by four and said, yeah, I don't think that's
the way it's going to be. First thing I'm going
to do is I'm going to cancel my medium I
(21:57):
was supposed to have with you at the end of
this month. So yeah, we're not going to meet, right,
So forget about that. Then he throws out on true
social that China is becoming very hostile. He mentions the
dispute with the rare earth medals. He says, there is
now no reason to meet with the President and she
and one of the policies we're calculating at the moment
is a massive increase of terrorists on Chinese products coming
into the US, and there are many other countermeasures. Well,
(22:20):
he was a man of his word today because that's
exactly what he did. Not long after the stock market
closed this afternoon, the President said he's going to hit
China with a one hundred percent additional tariff and opposed
new export controls on critical software products after Beijing placed
new restrictions on the export of rare earth medals our minerals. Now, remember,
folks again, we can do another show next week, Jason.
If this is still an issue on rare earth medals
(22:42):
where they use military Jason, semiconductors are those kind of important.
Speaker 4 (22:46):
Hey, yes, magnets, all that stuffy helpful for there you go, evs,
all those kind of TV's.
Speaker 1 (22:53):
Yep, that's that's all of it. So he didn't like
that this you know again she's using this as a
uh you know, bargaining chip with the President to get
what was fifty seven percent tariffs down at backfired. Now
China has a one hundred and fifty seven percent tariff
starting November the first, plus these other controls and things.
(23:15):
And like I said, I would be here's here's you know,
my personal opinion, Jay, I would be shocked, as I
was joking with you earlier, but you know me, you
read to be in between the lines. I would be
shocked if he doesn't increase that or create some of
the type of retaliation before November first, right, November first,
and the eternity for him. So don't be surprised again
if we do. You agree with me on that. You
didn't comment I was rattling when you.
Speaker 4 (23:35):
No, again, it came not it's out of left field,
because clearly China was doing things that sparked the incendiary reaction.
Speaker 3 (23:42):
But it seemed very.
Speaker 4 (23:44):
Aggressive, right, and China sparked to our part, our part
as far as like the tone and narrative, and you know,
I mean again, we've made comments about licensing things and
such with Nvidio and chips and but it seemed a
very big reaction, you know, even in his tone right,
more so than I, you know, would say, hey, if
the cert can change, et cetera.
Speaker 3 (24:04):
But this was like one hundred percent for sure.
Speaker 4 (24:06):
I'm not speaking for any other countries other than the US,
so clearly there's been some conversation on the back end
as far as others, right, but it seemed like there
was this was building for a while with this response.
Speaker 2 (24:19):
Absolutely, I'm glad you brought up Navidia. Let's hit that one.
We're going to go back to the news.
Speaker 1 (24:24):
Nine dollars and forty one cent lost today four point
eight nine percent declined to one eighty three sixteen, down
another seventy seven cents in the after hours to one
eighty two thirty two. Okay, again, rare earth minerals used
in everything, China controls seventy percent. That's the gist working out,
you know, going to tear off the one hundred and
fifty seven percent, as I said, but also said before
(24:44):
we went to break you know, there's other things that
we're going to get to that also impacting the market.
Speaker 2 (24:48):
I e.
Speaker 1 (24:48):
The tenth day of the government being shut down, people
are getting a little exhausted you And I said that
on Wednesday. People are getting a little exhausted. You're hearing
some military woman. C Span had Mike Johnson the speaker
on yesterday, and some woman called in and just bashed him,
started bawling and said because of you and the other
Republicans not opening the government, and she did throw in
(25:09):
the Democrats. From what I understand, she goes, I've got
two kids, special needs kids that need their medicine. My
husband's in the military. Were paycheck to paycheck, and my
kids may die if they don't get their medicine that
I now count afford because my husband's not going to
get a paycheck. So those are the human stories that
we're starting to hear. Johnson was very abrupt and basically saying,
not my problem, it's the Democrats problem, right, And that's
(25:31):
that's kind of where this whole mess in Washington, and the.
Speaker 4 (25:35):
Tough part with it, right is like an ugly game
of tennis. The Conservatives get to say it's the Democrat's
fault this time, right, But last time it was the
Republican's fault. Like the whole thing is both of these
moron's faults, right, and it's just a matter of no
one wants to fix it. They just want to use
it as a bargaining chip, a political lightning rod of
(25:57):
some kind. And like, that's the part that drives me
the most crazy, is that, I promise you, when it's
all Democrats at some point or whatever we elect next,
they'll be pointing at somebody else saying it's there. It's
just just frustrates me to no end. I feel bad
for that person, but you know, it tends to work
well for the political lens. But overall, it's just a
(26:17):
stupid situation that we got to figure out longer term.
And that's part of the whole debasement thing that's going
around right, people talking about why is gold acting so
well despite the fact currencies are moving the way they are,
Why are crypto is acting so well? And it plays
into that narrative of fiscal lack of discipline both here
and overseas, and you know, people moving away from the
(26:40):
currency of old, right, it just sort of plays into
that quite well.
Speaker 3 (26:43):
And this exactly is it.
Speaker 4 (26:45):
That's why they got down you know, us debt got downgraded,
you know, six eight months ago, and we all freaked
out about like this continues to play and we got
to figure out to you know, play play for real
and stop playing this game every single month and.
Speaker 1 (26:58):
Play with people lives, playing with people's lives or you're
playing with people's lives when it comes to this. And
like you and I criticize every time there's one of
these these debt ceiling discussions, and you know, you've coined
the phrase, they just keep kicking the can down. They
want to just get canned down the road to mid November.
They can't even get that done right, just so people
(27:20):
can start getting some paychecks. Well again, whole nother subject
or our job today is to let you enlighten you
on what's happened in the market today. Let's see, I
think we covered the main points of what happened. The
news is kind of light from the administration in regards
to specifically how many people. Now, you know, we still
(27:42):
haven't heard the threat from the president come true what
he said a couple of days ago, which is he's
also going to speaking of the Democrats going to use
this time period of the government being shut down to
permanently get rid of you know, we don't know. The number,
could be thousands, hundreds of thousands, who knows of government
workers that work for democratic in his mind democratic type
of programs. So I think that could be another nail
(28:04):
in the coffin if and when that happens. That was
one of the threats that market really didn't pay a
lot of attention to this week, but it's still alloming
out there, and especially now, I think what you're going
to see with him, Jays, I think you're going to
see a very very mad and angry president, more so
than he even was because now he know, I hate
to say this, folks, but now he looks like he
has egg on his face. That China got the best
(28:24):
of him. That's why he slapped this massive tariff, just
you know, off the cuff. Basically, now he's going to
seek out retaliation against them, and I think now this
is going to anger him, in my opinion, to do
even more damage against the Democrats. Hey, I think if
he maybe in his mind before this whole situation with China,
(28:46):
let's just do hypothetical. Let's say he maybe had A,
I don't know, sixty percent probability seventy eighty percent probability
that he was going to come to some agreement with
the Democrats to get the country because he's under severe pressure. Also, Yeah,
for sure, I think now, let's say it was seventy percent, right,
I would say, now, I bet that drops to forty
or fifty percent because.
Speaker 2 (29:06):
He's so angry.
Speaker 1 (29:07):
So now he's angry at China, and now he's really
going to be even more angry at the Democrats because
right now he's getting backed into the corner. Right he's
getting back into the corner, and one of the most
important aspects of our economy, the rare earth. She got
one up on him on that one. And now the
Democrats are just not budging Schumer and all them. They're
laughing at him right now. And so when he gets
(29:29):
this way, he's backed into the corner. Don't be surprised
what he does. So I think it's going to be
a really interesting weekend and see if he comes out
with more retaliation in some form or fashion.
Speaker 4 (29:40):
Yeah, I unfortunately agree with you, and especially like I said,
the bond market being closed on Monday, we lack some
of the big capability factor, right, big boy adults.
Speaker 3 (29:50):
Right, yeah, well said, well.
Speaker 2 (29:53):
Said, so your line? What are your MENI like you said,
acrodyms are things?
Speaker 1 (29:56):
All right, We're gonna come back and wrap it up
with some advice for you, which I think to be
thinking about this point. That's wrapping up a Christmas snot
right now, traffic center, hil Christ Welcome back to the
John Sanchez Show on News Talk seven to eighty k
which with Jason Gohn.
Speaker 2 (30:06):
All right, now, I'm even going to tell you what
we did today.
Speaker 1 (30:08):
You know, I want to leave you on a positive note.
Tough day to day bottom line, We've We've given you
all the reasons behind it. Jay, let's peer into next week.
We have this little thing starting called earning season next
week for the for the third quarter.
Speaker 3 (30:23):
Yeah yeah, decent amount.
Speaker 4 (30:24):
We get banks, right, JP, Morgan will be out on Tuesday,
Johnson and Johnson, Wells, Fargo, City Group, Goldman, Sachs, black
Rock companies you may have heard of. They will be
out before the open on Tuesday. Got Bank of America, Progressive, Morgan,
Stanley all before the open on Wednesday, post the close.
United Airlines. We saw Delta earlier this week. So it's
(30:47):
like their first class passengers were keeping things busy, but
a little deceleration overall, We'll get travelers, US Bank Corp.
Charles Schwab, Melon all before the open on.
Speaker 3 (30:58):
Thursday, and and what we.
Speaker 4 (31:00):
Got anything good on Friday, not much to speak of.
More banks, American Express, Slumberge. American Express will give us
a read through on how the affluent consumer is doing,
even though you have seen a millennial shift towards American Express,
which I've seen on last couple of calls from them,
State Street, et cetera. So all banks next week. It's
no longer Alcoa that kicks things off, it's JP, Morgan Chase.
Speaker 1 (31:24):
And I think interesting point too is Tuesday. They kick
off right Normally it seems to be on a Friday,
so and this could and by the way, folks, I'm
happy that it's going to be on Tuesday, because this
could be our savior. This could calm things down. This
could be a counteraction to the actions that we talked
about today if you start to get some blowout earnings
numbers from these banks. But again the opposite, if they miss,
(31:44):
which I don't think they're going to think. I think
they're I think everybody overall is going to have had
a pretty good quarter.
Speaker 2 (31:49):
I would expect it about the ernis yeah. Yeah.
Speaker 1 (31:52):
By the way, it was announced today with the government
shut down again day ten and not getting economic reports,
which is when you're sitting in our seats, is so
bizarre social when I do the Sotock up dates of
the morning's like man oh Man, I miss being able
to talk about this report of that one. But the
beer of Labor Statistics, which creates the CPI report on
top of our non farm paile numbers announced today. I
told you yesterday on the show they're bringing their employees back.
(32:14):
Why because they announced today that October twenty fourth, we're
going to get the read on CPI measure of inflation
for the month of Septembers. Don't know how they're getting
them back or whatever, but you know, at least we'll
get one government report, as it says, right now until
the government gets open.
Speaker 2 (32:29):
All right, finalize things. What do you need to be
doing right now?
Speaker 1 (32:32):
Look at the beta of the portfolio, Look at your
asset allocation, do an internal risk tolerance check with yourself.
Can you handle volatility? Can you and your spouse handle volatility?
Speaker 2 (32:42):
If not.
Speaker 1 (32:43):
Don't hesitate this, take some corrective action. Things are going
to be choppy, but as quickly as they fell today,
they can rebound.
Speaker 2 (32:49):
Who knows.
Speaker 1 (32:49):
We can come in on Monday and President she and
Trump are you know, shaking hands again like we've seen
in the past. Right now, just a lot of nervousness.
You need to manage accordingly. Any points on your side,
Jay No, I.
Speaker 4 (33:00):
Think it's spot on if you feel like your portfolio
is moving more than you wanted to. There's no shame
in taking a little bit of profit here at all
time highs.
Speaker 3 (33:06):
So it's absolutely always thinking about that.
Speaker 1 (33:09):
You bet him, you bet you? Alrighty folks, God bless
have a great weekend. Those of you that have a
three days. We'll miss you on Monday. But you know what,
you can always pick up our podcast, give us a
call in the office if you're not happy what your
portfolio is doing. Eighteen o one er online at Sanchez
gone to gaun t at dot com. Have a great weekend, Jake,
God bless everybody. We'll see you on Monday.
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