October 27, 2025 • 34 mins
In this episode of the Jon Sanchez Show, Jon Sanchez discusses the current state of the market, focusing on key economic indicators, corporate earnings, the Federal Reserve's interest rate decisions, and the implications of the ongoing government shutdown. He emphasizes the importance of understanding market dynamics and making informed investment decisions amidst fluctuating economic conditions.
Chapters
00:00 Market Overview and Key Economic Indicators
10:20 Corporate Earnings Season Insights
14:47 Federal Reserve Interest Rate Decisions
15:27 China Relations and Market Impact
19:37 Government Shutdown and Its Implications
28:06 Investment Strategies for Current Market Conditions
👉 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 Key Economic Indicators
10:20 Corporate Earnings Season Insights
14:47 Federal Reserve Interest Rate Decisions
15:27 China Relations and Market Impact
19:37 Government Shutdown and Its Implications
28:06 Investment Strategies for Current Market Conditions
👉 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 (00:05):
Good Friday afternoon to you, or should I say good
Friday record setting afternoon to you. Welcome to the John
Sanchez Show on News Talk seven eighty koh. It's a
pole leasure to be with you. I hope you had
a great Friday and you got an incredible weekend lined up.
I am flying solo. Let me tell you what I
have lined up for you. Earning season, the government shut down, China,
inflationary data, and oh, by the way, this little important
(00:28):
event called the Fed's interest rate decision next week. Books.
These are all the things that we're dealing with. But
with all that said, what could be the wall of worry?
What happened today? Well, as I said a moment ago,
a record setting day for the Dow, the Nasdaq, d S,
and P five hundred, it was just like nothing was wrong,
Like there was no problems with the CPI report that
(00:49):
we received. Yes, we did actually get a government report
this morning. But here's what's interesting. Investors are trying to
figure out what all these reports mean at this point, right,
how do you factor in your investment decisions when it
comes to the heart of earning season again, a government
shut down that the market doesn't seem to be paying
(01:10):
attention to China. You know, one day the President's going
to meet with presidency. The next day he is not.
Again inflationary data that we received this morning, which moved
us even further away from the FEDS mandate of two percent,
but yet the Street dis brushes it aside. Well, this afternoon,
(01:31):
we're not going to be doing for you as we
wrap up the week on Wall Street. It's not going
to break down each of these I'll call them components
that I just mentioned and many more, all with the
goal of helping you determine what your next portfolio move
should be. All Right, So I'm going to take you
back to this morning, and like I said, it felt
(01:52):
so bizarre when I was doing the stock updates this
morning with Jake. They actually have to say that we
had a government report that was released because it's been
you know what, twenty three, twenty four days, we're into
this thing now, but we did. We had the CPI
report come in this morning, measure of inflation on the
retail side. Now here we are October twenty fourth. This
(02:14):
was September's report, Okay, so you got to kind of
factor that in. I mean, here we are almost a
month later and getting the data. But when I saw
the number come in, you know, my immediate reaction was, hmm,
this is a report that really could take things one
direction or the other, meaning it could rally the market,
(02:36):
or the market could say, ah, you know what, I
don't like how this thing is moving further away from
the Fed's mandate of two percent. But within seconds, so
the report being released at five thirty this morning, guess
what if vestors went, hey, wasn't as bad as we
thought it was going to be. Almost like when a company.
Speaker 2 (02:54):
Misses the earning's numbers but not as bad as what
analysts thought they were going to be, same type of scenario,
it takes off.
Speaker 1 (03:01):
And that's exactly what happened today. You know, folks, we
still have a lot of money sitting on the sidelines,
and days like this where a report comes in that
could be viewed as negative and all of a sudden
it's viewed as positive. It's fomo, the fear of missing
out money starts to find its way into the market
and there we go. So let's get the afternoon show
(03:23):
started on what happened. First of all, Okay, so and
again I'm going to come back to the CPI report.
So we finished up four hundred and seventy three points
on the Dow, our best level today, we were up
almost six hundred points. I don't think we touched six
if I remember correctly. I had to take my eye
at the computer for a few hours, but I don't
(03:43):
believe we ever hit six. But we were dog gone close.
But finishing at four hundred and seventy three, that was
a one point zero one percent game for the day
closing level. First time ever that the Dow has closed
above forty seven thousand are closed as forty seven thousand,
two hundred and seven. The nasday gained two hundred and
sixty three points one point one six percent, closing it
(04:06):
twenty three thousand, two hundred and four, SMP at fifty
three points point seven nine percent closing it six thousand,
seven hundred and ninety one. And you think those percentages
were good, let's throw in the Rustle two thousand. I
didn't get a chance to see if that was a
record close. I have a feeling I'll double check it
here momentarily, but I think the Rustle, matter of fact,
(04:27):
I'm gonna do it right now. I think that should
be if I remember correctly, that should be a record closed. No,
it's not, dog on, it came close seventeen. Let's see
twenty five forty one is our record close. We hit
so close twenty five thirteen again, but very strong best
performer percentage wise rising one point twenty four percent, up
(04:48):
thirty one points to twenty five hundred and thirteen. Okay,
so market just it was a slow, steady climb higher.
It wasn't like you know, so is this report came out,
we spiked higher. It's just nice, slow stay growth all
the way up throughout the entire day. So once again
people are going, wait a minute here, this inflationary number
(05:08):
wasn't quite what we thought. But maybe again it's in
the eyes of the beholder. So let's break down today's
CPI report is one of our factors in this market movement.
So the good news is both the headline CPI. Remember
you get two reports when you get CPI, you get
headline where everything's included, and then you get core, which
(05:31):
is where they strip out food and energy. So both
the headline and the core came in one tenth of
a percentage point lower than expected. Now, the cynic in
me says, you know, you know how critical I am.
I always criticized Wall Street firms when it comes to
earning season. Right, Oh, the company made you know whatever,
(05:52):
three dollars a share, but that was above expectation of
two dollars and ninety five cents, and so they rally
the stock. But if you go back a year, you know,
maybe the company made three dollars and fifty cents. So
Wall Street will kind of play this game with you go, oh,
it beat expectation, let's rally things. And that's my feeling
is kind of what this is what happened today. It
(06:14):
was hotter than expected, but not enough to derail one
of our other points, which is the Fed interest rate
decision next week. So back to the numbers. Okay, so
we came in hotter than expected, but not as much
as we expected. So both again the headline and the
core came in one tenth of a percent below expectation.
But the monthly increase, this is the key to it.
(06:35):
The monthly increase was up three tenths of a percent
on headline and up two tenths of a percent on
the core. Now, if we look at the year over
year basis, and this is really where we need to
look at on a year over year basis. The headline
was up three percent, a touch faster than the two
point nine percent back in August. The core was also
(06:57):
up three percent, but that was a decrease from August
year over year number when we're up three point one percent.
So you see, it's kind of a kind of a
give and take, right, a little seesaw action. Core coming
down a little bit on a year over year basis,
but headline going up a little bit one tenth of
(07:18):
a percent on a year over year basis. But no
matter which way you slice it. And this is why
I was thinking, okay when this report came out, Okay,
this is again a little bit better than expected. However, folks,
look at where we are in regards to the Fed.
The Fed has a very very strict mandate. They have
repeated it over and over and over and over again.
(07:38):
Two percent, folks were at three percent. We're one percentage
point away. That is a ton of the FED mandate.
But do you think it had any impact in the
fed future's contract in regards to the probability of the
Fed cutting interest rates next week? Not even a back down,
just a little bit but still very strong. Was I'll
(08:00):
go over in more detail. So I don't know why
the street and investors and bond traders and so on
and so forth are I'm not gonna throw the bond
traders because they were asleep today. The bonds didn't even
budge or even on the weekly basis. But as far
as equity traders and investors, hey, no problem. One percent away?
Is that really the right way to look at it?
(08:20):
Or some of us that have, you know, over the years,
criticized the Fed saying, you know what, it's about time
you maybe change your mandate of two percent. I mean,
we're doing pretty good in the economy at three percent inflation?
How good? How much better could we be doing at
two percent? And so that is basically what happened under
(08:42):
the CPI number. Up a little bit more on one,
down a little bit more on the other. But again
what's not getting the focus in my opinion, is we're
one percent on top line and bottom line away from
the feds two percent. Okay, Now what where where did
we see some increases here? Well, we saw a jump
(09:02):
in seasonally just a gasoline prices. They contributed to the
faster monthly headline pace than the core reading. Shelter costs, Oh,
that's pretty normal. Among the items behind the core increase,
though the two tenths of a percent increase was pretty
modest compared to recent years. Airfares and recreation were among
the other gainers. Car insurance and used vehicles were among
(09:25):
the few major items actually that dropped. Tariff effects. Yeah,
we're seeing to leak into the economy a little bit.
Tariff effects seemed visible in a couple specific categories. I
saw it was up a little bit in household furniting,
which was up three percent. Remember the tariffs against furnishings
and cabinets and so on and so forth. Well, there
(09:47):
it is household furnishings climbing three percent on a year
over year basis, That is the most dating back to
twenty twenty three. Audio and video equipment climbed one point
six percent. That's the motions twenty twenty one, and what
we call super core or is service inflation, which strips
out housing costs. That was up zero point three to
five percent, among the highest reading of the year, but
largely matching the twenty twenty four average, but while still
(10:10):
illustrating that inflation rings well above the fed's two percent target.
This softer then expected CPI report once again sealed the
deal that we're going to get a Fed interest straight
cut next week and oh, by the way, one more
in December. But if you know that wasn't good enough
news an investors eyes, White House came out and said,
(10:33):
pretty unlikely that you're going to receive your October inflationary report,
which by the way, was due I think next Monday.
So we're not gonna get that, So we're going to
go on another dry spell until the government opens back up.
So no CPI report next Monday. So that's where we
sit on the inflationary side. Not too hot, not too cold,
(10:54):
gold daylock scenario. Market rallie, it's that simple, all right,
box number one checked inflation. Let's come back now to
some of the movers of today's market activity. S turned
over to christenin Snow. She's in the right now traffic center.
Hello Kristin, Happy Friday, Welcome back to the John Zanches
Show on News Talk seven eighty k which Happy Friday
(11:15):
to all of you once again. Jason is the afternoon off,
and we finished in record territory of the three out
of the four major averages four to seventy three gain
on the Dow, closing it forty seven thousand, two oh seven.
Now's like cup two to sixty three one point one
five percent, SMP at fifty three er point seven nine percent.
All right, as we do on Friday, we're recapping the week,
all Wall Street trying to help you set the table
for next week in your portfolio. Well, once again, we
(11:38):
just tackled one of the major reports of the day,
the only really report from an economic standpoint, CPI the
month of September. Once again, the number coming in up
three tenths of a percent headline, that's month over month,
annualized up three percent. Strip out food and energy up
two tenths of a percent month over months. Sure, and
then we get to the year over year up three percent,
(11:58):
which was a one tenth of percent decline from the
August report. All right, so we check the box. We
now know what's going on with inflation. Again, the White
House indicating that we are not going to get the
CPI reporter. They said it's unlikely unless maybe the government
reopens over the weekend. I don't think that's going to happen,
but unlikely that we're going to get the SCPI report
that was scheduled for Monday, That of course would have
(12:19):
been October's data. All right, So now we move on
to factor number two, corporate earning season. Well, folks says
we said these records today in the market. I thought
it would be a good time to bring up to
date on where we are on a year to date basis,
first of all, and then we'll get into the earning season,
which hopefully will be another driving force. Now, is that
composite year to date as of today's close up twenty
(12:40):
point two percent, s and P five hundred for the
years up fifteen and a half percent, the Dow's gainet
eleven percent, Russell two thy twelve point seven percent. Okay,
now let's tackle again this earnings number and find out
what's going on. Well, first I want to kind of
give you a little peak in the next week. Next
(13:00):
week results are going to be from five of the
mag seven companies. So tell me earnings isn't going to
be intant important? Next week on Wednesday, we have Meta,
we have Microsoft, we have Google. Thursdays it's the double
A report, Apple and Amazon. So again, if these companies
coming better than expected this can continue to propel US
(13:23):
higher at this point. Here's an interesting stat for you.
These five stocks that I just mentioned, Apple, Amazon, Meta, Microsoft,
and Google. These five stocks account for roughly twenty five
percent of the value of the SMP five hundred. Isn't
(13:43):
that amazing? So quarter percent of the market performance of
the SMP five hundred is attributed just to those five stocks. Okay,
now the earning season, it has been a very good
earning season so far. Why I say that of the
roughly one hundred and forty five companies of the S
(14:04):
and P five hundred that have reported third quarter results,
eighty four percent have beaten wall streets expectation. That's according
to fact Set, the blend of growth rate for the
third quarter profits now stands at nine percent. So not bad,
not bad. I like always seeing, you know, eighty percent
or more of companies when they that are beating. When
(14:25):
as we make our way through the earning season and
we know what they're driven by, serving by AI and
so on and so forth, companies again are making money.
And what we like seeing about this earning season, we
are seeing a rotation, right, It's not just all about tich.
We're seeing a lot of different companies doing very very well.
And you know, again in some of the areas that
you're not you know, normally talking about, you know, consumer
(14:46):
cyclicals and staples and industrials and healthcare and so on
and so forth. So you know, it's a nice broad
based time period here. But that doesn't mean we're not
worried about a few things. I'm always worried about a
few things. All right, Now, there we go. We got
earning season out of the way. You know what's coming
up next week and those are just the major names.
Obviously the calendar is going to be very full for
the entire week. But now let's focus down into the
(15:10):
other big event that's going to unfold next week. Wednesday,
eleven o'clock we're gonna have a FED interest rate decision.
Eleven thirty, we will have the press conference by Jerome Powell.
Where do we set. Well, they haven't updated the see
me FED watchtool this afternoon, but this morning we were
smidging above ninety three percent probability of a quarter percent
(15:34):
rate cut it next Wednesday's meeting, but over ninety percent probability.
This is smidge above ninety percent of a December quarter
percent rate cut. And you see, folks, this is again
one of the driving forces of the market at this point.
Falling interest rates historically do very well for the equity markets.
(15:54):
Money's cheaper to go borrow. People like it. They get
excited about cutting interest rates. So you've got a strong
earning season, You've got a FED meeting, where again the
streets pricing in nearly a one hundred percent probability of
an interra straight cut. And where do we sit a
day like today where we set a record. Now let's
(16:19):
move to China. Okay, where's Trump? Says Cana. You know,
this was on again, off again week for the President
in regards to China. One day he says he's gonna
meet with the President She. Another day he says he's not.
One day he says he is, one day he says
he's not. As we sit right now at three twenty
eight pm on October the twenty fourth, he is supposed
(16:41):
to meet with President She sometime next week. Now, the President,
i believe, is starting off in South Korea and he's
making his way through a few other Asian countries. And
he you know, as I mentioned yesterday on the show,
he has a huge agenda of deals that he wants
to get done that obviously could be very positive for
the market. But once again, I don't want everybody to
get their hopes up. In regard to China, we're still
(17:02):
dealing with rare Earth negotiations, among many, many other things.
And we have seen, of course, what tends to happen
when the President meets with China President She. You know,
the headlines get kind of exciting, but then in reality
nothing really ends up happening. We're still battling, you know,
the Chinese one hundred and fifty seven percent tariffs, which,
(17:22):
as the President said yesterday, are not sustainable, so they'll
be discussing that issue. They're, like I said, the rare
earth and many you know, other things at that point.
But you know, let's go back to October the tenth,
right when the President said things aren't going well with
China true social posts. We lost nine hundred points on
the Dow Jones industrial leverage. This is what I was saying.
(17:43):
This is one of our biggest risks right now is
we just never know when a truth social post is
going to come out, And again specifically the one in
my opinion that seems to affect the market in a
negative term, is when he says something negative about China.
So again, we will see what happens, you know, if
and when that meeting happens next week. But as we sat,
(18:03):
like I said right now, the President has indicated that
he will have those meetings, so you know, like I said,
we will see there. Now, speaking of before I go
to break, speaking of the presidents, things didn't go well
with Canada today. I don't know if many of you
heard about this, but Canada a few weeks ago started
(18:25):
running an advertising campaign and the campaign, now maybe this
is in relation to you know, the Dodgers playing the
Toronto Blue Jays and the World Series starting tonight. Who
knows what it is, but this, this TV ad is
a anti tariff ad and this ad completely upended tariff
(18:51):
talks between the US and Canada today. So what happened
is this ad. They took a courting from former President
Ronald Reagan where he criticized This audio clip is where
he criticized tariffs, saying they can look patriotic, but quote
over the long run, such trade barriers hurt every American
(19:13):
worker and consumer, and that leads to fierce trade wars.
And a result in lost jobs. Well, they took that
and they chopped it up to make it look really bad,
and as you would imagine, that upset Trump. Trump said,
Canada fraudulently used the advertisement, which is in capital letters fake.
(19:37):
Trump argued that the ad was designed to interfere with
the Supreme Court in other courtses they weighed the legality
of his far reaching tariffs and his true social post.
He said, based on the gregarious behavior in capital letters,
all trade negotiations with Canada are hereby terminated. Well, it
(20:00):
wasn't long after that then Canada came out. Ontario Premier
Doug Ford said, guess what, guys, We're gonna pull this ad.
We're going to suspend any anti tariff ad so we
can kind of get back to the table. He said,
and speaking with Prime Minister Mark Carney, Ontario will pause
the US advertising campaign effective Monday so that trade talks
(20:21):
can continue again. This is what I'm talking about. These
are now In a normal day. Can you imagine what
the market would have done had we not had all
this good news today, the CPI DAD and everything. On
a normal day, can you imagine true social posts and
training negotiations were off with Canada. Yeah, I could see
all kinds of disaster, but it didn't happen today, Thank goodness.
(20:43):
All Right, we'll come back and continue to talk about
what we have in store for next week as you
make your portfolio decisions. But first let's turn it over
to Jack Saban. He's got news traffic, O weather. Hey Jack,
looking back at the John Sanchez Show on News Talk
seven eighty k h Once again, Happy Friday, wishing all
of you a great weekend. Record close for the Dow,
the Nasdaq, and the SMP four to seventy three gain
on the Dow, up two sixty three on the NASDAK
(21:05):
and a fifty three point rise on the S and
P five hundred. All right, so now you're up to
date on earning season, you're up to date on China
inflationary data and next week's FED meeting. Okay, let me
throw in one final item, of course, on the mind
of investors to help you make your portfolio decisions. As
you heard a moment ago with the news the government
(21:28):
shut down. So here we are. Thank you for running that. Jack.
Day twenty four. I knew we're close to that, but
I've lost track. So day twenty four of the government shutdown.
Is the market caring about it at this point? No,
obviously not, or we wouldn't be setting records day after day,
it seems like. But should we be caring about it? Absolutely,
But at the same time, there's other things to worry about,
(21:50):
other things that get excited about. I mean, i don't
know about you, folks, but I'm just beyond frustrated to
say the least.
Speaker 2 (22:00):
You get.
Speaker 1 (22:01):
You know, I have CNBC on all day, you all
know that, and in the morning especially, it seems like
almost every day CNBC will have someone on from the left,
they'll have someone on from the right, and they do
this each and every day. Well, these politicians are saying
the same thing over and over and over.
Speaker 2 (22:21):
Blaming the Democrats, blame in the Republicans, we can't come
to the table, Da da da da da, And none
of them again are saying anything that's going to get
this thing closer to the end and most importantly, to
get the government workers, the military, et cetera paid right.
Speaker 1 (22:38):
It just again, it absolutely discussed me. Just discuss me
that men and women especially I'll focus on the military
for a second, are out there in harm's way. Protecting
our great country and they're not getting a paycheck. It's
it's the stupidest thing I've ever heard. If you politicians
are going to go fight among.
Speaker 2 (22:58):
Yourselves and be like little children, then you know what,
do it, But not at the expense of the government
worker in the military.
Speaker 1 (23:06):
It's not right. Once again, as I've always said, I
haven't seen anything. Maybe you can correct me on this.
I haven't seen anything that says the politicians have foregone
there have not been paid. Some of them, of course,
in a PR stunt called oh I'm not collecting a paycheck, Well,
then you're doing it for a PR stunt, because I
(23:27):
think they're still getting paid. But back to the market
side of things, the market's not carrying at this point. Now.
I gave you a little bit of a warning as
we got closer to the pending government shutdown. You know,
remember our deadline was October the first, and I said,
you know, the market historically has done very well in
a government shutdown. Now we are entering into we are
(23:49):
now I should say not entering, but we are now
in the second largest or second longest shutdown in history,
or we need to get to about thirty three days
to say it is the longest government shut down. So yeah,
another week or so we'll have that. But historically the
market does very well whatever the reasons. It may be, right,
(24:10):
we all have our reasons behind it, but it's you're
gonna get to a point. And this is what I
was saying before the government shut down occurred. Investors get
to a point where they go, enough is enough. Right,
we have no economic data. Things aren't getting done on
Wall Street or getting done in government. People aren't getting paid.
(24:31):
They're not going to go spend their money in the economy, right,
and you start the snowball effect, and then you wake
up one day and investors go, you know what, enough's enough?
I promise you, in my opinion, when we get to
that threshold, and you know, obviously we don't know when
that threshold is. It could be day thirty five, it
could be day forty five, day fifty five, who knows
(24:53):
where it is. But we will hit that threshold and
we will wake up one day and all of this
good news that I'm sharing with you right now, earning
season and China talks and decent inflationary data, an accommodative
FED it won't matter because investors will go, this government
(25:13):
is shut down and all these negative things are now transpiring,
and they who get portfolio managers coming out going I
can't make investment decisions because I don't know what my
data is, and it'll all culminate together, the market will
sell off, and then that will get the attention of
Trump and the Democrats and everybody else, and they'll come
to a resolution. Wall Street always always will get politicians'
(25:39):
attention because they don't want to go back to their
districts and look you straight in the face and a
talent hall meeting and say, gee, sorry, Sally that the
market dropped ten percent or fifteen or twenty percent because
we couldn't get our act together in Congress. They don't
want to do that right now. They are very very
very fortunate that the market has so many things to
be happy about, because let me tell you, if we're
(26:01):
just in kind of an average economy, it'd be a
completely different discussion at this point. The market would be
upset about it. But again, right now, it's down the
priority list. If the Fed was an interest rate rising mode,
completely different forecast, and people would be upset in the
Street would be voting again with a sell button, as
I like to call it. So we're tolerating it at
(26:24):
this point because again, we have so many other things
to be thankful about and positive about in the market.
But trust me, you will get to this point if
it extends long enough. And again no one knows what
that long enough time period is. Maybe it would go
past that previous record of thirty three days. Maybe it's
day thirty four, who knows. But at some point, and
I could see this happening, if I had to predict something,
(26:45):
I could see this happening after earning season ends, so
you know, after the bulk let's say in another two
to three weeks, because that's right now, we're excited about
earning season, right, So we could see it happen after
that point if the government shut down is still going on,
because what do we have to look forward to then? Right? Remember?
Wall Street is like a bunch of spoke kids on Christmas.
(27:07):
What's under the tree? What's under the tree? What do
I give it? What's my next? President I get to open?
Oh you mean there are none? You start crying, meaning
investors start selling. So I think we're in a really
critical time period right now. Now, how does this play
into your portfolio. This is what you need to be
thinking about right Don't focus your asset allocation on today
or tomorrow or next week. What's going on in your
(27:30):
life right now. If you have a pending retirement, say
in the next year, you better be looking at things
in a very cautious format, very cautious format, because as
all of you know, I've shared this, You know in
the twenty plus years you've listened to me, I get
very nervous in market conditions like this. I would much
(27:52):
rather have a market that's kind of going flat or
even down for legitimate reasons than one that's setting records
day after day after day, because you just don't know
when the party is going to end. And as I
was explaining to a client the other day, remember when
we were a kid and we'd play musical chairs. Remember
you'd have what eleven people and ten chairs, and everybody's
(28:14):
walking around, and then while the music going, and then
susan music stops, everybody jumps onto a chair, and inevitably
one person's going to be out, and then that number
continues to shrink down. It's the same type of thing
when you're setting record levels. The music's playing But where's
it going to stop and who's going to be out?
Will it be AI, will it be rare Earth? Will
it be consumer cyclicals? What area is going to be
(28:37):
Most likely it would be on the technology side. Something
will happen in the technology arena, some company will go
billy up, or something will start a snowball effects, a
cascading effect in the technology area, because that's again the
area that I said a moment ago. I mean, naw's
that except twenty percent year to date? Come on again,
we just don't know when. So always always be thinking,
(28:58):
always be prepared, Always have a defensive strategy, and again
especially don't get caught up in the euphoria of record
setting days if you are near retirement, because you are
completely different than that twenty five year old out there
listening right now. It's going, hey, this is cool stuff.
You know, Mom and dad said the stock market was
real choppy. I've done nothing but make money lately. Enjoy
(29:19):
it why you can, and who knows when that, Like
I said, when the music's gonna stop. But when you're
in retirement, if you're caught and you're the one that
can't find the chair to sit down, guess what that's
gonna be a miserable retirement, or most likely you'd end
up postponing it. So love the strength, love the euphoria,
but don't get caught up into it. All right, we
come back. We'll continue a few more things to wrap
up the week on Wall Street. Let's speaking of wrapping
(29:41):
it up, do it with the best kristin snow right
now trafphic center, hitli me dear, welcome back to the
John Sanchez Show on this talk seven eighty koh. All right,
if we can be of service to you at our
firm by all means, give us a call seven seven
five eight hundred eighteen oh one, go online Sanchez got
gaunt dot com. Set a pointment for Jason. I let's
take a look at your portfolio. Let's see what you're
doing right, what you're doing wrong. We'll give you our
(30:03):
honest opinion right always going to get honesty out of us,
no doubt about it. And one more time is I
should say one more time? But as a reminder, if
you missed any of our shows this week or any
other time, please go to Spotify, to iTunes, et cetera
search for the John Sanchez Show. Find us on YouTube,
hit the subscribe, hit the like button. We appreciate all
of that, We really do, all right. So I put
together my grand finale for you. All right, So here's
(30:26):
where we are. We just wrapped up another week on
Wall Street. Been a good week where a record highs
inflation's coming down. Government can't agree on the budget. But
as I said, who cares at this point? Right? Investors
aren't caring. So put together five things I want you
to go into the weekend thinking about. Number one, Stay invested,
but shift your your waiting a little bit. Here's what
I mean. This is not the time to go all
(30:49):
in or to go all out right the market. It's
going to reward you if you're patient, if you're buying quality,
and if you're disciplined in your investment approach. Get rid
of some of the froth in the portfolio. Keep the
exposure to sectors that benefit from falling rates. That's gonna
be my theme here as I wrap it up. Things
like industrials, technology, things tied to AI, and consumer discretionary.
(31:11):
And keep an eye on the small caps. Right, they
do historically well in a low air, falling interest rate environment.
So stay invested, but look at your waitings. Number two,
rebalance the fixed income portion of the portfolio if you
have one. As we discussed, we've got the Fed interest
straight cut that's expected on Wednesday, another one in December
that'd be another half a percent. Market loves that, Street's
(31:34):
gonna be looking for more cuts even after that. Don't
know what the predictions are at this point, but pretty
confident we're going to get two more of quarter percent
this year. So yields, they're likely to come down right,
gonna be great for a lot of things like mortgages, etc.
But that means that the sweet spot could be the
intermediate term bonds that's your ten year maturities and less
(31:54):
right around there. So what I want you to do
is look at locking in yields before they drift lower
ladder those maturities. Consider quality bonds using ETFs. You don't
need to go out and no one does it hardly anymore,
and buyas the individual bonds. But there's some great ETFs
that are out there that again, we'll do all of
that for you. Because remember, if you're new to the market.
Declining interest rates, it's like the teeter totter. When rates
(32:16):
go down, you see principle go up. Not always a guarantee,
but that's the theory. Okay. So driving interest rates lower
as the Fed wants to do, we should see principal
value of fixed income go up. And again that sweet
spot's what we call the intermedia, that ten year maturity
or so speak of sweet spots and getting a little
bit of income coming in. How about this Number three,
(32:37):
play a little offense with some dividends. Oh yeah, get paid?
Why you wait? High quality dividend payers. Think financials, think energy, infrastructure,
think healthcare. All of those can offer income and defense
if volatility returns, if this shut down drags on, or
things don't go well with Trump and she et cetera.
Number four, keep cash tactical, don't keep it emotional. Cashields
(32:59):
are great, but they're not going to last.
Speaker 2 (33:00):
Right.
Speaker 1 (33:00):
You can see money markets probably adjust CD rates, a
just etc. When we start getting these next two interest
straight cuts. So keep that cash tactical, use the cash
for dry powder, for opportunities when the market gives you
some pullbacks. And number five, remember this. Markets don't rise
on perfection, they rise on progress. We've got inflation cooling.
If that's coming into our favor, the economy is still expanding.
(33:23):
Focus less on this Washington drama because frankly, again the
street doesn't care about it, so you probably shouldn't from
an investing perspective, but focus more on position in your portfolio,
where the puck is going, not where it's been. I
was seeaching every one of you a great weekend. Thanks
so much for joining us this week. Don't forget go
out and pick up our podcast at Spotify iTunes. God
bless you have a great weekend. We'll see on Monday
on the John Sanchez Show. Capital Management LLC on this
(33:46):
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 should not be relied upon. As such a
statements or opinions are subject to change without notice. Information
presented is for educational purposes only and does not intend
(34:07):
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 orre not guaranteed.
Speaker 2 (34:18):
Information expressed does not take into account your specific situation.
Speaker 1 (34:22):
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 afternoon to you, or should I say good
Friday record setting afternoon to you. Welcome to the John
Sanchez Show on News Talk seven eighty koh. It's a
pole leasure to be with you. I hope you had
a great Friday and you got an incredible weekend lined up.
I am flying solo. Let me tell you what I
have lined up for you. Earning season, the government shut down, China,
inflationary data, and oh, by the way, this little important
(00:28):
event called the Fed's interest rate decision next week. Books.
These are all the things that we're dealing with. But
with all that said, what could be the wall of worry?
What happened today? Well, as I said a moment ago,
a record setting day for the Dow, the Nasdaq, d S,
and P five hundred, it was just like nothing was wrong,
Like there was no problems with the CPI report that
(00:49):
we received. Yes, we did actually get a government report
this morning. But here's what's interesting. Investors are trying to
figure out what all these reports mean at this point, right,
how do you factor in your investment decisions when it
comes to the heart of earning season again, a government
shut down that the market doesn't seem to be paying
(01:10):
attention to China. You know, one day the President's going
to meet with presidency. The next day he is not.
Again inflationary data that we received this morning, which moved
us even further away from the FEDS mandate of two percent,
but yet the Street dis brushes it aside. Well, this afternoon,
(01:31):
we're not going to be doing for you as we
wrap up the week on Wall Street. It's not going
to break down each of these I'll call them components
that I just mentioned and many more, all with the
goal of helping you determine what your next portfolio move
should be. All Right, So I'm going to take you
back to this morning, and like I said, it felt
(01:52):
so bizarre when I was doing the stock updates this
morning with Jake. They actually have to say that we
had a government report that was released because it's been
you know what, twenty three, twenty four days, we're into
this thing now, but we did. We had the CPI
report come in this morning, measure of inflation on the
retail side. Now here we are October twenty fourth. This
(02:14):
was September's report, Okay, so you got to kind of
factor that in. I mean, here we are almost a
month later and getting the data. But when I saw
the number come in, you know, my immediate reaction was, hmm,
this is a report that really could take things one
direction or the other, meaning it could rally the market,
(02:36):
or the market could say, ah, you know what, I
don't like how this thing is moving further away from
the Fed's mandate of two percent. But within seconds, so
the report being released at five thirty this morning, guess
what if vestors went, hey, wasn't as bad as we
thought it was going to be. Almost like when a company.
Speaker 2 (02:54):
Misses the earning's numbers but not as bad as what
analysts thought they were going to be, same type of scenario,
it takes off.
Speaker 1 (03:01):
And that's exactly what happened today. You know, folks, we
still have a lot of money sitting on the sidelines,
and days like this where a report comes in that
could be viewed as negative and all of a sudden
it's viewed as positive. It's fomo, the fear of missing
out money starts to find its way into the market
and there we go. So let's get the afternoon show
(03:23):
started on what happened. First of all, Okay, so and
again I'm going to come back to the CPI report.
So we finished up four hundred and seventy three points
on the Dow, our best level today, we were up
almost six hundred points. I don't think we touched six
if I remember correctly. I had to take my eye
at the computer for a few hours, but I don't
(03:43):
believe we ever hit six. But we were dog gone close.
But finishing at four hundred and seventy three, that was
a one point zero one percent game for the day
closing level. First time ever that the Dow has closed
above forty seven thousand are closed as forty seven thousand,
two hundred and seven. The nasday gained two hundred and
sixty three points one point one six percent, closing it
(04:06):
twenty three thousand, two hundred and four, SMP at fifty
three points point seven nine percent closing it six thousand,
seven hundred and ninety one. And you think those percentages
were good, let's throw in the Rustle two thousand. I
didn't get a chance to see if that was a
record close. I have a feeling I'll double check it
here momentarily, but I think the Rustle, matter of fact,
(04:27):
I'm gonna do it right now. I think that should
be if I remember correctly, that should be a record closed. No,
it's not, dog on, it came close seventeen. Let's see
twenty five forty one is our record close. We hit
so close twenty five thirteen again, but very strong best
performer percentage wise rising one point twenty four percent, up
(04:48):
thirty one points to twenty five hundred and thirteen. Okay,
so market just it was a slow, steady climb higher.
It wasn't like you know, so is this report came out,
we spiked higher. It's just nice, slow stay growth all
the way up throughout the entire day. So once again
people are going, wait a minute here, this inflationary number
(05:08):
wasn't quite what we thought. But maybe again it's in
the eyes of the beholder. So let's break down today's
CPI report is one of our factors in this market movement.
So the good news is both the headline CPI. Remember
you get two reports when you get CPI, you get
headline where everything's included, and then you get core, which
(05:31):
is where they strip out food and energy. So both
the headline and the core came in one tenth of
a percentage point lower than expected. Now, the cynic in
me says, you know, you know how critical I am.
I always criticized Wall Street firms when it comes to
earning season. Right, Oh, the company made you know whatever,
(05:52):
three dollars a share, but that was above expectation of
two dollars and ninety five cents, and so they rally
the stock. But if you go back a year, you know,
maybe the company made three dollars and fifty cents. So
Wall Street will kind of play this game with you go, oh,
it beat expectation, let's rally things. And that's my feeling
is kind of what this is what happened today. It
(06:14):
was hotter than expected, but not enough to derail one
of our other points, which is the Fed interest rate
decision next week. So back to the numbers. Okay, so
we came in hotter than expected, but not as much
as we expected. So both again the headline and the
core came in one tenth of a percent below expectation.
But the monthly increase, this is the key to it.
(06:35):
The monthly increase was up three tenths of a percent
on headline and up two tenths of a percent on
the core. Now, if we look at the year over
year basis, and this is really where we need to
look at on a year over year basis. The headline
was up three percent, a touch faster than the two
point nine percent back in August. The core was also
(06:57):
up three percent, but that was a decrease from August
year over year number when we're up three point one percent.
So you see, it's kind of a kind of a
give and take, right, a little seesaw action. Core coming
down a little bit on a year over year basis,
but headline going up a little bit one tenth of
(07:18):
a percent on a year over year basis. But no
matter which way you slice it. And this is why
I was thinking, okay when this report came out, Okay,
this is again a little bit better than expected. However, folks,
look at where we are in regards to the Fed.
The Fed has a very very strict mandate. They have
repeated it over and over and over and over again.
(07:38):
Two percent, folks were at three percent. We're one percentage
point away. That is a ton of the FED mandate.
But do you think it had any impact in the
fed future's contract in regards to the probability of the
Fed cutting interest rates next week? Not even a back down,
just a little bit but still very strong. Was I'll
(08:00):
go over in more detail. So I don't know why
the street and investors and bond traders and so on
and so forth are I'm not gonna throw the bond
traders because they were asleep today. The bonds didn't even
budge or even on the weekly basis. But as far
as equity traders and investors, hey, no problem. One percent away?
Is that really the right way to look at it?
(08:20):
Or some of us that have, you know, over the years,
criticized the Fed saying, you know what, it's about time
you maybe change your mandate of two percent. I mean,
we're doing pretty good in the economy at three percent inflation?
How good? How much better could we be doing at
two percent? And so that is basically what happened under
(08:42):
the CPI number. Up a little bit more on one,
down a little bit more on the other. But again
what's not getting the focus in my opinion, is we're
one percent on top line and bottom line away from
the feds two percent. Okay, Now what where where did
we see some increases here? Well, we saw a jump
(09:02):
in seasonally just a gasoline prices. They contributed to the
faster monthly headline pace than the core reading. Shelter costs, Oh,
that's pretty normal. Among the items behind the core increase,
though the two tenths of a percent increase was pretty
modest compared to recent years. Airfares and recreation were among
the other gainers. Car insurance and used vehicles were among
(09:25):
the few major items actually that dropped. Tariff effects. Yeah,
we're seeing to leak into the economy a little bit.
Tariff effects seemed visible in a couple specific categories. I
saw it was up a little bit in household furniting,
which was up three percent. Remember the tariffs against furnishings
and cabinets and so on and so forth. Well, there
(09:47):
it is household furnishings climbing three percent on a year
over year basis, That is the most dating back to
twenty twenty three. Audio and video equipment climbed one point
six percent. That's the motions twenty twenty one, and what
we call super core or is service inflation, which strips
out housing costs. That was up zero point three to
five percent, among the highest reading of the year, but
largely matching the twenty twenty four average, but while still
(10:10):
illustrating that inflation rings well above the fed's two percent target.
This softer then expected CPI report once again sealed the
deal that we're going to get a Fed interest straight
cut next week and oh, by the way, one more
in December. But if you know that wasn't good enough
news an investors eyes, White House came out and said,
(10:33):
pretty unlikely that you're going to receive your October inflationary report,
which by the way, was due I think next Monday.
So we're not gonna get that, So we're going to
go on another dry spell until the government opens back up.
So no CPI report next Monday. So that's where we
sit on the inflationary side. Not too hot, not too cold,
(10:54):
gold daylock scenario. Market rallie, it's that simple, all right,
box number one checked inflation. Let's come back now to
some of the movers of today's market activity. S turned
over to christenin Snow. She's in the right now traffic center.
Hello Kristin, Happy Friday, Welcome back to the John Zanches
Show on News Talk seven eighty k which Happy Friday
(11:15):
to all of you once again. Jason is the afternoon off,
and we finished in record territory of the three out
of the four major averages four to seventy three gain
on the Dow, closing it forty seven thousand, two oh seven.
Now's like cup two to sixty three one point one
five percent, SMP at fifty three er point seven nine percent.
All right, as we do on Friday, we're recapping the week,
all Wall Street trying to help you set the table
for next week in your portfolio. Well, once again, we
(11:38):
just tackled one of the major reports of the day,
the only really report from an economic standpoint, CPI the
month of September. Once again, the number coming in up
three tenths of a percent headline, that's month over month,
annualized up three percent. Strip out food and energy up
two tenths of a percent month over months. Sure, and
then we get to the year over year up three percent,
(11:58):
which was a one tenth of percent decline from the
August report. All right, so we check the box. We
now know what's going on with inflation. Again, the White
House indicating that we are not going to get the
CPI reporter. They said it's unlikely unless maybe the government
reopens over the weekend. I don't think that's going to happen,
but unlikely that we're going to get the SCPI report
that was scheduled for Monday, That of course would have
(12:19):
been October's data. All right, So now we move on
to factor number two, corporate earning season. Well, folks says
we said these records today in the market. I thought
it would be a good time to bring up to
date on where we are on a year to date basis,
first of all, and then we'll get into the earning season,
which hopefully will be another driving force. Now, is that
composite year to date as of today's close up twenty
(12:40):
point two percent, s and P five hundred for the
years up fifteen and a half percent, the Dow's gainet
eleven percent, Russell two thy twelve point seven percent. Okay,
now let's tackle again this earnings number and find out
what's going on. Well, first I want to kind of
give you a little peak in the next week. Next
(13:00):
week results are going to be from five of the
mag seven companies. So tell me earnings isn't going to
be intant important? Next week on Wednesday, we have Meta,
we have Microsoft, we have Google. Thursdays it's the double
A report, Apple and Amazon. So again, if these companies
coming better than expected this can continue to propel US
(13:23):
higher at this point. Here's an interesting stat for you.
These five stocks that I just mentioned, Apple, Amazon, Meta, Microsoft,
and Google. These five stocks account for roughly twenty five
percent of the value of the SMP five hundred. Isn't
(13:43):
that amazing? So quarter percent of the market performance of
the SMP five hundred is attributed just to those five stocks. Okay,
now the earning season, it has been a very good
earning season so far. Why I say that of the
roughly one hundred and forty five companies of the S
(14:04):
and P five hundred that have reported third quarter results,
eighty four percent have beaten wall streets expectation. That's according
to fact Set, the blend of growth rate for the
third quarter profits now stands at nine percent. So not bad,
not bad. I like always seeing, you know, eighty percent
or more of companies when they that are beating. When
(14:25):
as we make our way through the earning season and
we know what they're driven by, serving by AI and
so on and so forth, companies again are making money.
And what we like seeing about this earning season, we
are seeing a rotation, right, It's not just all about tich.
We're seeing a lot of different companies doing very very well.
And you know, again in some of the areas that
you're not you know, normally talking about, you know, consumer
(14:46):
cyclicals and staples and industrials and healthcare and so on
and so forth. So you know, it's a nice broad
based time period here. But that doesn't mean we're not
worried about a few things. I'm always worried about a
few things. All right, Now, there we go. We got
earning season out of the way. You know what's coming
up next week and those are just the major names.
Obviously the calendar is going to be very full for
the entire week. But now let's focus down into the
(15:10):
other big event that's going to unfold next week. Wednesday,
eleven o'clock we're gonna have a FED interest rate decision.
Eleven thirty, we will have the press conference by Jerome Powell.
Where do we set. Well, they haven't updated the see
me FED watchtool this afternoon, but this morning we were
smidging above ninety three percent probability of a quarter percent
(15:34):
rate cut it next Wednesday's meeting, but over ninety percent probability.
This is smidge above ninety percent of a December quarter
percent rate cut. And you see, folks, this is again
one of the driving forces of the market at this point.
Falling interest rates historically do very well for the equity markets.
(15:54):
Money's cheaper to go borrow. People like it. They get
excited about cutting interest rates. So you've got a strong
earning season, You've got a FED meeting, where again the
streets pricing in nearly a one hundred percent probability of
an interra straight cut. And where do we sit a
day like today where we set a record. Now let's
(16:19):
move to China. Okay, where's Trump? Says Cana. You know,
this was on again, off again week for the President
in regards to China. One day he says he's gonna
meet with the President She. Another day he says he's not.
One day he says he is, one day he says
he's not. As we sit right now at three twenty
eight pm on October the twenty fourth, he is supposed
(16:41):
to meet with President She sometime next week. Now, the President,
i believe, is starting off in South Korea and he's
making his way through a few other Asian countries. And
he you know, as I mentioned yesterday on the show,
he has a huge agenda of deals that he wants
to get done that obviously could be very positive for
the market. But once again, I don't want everybody to
get their hopes up. In regard to China, we're still
(17:02):
dealing with rare Earth negotiations, among many, many other things.
And we have seen, of course, what tends to happen
when the President meets with China President She. You know,
the headlines get kind of exciting, but then in reality
nothing really ends up happening. We're still battling, you know,
the Chinese one hundred and fifty seven percent tariffs, which,
(17:22):
as the President said yesterday, are not sustainable, so they'll
be discussing that issue. They're, like I said, the rare
earth and many you know, other things at that point.
But you know, let's go back to October the tenth,
right when the President said things aren't going well with
China true social posts. We lost nine hundred points on
the Dow Jones industrial leverage. This is what I was saying.
(17:43):
This is one of our biggest risks right now is
we just never know when a truth social post is
going to come out, And again specifically the one in
my opinion that seems to affect the market in a
negative term, is when he says something negative about China.
So again, we will see what happens, you know, if
and when that meeting happens next week. But as we sat,
(18:03):
like I said right now, the President has indicated that
he will have those meetings, so you know, like I said,
we will see there. Now, speaking of before I go
to break, speaking of the presidents, things didn't go well
with Canada today. I don't know if many of you
heard about this, but Canada a few weeks ago started
(18:25):
running an advertising campaign and the campaign, now maybe this
is in relation to you know, the Dodgers playing the
Toronto Blue Jays and the World Series starting tonight. Who
knows what it is, but this, this TV ad is
a anti tariff ad and this ad completely upended tariff
(18:51):
talks between the US and Canada today. So what happened
is this ad. They took a courting from former President
Ronald Reagan where he criticized This audio clip is where
he criticized tariffs, saying they can look patriotic, but quote
over the long run, such trade barriers hurt every American
(19:13):
worker and consumer, and that leads to fierce trade wars.
And a result in lost jobs. Well, they took that
and they chopped it up to make it look really bad,
and as you would imagine, that upset Trump. Trump said,
Canada fraudulently used the advertisement, which is in capital letters fake.
(19:37):
Trump argued that the ad was designed to interfere with
the Supreme Court in other courtses they weighed the legality
of his far reaching tariffs and his true social post.
He said, based on the gregarious behavior in capital letters,
all trade negotiations with Canada are hereby terminated. Well, it
(20:00):
wasn't long after that then Canada came out. Ontario Premier
Doug Ford said, guess what, guys, We're gonna pull this ad.
We're going to suspend any anti tariff ad so we
can kind of get back to the table. He said,
and speaking with Prime Minister Mark Carney, Ontario will pause
the US advertising campaign effective Monday so that trade talks
(20:21):
can continue again. This is what I'm talking about. These
are now In a normal day. Can you imagine what
the market would have done had we not had all
this good news today, the CPI DAD and everything. On
a normal day, can you imagine true social posts and
training negotiations were off with Canada. Yeah, I could see
all kinds of disaster, but it didn't happen today, Thank goodness.
(20:43):
All Right, we'll come back and continue to talk about
what we have in store for next week as you
make your portfolio decisions. But first let's turn it over
to Jack Saban. He's got news traffic, O weather. Hey Jack,
looking back at the John Sanchez Show on News Talk
seven eighty k h Once again, Happy Friday, wishing all
of you a great weekend. Record close for the Dow,
the Nasdaq, and the SMP four to seventy three gain
on the Dow, up two sixty three on the NASDAK
(21:05):
and a fifty three point rise on the S and
P five hundred. All right, so now you're up to
date on earning season, you're up to date on China
inflationary data and next week's FED meeting. Okay, let me
throw in one final item, of course, on the mind
of investors to help you make your portfolio decisions. As
you heard a moment ago with the news the government
(21:28):
shut down. So here we are. Thank you for running that. Jack.
Day twenty four. I knew we're close to that, but
I've lost track. So day twenty four of the government shutdown.
Is the market caring about it at this point? No,
obviously not, or we wouldn't be setting records day after day,
it seems like. But should we be caring about it? Absolutely,
But at the same time, there's other things to worry about,
(21:50):
other things that get excited about. I mean, i don't
know about you, folks, but I'm just beyond frustrated to
say the least.
Speaker 2 (22:00):
You get.
Speaker 1 (22:01):
You know, I have CNBC on all day, you all
know that, and in the morning especially, it seems like
almost every day CNBC will have someone on from the left,
they'll have someone on from the right, and they do
this each and every day. Well, these politicians are saying
the same thing over and over and over.
Speaker 2 (22:21):
Blaming the Democrats, blame in the Republicans, we can't come
to the table, Da da da da da, And none
of them again are saying anything that's going to get
this thing closer to the end and most importantly, to
get the government workers, the military, et cetera paid right.
Speaker 1 (22:38):
It just again, it absolutely discussed me. Just discuss me
that men and women especially I'll focus on the military
for a second, are out there in harm's way. Protecting
our great country and they're not getting a paycheck. It's
it's the stupidest thing I've ever heard. If you politicians
are going to go fight among.
Speaker 2 (22:58):
Yourselves and be like little children, then you know what,
do it, But not at the expense of the government
worker in the military.
Speaker 1 (23:06):
It's not right. Once again, as I've always said, I
haven't seen anything. Maybe you can correct me on this.
I haven't seen anything that says the politicians have foregone
there have not been paid. Some of them, of course,
in a PR stunt called oh I'm not collecting a paycheck, Well,
then you're doing it for a PR stunt, because I
(23:27):
think they're still getting paid. But back to the market
side of things, the market's not carrying at this point. Now.
I gave you a little bit of a warning as
we got closer to the pending government shutdown. You know,
remember our deadline was October the first, and I said,
you know, the market historically has done very well in
a government shutdown. Now we are entering into we are
(23:49):
now I should say not entering, but we are now
in the second largest or second longest shutdown in history,
or we need to get to about thirty three days
to say it is the longest government shut down. So yeah,
another week or so we'll have that. But historically the
market does very well whatever the reasons. It may be, right,
(24:10):
we all have our reasons behind it, but it's you're
gonna get to a point. And this is what I
was saying before the government shut down occurred. Investors get
to a point where they go, enough is enough. Right,
we have no economic data. Things aren't getting done on
Wall Street or getting done in government. People aren't getting paid.
(24:31):
They're not going to go spend their money in the economy, right,
and you start the snowball effect, and then you wake
up one day and investors go, you know what, enough's enough?
I promise you, in my opinion, when we get to
that threshold, and you know, obviously we don't know when
that threshold is. It could be day thirty five, it
could be day forty five, day fifty five, who knows
(24:53):
where it is. But we will hit that threshold and
we will wake up one day and all of this
good news that I'm sharing with you right now, earning
season and China talks and decent inflationary data, an accommodative
FED it won't matter because investors will go, this government
(25:13):
is shut down and all these negative things are now transpiring,
and they who get portfolio managers coming out going I
can't make investment decisions because I don't know what my
data is, and it'll all culminate together, the market will
sell off, and then that will get the attention of
Trump and the Democrats and everybody else, and they'll come
to a resolution. Wall Street always always will get politicians'
(25:39):
attention because they don't want to go back to their
districts and look you straight in the face and a
talent hall meeting and say, gee, sorry, Sally that the
market dropped ten percent or fifteen or twenty percent because
we couldn't get our act together in Congress. They don't
want to do that right now. They are very very
very fortunate that the market has so many things to
be happy about, because let me tell you, if we're
(26:01):
just in kind of an average economy, it'd be a
completely different discussion at this point. The market would be
upset about it. But again, right now, it's down the
priority list. If the Fed was an interest rate rising mode,
completely different forecast, and people would be upset in the
Street would be voting again with a sell button, as
I like to call it. So we're tolerating it at
(26:24):
this point because again, we have so many other things
to be thankful about and positive about in the market.
But trust me, you will get to this point if
it extends long enough. And again no one knows what
that long enough time period is. Maybe it would go
past that previous record of thirty three days. Maybe it's
day thirty four, who knows. But at some point, and
I could see this happening, if I had to predict something,
(26:45):
I could see this happening after earning season ends, so
you know, after the bulk let's say in another two
to three weeks, because that's right now, we're excited about
earning season, right, So we could see it happen after
that point if the government shut down is still going on,
because what do we have to look forward to then? Right? Remember?
Wall Street is like a bunch of spoke kids on Christmas.
(27:07):
What's under the tree? What's under the tree? What do
I give it? What's my next? President I get to open?
Oh you mean there are none? You start crying, meaning
investors start selling. So I think we're in a really
critical time period right now. Now, how does this play
into your portfolio. This is what you need to be
thinking about right Don't focus your asset allocation on today
or tomorrow or next week. What's going on in your
(27:30):
life right now. If you have a pending retirement, say
in the next year, you better be looking at things
in a very cautious format, very cautious format, because as
all of you know, I've shared this, You know in
the twenty plus years you've listened to me, I get
very nervous in market conditions like this. I would much
(27:52):
rather have a market that's kind of going flat or
even down for legitimate reasons than one that's setting records
day after day after day, because you just don't know
when the party is going to end. And as I
was explaining to a client the other day, remember when
we were a kid and we'd play musical chairs. Remember
you'd have what eleven people and ten chairs, and everybody's
(28:14):
walking around, and then while the music going, and then
susan music stops, everybody jumps onto a chair, and inevitably
one person's going to be out, and then that number
continues to shrink down. It's the same type of thing
when you're setting record levels. The music's playing But where's
it going to stop and who's going to be out?
Will it be AI, will it be rare Earth? Will
it be consumer cyclicals? What area is going to be
(28:37):
Most likely it would be on the technology side. Something
will happen in the technology arena, some company will go
billy up, or something will start a snowball effects, a
cascading effect in the technology area, because that's again the
area that I said a moment ago. I mean, naw's
that except twenty percent year to date? Come on again,
we just don't know when. So always always be thinking,
(28:58):
always be prepared, Always have a defensive strategy, and again
especially don't get caught up in the euphoria of record
setting days if you are near retirement, because you are
completely different than that twenty five year old out there
listening right now. It's going, hey, this is cool stuff.
You know, Mom and dad said the stock market was
real choppy. I've done nothing but make money lately. Enjoy
(29:19):
it why you can, and who knows when that, Like
I said, when the music's gonna stop. But when you're
in retirement, if you're caught and you're the one that
can't find the chair to sit down, guess what that's
gonna be a miserable retirement, or most likely you'd end
up postponing it. So love the strength, love the euphoria,
but don't get caught up into it. All right, we
come back. We'll continue a few more things to wrap
up the week on Wall Street. Let's speaking of wrapping
(29:41):
it up, do it with the best kristin snow right
now trafphic center, hitli me dear, welcome back to the
John Sanchez Show on this talk seven eighty koh. All right,
if we can be of service to you at our
firm by all means, give us a call seven seven
five eight hundred eighteen oh one, go online Sanchez got
gaunt dot com. Set a pointment for Jason. I let's
take a look at your portfolio. Let's see what you're
doing right, what you're doing wrong. We'll give you our
(30:03):
honest opinion right always going to get honesty out of us,
no doubt about it. And one more time is I
should say one more time? But as a reminder, if
you missed any of our shows this week or any
other time, please go to Spotify, to iTunes, et cetera
search for the John Sanchez Show. Find us on YouTube,
hit the subscribe, hit the like button. We appreciate all
of that, We really do, all right. So I put
together my grand finale for you. All right, So here's
(30:26):
where we are. We just wrapped up another week on
Wall Street. Been a good week where a record highs
inflation's coming down. Government can't agree on the budget. But
as I said, who cares at this point? Right? Investors
aren't caring. So put together five things I want you
to go into the weekend thinking about. Number one, Stay invested,
but shift your your waiting a little bit. Here's what
I mean. This is not the time to go all
(30:49):
in or to go all out right the market. It's
going to reward you if you're patient, if you're buying quality,
and if you're disciplined in your investment approach. Get rid
of some of the froth in the portfolio. Keep the
exposure to sectors that benefit from falling rates. That's gonna
be my theme here as I wrap it up. Things
like industrials, technology, things tied to AI, and consumer discretionary.
(31:11):
And keep an eye on the small caps. Right, they
do historically well in a low air, falling interest rate environment.
So stay invested, but look at your waitings. Number two,
rebalance the fixed income portion of the portfolio if you
have one. As we discussed, we've got the Fed interest
straight cut that's expected on Wednesday, another one in December
that'd be another half a percent. Market loves that, Street's
(31:34):
gonna be looking for more cuts even after that. Don't
know what the predictions are at this point, but pretty
confident we're going to get two more of quarter percent
this year. So yields, they're likely to come down right,
gonna be great for a lot of things like mortgages, etc.
But that means that the sweet spot could be the
intermediate term bonds that's your ten year maturities and less
(31:54):
right around there. So what I want you to do
is look at locking in yields before they drift lower
ladder those maturities. Consider quality bonds using ETFs. You don't
need to go out and no one does it hardly anymore,
and buyas the individual bonds. But there's some great ETFs
that are out there that again, we'll do all of
that for you. Because remember, if you're new to the market.
Declining interest rates, it's like the teeter totter. When rates
(32:16):
go down, you see principle go up. Not always a guarantee,
but that's the theory. Okay. So driving interest rates lower
as the Fed wants to do, we should see principal
value of fixed income go up. And again that sweet
spot's what we call the intermedia, that ten year maturity
or so speak of sweet spots and getting a little
bit of income coming in. How about this Number three,
(32:37):
play a little offense with some dividends. Oh yeah, get paid?
Why you wait? High quality dividend payers. Think financials, think energy, infrastructure,
think healthcare. All of those can offer income and defense
if volatility returns, if this shut down drags on, or
things don't go well with Trump and she et cetera.
Number four, keep cash tactical, don't keep it emotional. Cashields
(32:59):
are great, but they're not going to last.
Speaker 2 (33:00):
Right.
Speaker 1 (33:00):
You can see money markets probably adjust CD rates, a
just etc. When we start getting these next two interest
straight cuts. So keep that cash tactical, use the cash
for dry powder, for opportunities when the market gives you
some pullbacks. And number five, remember this. Markets don't rise
on perfection, they rise on progress. We've got inflation cooling.
If that's coming into our favor, the economy is still expanding.
(33:23):
Focus less on this Washington drama because frankly, again the
street doesn't care about it, so you probably shouldn't from
an investing perspective, but focus more on position in your portfolio,
where the puck is going, not where it's been. I
was seeaching every one of you a great weekend. Thanks
so much for joining us this week. Don't forget go
out and pick up our podcast at Spotify iTunes. God
bless you have a great weekend. We'll see on Monday
on the John Sanchez Show. Capital Management LLC on this
(33:46):
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 should not be relied upon. As such a
statements or opinions are subject to change without notice. Information
presented is for educational purposes only and does not intend
(34:07):
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 orre not guaranteed.
Speaker 2 (34:18):
Information expressed does not take into account your specific situation.
Speaker 1 (34:22):
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.
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