Welcome to the Party, Mr. Warsh (FvF Ep. 188)

In Episode 188 of Facts vs Feelings, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, welcome new Fed Chair Kevin Warsh the only way they know how: with data, context, and zero sugarcoating.

When Jerome Powell took over in February 2018, the Dow dropped 4.6% on his first day, the worst debut of any Fed chair in modern memory. This time, it’s not the equity market doing the hazing. It’s the bond market. The 30-year Treasury yield sits above 5% for the first time since 2007, and Japan's yields just hit levels not seen since the 1990s. Ryan and Sonu explain why the dynamics that once pushed foreign money into Treasuries are quietly reversing and what that means for U.S. investors.

From there, Sonu walks through industrial production data that almost nobody is talking about. Manufacturing is running at nearly 5% annualized. High-tech equipment production is up 61% above 2019 levels in real terms. This is hard data, not a survey, and it runs directly counter to the narrative that the economy is softening.

Then comes earnings. With 91% of S&P 500 companies reported, earnings growth is running at 27% against expectations of 13%. Communication services, expected to be down nearly 4%, came in up roughly 40%. The consumer is holding up, too, with retail sales running at 13% annualized and 95.2% of all household debt paid on time per the New York Fed.

The episode closes with a look at what to watch: NVIDIA earnings, FOMC minutes, and a bond market both hosts are keeping a very close eye on.

Key Takeaways:

• The bond market is testing Kevin Warsh the same way equity markets tested every Fed chair before him, and the dynamics driving yields higher are not going away quickly.
• AI is showing up in the hard data, not just stock prices. High-tech equipment production is up 61% above 2019 levels in real terms.
• S&P 500 growth came in at 27% against a 13% estimate during earnings season. Communication services swung from an expected decline of nearly 4% to a gain of roughly 40%.
• The two-year Treasury yield above the Fed funds rate signals the market believes the Fed is behind the curve. Rate cut calls from the sell side are, in Sonu's words, a John McEnroe moment.
• The S&P 500 is up seven consecutive weeks, gaining over 16% during that stretch. One year after prior streaks of this magnitude, the market has never been lower and is up 16% on average.

Jump to:

0:00 — Welcome and Who's Running the Fed?

6:10 — Bonds Are Testing the New Fed Chair

13:05 — Manufacturing Heats Up and AI Shows Up in Hard Data

21:40 — Japan Sparks a Global Yield Reprice

34:55 — Portfolio Moves on Duration and Cash

43:55 — Earnings and AI Spending

49:20 — Consumer Strength, Retail Sales, and Final Thoughts

Connect with Ryan:

• LinkedIn: https://www.linkedin.com/in/ryandetrick/

• X: https://x.com/RyanDetrick

Connect with Sonu:

• LinkedIn: https://www.linkedin.com/in/sonu-varghese-phd/

• X: https://x.com/sonusvarghese?lang=en

Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com

Transcript

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SPEAKER_00 0:02

Welcome to the Facts versus Feelings Podcast. I'm your host, Ryan Dietrich, and I'm joined by my co-host, Sony Vargeist. Cutting through the noise each week, Ryan Dietrich, Chief Market Strategist, and Sonovarge, Chief Macro Strategist, taking out the boring and helping investors focus on what really matters. Well, welcome to the party, Mr. Warsh. Sony, you think about bad first days. I know it's not as technically his first day. You're gonna explain all this, but it's he's he's coming. And yields are giving him a very rude awakening, which we're going to uh talk about here. Uh episode 188 of Facts versus Feelings, Ryan and Sonu, who is always well, they said first off, is Walsh in charge? Who who's in charge of the Fed, Sonu? Because I heard Friday was Powell's last day, and you and I just talked. You said, not really. What's going on? Powell's in charge.

SPEAKER_01 1:01

I uh the fed's uh yet to confirm or confirm them, but he's yet to take office. Um that way is that made no sense. That made no sense. And so Powell remains in place until Walsh walks in, but yeah, for all practical purposes, he's the new Fed chair and welcome to the party, right? But look, every I I feel like almost every time a new Fed chair comes in, the market tests the Fed. But usually it's the equity market that tests the Fed chair. Greenspan, was it 1987? Greenspan 87. I forget when Bernanke came in, but Powell too, right? It was 2018 and there were policy changes that he wanted to make, he made, and the market wasn't on wasn't happy with that. And this time it's not the equity market, it's the bond market. That's the big story of last week. Uh look, big picture, we'll talk about all this. Everything's running hot. Retail sales are running hot. The labor market, okay. I'm not gonna say it's running hot, but it's much better than most people think it is. Certainly much better than the economist thinks it is, I should say. And industrial production's running hot. And you and I have been talking about inflation being a problem even outside of energy and tariffs and all that for a few months now. When he came into the air with our outlook, we said, look, we were short bonds, long duration bonds. We were overweight cash, and there was a reason why. We thought we'd be in a period of inflationary growth. That's sort of playing out. I feel like everything we've uh seen in the bond market with the 10-year yield rising to about 460, the two-year yield is at 407. We'll talk about some of the stuff. We'll put the charts up as well. Yeah, it's a period of inflationary growth where this is not great for the bond market, but it's good for stocks.

SPEAKER_00 2:52

Well, you just dove right in there, Sony. That's kind of a quick summary. We probably can just stop. I don't know. I think everything you just said, we kind of summarized it all. Um, I believe it was well now, I can't remember. February 4th or February 5th of 2018 was Powell's first day. And I've made this comment before on this podcast, but I'll do it again. You talk about a bad first day on the job. The Dow dropped 4.6% in one day on his first day. That was the single worst first day out of the previous 15 Fed chairpersons. Uh, now that was because that was when the trade war started, right? I and again, we've got to that's what it is. Okay, I was wondering what that was. Yeah, you slap on a tariff, and I believe it was washing machines. That's where the first thing started was washing machines. But the market had a crazy rally. I think it was up like 15 months in a row on a total return basis after President Trump won the first election. Um, and then finally Powell takes over and boom, welcome to the party, Mr. Powell. And now we have the other side of this with higher yields. Um, you know, there's a lot of ways we can take this. Let's maybe start with a little, so we've kind of set the set the stage. We had a little appetizer there. Let's just remember the market finally, the SP 500 finally had a 1% drop on Friday. Now, Sonu, and we could talk yields are higher this now. I would just say, listen, we're up over 19% from the lows in late March. The SP 500, and we can put this chart up right now, Connor. I sent it about seven-week win streaks. The SP 500 is up seven weeks in a row. The SP 500 is up over 16% during this seven-week win streak, one of the largest seven-week win streaks in the history of the stock market. Seven other times the stock market had gained seven weeks in a row, at least 10% during that. One month later, three months later, yeah, kind of about average returns. Nothing out of the ordinary, but a year later, you're talking never lower, up 16% on average. And the last couple, as we're showing on the YouTube channel here, were really strong returns a year later. Uh, you know, you've said it a lot, I've said a lot. Momentum begets momentum. There's lots of other stuff. But my take is after this rally we've seen with seven all-time highs the month of May already, which is like tied for the third most ever, halfway through the month. Maybe we do a little pause. Maybe the market gives some back. We can blame it on the Fed, we can blame it on yields, we can do whatever we want, but I still think it's a bull market. I still think we're just gonna have maybe potentially a pause. And that's how this stuff works. I mean, you know, literally, last comment, and then you son. Last February and March, we had the deep seek drama, right? We had more two and three percent swings back then on deep seek worries than we did just recently with a war. All right. So just put some context around that, though. Put the context around it. What do you want to add to this and where do you want to go with it?

SPEAKER_01 5:31

I mean, I don't know that tech stocks even taking a break. Maybe everything else is small caps, mid-caps. Yes. Tech was up last week, even after the drop on Friday. And this morning, this is Monday, we're recording this on May 18th. The Cospi index, the South Korean index, was down about 5% intraday. It made up all those gains and then some. It closed up 1%. Now last week was it was down, but yeah, look, I think tech is still on fire. We'll talk about the other side of that coin is inflation too. Chip prices and memory chip prices, all you know, all sorts of semiconductor equipment prices, electrical equipment prices, all that's going up. But that also means profits for companies selling this stuff is going up. And we're literally seeing that in the stock market. There's two sides. I say it's all a macro story right now. Like AI is not like a small micro, it's a few stocks. Yes, everyone talks about it's a few stocks, but it's showing up in industrial production data, it's showing up, showing up in inflation data, it's showing up in GDP data, and obviously the stock market. But you have bonds as well. It's also an inflation story. So I think it's all connected, actually.

SPEAKER_00 6:48

No, I think so too. You know, and and the other thing, let's talk about gold for a second. So gold last week was down what between over three percent over three percent. Yeah, ballpark three percent. Uh equity markets, yes, the SP was barely higher, but we had that big down day on um on Friday. But then the reality was well, I think the NASDAQ was lower, the Dow was lower. I mean, listen, some some stuff was a little lower. It's okay. It it you know, it's allowed to go down after seven weeks in a row. Uh, it's allowed to go down. Now, the other side of this, did I don't think I mentioned this? Did I mention how many 1% gains in a row we had? I totally I was doing two things at once. I don't think I did. I don't think I did.

SPEAKER_01 7:25

No, not yet. I mean, you mentioned like we've gone, what, how many ever eight weeks or something? Something like that? Well, no.

SPEAKER_00 7:32

So we had the SP 500 had eight consecutive one percent gains with down to one percent loss. And then finally on Friday, we had that. Listen, that's again, just showing that's by the way, the longest stretch in 10 years, okay, with eight in a row, 1% gains without a 1% decline. And Thursday, we almost dropped 1% on Thursday, a little late sell-offs. We were flirting with that. Had we hit nine, that'd been the longest in 20 years. So again, these are just different ways of kind of showing um the same story that this market's had an incredible run. But it usually breadth, um, I'm sorry, momentum begets momentum is one thing that you like to talk about. But the other thing that gets me, the economic data, maybe let's just go all over the place with this one. Uh, you know, we saw some manufacturing data, right, from the Empire State, that's New York, uh New York area, came in way better than expected. That's a survey. Right. That's the survey, it's a survey, but other manufacturing data, and you mentioned the industrial production, that's not a survey, that's hard data. Exactly. That came in better, manufacturing up 0.6%. I believe it's over 5% annualized. I mean, everyone told us for the longest time manufacturing is bad, manufacturing's bad. And now that manufacturing's good, no one's talking about it.

SPEAKER_01 8:39

It's look at it's all running hot. Yeah, I mean, I I I don't know how you got there's no two ways about it. Uh you mentioned industrial production. This is hard data. And by the way, this is real, it's inflation adjusted since it measures volumes. So manufacturing production was up 0.6% month over month. Last three months, Feb, March, April, is up almost 5%. Right? And where is the strength coming from? Across the board. Vehicles now, vehicles are recovering from that auto strike in October. They're still yet to fully recover. There's room to catch up. That's a good news. But it was up four percent in April, just April alone. Then you have what we were just talking about AI. AI is showing up in a big way. Uh, and uh Connor, we can put this chart up high-tech equipment production. April, it was up one percent one month over month. By the way, that's really strong. That's over 12% annualized. Last three months, six percent annualized pace. This is all inflation adjusted. These measuring volumes, as I said, it's running well above trend, as you can see in the chart. If you're looking on YouTube, activity, Ryan, for manufacturing, production of computers, communication equipment, semiconductor chips, all of that. That's up 61% over 2019 levels. Inflation adjusted, it's not nominal, it's just real, right? And then you take a site adjacent to that is you know, uh electrical equipment, that's also part of the story. That's up 12% over the last three months annualized. This stuff is running really hard, but it's not just that. CapEx, if you take out autos, if you take out high tech, that's up three percent last three months. That's pretty good. Defense, another line that's literally going vertical. April is up two percent. Connor, we can put this chart up, defense equipment production. Last three months, Ryan, like I said, it was going up straight up vertical, 11% annualized pace. Manufacturing across the board is doing pretty well, right? Everything's running pretty hot. There's no, and this gets back to welcome to the party, Mr. Warsham. Everything's running hot. I mean, you're talking about rate cuts. Come on. I mean, well, like John McEnroe would say, you cannot be serious.

SPEAKER_00 11:12

He said a lot, John McEnroe. Um, yeah, you you and I just had a boarding call just a little bit ago with our amazing Carson advisors, and we talked about some of these very same concepts, and you pointed out, I think rightfully so, that the Fed is the only central, well, not only, but one of the only major central banks that's actually kind of even flirting with the idea of cuts, right? Japan on Friday, their PPI producer level came in at 2.3% month over month. Okay, what's that mean? It was supposed to be 0.7 percent. So Japan is seeing massive jumps in inflation, and their yields have absolutely soared. I think that's sparked Friday's sell-off. Everyone, I mean, I joke, like yields have been going up all year. You and I have been talking about an inflationary growth regime. Well, what happens in an inflationary growth regime? Inflation's a little hotter, yields might be a little higher, but you know what? The economy's still strong and earnings are solid. Well, that's kind of what we're seeing. Exact fact, that's exactly what we're seeing. But then on Friday, the Japanese news came out and their yields moved and everybody kind of freaked out. Now, Monday, famous last words, time we're doing this. Market's kind of flat-ish, but uh, you know, that's all right. Um, talk to me about global yields, though, because we don't, we don't, we talk globally sometimes on this podcast, in fact, a lot, but not so much the bond market of other areas. You know, you pointed out, and it's oh gee, what was it, like 17 or 18 trillion of negative sovereign debt around the globe this time five or six years ago? And now there's I don't know if there's any. I mean, anyone have negative rates anymore? I don't know. I don't know if they do. Not many, not many. You know, I mean, Japan was that that one that was, and their yields continue to go higher. The 30 year in the U.S. is the highest it's been in 30 years, up over 5%. Let's not forget, right around 5%, 30 years, kind of when um President Trump, when we had all the drama around um Liberation Day, yeah, that's kind of when he pulled back. It doesn't feel like President Trump's pulling back this time. He's he's um staring the bond market in the eyes, and and who's gonna blink first? I guess that might be one potential worry. Uh, I don't know what I even asked you, Sony. What do you want to add to this?

SPEAKER_01 13:01

Uh let's start at the top. Uh, so last week bond yields went up, but it was going up all week. It wasn't just about Friday. I know Friday. All year all year. All year. Yeah, exactly. Yeah, yeah. So the 10-year uh Connor, we can put this chart up. Two-year and 10-year treasury yields, and I'll connect this to global yields. Two-year yields last week was up about 18 basis points, 0.18% percentage points, to 407. This morning, it's somewhere around 405, 406, right? Before the crisis started, before the Middle East War, it was at 337. So we've gone up about 65, 70 basis points since over the last two months since the war started, two and a half months thereabouts. The policy rate, if you think about, you know, again, tying this back to Warsh, right? The policy rate is at 360 thereabouts. Okay. So when he came in, everyone was talking about rate cuts, things like that. I think we were in the camp that uh we probably shouldn't be seeing any cuts or hikes this year, because given the inflation backdrop and the labor market backdrop, to be clear. Now, what the two-year yield is saying is that wait, if the two-year yield is at 405, 407, something like that, the policy rate is 360. What does that mean? The two-year yield is essentially the average expectation of short-term policy rates over the next two years. Yep. And what the market is saying that we think rates are going to go up. Though the market is saying, we think the Fed is behind the curve. And the long end obviously is also rising. The long end is rising on the back of higher inflation and at the margin, probably lower demand from abroad, because if foreign yields are going up, you don't need to run to the US to get a higher yield than bonds. You can just buy local government JGB bond deal, Japanese government bond bond deals. You can buy German government bond deals. You don't have to come to the US and then hedge for currency and things like that. So the 10-year yield since the crisis started, February 27th, on the eve of the crisis, I think the 10-year yield was a 394. Today it's close to 460. So about 65 basis points increase. As you said, Connor, we can put the 30-year yield, uh Treasury yield chart up 512, that's the highest since 2007. Right. And what happened on Friday? Yes, it was I think it was two things, Ryan. One is the Japanese central bank, you know, probably thinking that rate hikes are around just around the corner, probably literally in June to fight inflation. Like you said, the PPI data, it's up 2.3% in April, close to 5% year over year. The odds of a rate hike in Japan by June is about 75%. The 10-year yield in Japan, by the way, let's put this chart up. I have the Japanese 10-year yield. It's at 274 right now. That is the highest since 1997. Okay. Now, what was interesting is back in 2022, remember, we had a lot of inflation, just like now, maybe even more than that. But the 10-year yield, the Japanese government bond yield was at 0.25%. Why? Because you had yield curve control. They were, you know, setting the rate at that target of 0.25%. They've taken that out and everything's exploded higher. One big difference between now and 2022, beyond the fact that they don't have yield curve control anymore, is that Japan's doing a lot of fiscal stimulus, including defense spending. Hello, that sounds similar, right? So what's the impact on US yields? Like I said, lower demand for treasuries at the margin if foreign yields are rising. Back in the mid to late, you know, 2010s. You were talking about negative yields. We had negative yields in Japan, Europe, everything from 2014 to 2020. We had negative yields. So that led to, and meanwhile, US Treasuries are paying about 1.5%, 2%. 1.5%, 2% isn't great, but it's much better than negative 1%. So that led to a lot of demand for US Treasuries. That dynamics changing now. And meanwhile, but so that's on the demand side. On the supply side, we are running 6% deficits, 6% of GDP deficits. That means you're getting an enormous supply of US treasuries as well. I mean, what happens if supply is a lot, demand is lower at the margin, and you have inflation, that's a recipe for higher bond yields.

SPEAKER_00 17:16

Well, and a lot of these concepts are things we've been talking about for a while, you know, and it is potentially playing out. Now, as uh stewards of assets, right, we manage billions of dollars for our Carson advisors and their clients. And we, I mean, everybody knows kind of what we're talking about. Our job is to look at what's priced in, what's not priced in. And this is where it gets kind of fun, but also extremely challenging. Let's be very, very clear. This is uh, you do this long enough, you make a lot of mistakes. I want to be clear. Um, although I put what we've done up against anybody lately. I saw um the Google Trend searches for the word inflation. I love going to Google Trends. You can type anything and just see what people are looking at, right? I think it's a good gauge for kind of what's going on out there. The word inflation, Sonu, recently was searched for more on Google Trends than even back in 2022. This is the most likely years. Now, 2022, just for those who might have forgotten or weren't there, we had over 9% inflation. We had the most aggressive Fed pretty much in a lifetime of anyone listening to this podcast. Um, and we saw yields soar, yada, yada, yada. So there's a lot of this priced in. I mean, I joke when Friday everyone looked and realized yields are higher around the globe and the market sold off then when they were higher the whole time before that, too. Um, you know, it's like, okay, we get near a point. Now, Barry Gilbert on our team. What's Barry's title? I don't know. Uh uh Vice President, comma, asset allocation strategy. Oh, he still has the comma. Oh, you you graduated from the comma. I never had one. I just be quiet. I don't want to deal with that stuff. Anyway, don't jinx anything here. Yeah, I know, I know. So Barry, um, yeah, very thoughtful, smart guy, worked on for over a decade now. And he, you know, he brought up, he wrote a really good blog. You can go check it out on Carsongroup.com slash research. You know, there's a point, though, where we've been underweight bonds and haven't liked them, short duration, all that stuff, all that stuff. There's a point when you start looking at a 460 10-year yield, I'm not saying we're there, but you start saying to yourself, hmm, maybe, you know, bonds start to do something here if if inflation doesn't come swing back, if the Fed maybe is a little bit more dovish on what the market's pricing in. If some of these, I mean, listen, we don't disagree. AI is deflationary longer term. I don't know what longer term is. Is it two years? Is it 10 years? I don't know. I just know the data now, and I look at things like grains, I'll put a euro in it. I think it's at least five years.

SPEAKER_01 19:28

I don't think I don't think we're gonna see any AI-related deflation for at least five years.

SPEAKER_00 19:32

There you go.

SPEAKER_01 19:33

Unless we get a recession, but that's different.

SPEAKER_00 19:36

Right. And when I look around the globe and look at these commodity prices, we've talked on this very podcast for a while. It's like, okay, it probably means inflation's gonna be closer to three, three and a half percent than two percent. And that hasn't changed. But what what what are um we can't probably give too much away because we do manage a lot of money, but you know, when should someone start to think about, okay, maybe it's time for bonds? Because bonds literally last comments now, the bonds are down on the year. SP is up eight percent, gold's up five or six percent, uh, emerging markets are up maybe five or six percent. Uh no, sorry, emergency markets up more, emerging markets up double double digits, development international is up a tad less in the US. But you have a lot of green out there this year, except for bonds. Um, what are you thinking there?

SPEAKER_01 20:12

So take the a portfolio construction viewpoint here. So we are obviously overweight equities, we're still overweight equities starting from the beginning of the year, but in an inflationary growth period, that's good for stocks. Well, for almost over three years now, so yeah, for over three years, yeah. We're coming in and and we were short bonds. Now, obviously, if you're overweight equities, you're going to be underweight bonds. But beyond that, we were also so here's the thing if you're underweight bonds because you overweight stocks, you would normally think, you know what, I could be wrong, and we could be wrong. If you have a recession, you want bonds. So you want actually longer duration because you've cut down your overall bond allocation. You probably want longer duration. In case you're wrong, you get a deflationary recession. But we didn't take that view. We were like, no, in an inflationary growth period, bonds are not going to do as well. We didn't certainly think a recession is on the horizon, not with six percent deficits to GDP. I don't think a recession's coming, and the federal government's pumping out two trillion dollars of you know money into the economy every year.

SPEAKER_00 21:13

But if you have economy is what, 31 trillion?

SPEAKER_01 21:16

Yeah, 30, 31 trillion, exactly.

SPEAKER_00 21:18

So you're pumping in 2 trillion. New money. New money. And you wrote about this in our Outlook. Our buddy, um, um, oh geez, what's his name? I just went blank. Uh um Warren Pies. Warren Pies has been talking about this, but you also have been talking about you just don't see recessions with six percent deficits. I I talked about that back in January when I did the um many, many Outlook presentations. Go ahead, so yeah.

SPEAKER_01 21:38

I I mean it's not impossible, but never say never in this business, but it's very hard for me to see that.

SPEAKER_00 21:44

Yeah, crude oil doubled like overnight. Anything's possible, you know.

SPEAKER_01 21:46

I mean exactly.

SPEAKER_00 21:47

There you go.

SPEAKER_01 21:48

Yeah, so coming back to the point about bonds. So now you're underweight bonds, but because we saw inflationary growth, we were also underweight duration. So if you think about our duration target, it was about two thirds. I mean, duration essentially for those people, you know, uh coming up the speed of this stuff, it's essentially measuring interest rate sensitivity, right? One year, you know, five year duration for a bond means if interest rates go up one percent on percentage points, your bond price. Goes down by five percent. And if interest rates go down by one percentage point, your bond price goes up by five percent. That's what a five-year duration, and that's how you can we were underweight duration because we thought bond prices would go down because yields go up, right? That's how it works.

SPEAKER_02 22:32

Yep.

SPEAKER_01 22:33

We've slowly shifted, right? We're still underweight duration, but instead of being two-thirds one-third, two-thirds normal, you know, our target duration, one-third cash, we've probably graduated to like an 80-20 split. Okay, right? 80% longer duration, 20% cash. We've reduced our cash all this. We're still underweight bonds because you know, inflation and all that. I the other thing is look, in terms of price in, I still think we were talking about this this morning. Several sell side notes I look at, I know you look at this too. They're still talking about getting rate cuts later this year after the inflation shock wears off. And I'm like, come on, again, at the risk of being redundant here. I am redundant. You cannot be serious, right? I think peak pain in the bond market, and 460 to be clear on the 10-year yield is painful, but I think peak pain will be when everyone capitulates, like is always the case in markets. Well, uh I don't think we're there yet.

SPEAKER_00 23:35

About 46 months ago, give or take, yield curve inverted. A lot of those sell side analysts um were telling us it'd be a recession, right? And you and I talked again this morning. Um, nominal GDP growth in the US ran about six percent give or take in 2023. Okay, what in the world does that mean? Well, that was pretty strong. That was stronger than China for the first time in probably any time, lifetime anyone listen to this. Oh, and by the way, that was also, you know, a year after we were told there's a 100% chance of a recession. It wasn't Bloomberg who said it, but it was a Bloomberg survey of economists that came out. I mean, the market bottom October 12th. I think that article came out like October 9th or 10th, like right at the low. They're telling us a hundred percent chance of recession. And we only had six only, air quotes. Six percent, you know, GDP nominal GDP growth. And three percent real GDP growth. And three percent real.

SPEAKER_01 24:25

Yeah, yeah.

SPEAKER_00 24:26

So I yeah, and we're still there, right? I don't know if I don't know if Warren Buffett said it, but we'll give him credit credit for this. It's something along the lines of if you have one economist, you have one employee, too many. It's something like that. It's something like that.

SPEAKER_01 24:38

Thank God neither of us are economists.

SPEAKER_00 24:40

Oh, like I said, I my career took some interesting paths. I am so grateful I didn't get a CFA. I'm so grateful I got a CMT. I'm so grateful I don't think like everybody else and look at the world differently because it's helped me. But also I think it helps us when we manage money because we don't think like everybody else. And that's uh and by the way, you have a PhD and the new Fed guy doesn't, right? Isn't that what we just determined? But my PhD, I I joke that it doesn't count.

SPEAKER_01 25:01

It's mechanical engineering.

SPEAKER_00 25:02

Uh you know, whatever. Yeah.

SPEAKER_01 25:05

So yeah, I don't have a CFA, I don't think. I mean for good noise, but uh which is not to denigrate on the CFA designation, especially for young people listening to this. I mean, it's a great way to, you know, CFA, CMT, to get started in the business. It's you know, I I recommend it actually.

SPEAKER_00 25:22

Yeah, well, it kind of shows you know how to think and learn and do things. But then again, when it comes to managing money, like you and I have got have got to do for the last three years. Um, if you think like everybody else, you're just gonna have average returns, right? And if you there's nothing wrong with that's fine. Yeah, I mean, there's j we joke sometimes, like, oh, let's just hug the benchmark. I don't think that's a bad thing sometimes when you don't know what's going on to hug your benchmark. That's not, I mean, listen, this is a long game, right? We're just trying not to blow up. I mean, that's what you're trying to do. You create gains over time and don't blow up, you're gonna do really, really well over the course of a couple decades. And but then sometimes you want to take big swings when everybody looks at you like you're crazy. I think that's uh that's what we've been that's what we did three years ago, and it's obviously worked out well. Where else want to go with this one, Sonu? Because I do have um yeah, I'm flying to New York in a little bit, so I've got an Uber coming in a little bit. And my people like my Uber story last week, by the way, my three and a half hour Uber story. I'm not taking an Uber to where I'm going.

SPEAKER_01 26:10

But three and a half year, uh three and a half year, not year, sorry, hour. I don't know what a three and a half year Uber ride would look like, but that would be quite something. You'd really get to know that person, is all I can say. You could probably go from Russia to South Africa or something. Three and a half years. Ladie was talk to Johannesburg. That's it. But last week we talked about CPI, so we don't have to cover CPI. Okay. Uh PPI did come out though, and there was even more heat. And PPI was up uh what uh 1.4% month over month in April. That was well above expectations. I this again gets to like expectations are like really being low ball here. I don't know why. Expectations were for a 0.5% increase. But anyway, last 12 months, year over year, PPI is up six percent. It's like, oh, that's food and energy. Take it out. Last 12 months, PPI excluding food and energy is up four percent. So that's also running hard. These are the highest readings since January 2023. One thing that was interesting, driving core PPI higher, is this thing called PPI for trade services. By the way, that measures margins for wholesalers and retailers. It's not quite input prices, right? Because retailers and wholesalers, what do they do? Bulk breaking, they're making sure these things are placed well on the shelves to boost sales, things like that, promotions. Margins saw a big increase in 2022. That's partly why inflation surged. And as I've talked about, I know I've mentioned this before: one person's inflation is another company's margin expansion. Well, the last 12 months, Ryan, PPI for trade services margins basically for wholesalers, retailers, is up 8% year over year. Last three months, it's up 12% annualized pace. Right? So there's that same story of inflation on one side, but also profits and margin expansion on the other side. And I think it's probably encapsulated well if you look at again the AI story. PPI and uh Connor, we can put this chart up. PPI for semiconductor and other electronic component manufacturing, up 26% year over year. And there's another chart, PPI for printed circuit modes manufacturing. That's up 160% year over year. Wow. There's no AI-related deflation yet. You and I are talking this morning. Look, this is a big difference from what we saw in the 1990s, especially in the late 90s. Prices are coming down.

SPEAKER_00 28:42

The opposite is happening right now. Well, no, great stuff. Also, we we did a pretty good dive, I think, last week, looking at 99 to now. But one other one, again, shout out to Warren Pies, and you've been on this too. Uh, we had a 2% government surplus back in 2000, 2001-ish, right? And now we're running at a 6% deficit. So you want to talk about differences. There are similarities. I mean, listen, some of these IPOs that are coming out, I talked about a week ago, that does catch my attention. Um, you know, potentially, uh, but at the same time, that policy matters, and that's likely not a recession. Um, let's see here. You know, a couple other things for me as I just kind of look at the notes, I scribbled, and it's just hard to read my own writing sometimes, Sonu. But uh talk about 99, something called Cisco. If I remember Cisco, not a recommendation. That stock was up 13% on their earnings, strong demand, the increased profits, all this now. Something called Ford Motors, you probably heard of them. It's a car company. Well, apparently they're turning in like an AI company. Their stock was up 10% one day, 13% the next day. There are still some real positive things going on out there. This earnings season, by the time people listen to this, NVIDIA is probably gonna have their earnings. We'll see. I'm gonna take a wild guess. I might joke with media, I get quoted every three months on the same quote. Death, taxes, and NVIDIA beats on earnings are three things you can, you know, you can uh you know take to take to the bank there. But the reality, so 91% of companies have reported earnings, according to SP 500 as of Friday. Earnings growth up over 27%. It was about 13% expected. It's just incredible. Revenues up 11.1%, which is the best we've seen in years. Take out tech. I mean, tech's been the leader. We get it. You take out tech, revenue's still running at 9%. I mean, that's that's not too bad. Last I checked. Um, and what was all the numbers I mentioned on our morning call? Um, I'll get it. Let me let me look on the two groups that um consumer discretion and consumer services.

SPEAKER_01 30:23

Yeah, I've got them.

SPEAKER_00 30:24

Where did I put it?

SPEAKER_01 30:25

You know what? The uh I I think it was it the earnings surprise you had. I have the number.

SPEAKER_00 30:30

Okay, yeah, let's do that then.

SPEAKER_01 30:32

The earnings surprise, and this is using a friends at wisdom tree, their dashboard. Okay, earnings surprise for consumer discretionary. And this is 37 out of 48 companies have reported within consumer discretionary so far. The average earning surprise was 44. Wow. For communication services, 19 out of 20 companies have reported. Wow. So 99 thereabouts. The average earnings surprise, 59%. That's how much that just think about that. The average earnings surprise, 59%. That's how low estimates were going into earnings season for these communication service companies.

SPEAKER_00 31:10

Wow. Um, so I do have so I do have what I was going to mention then. So that's we'll layer on with our buddies over at fact set. John Butter says great work there. Uh March 30th, a consumer discretionary first quarter year of year earnings were expected to be up 1.7%. Okay. All right, okay. Well, right now, Sonu, it's up almost 40%. And then layering on, communication services was expected to be down close to 4%. This is just a wild one. Down 4% year of year. Sonu, it is now up. What is it? 40%. I mean, are you kidding me? I don't even know. I joked, I don't know how that's even possible. I mean, listen, I've made some bad calls in my day. That is just like, oh my goodness, that's that's uh that's terrible. That's like saying tomorrow's Tuesday and it's gonna be Wednesday. You're so far off. It's not even, it's just ridiculous. Um, yeah.

SPEAKER_01 31:56

I I I'm trying to think about these are obviously analysts who follow these companies, and they clearly know more about these companies than any of us. And they're coming out of estimates. And let's this matters for portfolios too. I mean, assuming managers who take these analysts' recommendations, like, oh yeah, we are expecting negative 4% uh earnings surprise, right? Or average earnings, and then it surprises by 50% plus, and suddenly you're at you know, close to 54, 50, 53 average earnings for the last quarter. Now, obviously, that doesn't mean the stock prices will go up, but still you've got to be thinking, wait a minute, you know, does that mean the next quarter is being underestimated too? And this gets to, I think, why momentum works because you know, prices go up, more and more people realize, uh oh, we need to join the bandwagon here. We are underestimating things like growth and you know, more people getting optimistic about the stock, and then you get more momentum. That's why I keep talking about momentum begets momentum. Of course, at the other end of the cycle, you could get oversupply, overcapacity. I think coming back to inflation, that's probably what happened in 98, 99. Not probably what happened in 1998, 98, 99. That literally is what happened in 98 and 99. You got oversupply, overcapacity, prices came down. One thing I'm thinking about, Ryan, I mean, everyone's like, how do you know when a bubble is, you know, there is a bubble? How do you know when the bubble's gonna crash? Maybe one angle is to look at prices. As long as semiconductor chip prices, all this stuff is going up, what does that mean? That means demand is far outstripping supply. We don't have oversupply, we don't have overcapacity. But once prices start to go down, that's when I realized, uh oh, you're probably getting into that other side of overcapacity over supply. Maybe that's when things sort of pop. I don't know. That's one way I'm thinking about it.

SPEAKER_00 33:54

Well, that's interesting. That's neat. And I I don't know of too many people out there. In fact, I don't have anyone that's kind of settled like that. So I like that. Um, you know, one other thing I wanted to point this out. We're talking numbers. The average year, the SP 500, the time we're doing this on YouTube, you can see this one about the average year isn't so average. And I've talked about this, but I think it's really important for just most investors to understand this stuff or at least be aware of it. The average year gains between eight and ten percent. We know that. Long term you gain between eight and ten percent. That's fine. But as we're showing on YouTube, Sono only four times in history has the SP 500 gained between eight and 10%. Okay, that's going with like World War II. Uh it's four out of the last 76. So we're there right now, we're right around 8.5%, give or take the time we're doing this for the year. So could we really finish flat from here to the end of the year? Of course we could. Now we know there's gonna be volatility. This and that, I think our concept, and as we've laid out many times, it's probably to the upside, right? It probably gotta have a big upside. I mean, listen, the average year gains about 19. Your average down year, I'm sorry, your average up year gains 19. Your average down year is close to 14. Wider swings and just look since 2000. I mean, gee, well, it's just look since almost 2000, what's happened, right? I mean, 2000, wild move. Yet the market gained 15, 16. 2021 was a crazy year, lots of gains. Oh, by the way, 2022 was a bear market down 20, 23, 24, up 25. Last year up 16. Do you hear me saying anything about 8% gains in there? I mean, you know, it's like, so that's just really important stuff. And again, why we think maybe 15% mid-teens is still likely. That's our target. Listen, I hate giving targets. I go on TV and do all this stuff, and you do too. We hate to give targets, but we are overweight equities. And trust me, if we go up 25% this year, I don't think we're gonna complain that our target of 15 was passed because we manage real money and we're okay with that. Um, but anyway, so just average in so average is a real important concept. So, now what's another one? Let's take a little curve. What's another kind of timeless lesson? I would call that a timeless lesson to know that an 8% gain rarely ever happens. It's you're gonna get there over 30 years, it's just gonna be a wild ride. From like a macro point of view or something, and you didn't see this coming. This is the Joys of a Life podcast. What's a timeless one you follow that you think everyone should be aware of?

SPEAKER_01 35:54

From a macro perspective, you say my my brain's a whirling now. I know you've got like eight things in there, pick one, Sono. Just pick one.

SPEAKER_00 36:01

You got eight of them in there.

SPEAKER_01 36:02

You know, one person's spending is another person's uh revenue or and income and profits. I think it's as straightforward as that. We talk about macro stuff all the time. And why are we talking about the economy? Why do we spend so much of time talking about the labor market, for example, despite the economists saying it's a jobs apocalypse? Time out. Let's put that up there.

SPEAKER_00 36:23

Let's put that on there. The jobs apocalypse economist covers on YouTube right now. That's the view people see. Go ahead, Sonio.

SPEAKER_01 36:29

And yeah, I wrote a blog. What was it? Was it Friday last week? Yeah, cars.coms like it feels like ages ago. But I put like a little chart pack together showing job growth, monthly job growth is accelerating. We the economy probably needs to create, I don't know, maybe zero jobs to keep up with population growth. It's creating over 50,000, maybe close to 75,000 jobs a month, give or take. These things can be revised, right? That's good.

SPEAKER_00 36:57

And that's over what year to that's year to date, or what is over the last three months. Over the last three months. Last three months, got it.

SPEAKER_01 37:03

Okay, okay. And then you think about the unemployment rate, 4.3% historically low. The layoff rate, 1.2%, also historically low, lower than where it was in 2018-2019 when he had a strong job mark. Yeah, and then you have the you know, I've mentioned this before, prime age, 25 to 54 uh year old employment population ratio, 80.7 percent. That's higher than at any point in the 2000s expansion, higher than at any point in the 2010s expansion. Why do we talk about the labor market? The labor market looks good, by the way. You can talk about the consumer, you know, and even retail sales for that matter, which is running pretty hard. We'll get there. Yeah, we'll do that next. Yeah, but why do we talk about that? Because, you know, where does spending come from? Incomes. So as long as the labor market doesn't crack, doesn't crash, you don't see a lot of layoffs. The unemployment rate doesn't rise to five, six, seven, eight percent, we're in good shape. And that's where we are right now.

SPEAKER_00 37:58

Okay. No, that that um again, that's not what you hear. When you see the economist cover with people spiraling into the abyss about the coming of a jobs apocalypse, that's you know, I don't know. That's uh their jobs to sell magazines, and we know we get it. You know, sometimes if we say something like, if you and I were to do a podcast that says this is 1929, and that was the title, trust me, we'd probably get more downloads. It'd be like a clip actually. I don't know. Yeah, yeah. Then to say, ah, just kidding. Um, but let's talk about the let's let's let's maybe we got 10 minutes or so before I have to probably uh do a few things before an Uber gets me. Um that's a three and a half year Uber ride. Yeah, oh boy, yeah. I hope not, hope not. Um we had some retail sales numbers come out last week. You know, they weren't super hot, but they were stronger than expected, and the consumers still look good. When you dove into that what I'm trying to say, Sunu, what'd you find? I think it was pretty hot. Okay, okay.

SPEAKER_01 38:53

Look, April retail sales are up 0.5% in April. That came on the back of a 1.6% increase in March. This is month over month, it's not annualized or anything. So you annualize, take the last three months because these things can be revised, right? February, March, April, retail sales are up 13% annualized. And we could put this table up uh with retail sales corner. Now, a big part this is nominal. It's not adjusted for inflation. A big part of this is gas station sales, right? Over the last three months, gas station sales are running at 99% annualized.

SPEAKER_00 39:25

Yeah, can I jump in, Sonna, just a second? Yeah, so I I um obviously gas is more expensive than it's been a long time. I I I guess I used my debit card and I was filling my tank up and it was going real slow. It stopped at 99.99. I don't know if a debit card only goes to 100, but I didn't even get to fill my whole tank up because I have like a 22-gallon tank and you do the math. So yeah, it stopped at 99.99. I don't know if debit cards do that, or but thereby paying more at the pump, so I couldn't quite fill my car up. But anyway, go ahead.

SPEAKER_01 39:49

I'll say I haven't gone to a gas station now in two months. Two months? Yeah.

SPEAKER_00 39:53

Oh my goodness.

SPEAKER_01 39:54

That that's when I got the new car.

SPEAKER_00 39:57

There, there's why you got me. There's why you got me. I gotcha. I gotcha.

SPEAKER_01 40:00

Like no oil changes, nothing. By the way, the price of lube oil for you know, like certain grades of lube oil have also been going up. And that is a reminder that the Strait of Hormones is still closed. And that's, I think, not just Japanese bond yields. I think the fact that the Strait of Hormones is closed, oil prices, WTI is up around $100, $506 a barrel. Okay, Brent is up $110, somewhere close to that dollars a barrel. It's a reminder that we still have this oil crisis with us and inflation, all of that. But meanwhile, the consumer spending, you take out, I just mentioned gas station sales are 99% annualized. You take that out, take gas station sales out, you take auto sales out, take tobacco out. You have something called a control group. This goes into personal consumption expenditures for GDP. That's up 9% annualized over the last three months. Yes, inflation is strong, inflation's hot, but it's that's not all inflation. And we live in a nominal world. You and I are spending, right? We're spending nominal dollars. Online sales, up 16% annualized last three months. Apparel, positive 7% last three months, electronics, 17% annualized over the last three months. By the way, restaurant spending is also picking up. Last three months, it's running about 7%. Now, like I said, big chunk of that is inflation. About half of it is inflation. But once you adjust for that, close to three, three and a half percent real spending in restaurants tells you the consumer is doing fine, Ryan.

SPEAKER_00 41:25

Yeah, no, well said. And again, maybe the consumer does even better the second half of this year. If that labor market that you and I just been talking a lot about the last couple weeks uh continues to improve. And I mean, everybody talks about the same stuff into the day. Listen, look at all the AI spending, look at higher this, higher that, all record profits, record profit margins, record earnings, all this stuff. I haven't heard a ton of people saying the labor market is going to get better and it's maybe going to be a driver for the economy second half of this year. We are, we're saying it, but you know, we'll we'll see if that starts to catch on a little bit. Um, you know, you mentioned the consumer. We can put the chart up, Connor, that I sent what's it even called? It's a balance sheets? Yeah, the balance sheet one, total balance sheets. So the New York Fed every quarter comes out with like the shape of the consumer, in essence. What's it called? So no, I always forget what this is.

SPEAKER_01 42:09

The Household Credits and Debt Report.

SPEAKER_00 42:11

That's it. Thank you. This is why it's a two-man show. Well, I'll forget that in three months. I'll ask in three months, I'll ask you in six months, I ask in nine months. But I do love to look at these charts, and we're sharing on the YouTube channel. Um, you know, the reality is like close to, I mean, I've got the number in front of me. 95.2% of all the debt out there is paid on time. Now, listen, you think, okay, well, that's it was like 97, 98%, or maybe more like 97%. This time three years ago. Yes, that is true. After COVID, uh, some very interesting things took place. But the reality, Soda, that's 95.2% of all debt paid on time right now, according to New York Fed, is right in line with pre-COVID. Okay, that's right where we were. So it's almost like we're just normalizing uh where we were. When you look at things like moving into delinquencies, all right, auto loans virtually flat last quarter, mortgages lower, credit cards in moving into delinquencies actually went lower. You look at the number of bankruptcies, foreclosures in households, virtually flat the last couple of quarters. I'm not saying flat's good, I'm just saying it's not going higher. Uh like they keep telling us how bad everything is out there with the consumer. Uh, consumer credit scores also continue to tick higher. Now, people tell me it's because of this and that. I don't know. I'm not getting into all that stuff. I'm just saying when we look at this on the aggregate, yes, the lower 20% are struggling, lower 40% might be sure are struggling. Uh, it's always been that way. And again, we're not minimizing it, but the reality is you look at like the middle class, talk about the shrinking middle class, and I looked up some numbers this over the weekend. Yeah, it's a shrinking middle class because a lot more people going to upper middle class because people have invested, they have made money in housing, they have made money in their 401k and all this stuff. So um, this is why the stock markets at all-time highs and globally at all-time highs, in my opinion. You want to talk any more about some of that stuff from the New York Fed or the consumer?

SPEAKER_01 43:49

Yeah, and two things with the consumer, like I said, nominal consumption, uh just take some numbers. January, March, so last quarter, Jan, February, and March, nominal consumption was up eight percent. Now, a big part is it like uh I I think a surge in vehicle spending after because vehicle spending dropped in October, November to say Q4 of last year because the auto strike, things like that. Okay. That came back, that bounced back. But still, eight percent is a big number. Eight percent is faster, eight percent. Annualized. Now, real growth, if we adjust for inflation, it is 2%. But like I said, we live in a nominal world. But it tells you consumers are spending, they're able to spend. Now, two things. Obviously, income growth is relatively strong. Could wage growth be stronger? Yes. But I don't think wage growth is as weak as a lot of people think it is. The other side, we've got, and this gets to deficits, right? We've got the tax refunds coming in. I think that's helping fund consumption. And we have consumers are saving less. Every month the savings rate has been going down. Now, normally you think, wait a minute, that should be a problem. Because you tell anybody the savings rate is going down. I think the first intuition is, oh my God, that's not a good thing. Sure. And this is where you are asking about macro concepts. I'm like, from a macro perspective, you don't want people to save more. When do when does the saving rate, savings rate go up during a recession? That's when people are worried. Because if the savings rate is you and I like you tell like financial advisors and tell people, oh, you should save more, that's a good thing. But if everyone saves more, that's not good because that means there's less spending in the economy. Whereas if savings rates are falling, that actually is good for profits. It's because good for pro incomes and spending and things like that. But like I said, one person's spending is another person's income. Savings rates are going down, but that I think that's partly you mentioned it. Home prices are up, stock prices are up. There's a wealth effect. Now I get the K-shaped and all of that. I don't quite buy the whole K-shaped thing as much as you know the zeitgeist sort of talks about it. I'm not saying there's always inequality, as you mentioned. That's been the case, right? And but we're not here to solve that. That's a very difficult problem. But I don't think it's gotten worse. I don't think it's gotten a lot worse. I yes, inflation hurts the lower income groups and things like that, which is why you, you know, I think the Fed needs to solve that inflation problem somehow. And maybe even the supply chain crisis that's probably coming because of you know semiconductor ships, all sorts of things, right? But yeah, I think the consumer is doing fine, and the savings rate going down is not a bad thing.

SPEAKER_00 46:29

Well, it's interesting because yeah, you can talk to uh usually I say nine out of ten. You probably could talk to 99 out of 100. And if you tell them the saving rate's going down, is that good or bad? Most people would say bad because you're tapping into your savings. Now, the other side of that is what you just said. Uh go ahead. No, that's a paradox of thrift.

SPEAKER_01 46:49

And an aggregate. If everyone's doing it, uh-oh, we have some trouble.

SPEAKER_00 46:53

And you think about it also, you know, how's your 401k doing? You know, if you've invested for a while, click a few couple buttons on your phone, you're gonna realize that you're worth a lot more than you've ever been worth, you know, especially a year ago, two years ago, five years ago, ten years ago. Uh, and and it's like, okay, do I really need to have, you know, whatever XYZ amount in savings is when I've got this big nest egg over here, or the value of your house? And we get it. The argument is what if you don't own a house and you haven't owned equities for the last five years, the last decade, the last two decades? I mean, that's that's what I don't have the answer. We don't have the answer to that. I mean, that that's where things get much harder. But again, the stewards of assets, our job is to look at the aggregate, and on the aggregate, households, consumers, corporate America, SP 500 companies are truly in really good shape. Yes, our country has 37 or 38 trillion of debt. Who's counting anymore? Yeah, exactly. Nobody's crazy about it. We're not crazy about it. You go to New York City, whatever, oh, 44th Street, maybe you got the big debt clock right there, and it goes up all the time. And you know, but again, there's a lot of other positives out there. So um, we probably have five minutes or so. What else you want to wrap it up with, or what are you looking for this week?

SPEAKER_01 48:00

Yeah, and all that. I'll just connect that uh Sega from that. But this is not to say there's no cost, right? The cost of all that debt, I mean, that's why bond yields are as are as high as they are. Because we're issuing so much of treasuries. It's not like people say, Oh, this will hurt future generations and things like that. No, I think there's already pain. Look at the housing market. Painful. Well, it's great for people who own a home. I I'm you know, I'm one of them. But if you're you know, young, if you're in your 30s, if you're looking for a home, home prices have gone up, mortgage rates are 7%. Yeah, you're kind of stuck. That sucks.

SPEAKER_00 48:32

Listen, if you retired, let's say in 90 or no, 2019, and then 2020 came and a hundred-year pandemic, you said, listen, put me in a hundred percent bonds. I don't have to worry about this anymore, or even a hundred percent cash for that matter. Um, you know, how's the stock market done? It's doubled, right? And again, you've you've missed out. That's the that's the the pain and gain part of this um this whole thing. So this week we have NVIDIA earnings, we have FOMC minutes. There's some housing data. Honestly, Sony, there's not a lot going on. Anything else you're really watching?

SPEAKER_01 49:04

No, I think the bond market is just I don't know. Yeah, I hate to say fun to watch. We'll see how much you know. Watch is that you can't. The bond market is never fun. The bond market is never fun. It's usually like watching paint dry, but you know, there's a lot of activity there, and I it'll be interesting to see the commentary from the Fed as Walsh comes in, because Walsh has been in the camp that we need to put less communication out, but we have a whole host of Fed speaking because he's like, we need to shift the way the Fed you know does communication and all that. Basically, he wants to say we want to tell people less. I'm not sure that's a good thing. I like the dot plot, and it keeps me in a job, obviously, right? If the Fed's putting more information out there, but before, during the time before he takes his first seat as chair in the next meeting, so the June meeting, I'm sure he'll get a whole host of Fed speakers coming out and talking about inflation. So I'm a lot to the you know, follow there.

SPEAKER_00 50:00

Who was the Fed governor that was this real strong, did all the weightlifting a few weeks? Is it Waller? Waller Waller. Waller. Okay. So I mean, we literally have Fed governors that are like posting TikToks of them lifting in a gym. Okay. So I was just saying it's not your father's Fed when you when you look at that. So it'd be interesting if he can. I think Genie's out of the bag in terms of everybody loves to give their opinion, especially Fed members. Oh my goodness, you put them in front of a camera. They all love to talk. So good luck, uh Waller trying to, or um, I'm sorry, uh Wars trying to um rein that back in.

SPEAKER_01 50:31

We just need one of them on our podcast.

SPEAKER_00 50:34

Yeah, we've tried. Oh, we tried. We tried such a good idea for Halloween a while back, but we were told no, still hurt on that one. But we'll leave it there. Maybe you should try again. I know that. Yeah, you know, try, try, try again. Exactly. We'll give it a shot. Um, yeah, I don't think there's too much more to say. You know, I think um, you know, this has been a wild ride, it's been a crazy year, but then you look up and stocks are doing well, you know, and then the economy is doing well. In fact, some places the economy is starting to heat up even more. You know, inflation's higher, but hey, it's an inflationary growth regime like we've been talking about for a while. So there's a lot of positives out there, still think more positive than negatives, but let's just remember we we listed all those crazy stats a week ago, just some of the moves in these tech names. I mean, it's a stretch rubber ban. If tech pulls back a little bit, I mean, honestly, goodness, if semiconductors pull back 15% the next three weeks, that'd be fine. Like, like the move they've had, that that now what's that do to the market? Well, it probably hurts the market a little bit, but listen, maybe financials and beaten-up areas kind of take that, take back the baton as money rotates around. But the good news is on facts versus feelings, we'll be here every single week to keep talking about it. This was again episode 188. Welcome to the party, Mr. Walsh. Um, we appreciate everybody. We've had some good downloads and listens. Give us uh you know, follows, likes, share it. Uh, no, you can't leave the witness, so no positive or negative. You can just give whatever type of reviews you want to give. And we love those YouTube comments, so please feel free and make comments on YouTube uh as well. So I don't know, you bring us home. Anything else? We we good.

SPEAKER_01 51:59

No, uh look, don't be surprised if we get a little bit of a pullback. We've come a lot. I mean, you know, gold is another example of that. Last year up 70%. This year we were up 15, 20 in between. Gold is still up 5%. It's done but you know, better than cash so far. Well, so these things happen. Volatility is the toll you pay to invest.

SPEAKER_00 52:19

Yeah, I think on January 28th or 29th, gold was up like 26% for the year. Uh on top of, like you said, 65, 66 the year before. So you listen to you know, stuff uh, you know, but then again, you look at some of these grains and different other things, it's like they're still going higher. So money, money finds a place to go, is the bottom line. Um, with that. Everyone, thank you for listening. Thanks to Podpony, as always, our producer. Uh, with all that, I guess. Oh, Memorial Day is coming up, so thank you to all the veterans out there, everyone has helped serve our amazing country um and given the ultimate sacrifice. So Sony and I can just pontificate on a podcast. You know, it's just not lost on us that how much that means uh to all of us out there. So thank you so much. And it and just hope everyone has a nice uh holiday. And uh, oh, by the way, it's graduation season. As someone who has a daughter who literally graduates next Saturday, congratulations. Yeah, she had her last day of school on Friday. This is called senior week, which means they don't do anything. I don't I don't understand it. I walked up, I didn't even realize she was home. Like I was walking around before we did this. Like, what are you doing here? She goes, senior week. I go, what does that mean? She goes, I don't go to school. It's like, oh, okay. I guess you just don't go to school. I don't know. It's okay, I guess you're here today. Whatever. Um, but yeah, so if you have a child graduating, it's it's stressful. I'll tell you, there's a lot going on, man. It's it's nuts. But um, congrats to all the graduates out there as as well. It is graduation season. All right, everybody. We'll see you next week. Enjoy the long holiday, Sonu. You and I, I'm sure we'll talk soon. Take care, everyone. Thank you. Bye-bye. Information provided on facts versus feelings with Sonovar Geese and Ryan Dietrich are for general information only and are not intended to provide specific advice or recommendations for any individual. The statements and opinions of show guests may not be reflective of CWM LLC or its affiliates. Past performance is no guarantee of future results. All indices are unmanaged and may not be invested in directly. Investing involves risk, including possible loss of principal. No strategy assures success or protects against loss. To determine what may be appropriate for you, consult with your attorney, accountant, financial, or tax advisor prior to investing. Guests on facts versus feelings are not affiliated with CWM L L C