Everything's Running Hot! (FvF Ep. 204)

In Episode 204 of the Facts versus Feelings Podcast, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, dig into why "everything's running hot" across the US economy. The hosts unpack the August jobs report, including a much stronger than expected 162,000 jobs created, upward revisions to prior months, a tick higher in labor force participation, and a steady 4.1% unemployment rate now sitting below 4.5% for a record 59 straight months. They also dive into which sectors are hiring, the truth behind tech layoff headlines, and why the Challenger job cuts data may be overstating labor market weakness.

Later in the episode, the team covers scorching-hot ISM manufacturing and services data, surging commodity prices (copper, oil, diesel, gasoline), and what it all means for the Fed's rate decision next week, with markets pricing in real odds of a hike rather than a cut. They also touch on Lululemon's earnings miss, the AI-driven software rally, and pause to reflect on the 25th anniversary of 9/11.

[Key Takeaways]

• August payrolls came in at 162,000, blowing past expectations, with prior months revised higher, a rare reversal after a long stretch of downward revisions.
• The unemployment rate held at 4.1%, marking 59 consecutive months below 4.5%, a record in the data series going back to the 1940s, while labor force participation ticked up for the first time in 11 months.
• Job growth over the past three months has been led by cyclical, higher-paying sectors, healthcare, professional/business services, construction, and manufacturing, accounting for the vast majority of gains.
• ISM manufacturing and services indices both showed activity and prices running hot, with services prices hitting their highest level since August 2022, reinforcing the "running hot" theme in growth and inflation.
• With nominal GDP growth strong and inflation elevated near 3%, markets are pricing in real odds of a Fed rate hike rather than a cut at the upcoming meeting, a sharp shift from where sentiment stood just weeks ago.

Jump to:

0:00 - Welcome And Running Hot Theme

1:45 - Why Jobs Data Looks Underrated

8:00 - Payroll Revisions And Trend Changes

14:45 - Participation Rate And Unemployment Reality

20:30 - Sector Jobs Tech Weakness And AI

26:30 - Layoffs Data Myths Versus Scale

32:45 - Fed Odds And Running It Hot

41:00 - ISM Signals Prices And Commodities

48:45 - Stocks Versus Yields And Market Positioning

55:20 - 9/11 Memories And Lasting Impact

59:10 - Wrap Up Livestream And Disclosures

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_04 0:02

Welcome to the Facts versus Feelings Podcast. I'm your host, Ryan Dieter, and I'm joined by my co-host, Tony Varke. Cutting through the noise, Ryan Dieter, Chief MicroStratic, and Sonovarky, Chief Macro Strat. Taking out the board and helping investors focus on what really matters. Well, it's hot out there, Sonu. It was literally 100 degrees in Cincinnati and then episode 204 of Carson's Facts versus Feelings. Everything's what do we call it? Everything's running hot or everything's hot. What do we call it, Sonu? Maybe running hot. Nothing running hot. Everything's running hot. We'll go with that. Um, you hate the heat. That's a little known fact about you. Someone might look at you and say, ah, you probably don't have a problem with the heat, you know, but you hate the heat, right?

SPEAKER_00 0:55

I can't stand it. Like the yeah, I I break out in the sweat like if it's like 80 degrees. The nice thing about Chicago is now a nice 76. And this is my good zone. But yeah, like there's a reason I'm in Chicago and I don't mind. Everyone complains about the weather. I mean, same thing, Cincinnati's not that much warmer than Chicago, right? Everyone complains about the weather, and I'm like, you know what? First of all, I don't like the heat, I don't like humidity, and I have allergies, and everything's dead in the winter, so winter is kind of like my best season. Not wishing for winter, to be clear, but I like where I am.

SPEAKER_04 1:32

Well, there you go. I mean, so you don't like the heat, you don't like salad, you're allergic to wine. Those are some little known facts about Sono.

SPEAKER_00 1:40

After hanging out at you for four years, my friend.

SPEAKER_04 1:42

I know, but if you've listened to 2004 of these, you're probably aware of some of those. But Sono, let's talk about that. Run it hot, run it hot. You did a blog uh on Friday talking about this, but it's a concept we've been talking about for a while. We said, you know, I don't know, maybe a month or two ago, we talked about the Fed potentially running it hot. But this week I think we're gonna focus more on the economy, uh, you know, potentially turning up and and and turning a corner and it gets a little hotter here. We'll weave in the Fed because, you know, we have to. Um, what's the one part about the economy right now, the US economy, that really is you're running hot? It's really stronger than you expected start of the year. I think what's underrated is the labor market.

SPEAKER_00 2:18

Okay. Right? And at Tyster, we talk about inflation, we talk about gas prices, you talk about copper prices. We can talk about that, right? Commodity prices are surging, oil's going up as well, Brent is near $100. We'll come to all that. But you just look at core services, right? Inflation, that's been running hard. It's about three and a half percent thereabouts. And you think, okay, you know, I mean, that doesn't happen without a labor market that's pretty that's in pretty good shape.

unknown 2:45

Yeah.

SPEAKER_00 2:48

Right? Set aside the data, we'll talk about the data. So when you and I came into this year, if you all remember those of you who are listening, or for those of you who just joined us for the first time over the last month, last two months, well, we started the year. Ryan was talking about that on TV, we were talking about that on our Outlook, that we think the labor market is stronger than it is, right? And and then, you know, that kind of played out over the first four or five months, and then we got a couple of curveballs, Ryan, in June and July, right? All right, so say July and August payrolls because June and July payrolls, we got the data in August, like negative you know, jobs created, you know, the economy lost jobs in July. And fast forward to where we are now. Last week we got August payrolls. Guess what? That was revised higher. I think we made a joke about that last time. Like, yeah, that was revised higher. Now, turns out the economy created jobs in July. I think the labor market is stronger than you know, most people think it is.

SPEAKER_04 3:47

No, you do, and that was a pretty quiet call. I mean, I've been out there talking about it as well. Um, we'll get into the weeds of it, but it feels like you know, facts versus feelings. My feelings are it feels like most months get revised lower on the employment backdrop. It feels like you know, that's just something that people share these charts on social media and different things. But again, we saw the previous two months revised higher, 55,000, and the headline number can be better than expected, um, you know, for for last month as well. You you dive into this more than anybody. I mean, that's pretty darn rare in the last couple of years, isn't it? To see the previous month revised higher. Yes, exactly.

SPEAKER_00 4:24

I I uh and actually we got benchmark revisions as well, without really getting into the complete needs of it. So benchmark revisions, you remember, I think it was last year this time, you know, the prior year, the benchmark revisions go from April to March of the prior year, and that was revised down by 700,000, 800,000 or something like that, right? There's a preliminary revision in August, and there's the final revision in February, right? So we won't, so we just got the preliminary revisions for what is this, April 2025 to March 2026. Employment was revised down by 79,000. All right. And you'll get to August data, you know, but just to set the context of where we are, right? And and you know, momentum, right? So usually, yeah, for the last four or five years, these have been revised down. So prior to the revision, the economy was assumed to have created 273 jobs over the 12 months through March of 2026. That's not great. It's a 23,000 per month, and then after the revisions, the rever revised down by 79,000. And now with 12 months, it came to 194,000, 16,000 per month, right? So things are pretty bad last year. And this is the context into which you what we came into the start of the year, where you and I talked about the stuff. You think the labor market is doing better than you know the numbers suggest? And fast forward to August, 162,000 jobs created in August. Okay, the highest monthly gain since March, well up the monthly average gain of you know 31,000 over the last 12 months. And look, one month payrolls, yes, it gets revised, it's noisy. Take a three-month, right? The three-month average last month, I think it was a little worrisome. It was about 20,000. Now we are back to 71,000. Right? But I think it's uh we can put this chart up, monthly payroll growth, uh, Connor. And I think it's a direction of trap. You look at it, okay, three-month average, three-month average. Let's look at the last four quarters. Q4 2025, monthly average, Ryan, was negative 39,000 per month. On 2026, that rose to positive 73,000. Q2, 2026, so this is what, May, June, July, uh yeah, or April, May, June, positive 81,000. Q3, we're not done yet, but we've got two months, July and August, we are at positive 92,000. So the direction of travel is in a good place. You look at year-over-year growth of payrolls, that started to inflect higher. We can put this chart up, payroll growth over you know, the past year. That in December, it was 0.1% year over year pace, which is pretty much flat. Now it's risen to about 0.4%. Now that's still lower than where we were 2018-2019, it was about one and a half percent. But that line is no longer going down, it's inflecting higher. And I would argue it's inflecting higher in a pretty decisive way. So that's you know, we can talk about the unemployment rate. I'll bring up some stats, but you know, that that's where I saw you this morning on my uh uh Morgan Brennan's show, and you were talking about this as well.

SPEAKER_04 7:33

Yeah, we were. That was early. Boy, that was early, you know. And I had a here's the thing about early in the morning. Your brain's not always turned on. And I was talking to you last week about this. Like before I go on, I start talking to myself, just like, hey, Morgan, you know, I just like do that. Literally, when I started talking, I can find the words Morgan and morning. I said, Hey, uh, I don't know if you noticed that. It was kind of mumbled through. Then I rewatched it, it wasn't nearly as bad as I thought it was in my head, but that's that's the joys of live TV that early in the morning. But the hit was good, and it was a good, great conversation, as always. And it's an honor to join once a week on the uh morning call show there uh with Morgan Brennan. But we talked about those concepts, and you know, one thing I I had in my head, I didn't bring it up because I guess we didn't have enough time, but you know, the participation rate, just now I know you like to look at the prime age, but just the broad participation rate. I saw Sony, it ticked higher. Okay, big deal. And you might have the exact numbers like low 60 percentile, but here's what I really think matters to everybody out there. First time in 11 months, that's actually ticked higher. You know, so that's one potential positive that we uh see out there. Unemployment rate did hold at 4.1%, like we thought we talked last week when I was talking about the participation rate lowering. You look into it, it's like people over 55 years old. I mean, we don't have the exact crystal ball on this, but are a lot of people retiring because of all the net wealth we've talked about, you know, week after week, month after month out here, you know, maybe, maybe, and maybe that's why participation rate was lower. But you want to talk about that participation rate, that little tick higher, what that means to you?

SPEAKER_00 8:52

Yeah, so it went up to 61.6%. And to your point, demographics, right? You know, we are in an aging society, and plus you add to the fact that people feel wealthier, they are wealthier. So they're like, you know what? The market's gained 160% plus over the last six years, maybe I can try it two, three years before than you know, that then I expected. I just don't want to do this grind anymore. And so just by that, you would expect the participation lower to just grind lower and lower and lower over time. And that's been happening, but for it, you know, it's been pretty stable over the last few months. It's been, and it like I said, it ticked higher from 61.4% in July to 61.6% in August. That's a positive that tells you more people are coming into the labor force. Why would that happen? Well, if they think you can find jobs, yeah, right? That's why you come in but come back into the labor force, right? You're counted as being in the labor force, by the way, only if you are actively looking for the job. And the BLS has pretty strict criteria for this. If you just say, you know what, yeah, I'd like a job, but I, you know, I haven't looked, like, okay, you're not counting as being a labor force, right? But if you have been actively looking for a job, maybe in flying filing unemployment benefit claims, things like that, yes, you are counted as that. And so it's a very big positive that it it ticked higher. I uh and you know, here's another one, right? The unemployment rate fell to it it stayed steady at 4.1%. Goodness, that that is so we've now been below four and a half percent for 59 months, Ryan. 59 months, that's just one month shy of five years. That is a record, by the way. The data starts going goes back to you know the 1940s. We can put this chart about the I think yeah, the unemployment rate, long-term history. We are pretty low here. Just forget everything else, forget revisions, forget the payroll data, forget wage growth. Just by that, you think, you know what? 4.1% unemployment rate is pretty good, right? That's much lower than where the Fed predicted where we would be, and it's much lower than where the Fed thinks we would be from the dot plot at the end of the year. Just one last thing, you there's something called U6 unemployment rate. People last year, the bears are like, oh, look at the U6. The U6 basically is the unemployment, the regular unemployment rate, plus it has something called people marginally attached to the labor force and people who you know want to be employed full-time, but they, you know, they're not able to find a job, right? They're working part-time for economic reasons. So all of this is in the U6. The U6 unemployment rate peaked at 8.7% in November of 2025. It's been pulling back lower almost every single month since then. It's now at 7.7%. That is pretty good, right? That downtrend as well. We put a chart about uh off this up, Connor, the U6 unemployment rates. All in all, that labor report is really good, you know, across the board.

SPEAKER_04 11:57

So you mentioned about the Fed and predictions. And listen, the Fed doesn't have the best track record, honestly, with some of the predictions. It is what it is. I mean, nobody does. It's a tough, tough job to uh predict things. But at the same time, 162,000 jobs came in last month, expected ballpark mid 50%. Sonu, out of 74 economists in Bloomberg to give like what they think the jobs number might do, not a single one of them out of the 74 Bloomberg economists. Um, not they're not purely Bloomberg economists, they're economists of Bloomberg survey, that's probably a better way to put that correctly. Anyway, not a single one of them expected that many jobs to be created in August. So, right there tells you just kind of how um how uh strong that number was. A couple other things, and you know, this is straight from your data. You share incredible uh daily note called Sony's Daily Note with our um Carson partners. Leisure hospitality gained 62,000 jobs, 22,000 from construction, 16,000 for manufacturing. I mean, those are cyclical parts of the economy. Yes, it's probably AI, but that's all right. Education, sure, 29,000. We've talked a lot of these jobs have been education, a lot of these jobs from healthcare, but you pointed out there were some other areas. Now, listen, the one that everybody points out technology, or I guess it's called IT. IT down 23,000 jobs. The big question is is that just AI taking people's jobs? Or is it those are the companies that grew so fast in 2002, 2023, or 2022, 23, and 24, they're still just trimming the fat. I mean, maybe the answer is both. What's your take on that, Sonny?

SPEAKER_00 13:24

I want to do both the tech thing and AI. Tech firms, you know, it's basically information technology. It's published under media publishing, all of that. So yeah, that area is the one area that's been weak. If you look at information technology, over the last three months, it's lost 37,000 jobs. A lot of that is your regular tech jobs, right? Communications, telecom, things like that. And I think I think it's what you said. I think it's trimming the fat after they went on a hiring spree in 2021, 2022.

unknown 13:54

Yeah.

SPEAKER_00 13:54

Right. So they haven't, you know, I don't think it's AI replacing the jobs. If you look at, I don't have a chart with me. Our friend Guy Berger shared this. Software job openings have been rising. Right, exactly. Software, you know, developers, hiring has been increasing. So you think that's the first thing AI would take over. It's not. And then more broadly speaking, if you look at, you know, okay, who would AI impact, right? Entry-level workers, maybe workers who are just coming out of, you know, college kids, basically. You graduated, you're looking for a job. Is it hard to find a job? Well, the unemployment rate for 20 to 24 year olds just hit, you know, I'll pull up the Connor. We can put this chart up as well. It just hit 7.1%.

unknown 14:40

Right.

SPEAKER_00 14:41

A year ago, it was at 9.2%.

SPEAKER_01 14:44

Right.

SPEAKER_00 14:45

Uh like, you know, if AI was taking the jobs, if college kids, I and this is not, I'm sure there are anecdotes. I I know somebody listening is going like, oh, I have a cousin or I have a grandkid or I have a nephew who's having a hard time finding a job. This is not to deny all of that, but generally in aggregate, it's looking really good.

SPEAKER_04 15:22

Well, no, no. I mean, I think it was around November, like you know, Thanksgiving time, that that the unemployment rate was a peak for that age group. Like you said, it's really improved uh substantially. I've talked before my daughter Susanna is a freshman at Penn State University. I think she's starting her third week, probably, give or take. So so I'll have more uh real real anecdotes on this over the coming years. I'll let you know from the ground level. Um, I started paying them though. Every month I owe them a certain amount of money, that's a lot of money. So I started paying them. So I guess it's real now. Um, you know, let's see here.

SPEAKER_00 15:51

Actually, one more thing, since you mentioned the sectors, right? Let's just, you know, millions. So we talk about the tech thing. Okay, you know, I think I like you, like I said, I'm the same camp as you. I think it's just trimming the fat more than oh, AI is replacing jobs. I just don't see that in the rest of the data. But you look at, I think one thing that is really positive and kind of went under the radar for a lot of people with the August data. Okay, like I said, one month can be noisy, it can be revised. So let's take the last three months. Well, the last three months, the economy's created 214,000 jobs, June through August. The private sector has had added 224,000 jobs, right? The government subtracted about 10,000 jobs. Now, healthcare and social assistance that led the way, it's about 80,000 jobs. That made up 37% of the total game. But then you look at what's right behind that. All the following, all the areas that are looking good behind healthcare are all cyclical. Professional business services, positive 61,000, construction, positive 43,000, manufacturing, positive 43,000, retail and wholesale trade, 42,000 combined. Together, these areas accounted for 88% of total job growth since June. These are all cyclical areas of the economy. I didn't even mention leisure and hospitality, by the way. You did. It sort of came back in August. These are all, you know, areas of the cyclical economy that also pay higher, right? Leisure and hospitality is an area, you know, it's cyclical, but it doesn't pay as much. Manufacturing pays a lot, construction's pretty good, professional business service is also pretty good. Yeah, like we're creating a lot of jobs here. This is why I think going back to the fact that I think the labor market is harder than most people think it is.

SPEAKER_04 17:31

So um, anecdotal, yes, but we've been uh talking with some friends, maybe doing like a spring break trip. You know, um, I guess it'd be the first week of April. So yeah, it's spring break, so it's a busy week. Sunu, there's a couple different resorts we looked at down in the Caribbean. Like literally, they're sold out already. Like that is six months. Like March of 2027. Like April, it's like April of next year, and it's we're not even October yet. I mean, uh-uh. So uh yeah, you know, just just think of that. I mean, like how long they've been booked, and he looked at other resorts. There's some rooms, but like the one we wanted, like you know, like a beaches, like they're totally sold out, totally sold out already. So, what's that tell you? I mean, you know, I don't know, and then it's interesting though, because you were all over this, but actually, and you did a lot of by the way. I we all just want to thank you, Sono. From the ground level, you went to what nine different World Cup games, 10 different World Cup games, 17 different cities, um, something like that. Uh, close enough for government work, don't yell at me compliance, but I'm pretty close on some of this. Um, but you you were at these games, you were seeing it. I mean, we know the data showed there was a lot of hiring and leisure hospitality, made sense. Then we saw some fall off, but I mean, I will admit, like that shocked me. Was it 62,000, 63,000 jobs in that area? Yeah, like, yeah, we're kind of getting some back because we probably got laid some people off after the World Cup, but that's a huge jump. And summer's over. Like, I'm thinking, okay, you need that in the summer. I I can't wrap my head around that one. Do you have a theory why there was such a big jump there?

SPEAKER_00 18:55

No, I I think it was just coming back after June and July. I think seasonal adjustments played havoc with it. I think it was a lot of hiring before the World Cup, and then the World Cup happened. You didn't need as many workers, June and July. Right, you know, they let go more people than you know, seasonal adjusted data would suggest. That's why it was kind of negative. But then it all came back in August. It all came back in August. So that was really positive. Positive 59,000. And remember, over the last 12 months prior to that, the average is about 12,000 per month. So 59,000 is about five times that, you know, that's leisure hospitality. And this is basically food services and drinking places, right? That was 59,000. Yeah, I I mean that part of the economy is also doing fine. And it goes back to what I was saying. Core services inflation is running hot. It's been running hot for some time. And I think there's a lot of quirky stuff happening in the payroll data that, you know, sometimes it throws a curveball. You look at wage growth, we can talk about that if you want. Doesn't look all that great, but I think that's skewed by healthcare wages, right? Yes, healthcare has created a lot of jobs, but because of the tax bill that was passed, there were a lot of cuts to Medicaid. So a lot of hospital workers got laid off, right? But there was a lot of hiring in regular home health service aides, things like that. Now they get paid lower generally than hospital workers. And because of that, the composition changes. So when you average it out, it looks like healthcare wages aren't growing a lot, right? And that's pulling down overall wage growth numbers. You take out healthcare, wage growth is running pretty strong.

SPEAKER_04 20:39

Interesting. Well, okay, now one other thing that fascinates me. I know you you love talking about this one, so just watch Sony's face. But the the challenger is that. Yeah, I love this one. I love this one because it fires you up. But they look at like how many layoffs are out there, like what in like newspapers, I guess. I mean, that's what they're looking for, right? Layoffs and hires. And listen, this has been flawed, but it was a huge thing the Bears loved to point out over the last couple of years. Look at all the layoffs. This is all the all the IT layoffs are coming there. Here's something you don't hear as much now. So this is where it's fascinating. In last last month, so August, there were um 53,000 jobs cuts. That's actually down 38% year over year. That's the lowest in uh that's the lowest uh in any August in four years. And uh the flip side of that hires are up to 12,000. Now that's not that much of a big number. It's off a low base, but that's up 725% year over year. The most hires in the month of August, again, going back four years. So, again, this is just one of those things that the Bears love to point out when it was quote unquote bad. And now I'm not saying it's great, but I'm just saying it's looking better, and I'm not hearing anybody talk about it. Um, why do you hate the Challenger and Grace so much? Well, what what let's let's peel the let's go lay down. I'll be like your shrink. Why, Sony?

SPEAKER_00 21:55

Why do you hate this one so much? A lot of it is announced layoffs if they never come to pass. Announced hiring, like Amazon may announce over the next year we're planning to lay off right 70,000 people. Microsoft may again, by the way, I'm mentioning names now. Oh my god, this is not a recommendation to buy or sell any other stuff. We've gotten to trouble for that now. Yes, we did. But these are announcement. It may happen, it may not happen. It never tells you how much they're hiring, by the way. You I'm sure if you go open up LinkedIn, you'll find a whole bunch of jobs you know advertised at Amazon, a whole bunch of jobs advertised at Microsoft. And then you hear the headlines like, Oh, they're laying off so many people, but they're also hiring. What's the net? Now the parallel growth measures net, right? Now the Jolts data, which is a job opening and layo uh labor turnover survey. Now here's I I think I was at a dinner uh over the weekend with a bunch of friends, and we were talking about, you know, like AI and layoffs and things like that. And I think my wife just tuned out and she just went away. We walked away, and the conversation moved to this area. And I don't usually talk about this stuff because who wants to hear it as at a dinner party, right? I'm like true, you know, but then I don't think most people grasp the scale of the US economy. Yes, 31 trillion. What the what does that mean? But here are some numbers for you, right? The number of people that were hired, total hires in July. This actually happened, it's not announcements or anything like that. The total number of people hired in July was 5.1 million. Now that's on the lower side, it's a hiring rate of about 3.2%. It's not great, but that's because we don't have a lot of labor supply. Right? Fine, just think hiring 5.1 million people who are hired. Now, you know, a lot of people are laid off. How many people are laid off? Well, 1.67 million people were laid off in July. Just think about that. When you know, you mentioned Challenger Gray, you think about you know, 50,000, 100,000 just in one month, July. Right, right. There were 1.67 million layoffs. Then you think, okay, what you know, like that sounds like a god-awful large number. Well, back in 2018-2019, when we had a smaller labor force, that number was 1.8 million per month. And you normalize by the size of the labor force, their layoff rate back in 2018-2019 was 1.2, 1.3%. Now it's 1.0%, it's 1%. Wow. Right? We talk about AI leading to a jobs apocalypse, things like that. Hey, the layoff data is not showing this. But it doesn't mean people aren't getting laid off. Uh people say, oh, you know, I know this person got laid off. I know. Yeah, like I'm no surprise because 1.6 million people are getting laid off. I don't mean to laugh, but but within the context of where we are as you know, in the overall economy, relative to a trend, that's really low, folks. That's really low. So we also um we can put that chart up, by the way, of layoffs. I have a chart on layoffs. Jajol's yeah, we can put that up.

SPEAKER_04 24:57

So initial jobless claims, we've said before it's one of our favorite because it's kind of real time. Came in at 206,000. It feels like every time you turn around, it's ballpark, 200,000 initial jobless claims. I mean, we'd start to see stress there if the labor market was falling apart. Um, I mean, Sona, we've talked about the labor market a lot. I guess I'll kind of spin this to get us. You could go all day just to save everybody out there. Um, at the start of Friday, about a 50-50 chance of a Fed rate hike this coming um next Wednesday, next Wednesday, after Friday's stronger labor data jumped up to about 58%. I think we're flirting with 60% now, give or take. Um, you want to spin, do not spin this, but you want to take this to kind of the Fed, or you want to put a bow in, anything on a labor market before we go forward?

SPEAKER_00 25:43

Yeah, look, I I actually I'll bring up like a friend, our co-conspirator, core portfolio manager, friend, all of that, Barry Gilbert. You know, ping does both last night saying, hey guys, you know, like when we're looking at the weekly commentary, which is, you know, you did a blog, I did a blog, because Barry nicely made it, made sure everything fits, is like, you know, Ryan talked about the fact, I think you mentioned it this morning on Morgan Brennan's show, that we don't think there'll be a rate hike. And I'm kind of in that camp. Now, I'm very unsure of that. I think the confidence is pretty wide, but I don't think you know, if you push me, like sorry, do you think I'll be a rate hike or not in next week? I would say no, I don't think so. Right? But then you look at, you know, at the same time in my blog from last week, if you go to Carsong Group.com slash research, you'll see all our blogs there. I wrote that they're willing to run it hard. Right. And it seems like, wait a minute, you guys don't think there'll be a rate hike, but you think they're running it hard? Yeah, it gets to and this gets to what if you ask a bunch of Fed officials, if you ask President Trump, they'll say that we need rate cuts, maybe certainly don't need rate hikes, right? But this is where you know, like we are portfolio managers, we have to think about what's priced in, what's not priced in. And right now we think they are running it hard. They're willing to uh nominal GDP is growing at six, six and a half percent. Goodness, in fact, the second quarter was eight percent. Fine. Right Q3, you look at the Atlanta Fed GDP now, real GDP growth are like four and a half percent, something like that. You take add in inflation, we're gonna clock in around six, seven percent again. And they are like, yeah, maybe we shouldn't raise rates. And that's what's in the market. You just mentioned it. The market's pricing in a rate cut for next week at 60%. Right coin toss, right? Normally you look at all this data, like, wait a minute, labor market is strong. Wash things is actually consistent with maximum employment, inflation's elevated, nominal GDP is hot. We'll talk about ISM data, but they're like, yeah, maybe you shouldn't, you know, like we don't show yet whether we should raise rates.

SPEAKER_04 27:50

Yeah, I mean, listen, corn is up like 30% since end of June. Uh diesel, all-time highs. We're paying more at the pump this time of year than we've ever paid before. Yields are obviously uh very high relative to where they've been. Uh, you know, the running at hot theme is real. And and again, then you say the feds maybe a coin toss of a hike. I mean, we have a $31 trillion economy. Let's say they do hike on the 16th. We wouldn't be shocked at all if they did. Will they hike again in October, like literally days or almost hours before the midterm? I don't know. I don't think so. But once they start hiking, usually they hike a couple times. Yeah, you look back and we we um we did some of the data on this, or I did some of the data on this, but you know, look like um since 1990s, so there have been like six different cycles where the Fed started hiking interest rates. And you look at what happens after that first hike. Well, you know what? 2000 March 2022, that was not a very good time frame, right? They were way behind the curb. They had the hiked like 50 and then 75 basis points the previous next couple times. The market was down over double digits a year later. For those that's around 22, yeah, it was ugly. But you look at the five other rate cutting cycles before that, which all started again with a hike. I'm sorry, hike with hiking cycles, all started with a 25 basis point hike. Some of them were nice and calm, one hike here, one hike there. You know what? The stock market was higher a year later every single time, up like double digits on average. So we can tell any story we want. You can say, well, last time they hiked, it was terrible, or the five other times before that, you know what? Market had some shoppiness, this and that. But a year later, we did just fine when they started hiking. So I guess the big thing is are they way behind the curve? And we're talking about them, you know, we're talking about things running hot here. Now, I guess the bottom line, let's let's talk, let's hit rewind for a second. Year over year wage growth, I believe was 3.1%. I think that was the lowest in a couple years. I mean, listen, if wages aren't soaring higher, you know, maybe that's cover for them not to hike.

SPEAKER_03 29:33

Is that something, Sonio?

SPEAKER_00 29:34

Yeah, I I think that's the conundrum. All of them are a lot of them are in. Like, look at wage growth. It's only 3.1%. Yeah, lowest since May 21, according to my notes. And before the pandemic, it were about 3.2%. You look at non-managers, it's also running slightly below the 2018-2019 trend. Like, okay, that's okay. Normally it's only okay, there's no inflationary pressure coming from that, despite 4.1% unemployment, which is pretty low. And this is where I think the wage growth data is quirky. I mentioned healthcare also before, because of you know what's happening in healthcare. It's being pulled down a lot by healthcare wages. You look at non-manager healthcare jobs, yeah, a wage growth, that's pretty much flat over the last three months. It's up just one percent over the last year. And it goes back to that composition thing that I mentioned because of the OBBBA, you know, whenever B's that the tax bill had.

SPEAKER_03 30:26

Because Medicaid Can you can you tell us what that stands for?

SPEAKER_00 30:30

I'm joking, I'm sure you can't just look it up. Sorry, we don't know. There's a bunch of B's in one big beautiful, beautiful, beautiful, beautiful act. There you go. There you go.

SPEAKER_04 30:37

Beautiful, beautiful act, something like that. Yeah, yeah.

SPEAKER_00 30:39

So yeah, I like I said, because of Medicaid cuts, things like that, you know, hospital workers got laid off, but then you had a lot of public healthcare aides who get paid later lower. So but you take an average, you have more workers who are getting paid lower and fewer workers that are paid getting paid more. And so that you know, average comes down, right? Simple as that. Yeah. And that's I think what's pulling down overall wage growth. Interesting. But I think wage growth lags. I think the wage growth data lags everything else. I mean, goodness, look at everything else. It's trying hard. I mean, what more evidence do you need, right? Uh, we could talk about the ISM PMIs came out last week.

SPEAKER_04 31:14

Well, let's hold on a second there on ISM. Let me just jump in and we'll we'll get there. Um, you mentioned Morgan, Morgan Brennan, so join her show all the time. And I guess we might as well announce it now, right? On September 18th, an hour before the close. So 2 p.m. Central, 3 p.m. Eastern time. We're going to bring back a very special or a very popular um thing, the social hour, the one hour live stream of this very podcast. We're gonna be joined by Morgan Brennan over at CNBC and Jay Woods, um, a great friend, CBC contributor. Um, I think is it Freedom Capital? I think I think that's where Jay's from. I think it's his title.

SPEAKER_00 31:46

It's always at the NYSC. I just connect. It's always at the NYSC.

SPEAKER_04 31:50

Yeah, Jay Jay's awesome. So we're gonna have Jay and Morgan joining us, and we can probably put that up on the on the screen right now. But that'll be a lot of fun to do a live stream uh with those two. So um one more story, talking about inflation. I was looking at my numbers. Again, we really want to stress this. Not a recommendation, okay? Okay, not a recommendation. But Lululemon was down 19% last week um on earnings and very weak same source sales, weak guidance they missed. Now, here's here's the story part. My daughter, before she left for school, so this let's call it four weeks ago, said, Hey dad, can you run a Lululemon, you know, 20 minutes away, pick up a pick up a shirt for me? I said, Yeah, yeah, sure, whatever. I go in there and I go, Oh, I'm very confused. I'm like, I'm old, I'm old, guy. I'm all confused with where to park and what to do. The whole thing was overwhelming. I'm like, Susanna Dietrich, they give me the thing. It was like $82. And I look at it, suddenly it was a t-shirt. It was a t shirt that was 80, and I literally looked at the girl, I go, is that right? She just looked at me like you stupid. I just say something.

SPEAKER_03 32:48

Can we get $80 t-shirts for Fax Wizard's feelings?

SPEAKER_04 32:51

That's the quality must be like give me $10 t-shirts. I'll I would I I I I was like, you gotta be kidding me. So anyway, you fast forward to what just happened. I mean, I I'm not an analyst on this stock at all, but I'm like, oh my goodness. I mean, we're talking about people are wealthy, but there's a fine line to me that wow, that's a lot of money. Um, for a t-shirt.

SPEAKER_00 33:10

So on that, Ryan, I'm guessing you didn't tell your daughter, like, look, I have a cousin who makes t-shirts. He can get you eight t-shirts for the same price.

SPEAKER_04 33:19

No, no, it does it doesn't have whatever symbol or you know, whatever it's supposed to have on it. But anyway, that's just that's you know, that and again, that's we're aware. Like, we we do this for financial advisors, and a lot of clients out there you know own stocks like that. And they you hear that, or Walmart had some disappointing news and their stock was down, you know. But then just a flip side we can point out a lot of these restaurants have been soaring. And it, you know, you can kind of tell again what I said maybe 10 minutes ago. You can tell any story you want. I mean, you really can't. Like, we do this stuff, we look at this data, we can give you a bullish story, we can give you a bearish story. We look at all of it, and then you look at the aggregate, and the aggregate is the consumer is still solid, the labor market is still really solid. I mean, do you want to pay 82 bucks for a t-shirt? Hey, you know what? I'm the biggest capitalist guy you're ever gonna meet. Free markets, man. I'm I'm libertarian, free markets. You can do what you want to do with your money. To me, that felt a little extreme. Now, then again, you and I spend 25 bucks on chocolate cake, so we should not, you know, a slide calling we shouldn't judge anybody if you want to buy your stuff like that. But that one just stood out to me as a little bit extreme, and then you look what happened to the stock. So, all right, so now I just want to take a little break there. Um, you want to talk about ISO battle?

SPEAKER_00 34:18

Like, my daughter is, you know, she's nine, she's getting to the stage, she's into these dumplings and squishies and things like that. Oh, yeah. I want to get into that. She's like, I'm like, you keep buying stuff, like dad, you keep wanting to go to restaurants. What's the difference? Oh, yeah, you know, I'm gotcha. It's like we eat food and then we forget about it. I'm like, no, we talk about like what an amazing, you know, dining experience that was. And you know, but she's like, no, I think a dumpling would be better.

SPEAKER_04 34:46

Yeah, okay. I did okay. So Jay is Freedom Capital Market. So Jay is the chief market strategist over at Freedom Capital Markets. Um, again, he and Morgan are joining, gonna join us in a couple weeks. I will promote that more, but definitely follow us on our social channels. That'll be a lot of fun. Um, our discussion there. All right, so um, so other parts that are running hot. I guess manufacturing was okay last week, but the services number, which again, services is way more part of our economy than manufacturing, not that manufacturing doesn't matter, but you've got time to look into those ISMs, or the isms, as we call it, those isms how hot were they?

SPEAKER_00 35:16

Yeah, look, I think even manufacturing, the ISM PMI index yeah, greater than 50 means this area is expanding, the sector is expanding. Manufacturing comes in at 54.6. That's as good as we've had it, you know, across the years. That's pretty good. Services, blockbuster number 55.4. Oh wow. Well above 50. So then you look under the hood, you look at okay, production activity. Let's look at production within manufacturing. It was 58.3, Ryan. That means activity is running really hard. You said 50 is good. Above 50 means it's really expanding. Above 55 means it's really expanding at a pretty strong pace. You and I have a chart on this ISM activity indices, Connor. So manufacturing 58.3 or production activity for services, it's called business activity. By the way, services is not just restaurants and things like that, it does include mining and construction too. So it has things like that. That was at 61.7. Think about 61.7. It's we've seen that services, business activity index, sub-index, it's got the strongest upward momentum in over five years. These numbers are well above both on the manufacturing side and services side, well above anything we saw in 2019, by the way. And in 2019, we thought the economy is pretty darn strong. Right now, the other side of it is what you mentioned with Lululemon, right? Going there and experiencing that. You look at the prices index at for manufacturing, it's at 71.1.

SPEAKER_01 36:51

Wow.

SPEAKER_00 36:51

Now that was actually lower from the previous one, but that's because gasoline prices fell going into July and early August. That's probably going to reverse now. Services, Ryan, 72.6. That is the highest since August of 2022. And in August of 22, the direction of travel was down. Right now, the direction of travel is up. We have a chart on this, the highest and prices, price indices. Uh Carney put that out. 72.6 for services, 71.1 for manufacturing. This is well above anything we saw 2017 to 2019. I mean, you know, it tells you activity is running hot, inflation's running hot, inflationary growth. We've been saying that for the last nine months.

SPEAKER_04 37:33

Yes. And then I'm looking at my notes. I don't think you said this. If you did, I'm apologies when I reiterate it though. When you look at ISA manufacturing, the employment number was above 50 two months in a row. That's the first time in a while. So we talk about that labor stuff that we talked about earlier in the conversation. There's some potential positives there. Now the employment was still less than 48, though, on services. So, yeah, well, no, not perfect, but hey, you know, like you said, business activity, new orders, both really, really saw jumps. I believe it's 26 months in a row now. So if my math is right, that's more than two years above 50 on the ISM services part of things. Um, what else?

SPEAKER_00 38:06

You anything else on this? You you mentioned copper prices, right? Like all of this stuff is okay. This is what just happened. You know, these are survey data, so it's kind of forward-looking, too, maybe, or at least as real time as these things can get. Copper prices up 15% year to date. It's up 46% from the last year. Oil's back above close to $100 a barrel if you look at Brent. WTI is about $20.93. So the Middle East thing is still percolating there. Diesel prices are at a record $590 a gallon. Gasoline prices, you already mentioned it, it's the highest for this time of the year ever. $4.15 nationwide average per gallon. And what I'm amazed by, of course, we mentioned September rate hike odds is just about 60%. But okay, set that aside, going back to your point about you know, will 25 basis points really matter? Goodness, I don't even think 50 basis points will matter at this point, given how hot things are running. Over the next year, Ryan, the markets are pricing in 240 probability for rate hikes. What does that mean? That means it's 100% probability of two hikes. That gets you to 200%, 40% chance for a third rate hike over the next year. And think about everything we just mentioned, right? Two rate hikes, are you kidding? It's not gonna, it's gonna do a squat, it's gonna do nothing for the economy. And so if you're thinking, if you're actually serious about pulling it back, if you're serious about pulling inflation back, but hey, you know what? You and I, Barry and Grant and our portfolios are models, we are overweight equities. I'm not complaining, right? If they were not, by all means, do it.

SPEAKER_04 39:44

Yes, and we've been talking about the concept for a while, and people are like, you know, well, it's just a bubble, just a bubble. No, we don't think it's a bubble. Maybe parts of the markets are bubbles, but as stewards of assets, our job is to make sure if this is a bubble, we better be um participating in it. You know, right? Like, yeah, we'll know more in five years, we'll know more in 10 years. This is a bubble, but again, you know, and again, we we I mean, I feel like we're broken record, but we do have a lot of new listeners. Um, you know, yes, we're overweight equities, we're underweight fixed income. We've owned a good deal of hard assets, real assets, managed futures, gold, things that if you drop it, hit your foot in the hurts, things that honestly have done significantly, like wildly better than fixed income the last two, three, last two or three years, um, have been really nice diversifiers. But still, the time we're doing this, SP is up by 13% for the year. Not saying that's great, but I'm saying that's pretty darn solid. And I don't think it's as crazy to say we could we might have a 20% year when all is said and done. I really think that's possible. It's not that far away. I mean, you know, we we we hit 25 and 23, 24 and 24, um, 16 last year's total price return. We might be able to get more than that this year. And again, that keeps that going. And hey, don't forget, the mid to late 90s, we gained 20% five years in a row. Now, we're not saying they're gonna do that again, but we're already saying, you know, when you have a major technological change, when you have the Fed that potentially wants to run it hot. We talked, I think last week or maybe the week before, you know, Greenspan probably should have hiked rates more in the mid to late 90s. Okay, he didn't because he was a star. He didn't want to be the guy that he loved the he loved walking on the water, you know. I mean, it is what it is. Um, you know, and I don't think people at all feel the same way about the current Fed or uh, you know, new new Fed leadership. But those are just some things um that struck me. And I will say Waller was out in the news, I believe, on Thursday. So I'm gonna paraphrase it here. You know, Waller, he kind of gave the um put a little cold water on the hawkish, hawkish statements that we had.

SPEAKER_00 41:28

Um he said, quote unquote before you meant, do you think he's trolling Walsh? That's clearly no love lost, at least from Waller's side, it seems like because you know, two months ago, Walsh is a little more dovish. Waller comes out of speech, was hawkish, Walsh comes out of the hawkish sounding speech, and then Waller, as he said, throws cold water.

SPEAKER_04 41:49

Well, I mean, here's it is uh interview with Reuters, interview with Reuters, uh, came out on Thursday. He said he's content to hold quote unquote because of signs of inflation cooling, and the odds of a hike dropped to 50% from 62%, and then the very next day they spike back up close to 60%. Uh, President uh JD Vance, my neighbor, literally lives 10 minutes from me, um, vice president of the United States, he said the Fed should cut. Not a not a shock, not a shock. That also was on Thursday. Market had a pretty good pop. First, like 1% up day in a very long time for the SP 500 on Thursday. Snowflake was up 16%, not a recommendation, on revenues that were strong, and Broadcom said revenues up 221%. You know, the the the AI themes of the incredible earnings, incredible demand, companies literally saying, you know, we would have made more, but we just can't make enough stuff because of these bottlenecks and the on the memory side of things. It's still real. You want to talk about Waller there, a couple other Fed members. I mean, who was it? I've got it here. Waller, Barr, Williams, all we're in the news. I'll be honest, I'm looking forward to the Fed Quiet period soon because I don't even know these people. I just say their names on TV sometimes. Um, what's your take on any of those things the other Fed members have to say last week?

SPEAKER_00 42:52

I mean, the big picture, they're willing to run it hot, but to dig in since we have time to kill on the podcast, and people, you know, if you need a nap, now would be the time. No, no, keep listening to us, right? So Waller, I have a lot of respect for Waller, but I think that's isn't he the big strong guy?

SPEAKER_03 43:08

And he'll want to go to the gym. Yeah, yeah.

SPEAKER_04 43:10

He's the one who's me too. I wouldn't mess with Waller, like he he was one of posting selfies at the gym. I'm like, ooh, he'd not mess around anymore. Yes. And then, you know, maybe Wolf doesn't mess around with them either. But anyway, well, we we know our treasurer secretary. I mean, love him or hate him. I I mean he he's he's great. I think he's great. He'll he'll he'll he yeah, anyway. I'll be quiet what I'm saying, but he go look it up. He likes to scrap, is what I'm gonna say.

SPEAKER_00 43:33

No kidding, you know, pin people against up against the wall, things like that.

SPEAKER_04 43:38

Yeah, you never you never know what's true anymore.

SPEAKER_00 43:40

Doesn't matter whether you're the richest guy in the world or like Messenger's, you know, if he's upset with you, he'll take you off.

SPEAKER_04 43:46

Don't mess with him, don't mess with him. Yeah, and I knew he was good when uh our buddies over Ren Mac, they'd have Scott the Scott Assent all the time on different podcasts before he was like, and I was like, Yeah, they they they knew they knew he's just a good guy. He just yeah, don't mess with him, don't mess with him.

SPEAKER_00 43:59

Yes, yes. So uh coming to Waller. Look, I think generally you think as goes Waller, so goes the Fed. I think from then that's why Waller usually is, you know, his name appears more often than not in the media with these things, but that the with good reason, right? And I think he's generally got a good reason. In the economy. But his last speech is kind of bizarre. And because of that, now we are focusing on. So long story short, this is basically what he said. He's saying, okay, over the last three months, there's some positive signs on inflation. If you think, depending on the next reading, if the last three months is running about 2.8% annualized, he's okay with it. Now, what needs to happen for inflation to clock in? This is core PC inflation, by the way, personal consumption expenditures index. We're not talking about CPI. If that comes in below 0.3%, and 0.3% month over month, you know, for this is for August, by the way. If that comes in 0.3%, that's actually three and a half, four percent annualized, right? Something like that. So that's pretty hard. But if it comes lower than that, the last three months, June, July, August, will clock in around 2.8%. And Waller's saying, oh, if that happens, I'm okay. We're not gonna raise rates. I'm laughing because inflation's running hot. Even if it comes at 2.0 point, oh let's say 0.25%, which is about 3% annualized pace, right? So if you think about 2% annualized pace is 0.17% month over month, 0.25% month over month is about 3% annualized pace. If that if core PC comes in at 0.25%, 3% annualized, what Walla is selling us is like, yeah, I'm okay with that. I don't think we should raise rates. Meanwhile, all of this other stuff, all of this other data that we just talked about, you know, that's what we have. Right manufacturing, cyclical areas, the economy is running hot, nominal GDP is running hot, inflation is crossing at around 3%. Yeah, look, I think the big picture is they seem comfortable leaving inflation where it is, which is pretty elevated or around that 3% mark.

SPEAKER_04 46:07

So, no, good stuff. So I Son who said, I think, I don't know, 20 different charts. I only sent one. So, Connor, we're gonna share my one chart right now. It's not even for me, our friend friend Capillary over Cap Thesis. He's showing here the SP 500 going back the last three or four years with the 10-year yield. Now, let's keep this real simple. Son year yield was up around 490 in late 23, up around 480 in early 25, and ballpark around 480 right now. And as you kind of squint at this, maybe you can find a time that yields impacted things. But the reality is 10-year yields been in this big old range, chopping around, and the SP is continued to go up. So I'm not we're not saying yields don't matter, but I guess we are saying they haven't mattered lately. And if the 10-year yield were to break out, and we talked before, if it has explosive breakout, gets to say 550 in a hurry, yeah, that might mess things up a little bit. But just kind of some context um around things. Now, something else that caught my attention, it's running hot. Software is up almost 25% the last five weeks, Sonu. The only other times going back like 25 years since software ETF's been around, that we saw something like that off the lows in 2020, off the lows in 2009, and right off the lows in 2002. Again, you know, these buying thrusts, these buying pressures. Now, the flip side of semiconductors been a little bit weak. Well, life blood bull market is rotation, and we're seeing that rotation in the software until it's today, by the way.

SPEAKER_00 47:24

I'm looking at that's only because I have a screen next to me. And again, not a recommendation, please. Uh, Intel's up eight percent today, Qualcomm's up five percent today, Oracle's up three percent. I think Oracle's gonna report.

SPEAKER_04 47:36

Oracle has Oracle, and so does Adobe, and Adobe is kind of like the poster child for this whole is AI really going to impact one particular company, Adobe's one. So Adobe's a big one, obviously. And Oracle, we've talked before. Oracle's down like 20% for the year, actually, maybe before today's pop, if you said they're up a little bit, but they were down 20%. Their credit default swaps have been a potential issue that's out there. We've talked about this before, so I don't need to say too much more on that front. But those are some some of the big events this week. Oh my goodness, so we've gone really long. The big events are inflation. I mean, we've kind of talked about inflation. I mean, CPI, PPI. Do you want to wrap that up quickly? Or what do we think is going to happen with those? I think that's a good idea.

SPEAKER_00 48:10

CPI will come in around somewhere between two and a half to three percent annualized CPI, PPI, or PC. It's going to be elevated now. There's going to be, by the way, PCE is going to see some methodological changes at the end of the day. Can you spell that word by how do you spell methodological?

SPEAKER_04 48:29

It's a mouthful.

SPEAKER_00 48:30

I'm glad I got it. I think I've got to go.

SPEAKER_04 48:31

It's not even Monday, it's a mouthful for a Tuesday. Yeah.

SPEAKER_00 48:34

Methodological changes. How they're going to revise the way stock prices feed into PC through portfolio management service. That's going to change a little bit. And a few other changes, uh, they're going to change how you know we've talked about uh PCE for computer software, even CPI. They're going to change the way that's measured as well. So all of this is going to pull core PC down from about let's say 3.3% year over year to maybe 3% year over year. Okay. Right? But it just still goes to show despite that, despite doing these methodological changes, it's still running hard, 3%. We've gone through five years with inflation running way above target. Oil prices are now going up, copper prices are going up. We're in a commodity super cycle, which is the same thing as an investment super cycle. And going back to your question about yields or you know, Frank's chart, I love that because usually every year is like, oh my god, the 10 years going up, the 10 years at 470, 40, 10 years at 480, stocks have to go down. I was like, no, like it's it's just reflecting nominal GDP growth, strong nominal GDP growth. That means revenues and profits are going to go run higher. That's good for stocks.

SPEAKER_04 49:52

No, well, that's why we still are pretty bullish. Uh episode 204 of Facts versus Feelings. Everything running hot. Um, I will say the last two weeks, at least on the YouTube channel, uh, two weeks ago, I think is like our third most ever viewed. And then the one last week cracked the top 10. So we've we've hit some some really good numbers on these YouTube's. Um, thank you. Thank you. Give us a like, give us a follow. Positive review, negative review, whatever you want. Um, the algorithms like it all. Um, and what is the other thing I was gonna say? Um, I don't know. Oh, comments, comments on the YouTube channel. Feel free to say whatever you want because again, those those can go a long way with those algorithms as well. So new, I mean getting serious for a second here. It is 9-11 week, the 25th anniversary of the 9-11. It's coming up here this Friday. Obviously, very emotional for anyone who's obviously there. Uh, a lot of people lost a lot of loved ones, and it's obviously been a big part of our country's history for 25 years. Where were you on 9-11? It's one of those seasons, like I was thinking of this. Like, I remember I was 9-11. Honestly, I remember when I was her Kobe died. You know, there's only a handful of things that I really like remember. Oh, I know where I was when that happened. Where were you?

SPEAKER_00 51:00

You know, I actually remember that because I think it's sort of, you know, it it changed the trajectory of I think my own career in a lot of ways. I would I was at Purdue, I I mentioned there's a podcast. Who was it? Maybe a friend Brian Sweet. He's got a the Dream Life Architect podcast. I mentioned the story then. So I was doing aerospace engineering at Purdue. I was doing my master's in aerospace. It was very storied school. I wanted to do aerodynamics and Formula One racing and things like that. It wasn't more the plane side of things. But then, you know, so when was the job fair? The job fair was on September 11th and September 12th of 2001. Wow. So I was dressed up, Thai resumes all prepared. And as I was coming down, my friend, you know, my roommate tells me, Hey, some idiots hit the World Trade Center. I was like, oh, you missed that, right? So we're sitting and watching them, and then the second plane hits, and so all long story short, you know, the job fair is canceled. The next day, obviously nobody's coming, and then there's no and it's the middle of a recession. You we talk about 2001 and then the Fed raising rates and things like that, right? They were behind the curve. So, like it was a terrible job environment. And I remember the year before that, I'd come in, I'd started at Purdue, and everyone around me who were just one year ahead of me, some friends of mine, they were getting like two and three job offers, mostly from tech companies. Oh, wow. Two and three job offers. And then by the time you roll into 2001, May, June, a couple of these offers are getting rescinded and things like that. And then 9-11 hit. Boom. I think that just took things south in more ways than one. I was talking to my advisor at the time. He was like, you know, he'd always been asking me to stay for a PhD. And I was like, no, it's too long. I hate doing that. But you know, like there was no prospect of getting a job after that. And so literally, that day was a job guy. I I, you know, I remember it clear as day. Where were you?

SPEAKER_04 52:50

Well, I hadn't had a job, I didn't have a job yet. So I graduated from Xavier University in Cincinnati the previous May, May of 2001. Um, I had a couple jobs lined up. I was actually at my parents' house, sleeping on the couch, just kind of you lay on the couch, and then everything happened. And and it was you know impactful for a lot of reasons. But I had two very close roommates, um, roommates at Xavier. One of them was literally in my wedding, uh, in the the, I guess it would have been the second building I hit. They were there with Morgan Stanley at the Morgan Stanley or broker, I guess it's called broker back then. I don't think they're financial advisors. Anyway, um in that building. So this is before cell phones, everything really worked. Everybody's trying to call, see what's going on. You didn't know what was going on at all. Uh, fortunately, both of them got out and made it, but obviously a lot of people did not that day. So um, yeah, just definitely thoughts to everybody, especially when you do 25 years. You know, it's like, okay, it happens every year. We get it. Like, but 25 years, like, oh boy, that was um that's uh that's that's speaking of that and airplanes.

SPEAKER_00 53:41

I mean, not to go down well uh last week. I was flying to where was that flying to? Goodness, it it's a blur. Uh I was flying to New York. I was flying to New York, right? I didn't you're watching tennis. Sono you're watching tennis. I was watching tennis. Oh, is that for the US Open? Yes, uh, and other things too. I mean and other things, right? And other things, wing wink, other things. Yahoo Finance, thanks to friend John Flip for having me on in the studio. Fun experience. But yeah, no, um, I was flying there and you know the flight was delayed. I look at Netflix and this thing comes up about uh the series about the Lockerby bombing back in '88. I still remember seeing the headlines about the Pan Am 103 going down. So I started watching that. By the way, you know, like if you are looking for something, it's a very nicely done series. But then next thing I know, I'm like, you know, I'm on a plane and watching a series about a plane crash. I'm like, probably not the best thing, you know. But I it it it was, you know, tragic, tragic events, and you know, all of that. But I feel like that was night all the way from the late 80s into then you had the what 93 year World Trade Center bombing and then first World Trade Center bombing. First one, and then 2001, all of that. But yeah, 9-11 has sort of felt like end of an era in some form.

SPEAKER_04 54:58

Yeah, no, no, no doubt about it. So 25 years ago, so definitely thoughts got to everybody. Uh, so we're all impacted one way or another uh by that uh terrible day. All right, Sonu. So we kind of gone plenty long. I don't have too much more I really wanted to hit on. Is there anything else you want to touch on before we wrap up uh episode 204?

SPEAKER_00 55:15

No, I think next week, well, I guess we'd be doing the podcast before the Fed meeting. So true. That's a good point.

SPEAKER_04 55:21

You know, we will uh but well, we have the live stream. The good news is we'll have the live stream that Friday after the Fed where we can dive in a little bit uh more real time.

SPEAKER_00 55:29

Yeah, the I I think now is you know, we're past Labor Day, so I think the big thing for the next two months will honestly probably be the election. Right? Midterm elections that's coming up. Maybe next week you can talk about that. I have my own thoughts of you know, the House potentially going one way, maybe the Senate is 50-50, but different scenarios. I've been working different scenarios. I mean, I was looking at this Bank of America chart from I think Josh Hartnett, our friend Mike Zaccardi shared that. And he was like, Oh, it may be bearish if Democrats take both chambers of Congress, but Senate and House. I'm not quite in that camp, but maybe we'll talk about that next week.

SPEAKER_04 56:08

So PSA, you mentioned um sharing a chart from Bank of America. I went a little viral last week. I shared a chart from Morgan Stanley back in 1880. Uh I'll be factual. Not really. I mean I just shared a chart. I thought it was interesting, and five five weeks later, or five months later, they they dinged me and my account was like frozen on Xbox. It was five months ago that you five months later. I'm like, wait a minute, I gave like credit and everything. And I don't know, it went a little crazy, but fortunately, Calmerheads prevailed. And thank you, Morgan Stanley. They they rescinded the ding to my ex account. I just said, listen, I will never for the rest of my life share anything for Morgan Stanley, like anything for Morgan Stanley after that. Um, but I heard I guess um Bank of America does it too, which we get it. Like people have their own private data that's supposed to go to private clients and do things. Once it gets on social media, though, it's kind of like it's kind of grayer, it's kind of a free game, it's a cool chart. You share it and give gives give credit. I've done that for 15 years.

SPEAKER_03 57:04

Maybe we should start all the time.

SPEAKER_04 57:07

All the time. I mean, I'm like, I didn't think there was such a thing as bad news. I will say I had a huge spike in um followers all over social media the last couple days. I've heard from friends that reached out to me that thought it was funny. I was in Twitter jail and you know having a good joke with it. Um, but but you know, like it's just amazing kind of the uh attitude and how viral uh that went. So I was viral in in a way, but but again, cooler ads prevailed. Thanks, Morgan Stanley, for rescinding that. And we'll just leave it there. And I have any other comments on this, um, because boy, everybody wanted to comment on it. Um, but yeah, any live and learn. Just be careful what you share out there on social media, I guess. Um but you can share our stuff. We don't care. We love share our stuff on one. You everybody, you have our permission. Share our stuff, give us credit if you want. If not, whatever. It says Carson on the chart. Uh, we we like sharing our stuff. We're we're a little new age the way we think of things here around Carson Group. All right, so no final comments.

SPEAKER_00 57:51

What do you want to finish with? Uh, I think it gets back to the title of the episode. Everything's running hot. And we think, you know, going back to what you said, Bill at 20, even if they hike 25 basis points over the next year. I mean, what markets are pricing and two rate hikes, that's not gonna do anything. Yeah. And for now, like I said, I'm not complaining. I don't think we're complaining. We overweight equities, underweight bonds, overweight managed futures, you know, things like that, which includes being overweight things like gasoline, oil, copper, even gold, all of that, right? We are in the middle of an investment super cycle that translates to a commodity super cycle. Yeah, you want to be long, would you say, Ryan? Assets that can fall in but your feet.

SPEAKER_04 58:34

Well, if you drop it, hit your foot and it hurts. So you want to be in some of those things. I mean, listen, last December, I guess you were you were um probably traveling for holidays, and then we had Chris Kimball join uh on the podcast along with Scott Brown, two really close friends of mine. And and Chris, I mean, go back and look what Chris said. Like he was all over banging the drum to owning some commodities, you know, in your portfolio. And Chris, I know how he's positioned. He's he's very overweight commodities. Now we're not that overweight. We we have different things in the models we run, but that's been in the back of my head, and we positioned our models to benefit from potentially higher commodity prices, higher inflation, running the hot, all the stuff we've talked about. Again, we manage billions of dollars at the Carson Group. We um we're flirting with $70 billion total. Um, you've got advisors all over the country. If you're a financial advisor and looking for a new home, um you're sick of those big banks that maybe a little too picky sometimes with certain things, wink wink.

SPEAKER_00 59:23

Um, we don't allow you to share the charts either.

SPEAKER_04 59:25

Yeah, I don't want to say anything else. I might get I'm probably already in trouble for saying too much something. You can share us. Uh but but listen, we we're a little different here, and we'd love to talk to you and and help you um you know kind of find your forever home somewhere that will be there for you every step of the way. All right, everybody, it's still a bull market, lots going on. The feds coming up. It's September, could be a little dicey potentially, but uh, we still see more pauses and not out there. With all that, everyone, this was episode 204 of Facts versus Feelings. Um, we'll be back next week and again, September 18th. Definitely mark it on the calendar for that live stream. We're gonna do one hour before the close. Social hours coming back. See you right then. Take care. Thank you. Goodbye. Information provided on facts versus feelings with some of our geeks 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 industries are unmanaged and may not be invested indirectly. 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