Stagflation Talk Is Back After Friday's Jobs Report

[00:00:00] Speaker 1: today's market call is presented by fidelity investments and our all-new advanced trading platform fidelity trader plus with fidelity trader plus you can customize your preferred tools and charts and tap into crucial data across all your devices so i can save an order on my desktop at home get a mobile alert here at the studio and complete the trade in the fidelity app without starting over try it for yourself at fidelity.com slash trader plus it's monday the 10th of august at 11 a.m on the east coast of course that's dan nathan who is not a hopeless wanderer by the way i'm g swizz in just a couple minutes carter braxton worth he of worth charting will be joining us and we got some other little treats we're going to throw in [00:00:52] Speaker 2: today hello yeah hey guy domi um yeah we do and this whole thing i did there by the way yeah this this whole week guy domi the babble album he's going to be making mumford and sons references the boys the mumford and his sons are all here in new york city they're going to be at msg tuesday wednesday thursday night we'll give you updates each morning i am the official risk reversal media mumford and sons correspondent um and we're going to get some uh we'll get some updates you're the one you lost the lottery oh there it is um all right guy we have carter as you mentioned and he's got some great work from worth charting that we're going to detail um today on the broader market he's also going to detail one of his fine trades that work within the wrth etf that he manages um and we're going to get some good levels and a strategy there that he's focused on um let's start with oil what do you think by oil um you have been steadfast on a couple things as it relates to energy stocks uh first things first the disconnect between the underlying right and the fundamentals of these companies which don't have a whole heck of a lot to do whether if crude oil is at 68 or at 88 right that sort of thing so you know these stocks act tremendously well in many ways they're kind of outpacing the performance of crude oil here what's your thoughts because you and i have been in the camp man that there is not enough of a premium built into oil given the way that we think the war is going to go and and and the like and again we're not like you know foreign policy experts or anything like that but [00:02:22] Speaker 1: there's a pattern here and it seems pretty clear yeah i am no expert as you know and you i'm glad you brought up the disconnect between the underlying commodity and the equities and if amanda who by the way had a great weekend is doing great i don't want her to impale herself but if she can overlay an xle chart with a crude oil chart what you'll see is obviously crude oil since i think it was the march highs at the beginning of this war whenever it was i mean it's come down significantly but the xle by comparison trading at 59 it's not that far off from the all-time high that we made back in march i think it was the end of march around 63 and a half so i will continue to say that the equities have some value here so there's that one chart and yeah i mean i think that does a decent job of sort of showing what's going on flip side of the coin dan well not the flip side of the coin a similar coin flip on oih chart which traded down to and bounced off the 200-day moving average in a pretty meaningful way so oih is another place to go uh and i continue to think that oih sort of grinds higher from here and the last one if you want to play a little stock market you know we've been talking about this for a while but the performance in these refiners or sort of refiner adjacent names like marathon petroleum valero i mean they continue to do their thing so i think finally the market's coming to the realization that hey wait a second we don't need crude oil at 90 dollars crude oil can just go sideways and these stocks have value especially if there's going to be some sort of rotation yeah um no doubt i mean i think [00:03:59] Speaker 2: that that call has been a good one and it probably makes more sense than speculating on you know the commodity in general because that one is tough to kind of gauge obviously but we think there should be a bit more of a premium we had alima croft she's the head commodity analyst um from rbc capital on fast money i want to say it was thursday night guy and you know i i was surprised at um i don't know she seems to be in the camp that this war is not ending time soon the pressure is going to be um upward on the commodity because we're going to continue to get this sort of back and forth where there just doesn't seem to be a cohesive policy as it relates to the sort of threats that are coming out of the administration in an effort to get the strait of harmuz um open you know who has been consistent is the iranians about you know what it will take um to get that so again we'll see how that all plays out um um friday guy was the all important the all important july jobs report um and you know it came in worse than expected stock market rallied because the expectation is that maybe maybe if the economy is better yeah so the labor market's weaker the fed is less likely to raise um in september except for the fact that we have cpi and ppi this week how do those play in your opinion relative to what we just talked about with the commodity right the supply chains that are easily affecting the price of other goods other than just oil right and then if you think about what it means for a consumer that is dealing with higher rates and then obviously all the higher costs associated with [00:05:37] Speaker 1: again i said all the time i'm not an economist but this is what i will tell you the friday number was not good now pundits or certain people will explain it away one off maybe i i have no idea by the way the unemployment rate actually ticked lower which has been an aberration in terms of job participation and labor for all those things let's just shelve that first that number on the on the headline was not a good number now you just mentioned correctly we can get some inflation data so if that comes in hot i do think it will i mean you're going to hear more and more people start talking about stagflation and i believe that that's where we're headed also if you thought that that jobs number is going to get the fed in play pop a tlt chart bond market is not backing that up dan and the bond market right now tlt trading at 82 and a quarter i think you know i think right around that low that we made a couple weeks ago around 81.70 or something like that and that's telling an entirely different story as we're sitting here tenure yields are right back to what four six seven if i'm if my math is right so you tell me what the market is pricing in here again for emphasis not that it's had any impact on the market whatsoever but i'm still of the belief that yields continue to grind higher into year end [00:06:51] Speaker 2: yeah well i mean you've been correct from the standpoint if you just want to pull up the 10-year u.s treasury yield i mean it really does have this very uh well-defined uptrend a series of you know higher lows higher highs that sort of thing and you know we've had some folks uh on fast money of late just kind of talking about not from a technical standpoint but more from just kind of um you know obviously you look at that and see the last time we're at these levels make it a five year or two i mean we're getting back towards that that five percent that we kind of kissed what was that in the mid-2023 um you know i mean we'll get carter's take on it i think i know where he stands um really quickly guy before we get um to carter um let's just focus for a second on a podcast guest that we had it dropped friday morning it was mike wilson he is the ci i know mike yeah he's the head equity strategist at morgan stanley they have a note out this morning he kind of previewed it with us um let's just kind of pull up the highlights here because i think this is important he's been talking about um eps the broadening out away from you know we know the big drivers of s p performance and that sort of thing and you know i think this is important i mean he wants to go towards quality rotations he said we saw a low quality sort of rally in in memory and storage and some of the semi names and now it seems to be broadening out guy we have a clip we have a clip of the pod from friday and you guys should all go follow it in your favorite podcast store or watch it on our youtube and by the way slam the [00:08:21] Speaker 3: like button this is not any different than any big capital spending cycle there will be a massive hangover there will be malinvestment here there will be disappointment but i want to go back again to the 90s where uh our analysts who are you know making probably the most biggest boldest you know prognostications about the internet usage and how much is this going to grow so for as bad as it was between 2000 and 2002 when the internet bubble blew up every one of those estimates was off by like a factor of 10. meaning it was bigger and it was bigger because the marginal cost of that communication went to zero and so that's how you think about this cycle is that they're building all this stuff elon is the ultimate builder right he's going to build all this stuff in space and maybe you're more skeptical than i am and and yeah he's probably going to lose money on a bunch of different things but it's going to create this opportunity set for things we can't even imagine and and and that's that's the trajectory and so what i'm really interested in now though is finding those early stage companies that are already adopting and taking advantage of this technology in a way that is not priced in the stock [00:09:32] Speaker 2: yeah well i mean i think that was you know a bit more about you know in the backdrop of that spacex ipo and what they're expecting um as far as anthropic and open ai but we spent a lot of time talking about the ai capex build and what it means not just for the technology but also uh you know economic growth and then obviously s p 500 earnings so great great conversation so um check that out guy he did mention though we're a bit more we could be a bit more skeptical than him about what elon's going to build in the [00:10:01] Speaker 1: delivery timelines i think that's probably fair yeah and as you know you know mike is a beloved guest on our podcast and he's typically the guiding light for a lot of people in terms of their oh see i see what you did beloved guiding light yeah you're killing it i'm killing it on the month for instance but you should listen to it because you know people paint everybody it's very easy to paint everybody with a single brush right this guy's a bear this guy's a bull but you know it's not he's far more nuanced than that and that's why he's one of the people that you have you don't have to agree with him but should absolutely listen to and he's been he's been spot on now for by the way it was three weeks ago ish that he said you got to sell semis and buy software i mean look at what that look at the what that trade has done in a very short period of time so good on mike as they say [00:10:52] Speaker 2: yeah just throw that slide up this is one of my uh the more important you know takeaways you know a lot of folks have been talking about these um you know non-operating gains that we saw in some of the big hyperscalers marking up um you know the valuations of some of the investments that they made primarily in open ai um ananthropic uh spacex was one of them but you know he highlights the fact that you know the market is rewarding free cash flow supportive of a quality um thesis so he's talking about moving into quality and you know if you just look at you know earnings that we saw from the hyperscalers i mean that was the theme in microsoft that they did not have the degradation and free cash flow that a lot a bunch of the other hyperscalers um had and that's one of the reasons why you had that huge rally there so you know mike highlights the fact that s p 500 um the median s p 500 stock and upward ribbons both the 2026 eps and free cash flow um has outperformed by 1.6 post reporting into 1.6 pers uh in q2 so just go watch that all right guys should we do it real quick um that sort of dovetails [00:11:55] Speaker 1: a lot of john butter's work as well yes just to sort of tie all this together back to you of of fact [00:12:00] Speaker 2: said all right let's bring him in he's been patient that would be carter braxton worth of worth [00:12:03] Speaker 4: charting car guys how are you good morning man good good how goes it goes well um you know i always [00:12:10] Speaker 2: love uh you know wake up monday morning there are two things in my email box that is a must watch and a must read um unworth charting you do your i think it's a midnight a midnight video for your subscribers that drops and you do a lot of great work obviously and you're ripping through a lot of different charts but then also you had a note out yesterday um about russell the value index and we're going to hit that just in general carter um yields really quickly i mean we know you've been in the camp that sideways we've been trading the same levels i mean what would it take for you to start to think that a bill a breakout is building a little bit yeah i mean it's been building and it never breaks out [00:12:50] Speaker 4: but it never sort of falters either we know that um at no point in the last three five six seven more years has the 10-year yield ever breached the five percent level in fact it did intraday it was about uh three years ago right in october uh of 2023 um and we sit here still it's it is a goldilocks thing it doesn't um it doesn't uh go higher it doesn't go lower and uh you know i guess the temptation is always to see a direction things don't have to be in a direction they can just be where they are and i think that's the circumstance here my bias is lower yields sort of the remember the higher for longer if you do it just the way you can search for mag 7 usage right now in wall street reports media it disappeared um when things are popular the most popular phrase of all was higher for longer you can't find it you won't find it in wall street journal you won't find it in goldman sachs and morgan reach sports you won't find anywhere because it's an inconvenient thing it never happened right rates never went higher uh we've been sitting here and sitting here and sitting here and to be fair they're not lower either they're just where they are and so i guess this is what a pair of twos is what would it take i guess higher yields to believe in higher yields but you know for now it's taking all the things without uh it takes oil spiking and gold and war nothing seems to move the [00:14:22] Speaker 1: yield you know and that is absolutely fair and furthermore the market doesn't seem to care about any of this so you know whether what they could it appears as though if we continue to sort of grind higher in this methodical way the market's not going to care at all maybe it's just going to be carter i guess if there's a precipitous move higher maybe that changes the equation but we shall see but let's go to your note because as i'm looking at it there's some pretty interesting things and you always start with sort of the headline money in motion august 10th russell 1000 too far too fast sell [00:14:55] Speaker 4: it let's go yeah so maybe we look at the charts first then we can talk about some of the thing we've got the chart of the um etf or two etfs one that mirrors the russell 1000 growth if we don't have that that's fine there's the there's the value uh aggregate and then we have the growth next and if we just go back and forth obviously the question is is the value now um we might have a table here that shows some of the weightings uh and if we don't that's fine but my thinking here is you pair this right you fade oh here we go so these are the top 25 members there's a little bit of oral correlation which speaks to how silly the whole thing is apple value or growth i guess according to russell corporation it's both right i mean but anyway i mean what that's a laugh is that it was kennedy are you serious uh meta is has a three percent weight in the growth and only 63 basis points in the and so forth and so on but basically the real difference is is that the value has things like walmart it's more heavily weighted towards staples and energy and uh industrials financials whereas you can see that the growth uh doesn't have a whole lot of that it's largely super cap momentum stocks and tech but anyway back to the two charts and then the comparative chart and then let's talk about some there's the comparative i think you play for mean reversion but the um back to the russell itself so we are now um the the etf for the russell itself we are now um sort of 12 above the 150 day moving average you'll see in the chart and that reading is one of the more extreme readings uh on record we might have it in the deck if you want to do it on the deck we've got the chart um but if not we can do it here so you're 12 above and consider this from that march 30 low it's the exact same performance up 22 as this is the russell 2000 of course right we're talking about the the value and the growth of russell 1000. yeah let's go to [00:16:59] Speaker 2: let's go back to the deck um rather than uh i think that's probably more useful yeah so if we look at [00:17:05] Speaker 4: these two um the the the russell uh 1000 value index versus the russell 1000 growth the they both are up the same amount from that march 30 global equity low that was the low of sort of the iran-us uh conflict yes and so for something that has a beta of 0.71 versus something that you see there in the table the growth of 1.3 if you've appreciated the same amount what what you've done is on a risk adjusted basis you've doubled the performance of growth so that's very rare for value to have done that if you look on the next page just to get into a little bit more of the stats it says that they're in sort of plain language also that we're you know 11 12 percent above the 100 infinity moving average and so those two circumstances just how far above but on a relative basis a beta adjusted uh we think you play for mean reversion so you pair these uh they're pretty liquid iwd captures the russell 1000 value iwf catcher was the russell 1000 growth and uh you know the the ladder the growth had some life of late and what will really help it and this is important of course is we're waiting for nvidia uh and i think nvidia is going to do very well and it's been showing great relative strength as the [00:18:33] Speaker 1: rest of its peers have fallen apart real real quick carter can we put up the chart that shows the components of both because this sort of going to dovetail into a question we have about amazon um so there you go the the the value the number one holding is amazon it's six and a half percent we've obviously seen a pretty significant movement in both amazon actually the first three if you think about it the movement apple and then subsequently microsoft and one of the questions we had was about amazon if man wants to throw that up but i guess sort of built into this is a belief that all three of those top holdings have overextended themselves i mean that stands to reason given their weightings [00:19:11] Speaker 4: amazon less so but certainly microsoft microsoft is particularly this is microsoft only done this one other time in history where it's moved up 30 plus percent in a two three week period i would fade that aggressively apple already had a setback um a drop in gap about four or five sessions ago so not quite as extended but you know this is um in the simplest let's just go to the rlv chart which is the russell 1000 value captured by the iwd and we have it here in the deck um it's extended um yeah i mean that's just you know and that's it it's just forget it if you want to get rid of all the other stuff and say look [00:19:50] Speaker 2: is that is that due for some sort of tip yeah yeah yeah and i guess the point listen the main takeaway is here that value okay is just kind of on a runaway and it just to me it speaks a little bit of that rotation we talked about rotation that mike wilson was called for it also told a rotation into what people perceive um as value and you know torsen stock had something out this morning i thought was really interesting um it was when value or what excuse me when growth met value um and here the chart is the ford pe s p 500 semiconductors versus healthcare and you see just how this has converged um a little bit over you know the last let's call it you know a couple months or so and that's how these you know a few instances where it was very well far apart and then a few times where it's kind of come back a little bit and to me that just kind of says a little bit about where um investor interest is right now um carter i want to hit you on this one name because you know guy and i woke up this morning one of the we didn't woke up well we both woke up at different times i was more i was more like i was like a more 6 15 a.m guy guy what were you i don't know you know what i mean like you were out there in new jersey and i'm out here in new york city that's just want to be really clear about that um so whatever i woke up one of the first headlines i saw one of the first things that guy and i talked about this morning excuse me was intel okay now we've spent a lot of time about a year ago it might have been maybe they can pull up a one-year chart or an 18-month chart i think it was about a year ago that intel sold a stake to the administration or to the treasury i guess you call it um you know 10 billion dollars they converted this chips act um you know i guess it was a loan um into equity you see what's happened since nvidia then came in and bought a stake i think the stock was originally around 20 bucks when the government bought 25 when nvidia did you saw that kind of parabolic move it was parabolic and it's come in a bit now the company is selling 15 billion dollars in equity the stock is down 35 or so from those recent all-time highs they've sold debt so they're selling everything that is not you know i don't know locked down if you will when you look at this i mean what do you see here it's retraced at one point maybe almost you know 45 of the move from you know going back to last spring to um you know where we are right now i mean it's a common circumstance throughout the [00:22:19] Speaker 4: space i mean sandisk uh lrc i actually think of dozens and dozens of high flyers all went parabolic all have dropped 30 to 50 percent are now sitting plus or minus at their 150 day moving average this is what a pair of twos is i mean it's tempting to say that's it it's over it'll bounce and go a lot higher attempting to say that's it that ties are in this is going to be a 90 decline when all is said and done like every other parabolic move why why not just hey it's been re-rated to where it belongs in quotes no one knows where anything belongs valuation is a terrible uh terrible everything there's no such thing as valuation um and so i'd say pair twos leave it alone all right if you can go [00:23:05] Speaker 1: back amanda if you could go chart from the prior all-time high which i think was sometime in 99 or 2000 and just keep an eye on that sort of gap so look at that high and if amanda wants to draw the horizontal line so that comes in around 75 or so and dan carter i'll go to dan first okay so you see that now go back to where we just were and you'll see where the gap is in the chart and you know i would submit it's it's not ridiculous to think dan that we back and fill down to the prior all-time high which will fill that gap we have in the chart from the spring yeah and you know we were making this point [00:23:39] Speaker 2: this is going back to april when the stock broke out and it was getting towards those prior all-time highs you know going to 1999 and maybe you know amanda wants to make um a log chart there but guy we we were talking about this that in 20 the last time the stock was trading near 70 some dollars or whatever i mean the company was earning you know um you know five times more than it's earning right now i mean like the revenue base was much higher the margins you know what i mean were much higher so the fact that you've just seen basically multiple expansion you know what i mean is the reason why folks have been buying this stock before they basically demonstrated their ability to not only build the fabs but also get customers outside of themselves right the fact that they need to execute on all of that a company that has not done a good job on executing on manufacturing for the last 20 or so years to me it just doesn't make a whole heck of a lot of sense but i'll let carter speak to [00:24:36] Speaker 4: this log chart well uh yeah i mean like the gap basically yeah yeah i mean look we're pulling back i mean i again this is um in my view the long term here is not particularly um insightful right the only interpretation it would seem is that you know a great run-up but this is elemental intel was one of the greatest enterprises ever ever to open its doors and then you could say it's a big consolidation but that's not what this is in since 2000 this is a wide range remember you lost probably 90 of its value from its peak in 2000 not really depicted here right um but either way i if it gets down to buy seller whole intel here i just would look elsewhere i think there are all sorts of interesting things to do right that um well what about stocks really quickly um but the socks same thing the socks is down to you get a small balance smh or socks and now here it sits i wouldn't trade that either um okay versus let's pull a berkshire for fun uh just apropos nothing but you know travelers and all state and pull this back a little bit and get a little more time but the berkshire's just getting going after being dull for a long time and if you look at pull three or four month to make a point look at all state and travelers just to and others the insurance stocks we know are through the roof this is just a nice catch-up trade i think there's more timely um you know that's extended play play play uh play berkshire [00:26:07] Speaker 1: when i was in college one of the shittier um college food experiences where it was at georgetown university and it was on the back of the marriott uh corporation i'm not casting aspersions but i will tell you the food sucked however uh there's also a publicly traded company called marriott that carter's [00:26:26] Speaker 2: done some work with yeah just really quickly and you know we like to detail once a week um one of the trade ideas that carter has in his wrth it's an etf that he has constructed basically after big moves and single names or sometimes in some sector etfs after big gaps one way or the other he looks to sell strangles that's an out of the money call and out of the money put he thinks the move has already come um and therefore he's looking to get um you know a premium collapse and um you know as a as a portfolio as you know you don't have that idiosyncratic risk if you're selling and out of the money call out of the money put but he's made into a portfolio and an etf and it's something that we own and we appreciate the opportunity for carter to come on in detail one of these strategies for us and i think a lot of our viewers what's helpful for we just went through a bunch of charts with carter here are some levels in a name after it's already moved on news so carter walk us through what you did in marriott [00:27:22] Speaker 4: going back to last week sure so on monday august 3rd um we strangled marriott so marriott you see their prevailing price 346.83 there was money available in the 375 calls that expire august 21st the month the third friday and there was money in the 325 puts the two of them added up to three dollars and 62 cents which is a one percent yield based on as a percentage of the stock for 19 days which annualized 20 percent so let's look at those levels on the chart the stock dropped and gapped on its earnings and the first the inner center of the fainter lines are the actual levels of the strangle and then the the more prominent blue lines a little bit higher the lower is the is the total uh that the strangle would have to get higher than or lower than before it was a profit and not successful let's say it that way and so the level's chosen after dropping and gapping on fundamentals it's been re-rated um is it going to climb back and fill that gap in the next two and now less than two weeks we don't think so um in turn is there going to be such a momentum drift if we look at the chart again that it goes all the way down to 321 between now i don't think so or said differently would one be willing to buy marriott down at 321 that would be a sell-off from 4 15 to 321. i think a lot of large equity law only manager would say i would take marriott at a discount like that and in turn would one want to if you called around to holders right now who are stuck in marriott quote stuck because they just had a bad setback not their fault and earnings drop and gap and you say would you like to sell it at 378 they'd say ho ho hold on what you you'll take sold they would love to have that and so that's the level we chose those level we chose i don't know where it's trading today but we believe this is uh well this is the kind of thing one does in a properly managed portfolio and you can wait for vol crush and decay uh and so that is [00:29:40] Speaker 2: this yeah and and again you know as a portfolio strategy um we think it's really interesting and you don't have that idiosyncratic risk we don't go out there and i know you do not that's why you have the etf that's why you have the portfolio suggest these sorts of trade ideas for individuals because you do have that sort of risk that sometimes there is a follow-through but as a percentage of the portfolio where it's small um we think you think obviously it makes a lot of sense we love to see the levels on some of these names we often say you know sometimes it just makes sense to sit on your hands especially into an earnings announcement and kind of see what happens next and sometimes just gleaning some of that will help you make a better informed trade in another similar name so carter braxton worth we appreciate all your fine work thanks worth charting.com wrth is the etf [00:30:29] Speaker 1: our friend thank you so much all right well that's that's sold i mean that thing awoke my soul dan [00:30:35] Speaker 2: yeah did you also see where it belongs did you see what i did there yeah but did you see that that carter said where it belongs because that's another mumford and son song so guys just going to keep [00:30:44] Speaker 1: doing this all week long no hopefully not yeah probably um well i mean you know what i am going to do i'm going to tell people that when we're trading we want real-time data customized alerts and powerful tools that can help us act quickly most importantly we need an easy way to access those insights wherever we are and we are multiple places multiple times a day with the all new fidelity trader plus platform you can stay closer to the trade with seamless access to your preferred tools and charts across desktop which i'm on now web and mobile which dan spends a lot of time on with fidelity trader plus you can customize your chart or start a trade on your desktop setup at home and pull it up on your phone or laptop at work try the all new fidelity trader plus the next generation of advanced trading [00:31:31] Speaker 2: from fidelity yeah we get so many questions uh whether it's in person whether it's on the line um you know what are some of the tools uh that we use when i tell you this pro platform is about as pro um as it gets and it's simple you know the other thing is that we see a lot of platforms we get pitched a lot of things and it's just like i think some some designers feel like the more bells and whistles that you put on the user interface the better the product is and i think that our friends here are demonstrating the fact that simpler can be better and then obviously access across multiple different platforms and devices um so thanks to our partners there guy one thing i thought was really interesting about the marriott and and the gap lower and maybe amanda can pull this up this was on the uh uh the front page of the wall street journal today yes just the wsj if you find it on the line it's also there um did i put that in there i think i did this is the man will pull it up well maybe i mean we're we're we're we're really waiting for it i mean we're waiting for it we can keep talking see when you do that [00:32:32] Speaker 1: then it makes it awkward for her now she's upset and it's just not good is she upset i think she's [00:32:36] Speaker 2: doing well um this was there it is there it is the rise of the unstoppable american tourist and i thought this was a really interesting read because you know marriott gets let's call it a third or so of their revenues from overseas um we know that you know we just had this uh the world cup here in the u.s they get 75 percent of their sales um in north america or 70 ish percent or so and i just thought it was interesting when you see you know price action like that in a single name and that's one of the reasons why you know very happy for carter to come and obviously highlight a name that he did a trading strategy on but it also helps think about um you know some levels in and i think a very important [00:33:20] Speaker 1: hospitality uh stock yeah it's amazing that because if you had asked me like just off the top of your head what do you think about international travel out of the united states i'd be like it's got to be it's sort of you know decade lows and here we are i mean the article says something entirely different so i'm not sure how to sort of figure that out but what i will say is you know if you look at the performance in the airlines recently it sort of makes sense i mean the jets got up to multi-year highs now here's what i would throw up if amanda wants to sort of do something for us pull up a six or seven year chart of the jets etf i think we all know what that's comprised of remember this thing was killing it into covid then it fell off a cliff what we've just done now is basically gotten back to those prior highs so either that's a really good thing or this is a level that we're going to stall at and i will tell you you know given some given what i think is going on with the employment picture as you talked about at the top of the show given this elevated price of gasoline which you talk to me about offline and your travels back down from maine and other things that are going on like i'm hard pressed to think this can continue on the current trajectory higher yeah and i mentioned to [00:34:31] Speaker 2: you um so i drove yesterday it was like a 10-hour drive from you know very up north in maine went through new hampshire went through massachusetts then connecticut then new york and you know all along on the highway you're seeing the price of gasoline you know like the big boards they're trying to get you to stop off man you know i didn't see a single one below this is for regular um gasoline i didn't see a single one below four bucks and you know what i i honestly i think it was average about four and a quarter 4.35 or somewhere in that range um for regular gas and this is the sort of thing that you know with the war going the way it is that's not changing anytime soon you know what i mean like we have this situation for the next you know at least few months or so and probably into the end of the year and you think about what's going on on the labor front and you use the expression as a bit of anomaly to see you know to lose that many jobs in one month but also have the unemployment rate um ticked [00:35:28] Speaker 1: down there's a lot of funny math going on there um there's math real quick i think we're we're difficult on amanda at times but over the years she has developed her own fan base and yeah there there's a laundry list of comments we're going to cherry pick two please amanda uh-oh uh-oh uh-oh i'm waiting yeah yeah there you go geez give amanda a break i agree that's ursula's with two s's yeah amanda is the best jrp 5069 which i also agree with there's got to be a few more in there but you know man oh they're they're a lot you know i mean we'd spend we'd spend two hours if we just looked at all the [00:36:09] Speaker 2: comments about how no doubt is um guy couple things here um home builders not having a good day here across the board i'm looking at the xhb down two and a quarter percent a bunch of the names uh i'm seeing lennar down three percent old brothers down three percent um what's going on here we're up we're up how many basis points in the 30. um you know is that is that part of it is yeah it's a huge part of it we're just not seeing any relief on the more it's a huge and you're not and look i don't [00:36:35] Speaker 1: want to say speak in in just sort of definitives but i don't think you're going to see relief i mean that 30-year move we had a couple weeks ago i think it's a little over two weeks ago that was historic in terms of the magnitude of the move this is the united states the large economy in the history of mankind and we had a 13 i think basis point move into 30 year that doesn't happen so that's part of it i don't think that unemployment or the employment um data helped at all and i think there's concerns around here and if you want to put up a toll brothers chart just for as they say shits and giggles in february we traded up to 165 166. look where we just traded up to at the end of june same level now we're falling off so there are technical reasons and they're fundamental reasons i think to be bearish of the home builders yeah um and maybe i did that pretty well that wasn't even with chat gpt no it was just me sort of ripping look at you by the way amanda said you come from me and my fan club comes for you yes that's correct i love it um hey ad while [00:37:40] Speaker 2: you're crushing it right now and while you have so much support on the line will you pull up our newsletter you can get it at the sub stack where maybe jacob can throw that down there um one of the things i love and and cc writes this on sunday afternoons go to richversal.substack.com let's look at the week ahead um post that he put out um the every every week he'll put out like what the expected range is what the expected moves are um in the options market for the major indices and he's often looking at you know the etfs that track them the s p 500 guy the expected range this week 76 50 to 78 50 about one and a quarter percent move the nasdaq 100 qqq um about two percent when you this is amazing the smh four and a half percent yeah um uso that attracts uh oil five and a half percent but let's go back to the s p 500 so we have the jobs data we have cpi we have ppi we have oil moving higher we're likely to see a couple more um headlines as it relates to the war coming out right from the administration that sort of thing we had that epic breakout there making that little flag just one and a quarter percent for the s p for the week does it seem a little light to you in either direction 100 percent and you know [00:38:58] Speaker 1: more and more people have been writing about this and i saw it over the weekend people writing about volatility in the broader indices versus volatility and individual names and the historic disconnect between the two so when you ask me that question yeah i i think it's really um light in terms of where it should be but with that said that's been sort of the norm now i mean look at where the vix is trading and the broader market through measured through the vix doesn't seem to care but yes i think it's way too cheap so yes and by the way i just want to say that every weekend cc starts with a white blank page and then he puts all the words on it and comes out with the newsletter back to you [00:39:38] Speaker 2: i think cc went and saw him and uh at folsom field in boulder colorado about a month ago or so um two things let before we get out of here guy um you've been steadfast on these names this would be the security name cyber security names this is we'll pull up the pal alto then go to the crowd strike i mean you know it's interesting at first these names were like thought to be i don't know for some reason disrupted by ai right but then it became very clear that ai agents and the power of such and maybe our lack of control over them were causing some some pretty funky sort of problems we had that sort of open ai hack of hugging face this is a um depository of ai agents and programs that sort of thing and just look at how these stocks have acted over the last you know few months or so and despite valuations which you know you and i don't have to spend a lot of time on with a group like this it's just like how are enterprises exposed to some of these tools that are essentially these ai tools that are just on a daily basis they seem to be evolving far quicker than let's say a lot of the defense mechanisms that these companies have and that just must be a huge huge reason why you're seeing a rush into these names obviously maybe i'm [00:40:52] Speaker 1: stating the obvious no i you're not saying the obvious when software was under pressure these names were getting dragged down vis-a-vis their um their importance or they're waiting in the etf and then i think i think what's happened as you've seen some relief in software these stocks have now been allowed to sort of go on their own devices and palo alto i think it's at an all-time high today if it's not it's pretty damn close and it's been this stealth move higher over the last you know basically three and a half four weeks i mean look at that it's a pretty significant move in a very short period of time so are they extended yes i think what's happening though is it's a catch-up on the back of the of the weakness and software uh for that extended period of time that's just my two cents i don't look by the way i don't think you're initiating a position here in palo alto i think you can get a better entry point but i think what this shows you is the importance of these names and um how depressed they were in the [00:41:47] Speaker 2: throws of that software sell off yeah i mean that gap between you know 381 where it's trading right now and basically 219 where the 200-day moving average is is pretty astounding and you know like you know you're pretty heavy into the um gap filling sort of um mentality or whatever and um you know it's held this uptrend that's been in place but you see the rising 200 day it's going to get towards that breakout level i think it was about 230 or something like that that's the 200 day and don't think for a second it is as good as the fundamentals might be don't think that these companies these stocks can't sell off 30 40 percent we've seen it happen you know we've seen it happen in the last few months or so [00:42:28] Speaker 1: um anything else yeah there is something else uh and this actually out of all the comments that i've seen this one probably brings the most true amanda i know you have it just sort of teed up uh-oh uh-oh you're teeing me up no i seem to have some it's about the existence no no no no i mean seriously amanda come on you're better than me the show would not exist without amanda and i don't know what that [00:42:56] Speaker 2: emoji yeah you just said she's better than that so maybe maybe today it might exist maybe no i think she just might feel wrong no no she is a genius the the company wouldn't exist without her okay how's that well okay yes all those things are true you know just lastly guy on the sentiment as it relates to um markets here and you just said this i think i want to say 10 minutes ago i mean you know there just doesn't seem to be a lot of concern about rising rates the historic move that you've seen in the 30 that issues about affordability which are only made worse by you know um you know this war and we have tariffs and you know um you know one of the things that uh again you know peter go back to his note for one second this is the point i missed about peter's note when he was looking at the unemployment rate versus the jobs that have lost he's not saying if you just look at this he's saying this is from productivity okay it just that's reduced the pace of hiring okay but he's also talking about because of inflation you're seeing job cuts right it's not right now about ai taking jobs yes there's increased productivity but a lot of folks who track these sorts of um you know tech cycles it does not mean that a huge productivity gain means that you're going to displace you know millions of workers it means that more good stuff can get done you know what i mean like that sort of thing but the fact of the matter is and we've talked about this going back to the fall of 2022 it wasn't until some of these big tech companies that had overspend during covid right started firing people and cutting costs that's when you know meta bottom that's when some of these other big tech stocks bottomed amazon and the like so again i just think it's important to kind of look at the nuance here um because it's not so um you know [00:44:45] Speaker 1: cut and dry it's not so cut dry by the way it's august 10th before you know it the winter winds will [00:44:52] Speaker 2: start blowing oh god okay that's a good way to end by the way that's the mumford and sons listen we uh thank you all my favorite songs we thank everyone for being here we thank amanda jacob timmy cc for all their fine work bill yes bill um he's not watching so it's okay um i might be watching i doubt it but um and bill a great team they're all doing great they all work very hard so we don't have to sit [00:45:23] Speaker 1: there and wait and wait we we don't we don't have we don't have hr at risk reversal uh yet i'm looking i'm not gonna even address this one because you know i don't do this that's not what i do i'm not here to do that stuff so but maybe we maybe we should hire an hr agent can you are there agents that would [00:45:44] Speaker 2: that'd be bad for us guy or we do it in like the chat gpt man this is no thanks um all right we're going to be back here all right just a couple things check out the mike wilson uh it's on the youtube it's in the podcast stores guy dan mike wilson cio of morgan stanley also the chief equity strategist [00:46:04] Speaker 1: when you put your finger up are you no i'm waiting for that's one one thing one okay couple things you [00:46:10] Speaker 2: had a really great conversation that dropped in the podcast this morning with jim swarthout who you've known for a long time uh really great market mind and then we also had on that podcast is separate in a separate interview i sat down with a guy named j jacobs he's from the black rock they manage the i shares they just introduced the iqq which is a qq um competitive etf um that was a really interesting conversation do we have another four yeah i just call him jj that's four okay so um on that note we will see you tomorrow at 11 a.m thanks so much this episode of