Market Update Stock market does well after inflationary report 4.9.2021

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

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Transcript:

Hello, everybody, welcome to Friday, I really want to thank everybody who came to Go Live With Tom today, I had a really good time, obviously, we’ll be doing that every week. So thank you for coming. And if you did miss it, we have recorded it. And I will include it, you know, in the emails that we send out, or you can subscribe to the channel by hitting the subscribe button and then hitting the little bell. And it’ll notify you when we post these other videos that aren’t, you know, this daily video. So, so today was very fascinating. Actually, let me show you the chart here just to show what happened here with the S&P 500. For example. This is a chart that shows kind of by the minute, you know, rates of return, we drag this down a little bit so we can see it last, you know, three days, so nice steady gains. But then look at this. And this has been happening on Fridays, for some reason, this giant kind of motion upward here right at the end, which is really fun.

So big, big move. And very fascinating today, just in the sense that this is happening in the middle of, you know, a report that came out today, from the Producers Price Index, the expectations was that we would see an increase of what the prices that they are getting for a half percent, and it came out at 1%. So this is showing some inflationary pressure that we’ve been talking about quite a bit. And again, it’s showing this upside surprise, where things are really jumping a lot more than, you know, the analysts are expecting. We saw with the jobs number we saw with the service industry number, we saw it with the manufacturing number over the last, you know, like 10 days.

And so I think, again, we’re gonna continue to see these upside surprises and all kinds of different places. So, you know, what does that mean, obviously, well, the market originally when that report came out, actually dropped, you know, not a lot, but some, because again, there’s some concern about the inflationary pressure that might come that could affect the stock market, you know, kind of in competitive nature. But then, you know, obviously, as you saw there, they’ve got over it, by the end of the day, I think the basics for the market, and the amount of cash flow that’s coming in the low interest rates and total are something else. I mean, one of the things to keep in mind, you know, just kind of put things in perspective, the Federal Reserve expects inflation to hit 2.4%. This year, I think we’re going to have an upside surprise there, I think it’s going to be higher than that. But if we go back, you know, to 1974, inflation was over 12% at that point in time. So, you know, even if this inflation hits three or 4% this year, it’s still really low in comparison, I do think the market will survive that it could get soft at periods of time, if it spiking really hard, but then it’ll resettle. And that’s kind of what’s happened. If you think about it, we went from roughly .6%, on the 10 year Treasury to about 1.7%, just since August, two now, and periods of time have got kind of soft, and now the market is kind of hitting new highs almost every single day.

So once it kind of settles in, I think that’s exactly the pattern, we’ll see when there’s a spike. And kind of in those interest rates, we’ll see softness in the market, we’ll see more softness in the growth stocks than the value stocks, just because that’s kind of how it works with these. And then we’ll see you know, it settle in maybe, and then the market can move off again. So because I think the fundamentals are so strong, that you know, higher inflation means higher earnings, ultimately. And so that drives the stock market. And that’s something I think the market really looking forward to.

So not a bad day, actually lots of green on the chart today, lots of the stock pieces, the bond pieces were down today are inverse pieces were up because the bonds were down today. And again, so the bond market responded more negatively to the possible inflation from this PPI report than the stock market did which you know, which is what you would expect actually, that is why the bond markets going to have some more challenges trying to get you know, through this time period and back. Now, please again, remember that even though the S&P the 10 year treasuries at 1.7-ish right now, you know, again, it was at 3-ish, before this whole pandemic started. So, you know, it wouldn’t surprise me if it doesn’t get back there at some point in time also. And I think we’ll survive that as far as that goes. So great day.

Thank you again for coming to Go Live With Tom, I look forward to seeing you on Monday for the daily updates and then again next Friday for our live stream. Thank you very much. Have a great weekend.

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.