Market Update: December 9, 2021 When Good News Makes The Market Go Down

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:

Tom Vaughan:

Hello everybody, welcome to Thursday. The S&P 500 was down .7% today. We got a couple of different catalysts. Number one, we had this company called Evergrande, in China. Big real estate firm, 300 billion in debt. They defaulted on some of their interest payments, on a couple of their bonds and so there’s going to be some news coming out about that, as they try to figure out what to do, do they get restructured and what is China to do with that, as far as that goes.


The second big catalyst is kind of an ironic one. And that unemployment number came out today. And the number of people that applied for first time unemployment was 184,000, which is a low going back 52 years. Normally think that sounds good. But that’s not really how the stock market works. When you have unemployment going too high, that can be poor for the stock market, just because it looks like the economy slowing down. When unemployment claims go really low like that, especially in an environment like this, the market starts be worried about inflation. It starts to worry about a tight labor market, especially with 11 million open jobs. And so the inflation number comes out tomorrow, I think the market is kind of waiting around for that. Also, the expectations that we might see 7-7.1% increase inflation year over year for last November, you know, which is pretty high. And so the market’s, you know, reacting to this labor number in this context of inflation and this kind of fear of what’s going to happen.


The Federal Reserve meets, you know, next week. Gonna be talking about what they’re doing to fight inflation. So I think those fit together actually, I personally feel like these tips situations are much better than some of the situations that we could be in. So for example, you know, last year, there was, you know, a lot of jobs lost, we had 16 million jobs disappeared, you know, basically overnight, because the pandemic, now we have 11 million jobs that are open that people trying to fill, and they’re basically trying to get, you know, this economy, keeping up with the demand. I think that you know, too much demand for what we can supply is a problem, but it’s a better problem to have. And I do think, again, that we will work through this, this situation will resolve itself, as long as that demand continues to be there.


You know, wages are going up, that means people have more money to spend, you know, all of these different types of things. So there’s a cycle here that I think is okay. We’ll see what happens. We’ll be watching that, but it does create some volatility through this timeframe, and that’s something that’s going to happen.


On the good news side, the Senate did pass the debt ceiling increase bill. This is a one time bill that allows the debt ceiling to be increased with just 51 votes. So the Democrats can control this themselves, that goes to the White House to get signed as a law comes back, and they’ll probably get that through tonight, tomorrow, and we’ll have that behind us, which I think is a really big deal.


So things are okay, just expect some rockiness here as we go through this inflation number and the Fed meeting next week, and you know, kind of see what happens as far as that goes. But, you know, again, good problem to have with too much demand and not enough supply. So, you know, still problem but better than some of the alternatives. So I look forward to talking to you tomorrow. I have my show. I’m going to do a summary of what’s happening for the week at the beginning of that show. It’s 12:15 to one o’clock on Fridays. Talk Money with Tom just go to YouTube, you can find it. So look forward to seeing you then. Thank you.

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.