Transcript:
Tom Vaughan:
Everybody, welcome to Thursday, the S&P 500 was down 1.8% today, and unlike yesterday, and the day before the NASDAQ was actually the bigger loser today, it was the bigger winner, actually, NASDAQ was down 2.1%. So what we have today is like a polar opposite of what happened yesterday, yesterday, we had a great update lots of green on the charts, we had a couple of Fed governors during interviews, talking about, you know, reconfirming, what the Fed had already been talking about before three to four rate increases, maybe not, you know, having a half percent increase in March. And then today, of course, was the inflation number that came out was at seven and a half percent, the expectation was 7.2, to 7.3%. So obviously, the market dropped right away in the morning. But then it recovered. And actually, we were in the positive territory. You know, there’s a whole bunch of reasons why that might happen. But then another one of the Federal Reserve governors came out, and said that he thought they should have interest rates increased by a full 1% By July, which is more than, you know, the consensus estimates, in general, and more than what we’ve seen in the reports coming out from the consensus for the Federal Reserve, obviously, there are multiple fed governors, and they have different opinions as to what happened. But as soon as he started speaking, the market started to come down. And we saw this kind of fall throughout this timeframe. And, you know, what was great yesterday, a day before with technology and Small Cap, and what have you was great today, you know, and energy financials, you know, materials, those are the things that did well today.
So this is environment that we’ve been in for quite a while here, where, you know, earnings come out, you see these big companies, the Microsoft’s and apples and Googles of the world doing unbelievable, you know, with their earnings, the stock market goes up, you start to see some motion in that direction. And then we get an inflation reading that’s high, and everybody starts moving over towards the other side of things that you would buy during high inflationary period. And I think this is the game that’s going to be played right now, and has been played here for the last six months. And I think it’s why you really want to have a majority of the portfolio like we do, invested in the broad market across the board, you know, because if you go all into one side on, you know, growth and technology or whatever, you know, that might not work. If inflation does really continue to really come strong, you go all in on the other side with value and energy and financials and those types of things. That could work out poorly. Also, if inflation turns out to be, you know, mild throughout the rest of the year, you know, looking at the end of the year, I think inflation gets worse before it gets better. I think the next reading is at least this bad. You know, I think it’s going to take some time, if inflation is going to come down this year, it much more likely to happen in the second half of the year. And maybe it stabilizes here in this first quarter. But nonetheless, one of the things that we want to watch for is just kind of how that works. I’ll be talking about inflation and my outlook on it in our summary for the talk money with Tom show tomorrow at the beginning, so you know, cover that at that point in time, but look forward to see what’s going to happen tomorrow, and we’ll see you then. Thank you for watching.