Transcript:
Tom Vaughan:
Hello, everybody, welcome to Thursday, the S&P 500 was up 1%. Today, great update all together, we had a couple of gapped down days that happened in the middle of June, when they announced the, you know, CPI number at that time and the Federal Reserve, you know, surprised everybody by doing higher rate increase, the market has a tendency to refill gaps, we refilled the lower one already. And today, we refilled the higher one, almost exactly, actually, we still have some room to go to the upside before we start to hit a pretty heavy level of resistance. So we’ll see what happens as far as that goes, maybe another two or 3%, the market could even move before it really runs into more resistance. It might have some trouble tomorrow, just because we had an after hours report from snap, that stock dropped 26% was already down over more than 60% as it was because they’re having trouble with their online advertising. We saw after hours, you know, fall from meta used to be Facebook, which and Google which both Do you know a lot of online advertising revenue also. So we’ll see how that plays out. That is one of the things we’re in the middle of earnings season. So it’s a little hard to tell, that can be something that can really drag down if companies start to report, you know, things that the market wasn’t expecting.
So the Nord1 natural gas pipeline reopened this morning, some concerns that it might not, it did, it reopened at the same volume, not to reduce volume, that was another thing that people thought was a possibility. But it is still at a reduced volume from where it was prior to the invasion artifact is down about 60%. And the problem with that is that to Europe is trying to gather reserves, in case we have a situation of you know, shutting down those pipelines. And of course, when they’re not getting extra, they’re having to use that, you know, 40% that is coming through to operate, it doesn’t allow to gather reserves, Russia probably realizes this, and it just makes that weapon that much more effective, especially heading into the winter here, when that natural gas will be even more, more consumption will happen from that. So we’ll see how that plays out. You’ll hear me talking a lot about energy from Russia, specifically in Europe, because it has the ability to affect what’s happening here in our stock markets, depending on how bad it gets as far as that goes. So we did have the leading economic indicators reported today also, they were down point 8%, which is a fairly big amount down for that index, we’re down 2% from the high, we’ve fallen for four months in a row. And you know, the last time we had this type of fall in the leading economic index was before the 2008 downturn, the time before that was before the 2000 and downturn. So this is why we’re being so defensive, even though the markets going up, you know, the average rate of return for the downturn in the stock market since World War II without a recession is 15%.
The average rate of return with a recession since World War II on the S&P 500 is 36% down. So you know, the fact of the possibility of a recession is picked up dramatically. That’s what these leading indicators are showing. And so that’s an in top of that, you get the Federal Reserve, hammering, you know, interest rates to the upside to try to fight inflation. And so that’s combination is something to really be careful with. And that’s what we’re doing right now. So I wish we were, you know, in the market making more on the upside here, but I’m very, very comfortable in this situation just being a little bit more conservative, because there are some historical things that are happening, you know, go all the way back to World War Two and look at what’s been going on with these different indicators and what have you and this is something that’s pretty unusual, so and not positive for the most part. So we want to be careful, and we are being careful. So look forward to talking to you tomorrow. I have my talk money with Tom show on YouTube 1215 to one o’clock Pacific time, you can feel free to join and you can ask questions, listen to what other people have, and I do a summary of the market prior to the show. So look forward to seeing you then. Thank you