Transcript:
TomVaughan:
Everybody, welcome to Wednesday, the S&P 500 unfortunately, was down .3% today, but it could have been worse. That was down a lot more early in the morning, 1 1/2-1.6% for example. We saw cryptocurrencies take a really big drop today, did bounce some at the end. China came out and said that they were going to start to try to regulate Bitcoin seems like they’re trying to push their own version of cryptocurrency that would be backed by them. We’re seeing that with other countries now very fascinating concept where a country is creating cryptocurrency. And that could be and then using the regulatory power to try to stop the other cryptocurrencies from being used. That could be a problem for the Bitcoins and Ethereums of the world. So we’ll see how that plays out, actually. And so that was a big piece. Seems like the market fell some related to that cryptocurrency, although it wasn’t tremendous, and it did bounce.
But one of the key things about the bounce today was that we hit the low that we hit last week. And last week, there’s a thing called the fear index, which is the VIX, V I X. And so last week, when it got to that low, the VIX was up to 27. And so then this week, when it went to the same low, the VIX was really around 23. And so really that’s a big difference actually means something to the market, that it was a bit less fear today, even though the market came down to and that’s kind of a divergence that the market looks for.
And so we did see some money coming in. And it really, that’s kind of the other thing that’s fascinating is that there was a report today about how much cash, the professional money managers have gathered. So they have a ton of cash, apparently, as much as they had last May, which was very, very high also. And really, what you know, that means, theoretically, is that there’s a whole bunch of fuel that could come in off the sidelines, we’ll see. I mean, if it just sits there, it doesn’t do us any good. But today, we saw a pretty good bounce, a lot of really good chart patterns where things bounced right back. We even had the Federal Reserve, the notes from their last meeting come out, they’re talking a little bit about when they might raise rates, the market got a little bit volatile around that time. But I think that was digested well, too. So really it’s a fascinating things, all these different interrelated pieces that are happening right now.
Although the key I think, is still this inflation debate. Is inflation temporary, or is it permanent? How high? Does the temporary go if it is temporary? And what does the Federal Reserve do in response to that, so that’s what everybody’s watching for. It’s why we’re all paying so much attention to them as far as that goes. But really, I think today is okay, this situation we’re in right now you kind of need to go sideways, you need to go flat for a while, in order to see higher runs, all that money sitting on the sidelines from those professional money managers, could be a big catalyst. I really think though, we’re in for a month or two of kind of churning, because earnings were so fantastic.
This last quarter, one of the biggest upside surprises, it would be great to see some follow up come up, that really comes up and kind of that June, July timeframe, when they really start to report again, although we did see reports today from Target or this week from Target and Walmart, and they’re off the charts good. Things are really going well as far as that goes. So great time for companies right now. The stocks are really kind of lagging behind. But that’s not a bad thing. If earnings continue to go up and up and up and the price kind of stays moving sideways, more or less, then you can see some explosive movement off of that earnings base.
So, this this type of situation is okay, so far, not expecting anything too dramatic. Not with that this much money on the sidelines, low interest rates and all that. So, look forward to talking to Go Live with Tom if you get a chance on Fridays at 12:15pm. And again, if you’re really interested to make sure you subscribe to the channel because we’re going to start putting out more and more content on that too. So look forward to talking to you tomorrow. Thank you very much.