Transcript
Hello, everyone, Welcome to Tuesday, the S&P 500 was down .16%. Today, unfortunately for us, in my models, I have more value and value did not have a great day today. Growth did better, we do have that in the taxable side. So we did, you know, see some decent situation there. But the big catalyst today was a retail sales report that came out softer than expected for February. And so what that did was that released some of the pressure that was happening about inflation going on, you know, really right now, and so that the yield on the 10 year Treasury when it drops, we see growth stocks go up in value, stocks, underperform, and then when the yield goes up, because there’s more inflationary pressure, you know, we see the value stocks do better and grow, stocks go down.
That’s exactly the pattern we’ve been seeing here for quite a while. And so, you know, my expectations, and the kind of the long game here is that yields are going to go up, you know, because this pandemic is going to get under control. This big stimulus is now being delivered, right as we speak. And the combination of that with the pent up demand, we’re going to see, you know, this big move. And we’re also going to see, in my opinion, the Federal Reserve not do anything about it, at least from what we’ve seen so far. So that’s the other thing that’s happening right now, the Federal Reserve is meeting today. They’re meeting tomorrow, and then Chairman Powell is going to talk tomorrow. And so people are really looking at, you know, what is he going to say? You know, are they going to raise interest rates sooner than they said? Or are they going to, you know, stop doing their quantitative easing, which is their bond buying program. Sooner than they said, they’ve been very consistent about saying they want to not worry too much about inflation at this point in time, they want to get back to full employment. And they feel like the bigger risk is economic downturn, and not upturn. So, really interesting to see how this plays out. As far as that goes, there was a survey by Bank of America that they do every month of these big money managers, 220 money managers, $630 billion of assets under management.
And the number one concern for the last year has been the virus, or the vaccine delivery, the vaccine, those type things that this was the first month where the number one concern was actually something else. It was inflation. So they’re on the same side of the page that I am on here. And they’ve moved to their lowest position of tax and growth stocks for the last year, and they moved to their highest position of value stocks. So we’re in good company here. We’re on the right side of this, it might take a little bit of patience, you know, for this thing to play out. But the gains that we could get here, I think it’d be really, really great, especially the way things are structured right now. So didn’t see that today. But I think we will see it. We will continue to see rockiness here even this week, because that always happens when the Federal Reserve’s meeting, but I’ll be very interested to see what happens, you know, later on this week and how this plays out.
But so anyway, that’s what’s happening today, I think, you know, we’ll have to wait are through this is, you know, again, for all of us, this is our first pandemic, to see how this plays out. But I feel like the theme that we’re looking at, is very strong. The trend is definitely there didn’t happen today. But if you look at the last three, four months, boy, all of these things have been doing really, really well as there’s an expectation of recovery that’s coming, you know, towards us as far as that goes. So, look forward to seeing what’s gonna happen tomorrow. After that.