Derek Moore explains what was in those Fed minutes released last week that stirred up selling in the markets. What does balance sheet normalization mean? When are forecasters expecting the first interest rate hike? Is the Fed worried about the yield curve? Why did the Fed Minutes release rile markets Increasing the probability of the normalization of rate policy Removing accommodation by reducing the size of the balance sheet. What is balance sheet runoff? Fed comments on the shape of the yield ...
Jan 09, 2022•21 min•Ep. 150
Derek Moore reviews asset classes like stocks, bonds, bitcoin, and gold. What investors thought would be a no brainer with higher inflation didn’t work. Plus, Derek goes back ten years and reads some bearish doom and gloom predictions for crashes that never came true. How wrong where they and why you maybe shouldn’t listen to them. Instead just invest but be hedged. 2021 Inflation hedges like gold lost money in 2021. Why the obvisous short bonds and buy gold showed less than steller returns desp...
Jan 02, 2022•25 min•Ep. 149
Jay Pestrichelli joins Derek Moore to review some 2022 market predictions. You shouldn’t trade of these! Make sure to listen in a year to see what they got right, and what they got wrong. 2022 S&P 500 Index Year End Predictions 2022 Inflation 2022 Earnings on the S&P 500 Index Will the S&P 500 see multiple expansion, earnings growth, or both? Plus, Bitcoin, Oil, and Gold. Will there be a recession in 2022? What will GDP growth be in 2022? Mentioned in this Episode: Contact Derek Moor...
Dec 27, 2021•1 hr•Ep. 148
Derek Moore responds to market pundits making 2022 predictions where they examine whether stock prices will see moves diven by changes in earnings vs PE multiples expanding. Also covered will be effect share buybacks have on earnings per share EPS. Then he compares Amazon and Apple forward multiples and share counts. PE Ratio EPS Earnings per share Calculate Market Cap Multiple expansion versus earnings expansion Forward PE vs PE Ratio S&P 500 2021 price driven by earnings expansion while mu...
Dec 19, 2021•29 min•Ep. 147
Derek Moore reviews the range of potential moves the Federal Reserve may take given rising inflation. Will the Fed reduce their monthly purchases? What does the Fed Fund probability tracker show the market is expecting interest rates to be? What about the trillions of dollars the Fed is doing in the Overnight Reverse Repo Market? Monthly Fed purchases of MBS and Treasuries $1.5 Trillion in Overnight Reverse Repos Fed Rate Hike Probabilities Chairman Jerome Powell gets more hawkish? Inflation eff...
Dec 13, 2021•31 min•Ep. 146
Jay Pestrichelli is back to co-host with Derek where they simplify risk measures like Alpha and Sharpe. Then they discuss the market drop that started during the short post Thanksgiving day session. Later an inflation check in, corporate profit margins at multi-decade highs, the yield curve flattening, and oil prices. Markets pullback from highs Market valuations Alpha explained Sharpe Ratio explained Comparing portfolio managers through risk adjusted returns Comparison benchmarks Market moves d...
Dec 05, 2021•1 hr 3 min•Ep. 145
Derek reviews some key market themes including things to watch on corporate earnings, profit margins and more. Then he discusses the current situation around oil rig counts and inventories versus demand. Later Derek talks about how government responses such as lockdowns can impact the economy. S&P 500 Earnings Profit Margins at Decade Highs Multiple expansion Earnings expansion Difference between multiple expansion and earnings growth JP Morgan Guide to the Markets data What is the market ri...
Nov 28, 2021•28 min•Ep. 144
Derek is back to review data put out by OSAM showing periods of severe inflation, high inflation, and how stocks have done historically. How have bonds done during periods of high inflation? How common is severe or high inflation? Severe Inflation High Inflatipon Moderate Inflation or Fed Target Inflation Low Inflation Deflation How to calculate real returns after inflation Stocks and bonds performance during inflationary periods How common is high or severe inflation Looking at stock returns du...
Nov 21, 2021•23 min•Ep. 143
Derek is back to discuss the recent media reports of highest inflation in 30 years. What is true and what isn’t? Plus he takes a deeper dive into inflation components, inflation sentiment effecting consumer beheavior, and sticky vs flexible inflation. Inflation at 30 year highs Today’s inflation vs late seventies and early eighties inflation Flexible inflation (CPI) vs Sticky inflation (CPI) What makes up the CPI index Year to date 5.8% inflation in 2021 How many years have we seen deflation Mic...
Nov 14, 2021•26 min•Ep. 142
Jay Pestrichelli, CEO of ZEGA Financial, is back with Derek to discuss Nassim Talib’s comments that Bitcoin is another Tulip Bubble. Plus, the Fed announced a taper so now what? How companies putting Bitcoin on their balance sheet effects volatility. Nassim Talib's comments about bitcoin being another tulip bubble What was the Tulip Bubble? Cyrpto bleeding into S&P earnings and volatility Fed Tapering, Wage Growth vs Inflation Doom and gloomers are wrong so just be hedged. Mentioned in this ...
Nov 08, 2021•51 min•Ep. 141
Derek is back to explain why homes may not be as unaffordable compared to 30 years ago. What the media may leave out when talking about home prices and inflation. Plus, quick update on container shipping prices and the week ahead for several central banks. What the media gets wrong about home prices After inflation, home prices haven’t risen quite as much Low rates mean more house Challenge with extending the terms on auto loans Importance of annualizing data Down payments not as bad? Comapring ...
Oct 31, 2021•23 min•Ep. 140
Derek is back to explain why inflation normalizing does not exactly mean lower prices. Jack Dorsey says hyperinflation is coming. What is hyperinflation and is he right? And who’s right the blue chip analysts or Atlanta FED’s GDP nowcast? Jack Dorsey says hyperinflation coming. Inflation compounds on itself. Illustrating how damaging 1970s inflation was Compare prices with a normalized inflation rate vs 1970s and early 1980s actual What is hyperinflation GDP Nowcast by the Atlanta Fed comes in l...
Oct 24, 2021•27 min•Ep. 139
Jay and Derek are back to together on the podcast to go back and forth on current event. Jamie Dimon thoughts on crypto COLO Adjustment Jay guest starring on Fox Mornings And Marie (well atleast on a panel discussion) Doing financial TV as a guest CPI latest numbers Container Shipping prices finally tick lower for the first time. Tech earnings releases How Tech companies perform before and after earnings releases Mentioned in this Episode: Contact Derek Moore derek.moore@zegafinancial.com ZEGA w...
Oct 17, 2021•47 min•Ep. 138
Derek Moore is back to discuss whether the Fed has any cover to not pull back on their monthly asset purchases. Plus, what is the employment situation? What about inflation and supply side supply chains? Are we nearing Stagflation? This and more on the program. Fed Taper Fed Asset Purchases Inflation Container Shipping Supply Side Issues GDP Now failing Stagflation US Treasuries Close Above 1.6% Unemployment Labor Participation Rate Mentioned in this Episode: Contact Derek derek.moore@zegafinanc...
Oct 11, 2021•21 min•Ep. 137
Derek Moore is back to discuss political risk to markets and interest rates. What exactly is the budget reconciliation process? What is the debt ceiling and is there really a risk of default? What about the filibuster? Debt Ceiling Budget Reconciliation Process Continuing Resolution Inflation Supply Chain Issues Container Shipping Issues Infrastructure Bill $3.2 Trillion Budget Bill Political Risk to Markets Inflation Risk Interest Rates reaction to debt ceiling US Bond Downgrades US Debt Defaul...
Oct 03, 2021•24 min•Ep. 136
Jay Pestrichelli, CEO of ZEGA Financial is back to discuss key market themes including comparing September to other months. Guess Which month is the worst? Evergrande in China and what is going on with their bonds. The Fed Taper and interest rates. Economy and GDP growth slowing? Housing starts along trendline. Plus, myths about portfolio hedging. Evergrande in China China’s Three Red Lines Debt Policy Evergrande bond prices and ratings are pricing in defaults Evergrande is not new. How long has...
Sep 26, 2021•1 hr 4 min•Ep. 135
Google web searches for the term Stagflation are spiking. More pundits are mentioning the S word. So what is Stagflation and what should be looking at to tell whether this is a real risk to the economy? What is stagflation How to measure slowing growth How to find CPI inflation data Where to follow unemployment and wage growth Why the Fed would be put in a box during stagflation Stagflation causes including supply side issues Fiscal stimulus the wrong thing if its supply side Mentioned in this E...
Sep 19, 2021•29 min•Ep. 134
Marcel Benjamin is back on the show for another appearance to dig into the details around TIPS Bonds (Treasury Inflation Protected Securities). How they work and why they are misunderstood by many. Plus, we discuss interest rate risk comparing high and low interest rate environments. Yup, even a little bond convexity primer! This was a great conversation that gives anyone a much greater depth of knowledge on an asset class that is a little more complicated. T Bonds and Bills: lower interest rate...
Sep 15, 2021•1 hr•Ep. 133
Derek goes beyond the headlines to look under the hood of the labor market, jobs, and unemployment. Plus, he reviews the container shipping issues and port delays, semiconductors now delayed over 20 weeks. Finally, he discusses whether the government stimulus for a drop in demand might have miscalculated the recession. Instead, what if it’s a supply side issue where falling supply and rising prices is the regime? Both demand shock and supply shock are covered so you can talk to your friends abou...
Sep 06, 2021•35 min•Ep. 132
Jay Pestrichelli, CEO of ZEGA Financial, is back to talk a walk around the markets to discuss both sides of inflation debate, interesting numbers around all-time highs, hedging, the FED, Housing Prices. Jay turns the tables and hosts asking Derek about the case for and against inflation being transitory. Transitory or Non-Transitory case for inflation Container shipping issues with inflation The Fed interest rate tapers and rate decisions Market at All-time highs Just best Hedge Housing Prices b...
Aug 29, 2021•48 min•Ep. 131
Traderscoach.com founder Bennett McDowell joins Derek Moore. They hit the record button and what ensues is a free-flowing discussion around what common themes they see from successful investors and trades. Plus, what common mistakes they see repeated by those struggling to find their trading voice. Later they discuss trading live in front of an audience in a trading challenge. Favorite trading movies. And writing and publishing investment books. Bennett McDowell and Derek Moore reminisce about t...
Aug 22, 2021•1 hr 3 min•Ep. 130
You hear it all the time: start early contributing money to investment accounts. But just how big of a difference does it make? What about doing a monthly budget? Are detailed budgets more of a hassle than they are worth? How much money at various ages needed to contribute to build wealth? Why some budgets may not be beneficial The big items like cars, rent, and mortgages make an impact not your Netflix account What if you invested the difference? How to review your statements to find things you...
Aug 22, 2021•21 min•Ep. 129
You often hear people quote historical stock and bond returns. But are they useful to investors? What lessons can you take from them to help with your portfolio construction? What challenges do historical investment returns have concerning dividend reinvestment and commissions? What about bond historical averages given our low-interest-rate environment? S&P 500 Index Total Returns 1928- 2020 History of index funds and dividend reinvestment Treasury Bonds historical returns 1928-2020 Probabil...
Aug 08, 2021•31 min•Ep. 128
Watch CNBC or Fox Business for a short while and you are likely to see predictions on interest rates. But how would you see for yourself what the various futures markets are implying for future interest rates? Learn how you can look at the Fed Funds, Eurodollar, SOFR (Secured Overnight Funding Rate), and soon BSBY Rate futures to see into the future what market participants are currently thinking. Plus, many of you have variable-rate mortgages or home equity loans that are tied to the Libor Rate...
Aug 01, 2021•24 min•Ep. 127
This week we discuss how advances in technology and dropping costs have made it better for investors. Has it ever been this good? Maybe investors worrying about payment for order flow are worried about the wrong things? Looking back when there was no dividend reinvestment and high commissions, it would have cost you an arm and a leg to replicate the index. Then we discuss updates to the S&P 500 earnings estimates and forward PE valuations. How things have changed from March of 2020. How bid/...
Jul 27, 2021•31 min•Ep. 126
Last week the latest CPI inflation data came out from the BLS. If you watched the news, they played it up. While we don’t know what inflation will be with any certainty, stop watching the news and start watching the data for yourself. In this week's episode, Derek runs through factors to keep an eye on and where you can track the data for yourself. What's going in with rental car prices? What about energy prices? What happens if you remove the re-opening items from core CPI? CPI Consumer Price I...
Jul 18, 2021•38 min•Ep. 125
Container shipping rates are at all-time highs. So How bad is the situation? How bad is the backup at various container shipping ports? What effect is this having on inflation in the short term? Evergiven container ship released from Suez Canal Busiest Container Shipping Ports Problems at Yantian port Ships anchored of container shipping ports causing backups The surge in Container shipping prices Panana Spread all-time high container shipping rates Empty sailings containing shipping Dwelling ti...
Jul 13, 2021•36 min•Ep. 124
Dan McMullen Senior Managing Director and Senior Portfolio Manager in Blackstone’s Credit Liquid Credit Strategies Unit, SPDR Blackstone Senior Loan ETF (Symbol: SRLN) joins the podcast to explain what senior loans are. How senior loans compare to leveraged loans and CLOs or collateralized loan obligations. Plus, Dan explains what the risks are, how they compare to high yield bonds, and what happens in the event of bankruptcy. Later Dan gets into how loans trade and are priced plus whether they ...
Jul 03, 2021•50 min•Ep. 123
Often, we get questions on why one company’s options are priced so differently than another. So how options prices differ based on implied volatility? What makes up intrinsic value vs extrinsic value in options premium? Compare a high volatility company to a lower volatility company in the options market. How to calculate expected single standard deviation expected move based on IV Implied Volatility Implied Volatility Volatility Intrinsic Value Extrinsic Value Time value in premium LEAP Options...
Jun 27, 2021•31 min•Ep. 122
The Federal Reserve this week held their June meeting and released their new dot plot. Chairman Powell also did his customary press conference. The Fed says inflation is transitory and likely temporary. Others disagree. They even said they are talking about talking about tapering. So is inflation out of control or transitory as the Fed claims. Plus, what did they do or did not do on policy changes? Sticky CPI vs Flexible CPI The Fed’s new dot plot Fed track record on projections ON RRP Market (O...
Jun 20, 2021•24 min•Ep. 121
