Mr. Money Talk

Good afternoon. This is Josh Arnold, Miss your Money Talk with jud Arnolds here to answer your questions on stops, fun ons, mutual funds, how you should position your investment dollars including your IRA in four oh one K do give us a call nine five two nine two five five six oh eight. That's nine five two nine two five five six o eight to always get straight talk, not sugarcoated advice. Before we begin, do have to remind you

of the usual caveats, pass performances, no guarantee of future results. Markets are always changing. Any anything that we do share with you on this program is for informational Russian purposes only. Nothing should be viewed as an investment recommendation. Please consult the financial advisor before making any investment decision. All investments contain risk in concluding risk of loss, Some or all investments we discussed may or

may not be suitable for you. Please talk to an investment professional with that. Wow, yeah, you do as much better, much cleaner than I do. When you and I have to have you pre recorded this, so we just plugged this plug this disclaim. When you were in javeat in when you work at a big investment bank in three large hedge funds and a large asset manager. Believe me, you sit through enough continuing education and whatnot.

But with that said, speaking of our continuing education, because that's what the markets are. It's the greatest game ever invented, well, certainly in my lifetime. It's the greatest game ever invented. That's why we like to play. It's not golf. Golf is not the greatest game game ever invented. Golf is a long walk spoiled or an easy way for people with difficult marriages to avoid each other. That being said, thank you very much, John

Firestone. That that being said, we had a huge week this week. The market came off from highs. Going into the week, we were up nineteen and a half percent on the SMP five hundred. We closed the week only up sixteen point eight percent, still up very nicely for the year, but I would point out we are barely up for Q two right now, and Big Tech struggled a little bit this week. We did have a catch

up. This is as much as sell off as it is what I would call a rotation, and by rotation, I would point out the big laggards of the year, which are banks and energy Banks and energy respects respectively entered Q three down thirty point five percent and down seven point two percent for the year. Those two hold one stop stopped there. Did you just say that banks were down thirty percent for the year into Q two into Q two, So well, yeah, we lost a few big banks. There was a

crisis with Silicon Valley Bank that was this year. This year, Well, now we've caught, We've rallied a bunch with earnings. We're only down seventeen point four percent in the KRI Banking ETF, the energy ETF that's the XL was down seven point two it is only down point seven percent now, and many other laggards have slowly but surely picked up the pace as the big stuff that's outperformed like QQQ is barely up for the quarters, still very nicely though.

So with that you had too big. I had had a very very very big, big week in terms terms of earnings, and particularly on Thursday has three of the companies that I and my client clients own reported reported their earnings all at the same time Thursday night, had Apple, Amazon, and Draft Kings all reported at the same time. Judd, Apple, Beats, beat the estimates on the top line. In the bottom line, I had much much, much better than expected services revenue, and that services revenue was

growing apace. That was good. Macintosh computer sales surprised on the upside. Margins again surprised on the upside forty four and a half percent. Even iPhone margins were at thirty thirty four and a half percent. But I think there was some disappointment, and not only iPad sales, which were underwhelming after a very strong while. They suffered from a very strong comparison from a year ago, as as as Do and Will Macintosh sales, but phone sales disappointed many

analysts. We got a I gotta I gotta poke it. Of course you're gonna poke poke at me. But phone you've got. Revenue was down slightly. It's a consumer staple. You got a thirty plus times earnings multiple revenue. It was down slightly. Now, Operating income and net income were up because operatingcome was up because of the mixshift to services. Earnings per share was up because the number of shares keeps going down. But it's a well, I want to just just point point something else at that, you know,

free cash flow was up a lot continues to be up. I mean Apple will return to shareholders last quarter twenty four billion dollars in UH in share buybacks and dividends, which is a big number. Still sitting on one hundred and sixty six billion dollars in cash. Yeah, but the company is really expensive and it's a great company. That's why it's got a high multiple. Well, it's a tremendous company. And what many overlook is there installed base at

over two billion people around around the world. Uh, I mean that big continue to buy. Let's point out some other stuff. The big cash now you just cited that is less than five percent of the market. Cab uh still big. I thought it was a fine quarter. I know it's disappointing a loop. Apples had a huge run this year. Now, I think what disappointed a number of analysts in addition to you know, the phone sales being down down a bit, is the fact that uh their guidance into the

next quarter. It will say it was not a beaten raised quarter. It was a beat and more of an inline quarter, and concerns. Concerns come come about how good is the next phone going to be? And will it be delivered on time? So I think more analysts are still looking at Apple as a hardware company. And I complete, when you make that statement, when the multiples over thirty times, this is yet I disagree. I don't hear anybody, uh you know, saying boo about Chlorox and you know,

with Chlorox having a multiple, you know at thirty times. I'm not I'm not saying that. What I'm saying is the multiple is thirty. It's it's valued like a consumer staple. You had a big run, and I mean Apple is up on a one month basis, all right, one month you're flat. On a six month basis, you're up from one fifty to one eighty. Oh I'm sorry, okay, sorry, sorry for crying in my milk. I mean, socks doun't goes go up in a straight line.

We just endured two and a half years of Amazon doing nothing, so all of a sudden we'll get to Amazon and just in just a second. But I still like Apple. I still have maintained my two hundred and fifty dollars price price target. And I will also point out that prior to the earnings, I did mention on this program. I have mentioned to my clients, do be prepared for earnings, both for Apple, Amazon and other companies that

we deal with. For a pullback on the numbers, is going to be somebody that doesn't like some some number, and or there's going to be some profit taking. Let's let's talk about but hold on, let's wrap up on Apple. Let's talk about where pullbacks had end up. Okay, at the end of twenty twenty, we had to pull back to one hundred a share. Recently this year we had to pull back to about one thirty. Okay, that was the beginning of the year, the year and the year.

Well, we are saying, and what we say consistently with Apple is there's always going to be pullbacks, but it's going to keep making higher lows as well as higher highs. Okay, we'll stop there, there you go. We'll stop there and come very quickly to Amazon and then maybe have to go

go a little bit more into Amazon. But Amazon surprised on the top line, surprised on the bottom bottom line, and surprised especially with AWS to Amazon Web Services, which grew twelve percent, which was above what analysts had had expected, and that gave a very nice boost to boost to the company.

Additionally, the CEO. Andy Jazzy, who had run Amazon Web Services prior to being elevated to CEO, talked about the growth in Amazon Web Services continuing and talked about the uses of artificial intelligence and generative artificial intelligence within there. Amazon North American core in this retail didn't make money for I think eight quarters

in a row. They just printed a huge number. And Amazon has gone through this multiple times where they invest, they invest, they investing, you don't see the profit, and they stop investing briefly and you see big profits. We just saw big profits and we're gonna see big profits. And at the bottom Amazon always people say the retails were zero and when the stock works, people say AWS is worth a lot in retail could be worth a lot.

But we're gonna have to come back, Yes we will. This is Josh Arnold Mister Money Talk with Judd Arnold here to answer your questions on stock spawns, mutual funds, what you should do with your retirement dollars including your IRA in four to one k do give us a call nine to five two nine two five five six o eight. We're here to help. But did John Arnold, Minister Money Talk with Judd Arnold here to answer your questions on

stock, spawnds, mutual pundsail. You should position your investment dollars including your IRA in four oh one K. Don't hesitate to give us a call at nine to five two nine, two, five, five six or eight. That's nine to five two nine, two five five six h eight. You'll always get straight talk. Not true with goded advice. All discussions on this show are in our for discussion purposes only. None of it should be considered

investment advice. Do not make a financial decision without consulting a financial professional. Some are all of the investments we discussed on the show may or may not be suitable for or you. Investments contain risk in including risk of loss. Please consult the financial advisor before making any decisions. The opinions of the show are ours and hours alone. As we concluded the last segment, Amazon some really surprise on the upside both top line, bottom bottom line, and up

their guidance into the end of the next quarter. Very very impressive, and I do believe there was some we'll say some short short coverings. As the stock you know jumped jumped up eight eight percent. I don't think this was short covering. I think this was money coming in. Well, it definitely adds adds to my perception of this is a tremendous, tremendous company despite all the disappointment hardy that it gave me. In twenty twenty two, they started

showing how they can make money in retail. Again, that's all that really matters. The guide was really good, the earnings were really good, and AWS was better than feared. So there's one analyst that talked this week about how Amazon is the best mixshift story in tech. Now let's talk about what the heck that means. Well, I'm a little confused. You can help me. Apple has gone through a five to six year mixshift from being a

product company to a services company. Okay, product companies are tough. Apple, I don't think it was six seven years ago. Apple would get forty percent of its sales in Q four and it was what's the iPhone gonna sell? With services? Which is that monthly billy you get that just keeps going up. You get monthly revenue for all the stuff, all the services they sell you, all the apps and all the other stuff. And that's a

recurring revenue stream. And that shockingly or unshockingly if you don't get my Sarcanism is a revenue stream in a business where the heck of a lot more services has a gross margin profile of two times products. And that's why Apple's multiple has gone from I don't know ten times earnings to thirty plus Amazon as AWUS gets bigger and bigger and bigger. The retail piece, which nobody has been able to figure out, how the heck to value gets smaller and smaller as

a percentage of the company. That's it. We are getting to a point. And with Apple, we sat there when services was twenty percent of revenue and said, how the heck is this not getting a services multiple? Well, it had to go to about thirty five. Okay, Amazon is getting to that point. Now AWS is all ready over one hundred percent of operating income. That's because everything else plus the corporate overhend is negative. Um, that's not a T T tralelinge called month basis, but on a quarterly basis,

I think it was about seventy. But that's that's the big thing, which is retail doesn't matter. So that is the mixed shift story. We're getting to that zone where people are going to be able to disregard the retail business, which has its ups and downs. That's the mixt shift story, and the evy to revenue multiple is actually very very well and that's what people talk about, the mixed shift story. That's really what people are getting at,

which is you have a very very low optical valuation. I know, earnings. It's very expensive on earnings. They invest a lot in operating um expense opex and that's what's student net income. And every once in a while they show you what this thing can earn. But if you just strip it all, you'll get evy to revenue things. What's it's not even it's a

little over two times two times sales, which for Amazon is inexpensive. Yeah, definitely inexpensive for Amazon, and particularly if I were to compare Amazon to any of the other large large capitalization tech companies, Amazon is inexpensive on a price to sales basis. Well, there you go a lot of money coming into Amazon. We'll see. We talked about it at the starting segment. A little bit of a pullback as markets come back only up sixteen point eight

percent from nineteen point five percent of the year. We're really seeing under the surface is a rotation where banks, which are down thirty percent for the year at the end of Q two now only down seventeen. Energy was down seven and a half. Now it's down less than one percent, and you got a bunch of the laggards are now sort of catching up. You still only

have of think about this. This is a great stat Fifty five percent of the of the SMP five hundred is trading of it's two hundred day moving average. Of nasdeck stocks, only fifty seven percent are above their two hundred day moving average. Now I point up the nas deck fifty seven percent because the

nas DEC one hundred index is up forty percent for the year. That would mean that an awful lot of the stocks within that naz DEC one hundred index are not up that much, but not only not up that much, but are still in negative territory. Correct, And that this is the dynamic that we've seen all year, which is the art we've seen it for twelve years, which is the marketcap weighted SMP five hundred. So the bigger the marketcap, the bigger the weight which is what that is the SMP five hundred,

It is marketcap weighted. I should say it's up sixteen point eight percent the equal weighted SMP five hundred, so that they are all weighted equally is only up seven point one. Now that's a little bit better. It's it's about a nine point gap now, but was ten. Well, that that brings

up something very interesting when we talk about an equal weight index. And you know, I've listened to i'll say, talking heads on fin TV, financial TV and even looked at you know a large number of open end mutual funds or actually manage mutual funds, and most of them, JUDD are not performing as well as the SMP five hundred. They're closer in line to the equal

weight index in terms of return. Well, that makes sense because first of all, from an industry concentration standpoint hacking, communication services, I think it's forty five percent of the SMP five hundred. Now, most mutual funds have industry concentration limits to twenty percent of any one industry. Well, I'll start there, and then they have position limits at five. You've got my Apple and Microsoft are over five. Well, I think I think between the two

of them, they they're probably close to fifteen percent. Yeah, market cap weighted on the SMP. And so when you have sectors that are larger percentages of the SMP high hundred. The mutual funds are allowed to concentrate in one sector, or individual stocks are so big versus the index that they can't be owned. That's what you get, and you have most mutual funds. Most active managers don't like to own high valuation growth stocks. They have a quality

and a value bias. So this is what we've seen with active management since the global financial crisis, since the agent quantitative easing, which is big tech is outperformed, and active management has chronically under under owned them. And by the way, they've owned a lot of banks instead, which that's what I'm going to say, is that most most would seem to own are very heavily weighted to Tom Bank and some of the industrial companies that have or i'll say

and defensive names that have underperformed. Yeah, so it's very very interesting. We are not bank and bank investors, uh, but you know this. This past earning season, the banks of particularly the big banks did report better than better better numbers or beaten RAI raised numbers, and I think some of the regional banks surprised on the upside that they're that they're still still around. And then you had some mergers and Acquisition Act. We talked about it last

week. The bank in California, PacWest merger I think was unbelievably good for the market. It took out a left tail risk. Left tail risks are bad ones, right tail risks are good risks. Took out a left tail risk bank that continued to trade really well. This week, you're going to

see more troubled banks that can be saved. Get this and that PacWest bank Bank California, you know, which is really a rescue of pac West, did not require any government funding, so that's pretty I think the other macro collum very comfortable, making as comfortable as you can with macro calls because nobody knows macro. And the more people talk and the more they pontificate, the more I'll just tell you they're wrong. I think we're gonna have a big

M and A wave. We've seen the high bond market comeback, We're seeing the ipo market comeback. Every time I've seen those two things happen, you've seen an increase in M and A M and A it's been dormant for two years, and a big surgeon M and A is gonna be really good for the equal way to SMP five hundred. Well, if I were looking at a big wave in mergers and acquisitions, would it make sense to look at

some of the what'll call private equity firms that you always bring this. Well, first off, the biggest value driver for the private equity firms is an M and A. It's the deals they've already done. So when the market sells off, they all get hit because people assume they're not gonna have performance feeds. Market starts rallying and then people start pricing in those performance fees. So Blackstone is already back up I think to one ten bottomed in the seventies.

We've already we've already priced in the full. They're going to get nothing. And now it's back. And Apollo had great earrings this week, and Apollo that's thicker. Apo is going in the SMP five hundred. It's gonna be the next thing added. They now qualify, which is which is big? You know, we gotta come back. Well, I'm just gonna cut it right there. We gotta come back. We got we got say true

to the show. We'll be right back. This is Josh Arnold, mister money talk with Judd Arnold's here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars. Do give us a call nine five two nine two five five six oh eight. That's nine to five two nine two five five six oh eight. You always get a straight

talk. Not sure to coded advice. This is Josh Arnold missed your money Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA in four oh one K. Don't hesitate to give us a call at nine to five two nine two five five six oh eight. That's nine five two nine two five five six h eight. All stocks discussed are for discussion purposes only. None

of this is investment advice. Please consult a financial advisor before making any investment decision. Some are all stocks discussed on the show may or may not be suitable for you. Investing contains risk, including risk of loss. Welcome back, welcome back. So in terms of you were talking, but when we when we have an anyway from about the coming merger acquisition wave, and I brought up investing in some of the private equity firms is a way to invest

in that that move. But maybe maybe not, Maybe it's maybe it's just I think they've already to invest the way that I have been focusing in on on growth companies in particular areas, and anything with merger acquisition just happens. Yeah, you don't have to play every macro trend and try to express it. And my point in saying we had the high opon market clothes and then come back the IPO market clothes and then come back we saw Cava, the

Mediterranean Chapulte and then another one odd just go up one hundred percent. Those are big enough deals. We're going to see a lot more IPOs come post labor day, okay, and MNA. It is the last of those three markets, so the first of those three markets to close, and it's the last of the three to open because you have bid ass spreads. Bid ass spreads are the people buying the companies say they'll pay a lower price, to

people selling the companies say they want to higher price. We have been at an eighteen month to two years standoff between bid ask and that is now going to get resolved in favor of the ask. The bidders all thought they were going to get generationally low prices. That is not happening. And you're gonna see appital in the m and A market be deployed rather aggressively. Where do

you see more of the consolidation everything that is in tech? Okay, So one of the ways that the RSP that's the equal weighted SMP five hundred SPY, that's the the SMP five hundred that's marketcap weighted. And just for context for people, the top ten stocks in the SMP five hundred are thirty percent of the index. Okay. The other four ninety are not all you know, and if you went to the top fifteen names, I think they are

about thirty six percent of the index. It's really really it's it's contrary. And what you've seen is with tech really outperforming. You have tech at i'll say normal, the elevated elevations. Historically, you've got MidCap value. Now a lot of that's banks, so i'll caveat, but even X banks at very very low historic valuations. Okay. What kind of companies would you see in the energy industrials, Energy and industrials and some healthcare stuff. Healthcare is

harder because of regulation. But you're going to see a lot of the you know, industrials is down. Nope, I take up at I apologized. Industrial is up eleven percent year to date. But let me just give you a little context for that. Industrials is up only twenty one percent in twenty twenty one, it's down five in twenty twenty two, and ends up eleven percent year to date. So we're up since the end of twenty twenty, we're only up about twenty twenty three twenty four percent, text up a lot

more, and we've now priced and inflation. It's not like industrials is really killing it into twenty twenty one either. In twenty twenty two, the covids, you're gonna see just a lot of consolidation. Private equity, which has been really at bay, I'll say, since the global financial crisis, because triple B rated corporates Triple B is the lowest rating before you go nine investment

grade. For the first time in a very long time, triple be rated corporates, who will only lever a company up two and a half times, had a lower cost of capital than private equity firms that typically use six to seven times leverage. And so you saw the number of leverage buyout transactions to client every year starting in two thousand and nine, and you're going to see

a resurgence of that as sort of evaluation put. But I think the bigger point, the meta point, if you will not meta the stock, the meta point is, and I brought up Bank of California pack West, is you still have all these late bears I'll call that that are calling for a generational selloff. We have to blow up the market's got to really go down. And look in every year you have three to four at least five percent pullbacks. My point, and partially your point as well, is what's going

to blow up this market? Can you have a five percent pullback? Sure? Can you have a ten percent bull back, sure? But to get a twenty percent pullback, like a lot of people are still calling for, you need a lot of bad stuff to happen. And when you see M and A start to accelerate, not decelerate, you see the IPO market start to accelerate, That to me says this market can hang on a lot while

longer. Now the market again, we have very big sector dispersion this year text and you know, the the NASTAC one hundred names we may have seen up forty percent. They may do nothing for the next six months. That could happen. I mean that's happened in the past. Typically NAZAC runs first and then everything else stills in behind it. And you know that that could be could be very very My point was less the positive and less the avoidance

of the negative. With the m and A picking up and ideos I should say, which is I just don't see like you know, we've got a little bit of a healthy rotation this week. I just don't see the seeds right now, barring in existential events. Well, if you talk about an existential event this this this past week, and we'll we'll we'll talk a little

bit about it now and then talk about it in the next segment. One of the bond rating agencies Fitch. There are three bond rating agencies standard in poor Moodies, and Fitch rate bonds and credit and they downgraded US credit and US bonds from triple A to double A plush, saying there there are some major issues, well, too much fending on the part of the current administration. They felt the fit is overboard with their interest rate policy, and the

Congress is being in transigent on the on the depth ceiling. But I just say, we are very deep into segment number three, and I was hoping to get through the show without dignifying this Fitch down grade of the United States with even a second of commentary, because this is this is lunacy, idiocy and whatnot. First of all, how can the United States sovereign credit rating be anything other than super trip ala since we are the global reserve currency.

Good point, You cannot the fault as a country unless you are Russia in nineteen ninety eight, which shows to default. If you issue that in your currency, what do you always have the option to do to avoid default? Print more money. That's why the financial historians will go back to nineteen ninety eight and Russia and the default which triggered the end of launch from capital management. They chose to they affirmatively chose to default on ruble deeds, which anyway,

most countries don't have that option. Argentina, while the Latin American countries, the Mexican you know, all these country had to issue debt in dollars because otherwise people won't lend to them. So that's number one. Number two, how do you have the US sovereign Brendit rating not triple A and states like Minnesota be TRIPLEA. That makes no sense that I'm not going to disagree with you, jos So. I was saying this was an outside event that

wasn't talk so ridiculous. And Fitch. Look, I have almost zero respect for the credit quality and analysts of Moody's and SMP. It's a rig game. They have to put up good ratings. Fitch isn't even the rc cola of rating agencies. Who it is, Edith. If you are a Wall Street person and you end up at Fitch, believe me, don't end up there. Get another career. Wow. Yeah, they don't know the do you know how make triple A clos and CEOs? There are right now structure

credit that blew blew the world up in OA. I hope they're the thousands thousands, And you're going to say the US government that can the global reserve current? I mean, these are these people downgraded the Roman credit at the height of pox Romana like this. This is ridiculous. It's trying to get a headline and you're you're making me little little. I can see that you're jumping here. Here's the other thing we started saying. It's on the show

a few months ago, and I'm going to repeat it right now. Higher interest rates are good for stocks now, not not always, not usually, but right now, higher interest rates are good for stocks because what does it mean? Means the economy is doing well? When the economy is doing better,

better than many people expect. And you know, when you're you talked about the number of people who are expecting a major sell off would probably be equal to the number of people analysts who are talking about having a serious or significant recession and have been talking about having a significant recession for the last year and a half on the yield curve. The genius of these recessions for people that have held fast to that call for eighteen months without reversing it. Myopically,

I would point out, is eventually they will be right. But guess what. The difference between being early and being wrong on Wall Street is indistinguishable. We'll be back. This is Josh Arnold, Mister Money Talk with John Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA in four oh one K. Don't hesitate to give us a call nine five two nine two five five six

oh eight. You'll always get street talk. Not sure your coded advice. This is Josh Arnold, Mister Money Talk with John Arnold to answer your question fun stock funds, utual funds. How you should position your investment dollars including your IRA in four oh one K, call us nine to five two nine two five five six oh eight. That's nine to five two nine two five five six oh eight. You always get straight talk, not sugarcoated advice.

Well, earnings continue of pace. And it's not just my two large companies, Apple and Amazon that reported this week. Apple finished on the downside, Amazon finished on the upside. Also had my casino stocks reporting this week. Caesar's Draft Kings and MGM Draft Kings I thought did very very well and it looks like they're going to be making money either before the end of this year or early next year. Uh, and that could be very very interesting as

we start into a heavy betting season. MGM and Caesar's to me did very very well with their Las Vegas casinos. Regional casinos not as as well, but but their sports books are definitely showing showing profits and that is a plus. And if I look at Las Vegas, we've not only have football season happening, you've got Formula one and Formula one as a company, they reported

this this week and there they did better, better than expected. And then we have the Super Bowl in Las Vegas later this year, so we'll say sports gambling and Las Vegas should be pretty strong in my estimation over the next several months. And maybe they're uh, maybe they're After next week. We do have some of the media companies reporting numbers, including Paramount, which I've

just assumed snooze through and Disney that'll that cannot be. That cannot be real, real good or promising, particularly with a number of Disney Plus subscribers going down and not up. But maybe they'll have something exciting to talk about on about ESPN if somebody were to become their their partner. But that's that's coming up, uh in the next week. And Judd, you have some interesting companies that are going to be reporting next week. Oh that's a big week,

big week for my name. We've got up Start, which I don't own, but it is a comparable company. To one eye you own, which is Pagaya. That is Thursday, after the quotes for up start Pagaya. At Thursday morning, a guy a very important We got ti the Oncology Institute Thursday afternoon. I did. It is true. I wrote a letter to the company told them you do a lot of other things differently, but also said I would buy the company at a dollar twenty five a share if

they gave me a little bit of time. People that it's funny. I I, oh, I'm not. I'm not the CEO. I have a call with the board and the CEO after they said we'll talk to you after earnings. I've actually had a few good calls with people, and people are asking, are you serious? I said, yeah, that price? Are you kidding me? They said, I'd love to invest in the deal. Okay, Well, all of a sudden, my son the corporate activist, and well, I'm not even going to call you, maybe even a corporate

breater. I did put a lot of other things in the letter other than I will buy you that. I will point out the following sense and you can read this on Twitter. My my handle handles I think is the right way. Well, it's for your research company Lake Cornelia your research the hand was at Cornelia Lake. I got fourteen thousand followers. I just I just crossed over. I'm a big deal, A big deal, Minnesota, modest, big little deal. Um. So we got them Tuesday afternoon, so

that'll be that'll be interesting as well. We also have some healthcare companies that I follow, Canal Health, which has been a corporate saga that deserves two books, five soap operas, and a reality or a Hallmark movie or a Lifetime I don't know what what I mean. Anyway, I've got a nine part podcast series you can find on my on my Twitter page. But that

is I believe Tuesday and then Wednesday for CarMax. We still have a few energy names left too, but I traditionally next week it's the last week of real learnings. Then after that everybody reports as a fake company. Oh so you're you're talking like Nike is a fake company? Well retails last the earning season has lived up to what the expectations were, which is we had a

lot of positive pre announcements and earnings have generally been better. I think that the earnings and have been earnings and guidance for the most part have been much better than most animals had had expected. And I think that's that's surprised people you talked about, the people who are expecting recession and or a market pullback, they've been They've been caught off guard. I think things to watch. We had a really good inflation number Friday, and Goldman came out and said

it's unlikely the FED raises in September and may not raise in October. Again, there is no August meeting the bankers. They take them under the August off. They go to Jackson Hole and they give some speeches. But plation number looked pretty good. Oil has been sneaking higher mid eighties. The administration came out and said they're not going to fill up the spr the strategic patroling receive, they fill up something or put something. Yeah, I have five

hundred million barrel capacity. They've refilled I think three million barrels. And everybody was Joe Biden's taken and Amos haste and the Energy advisor taking victory laps on selling oil at one hundred and twenty dollars a barrel in the middle of the Grand Well, guess what, guys, you didn't complete the trade until you cover your short Well, it's still it's still out there. And my understanding is they put put some of that back and then have been taking it out

that a pretty significant rates. They have not refilled anything, okay, because they keep selling a little bit and just presume none of that's going to get refilled before the election, and that may never be refilled. And it's unfortunate, especially if we ever have a war, because we give up half our strategic patroleum reserved, the whole reason the darn thing exists anyway. Anyway, I digress, but I think for attends, I can go bad for the

market. Certainly, oil in the eighties is going to is kind of goldilocks where the producers do really well in consumers and afford it. He started getting up to ninety ninety five, you start having our aggrest attacks impact on consumers. That's one too. We did see Thursday, now Friday, it was fine on the good inflation number, but Thursday you saw that ten year bond creeping up to about four point two percent, and typically over four on the

ten year is a bad thing for stocks. And on Friday the ten year finished just about four percent, just about four it came back, so, um, that is another thing to watch. I'd say the ten year moved Thursday really was a negative for the market, and the market failed to rally on Friday, and I just I'll throw this out just in terms of the bond market, one of the big hinge hinge fund managers, Bill Ackman of Pershing Square Capital, came out and with a pronouncement that he was shorting the

long treasury. Long treasury could also be symbolized by the market to TL two right, he's betting on higher long term interest rates. So short term rates are five to five point five percent. The peak of the rate curve is

the six month pock Okay, it's about five point five percent. The curve is inverted because front front end rates are higher than long term rates typically a refreshon resessionary single because if you think about it, long term rates should be higher than short term rates normally because you're taking more credit risk because time equals risk. Correct how the curve was going to resolve itself is a question. Typically people say a bullish reversion is when short rates fall, and people say

a bearish reversion is when long rates rise. I think this is awkward and dated thinking. Given the scenario, I think I would argue, and we have been arguing, that it is bullish for long rates to rise because it means the economy is getting better, not worse. But we got a lot more to talk about. Give us all think the economy is getting a little better. This is Josh Arnold, Mister Money Talk with Judd Arnold, always here to help you. Nine to five two nine two five five six.

Josh Arnold Investment Consultant is a registered investment advisor located in a state of Minnesota. All securities discussed are for informational purposes only. Investing contains risks, including risk of loss. Consult your investment professional before making any decisions about your investment portfolio.