This is Josh Arnold, mister money Talk with jud Arnold here to answer your questions on stockt 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 five two nine two five five six o eight. That's nine five two nine two five five six o eight. You always get straight talk,
not sugarcoated advice. Another big week and a big week in terms of earnings, But a bigger week in terms of earnings comes next week as one hundred and sixty eight stocks of the S and P five hundred report their numbers. Not to mention next week that the FIT has their meeting, and the probably eighty five sent chance that the Fed is going to increase interest rates twenty
five basis points, it is going to be on the table. Market is definitely going to be focusing in on earnings from the likes of companies like Microsoft, Fit, Facebook or Meta, Google, Amazon, Visa, and McDonald's,
among others. And the focus is not only going to be on their earnings and how they did to let this past quarter, but what their guidance is going to be in the coming quarters, And of course there is going to be the market worry about the FED and what the FIDS guidance and or dot plot is going to be over the next several months, and is the FID thinking about raising interest rates a second time at their next meeting in September.
And of course we do have the start of the NASDAC rebalancing which will take take effect Monday morning. And continued concerns at least among many strategists of a recession that could be happening sooner rather than later on some strategists viewpoints, or later rather than sooner on others. And then there's a always worry that
the market is overbought and due for a significant correction. Now, when it comes to the market being overbrought or having a significant correction, I think there are numerous strategists and numerous individuals who have not anticipated in the markets move up this year and they're looking for a chance to get in. What do you think, jud We've been tracking it for months now. Which is the SMP five hundred index versus the equal eight SMP five hundred. As a reminder,
in the SMP five hundred is a market cap weighted index. The top ten companies are about thirty percent of the index, meaning the other four ninety are only a lot smaller, a lot smaller. That gap has been ten percentage points all year for the you know, for the quote unquote catch up trade.
It's now nine coming closer. Well, that's that's because of what happened on Friday with a lot of the large, large, large capitalization TEX stocks, which make up a pretty heavy weighting not only in the NASDEC but also in the SMP, are going to be rebalanced. But that's only that's in the QQ here. That's not in the STI. I understand that, but the selling that could be going by. But well, let let's let's leave the tech world. Let's be a little positive, which is they are very
positive. Banks are a big part of that four ninety and uh, banks sounded really good again this week. Yeah, we're week two of earnings in the book Q two earnings and it sounds not bad. It sounds at least from the from the banks. It looks like the banks are not going to be going out of business any They might they might have to raise a little bit more capital, but there it looks like the banks are not going going to be going out of out of business right now. And that's particular with
the regional banks, which seemed to have the most trouble in April. Uh yeah, they all sound find the energy companies, all the big services companies Haliburt and Slumber J. Baker hughes Or reported this week they all sounded downright giddy about spending imp spending from the big majors. So that's humming. Two yeah, three more, I'll say, three more weeks of earnings left. But here we are. We're up eighteen in change on the SMP, five
hundred nine in change on the equal wad on the NAS deck. It's just just a normal great year. And inflation keeps coming down, I'd say. Of note on the inflation front, the most telling thing is Blackstone, the mega asset manager. I think it's the biggest asset manager in the world. Well, they have several trillion dollars one trillions, one trillion, one trillion. That's several big private equity fund they said across their portfolio. I was
thinking of black Rock Mempers. Yeah. Yeah. Black Stone, which owes a bunch of companies big private equity funds, said they're at the company level of what they own. They're seeing inflation come in a lot more than headline numbers. Well, I would I would tend to agree with that. I know that the fan is only looking in terms of inflation. They're they're saying
that inflation is extremely sticky, and particularly in employment. Well, labor cost Labor costs continue to go up and and house prices one of the big tenants of the well, i'll call it new bowl market because it is technically a new bowl market. We are up way more than twenty percent from the bottom, which was last October. So is this dead ceiling deal that they struck was a month ago? Now, Yes, allows the federal dead outstanding to
go from thirty one to thirty five trillion in the next two years. That's four trillions. That's that's a lot of a lot of mice. So we're about a ten or sorry, we're about a twenty trillion dollar economy. So an extra ten percent used to the economy next two years, and death is
it spending. The Fed can be as tight as they want, but as long as fiscal policy is that loose, that's where we're going to keep inflating assets and then just going back to the Fed it's kind of both sides of their mouth because while they're raising interest rates, the amount of liquidity they're providing to the system keeps going up. The FED balance sheet keeps expanding. You get it. That's pretty it's pretty interesting. I would I would have thought
that the FED would have been cutting back on their balance sheet. Well, they're not expanding it. They're cutting back on what they said they would cut back on, which is the quantitative easing stuff. They're expanding the bank support stuff. So the one of the outcrows of the bank crisis from March was all these emergency FED programs, which you're now pumping in three four hundred billion dollars of liquidity into the system. So again that becomes very significant. It
starts to matter. Well, it's been mattering. We we've had for the March to get to get kneecapped. We really needed Q two earnings to be bad, and so far now we're two weeks in, they're not bad. We had a lot more pre announcements than we've gotten into three years coming in, which was positive. So we're entering a weaker seasonally weaker part of the market, which is August is usually a down month. For the SMP five
hundred, but well both August is usually down. That's primarily because of all the vacations that the big money players take, not only here in the United States but abroad and Auguste Yeah, the junior varsity takes takes over in August. Well, the varsity is on vacation. The varsity comes back in September and looks at the at the sheets and said, oh, we've got to sell everything. Yeah, so September, October or actually really October is the
worst month for the market. So we're entering up a quote unquote perilous time. And we'll just remind everybody for the twenty million time, there's a lot of risks and the markets should sell off fives ten percent three to four times a year before we come back. We do have to say, are a disclaimer, the normal disclaimer, which is none of this is investment advice. This is for discussion purposes only. Don't make any investment decisions based on this
show. Please consult the financial advisor. Investing contains risk, including risk of loss. Some of the stocks we talked about are not suitable for you, and be careful out there. But with that fun stuff, it is the summer, the market is rallying. You're having a great year. I am having a very very good year. You're out performing once again on a one year, two year, three year, four year, five years, six year. While we can go back, it's a lot of years, it's
a lot of out performance. Clients are happy, we're happy. You and I are the biggest investors and we invest right alongside our clients. Biggest investors have done that for a very long period of time. That only makes a lot of sense. Of course, of course it does, and we are active managers. We don't We do not just by the SMP five hundred. But we got a lot more to talk about on this fun show, this beautiful summer weekend. Hope everybody's having a great time, and we will be
right back. This is Josh Arnold, Mister money Talk with Judd Arnold, always here to help you, whether it's in stocks, bonds, mutual funds, how you should position your investment dollars including your IRA and four oh one K call us nine five two nine two five five six oh eight. This is Josh Arnold, mister money Talk with Judd Arnold here to answer your questions.
When stocks bonds, 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 oh eight. You'll always get straight talk, not
sure coded advice. Very interesting when we've talked about earnings coming in this week that two large, large companies, two of the Magnificent seven that have been leading the or helping to lead the SMP and the NAZ deck up, Netflix and Tesla reported their their earnings. Both I would say would be more mixed in terms of beating on the bottom line, but the top line being not
as good. Netflix showed that they were going to have an increase in subscribers for the next quarter and did say that they were seeing an increase in revenues over the second half. Tesla, I think a lot was expected of Tesla, but their disappointment was in when their new cars would be coming out or new trucks would be coming out, and that seems to have been delayed,
and both stocks sold off on Thursday and Friday. I found that, I'll say, kind of interesting, how fast both of those both of those companies went down, the tech stocks led from the bottom, and they're going to be the first to top out. That that's the called I We've been talking about this SMP five hundred verse equal weight SMP five hundred gap for a while. We did have utilities breakout later this week, which is sort of the
ultimate opposite tech trade, if you will. And transports are looking incredibly good. I mean we had just let's just talk about transport. We had awful prints from Night, awful prints from CSX, and the stocks really didn't care, No, they did not care. You get add to that JB Hunt a week ago, and I think this just all goes to the market setup, which is for the first half of the year, we had people both bullish tech and hiding in tech and not wanting to touch anything with any economic
sensitivity. And now that economically it doesn't look like we're gonna in a recession for the next couple of months, the spread is just so huge. If you look at NASDACK versus banks or NASDACK versus oil stocks, you're talking sixty to eighty percentage point differentials. And now Wall Street guys like to we'll say, rotate from rotate rotate from one one sector to them. You said they're
eleven sp SMP five hundred sectors and you know financials. Because one sector has been a laggard, Energy has been another laggard lagger this year, Industrial the industrial sector has been kind of mixed, and tech has been we'll say tech and consumer tech, consumer discretionary have been leaders. Consumer staples has been not a laggard. Is just there. Keep in mind stock reactions to earnings reflect
differences in embedded expectations, So oftentimes people are always surprised. Company beats numbers and the stock sells off, or a company misses and stocks cells up or trades up. I should say people are very good at calling quarters. There's a whole industry. I used to work with a lot of these people.
There's all this stuff about it invented expectations. If you want to play that game, which I don't recommend, you're going to lose the people who invest a ton of money to figure out how to do that, and the even nice struggle. So you really have to take a bigger picture of you. But I'd say, and the bigger picture of you is just simply a lot of stuff is rallied we have an up market, and you typically are going to have the tail start to catch up. You're gonna have a little bit
of a ketchup trade. Well, in terms of having a ketchup trade, some of the leaders, you know, might might be reduced to go into some of the laggers. Oh possible, But like you know, all the stuff is noising. You've held Apple since two thousand and four, that's correct, and Amazon you've held you know since what well this time throw since two
thousand and seven. And when you hold stocks for a long period of time, I mean both these stocks are up fifty to one hundred x for clients depending on when they got in. I will Apples up more than one hundred x, but you're gonna have multiple periods of time where they're out of favor. And Amazon, Amazon, we just went through a period of two and a half years where seemingly nothing needed manner, nobody care, and all of a sudden, people care. And you look to decide time horizon. Are
you an investor or, are you a renter? And a lot of other things, And for high quality stocks, it is it has proven best for clients to just just hold for a long period of time and we have our trading portfolio, we portfolio, but with our big ones, you know, with Apple and Amazon, I think we will readily admit they've had very nice
runs and they could do nothing for the next twelve months. They could and I've as I've said to to clients every quarter when it comes to Apple, do be prepared for a little bit of a pullback just after the earnings are reported, because there is going to be some number that some analysts or group
of analysts does not like or isn't up to speed or Apples. During Apple's conference call, the CFO or the CEO is going to say something that is going to be perceived as too conservative or a little negative, and the stock is going to sell off. The same is true with Amazon and we Amazon have seen two quarters or saw two quarters last year where on seemingly good numbers, the stock dropped the twenty dollars a share on the earnings and I was
like, whoa, what just what just happened and why? And some of the commentary was, well, it looked like AWS Amazon Web Services was not going to be growing at the rate that we thought it was going to be growing. I'm kind of questionable, what do you mean, you've got an eighty five billion dollars a year revenue run rate business. It's not going to
grow at thirty percent at that at that size. Amazon Web Services is more than twice the size of microsoft'ss or and several times more the size of Google's cloud, and those should be growing at a lot faster paced than than Amazon
Web web Services is right now. I think the belief is that with artificial intelligence and the need for not only more storage for artificial intelligence plus um plus the need for fast or chips, that that's going to be a boost to all these companies to provide some type of data, data storage or the ability to track orficial in telling you, you're dancing around something that the core tenant of how we invest We are growth investors. The number one driver of stock
returns on a ten year basis is revenue growth. Now that might be a little counterintuitive for people because people will say, well, don't you care about profits and earnings and just bear with us. On a one year basis, if revenue goes up a lot, does that mean the company's making money? Not necessarily, But if you raise revenue ten years in a row, almost by definition, you either have to be profitable, or you have to have an unbelievable funding source. So that's what we focus on, and this is
backed up by tons of empirical data. And so a lot of people get enamored by value stocks. And keep in mind, everybody, at the end of the day, is a value investor. Growth investors are value investors. We're all trying to do the same thing, which is by pay less for something than we believe it's worth. Correct the difference between what many people would
refer to as value stocks and growth stocks. What we try to avoid are stocks where people say, well, the stocks at five, it's really worth ten, and then you ask the people, would you buy it at ten? No, I hate it. It's really boring at ten. It probably just goes sideways from there. And in those situations, you're never gonna get ten. You might get seven, you might get in because somebody has to
be there to take you out of the trade. Somebody has to say to themselves when it gets to your price target, well, this is still interesting to me. Because my time horizons longer, I have a different view on growth and whatnot. And with companies that are growing, we have found the nice thing is one. Every year you hit your price target and you get a little further forward and you say, well, now we have to raise our price target because earnings are higher. So with Apple four or five years
ago, we were talking about how it was a five dollar earner. Now it was a six seven. Now we're an eight fifty to nine dollars earner, and slap a multiple on that, and you got to hire and higher stock praise. The business compounds, as they say, over time, and that's what we're looking for. And people have gotten a rude, rude awakening. This is I will I'll end on my high now and I don't know
if you know where I'm going. Eight T and T the venerable if you look at the sticker is T. People perceive a monopoly safe dividend and it is a big piece of a lot of quote conservative portfolios. And Pete's looked at as a value stock value stock, low PE multiple. Well, guess what, low pe multiple stocks tend to be bad stocks. So while you've gotten your dividend for the last thirty years, you have gotten your viewer stock
appreciation. Actually it's worse than that. The stocks has actually gone down in value. And this year you know, the stock has gone I believe, from about twenty five dollars a share to fourteen dollars a year, even though it's still paying the dividend. They've been losing losing subscribers. At fourteen a share, we are back at the nineteen ninety three price for the stock. Oof. Oof that that seemed to be I've just lost thirty thirty years.
So all I've gotten is the dividend over thirty thirty years, you got a bond return. And by the way, if you would have bought the thirty year bond back then you've got, you would have gotten eight and a half percent yield. So with that, we got a lot more to talk about. Do remember the disclaimer not investment advice. Please consult the financial advisor. Not everything we talked about is suitable for everybody. This is Josh Arnold,
mister money. Talk with Judd Arnold here to help you with your investments. Whether it's stocks, bonds, mutual funds. You should position your investment dollars call us nine to five two nine two five five six oh eight. You always get strict talk, not sugarcoated advices. This is Josh Arnold, mister
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 and four oh one K. Don't hesitate to give us a call at nine five two at nine two five five six oh eight. That's nine five two nine two five five six o eight. You'll always get straight talk, not sugarcoated advice. Well, saw something very very interesting. Actually it was more than
just saw something very very interesting. Talk to talk to one of our neighbors on the floor, and I actually made a comment about his his shoes and the color of his shoes, and and and he made a comment as well. His son gave him those those shoes. And I said, well, the light pink does not match your your dress. It's a little too ale. If you want to wear pink, where bright bright pink. It's a rich and a royal color. He said, well, he does get comments
about these shoes and he loves them. He said, he's on his feet most of the day and the shoes were talking about these pink shoes, loose color. I did not like where Crocs and Crocs as a stock has done extremely extremely well. And while I might not like the color, nor even wear Crocs shoes. This company has been, we'll say, on fire for
a very long period of time. I have talked before about shoes and whether in good markets or good economies or bad economies, people are going to buy shoes, something that my father told to talk to me about a very long long time ago. And even hey, there was even a commercial made about the shoes. It wasn't the basketball player. It was the shoes that made the basketball player who he was. Now that Spike Lee commercial for Nike,
It's the shoes, not the basketball player, which was Michael Jordan. I'll say that the Nike, the Nike shoes made Michael Jordan, not the other other way around. Now there are many people that will debate that. But we'll go back to Crocs, whose stock has continued to move up and could almost be seen as a I'm not going to say a safe asset, because sometimes shoes can be seen as a short term trend. In the case of Crocs, that trend has continued for quite some time. Crocs earnings, you
know, continued to climb, their sales have continued to climb. They are going to be reporting their earnings next week, so they're one of the one hundred and sixty eight companies that is going to be reporting. And my guess is that Crocs sales and earnings you will probably be up in excess of twenty percent when they report next week. And it would also be my belief that Crocs, as many companies will do, will issue fairly conservative guidance for the
next quarter and the balance balance of the year. But Crocs has returned to will say being a we'll call it a lifestyle brand. Another company in the shoe business that has continued to do well has been Deckers. Deckers known for their ugs, ugs, boots and shoes trend that I've never been able to understand, but that has done well as well as Teva sandals. Now they have Hoka running shoes or Hoka sneakers, which have been big big sellers.
Deckers Outdoor has has done exceedingly well. Their sales or due the same time as Crocs or giving their earnings come out at the same time as CROCS, and I would pay attention to what they have to say about about sales. Here again, with Deckers, i'd have three called lifestyle brands, and I think again earnings will be up. Sales are not going to grow you know that that much, but I think they'll be very, very steady. The stock will say is reasonably priced but could come in a little bit UH as
it has. UH has doubled in value since UH since last year at this time. But again, as John has brought up in looking at a growth stock like Deckers, for one, sales have continued to to increase and earnings have have followed followed suit. And then you've had UH, You've had another we'll say shoe company which did report and their their next report is not until the end of September, and that is Nike. Nike's stock is you know, has drifted down, but has up a little bit since since they're earned.
Fears with Nike has been sales not coming in as much as had been
expected with a rebound in in UH or an economic rebound in China. And when it comes to China, their economy is not growing as fast as had been expected coming out of their COVID COVID lockdown, and indeed, China has been cutting interest rates and trying to stimulate their economy to get some more economic growth, and they're even providing some additional support to some of the they're leading technology companies including Baidu, Ali Baba, ten Cent, and JD dot Com
just to name a few companies where I'll say leadership has been kept under wraps for for several several years. These particular companies could be seen as offering some value, particularly those that are technology related. But I'm a little bit we'll say, I'm a little bit cautious, We'll say more than cautious in dealing with those those Chinese companies because there can always be a change in heart in
terms of how the government, the Chinese government deals with them. On the other hand, businesses, I'll say US based businesses that do business in China, different story altogether. Apple does a lot of business there, Three M does a lot of business in China. American Express, Visa, Master Car, Kentucky Fried Chicken, McDonald's, Burger King. So there are many different
ways that you can get Chinese exposure through investing in American companies. And that's the way that I would much prefer to, you know, to invest in China. And that still is a fast growing part of the world. Uh, still a lot of money to that is there. With the next the next potential country driver being India, and again it'd be the same. We'll say the same caveats UH would would apply. Now in talking about China,
we've talked about growing earnings. Well, we're gonna come back, or when we come back, we'll talk a little bit about some other China related stocks and how they've performed, plus a few other pieces of information that can help you. This is Josh Arnold Mister or money Talk with Judd Arnold always here to help you with your investing. Do give us a call nine to five two nine two five five six o eight. Do remember the usual caveats apply
past performance and no guarantee of future future results. Markets are always changing investing in stocks, as voldel. What we share here is for information purposes only and does not constitute investment advice. Does Josh Arnold Mister or Money Talk with John Arnold here to answer your questions on stocks, funds, mutual funds, How you supposition your investment dollars including your IRA and four oh one K. Don't hesitate to give us call it nine to five two nine to five five
six o eight. That's nine to five two nine two five five six o eight. You'll always get straight thought, not sure coded advice. We ended the last segment talking a little bit about the China and Chinese growth at some of the impact of China one American companies and American companies such as Favorite Apple. We could add Coca Cola, Starbucks, Nike, Tesla, three M, General Motors to that to that list of companies that do business in China
and have a portion of their revenues benefiting from that Chinese exposure. And that is the way that we have invested in that area. And I have found through through the years that that businesses that do have this type of exposure have done pretty pretty well over over a period of time. That's not to say that they go straight up, because they don't, but we found that that
has added added to the potential revenues that these companies have. That said, one of the companies in an area that I happen to like investing in leisure related businesses, which could include travel related stocks, leisure related shoe companies, or league We've talked about before, U Casinos, cruise cruise lines, U Off drinks, entertainment all fit in that leisure related category. And I have
found again during tough economic times people are spending money on leisure pursuits. Well, one leisure related company on Las Vegas Sands, reported they're earning this path past week. I think much was expected, and the results came in much better than had been expected. Yet even with better better results, top line top line beat, bottom line just crushed, crushed any of the estimates.
And the reinstatement of a dividend after almost a three year hiatus, the stock sold off on the news and that kind of kind of surprised me because and business is very very good. Business is expected to be a little better going forward. And I was just a little bit, will say, a little shocked shocked at that because Las Vegas Sands has gone from not earning any money to now earning earning money. But they do not have any more any outright
United States exposure. Uh well, they have a very teeny United States exposure Las Vegas Sands, so they are they make the bulk of their money in Singapore and in Macau. And in looking at the results in Macau while they were up, I think analysts were were of the belief that Macau results would be ahead of at least by this time Las Vegas Sands results from twenty nineteen from before the pandemic shut essentially shut Macau down, and they were not.
So the belief I'm guessing is take the profits, sell sell the shares, and wait until the stock comes down a few more dollars before looking at it again. But the results from UM Macau, even though they weren't up to what analysts had thoughts, if they are this good for Las Vegas Sands, maybe they'd be at least this good for Win Resorts, which has exposure in in Macau. And then if you add to it the strength of Las Vegas and wins other properties in the United States, that could be a boost for
for Win. So while Las Vegas Sands was down after their earnings, Win Resorts, which does not report earnings for another two weeks, that stock moved up up this week. Plus we had a move up in the other Las Vegas related casino names. Favorite Caesar's Palace has moved up and MGM MGM Mirage also moved up and until Friday kind of broke out of its upper upper range.
MGM Resorts this week signed a we'll say a deal with Marriott to We'll say UM share benefits Wind Resorts or to me, MGM resorts sharing benefits with Marriott, Marriott sharing benefits with UH MGM resorts. The benefit to Marriott with this deal, in particular for Bonvoy Bonvoy Rewards UH points holders, is that the Bonvoy holders and people getting on the Marriott system now have access to another
we'll say, uh sixty thousand plus rooms through MGM mirage. Well, that's a that's a big, big number, and there's there's one benefit for MGM to get more uh more people coming to their to their resorts, plus getting the Bonvoy points for Bonvoy points holders going to an MGM resort plus um UH if you're going to bet or if they're sportsbook betters, you get Bonvoid points from using bet MGM UH, which gives MGM a further boost for online gaming
against a crowded field which would include uh WIN and Draft Kings and fan Duel and Churchill Downs and Caesars and UH and pen Gaming or pen Gaming's barstool sports. So going to be will say a very or continue to be a very competitive space in within leisure. But I just find this particular area not only fascinating, but because people like to travel, people like UM I'll say, convention goers or convention planners like Las Vegas, and you have the sportsbook and
both now online and offline gambling. I think that these companies, even with a tremendous amount of competition, could be very interesting going going forward. And particular you not only have a big soccer tournament going on with the Woman's World Cup, who we are now getting ready for football season and that's real big with the betters. This is Josh Arnold, Mister Money Talk with Judd Arnold, always here to help you with your investing, whether it's inside or outside
your retirement account. We do have our opinions. Usual caveats apply. Do remember this program is for information only. The ideas we share in the opinions we share our own. Many of the investments may or may not be suitable for you. Please consult an advisor before you go forward. Do call us nine to five two nine two five five six o eight see you next week. 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,