Investor's Edge with Gary Kaltbaum - Bullard The Mouthpiece

Episode Date: February 16, 2023

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Terms apply. Lounge access is subject to change. See Capital One.com for detail. Investor's Edge with Gary Coltbaum. Straight talk about you and your money. Now from the BizTalk Studios, here is Gary Cultbaum. And welcome once again to Investors Edge. I'm Gary Colbom, your host.

A thanks for being with us today. Glad you here, ladies and gentlemen, happy that you are listening. It's February 16, Thursday, 2023. I want to get right to the point because a very important point about you. markets, money, our central bank, all intertwined, unfortunately. I want to work backwards. And those that have followed us, those that have listened to us for a very long time, let's just go back to Christmas of 2018.

I take that back. Eve of 2018. The market was croaking. I don't want to use the word crashing, but the market was getting blasted into Christmas Eve, and that was a half day. Just remember that. That was a half day. The economy was strong. We had, I believe we did have a thing with government shutting down a little bit. But our central bank was raising rates. Jay Powell was and promised to raise rates a few more times into 2019. Christmas Eve, they did not even wait. The market closed at 1 o'clock. The NASDAQ, just so you know, on that leg down, in a matter of one, two, three weeks had gone from 7486 on the NASDAQ to 6192. On that half day, well let's do the Dow while we got you.

The Dow went from 25980 to 21792. On that half day, the Dow would drop 653 points. On that 2.9%, the NASDAQ dropped 2.2%. The SMP 2.7%. Christmas Eve 8%. gentleman by the name of James Bullard came out and just made the not a definitive statement but a statement of and this is a paraphrase but a pretty close paraphrase we can probably stop raising rates the Fed can didn't mention Powell probably stop raising rates I can tell you the day, when we came back, the S&P was up 5%. The Dow was up 5%. The NASDAQ was up 5.8%. I can tell you the close on the NASDAQ of Christmas Eve was 6192 Christmas Eve. From 6192 just to the end of January, 7281. The Dow went from, not making this up, 21792 in a month in a few days,

24999. And of course, throughout 2019, they changed their stance even more. They started lowering rates. And of course, every announcement of lowering rates had the market go up and once they lowered rates, markets would go down and then they would make another announcement until the point we got into October where the markets weren't listening anymore and he announced money printing. And we told you the market was going to be off to the races and it was until COVID hit in 2000, February of 20. Why am I bringing this up? Well, you had a crappy day today. had a crappy day the inflation number came in

hot it's the best way I can put it the inflation number came worse than expected hot James Bullard at around a couple of minutes after three

and I quote remember who's his mouthpiece James Bullard said he would not rule out supporting a half point march hike. And as you know, the market has been expecting a quarter point. And as you know, if you've been watching us and following us and listening to us,

the market's been all about central banks and liquidity both up and down. And I gather the rally has been in the hope that inflation was getting under control and they can really slow down the raising of rates. but James Bullard came out today and said he wouldn't rule out supporting a 50 basis point March hike now why is that important and why did the market tank as soon as that came out and why maybe not saying it did because the market's been better could get a change of complexion off of words the reason is the market knows what we know he's Jay Powell's mouthpiece. The market is believing that they are now telegraphing half point instead of a quarter point. Just remember the market's been expecting a quarter point. If that is the case, it could be of import.

Now, right now it's 351 p.m. The market will close in nine minutes, but we can tell you that. the Dow right before he said that was it 34 33999 we've dropped 230 points since then now we got nine minutes to go we'll see how we finish but just letting you know that's what happened today and when the market closes and we report the final numbers and we'll see what happens we believe it's our belief you may not believe it. But we follow these people judiciously. You know we do that. James Bullard, I wouldn't say it's 100% of the time, but at the most important times, he has been the mouthpiece. Because

Jay Powell can't do that. Jay Powell's got to be the head of the Sopranos. Sit in the corner, say nothing. So that's the story today. And we'll see how we finish. That's all. The market has been acting pretty decently coming into today. Not everything. And some of the best moves has been stuff off the bottom, as we say. There's been good reactions to crappy earnings. We've been reporting that to you. And there was more good reactions today. But James Bullard, the mouthpiece, the J. Powell, and we think this was by no accident.

Maybe, not 100%, may have stuck a fork in. Why again? These people matter, unfortunately. I hate saying it. It nauseates the hell out of me. But they matter. If somebody had the control, the ability with no accountability or oversight, to print a $9 trillion and bubbled up all the assets, prices,

and killed, destroyed people's wealth who got in, late. So that's the story as we head into the close. And just, you know, it was not a good day to begin with, but it was hanging in there fine. A down day, not a big deal. Now, what we'll be doing tonight is seeing has anything changed. Remember, it'll play out in the way it shows up. But I would suggest for now, going into tomorrow, James Bullard spoke up for Jay Powell. and they can say, nah, if the market believes it, that's all that matters. And I can tell you flat out. From 3 o'clock on today, the market be believing it.

And they've had pretty much no bias since that yapping. All right, we'll take you into the close. Lots to cover. This is the one only investor's edge. Hi, I'm Gary Kalbaum, hosted in the national. nationally syndicated radio show Investors Edge. We're not just handsome radio people. We manage investors money for a living, specializing in fee-based discretionary money management. No big commissions, just a fee on the assets that's managed. We also provide a full range of personalized

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You're listening to. Hey, this promises to be fun. Investors Edge. The last bastion. of quality programming with Gary Coltbaum it doesn't get better than this and well once again to Investors Edge the words of the fear

that's all I can tell you now in case you don't know the producer price index came out today and it was much higher than expected and I think that's what they have reacted to that's why I think they

telegraph this now if I put up the words of PPI that's producer price index what it is by definition is a price index that measures the average changes in prices received by domestic producers for their output its importance as being undermined by us I don't need to get into the Wikipedia but that that's basically as measures the average change over time and the selling prices received by domestic producers for their output if the prices go higher for the things they are doing, guess what happens to the consumer? It gets fed down to the consumer. In other words, inflation.

That's the story. I guess that's the best way to explain it. If it costs 50 cents for a glass eliminated lemonade stand and it goes up to 70 cents because of the price. lemons or the cups inflation produce a price and it starts with where do you get the lemons from and that includes everything involved everything involved and may i state for the record what they have come after into the close has been some of the beta b e t a so the getting a little bit of the NASDAQ today for a couple of percent. The S&P only done about 1 2, 1.2.

And I can tell you into the close, they're not so happy. So possible here. And I hate saying because of somebody's words, but these people matter. These people matter big time. And it's unfortunate. You know, like Congressman, I forgot the person's name, wrote something a while back.

I have it here somewhere. It's 350 million of us versus 535 of them. That's 100 in the Senate, 435 in the House. But you've got to throw in the administration, central banks. Let's call it 600 of them. How come we can't get control of them? How come? Anyway, market's about to close in about 30 seconds.

We'll give you the final number. Blue Horseshoe says, market no happy into the close today but tomorrow is another day but that's a story leave no doubt so today's market wrap and it's a wrap is brought to you by investment dash models dot com that's jim morback one of the great market timers no great areas with the man you're either in or out of the market with his proprietary indicators go check it out investment dash models.com 431 on the Dow.

431 on the Dow. And let me state for the record again that when he started yapping 34,000, we dropped 304 of the 431 after that came out. S&P down 57, NASDAQ 214, NASDAQ-214, NASDAQ-245. Sox 78. Advanced declines terrible by the end of the day.

We lost 300 points on a man's words, but it was the words of Jay Powell. And I can go through the rest of the market, but what else am I going to tell you? Just a very tough close. There were good reaction to earnings, coal stocks, arch coal, Roku on a big loss, Twilio, West Corp, Crocs. But that came down from the highs. So forget Crocs. Names I've never heard of. That would up pretty good.

But overall, the market took it in the jowls after bullet opened his yapper. And I've got Fox News on there talking about Biden right now. I want to see if Neil, by the way, you're not going to know this because you're going to hear this later. I'll be on Fox News in the 4 o'clock Eastern Time hour with Neil. by the way Biden came out and talked about these balloons you know I always you may not know this but I try to give everything the benefit of doubt I really do believe now Joe Biden knocked down those last balloons

because he didn't knock down the first one you know they're kind of sort of telling us these last balloons were probably nothing and it may have been corporate balloons and the other they the United States of America and it's $850 billion defense budget? They can't tell us what they are?

Just what the hell is going on here? You know, when people complain about transparency, there's your reason. There's your reason. When people come up with all the... You know, I know people that believe a plane did not hit the Pentagon on 9-11. There are people that believe it's an inside job.

When you see some of this... Well, I really shouldn't. I didn't compare, but you get my point. You almost think, maybe I get why people believe in conspiracy theories. How is the President of the United States not able to tell us what went on with that? He had a press conference today. It should be the cold open of Saturday Night Live this weekend. Don't know if they'll do that.

I'll be glad to star. I'll go on him to be Jackie Gleason and say, homina, homina, homina. Anyway, back on markets, I can't overemphasize it enough how important liquidity central banks are to this market. And good markets

don't usually turn tail immediately. But just remember, when they did the opposite Christmas Eve of 18, the markets turn tail. tail straight up. So we ignore nothing. We ignore nothing. We pay attention to everything. And we'll see it tomorrow brings. What's tomorrow Friday? Yay. And we have a three-day weekend coming up. Yay. What's Monday? President's Day? Up next. More in these markets. I'm Gary. This is the one only investor's edge. This message is brought to you by the Capital One Venture X card. Venture X

the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply, lounge access is subject to change. See Capital One.com for details.

This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Sprinker distributes it everywhere people listen. Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big,

thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today at spreeker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card.

What's in your wallet? Terms apply, lounge access is subject to change. See Capital One.com for details. We're listening to. America is talking. Investors Edge. He's got to be pleased with that. The crowd is just on his feet here.

He's a Cinderella boy. With Gary Coltbaum. highly recommended. You're going to feel better if you talk to them. Apple, which thus far avoided the mass layoffs that have claimed tens of thousands of workers at Amazon, Google, Meta, and Microsoft, has quietly begun axing contractors. According to people with direct knowledge, the iPhone maker over the past few days have started to cut ties with hundreds of contractors, workers technically employed by outside agencies who work alongside Apple employees on projects in what looks like a stealthy move to cut costs. Instead of waiting for contracts that are typically renewed every 12 to 15 months to expire, Apple is firing contractors outright. One contractor claimed to have been blindsided saying Apple management had assured him that all jobs were safe.

Only a few weeks earlier, some had been gloating that Apple hadn't overhired like other tech companies. The source added. That just came out. And by the way, February 20th is George Washington's birthday. And I guess it's President's Day, right? In the news. you know, I wish I had more to say on the markets. I really don't.

What I do tonight is I'll scan knowing right front and center in the file manager what was said and what the reaction is. Remember, it's not the news, it's the reaction to the news. And I'll look to see that anything change. And what I mean by that is that day after Christmas Eve, and 18 we were crashing that big next up day you couldn't really tell just yet it was a big reaction

but you couldn't tell within a couple of days you could tell it had meat on the bone so i'll be able a number one what is already croaked b whether this is meaningful i'll get a good idea tonight but not a definitive. A couple of more cards coming out of deck. That could possibly do the track. Should be an interesting scan tonight, ladies and gentlemen, and I was so relaxed at 3 o'clock today. Thinking normal pullback, that's fine.

Find some things into pullbacks and go from there. And I'll tell you what I noticed also into the close today. they were coming after the beta, as I mentioned before. That's the risk on. This is what we like, the risk on. Well, they turned the lights out pretty quickly on just that. I'm still watching Fox News looking to see if Neil Cavuto brings up Bullard. Hopefully he mentions it to me when I'm on with him later.

In other news, and I do have a bunch. I do want to cover, by the way. As I mentioned yesterday, reported that the U.S. is on track to add $19 trillion in new debt over the next 10 years. Just make it 30. I'll leave it at that. Michael Jordan is donating $10 million to the Make a Wish Foundation, a magnificent organization. Here's a fact. My wife and I were one of the first wishgivers.

Seriously. or close to it within the first few months. We were in Florida living in Boca Raton. I read in the West Palm Beach paper about two young girls that were just going to, they were dying. Very young, seven, eight, nine years old. They had a terminal illness, disease. And we sent them to Disney World with all the trimmings through Make a Wish.

And that was one great. great feeling. We got to meet them and I don't want to tell you the rest. But great organization. Well done Michael Jordan. Banks in the duh comment of the day. Banks are breaking up with crypto during a crackdown at this point in time. Duh. The SEC and the banks are now stepping up scrutiny following the collapse of the FTX as well as others. Again, duh, we told you so, way in advance. And every time I would talk about it on TV, got shrugged off. And amazingly, they don't really come to me on it. I should be the, I'm the expert on crypto. And as I've said to you, it's just a freaking bubble. It's all it was. 22,000 coins came out.

Actually, maybe 23,000. Everybody was trying to come out with the coin and be the next great coin. And of course, that all happened in the final throws of the bubble. That's how it works. you know the loudest noise was on that last drive to the hoop so I'm just letting you know the banks whoops they're finally worried after by the way some of them backing it you may want to read the op-ed Biden's federal budget blowout in the Wall Street Journal

it tells you everything you need to know he was again out today saying what a magnificent job he has done with the debt and deficits that he's lowered the deficits big time and it's a lie and I would say Mr. President stop lying. I'd have no problem saying that to him. He's counting no longer spending on COVID as a drop in the deficit. And he's doing all this and saying all this. This year will be a record deficit ever taking out COVID.

but that doesn't count right so that's a little bit of the news the big stories are the balloons James Bullard the debt and deficits there's all talk about what's going to happen in the next few months if there's a debt limit standoff and oh we're going to you know not pay our bills and all hell's going to break loose that would be self-inflicted by the miseries in uh we're going to Washington, D.C. Unfortunately. Dang it. And just remember what we've told you.

Just remember. We think they're cursing each other out in front of the camera and laughing there, you know what's off behind the camera. And pop in champagne corks. That's all. And we have... They've convinced a lot of people

that if we don't raise more debt, we're in trouble when it's the other way around. You know that, right? You as an individual. You can't go into too much debt, right? You get in trouble. You don't pay your bills, you get in trouble. You can't take out loans.

Your credit score goes down. In government, just the opposite. Just the opposite. And we end up being the victims. And there's nothing we can do about it. they created the system. I read a story today about Medicare. I didn't realize how bad shape Medicare was in.

That's worse than Social Security. Yet they say if we do anything about it, that would be terrible. We're just letting you know. You can't fit a 10-pound salami in a 5-pound bag. And eventually something's going to give. They're blaming the Republicans for wanting to do something about these. things. I have news for you from me to you. They're going to have no choice. They're not going to have the money. They forgot to realize we're going to live a lot longer and people are getting

more and more checks. And they never thought we'd get to that point. And of course, they stole all the money. As I said yesterday, the money that was taken out of your check, you're not getting that back, you're getting workers of today their money. Up next, this, that and the other thing, and whatever else. This is the one only investor's edge. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply.

Lounge access is subject to change. See Capital1.com for details. This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen. Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big thing.

Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today at spreeker.com. Sprinker, because if you're going to talk to yourself for an hour, you might as well publish it. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card.

What's in your wallet? Terms apply. Lounge access is subject to change. see capital one.com for details. You're listening to. What are we waiting for? Well, what are you waiting for? One, two, ready, go.

Action! In the Wester's Edge. With Gary Kulpaw. So let's go back markets. As I said, bullet opened his mouth and the market crept into the close. And just as I'm looking at my screen here,

the beta, which was acting pretty decently, me, splat. And I just got to, tell you just more and more of this is showing up you ready door dash reports a loss of a dollar 65 a share 96 cents worse than the estimates of a loss of 69 cents a share and stock's up 11% in the aftermarket keep in mind door dash is one of those names symbol d a s h which has had a high of seven, it's 72 bucks in the aftermarket. So maybe just getting a little bit of that.

But we're getting a lot of these very weird numbers. We're used to companies with losses and misses. But they come up, you know, I guess DoorDash, they come up with something called Marketplace, GOV, increased 29% year over year. Blah, blah, blah, blah, blah. Oh, a $750 million share, a dollar buyback. That can hurt.

Just let you know we're seeing a lot of it. And just to be repetitive on things we've said in the past, in the end, in the long run. And you have to remember this. Notwithstanding the bubbles, if your earnings and sales. are constantly to the downside. Your stock's dead. Great companies, great companies that stop growing

after magnificent stock moves, if they stop growing, they end up dead. Into the year 2000, Intel, from 1986 to 2000, went from 51 cents, the 75 bucks. It's down from the year

2000 now and why is that? Earnings. Sales. Microsoft from going public and get that, well this is all with splits. 9 cents? At the end of

2009 it was 54 bucks. It did not break the $54 until 2016, 16 years of no gains. Of course, had to work off that bubble. But do you know why it's gone from $57 up to $262 today versus Intel not? Intel earnings and sales down.

Microsoft earnings and sales re-accelerated off of new product, new services, cloud. They've done a magnificent job with that. Apple Apple came out in 83 22 cents in 2000

actually it was only a dollar 34 but when it lifted off in 2003 it was 25 cents again and has gone from to 155. Why would that be? iPod which I thought was going to be

another Walkman, iPhone, I watch, I whatever, new product, new services, whatever. What I'm just telling you is bottom line, the stronger the earnings in sales, the better. The longer they are stronger, the better. And if you accelerate those earnings and sales into the stratosphere, dudes, Anything's possible. So keep that in mind as we move forward. Because we have a lot of stocks right now with just terrible earnings, with losses, and they've rallied up. That won't last.

It can't last unless we accelerate. Business gets much better. Something else they do, new CEO that changes the complexion. or what have you. That's why we are quite addicted to earnings and sales when people report. And of course, the reaction to those earnings and sales in the long run. In the short run, anything's possible. DoorDash, big loss, up 11% in the aftermarket, and 9% right now. Seagate, 93% drop. Stock wrap. valleys up. Again, maybe it's already down big and the market's had enough, maybe. We're open to all, but I can promise you, if Seagate cannot reaccelerate, it ends up with much higher valuations than their norm and the stock ain't on anywhere. So very much important you pay attention. And use your eyes, use your ears. If your kids are buying, want new sneakers or they find Pokemon. I remember four kids entertainers.

And Pokemon, I said, I'm not buying this stock. I think it went up tenfold. Seriously. I should just listen to my kids. New restaurants. Look at Chipotle. I still remember Outback Steakhouse. Early 90s, they open up Southwest 18th Street in Bocca Raton.

Little strip shopping center. Wednesday nights, hour, two hour waits. Weekend, you can't get in. Take the restaurant, put it everywhere. What the stock do? You get the hint. All right. We'll see what tomorrow brings because Mr. Bullard may have put a fork in.

You have a great evening. Drive carefully. And when you get home, do like we do, it's quite simple. Make sure you hug your family. Make sure you hug your children. They will feel better. You will feel better. I promise. I wish we had better news for you today.

But ladies and gentlemen, those central bankers, have a great one, everybody. We'll be back tomorrow. tomorrow. Bye-bye. This has been Investor's Edge with Gary CultBomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryKK.com. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination.

Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details.