The Compound and Friends - JPMorgan Earnings, Trump vs Powell, Goldman’s Revenge, Apple + Google Deal

Episode Date: January 13, 2026

Join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for another episode of What Are Your Thoughts and see what they have to say about the biggest topics in investing and finance! This episode is sponsored by Betterment Advisor Solutions.  Learn more at http://Betterment.com/advisors  Sign up for ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Compound Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and never miss out! Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Gangsters. We're back. What's up? Yo, you know what zebra striping is? No. You don't? I don't. You never heard of this?

I'm going to try it this weekend. Zebra striping is when you go out, like, to a party or for drinks, but you alternate. You do, like, a drink, and then something in the middle, and then a drink, and then something in the middle. Like, either sparkling water or, like, that, you know. even Diet Coke or just like a bottle of pollen spring. And it like supposedly prolongs the night, reduces the possibility of hangover. And still allows you to be like socially having had a drink and not like the guy that's like, I'm doing dry January.

But like you're not doing, you're not doing four drinks in a row and then waking up the next morning with your head on fire. All right. We can try tomorrow. The kids are calling it zebra striping. And I said, that's. sounds like my kind of version of dry January. It's too much. Four syllables.

I don't like it. Zebra striping. No, if you say it fast. No. All right. All right. Guys, welcome to what are your thoughts? America's favorite live stream about markets, the economy and life.

My name is downtown Josh Brown for first time listeners. Nice to meet you. I'm here with my co-host, Mr. Michael Batnik. Michael say hello. Did we just open the show with zebra striping? Yeah, why don't you zebra stripe a hello for the folks. All right, guys, we have a lot. We have a live chat going as usual.

Love to see all my regulars here in the chat, all the gangsters. Welcome Cliff Peoples, Chris Hayes. John Carlo is here. Charisma Spigot is back. Akbar Muhammad is here. Everybody's here. Benjamin Lupu is back. Georgie D.

Trying to give all the regulars their props today. We appreciate you guys. Thank you for coming this week. and every week. You're already cracking me up in the live commentary. So good to see you guys. We have a sponsor tonight. I'd like to let you know. Tonight's sponsor is our friend Betterment advisor solutions. Michael, tell us about Betterment. What can I say about Betterment? What can't I say about Betterment? What growth strategy are leading REs using that most firms don't, Josh? I don't know. Segmentation. Some clients' needs are sophisticated and require deep ongoing

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Earnings season already. Wasn't it just starting season like the other day? Is it coming faster and faster? You know what it is? The, they end late. You know what I mean? Like it just, it goes on forever. It's not a season anymore.

You're exactly right. It like tails off. It tails off. Like we heard from Nike like four days ago. I mean, I know it's not true, but it's a long season. But you know what? We're about to get into the thick of it, Josh. It's about to get me.

And I'm here for it. I love hearing from the financials. You know I do. So this is one of, I agree. this is one of my favorite weeks of earning season, the first one when we hear from the financials because I just think there's like so much anticipation that all of a sudden the bank CEO is going to come out and tell us how fucked up everything is and they never do. Well, you know what, Josh?

I don't really care that much, no offense, about sweet green or Chipotle because like all of that sort of shit is idiosynicronic. It's the stock price multiple. It's the locations. It's the consumer. It's whatever. That's your own problem. I want to hear from the bank. that serve everybody. How is everybody in the aggregate doing? That's what I want to know. Yeah, and it's like 36 months in a row with them coming out and being like,

I know you want us to tell you that we're seeing signs of deterioration. Sorry, foiled again. Not this time, not this Q. And once again, but let me set the table. Ed Yardinney was writing about the Q4, 2025 earnings season just generally. And he's saying,

Collectively, we're looking for an 8.6% year-over-year increase for these Q4 earnings, which is pretty good market-wide. And he points out they were way too cautious for the first three-quarters, and he thinks they'll be low yet again. He thinks 10 to 12%. If we finish this earnings season, which it'll be a while before we can confirm it, with another double-digit earnings growth year-over-year, it to me justifies the vigor of the rally that we experienced in September, October, November.

Like, the market was right yet again. Let me show you Ed's chart on financial earnings. This is all commercial banks, loans and leases. Like, I'm not like a cycle expert, but just looking at large banks and small banks, correlated seeing this uptick in loans and leases. I think it's like, all right, do we want to get bearish now? like of all things now is when we want to get bearish. Next one is the spread between the 10 year and the two year.

Like this is just, this is the meat and potatoes of how banks make their money. So J.P. Morgan reported like $95 billion in net interest. And this is like the bread and butter of the banking business. So that's not a profit. Of course, there are expenses that go along with that. But like banks make their money. in the net interest margin.

And that treasury yield curve spread is kind of a stand in for that. I'm going to show you a couple more. This is U.S. corporate bonds and equity issuance. This is another way large Wall Street banks make money, literally selling IPOs, selling stocks, selling bonds, helping the treasury market as a dealer. And this will show up in these earnings and already is. Next one is loan.

and least losses. So we don't want to see this number tick up. We want to see this one flat line or, God forbid, even tick lower. It is. It is. I mean, I don't know what you want. Like I know people want a change in the narrative

and they want, they want everyone else to buy into this, like the consumer is barely hanging on by a thread. Maybe someday, not today. What else? There was one other I wanted to show. Payroll employment next. What else do we have? All right.

So this is like the forward earnings for the index itself. And you can see we're obviously at the higher end of the historic range, somewhere around 1314X. But not the highest ever. And again, we're at a pretty good part of the cycle here where there's tons of activity in all aspects of these banks' actual business. Do the last one. Skip the last one.

This is the financial stocks in the S&P 500, the 400, and the 600. So that's the midcaps and the small caps. Like, this is not a story of haves and have-nots. This is not a story of, you know, mega-cap outperformance dominating. They're all telling you the same story. So either everybody on earth is wrong and you are the only one that knows how bad things really are, Or you sort of have to just look at this confluence of things and say, okay, these banks are in a really good position. And that's probably because the economy is pretty good.

It would be hard to make the case. The economy is horrible. Therefore, the banks have a lot of good things to say. What do you thoughts? Yeah. You're right. That would be unusual. Every quarter, we hear Jamie Diamond, we sort of respectfully roll our eyes.

of all of the risks that are to come and all of the reasons to be cautious. And sometimes a hurricane is coming. Sometimes there are cockroaches. Sometimes we're not, we're underestimating the geopolitical risks. And respectfully, he's the biggest risk manager of the biggest bank in the world. It would be unusual if he was like rainbows and butterflies. That's not what he gets paid to do. He gets paid to worry about risk.

But I thought what was so notable about this report is that on page one, This is a quote. This is not in the call, which he had some bullish comments on, but this is literally like written down on the report. In the release. Quote, in the release, quote, the U.S. economy has remained resilient. This is Jamie Diamond. While labor markets have softened, conditions do not appear to be worsening. Meanwhile, consumers continue to spend and businesses generally remain healthy. These conditions could persist for some time, particularly with ongoing fiscal stimulus, the benefits of a new regulation at the Fed's recent monetary policy. And then of course, he goes on to say, however, whatever, but he's, he's saying it. He's saying it.

Full year earnings for 2025 for JPMorgan, $57.5 billion. That's $150 million in pure profit every day of 2025, including Saturdays and Sundays. This bank is making $150 million. $50 million a day in profit. Not revenue. To me, that is just beyond extraordinary. I mean, it's truly, it's unbelievable how profitable this business is, how dominant. And actually, that's a slight downtick in overall net earnings.

I think they were $58 billion in $24. But like, again, this is like, this is the biggest bank in the country in one the biggest stocks by market cap in the world and with good reason i wanted to share uh i'm going to skip this what barnum said he basically echoed that on the consumer we are currently not seeing deterioration across income groups um so i are so that's like the headline and then erika nijarian from ubs gets like the fourth or fifth question the first the first question was like a stable coin Table coins. Yeah, that was interesting. I don't fully understand what the issue was there.

But basically, she's like, Jamie, can you make us feel better? So she's like, investors were feeling quite optimistic about the fundamental macro opportunities for the banks in 26, paired with deregulation, of course. And I think this weekend sort of shook their confidence, given the social media post about credit card cap rates. Trump said 10% cap rates on credit card. as of January 20th or something. I don't think that's going to happen.

But, and then they stood, the Department of Justice subpoenaed chair Powell. And investors kept saying over the weekend, quote, we can't wait to hear what Jamie has to say about the 2026 outlook. So she's like, make us, Jamie, can you make us feel better? And he sort of did. He said, I think when you're guessing

what the macro environment is going to be, if you ask me in the short run, call it six months and nine months and even a year, it's pretty positive. Consumers have money. There's still jobs. There's a lot of stimulus coming from the big, beautiful bill. Deregulation is a plus, not just for banks.

Banks will redeploy capital. But then he's like, look, geopolitics is an enormous amount of risk. So it's like you have to bet. And he goes into the dead and blah, blah, blah. So you have to like do what Jamie Diamond does. You have to balance two ideas in your head at the same time. The environment is pretty good. but there are also huge risks out there.

We just don't know if they're going to affect us in the next six months, nine months, 12 months. Nobody does. Or ever at all, quite frankly. Or maybe they're the wrong risks that we're worried about. I think like to be an investor in 2026 or any year, you kind of have to, you have to like do those two things. It's a great message.

I'm not saying there's no risk, right? I'm not saying it's no risk. But I'm saying things right now are pretty good. And I think that's what he got across. Yeah, as you're thinking about like allocating your own money, you have to say to yourself, should the conditions persist and we go in bull market, am I taking enough risk that I'm going to feel good about the upside that I'm capturing? And if it's not, and if the wheels fall off, am I taking too much risk that I'm going to bail

at an inopportune time? And that's life that's investing, that's running a business. They were asked directly about the cap rate stuff. And Jeremy said, this is the CFO. who leaves the call. What's actually simply going to happen is that the provision of the service will change dramatically, specifically. People will lose access to credit on a very, very extensive and broad basis, especially the people who need it the most, ironically. And so that's a pretty severely negative consequence for consumers and frankly probably also negative consequence for

the economy as a whole right now. I don't think anybody who's serious think that this is going to happen. Also why it won't happen. No chance. And then it's like, and then someone was saying, oh, there's talk that it's just going to be about revolvers. And then someone was like, what about all the subcredit cards? Like think about how many versions there are of a visa card or a master card to varying degrees, subprime borrowers, department stores. Like the idea of all of a sudden there being a cap that makes people just deny credit to millions of people. And that that's somehow going to help the affordability crisis.

you have to be absolutely out of your mind. They asked a lot of questions about the proposed takeover of the Apple credit card loan portfolio from Goldman Sachs. And I thought this was really interesting. They were talking about how specifically Apple built this technology to be seamless with iOS. And it's not like a traditional, oh, we'll just take over that credit card business. Like they said it could take up to two years to fold that in

to their existing credit card operations. Who know? He was, Jamie was very complimentary to the tech that they built. But yeah, nonetheless, by the way, I think their earnings were down. I think they took a preliminary

or premature charge off from that. But yeah, it was sort of a boring call, which is great. There was not really a lot there. They spoke about as a long-term shareholder. I'll take that boring call. Yeah.

And the stock reacted negatively today, just, I don't know, whatever. It's been up a lot. I don't think there's anything really negative in the story. Yeah, I think this thing went from $2.50. to 350 in the last year. So you could understand.

Chart on, we have some more earnings this week. I don't, why did Delta gave guidance today? Delta reported today. Delta reported. And gave bullish guidance. We're going to hit that later. City and Wells Fargo are tomorrow. I'm Thursday.

I'm a Thursday guy. Black Rock Goldman is Morgan. You love that. You love that Black Rock call. That's a busy day for me. I do love that Black Rock call. And the Morgan call, because that's wealth management. Are you a J.B. Hunt?

No. You a J.B. Hunt guy? You don't care about trucking? Nope. Not a trucker. I don't know. I'm not either, but I thought maybe you would be. All right. You're up. What do you got? All right. We're going to, we're going to weave on this topic, Josh. I've got a lot to cover. So we're going to start with Spotify and Netflix. We're going to go into some sex or stuff. And then we're going to tie a little bow on this baby. All right. I thought this is super interesting. And I'd love to get your take.

Did you know that Spotify and Netflix are the same stock? Like almost literally. Oh shit. No. That's funny. Wow. I mean, this is, dude, this is remarkable. And it's more than a little.

I mean, involved in an M&A transaction. The other one's not. There are obvious like overlaps. I mean, they're doing business together. They're, they're both in pretty competitive markets. And they're both competing with YouTube, frankly. But they're both. getting their shit kicked in i think spotify competes with youtube and maybe most people would

associate it more competing head to head with apple music but i agree with you like youtube is youtube versus spotify podcasts on video versus netflix like it's almost all becoming one big battle royal it's really interesting they all want your eyes that's at the end of the day they all want your eyeballs and your ears yeah um okay so let's move i never i never looked at these two side by side. Dude, it's wild. Let's throw it back up for a sec. I mean, it is, you don't have to squint. This is the same chart. Okay. Yeah. All right, some, some really great research. This is from, we're going to start with turning point. Before you throw this chart on, John, we spoke recently about how many active funds underperform last year. And I don't know what somebody would have had to do to outperform. It was a brutally difficult market. Most stocks underperform the index. And as a result, most sectors underperformed, but the spread by which they out underperforms throw this chart on. This comes from turning point market research. They do great work. So we're looking at the number of sectors that have lagged the S&P 500 by at least 50% over

three years. It's as high as it's ever been. It's six sectors have lagged by 50%. So if you're in the wrong sectors, I'm going to guess it's healthcare, real estate, and energy. I can't, I'm not positive. until recently materials too yeah um matter of fact why i don't know why i stopped there it's it's staples for sure i'm guessing tables definitely right like so all right so then turn into duality research he has an awesome chart showing that since the liber no i'm sorry i'm sorry not liberation day lows since since yeah so since the since the since the launch every sector has underperformed the s and p say for tech stocks and communication stocks.

So Google and meta, okay? But more recently, more recently, if you zoom in a little bit, tech has been getting destroyed, relatively speaking, I think maybe underreported. Josh, did you know this? We're looking at technology. This is zooming in. So over the last 50 days,

tech has underperformed almost to a three standard deviation degree against the broader index. Did you know this? No. So like this is like this is so recent. Like this is how since how long? Five days. It's 50, 50, 50 days.

50 days. But I'll do you one better. So by the way, I think the upshot is that this is this is not bad. This is the opposite of bad. I think this is very bullish. So I've never heard of this next company, Blue Cardic Market Insights. And I freaking love this chart. Look how awesome this chart is.

We're looking at the S&P 5 Hydron on the top pane. and those red dots that we're looking at is when XLK, so when tech stocks fall over 1%, and yet 350 stocks in the S&P rally, which is unusual, right? Because tech is generally a risk on sector. So it's a relatively unusual phenomenon. It's happened in the past. I don't know, a dozen times it's happened. But here's what I love what they did.

So they show the average price path on average from when that trigger happens in red for all going back to like the turn of the century. But what I love so much that they did is they show the average price path since 2016. So the takeaways like generally, if you look at the red line, not actually that bullish in the short term, forget about the red line. Not forget about it. But if you look at like what has happened since 2016, which I would argue is probably more important than data from 2002, it's been kind of bullish. I love this chart. So the takeaway is because I think people.

Because I think people don't understand this. And I don't think I've ever seen it put this way. The takeaway is like the XLK falling, even though they're the biggest, most important stocks, quote unquote, it's not a negative for the rest of the market. And in fact, it could actually serve as like fuel. So I had that right? So this is showing to take it a step further. It's showing when XLK falls 1%.

And yet 350 stocks in the SP are up on that same day. Yeah. So you could say like, uh-oh, the market is losing its leadership. that's probably bad. It's not true. And so let's talk about where we are today. What's going on to the stock market? Chart kid calls it the great broadening. So he has a chart showing the cap-weighted index of financials, industrials, and materials, all things that have not really kicked ass in recent years. And they're kicking ass. And then he shows, I'm sorry, this is cap-weight, my bad. The next chart shows equal weight, so it's not just the mega-caps. It's all working.

And this to me, chart off, Josh, what I'm about to show you is so bullish it hurts. Remember that guy? Okay. Who said that? So bullish it hurts? There was a guy on CNBC in like 2013. I can't remember which strategist it was who said I'm so bullish it hurts. And everybody.

That's it. That's who it was. Whatever. I can't remember who it was. Doesn't matter. Look how, look at, all right, this next chart is getting, is a turning point market. research we're looking at cyclical industries okay and what what what what dean has showed is that 90% of cyclical sub industry groups are above their 10 day their 20 day their 50 100 and 200 day

so it's all working all these cyclical industries what are the cyclical industries you ask i'm so glad you asked that question next chart these are all areas that are highly sensitive to a improving economy or at least a decent economy we're talking about auto parts casinos home furnishing improvement and home building like restaurants it's it's all the stuff that things that people spend money on in good times and conversely pull back in bad times it's all of the things that you would want to see working and they're all working here's the coup de grace next chart please so dean is showing is the S&P 500 when you have 90% of cyclical sub-industry groups above every moving average. And if you look at the table on the right, great job, John.

I'm glad you broke it out like this. If you look at like three months later, four months later since 2009, there's not a lot of red in here. Right? Like when all of these things are firing in recent and modern markets, they're generally right. The market is not always right. But when these things are all firing, it's full speed ahead. Maybe this is the time it breaks, but. Two, two things.

First, we have some guesses of who said so bullish it hurts in the chat. We have a couple of guesses. So my friend John Suarez says Jeremy Grantham said it. Yeah, nailed it. See Paul Breezy, one of the Najarian brothers. I don't think so. I would know. I don't think that was them.

Chris Hayes, it was not Dan Nathan. Yeah, no shit. I don't remember who said it, but it's a great thing we should go look at. But the point I wanted to make, and we're going to hit this later, Sean and I in our column for CNBC Pro today, we're talking about material stocks, and my framing of it is, like, last year was a mid-cycle sort of market. Financials outperforming almost everything, industrials.

like that's mid-cycle i think we're starting to pass the baton and it doesn't mean we had that recession at the end but like we're starting to pass the baton from mid-cycle into late-cycle late cycle is when the materials start roaring you ever see you see a chart of like freeport macmran recently holy shit like you saw what the oil stocks are doing exon mobile uh new record high today we're seeing like the oil services like when you start seeing um those cyclical gruel and then you start seeing like the materials catch on that's when you know like you're in not only a broadens market but like you could have a couple of years of just like steady economic growth and it doesn't you know oh this will unbadly okay probably but like you know when yeah in the meanwhile

i don't badly i think we're in a mid to late late uh cycle portion of of what we're looking at so that's all right i found i found the clip um it was when paul He was the UBS head of FX. This was in, I like that guy. It was in 2014, but the, the web is saying that John Ngerian was the actual one that said it. I just remember the headline. So bullish it hurts. Semi-colon Paul Richards.

So I don't know who actually said it. But you remember that, right? Yeah. Paul Richard, Paul Richards is a sweet guy. He was like this British gentleman who they would bring on a, it was like, he was like on every day for a few months. No. No, he's still is.

He's still British. Still British, but I haven't seen him on. TV in a long time. I think he was at one of the wirehouses and he would come on like almost every day and do like a five minute spiel on currencies and then they would look at us on the desk and be like so what's the trade? And I would just talk about whatever I wanted to talk about. I didn't even react to it because I don't know I don't I don't do currencies but he was a he was a bright guy. I don't remember him saying so bullish it hurts but I'm I think I'm going to steal it. It's a good one. So anyway, he probably said so bullish it hurts.

The stock market right now is working and one day it won't, but right now it is. I just like that the conversation is not Microsoft every day. I love it. It's enough. More than enough. I love it. I love it. All right.

Let's keep going. Oh, okay. Apple and Google have entered a multi-year deal so that Google's technology will power the Siri voice assistant reboot. So we're going to get a better Siri because Siri now is fairly awful. We're going to get like an AI powered Siri, which they promised us over a year ago,

finally happening. And it seems like it's going to be the guts of it inside the wrapper will be Gemini. After careful evaluation, Apple determined that Google's AI technology provides the most capable foundation for Apple Foundation models and is excited about the innovative new experiences that will unlock for Apple users.

Two companies said Monday in a joint statement. Did Apple win the LLM war by not playing? The story is still being written, we'll say. Do the users give a shit if it's Google technology or Motorola technology? inside of, do the users care what LLM Siri is running on top of? Or do the users just want Siri to be awesome? So I'm curious.

I mean, yes, the rhetorical question, they want to be awesome. I'm curious to know what the economics of this dealer. So does Google pay Apple $20 billion for Chrome to be the default browser? Is it $20 billion a year? It's some crazy number. Well, that was the deal. And I think, I think the remedy. is that now Apple has to make like Duck, Duck Go be a menu option

that people could have as their default search engine if they want it. Like it was about Chrome the browser and then it was also like, but Apple has Safari. So Chrome ostensibly competed with Safari. What it was really about was to be the default search inside of the iOS environment and in all the Apple apps because Apple doesn't do its own search. and Google paid a lot of money for that. And as a result, every iOS user, a billion people,

standardized on Google. It just became their go-to. And in return, Google spent all that money, but they got to a place where they knew everything that everyone was searching about. Oh, I'm sure. It was just brilliant. I'm sure it's a great deal.

I'm sure Google is winning. Like, you know, and Apple's getting $20 billion. I wonder what the economics of this dealer like. I think for Apple, it almost, it's beside the point. I don't know that they need to tell Wall Street. Like, look how much money Syria is making us. I just know that they have to cut. I just mean, I just mean like how much is Google paying Apple? Encroachment. What they're paying for for the search is not immaterial. It's a lot of fucking money. So it could be another one for both. Yeah, no one will know. Well, we'll never know. Um, but I,

I, I think like this, the, the mission critical aspect of this is to have a product. that people rave about in the iOS ecosystem that's got an Apple wrapper around it. You use Siri a lot. I just, you know, I, I vent to it. I like, I don't even want an answer from it. Sometimes I just want to yell at something or someone. Siri is really perfect for that. I don't know that I get a ton of utility out of it other than connecting my phone calls.

Like, hey, I don't want to say it because it'll start calling. Hey, blank, call sprinkles. Like, that's how, you know, Paul Batnik, like, that's helpful for me. I don't know. What else do I really do with Siri? Not much. I'd rather talk to chat GPT, honestly. At least I get, like, some answers from that. One of the things with Siri that has to get fixed is you can't ask follow-up questions.

So if you say, if you say like, hey, sir, I don't want to do it. Get me directions to that Chinese restaurant I went to last week. It may be able to do that, maybe not, depending on if you used Apple Maps. You know, a thousand people, dude, a thousand people listening are very happy. You didn't just say that. Right. And then by the way, and then by the way, you have to be like, you'd be like, you'll try to be like, all right, and oh, what street is it on?

Or can you call them so I can make sure they're open. And it's, it's what? Like you have to start all over again every conversation. And that's the thing that has to get fixed. It seems so obvious and easy and why haven't they fixed it yet. I really don't have the answer to that. But I do know that Apple is not thrilled with Johnny Ives' open AI device coming to market and then not having their solution in place. I'm so curious to see what that's going to be.

The next form factor. It's a medallion. It's a medallion that you wear around your neck. Spoiler alert. It's literally it's, uh, you, you will, you will never get a date. again so long as you're wearing that or what can you imagine married you imagine it's like wearing a wire walk into a room with a with a chat GPT device around your neck like I'm like an amulet I don't know you amulet you know anyone in your life that's going to do that like it's like

it's hard at the school you didn't see a picture of it I don't know we walk around with headphones no I haven't seen it okay um I don't I don't think it's going to moving on um moving on um All right. So Goldman has dive. That's it. I divested itself from all that nonsense distraction, going to Main Street, going to different verticals, consumer banking, like it was bad experiment. And credit to them, it didn't work.

They tried it. It didn't work. They came out alive, bigger and better. So the journal reported the deal that they did with Apple, they're expected to offload $20 billion of outstanding. the card balances at more than a billion dollar discount. And the interesting thing is most of the time, that's actually sell it up. They sold at a premium because that's like it's a good business.

They say on average of a percent, discounts are rare. So they say the discount on this deal reflects a high exposure of subprime borrowers. And just the idea that Goldman is lending to subprime borrowers, I know it's like via Apple. It's just, it's so far afield from Goldman Sachs. I mean, it's Goldman Freakin' Sacks. So they launched the card in 2019. A lot of fanfare, but the loss started to grow in 2022. And they lost, I mean, holy shit.

I don't realize it was this bad. They lost more than $7 billion on a pre-tax basis since the beginning of 2020 on, not just on this, but on its consumer lending business. The member of Green Sky, I can't remember who they sold that to. They had a general modus program, credit credit program that didn't go well. And sometimes, you know, sometimes businesses get distracted. they go into the wrong area but credit to them they were able to come out the other side you want to know something funny to us in 2020 in the in like the 2020s it seemed so off brand correct to see

Goldman Sachs doing subprime lending but that's literally the origin story of the firm so they named their i guess they had like an online bank slash robo advisor called marcus and right so that was going to be like their consumer facing business. That's not an accident that they chose to invoke the name of the founder for that product. In the 1840s and 50s, do you know who would give credit to Jews?

Literally nobody. That's it. So like banking was for the upper classes who lived on the Upper East Side, who lived like, let's say, north of, you know, 60th Street. And the animals

living in Paradise Square and all the stuff you saw in gangs in New York, and people living along the river, people living in tenements and tents and in dungeons underneath buildings. There was no consumer credit for those people. And a couple of enterprising, mostly Jewish lenders, came into that market. The Lehman Brothers were among this group and Marcus Goldman. And he walked around the Jewish ghettos of Lower Manhattan,

and he made loans. And it was like handshake loans. But that's the origin of Goldman Sachs. Goldman Sachs does not have the same origin story as like J.P. Morgan slash Morgan Stanley. These are very different segments that they were born to serve. So it's not really off brand for Goldman to be in that business in the grand scheme of history. But yeah, like in the modern era, Goldman Sachs is for rich people. We flagged in real time.

this didn't this didn't this didn't feel right it was it was weird dumb shit like what to say what is it works what are you getting out of this and we also didn't even mention in this time period it was the united purchase like they were they were trying all sorts of shit that didn't work out right now uh solomon survived it and he was he was he was on thin ice allegedly like if you bill cohan was right about it and uh charlie gasperino where they were Charlie was quoting all these like Goldman partners who weren't getting their profit distributions and they were furious. And he was DJing and he was DJing to boot.

He was DJing COVID parties in the Hamptons. It's like, yeah, yeah. No, it's like a pandemic, but like this is East Hampton. Fuck you. Like, you know, like Leo is here. I'm DJing. Like it was like that kind of thing. I thought that was kind of cool.

I admire the fact that he survived. And you know what? We lionized these technology guys. for like these pivots and trying new things and like making huge gambols and putting their their foot on the pedal. I think the takeaway here is like the standard is different when you run a systemically important financial institution. A little bit of innovation is okay.

But the types of swings that Solomon was taking are not historically rewarded by Wall Street and by the investor class. We don't want to see that much innovation. at a at a golden sacks yeah it's unusual i think it goes it goes to the power of the brand right like the fact that their their customers were able to look past like the customers that matter their investment banking customers that's it right that's who matters hedge funds private equity corporations the people that look at goldman sacks as goldman sacks like it's a it's meaningful to them they got over it like oh they did a credit card with apple who cares

All right, let's put this chart up. Okay, go ahead. Well, this is the drawdowns. This is the Solomon era. So obviously, like 2020, you don't look at that drawdown of 45% and say that has anything to do with David Solomon. No. So he, right, there's nothing to do with him. So he came in on October 1st, 2018.

So this chart goes back to like the summer of 2018. But this stuff in 2020. this stock had the same drawdown as like a mag seven and it stayed down for two it looks like two years um a little bit of a scare this year uh this past year from the from the tariff stuff but like this thing is at an all-time high is in nine hundred dollar stock now looks uh looks pretty unbelievable the cumulative return for Goldman sacks since july 1st 2018 is four hundred and three percent which is 24% annualized. Over that same period,

the S&P 500 cumulative is up 187. So Goldman is more than double or 15% a year, S&P. The XLF is only up 136% in the age of David Solomon. So that's 12% annualized. So Goldman Sachs is double the XLF on an average annual basis.

So if you're one of these, if you're one of these pricks who was giving Charlie Gasparino quotes about how horrible David Solomon is two and a half years ago probably not using your real name you have my permission to apologize to the man

because this is as good as any I don't know if Morgan Stanley is much better maybe it's a little bit better this is pretty damn good I think you'd have to agree yeah yes okay all right

the Jay Powell thing. We're not going to get political here, but I do want to play this. John, hit it. Good evening. On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings. Trader! I have deep respect for the rule of law. and for accountability in our democracy. No one, certainly not the Chair of the Federal Reserve, is above the law.

But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight rule. The Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve

setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead monetary policy

will be directed by political pressure or intimidation. I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people. Thank you.

Lock them up. All right. Takes. Give me takes. For me? You want takes? Yeah. What are your statue?

My take is how could there be any other take than the rational one here? This is. What do you think is the rational take here? I don't think that we should be using this much overt political pressure to influence the head of the Federal Reserve. How could there be any other opinion? I don't care who you voted for. Okay. I don't want to be called MAGA Josh in the comments this time, but here's an alternative opinion.

And I'm not saying that I like this kind of thing, all right? But why does it cost $2.5 billion to renovate the Fed's headquarters in Washington, D.C.? Nothing, no offense to Washington, D.C. I've been there. It's very nice. Nothing in that city should be worth $2.5 billion. No offense. No offense. Why is that the,

why is that the dollar amount that the Federal Reserve's headquarters is costing? And why is the Fed putting itself in this position of having to answer for a dollar amount like that? Okay.

That's an all. Isn't that a, that's a take? That's a take. I mean, you didn't tell me to come with takes. I just thought that we were just going to call out the fact that we don't,

what do you think we're, what are we doing? What are we doing here? All right. A lot of Republicans agree with you, Mike. And a lot of the people, Allow me to go Stephen A for a minute.

Hold on. I got it. I got it. Do you want to take it? No, I'm just kidding. Go. Keep talking. A lot of the people that normally just like whatever the administration says, they just

repeat it. Here's Senator Tom Tillis, Republican. If there were any remaining doubt whether advisors within, is he, wait a minute. He's a, he's a Republican in name only, my friend. No, he's not a Republican. Is he? Hold on. For I, for I butcher this, because I had a couple of things to say.

Yeah. Republican. He's a mom-dani Republican. He's a rhino. If there were any remaining doubt whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question. I will oppose the confirmation of any nominee for the Fed, including the upcoming Fed chair vacancy, until this legal matter is fully resolved. Well, Tom, I hope you enjoy Guantanamo. Yeah, this guy's fired.

Enjoy your time in El Salvador. All right. I think the down the middle take is that there are people in the Trump administration that wanted to do this, but not everybody in the administration. Trump said he wasn't even aware of this. Correct. Now, you might say that's nonsense. Which means it's going to quietly go away, my guess. What is the point?

He's out in May. Is it retribution? he's got he's got two meetings left what do we do like even if even if you now if this is really about fraud like building fraud I guess there's a percentage chance that that's really what instigated this yeah I don't know I'm not in the room I'm not in the room allegedly allegedly Bessent has been in a zero saying maybe let's not do this I bet you he didn't put it that way. I bet you he put it like, this hurts you. Yeah, I mean, not let's not do this for the sanctity of the, of the institution.

Like, let's not do this because, yo, there's an affordability problem. Republicans are losing on that issue. You don't, you don't want to look like you're meddling with, with the Fed. It's like, it's not going to help the, the cause of what we're saying is important here. So I think it, but I think it, uh, let's put this, uh, Let's put this graphic up. Did you loll with this? I stand with Jerome Powell. Who's in this?

Statue of Liberty, Churchill, Abe Lincoln. Is it Tom Brady in the back? I think it's Aaron Hernandez. Oh, it's, I think it's 81. Squidward? That's the bad boss in SpongeBob, right? That's his name? All right.

I liled. I posted this in July. I was totally joking. I did this as a what's known as a diptic. It's two images juxtaposed with one another. I thought this is funny. I never thought it would come true. I would say the GOP is definitely worried about getting hammered in the midterms.

Not Trump as much, but like the people that are actually up for election or re-election, they're losing on the affordability issue amongst independents. That's not my opinion. And that's what the polls say. And, you know, they could point to stuff like gases, $3 in change at the pump and a national average. They are getting encouraging stuff out of the housing market, especially rents, are coming down pretty substantially. Like, they have some stuff in their favor, but people are just still pissed about prices and health care. And, like, it's just not going away, which is why you see the spaghetti cannon firing, things like 10%.

cap on credit card interest rates, the mortgage thing. We're going to buy 200 billion worth of mortgages to push down the cost of a mortgage, which I'm actually in favor of. I think he should have done it five years ago. But you're seeing a lot of this kind of like populist stuff being floated out there as kind of their answer to like, what are we going to say in the midterms of people are still mad about affordability. Half the Republicans are saying there is no affordability crisis.

They're saying it's a Democrat hope. folks, things are great. The other half are saying, no, there is an affordability crisis, but it's Biden's fault, and we're fixing it. So those are like kind of the two opposing ideas within the Republican Party. And then the White House is basically saying we need lower rates to fight inflation, which I'm not 100% sure how that works. But I think what all these things add up to, you want to be in material stocks. Because you're getting a new, Fed chair in May, and they're going to run it hot. I don't know how hot.

I don't know if they're going to 2% interest rates just to show that they have the power to do it. But they're going to push weights down. This is a Michael Hartnett chart. Put this up. He put this out in December. This is showing 10-year commodity returns versus bond returns. And I think the current rate of 10-year commodity returns, versus bond returns as of last month is 8.2% average annual, which is a high dating back to the late, early 1980s.

Is that what that looks like? So it's very rare to, or at least dating back to 05, it's very rare to see 10-year historical returns of commodities beating bonds to this extent is the point that Hartnet is making. What do you think about that idea? Which part? Buy materials. A new bull market for commodities as a result of the economy running hot. Yeah, you know what's so interesting. The market getting ahead of that.

Yes. And I think it's really fascinating that the biggest commodity of them all is not participating, like at all. Energy. Oil. It's not moving. 60 plus today. Oh, was it? Starting to percolate.

But yeah, it's all working. You're bullish on what energy stocks? My best stocks to market list has seven or eight. energy stocks on it was the first time and uh i bought i told you i bought exon um which we talked about a couple weeks ago um i think i think this the sector is just due like i know that's not how it works but it sort of does um i i i also uh we have this home builder chart if we get a housing cycle material stocks are going to continue to rip because copper and companies that do everything from sheet rock to concrete to like it's just it's all it all becomes one trade

and uh the xhb love that mortgage news what trump wants to do on mortgages which i think is really um a smart move and if you if you just sort of picture like a new housing cycle started it's like yet one more reason that you're going to want to be in these commodity stocks josh do you have you have a chart you have a chart you have chart software up on your screen I want you to punch in a thicker. Punch in LOW. And zoom out a little bit. Like normally, normally we talk about Home Depot when we're talking about the segment.

Home Depot is the premier brand. Lowe's looks so much better. Like look at this chart. This is going to pop up on your list very soon. Lowe's, it might be on the list already. Lowe's is roaring. Roaring. It's got a, yeah, it's got a lid on it, 285.

So hard, hard, hard, hard resistance around here but if it gets going i mean blue skies there's no there's no sellers there's no higher prices yeah 22 multiple about the same as the market you know it's interesting look at home depot contrast that like home depot looks like shit in comparison i mean it's still had a rip over the last couple of sessions but the difference between these two is one of them like makes the case to wall street that it's better in the professional market and the other's better in the retail market i think that's home depo is the is is that one no i think it's the other way around Okay.

I mean, they both serve both, so who the hell knows? Can I show you some of these materials charts that we wrote up? Here's Martin Marietta. Let me say. So this is a $40 billion market cap. This is aggregates, concrete, cement, you name it. Like, this is an obvious breakout. We wrote it up today.

Vulcan materials, VMC. This is also $40 billion. Same chart. You can obviously see this consolidation period being burst through, like the Kool-Aid man. You can own both those stocks. The bigger one is the CRH, which is like globally, like it's a bigger company, bigger market cap. I don't know any of these names. This is less well known to like casual investors. I think more people know Vulcan, but these are these are all breaking out and these are all very much breaking out because we're probably running things hot and

the price of all of these materials is going higher. So all right. Last thing, the Delta news. So the CEO is saying 20% jump in earnings for 2026. And margin expansion. It's unbelievable. Yeah. And they're now doing more business in first class, in dollar terms, than they are for the entirety of the main cabin. Are you surprised by that?

No. That's as of Q4. I'm not surprised. Not surprised. No. Okay. Ed Bastion said Delta sits at the top of the K in the so-called K-shaped economy. with more revenue coming from higher spending customers.

Quote, we're looking at our seat growth in the coming year. Effectively, none of our growth in seats will be in the main cabin. Virtually all will be in the premium sector. Make the whole plane first class. No main cabin. Do it for, do it for me. Main cabin ticket revenue fell 7% in Q4. Premium ticket revenue rose 9%.

So premium is 5.7 billion worth of ticket sales and main cabin is 5.62%. So coach is now the smaller part of the ticket sales that they're doing. You think that reverses anytime soon? What are your thoughts? No, I don't think that it reverses anytime soon. And given that foreign travel was a headwind in 2025, the fact that they produced record revenue, record earnings, they did so in Q4. It's remarkable. It really goes to show how the top. of the K is doing and also and also they said that they are seeing an acceleration so far in the first quarter so not no surprise there we know the top of the K is doing very well and it's it's showing in the numbers are you an airline slot snob yes you know i'm a delta guy you're a delta guy i think i am too but i'm really a jet blue guy but i'd say i'm a delta guy i love i love delta i really do and it's noticeable it's not too late to switch why the planes cleaner what the hell is wrong with these other airline why is the plane physically presentably cleaner I don't know what they're doing that's so much

different than the competition but they are smoking them I've taken a lot of flights over the last couple of years and I've had one lousy experience that wasn't their fault it was weather related like not not a bad experience so we've been over this the reason I'm jet blue is because I have four family members taking planes all over the place and we need to move miles be twixt each other and Delta doesn't let you do that I tell you something they let me do that I would never get bored of jet blue flight again drain your miles on jet blue do not pay for another jet blue flight drain your miles like

the starbucks points just drain them the bandaid off do not pay for another flight in jet blue drain the miles and then go to delta yeah but i still need that ability i need to move things it's not accumulated miles if if my kid flying to college cancels her flight i have that in the bank and if i need to shift that to myself i can no i get it and vice versa drain the bank drain the bank drain the bank All right, I think I think you're missing why I won't do that. Okay, make the case. You're up. All right.

I'm going to make the case. What case am I making, Josh? I want to say, oh, dude, I got stopped out of it. I see, I see you doing software. I got stopped out of Adobe today. So I whacked off. I knew it was going to happen. I whacked off Adobe yesterday.

And I want to say this. So no harm, not foul. I lost 2% on the trade. No big deal. Yeah. We respect trends, you and I. And every once in a while, we get cute. But when you are bottom fishing, you have to have stops.

You have to position size it appropriately because the market is usually right. There's a big difference between buying a gap down when something gaps down 20%. And you just say overreaction, force selling. I'm taking the other side. Different. Very different versus because gaps get filled on both sides, upside and downside. We saw that in Chipotle, a stock that I hated last quarter. Guess what?

I'm an idiot. The gap got filled. But there's a very, very big difference between a gap down and a persistent. bleed. When you see a persistent bleed that is just down, down, down, down, down, you're probably wrong or the market is probably right. That has to be your default setting. Now, we might be setting up for an amazing trade in the future where Adobe might look ridiculously cheap today. That's not my game. Okay. I don't think it's your game either. That's possible. But try on. But could not agree with, could not agree with you more. Okay. So I'm looking at an equal basket of Adobe workday,

into it, sales force, and service now. And some of these are great businesses. But guess what? Who gives a shit? Wack them out. Wack them out. Wack them off. The stocks are not working.

In fact, not only- Those stocks off of your screen as soon as you can. And we visit them when they give you a reason to. So I'll revenge trade Adobe. But guess what? Not until I see a convincing sign of a bottom. See ya. I will revisit you at a later point.

But here's here's the other, here's the other point. I'm moving for it to go to zero. You know me. You know me. So, um, okay, did you know that the Russell 2000? Damn it. I forgot to put this chart in here. Hold on.

What did Sean and Matt say to me? The Russell 2000 has underperformed the S&P 500. No, I don't have this chart off please. Hold on. Bear with me. For eight of the last nine years. I'm double checking because I thought that was right, but it seems hard to believe. Eight of the last nine years, it's underperformed houseway.

It's just it's just a hyperscale. Okay. That's really old. I think we might have, I think this might be the year, Josh. I know I just said like don't fight the trend, but last year. No. No. The Russell did.

Oh, the Russell did like 10. No. But, but this is not, this is not, this is not. The bleeding is stopped chart on. This is the ratio. This has turned. We're turning up. Yeah.

We're turning up. You know, it's different. You know what the problem is? Chart off last week we talked about a phrase from Semblis, the internal logic of the market, how basically the highest margin, the best ROE stocks are also the ones with the best performance and the highest multiples.

A small cap universe is like a 5% profit margin and the S&P is like 14 and a half. And they're turning up. I'm making the case. If they have a boost to profit margins, they will be re-rated higher. Yeah. So I think we could say it. I think it would be right.

All right. Mystery chart. So we like the Russell. I like the Russell. I do. All right. Mystery chart. I left the price on because I don't have, I don't, I don't want to make it like so

difficult. This is a Dow component, blue chip stock, true blue chip stock, like a real chip stock. like a real blue not a recent just a long-term blue chip stock and i'm showing you five years no no monthly moving average bullshit i'm i'm giving you an rsi and a price and i just want to know one thing from you before you guess it i'm buying you a buyer oh absolutely are you kidding me this is going this is going generation generational resistance is now being broken correct yeah no this is going okay so these are weekly candles i think this goes right i think this like this like this or goes to 150.

Yeah, I agree. What is it? Can you give me like anything? Yeah, check the live chat. No, I'm not going to cheat. I don't want to do that. Okay. Okay.

Here's something. There's been a recent geopolitical event that this stock reacted to. That's a pretty good hint. I mean, is it an oil stock? I don't know what else it would be. they're screaming in the chat I'm the biggest idiot

yeah hey you know what it's a little bit harder to do it live screaming a geopolitical so is this is this Venezuela no this can't be Venezuela a geopolitical is it Exxon I mean is that the isn't that the only energy stock and look at you

you got it you got it you got it I was like overthinking it give me the reveal all right you'd buy their shit out of this stock right now not only would I I'm gonna get along one of these names tomorrow I'm at 119 I'm thinking about averaging

up. I have completely drank my own Kool-Aid. Yeah, this is going so much higher. Yep. Best stocks in the market. We wrote it up a week and a half, two weeks ago maybe. I forget, it's all blends together. But this is one of my energy stocks and man, does it look good?

Unreal. And yeah, just get it reacted to Venezuela. They have no business in Venezuela, but it reacted because they will get. All right, guys, thank you so much for tuning into the live version of the show. Those of you view out in Spotify and Apple Podcast Land, we appreciate you.

If you're watching this on YouTube, thank you so much. And we love all your comments, all the likes, all the subscriptions, and guys, especially the reviews. Review the show. Like if you're into it, that's the best way to tell the algorithm that this is something that's valuable. And more people will join our gang. So please, go ahead and do that.

Tomorrow is Wednesday, which means all the edition of my favorite podcast, Animal Spirits with Michael and Ben. And then we'll do Ask the Compound Thursday. Wednesday. When do we even? I don't even know. Wednesday. Wednesday.

Wednesday. Wednesday. It's moved before. It's not our fault. Ask the Compound with Duncan and Ben. Always a blast. We get to answer live questions from you guys. That is a special event every week when they do it.

And you guys could get your questions answered live during Ask the Compound by Ben and Duncan. And then, uh, Friday, all new edition of your compound and friends fix and a very special guest this week. We're so excited to run it back with him and you'll all find out who that is soon. So guys, thanks for tuning in. God bless. Good night.