Enlightenment - A Herold & Lantern Investments Podcast
Enlightenment - A Herold & Lantern Investments Podcast
Navigating 2025's Economic Trends: Bond Yields, Market Impacts, and Semiconductor Innovations
January 13, 2025 | Season 7, Episode 2
The episode provides an in-depth analysis of how rising interest rates and the ongoing wildfires in California are impacting financial markets in 2025. We discuss the implications for bond yields, stock markets, and insurance companies, while examining economic indicators contributing to these shifts.
• Understanding the bond market's response to rising long-term interest rates
• Discussion on how wildfires influence insurance rates and overall market sentiment
• Examination of individual stocks and sectors affected by changing economic conditions
• Insights on labor market data and its contradictory effects on the stock market
• Evaluation of potential implications for future earnings and valuations across different sectors
** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.
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And now introducing Mr Keith Lantin.
Keith Lanton:Good morning everyone. An enjoyable weekend. Obviously, our hearts and minds and thoughts and prayers go out to the folks in the Los Angeles area being impacted by the wildfires. January, almost halfway through the first month of 2025. And 2025 has proved to be a bumpier start than a lot of market experts were predicting. We're seeing lots of volatility in the bond market but bond market yields, especially on the longer end, moving higher and that is one of the factors impacting equity prices, which have been dipping lower. We saw a significant sell-off at the end of last week with some economic data and we'll talk about that as well.
Keith Lanton:So what we're going to talk about today is we're going to talk about interest rates and perhaps some reasons why and I think it's not that complicated, fairly simple why we're seeing longer-term interest rates increase, and I'll explain why it's fairly simple and what I think is going on. And then what we'll do is we'll talk about equities Barron's had a great piece talking about long-term returns and equities markets being driven by just a handful of stocks. We'll talk a little bit about that, put markets in perspective, and then we'll talk about a few individual stocks from Barron's as well as this week's news, and then we will talk about the wildfires and what that might mean for insurance stocks and what it might mean for you and your personal insurance and what it might mean for you and your home. So very, very real effects of what's going on in the West Coast, not only for, obviously, the people tragically impacted, but for even people who are almost a continent away here on the East Coast, like I am here in New York, and I think we're going to ultimately feel the impacts of what's taking place outside of Los Angeles. So let's talk about the bond market, let's talk about interest rates, because I think that's one of the driving factors. So let's talk about the bond market, let's talk about interest rates, because I think that's one of the driving factors that's going to affect the markets in 2025. And what we've seen in just the past few months certainly in the last six months, we've seen a dramatic increase in longer-term interest rates. Put things in perspective we've seen the 10-year go up over 1%. We're now looking at 4.77%, one of the biggest moves upward in the bond market in recorded history. The five-year is at a 459. Again, 10-year 477. 10-20-year, north of 5%, we're at a 502. Some folks talking about 5% kind of being the bogey of where interest rates may be heading. It's 20 years already there and the 30-year is at a 4.94%. So what drove interest rates up higher?
Keith Lanton:Last week? And I would argue that was a couple of economic reports, one getting more attention than the other. But early in the week we got on Tuesday we got the ISM prices paid component to the ISM index and that came out at 64.4, which was up 10.65% from the previous month, and the ISM prices paid component is viewed as a leading indicator of perhaps where the CPI would go. So that was something that the markets were certainly surprised with and concerned about that inflation may be accelerating. And then on Friday we got the employment report come out from the Bureau of Labor Statistics showing that the unemployment rate dipped to 4.1 percent. Expectations were for it to stay the same at 4.2%. But perhaps more importantly is the non-farm payrolls increased to 256,000, meaning 256,000 jobs were added. Expectations were 165,000. Also was the U6 report, which was not a headline number, but folks who dig through these numbers said that that is something that you got to really keep a good eye on. And with the U6 employment report includes people who are working part-time, who would like to work full-time, and that is often an indicator of which way the unemployment rate is headed. And that dropped as well. So that went from 7.7 to 7.5, all indicating that the economy is stronger than expected.
Keith Lanton:And if the economy is stronger than expected, well, this changes expectations on which way the Federal Reserve is going to go with interest rates. So currently the Fed funds rate is at 4.25% to 4.5% is the range that's down about 100 basis points from a year ago. So a year ago we were at five and a quarter to five and a half. Fed's cut rates 100 basis points Going into these reports. Last week, market expectations were that in 2025, we were going to see three more interest rate cuts.
Keith Lanton:Well, after these reports, markets are now expecting depending on which economists you're following anywhere from two, one or zero rate cuts. I would say one is probably the most often cited as the new number of rate cuts to expect. So therefore, it's expected that short-term rates aren't going to drop all that much anymore all of a sudden. So why does that matter? Why is that factor into what's taking place on the longer end of the bond market? Why is the long end of the market selling off so much and yields rising? Simply because we don't expect rates to drop. We're not expecting an increase, at least not at this moment in time, and I would argue the reasons are simple. We don't need to overcomplicate this.
Keith Lanton:So if you can go out and get 4% on your cash, maybe four and a quarter right Fed funds rates four to four and a quarter you might have to shop around at your bank or just simply go out and buy treasury bills from your financial advisor or do it yourself on treasury direct. Well, now you can get that four and a quarter percent to four and a quarter percent and the expectation is. It's not going to change much. It's not going to decline. You don't have to worry like you did before. Hey, I can keep my money in T-bills and yes, I understand, I'm getting 4.25% today, but a year from now I might be getting 3.5% or 3%. So I need to be mindful of my bonds and my bond strategy. So perhaps I should be thinking about longer term bonds or other bonds. Well, now that worry has really receded.
Keith Lanton:So the thought process becomes to the average investor well, why should I reach for only a little yield when the risk reward does not look good? And we're going to break that down for a second? So let's take a look at the cons of what's going on here and let's take a look at the risks and the rewards. So if we look at the reward of purchasing a 10-year treasury, currently you're getting about a 4.75%. If you're buying a 30-year treasury, you're getting 4.95%. Let's stick with the 10-year treasury of earning 4.75%. Well, that means that all you're picking up versus the cash rate, which is again four to four and a quarter percent, is somewhere between half and three quarter of a percent. So you're going to go out and buy something that goes out for 10 years and you're going to get about three quarters of 1% more return in order to take that risk of locking yourself in for 10 years. Well, that perhaps looked like a reasonable strategy. I'll get three quarters of a percent more, and that strategy looked logical. Well, not because of the fact that you were picking up three quarters of a percent more to go out 10 years, but because the expectation was a year from now you might be getting one and three quarter percent more, or perhaps two years from now you might be getting two percent more, because rates were expected to decline no longer on the table. Things could change again tomorrow, but right now that's not what's expected, markets not indicating that they think that's what's going to happen. So the thought process is no real reason for me to go out to just pick up that little bit of extra return when I can be very comfortable here staying in T-bills.
Keith Lanton:At the same time, we've got other factors going on that are further reinforcing why you may not want to extend maturity, and front and center is the uncertainty of the US deficit. If we keep issuing more debt, well then it's very simple Supply will increase and in order to satiate whatever demand there is when supply increases. Well, what does that mean? That means that prices have to drop. Why is supply increasing? Well, it's increasing because we are continually increasing our deficit. Every year. We are currently running a deficit of somewhere between $1.8 and $2 trillion. We've talked about this before. So we need to issue roughly $2 trillion in new bonds every year, on top of the fact that we've built up a very big stockpile of existing bonds. We currently have a deficit of $36.3 trillion. Next year, that means it'll be $38.3 trillion. We constantly have to roll that over.
Keith Lanton:Lots of new supply.
Keith Lanton:At the same time, the Fed is doing some quantitative tightening, meaning that they're not owning as many treasuries.
Keith Lanton:Further crimping the amount of well, not crimping, but increasing the amount of supply. Lots of supply, lots of uncertainty as well. So another factor is we have a new administration coming in that creates uncertainty. Risk for buying longer term bonds goes up, especially when some of the policies potentially we don't know what's going to happen. We know that President-elect Trump likes to negotiate, so we don't know exactly what it is that he is or is not going to do, but some of the things that he's talking about potentially could stoke inflation. We don't know if he's going to actually do them, but the markets are worried. So markets are worried about tariffs. Tariffs are additional costs on goods that potentially could get passed on to consumers, further create inflation and also talking about limiting immigration, therefore the possibility that fewer people will be coming into this country, whether it's legal or illegal, regardless of your views on this matter, if you've got a tight labor market, like the numbers indicate we had last week, and you've got some potential for wage inflation.
Keith Lanton:well, if you've got fewer workers coming into this country, fewer people who potentially could be adding to that pool, well that means that that could be driving up wages. So, logically, the pros of picking up a little yield when it looks like short-term rates are sticky for a while versus the cons where you're not getting much of a yield pickup means that, logically, folks are going to say to themselves you know what? You want me to go out and purchase something that's going to last 10 years. I'm only going to pick up three quarters of 1%. Well, you got to pay me more and that's called a term premium and for the first time in a long time, that term premium is increasing. Because of all the aforementioned factors. The short-term rates are going to stay higher for longer, which I think is the main factor. The budget deficit, which means we're going to have more supply, and the uncertainty about what the upcoming administration is going to do. All of that is what's driving interest rates are moving higher. Investors are saying you want me to take on more risk. Well, you got to pay me more in order to do that. Now I will conclude talking about these interest rates by a piece in the Wall Street Journal over the weekend which suggested that the cure for high interest rates is high interest rates, meaning that if interest rates get high enough, you lure buyers in, perhaps by pulling their money out of the stock market or out of the bank, and they will then buy bonds, drive down prices, because at some point it becomes attractive enough for them to do lock into those higher yields. What that level is, nobody knows for sure, but at some point, if rates get high enough, we might see the reaction being that you will lure in buyers both internationally and domestically that you will, lauren bias, both internationally and domestically.
Keith Lanton:So let's move on to what's going on this morning and where markets are, and then we'll talk about the stock market and long-term trends in the stock market. So we're seeing futures improve slightly as we get underway this morning. Dow futures are down 33. S&p futures best level I've seen in the last couple of hours is down 35. Nasdaq futures down about 190. They are the weakest of the three indices. Nasdaq futures down about three quarters of 1%.
Keith Lanton:You could argue that good news is bad news again, at least as far as the stock market is concerned, and that is because of the jobs report on Friday which caused a significant sell-off on Friday. S&p now 1.5%. Nasdaq dropping for the week about 2.3%. Dow down about 2% for the week. Some are saying that bad news being interpreted as bad news, when in fact the good news is that more Americans are working. So if you want to look for a silver lining, well, if more Americans are working, obviously more people can go out and purchase goods and services. So potentially, earnings can come in, hopefully strong and perhaps better than expected.
Keith Lanton:So we have this tug of war going on between rising rates. Rising rates cause the markets to reprice equity prices. How do they do that? Well, they say to themselves future earnings are worth less. Therefore, valuations may need to come down.
Keith Lanton:On the flip side, if the rising rates are the result of a strong economy, well then potentially earnings could go up. So now you have this tug-of-war Earnings are going up, future earnings are being discounted. Which one is influencing? If you do all the math, how does it work out? Or should prices be higher or lower? Is the earnings going to overwhelm the decrease that's taking place because interest rates are higher? Future earnings are worth less. The decrease that's taking place because interest rates are higher? Future earnings are worth less. Also, potentially, if you've got a company that's borrowing money, well, that means that they are potentially going to see higher borrowing costs. Weigh all those factors and arrive at a new valuation in your valuation model, and each company is going to look different when you do that analysis. But the bottom line is is the good news is, is that it doesn't look like we have a recession, at least over the next little mountain ridge, and it looks like the economy is still fairly strong. The question is is how strong is too strong, and we will get more data this week to give us some interpretation of that.
Keith Lanton:So the big event this week is the Consumer Price Index for December, which gives investors a critical look at inflationary pressures in the US economy. Wall Street is expecting to see a 2.9% year-over-year increase and a 0.3% month-over-month rise, excluding food and energy. The so-called core CPI is expected to be up 0.2% on a monthly basis and 3.3% on an annual basis. Tomorrow morning, tuesday morning, we get the producer price index, which provides an update on wholesale inflation. Now the CPI gets more attention because it captures the prices that US shoppers are being asked to pay. But the PPI is important because it's a leading indicator of future CPI reports because it measures input costs for businesses, offering insight onto whether they will need to raise prices in the future in order to protect their profit margins. And the PPI expected to look somewhat similar to the CPI. Both core and non-core PPI is expected to be up three-tenths of one percent.
Keith Lanton:Secondary economic reports Commerce Department retail sales Thursday morning we're looking for that to be up four-tenths of one percent. Retail sales Thursday morning we're looking for that to be up four-tenths of one percent. Also, on Friday we get industrial production capacity utilization numbers and also on Friday morning we get the Commerce Department releasing a report on new residential construction data. Now we do get a peek this week into earnings, which is going to be the next driving force, along with the inflation expectations. And we are going to hear on Wednesday from Wells Fargo, goldman Sachs and BlackRock. Goldman and BlackRock will be reporting for the first time in well quarterly here. Potential topic coming across all three of these conference calls is the regulatory environment under President-elect Trump. This morning we had JP Morgan CEO speaking of earnings from banks, saying in an interview that he is cautiously pessimistic about the US economy. Now he has made comments in the past, has a mixed track record, but obviously has lots of experience and lots of insights and he expressing some concerns, so it is certainly relevant.
Keith Lanton:Some other companies in the news this morning Lululemon symbol, l-u-l-u. Raising their fourth quarter guidance that stocks at about 9 points or 2%. Exxonmobil and Chevron moving higher with higher oil prices, oil this morning moving up about $1.50 a barrel highest level in several months. We're at $78 for West Texas Intermediate here in the United States and this is as the US is imposing more sanctions on Russian oil. Apple this morning down about two and a half points. They announced that they're going to be planning new iPhones and artificial intelligence features this year.
Keith Lanton:Biotech stocks in the news Johnson Johnson announcing they are going to acquire intracellular therapy symbol, itci for about $14.6 billion $132 a share and Sage S-A-G-E moving higher this morning. Biogen going to be buying that company. So two biotech deals this morning. And in the biotech space we also get news from Moderna on the downside Stock's down about 18%. They gave a business update across its pipeline of medicines and said that they see fiscal 2025 revenues below expectations and this is below expectations that were already reduced. Also this morning, news that Howard Hughes Holdings, which is a real estate developer, bill Ackman's Pershing Square, proposed a deal to form a new entity to merge with the real estate company, offering $85 per share for that stock. So certainly getting some M&A news this morning, despite some weakness in markets.
Keith Lanton:Crypto this morning to the downside we see Bitcoin at around $90,000. Coinbase and MicroStrategy both down about 4% pre-market this morning and quantum stocks tumbling as well, after comments from Mark Zuckerberg echoed comments from NVIDIA CEO Jensen Wang that quantum is at least a decade away from being a useful paradigm. Zuckerberg made the comments on a Joe Rogan episode on Friday, so those stocks are declining anywhere from 8% to 25% More this morning after tumbling significantly last week, perhaps seeing some of the froth come out of this market, and rather quickly. Abercrombie Fitch, the clothing retailer, plunged 11% in pre-market trade. Even after Abercrombie raised its outlook for the fourth quarter on strong holiday sales expectations, company now expects fourth quarter sales to grow 7% to 8%, compared to 5% to 7% growth, which was the guidance they gave. These expectations, though, are still lower than the year-ago period, however, suggesting a slowdown in growth.
Keith Lanton:Talking about the fires in Los Angeles, high winds are forecasted in LA. Death toll is, unfortunately, increasing. The two largest fires have burned over 37,000 acres. The Palisades fire has burned 23,000 acres and is 13% contained, and the Eaton fire has burned 14,000 acres and is 27% contained. California wildfires, nbc News saying, could cause 10 billion in insured losses from homeowners. Talking about the wildfires, barron's saying that, while the wildfires have caused billions of dollars in losses, a factor for the insurance companies, certainly, but nevertheless suggesting that insurance stocks could potentially benefit from increasing premiums as a result of homeowners and the market participants recognizing that the risks have certainly elevated here with the effects of these wildfires and, arguably, the effects of global warming playing a bigger, bigger role of more tragic events.
Keith Lanton:Here in the United States, as of Friday, shares of property and casualty insurers were down significantly, with expectations of significant losses. In Los Angeles, mercury General perhaps the stock that is most associated with California insurance down about 24% last week. Allstate was down 5%. Travelers was down 4%. While this is certainly a concern, what's going on here? From a financial perspective, barron saying the long-term picture for insurance stocks is brighter. Over the past five years hurricanes and fires insurance stocks have outpaced the S&P 500. Insurance stocks up about 87% versus an 80% increase in the S&P over the last five years, and that's because the insurance industry has been able to raise premiums and has avoided pursuing business where it can't operate profitably.
Keith Lanton:We've heard stories about insurance companies pulling out of California, while certainly that's very stressful for homeowners. Stories about insurance companies pulling out of California while certainly that's very stressful for homeowners because California has limited how much they could raise premiums. They simply decided that it just wasn't worth it to stay in the state given the risks. With the benefit of hindsight they perhaps properly evaluated those risks and decided to exit the state. Specifically, two companies Farmers and State Farm saying that they had stopped writing policies two years ago in California. But Farmers recently saying that with expectations that they will be able to raise premiums to be more on what they view market pricing. Saying even still after these wildfires, that they will, if this all comes to fruition, be returning to the state.
Keith Lanton:Now you may be wondering what Warren Buffett has to say. Berkshire Hathaway, one of the largest property and casualty insurers in the country, the third largest in California, but they get less than 1% of their premiums from homeowners insurance. But Buffett recently told shareholders, in May of 2024, that climate change increases risk. But he said in the end it makes our business bigger over time. He said rising risk means a rising need for insurance coverage. If there was no risk, there would have been no insurance business. Ajit Jain, who is the chief executive of Berkshire's insurance unit, said most of the insurers' contracted liabilities, especially in reinsurance, are limited to one year. And he said climate change, like inflation, done right, can be a friend of the risk bearer. So he went on to say that California is waking up to the fact that insurance carriers need to make some kind of return, a decent return for us to keep deploying our capital. And, as mentioned before, california, before the wildfires had said that they were going to allow higher premiums.
Keith Lanton:Now you may think well, I'm living somewhere in Florida or the Carolinas or Boston, how does this affect me? Well, it's not just wildfires, it could be hurricanes, it could be tornadoes. It could be hurricanes, it could be tornadoes, it could be flooding If you're in southern Florida. Certainly could be hurricanes if you're somewhere on the East Coast. And what does that mean in terms of the insurance on your home and what does that mean for what your premiums may be in the future? Well, what's happening is websites like Zillow are waking up to the fact that homeowners you will see that they are now providing some updates of risks. They're coming up with risk scores for individual homes. For what is the risk of flooding, what is the risk of wildfires, what is the risk of hurricanes? Homeowners are paying increasing attention and this could be a factor that determines not only the value of your insurance costs but the value of your home.
Keith Lanton:All right, let's move on to a couple of interesting stories, a couple of interesting stocks in Barron's, one of which is the chip equipment maker, asml. Barron's saying its stock is poised to bounce back. The stock market wouldn't have moved up so much in the last several years without the chip makers moving up, companies like NVIDIA, which is certainly at the center of spending on artificial intelligence. But NVIDIA is deeply dependent on Taiwan Semiconductor, which runs the world's most sophisticated chip factories. And Taiwan Semi would be lost in cutting edge chips without a Dutch company called ASML Holdings, the leader in lithography or using lasers and mirrors to print impossibly, and it's crazy how dense the patterns are on tiny, microscopic silicon wafers. We'll talk about this technology and why that creates a deep moat for ASML and why it's so hard for competitors to catch up. So if you look at all three of these companies, nvidia has returned over the past 10 years 29,000 percent for shareholders, taiwan Semi has returned 1,100 percent and ASml has returned 800 percent. But nvidia and taiwan semi trading close to their highs and ams asml, after slashing its revenue guidance in october, is down nearly a third from its september peak. So, baron says, is this an early warning sign for chips or is asml losing its monopoly hold on high-end lithography? And bar Baransk, in their opinion, concludes neither, and they think that ASML is likely to bounce back.
Keith Lanton:What does ASML do and how do they manufacture these chips? Well, they use a technology called Extreme Ultraviolet or EUV, and these machines can print 13 nanometer resolutions, which chip makers turn into even smaller features to achieve Chips with nanometers as small as three nanometer nodes or generations. And to put that into perspective, these chips, which are three, five or seven nanometers a nanometer is how long a fingernail grows in a second so they are producing chips that are the size of how fast your fingernail grows in three to seven seconds. That's how small these chips are. And what they do is they turn this equipment. They manufacture this equipment in room-sized machines that analyst Didier Scamana at Bank of America Securities calls the most complex thing humanity has ever created, and he has covered ASML for decades. He said, for example, what ASML does. They fire lasers at molten tin droplets falling at a rate of 40 to 50,000 a second. So picture 40 to 50,000 tin droplets falling at the rate of 40 to 50,000 a second and they hit every one of these droplets with two hits without a miss. And if one stray particle were to occur out of these two hits, at these 40,000 to 50,000 droplets falling per second, that could ruin a wafer or take down the machine. That technology took decades to develop. Now countries like China are working very diligently to seek to replicate this technology. China is banned from buying ASML's most sophisticated machines. They'd like to make their own. But if you talk to the analyst at Bank of America, scamana goes on to say the odds of them being successful in EUV over the course of the next 10 to 15 to 20 years are fairly low, not only because of the complexity. But beyond the complexity are ASML supply deals with Germany's Carl Zeiss, which makes the world's flattest mirrors, and Trump, which makes the world's most powerful post-industrial lasers. So not only is the technology incredibly complex, the inputs are limited and ASML has the agreements and multi-year agreements and long strategic partners with companies providing these inputs. Asml has the agreements and multi-year agreements and long strategic partners with companies providing these inputs. Asml's current top machines are estimated to cost more than $220 million. The next generation, which is going to produce two nanometers again, that's the size of how fast your nail grows in two seconds. That's the next generation. Those machines are expected to cost $380 to $400 million. Intel in the US is an early recipient of those new machines.
Keith Lanton:But back to the original question. And for all this is so terrific and so wonderful, why is ASML stock slumping? Barron says three reasons. First, china has stockpiled lower-end ASML equipment because they're anticipating tighter trade restrictions, and this morning in fact the Biden administration did announce tighter trade restrictions, one of the reasons that we're seeing some weakness in some of the semis this morning. The shift back to lower demand from China will temporarily sap growth. Second, intel made a push to expand in chip manufacturing and they haven't had a lot of success so far. So Intel and Samsung both have delayed equipment orders for their foundries. And third, despite strong growth in chips for AI, there is currently a slump in consumer devices and their chips. In fact, two-thirds of the companies in the Philadelphia Semiconductor Index have trailed the S&P over the last year. Nvidia gets all the attention, but chips in general, over the last year two-thirds of them have not been moving up and many of these companies are customers of ASML.
Keith Lanton:So Barron's concludes that growth, the return to growth, for ASML seems likely.
Keith Lanton:Timing will depend on demand for phones, computers, cars and gaming machines, but the shift to the new high EUV we talked about those ultraviolet light chips, those new chips is coming and computer memory is following the same path as processors.
Keith Lanton:So computer memory is also going to be produced on smaller nanometer using smaller nanometer technology. So they're going to eventually need more sophisticated equipment. They're going to need ASML equipment to meet that next generation not only of processors but also memory. So the analyst Skamana at Bank of America reckons that earnings for ASML will grow at a compounded average rate of 16% over the next five years. Now ASML still, even after selling off by a third, trades at 37 times the reduced earnings estimates a premium, but one that is close to a 10-year low relative to the US chip equipment companies. Is what JP Morgan points out, and that analyst at Bank of America has a price target for ASML about 26% above its current levels, and Barron's, in their 2025 top stock picks, did list ASML as well. I will save a couple of the other articles I had for discussion and I will turn things over to Brad to talk some more about markets, because it's getting late.
Keith Lanton:Good morning Brad
Brad Harris:Good morning Keith.
Brad Harris:Good morning everyone. Talk some more about markets, because it's getting late. Good morning Brad. Morning Keith. Morning everyone.
Brad Harris:Unfortunately, in these markets there's a lot to be nervous about. The Los Angeles fires wars on two fronts that at any point can escalate. A new president and administration that will preside over an extremely divided country, and a very volatile bond market that feels like, after two 25% return yields, years in equities, is looking to correct. All of this. Bad news in the good old days would have been a bond investor's solace.
Brad Harris:For the last handful of years it does not seem to work that way anymore. It has become extremely frustrating that almost all assets are trading as correlated assets as opposed to performing the way they were meant to as a hedge of sorts. I felt that we were getting a little toppy in yields a couple of weeks ago when we hit the 4.6, 4.65 level, but as just a mortal human with plenty of emotion as the market blew through that four and three quarter percent level on the 10-year last week, I felt lost and very concerned. Additionally, the awful bond market is the tail wagging the dog for this unsettled stock market, as inflation fears are being reignited. If I were a betting man, which I am. I'd make one bet on this year. That's volatility, and a heck of a lot of volatility. Volatility is not good for the head or the heart, but there are certainly ways to take advantage of it for those who may make sense, that this may make sense, for With that I'll turn it back to you.
Brad Harris:Thanks,
Keith Lanton:Thank you, brad.
Alan Eppers:Thank you for listening to Mr Keith Lantern. This podcast is available on most platforms, including Apple Podcasts, spotify and Pandora. For more information, please visit our website at wwwheraldlanterncom.
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