Positively Sloped
Positively Sloped is where markets, culture, and momentum collide — because the most interesting things in the world are the ones trending up and to the right. Jake and Scott break down what’s moving — in the markets, in the headlines, and in your group chat — with sharp insights, real opinions, and just enough irreverence to make finance actually fun. These are the conversations we’ve been having for years — debates, hot takes, and deep dives — just now with a mic in front of us.
Positively Sloped
19. Q1 Market Wrap-Up, WTI vs. Brent Crude Inversion & CPI Preview
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In this episode of Positively Sloped, Jake is joined by options trading pro, Scott Bauer, to broadcast from the CBOE trading floor. The pair wrap up a turbulent Q1 and explore whether the market's resilience will hold. We break down the ongoing geopolitical tensions in Iran and explain the rare backwardation happening between WTI and Brent crude oil. With the potential for a hot CPI inflation print on Friday, we discuss how the bond market and elevated interest rates could dictate the direction of equities moving forward. Finally, we step away from the charts to offer our predictions and fades for this weekend's Masters tournament.
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Kingsview Wealth Management is an investment adviser registered with the SEC. Registration does not constitute an endorsement of the firm by the SEC nor does it indicate that Kingsview has attained a particular level of skill or ability. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed.
All opinions expressed by the Positively Sloped participants are solely their opinions and do not reflect the opinions of Kingsview Wealth Management, its parent company or any of its affiliates. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Positively Sloped participants deem reliable.
Kingsview Wealth Management serves as portfolio manager to separately managed account strategies and investment adviser to exchange-traded funds. As of the date of this recording, those strategies and funds held positions in NVIDIA, Amazon, Apple, Broadcom, Meta, Microsoft, and Wallmart, and did not hold positions in Google or Costco.
On today's positively sloped, Scott Bauer, CEO of T3 Prosper, joins me in the studio for a wrap-up of Q1 before we move on to the war in Iran and the latest updates and how that's affecting oil and possible inflation prints on Friday, and then wrap up with some masters talk. Okay, let's talk shop. Today is Wednesday, April 8th, and welcome to Positively Sloped. Dad, welcome back. Welcome to the studio, a place that you might not be familiar with. Have you ever been on the floor of this area? What what is this? This is the placebo floor right here. One of the last open outcry pits in the country. Have you ever seen anything like this?
SPEAKER_01I have wanted to see this for the longest time. Yeah. Um, it's probably been about a day or so since I was down here. And for those of you that don't know, the SP 500 pit, which is right here, I actually traded in there for a very long time.
SPEAKER_03Very long time. So familiar digs for you, at least. Familiar digs, love it. Home away from home. Yeah, absolutely. We've got uh, as always, these days, a lot to cover. Um, I want to start today by revisiting our fades or trades from a couple weeks ago when we did positively slope from the slopes uh before we got about an hour of skiing before 70 degrees. I think I got the mat. Um real quick though, we'll just hit on these uh and then we'll move through to today. I've got a I've got a show flow. I want to review Q1 and then get to the current events and then talk about what's going on in the future. Do we have like three weeks for this? Yeah, we've got an hour. We got three hours for the listeners. Excellent. Uh, but real we'll we'll just blow through the fades or trades from a couple weeks ago. So uh we said fade or trade, the market will have given back all of Monday at the time March 23rd's gains through the rest of the week. Uh, you we both faded that. We both faded that. We were both wrong. Uh Thursday and Friday, uh the 26th and 27th were consecutive one plus percent down days. Um, this trend that we've seen that we talked about and we both acknowledged of Monday up and then the rest of the week down as the as the war progresses happened again. We're both wrong on that. Um, we'll get to why we're reviewing these in a second. But second one was WTI and Brent trade above$120 a barrel again in the next two weeks. I traded that, you faded that. Um they've been around that no, no, no, no, no, no.
SPEAKER_01117 top, 117 top 117 top.
SPEAKER_03So they've been around that. I do want to talk about, and you kind of teased it right there. Uh, the this weird kind of dynamic of WTI trading above Brent. We'll get to that in a little bit. But so far, so good on that one. Uh, the third one was the Fed makes a move in April. We haven't had that yet. That'll be next week's Fed meeting. And then the last one was a one-seed wins March Madness. I traded that. Um, I don't know what you did. The point of this was to say that I had Michigan since mid-January on this podcast. Um, said it again, doubled down, tripled down last week or two weeks ago, and uh they dominated that tournament.
SPEAKER_01You know, Indiana's not a basketball school anymore. Illinois maybe is. We had a nice we had a good tournament, good tournament. Um, didn't really want to see either of those teams win, but is what it is.
SPEAKER_03Yeah, it was a great tournament. Yes. Uh Michigan was the best team the whole time, and took it. Sure were. So that's that's our March Madness wrap-up real quick. But let's wrap up Q1 uh for the market. So we had a, you know, more all all indices were firmly lower. Um, pretty lucky or not lucky. I'll let you weigh in on this in a couple minutes on how bad the the end of the quarter was, with that March 31st day being a plus two and a half, three percent day for all major indices. So stopped some of the bleeding. You had NASDAQ, the NASDAQ was down 10% year to date headed into that day, and then rallied up three percent to finish down seven percent. So, A, is that a coincidental relief rally? And B, what does that do for traders? What does that do for market sentiment for these for the people on the pit for traders online?
SPEAKER_01Well, I'll tell you right here that that the traders down here, because I'm down on the floor almost every single day, um, they never really bought into a major, major sell-off. And and I think the reason is because of what we saw happen with the VIX, what we saw happen with volatility. Yeah, we hit that 30 level on on the VIX just for a brief moment, a couple of times. The opportunity, though, to have protection, whether it was for traders on the floor here for retail, institutional, was abundant. So I think people were already positioned for a potential downside, which allowed them to be more aggressive with their trading. So, you know, what was it a coincidence on March 31st that we got a lot back to make the quarter not look so bad? It may have been a little bit of window dressing there, something to consider. But I think all in all, given everything the market has been through, the shock of you know, Middle East, everything, I think the market has held in pretty well.
SPEAKER_03I would agree, I would agree. And you mentioned the VIX and having it at 30 for just a brief moment. Um, you know, the VIX tends to pursue to a 1% uh move in the markets for every 16 points. Exactly. So the VIX at 30, uh, the market moved about 3%. And we've seen the VIX elevated relative to historical uh norms over the last three, four, five months. And that has been, you know, we've also become accustomed to these two percent days, these two and a half percent days. An interesting uh part about these days that I want to talk about is is a lot of this movement is happening overnight. Yeah. And we're gapping up and we're gapping down, and then intraday, there's not a ton of activity. So this is a little bit off off the script here. But you know, when I think about trading, all movement is good movement. It's all opportunity, whether it's up or down, you just you know, you kind of got to point direction and then figure out magnitude. But when a lot of that activity happens overnight, what's the opportunity throughout the day? If you know, take today for for example, we gap up two and a half percent on the news that we've got a two-week ceasefire. We'll see how that news rumor, whatever you want to call it, if we stay at these levels the rest of the day, is there a ton of activity to be had?
SPEAKER_01I think that's the key. Are we gonna stay at these levels and where are we gonna close? Are we gonna close near the highs of the day or are we gonna sell off a little bit? Right now, it's not so busy down here, and you you've talked about that. And I think even though option volume has been busy, has been robust overall, the activity intraday um really hasn't been because, like you said, we've seen those gaps, we haven't seen big moves during the day. So it allows professional traders, it allows retail also to really digest what has happened overnight and then to take an opinion. And that opinion maybe is not just for the day because we haven't seen a lot of big intraday moves, but it allows you to take an opinion for the next tweet or the next news cycle that comes out.
SPEAKER_03Yeah, for sure. And and uh let's let's digest what Q1 really looked like overall, not not the intraday, not the intra week trading and all the rumors. So the the real backdrop is the objective backdrop is we had strong and and resilient corporate earnings again. We had double digit growth, we beat expectations in terms of the SP as a whole, led by the Mag 7, but really there was some strong earnings across sectors. Across the sector. Um, we had positive, largely positive but variable job numbers. We'll talk about that that March surprise upside print to offset the the February down print, but overall, pretty solid. Um, inflation is is nagging, and that's gonna be a topic we'll get to in a little. So that provides you a downside. And then you've got just throughout the quarter, throughout since really January, late January, when this conflict started, or late February, I should say, all eyes on Iran and what's gonna happen there. So we had there's a lot of reason for positivity and for bullishness in the market. You've got this one huge event, this one huge conflict weighing down on everything, but largely you said it, you know, the market held up pretty well, all things considered. You know, how do you take in the the first quarter? What do you make of it?
SPEAKER_01Well, I think this has proven that if you remove everything else, um, the bond market leads the equity market. There is no question about it. The bond market was was flashing some signals. And once we saw the 10-year drop below 4%, that was kind of a high water mark in the equities. And as things started to escalate, and as credit started tightening, and as inflation started picking up, and we started to see that 10-year ratchet up towards 440, almost 450 again, that's where the equity market got in trouble. So going forward from here, yes, we all hope the de-escalation holds. Um, the bond market and rates are going to drive this market here. The market, the equity market is very comfortable right now with a four to four and a half percent tenure. Okay. If we start to break above that four and a half percent, the equity market could start selling off again. If we start to see rates coming down again, that should be bullish for the overall market.
SPEAKER_03And even, I mean, you saw this Tuesday night as we were approaching Trump's deadline, where we got that, we got the news at 6:30 or so central time, um, or 530 or so central time that there's been negotiations and there's a two-week extension. But before we got that massive, massive soar in the equity markets, the the bond market dropped a little bit. The bond, I mean, the bond market was telling us that we feel okay with what's going on, we feel okay with the news. And so bond uh rates were down a little bit. And that's that point about leading the equity markets. We've talked about this. Bond market is however X bigger than the equity markets are always going to lead.
SPEAKER_01No, no question about it. And I want to I want to um kind of jump back for a meant for a second. You mentioned earnings, earnings start again in in earnest next week. There have been so many upgrades in terms of what guidance is. Uh, I was reading something yesterday that this could be like the the largest set of upgrades. The expectations are actually pretty high for earnings coming up right now. And um, I don't think that would be the case if the market really thought that we were gonna see rates stay elevated at these levels.
SPEAKER_03It's this it's this disparity of which news item or data point is first and foremost in the markets trading. Um, you know, we talked about bond markets leading the equity markets within the equity markets. A trend that we saw in Q1 was the rotation continued. Yeah. And we saw this at the end of last year. Obviously, you'd expect energy to lead in this market, given um, you know, the the circumstances overseas and and the fallout that could happen with that. But you know, we had pretty broad participation in the market outside of tech. Um, you know, for a down market, what you'd expect is the defensive sectors rotate into power, and that's what happened. It was led by energy, materials, utilities, real estate, you name it, pretty textbook, and and there was less reliance on AI and mega caps.
SPEAKER_01No doubt. And that's that's healthy for the long-term, you know, some breathing outlook of the market. There's there's no question about it. You know, you look at some of the Mag 7, some of the big tech stocks that, you know, you see some of these valuations now, some of these PE ratios that are as just about as cheap as they have ever been. And if I had that crystal ball, which I don't, which I don't, but if I could close my eyes and say, boy, nine months from now, a year from now, are these things going to be higher or lower? I'd close my eyes and I'd pretty much buy all of them.
SPEAKER_03Yeah. Yeah, it's pretty. I mean, we've seen, I was talking to uh some clients yesterday about the valuation gap between international and domestic closing. Yeah, there's certainly some valuation uh tightening between you know uh growth and and value right now. No, no doubt. And go ahead.
SPEAKER_01I was gonna say one other thing that really held up that I still like, even if we start expanding, is some of the consumer staples. Not discretionary, but if you look at the big retailers, Costco, Walmart, boy, those things held in so strong. And I think those are set to really launch even higher, regardless of what the economy does.
SPEAKER_03I like that. And and I mean that aligns you. We're gonna get to it in a little bit, but consumer sentiment is is down in the dumps, uh, pretty much at an all-time lows. And that does lead people to pull back and tighten their spending a little bit, go to the you know, Walmart, Costco, and and buy some of those goods. If I asked you who were the top detractors from the SP performance this year, who would you say? Individual stocks. Yeah, individual stocks.
SPEAKER_01Um had to be Nvidia. No, probably not. It may have been go ahead. You were saying year to date. Yeah, yeah, yeah. For the for Q1. Yeah, Nvidia, not Apple, um, maybe some of the cyber security stocks. Um, boy, you're putting me on spot here. Microsoft, Microsoft for sure, has to be up there, maybe even Meta.
SPEAKER_03So the top eight detractors, keep in mind, this is based on their cap weighting, too. So not the worst eight performers, but the top eight contractors were Microsoft, Nvidia, Apple, Amazon, Tesla, Meta, Broadcom, Google.
SPEAKER_01There you go.
SPEAKER_03Your new mag eight with Broadcom involved in that. I mean, those eight, again, not the not the worst magnitude performers, but given their size and weightings in the SP, the top eight detractors from performance.
SPEAKER_01So I think that there's something to be said about that, that these eight stocks who have carried the market for years, let's call it, those are the worst performing stocks. And yet, yeah, we had a sell-off, but we're still within you know reach of all-time highs. Yeah, and that goes to the broadening of what we've seen. And again, I think that's super healthy for the markets down the road.
SPEAKER_03For sure. I mean, we are as of as of recording right now on Wednesday, we are uh less than a percent away from positive year to date in the SP. We were down eight percent six days ago. Um, you remember like five or six years ago when I was a senior in college and then uh fresh out of college, and I would write articles for you. I do. And I think I wrote articles about the Santa Claus rally, the Super Bowl theory, don't shell and make it.
SPEAKER_01Don't tell anybody that I really didn't author those.
SPEAKER_03The the one that uh we we write about and we talk about it at Kingsview and is very, very um persistent and because it happens every single year and every four years, is the presidential cycle. Yep. You follow the presidential cycle closely as a trader?
SPEAKER_01As a day trader, absolutely not. If I'm looking to position you know, longer term portfolio, maybe I think it is um it's somewhat irrelevant. It's one of those data points, it's one of those things you can look back and and say, oh yeah, you know, it held again. I'm really not thinking about it on a day-to-day basis.
SPEAKER_03So you it's more of a confirmation bias when it happens. For sure. So that's that's interesting because you know, we I wanted to take this and say, we all these things that happen throughout the day, right? The different data points, the different company news, the the every conflict going on in the world, whoever wins the Super Bowl in March Madness, it changes every year, it changes every quarter. But one thing that held true, and whether it's confirmation bias or not was we wrote this in our in our 2026 Outlook at the start of the year. Uh, the second year of a second-term president, the midterm year, is typically the weakest of the eight-year possible cycle. And this was always going to be some sort of difference because it's uh obviously a disconnected uh second term for President Trump, but it held strong in the fact that typically that first quarter, you see some momentum at the start of the at the start of the quarter coming off from the last year, and then it wanes into March and April, into the summer, and then we get a positive Q4 to rally back. And what we saw was all-time highs around January 28th, February 2nd. And then obviously, you could my question is you could say it's circumstantial based on the war, but again, this is a a long-standing trend of 70 years of the SP, and it and it tends to point in this direction. So you're saying it's it's really coincidental, you don't really take much from it, but is there anything to derive from that?
SPEAKER_01Uh you know, I I think that recently, when I say recently, I'm talking about the last couple of years, trends that we have seen in the marketplace that have held for decades and decades and decades haven't necessarily held all the time. And if we look at 2025, right, start at the beginning of the year with with Liberation Day, you know, was it a one-off? Probably, you know, it's one of those things, massive rally back. But if you sold in May and went away, you got your you know what handed to you, right? And and some of those other trends really didn't hold throughout the year. So I look at this year and say, okay, is it gonna be a sell in May and go away? I don't think so. I personally don't. I think that if the Middle East conflict is is not gonna be over, but if it's minimized, I think this market is set to roar. So as a trader on a day-to-day basis, I am not thinking about that, but on a macro level, I think you do have to look at those data points.
SPEAKER_03Yeah, it's it's just uh again, it's it's interesting that we you could take the the day-to-day perspective, you could be so bogged down in headlines and news and what you see on the TV, and depending on which channel you watch, how it's perceived. And if you just step back and take an objective, you know, review of the quarter, you could say, Oh, that looked like a lot of other quarters in this given period, and none of this stuff was going on then.
SPEAKER_01Exactly. So, what you're really saying is you have to remove that emotion from your decision making, which in teaching tens of thousands of people how to trade and trading, that that's the biggest hurdle for anybody trading. Remove remove your your bias, remove your emotion.
SPEAKER_03And I mean, that's that's from a trading perspective, whether it be day trading or week trading or month trading, that's the same perspective we hold as as long-term stewards of of investment portfolios, is that when you decide, oh my god, the market is so terrible and the war is gonna go on forever and this can be World War III, I gotta pull all my money out, as Scott likes to say, that's what I'm putting all my money in. Yes. You know, we we too say you have to take your emotion out of it because you make bad decisions.
SPEAKER_01You know, there's this uh there's this guy out there that some people may know about, Warren Buffett, yeah, said the same thing, right? When it goes something like this when when people are most fearful, that's when you need to be greedy. When people are most greedy, that's when you need to be fearful. So I agree with Scott, I agree with Warren Buffett.
SPEAKER_03Yeah, so you said, you know, the the market is set to move higher. Should we get some sort of real or lasting resolution in Iran? And I I would agree with that. And and that is it is all eyes on Iran right now. And so, you know, last night, uh two days ago, we had President Trump put out a truth social post um threatening to wipe out the civilization of Iran to never return if they don't meet the deadline of 8 p.m. Eastern on Tuesday night, last night as of recording. Um, an hour and a half before that recording, we had we had news that there were negotiations that were being mediated by uh Pakistani um and Chinese governments. And obviously, we just mentioned that the the market gapped up two and a half percent. So the market continues to trade on strictly basically news of Iran and truth social posts and Easter posts that are that we're swearing in and whatever else is going on. Um, it's a very, very to bring back a point from 30 seconds ago, emotional market.
SPEAKER_01It is a very emotional market, it is a tricky market. Um, these these swings that we're seeing happen on a minute-by-minute basis are like anything, you know, nothing we've ever seen before. I would caution, just my own personal conviction here. This is not over. It is not over, right? There's a new two-week deadline. This is not going to be resolved in two weeks. So, what does that mean? Does it mean that you fade this rally and just get short everything? No. Does it mean you buy into it because we're moving higher? No. What it means is you've got to stay prudent, you've got to stay nimble. I look at what happened to the VIX today. VIX went from nearly 30 a few days ago, closed at 27 two days ago, and it's hovering around 20 right now. Historically, 20 is actually a very high number for this environment. I think that is incredibly, incredibly cheap. So you go out and you say, Hey, you know, I want to get a little protection here because I want to, you know, maybe keep some of my longs, I want to initiate some risk. I think VIX at 20 in this environment, way too cheap. The the conflict is not going away.
SPEAKER_03Yeah. I mean, if if we expect a resolution in two weeks from an American perspective, that means that the strait has been opened and that Iran has given up all nuclear capabilities. And I don't think they've come this far just to come this far. So I would agree that this conflict is not over. And and speaking of cheap, we we the the wild swings in oil. I mean, there are some oil traders that are making millions right now, probably some oil traders that are losing tens of millions, but we are now back for WTI and Brent back down into the low 90s, like you said, topped out at 117 uh a couple days ago when it seemed like we were going to take extra drastic measures um in the bombing of Iran. The point we mentioned at the start of the episode that I am gonna turn over completely to you. How is it possible? And this is something that I discussed with Scott at the start of the conflict, I discussed with Neil, we discussed a couple weeks ago, that we've got so much oil in the United States, we just you know onboarded Venezuela as a strategic partner. That's probably two years away from being operational, it sounds like, but still, with all of our reserves, how is WTI trading above bread?
SPEAKER_01So, really two reasons. Number one, if you look at our oil here, okay, our oil is not um not indicative of what we use on a day by day basis. Right, it it is, and I'm not an oil expert, it's the heavy sludge, so even though we have a lot of it, it still takes a very long time to process it into how we use it every day, whether it's in your your gas tank, natural gas, whatever it is. So, even though we have a glut here, it's not the perfect oil. What people have to remember though is this is a global commodity. Okay, this is a global commodity. So just because here in the United States we may have all we need, and I don't think that is the case, but we may have all we need, it still trades on a global market. So there's still risk. Anyone trading that could be in Asia or or anywhere else in the world could look at our markets, have access to it, and you know, trade it and say it's bullish or say it's bearish. The risk to what happened with WTI getting more expensive with Brent was something called um backwardation. Not dissimilar to when we see that happen in the marketplace with volatility or with the VIX, where a near-term future gets more expensive than a further out future. And backwardation, when that happens, which is which is not something that happens all the time, we usually see a very, very quick reversal out of that. That happened this time. So what the market was kind of telling us, and it's obviously easy to be the Monday morning quarterback and and look at it from from you know a few days out, but the what the market was telling us was there is an immediate risk panic to WTI, and that's why that was getting bit up so much more than Brent. And those that listen to history, we talk about these historical trends and looked at that backwardation. And if you played the Brent WTI spread, you knocked it out of the park. So it's a it's a yield curve inversion almost for sure for oil, absolutely, and it and it doesn't when we see those inversions, it does not last long.
SPEAKER_03Interesting, interesting, and I think the you know, to the to the Venezuela point too, I think um that's probably not the the great success that's been held to be. I mean, you mentioned having all the oil that we need, or probably not. I mean, we use millions of barrels a day. Venezuela is slated to produce 200 to 300,000 barrels a day um two years from now. Not sure that that's really solving our today problem. But the the oil crisis, you know what all like we've talked about it, all hinges on the Strait of Hormuz, which um so far no resolution. Did you see the report from Citrini? Did that cross your desk?
SPEAKER_01Well, I'm sure it did, along with the 17,000 other ones. This is pretty cool.
SPEAKER_03You would have you would have known this. So Citrini research is a kind of middle of the road research firm on the street. They sent an analyst out there undercover, kind of like uh, what was that Netflix show? Not night agent, but the other one, like the CIA.
SPEAKER_01Oh my god.
SPEAKER_03It's the one you guys have said to watch, and I haven't can't think of the name, but they sent a an analyst out there undercover. Um, and he reported on what the Strait of Hormuz looks like in it, open at least my eyes. I don't know what I you know, I probably had a movie-esque picture of what it looks like out there, but he's basically like it's open, it's pay-to-play. You you know, the Irani uh government is boarding boarding ships, they're asking for documentation that it's pay to play. If you don't pay, it's not like they're bombing that ship. Um, they're just leaving you out there in the in the sun to bake all day. But it sounds like, you know, like we talked about two weeks ago. You said if they've if if our multi, multi, multi-billion dollar organizations have to pay a million bucks to pass the difference that's worth it. And it sounds like that's what's happening, it's just moving a little bit slower. Um, but certainly with WTI going above Brent, this has shown, I think, and disproven some people from a month ago that said we're okay because we produce all this oil.
SPEAKER_01There's no question about it.
SPEAKER_03We're not insulated from this shock.
SPEAKER_01Yeah, yeah. So, you know, the drill baby drill, great, whatever it is, but that does not mean that we are insulated from a global shock like this in any way, shape, or form.
SPEAKER_03Yeah, exactly. And I, you know, oil isn't just oil, right? Obviously, it's it's what's at the gas pump, which is a huge expenditure for most consumers and households, but it also is a part of food, plastics, fertilizer. I mean, and that that leads us to our CPI print coming on Friday. Um, you said a couple weeks ago when we kind of disagreed on where inflation is, you said, okay, but the March print doesn't really have or the February print doesn't really have effects from the war yet. Yep. Um, you know, there was a seeking alpha report that came out that basically said every 10% move up in oil is is somewhere around a 25 to 30 basis point move in in CPI. So the analysts uh on the street expect like a very hot print uh coming out on Friday. Some people, some analysts expecting near 3.15% or so. Um, do you think it moves that quickly?
SPEAKER_01Yes, I do, because that shock from the February report to this March report happened so quickly. Now, when we see this print, if it is a super hot print, which I believe it's going to be, there's going to be a lot of caveats in there. There's going to be a lot of parsing out of what happened because of the escalation in the Middle East. So is it going to be market moving? Um, yes, it probably will be. If if someone is set to trade the print, boy, you better be nimble because you're you're you're likely to get a big gap that reverses one way or the other.
SPEAKER_03Yeah. And and you know, the there was uh uh the New York Fed put out their inflation survey um yesterday that showed, and this goes back to consumer sentiment, but households expect inflation to be 3.4 percent in the next year. Uh, they expect to pay more for groceries, they expect a higher chance of losing uh a job. That might be some uh some AI impacts there. Um, and current perception of their financials is decreased. So again, you've got consumer sentiment, and I'm sure the Michigan survey will back this very, very, very low from an investment perspective. Obviously, I understand the pain that households are feeling at at the pump and at the grocery store, but from an investment perspective, that has got to align with a turn in the markets, contrarian, 100%.
SPEAKER_01That is just like when we see the VIX trading 30 or above, that is typically a turn in the market. It's a buy the market indicator that is very contrarian, and that goes back to that fact when you know, or the the saying, when people are most fearful, that is the time that you want to be on the opposite side of that. So I get that. I am concerned. I am concerned that even with this drop in oil, and hopefully it's not temporary, hopefully it stays here. We are coming to the most expensive part of the year. This, you know, you you look at Memorial Day, Memorial Day through Labor Day. Typically, we see gas prices, you know, X percent higher. There's got to be different blends of gas that that drives that. People are ramping up, you know. So, so that concerns me a bit that if this escalation does continue and prices at the pump don't come down, they're just gonna get more and more expensive. And this consumer discretionary area is gonna get hit. However, I'd like to be optimistic, I like to be realistic. I don't necessarily see that happening.
SPEAKER_03Yeah, I mean, we are you know on the timeline, we are moving from short-term conflict and something that could be a blip on the radar and data points to intermediate term. I mean, from the start, it was analysts and and you know, people were saying if this goes on months, we'll see a pretty intermediate term impact on inflation numbers. Well, we're entering week seven, uh, and so we're getting to that time period that this might last in inflation. And so we'll we'll see on Friday what the what the real print is, and and I think May will be another important number, of course. Um, but we'll just we continue to see these data points. And speaking of data points, we had a jobs report last week that we mentioned earlier. Um, surprise to the upside, which was pretty important. What I what I thought more so because February we had a a negative print. There was a a uh healthcare strike in California and hospitals that had 35 and uh thousand employees that were lost, um, you know, in that number. And so they that strike ended, they got back in the market. I was impressed with January's revision upward. Um, this is something that Neil and I talked about. All revisions lately have been down, you know. Every every prior two months we've been revising down, revising down. We got an upward revision. So the the you know, the the market is gaining 70,000 jobs a month this quarter, which given February's number is pretty is pretty robust.
SPEAKER_01It it is, but I think though we had that big blowout number, the upside, didn't we see a revision down? Yes, even further, right? Right. 41,000 more jobs lost. And I just think that there's there's too much of a gray area in these reports now to really understand what's happening beneath the surface, whether it's with public sector, private sector. Um, so it's real hard to trade those headlines. But listen, you talk to your friends, you talk to people on the street, I talk to to you know, my friends, and jobs out there are not easy to get. I don't care if you're coming out of college or if you're 50 years old looking, you know, to make a career change. It's difficult.
SPEAKER_03We've been in sort of a no-hire zone since last April. I mean coming up on a year of a very no-hire environment. Um, the show, by the way, is the recruit that we watched. There you go. That's what I was thinking. There you go. Um, so we would certainly big data point coming on Friday. Um, then a breadth in terms of economic data, but uh the market continues to move on on the Iranian um war and what's happening over there, and we'll see what happens over the weekend as we've kind of detailed that trend of uh a lot of you know a lot of conflict um rising up over the weekend when the market's closed. Uh speaking of weekend, though, and I heard this joke, you know, it's it's tongue-in-cheek, it's not funny for some people, not others. But if you really thought that Trump was going to wipe out a civilization the night before the Masters, you don't understand his priorities. Um, we've got Masters Weekend coming up. You do. One of my favorite weekends of the year. I'm uh I was blessed enough to be invited last year. Oh man. Uh pretty list pretty incredible opportunity. I'm bummed not to be going this year again. Um, but uh I'm very excited. I'm very excited to sit down and watch a ton of golf. Um, anyone you like in the field? It's Jack Nicholas. Jack Nicholas, I think uh you still got Freddie couples?
SPEAKER_01I think it up, VJ. Yep, they're all there. I mean, it's it's it's hard not to go with the uh the big guys. Yeah, um, it's really hard to fade those. And um it's not my wheelhouse. It it really isn't my wheelhouse, but I'm gonna I'm gonna go with John Rahm.
SPEAKER_03I like that pick. I like that pick. It's uh it's gonna be it's gonna be very interesting. There's a lot of storylines coming into this week. Um, we've got you know, Scotty just had a baby, but he's so he's got a new dad bump, but he's not been playing the best golf. Rory might have a back. You know, we don't say injury, we just no just a back. Colin Borakala definitely has a back. Bryson and Rom are playing unbelievably on on live right now. And so there's there's uh I think it's gonna be a great weekend. It's the first weekend in a handful of years that the weather looks unbelievable.
SPEAKER_01We we've seen some delays recently.
SPEAKER_03So that'll be interesting. It's gonna be a a birdie fest, I think, although the greens will probably be quick as hell.
SPEAKER_01Um you know what that in that you look at the short players, right? And the the short game, who is the best short game player? Who who's gonna get it to the green and get it to within 10, 15 feet? And may come down to that. And John Rahm is my guy.
SPEAKER_03I like that. I like that. Let's get to the fades or trades for the week to wrap up. So we did this a couple weeks ago. You know how it works. Um, first fader trade. We touched on this, but I'll I'll take your uh definite answer here. Headline CPI over under 3.16% on Friday. I'll say over. Okay. I will uh I'm gonna trade the under 316. I just think I not to diminish um you know the impacts that the oil increases have on inflation. I think it's a little quick. I think what I what I read at least was that it's gonna take a couple more months to fully filter through all that that basis point increase. So I'll say for Friday at least we we make a market number. It's like what's going on here. Um second fader trade. SP ends April in positive territory for the year. I will take that.
SPEAKER_01Okay. I will take that. Yes, I say yes. How come I will trade it because I think that the underneath the surface here, yeah, we broke some support, we're back there. I just think that that things are actually fairly decent and earnings that start next week, which you know we'll be full into it by the end of the month here. I think we're gonna see some nice surprises to the upside. I like that.
SPEAKER_03I uh I hate to be the pessimist of the team here, but I'm gonna fade that. I think um it would be easy to say we're in a three percent upday. So, you know, you're just looking for one percent more the rest of the month. I just I I don't buy into the three percent upday today. I I think the the two-week ceasefire, based on historical trends and nothing else, uh, will be broken before then, probably on our side. And so I I still think there's too much uncertainty there. Like you've said, I don't think it's coming to an end in the next two weeks, and I think that's gonna weigh on us in April. Um, you already answered this one, so I'll answer this. But fader trade a one seed, and I've got the one seeds you know coming off March Madness as Scheffler, McElroy, DeChambo, and Rom wins the Masters. Your pick is Rom, uh, which I which I really like. I'll fade that and take the field. Um, like I said, Scotty's not on his A game. Rory's got some injuries. Bryson and Rom are both very, very hot right now. I saw Bryson and Rom are the two biggest ticket getters, though, in the betting markets, which typically you know the books don't lose. Um, I think it's gonna be Xander. I think Xander Shoffley. Um every every year at the Masters, people say X is gonna win. He's right for the game. You mentioned Iron Play in short game. He's an elite iron ball uh player, and he's a very good putter. We'll see. I'm playing my first round on Friday in New Jersey with your boys Jack and Darren.
SPEAKER_01So big shout out.
SPEAKER_03So uh I'll I'll take X in that. Um, this one, this is just a topic. Fader, Fader trade, the Artemis 2 mission. Do you do you care about it? Do you like it? Do you not like it?
SPEAKER_01Um, I care about it because it's historical. I heard um one of the astronauts, one of the Apollo astronauts talk yesterday saying that this is not life-changing, this is not really doing anything other than maybe setting the stage moving forward. So, is it gonna change my life? No. Is it really cool to watch? Yes.
SPEAKER_03Yeah, I'll uh I'll fade just the topic. I mean, it's very cool, it's the furthest anybody's been from Earth. Um, what I read was that we're scoping out a landing spot for the 2028 mission. It's been 57 years since we were on the moon. Like, let's get back or let's go to Mars or let's stop talking about it. So I'm I'm gonna I'm gonna fade the mission. I mean, it must not be that important to be on the moon if we haven't gone back in 57 years. I I would agree with that. Um, so we'll see. We'll see in 2028 whether they land and we get another uh small step for mankind or uh if it's a big step for mankind. But uh a lot to do before but between now and 2028, a lot to do in the next week or so before the next episode. That's the episode for today. Thank you all, and thank you for joining me again. My pleasure.
SPEAKER_01Love doing it.
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