I'm Chris Preston and I'm Brad simmerman and welcome to Street check the best two person podcasts in the 50 plus year history of cat wealth network uh Brad um Beetle Beetlejuice Beetlejuice uh filmed in Vermont first uh both first and second um opened as one of the biggest box office um openings of the of the year the past week or so listen to some of the the top 20 uh box office hits this year Beetlejuice Beetlejuice Twisters Bad Boys Ghostbusters alien Garfield it's clear that uh 80s nostal 80s and 90s Nostalgia is in is in full swing uh you and I are clearly the the target demo are you feeling nostalgic these days or no a little bit yeah yeah I like I mean I like a Nostalgia play I enjoyed Ghostbusters I I really enjoy so we took we took my kids to see Ghostbusters and it was oh uh actually no I'm thinking Ninja Turtles we took my kids to see there's another one Ninja Turtles and Ghostbusters in theaters and I was like hey this is cool I'm a 40 plus year old man sitting in a theater with his kids watching something that was meaningful when I was younger I want to see Beetlejuice Beetlejuice yeah I do too I've been me I've heard that's actually decent I don't know I can't speak to all of these actually I heard Twisters is good too but I have not seen that one I do not have any Nostalgia for Twisters the first twister was great but it it's like it came out like 94 like all right well that was based on my recollection that was like 10 years ago right yeah it's not yeah it's not one that sticks with you the way Beetlejuice does necessarily but um yeah I want to see yeah I don't have huge t did you you took your kids to see Ghostbusters colon Frozen Empire yeah it was fine okay it was just I liked ghost I dressed up as a kid as a Ghostbuster as a kid I used to the the Boogeyman in ghost in the animated Ghostbusters cartoon is one of the iconic villains of my childhood and uh it was a it hit me right in the Nostalgia spot that that Studios were planning I didn't see I did see the alien remake or not remake the alien inter or whatever yeah it was it was a b B+ or B minus C+ kind of movie it was like downloadable content for alien where it's like hey remember all that stuff you like about alien here it is on the big screen right it's solid right okay solid I'll take solid that that's not I mean that's what Hollywood does right the the Wizard of Oz the 19 what 35 or 39 Wizard of Oz was a remake um I don't know if you were aware of that but the first Wizard of Oz came out in like 1919 and uh it looked super janky Hollywood has been uh intellectually bankrupt and out of ideas for a century at this point yeah well speaking of out of ideas let's move to uh our podcast for today um that's a good segueway uh tell people what we're going to talk about today uh obviously we are going to talk about rate cuts that was the big news this week uh fed oping to cut 50 basis points uh we are going to talk about small caps sort of leading the postcut rally and whether it's their time to shine and then uh try to assess whether the bottom has already come and gone and then after that we are going to each P make three pitches for what we will talk about now that the FED is is switched from fa a friend and is finally cutting rates yes this this will be a Fed heavy podcast because this big thing just happened but hopefully can we can move sort of past that uh in future weeks um so yeah we'll talk about what we could be talking about the next 6 months um but first as always is defend the take and uh your take Brad is naturally fed related um the cut uh 50 basis point cut from the other day this is that is the green light that will pull cash off the sidelines and into the market you have 90 seconds go okay so that we'll get more into the FED cut shortly after this uh 50 base points is a slash and burn they're projecting another 25 or 50 basis points of cuts this year and maybe as much as 100 basis points of cuts next year um that brings cash yields down into the low to mid threes depending on how it all goes I I should say not fully a projection just what voting members who deci make the decision think is likely so it's not a forecast but it is an assessment of what they think may be coming um when cash yields get down to 3% they aren't as they aren't tenable as as a an investment vehicle um for the last year plus if you're a big Institutional Investor and you need to make 7% a year because of your pension obligations for instance if you can park a lot of money in cash at 5% you don't need to outperform with very much more of your money so if you've got 60% of your money making 5% in cash and you've got 40% making 9 and a. half% or so that gets you to your 7% annualized returns that you need to be generating to manage your pension obligations that is no longer true when cash is at 3% when cash is at 3% you need to be looking for your your sort of mandatory returns to support your pension obligations you need to be looking for that in the market so the FED taking a slash and burn stance to drastically reduce rates in the next two years is going to force institutional money that's on the sidelines into the market uh will it do the same for retail money I don't know um it really is dependent upon why retail money is sitting on the sidelines if it's like future obligations or concerns about high borrowing costs or something like that that would have a negative impact but Fed rate Cuts Low Cash yields means institutions have to invest uh yeah I mean I think we've you know we've we've talked about this you're not going to get any push back from from me um you know I I I did a I had a webinar yesterday where I showed um a chart of the it's one you and I have passed around the the federal funds rate um or sorry no the uh money market funds uh um the the a chart of how much has been in there for the past decade it pretty it was below it's right around three trillion a little under three trillion from like 2014 all the way through 20 late or mid 2018 then it spiked uh in up through all the way until the the covid you know through early covid um you know partly that was the FED um the the spike was because inflation rates were were high first sorry not inflation rates uh the um uh gosh what why am I why am I missing the the number anyway it spiked all the way till 2020 and then in March 2020 after the co crash bottom um it it dipped and we saw a a what almost two-year 21 month bull market from you know say March April 2020 uh to the end of 2021 stayed about the same and then when the bare Market hit it started spiking again from about five trillion up to where it is now $6.3 trillion so it like a a really sort of existential um or macro uh Catalyst and seems like we're getting one now especially with it looks like how the FED is going to start cutting rates yeah and that I mean that's it's not probably going to be like an overnight flip switch that gets flipped because you we're still even with the Great Cuts you're still 475 but cash has you are in a position if you are a pension fund or if you're a retirement system where cash has to come off the sidelines now which means it's probably going to matriculate into the market over the next two quarters I I would guess I don't know I don't I mean it's not like I'm talking to the head of cpers or anything like that it's like uh just trying just sort of back of the back of the napkin math on this um right but the the money at this point is really has to go into the market there's not anywhere else where where you can make the kind of returns that you need to make yeah so what people been sort of you know a lot of people probably been waiting to deploy that cash um until this happened you know we had cliff droke on last week and he said I think I think this is a rare case where it's not just buy the rumor sell the news seems like by the news you know uh there's some buying the rumor but maybe even more so buying the news not than the news being transitions right to our you know first in our big three uh the FED cut rates we were both wrong we're going to have to eat some hot sauce on that one we thought um they'd cut by 25 basis points we thought they've already cut what we thought they were going to cut by the end of the year we thought they're going to cut by 25 basis points twice once in uh once this week once in December if it's possible they'll they'll cut by a full hundred basis points now maybe they will cut in November it seems like they will you know we we thought maybe election week they might stay away from that but it's not sounding like that um I was really skeptical you and I have generally been you know right on what the fed's going to do we were wrong this time um and the market I think when we sat here and did this a week ago the majority thought was thought along with us there was going to be 25 basis points and then that flipped it was what 59% um thought it was going to be 50 basis points by the time they actually did it I'm not sure what flipped that exactly but the market was right and F fed is is serious uh they're cutting and it it does seem like they didn't say this they would poell would never say this It Seems like by cutting 50 basis points it's almost an admission that maybe we should have started in July yeah 25 basis points then 25 now then that July you know that that July uh end of July jobs report came out that really spooked people and said the market tumbling um see like that spooked the fed too and they're playing a little bit of catchup here yeah I I would agree I think that the sort of catchup element is is definitely there um I mean the the problem with the problem with the FED is is we're trying to like Divine out what they're actually thinking um right I don't know if they want to send a message to the stock market in an election year that hey we're on your side now I don't know if they're worried about jobs numbers that that we should be maybe more concerned about I mean I think that's going to be a talking point and I'll get more into that later but it definitely I think we can sort of confidently say that they should have cut in July and that they're aware of it yeah um I don't know I mean like maybe they're sending a message and doing a big their front loading but their their Dot Plot that they've got for the rest of the year and then for 25 and 26 um it's it's pricing in a sort of a terminal fed funds rate into the end of 26 and 27 of around three three and a quar per. so it seems like they're instead of gradually lowering rates to those terminal levels um and then getting back into the twos which is what the expectation had been in June it seems like they're going to cut quickly to get rates down into the threes and then hold rates those levels for longer um that's just based on on the differences between what their summary of economic projections were in June and September I you know Color Me shocked that they cut as quickly as they did I I thought it would be more of a waitand sea mode and it it wasn't um we'll see but yeah and the market was an interesting reaction the market you know initially all the indexes when when the announcement came out indexes were all up more than half a percent but we're kind of maybe waiting for what to see hear what pal had to say then they fell the markets were down all three indexes were down by the end of the day on when wednes after pal spoke and then of course by you know yesterday they're up all up more more than one and a half percent uh and seem like the rally is on here it is small caps too which we'll get to um so yeah it's hard to I wonder what it was I think they were looking to see what pal was going to say about Job report like yeah we're we're spooked by that he said you know jobs Market is still solid um but we're keeping an eye on it you know not saying a whole lot but I guess that's fed speak for yeah we're a bit concerned the the one thing that stood out to me was looking at Job losses um he had mentioned like immigration influx as being a net addition but with a lot of lost jobs in native born Americans um but if you drill down into the BLS numbers it's not so much that like immigrants are coming in and stealing our jobs it's more that the jobs that are open or the jobs that native born Americans don't want so the the messaging around jobs and the the job loss attribution by Powell I I think is probably a little bit confusing to the market because what we are what we're in environment wise is a period where we are constantly getting negative revisions the job figures um the 50 basis point cut I think surprised you know it was 6040 was the expectation for for 50 or 25 basis points so you know we were not alone in thinking 25 was coming the 50 basis points cut is probably probably triggered a little bit of worry that they are that they missed the window and they're they're overcorrecting now right so there's still there will still be plenty of negative headlines and plenty of things where you know people are trying to outsmart the market and sus out what's really behind the numbers um and so I I think that in the in the short term immediately after the announcement that was certainly influential uh and then like like you said the NASDAQ I think was up as much as 3% the next day um it was pretty much a an across theboard rally small caps were up something like 2% yeah yeah um so yeah let's get to small caps um small caps I don't think people quite understand how much they've underperformed you know reference that they've underperformed for five years but the return in the iwm uh which you know tracks the Russell 2000 is 43% over the last five years and that's uh roughly half uh sorry less than half of the return in the S&P 500 which is 90% um the Russell is still below it's the one index that's still below below it's 2021 highs um pretty significantly below I mean iwm here I'll pull up iwm chart versus just the Russell um iwm topped at 241 about 242 in October 2021 uh it's right now it's still only at 216 um you know even like the equal weight index is is up a bit from you know during that time small caps have severe really underperformed now they started to you know build some momentum um lately and they they got a big spike uh in the last week um they're up iwm is up you know 10 and a half percent year to day but almost you know most of those gains have come in the last month or two and as Tyler said on this podcast um they tend to outperform large caps you know over time they tend out to perform three out of every five years it's it's harder to just say like they're due but I mean they're overdue in this case yeah yeah I would I would agree I like on the one hand the the business conditions were particularly bad for small caps with with higher interest rates because a lot of borrowing by small cap companies is done at variable rates um it's a lot harder for you know small manufacturing company to issue a bond and borrow at a fixed rate for 30 years so they they're going through lines of credit and things like that that that are more likely to have higher and variable rates so a high rate environment is bad for small caps um the the mag s component of it is also is also a net negative for small caps um we we are seeing or we have seen more of a push towards passive investing and away from active investing um passive investing meaning you're buying like an S&P 500 fund like a vo or spy or whatever um the the problem with the passive investing is you're allocating like 40% of your portfolio to large cap us equities and you're allocating like 10% to small caps and then by virtue of how the S&P is constructed the stocks that grow the most represent the biggest chunk of the S&P 500 and because we are doing more passive investing collectively they're also attracting more investment dollars which then causes them to you know cyclically causes them to become larger so a an environment that is on the business in the business condition side bad for small Caps Plus a less active investing environment I think is is kind of a perfect storm for small caps um this is this is one category that I am very bullish on going forward like maybe we get an October surprise I don't know what the Market's going to do in the next six months but I'm pretty confident that in the next year it'll it'll be higher especially if this soft Landing thing is landing as the FED seems to be expecting or uh is doing everything they can just to hit on it but I think small caps are finally in a position where they're ready to outperform yeah and it's probably just getting started for them they don't have valuation concerns the same way the big cap Tech has right and I think that's where you know you talked about where all that $6.3 trillion in Money Market funds is going to go I think you know a lot of people especially institutional smart money types are going to see or maybe they've probably already had the eye on like this is where there's value uh there's a lot of places with value but small caps no more than small caps as I mentioned it's the Russell is the one index that's still below its 2021 highs um and you know for this to be a traditional area arena for growth and be underwater for almost three years there's you know tons of value there and I think money's just come pouring into that sector yeah I was going to save this for our our main segment later but since we're on the topic of it now I want to bring it up so the last time the FED did what they are seeming to be trying to do was like 1995 so they cut rates from above 5% to like around 3% then sort of held them for an extended period of time uh in 1995 the Russell 2000 was up 26% in 96 it was up 14.7% and then in 97 it was up 20.5% so it was a 60% return for small caps compared to like a 30% return for large caps in the same period That's best case scenario that's sort of what what we could be entering into yeah I think that's totally in play I think a doubling of the market over the next two three years is of large caps is totally in play for small caps yeah that I agree I I think that I think you handle it tactically like you don't dump every large cap that you own to pile entirely into small caps but if you're a follower of like the modern portfolio Theory and you're like hey I'm 10% small caps maybe I'm 15 or 20% small caps uh in in that environment um of course if we get like a return of inflation If the Fed cuts too quickly or we get the October surprise like you never like who knows what's coming but I I'm I'm overweight small caps in this environment I I'm bullish on for certainly the next couple of years e even just setting aside the outperformance they have a lot of ground to cap to catch up just from underperformance for the last five years right yeah exactly yeah that's why you know I would think that um institutions would be sort of salivating over you know the opportunity there um okay and you you touched on it briefly number three in our big three um has the bottom in the market already come and gone uh you know there's been four straight years where the market has bottomed in the SEC the second half bottom for the market has come in October um you know the stocks have fallen in September and October as much usually between about you know five to eight% um those last four years well I mean they they were down sharply the first week of September but did the timeline bump up this year because of the rate cut um or do we think somehow the stocks will pull back again we do we do still have you know an election hanging out there and and other other you know sort of EX potential existential crises yeah and seasonally I think these are the 10 I think the 10day period that we're in right now is like the worst 10 days in the market yeah um seasonally it's it's tough to really make a judgment call at this point just since we're right on the heels of the raid cut uh you know Market's down a little bit today technically we're still sort of set up the like the S&P is broken out to new all-time highs um the nasdaq's lagging a little bit and I I was reading something that Mike sto had written earlier in top 10 Trader saying that some of the growth indexes are are still sort of throwing up yellow yellow flags um so it's not quite full steam ahead there but I know he's bullish that we're going to get that the next leg is going to be higher um I'm I'm a little bit hesitant to say we are definitely past the bottom yeah but I'm probably like 65 35 that that we're looking good going forward barring unexpected news yeah my guess would be the bottom is in so the bottom um well actually the bottom came in August uh first week of August uh those at least for the S&P was 5186 August 5th uh it's now at 5688 uh and then we had the other you know ShakeOut I guess Mike would call it uh first week of September dipped to 548 I could see it getting back close to this month's lows I don't see it going back to August lows um you know that that was a big pullback in second half July early August I mean S&P was down more than 8% NASDAQ was down like 134 % you know that's that's a big pullback and you know the fact that it's two months earlier than usual I don't know that that matters and it may be have everything to do with the FED yeah I I just I pulled up a chart of the NASDAQ which you know is the like you like we sort of talked about the only one that's not not at Fresh highs right now um I I want to see a subsequent close above yesterday's close so I just want to see the NASDAQ sort of Break Free of the 18000 level that that's what I'm looking at as a as a green light as as a bottom confirmation because then you've got uh higher highs and and you've got higher lows right that's defin definitionally a trend and it's just the the like you said the FED news is so overwhelming in the short term that it's it's a it makes it a little bit tougher to sus out what the long-term technicals look like I think it looks good um you know honestly you from what a month ago or whatever is probably the white the right way to play it where it's like hey they'll stocks are going to come down in September they'll be at new highs by Thanksgiving if you if you go into it with that mindset and you're like all right well Grandma's coming over in a week I better start buying stocks again because they're about to be at new highs I think you probably win I think you're probably in good shape if you do that so I'm not you know I'm probably if I'm looking at gross stocks and Tech and stuff like that I don't like Tech still but if I'm looking at gross stocks um probably not piling in right now I'm giving it a couple more days I'm not going to miss out on a 10% or 20% run I'm going to miss out on one or two perc uh and I'm looking for more confirmation of of an upside breakout on Tech to sort of follow the rest of the economy um if I am you know in other sectors I I'm probably the confirmation I think is already there yeah um okay that is our fed talk for the day this our big three was entirely related to the fed and and your your Tech or entirely sort of you know at least closely somewhat closely related to the fed and its impact of uh raate Cuts that'll that's the end of the FED talk for today now so for our segment today featured segment today we wanted to talk about what are some topics nonfed or rate cut or inflation or in you know any non-fed related topics that we're going to be talking about over the next six months hopefully it'll be quite a bit um you know hopefully this this at least this week took away the Dark Cloud of the FED hanging over the market you know as we've said flipping from foe to friend so we have to talk about you know fed angst hopefully won't be a thing anymore or at least for a while so what are things that are going to make headlines that we'll be talking about over the next um six months May CH chose sixth a year seemed too far out to predict end of the year didn't seem far out enough because it's you know barely more than 3 months six months seem like a good sweet spot um we each chose three uh I'll let you go first all right I'm gonna my first one um I'm gonna say that it's it's space and but I don't just mean space I joke to you that we are now a space podcast once the FED cut rates um what I mean specifically and part of this is like uh intuitive machines LR is up like 50% a week on a new NASDAQ contract uh rocket Labs is up like 7% today on uh I think I said NASDAQ contract NASA contract on a NASA contract ums space mobile was a big winner over the summer what I mean when I say that space is going to be something we talked about we're going to see something that we have talked about a number of times sort of indirectly which is identifying opportunities that maybe were not previously available or were not obvious or were not obvious enough to justify investing in um because we're in an environment that is way more favorable if we've got a lot of money coming off the sidelines into the market if we've got interest rates going down that's a lot more favorable to speculative technology investment um to new products new Services you know we had talked months ago or maybe last year about how there's sort of a lack of new ideas in the market like where's the where's the segue where's the beyond meat like where are those kinds of products those kinds of products thrive in an environment where money is easier and where investment uh investment dollars are easier to get so I I I think that we're going to see more novel products I I'll position it that way uh people are tired of AI they're done with it they're looking for opportunities outside of it U so I think that's going to be a driving force right now that's in space and that'll probably sustain for the next 6 months maybe as far as next year um there's a federal initiative to try and find more contractors to provide uh up what is it it's up Mass services so like getting satellites to orbit stuff like that uh I think musk came out recently and said that the goal now is to have people on Mars in like two to four years something something along those lines so I I do think it's going to be in the Zeitgeist again it's space for now but it's going to be novel novel products novel services and uh bigger swings so the moonshot stuff moonshots that's a better way to say it there we go um yeah I you know there hasn't been a whole lot of if you're looking to invest in space this is outer outer space uh we we uh there hasn't been a whole whole lot of options until recently um as you mentioned ASD space mobile you know rocket Labs now um you know we're even seeing the sort of space fever you know mini fever I guess you could call it um showed up in United Airlines the other day um reported that they're going to have offer start to offer free wifi on all their flights because they're hooking up with starli um they're gonna have use Elon Musk SpaceX um satellites to offer free wifii on all their flights and that's sort of a new trend but you know I think people are that that caused United Airlines uh stock U shares to spike from 49 to almost 53 pretty much overnight uh it's a couple days um it's the highest stock has been in a few months sorry go ahead that I don't get I do not get why U would rise on on starlink providing Wi-Fi instead of ViaSat I assume is who was doing it before like I'm not going to make take an extra flight to Chicago because I can now use starlink Wifi um well I think it's free the the free WiFi is the part that probably got people I mean yeah but it u u is a big has been extremely under undervalued uh for a while so that may be more about that and Market forces I don't know just just a marker of innovation and willingness to make changes like maybe maybe that's enough like hey we care we're doing something about it right yeah yeah so anyway yeah I think I think space um the there hasn't like I said there hasn't been many opportunities to invest in space and now you can uh you know so I think that there's some Intrigue there um yeah the big ones now just for anybody that's looking ests obviously is the big one they they launched their Bluebird satellites now I think they have to unfurl them they may have done that um LR is intuitive machines rocket lab is rkb red wire or not yeah RDW and then you've got Virgin Galactic but they seem to be sort of doing nothing Amazon has their blue origin so there there are more names out there and they are getting pressed but if you're interested those would be the tickers I would start with yeah okay uh I'm just my number one I'm start pretty simple uh election um so the the next six weeks it'll be you know we talked about maybe the market could pull back and possibly match its its lows from earlier this month that I don't know if there's a level of election angst that would do that but I could I think the sort of um you know fed has been the thing that's been the the Dark Cloud hanging over the market I don't think the election is a dark cloud there's one every four years and they're usually pretty about as uncertain as they are as it is now every four years um but you know that's why there's a reason there's a pattern of this Market being flat to down in the two three months before an election um so that's just something that could you know prevent a true Rally from forming until after the election and then post election the pattern especially the last three elections doesn't matter who wins what party wins who what candidate wins the last three winners have been Biden Trump Obama regardless every time the market is stocks have taken off after the election just because the market has an answer as you know I've said before the one thing that could maybe uh the market wouldn't like is a 2000 situation Bush Gore where there's hanging Chads and uncertainty for a couple months um so barring that with Harrison Trump um I think once we get past the election it could be like last November which was not election related but is post October related um once we get past November people could really feel free to start pouring into the market um so I think election of course there's going to be endless election talk the next six weeks in the mainstream but I think it's going to be a pervading topic um investment wise in the next six weeks and then after you know if stocks take off and be like oh look at look at how well stocks are doing under it's gonna be a new newish president regardless so that'll be a big deal the the one the one thing I would have that you didn't mention on my radar potentially is like the Blue Wave right if if it's a Blue Wave election um that raises the likelihood of Anti-Trust action we've already seen U moves against Google by the current justice department um because that that's sort of an endorsement of that that position also if you've got stuff like you know a concerted push for Medicare for all which I would be a net uh supporter of because it saves like 30% of administrative costs for the cost of Healthcare in the country but it's bad for insurers so I think that there's maybe some risks to like a Blue Wave I don't know if we get it I don't but that that would be one on my radar as well that for maybe a postelection that could contribute to a post-election dip that we might not see coming yeah maybe um that's you know theoretical I you know I that's why I'm sort of positioning as you know it doesn't matter which part has won the last three elections we we've seen stocks take off um 2008 last time they didn't and that was in the middle of uh the worst recession since the Great Depression uh there were other things going on there yeah that's that's the tough thing with elections as data points is well we get one every four years so it's it's by default the small sample size but right um yeah I think I think Wall Street likes gridlock because that means no rule changes no uncertainty that's yeah if we get you know Congressional Republican Congressional control and then like uh Democratic presidential and Senate or something like that I think the market responds just fine and regardless you know this is something that we're going to be talking about the next few months uh you know without getting into into the politics of it all but uh I think you know ramifications of you know both pre and post elction uh will definitely be a big theme um okay what's your number two so uh my number two is jobs uh bears doomsayers always need something to be worried about they always need something to complain about we talked about it a little bit earlier I think jobs is the thing um right if if inflation is gone and the fed's on our side now well what's the next thing to worry about jobs um what what form of the are new jobs taking disproportionately affecting white collar workers or job losses right now are disproportionately affecting white collar workers and we're seeing more hiring among low skill labor um home health aids actually Healthcare has been in sort of a net so net neton net is sort of a a hiring spree for like physicians assistant home health aids stuff like that if you look at the BLS data it's uh the private employment and health care services actually what's the uh private education and Health Services category in the last 12 months has been far and way the largest net hirer with government being second so the form that the new hiring takes where the layoffs are happening that's going to be a lot of the conversation is hey because we we've had something of a k-shaped economy for the last year or two where people on the lower tiers of the incomes the income ladder are sort of underperforming they're feeling inflation more they're seeing wages go up but uh cost of living is rising sort of commensurately but most of the benefits are uring to the investing class and and professionals but the one the one thing that I'm I continue to be intrigued by is something Bruce kaser wrote about Way Way Back in the Day a couple years ago he wrote about whether we were having um what would essentially be a sector by sector rolling I don't want to quite call it a recession but rolling weakness across different sectors um and if if that pans out if we start seeing Tech hiring pick up um the Service hiring has already been strong but if we see Tech hiring pick up if we start seeing then manufacturing hiring pick up because the consumer feels better and the demand is sort of refreshed that that would be net bullish but I think you you'll see a lot of sector breakdowns by we're jobs are where they're coming from and whether that's something to worry about but the reason it's on my list is because Bears got to worry about something yeah I mean that that other than just general pre-election that probably is the the true catalyst is the wrong word reverse Catalyst uh that could weigh on markets the next couple months or you know send send them tbling um yeah jobs are going to be until the jobs report improves or at least doesn't fall you know well short of expectations that uh like it has the last couple months I think that'll um be something that people are concerned about and that the fed's concerned about I mean the fed's viously taking a proactive stance um but you know the the more that uh the unemployment rate Rises the the the more times that the jobs report um you know hiring comes up short uh the more fear of a recession regardless of what the FED is doing is going to creep into the market anecdotally I've seen reporting that recruiters are more active now just in the last couple of days after the Fed rate cut like that Sol that answers a lot of questions for how much are you going to have to pay to borrow money to hire new employees to you know start building your business out uh it's anecdotal but that's something that I I've seen early so things are do everything sort of operating as it should right the fed's goal was to to lower the employment rate a little bit because the job market was too hot but now it's just navigating the is it an overreaction did they have they put their thumb on the scale too much that but that that'll be a common talking point for a long time until as you said until we see a lot of stabilization in it and then it's the market can put it behind it okay uh my number two um anything real estate related now they're not all created equal and you know it's important to note that the FED cutting rates those are short-term interest rates they don't have anything to do with 30-year mortgage rates but generally when the Fed rates uh mortgage rates T start to fall they already were starting to fall prior to you know in anticipation of this cut um and I wrote about and I've talked about here uh I like home builders in particular um you know better margins better sales you know seven you know what was it what was the what was the the peak of mortgage rates it's over 7% right yeah um and now is what in the low six is it down it was 61 earlier this week yeah it may be in the 59s now yeah I'll pull that up that that that sort of you know it's beyond just sticker shock you know those are that makes for a much more expensive home buying uh proposition that's really been weigh Weighing on the the real estate market when when the FED starts to cut rates um and mortgage rates start to come down the home builders are sort of the first uh first to get going um now you know it's in investing you know usually when you group sectors together it there's everything sort of gets lumps together just under the real estate you know uh umbrella you're sort of investing in a a theme or a narrative rather than like well Zillow is not going to go up but these home builders are so I think that's why I'm putting it sort of all under the I think it'll lift all boats in the real estate sector but you know home builders we've seen seen a spike in the ITB uh which is the home construction um uh ETF uh it's up from 117 to 126 in just the last nine days uh with you know big spike happening since the FED cut rates and that's the pattern um the last time the FED cut rates now rates weren't as high but uh you know pre preco in uh from December 2018 uh through uh actually sorry it started in mid July the FED started cutting rates from 2 and a half% to one and a half percent from mid July of 2019 till February 2020 um and during that time uh the homebuilder stocks were up 15% uh like double what the market was up um and they actually started going up first half of 2019 after um you know the rates sort of flattened out after they'd been raising them um so I I home builders what I'm specifically what I'm most uh sort of bullish on personally but I think real estate is a theme uh real estate stocks people go you know getting back into reats getting back um into you know home builders but also things like Zillow um I I think that's going to be a theme over the next six months because that's sort of the one of the more direct beneficiaries of a lower rate environment yeah I like it um the 30-year average 30-year mortgage as of yesterday according to St Louis fed is 6.09% so still still in the sixes but really low um you know new new Builders have a couple of advantages going for them right now if inflation is on its way down uh raw input costs are are not Rising nearly as quickly so things like lumber paint concrete right those costs get more in control and their ability to offer uh rate promotion stuff like that the magic number that I think we talked about last week is somewhere around 5% for most home buyers according to polls and surveys and things like that um if the prevailing 30-year rate is 6.09 but you can get it at five and a quarter from a new Builder if you go to their preferred lender yeah that gets you pretty close right it's close enough for Army work so I think there's a lot in favor of of home builders right now yeah okay what's your number three it's small caps um I I'll keep it short because we've already covered it a lot but but small caps it I think this this is going to be a major theme for for a while definitely into next year it because small caps are are poised to outperform they've got a lot of room to catch up and then even once they catch up they've got a they've got a lot of room to run um I think we'll be talking about the performance of small caps I think we're going to be talking about more of those moonshot projects that I had mentioned earlier which are probably going to be driven by small caps it's uh it's small cap summer or I guess small cap early fall right now yeah feels like summer where you are um still summer technically uh for two more days um yeah I mean I'm the guy that came on here with a defend the take what few weeks ago and said I I I thought that uh Russell 2000 would be would reach new all-time highs by Year's End um which would I think would require from when I said it like a 14 15% bump 15% right and it's probably what 10% now yeah I I I'm sticking to it um you know I I left that one to you uh but I you know I guess our what we're talking about here is what will what would be some of the biggest themes of the next six months small caps would really have to spike to become a theme because they you know by their nature sort of under the radar but I think I think we're going to get that big a spike so I agree with you um uh my third is is a louder one uh that you know gets a lot of attention in Good Times uh and you know probably a lot of attention in bad times too uh Bitcoin um you know I've had takes about this too uh where I thought it going to reach record highs which it did earlier this year 73,000 in March um it's a bull market play Bitcoin it's it's since Fallen as the market is sort of weakened over the course of the year it's Fallen back uh dipped as low as 53,000 um couple times in August and then uh when the market pulled back first week of September if you if you put like the Bitcoin chart right over the S&P 500 it's just an exaggerated version of it it's almost like a two times three times leveraged ETF to the market um so I this is on the premise that I think the Market's really going to take off and go to new High not only go to new highs and it already is uh technically but you know it's going to be broader a broader rally with small caps involved uh with other sectors Beyond uh the mag s and AI involved and so I think um you know Bitcoin tends to spike when there's real Market you know I guess which is exactly what we saw uh from no last November until this February March um when and sure enough Bitcoin went from during that time so let's see uh heading into last November well we'll go mid November last year Bitcoin was 26,000 by mid-march it was at 73,000 so you know nearly tripling I don't think that's going to happen you know it's it's still at 63,000 it's still High um but as a bull market play you know I think uh Bitcoin will will really start to um to rise again uh and I think it'll push past 73,000 pretty easily you know if not by the end of this year then early next so so within our six-month window we're talking about here and I think it'll rise to the point where it gets talked about again and people are starting to talk about here's why you should invest invest in crypto um I I've said we both said we don't we're not big Believers and Bitcoin is a long-term investment I like it as a bull market play and you know I think when Bitcoin gets talked about everywhere and like you know your neighbors and your friends are asking you about like hey should I invest in Bitcoin that's the time to sell Bitcoin we're certainly not there yet we don't hear much about it these days but I think we will we will in the next six months yeah my question for you was going to be does it hit new alltime high this calendar year which is does it break 73 yes um yeah as much as I've I'm sort of Jaded by Bitcoin um me too I agree with you I think I think 8090 is in play early next year assuming the market cooperates and like you said it's an extension of the bull market um yeah it would it would be to to get to New highs would require about a 16% bump from here you know that's not nothing but bit you know Bitcoin like I said it's sort of almost like a leveraged fund it rises quickly I mean it's it's up from 53 to 63 in the last two weeks so maybe the maybe the play is buy Bitcoin and then depending on how many people at your at your Thanksgiving table are talking about it decide whether or not to sell in in two months um you know I what what level of return do you need would you need to see to to be like I'm buying Bitcoin here because for me it's like 100% I like what what level return of like UPS I need yeah yeah yeah I mean that's why I I loved it when it was at 26 you know 63 no I don't I don't think it's rising to 126 127 I don't see that so so 20% so like 16 to 20% to go from 63 to hit new all-time highs probably enough for you to jump in just given the volatility but what about 90 you know 96 you make 50% maybe is that like what sort of up upward price Target would you need to have in mind to justify taking on the risk and the volatility I I would need I'd say at least 75% and so I yeah I'm putting this in here as something we will be talking about in the next six months do I recommend buying it here no maybe maybe two weeks ago when it was 53 we weren't talking about it then um but even then I don't even know if it'll top a 100 uh maybe it will if it does you'll hear about it uh and when you hear about it again time to sell but uh Bitcoin will become a theme um so I think just the fact that I'm saying it's become a theme not only new time highs by the end of the year I I I agree I think it's going into the 80s um you know by early next year and yeah maybe 90 100 I don't know if I can get there um but we'll see uh we'll see how just strong this next leg of the bull market is um okay so that's we've each on three now right y so to review mine are um election both pre and post um real estate uh you know home builders in particular for me but just all things real estate I think will be will be a topic the next six months and Bitcoin reaching new highs your three are moonshots uh jobs and small caps yes moonshots meaning space outer space not not specifically outer outer space is the sort of the uh is the the picture of moonshots right now but I think it'll I think it'll evolve but it'll be more moonshot projects right now as evidence by space okay well I think those are I think this this will be a perfect list I think we'll be I mean the great part of this is we we make our own schedule we talk about what we want to so you know we could just put all these all six of these regardless of what they're doing talk about Bitcoin every week right yeah yeah as long as you talk about it once in the next six months then that'll that'll that'll be enough um okay that's it for us uh for this episode of Street check as always um like And subscribe whether you're watching us on YouTube Kevin wealth Network videos channel or listening to us on Apple podcast wherever you get your podcasts like subscribe give us a festar review and um you know if you have any any thoughts or other you know ideas about themes that you think are going to pop up in the next six months feel free to email us at Street check cabit wealth.com uh any final words Brad before we sign off no no okay man a few words uh not making it easy for you that's all right uh we'll see you next week