• This week’s Market Alert revisits several themes we’ve been discussing in recent weeks and highlights why staying informed can help you better understand the forces shaping today’s markets.
• As anticipated, renewed geopolitical tensions have pushed oil prices above $100 per barrel, driving gasoline prices higher and putting upward pressure on inflation once again.
• While rising energy prices deserve attention, we believe the longer-term impact may be more limited as global energy producers continue developing alternative routes that reduce reliance on the Strait of Hormuz.
• The larger story continues to be the rapid expansion of artificial intelligence and the increasing concentration of a handful of technology companies within the stock market.
• Today, the “Magnificent Seven” represent more than one-third of the total value of the U.S. stock market, creating an even greater level of concentration than investors experienced during the dot-com era.
• Technology companies continue to dramatically increase their investment in AI infrastructure, with spending expected to approach unprecedented levels over the next year.
• Despite these enormous investments, investors are beginning to question when those billions of dollars in spending will translate into meaningful long-term returns.
• Another trend worth watching is the growing use of financial engineering and debt financing among some of the largest technology companies, despite many of them having operated with little or no debt just a few years ago.
• We are not predicting that an AI bubble will burst, but we believe these developments warrant careful attention and reinforce the importance of maintaining perspective during periods of market enthusiasm.
• The Federal Reserve meets this week, and while most economists expect no change in interest rates, any unexpected policy shift could have a meaningful impact on markets.
• Rising interest rates could place additional pressure on highly valued growth companies, particularly those relying heavily on borrowed capital to fund future expansion.
• Rather than trying to predict every market move, we remain focused on preparing for a wide range of possible outcomes while continuing to participate in long-term growth opportunities.
• Our Invest and Protect philosophy remains at the heart of that approach because we believe growth is important, but protecting your principal is even more important when planning for retirement.
• We continue to monitor the markets on your behalf so you can focus on enjoying your retirement with confidence, knowing your portfolio is being managed with both opportunity and risk in mind.
• At Retirement Planners of America, our commitment remains unchanged: helping you make your money last as long as you do, so you can enjoy living your second childhood without parental supervision.

Transcript:

Ken Moraif 0:01
Hello, everyone, and welcome back to our weekly market alert video. And as you can see, I am back in studio here with my producer extraordinaire, Alex. Thank you. Is that applause for you? You’re applauding yourself. Wow! Wow! Okay, so thank you for joining us. I hope this video finds you healthy, wealthy, and wise. We have a lot to talk about, and you know I always say that if you don’t watch these videos, you do it at your own peril. And this is an example this week of that. Okay, because just about everything we’re going to talk about, we have whoa! I almost spilled the water here. We have been telling you was going to happen. So you only need one place to go to find out what’s going to happen next, right? And my crystal ball up in my office, it right now it seems to be working, even though I haven’t found the on switch. So let me go over with you what we’re going to talk about on this our weekly market alert video. So first of all, last week we said with the what was heating up in in Iran with the war and everything else that gas prices would go back up, inflation would go back up, and that temporary reprieve that we got would evaporate as quickly as it came, and sure enough, that’s what happened. So we’re going to talk about that. The other thing that happened is we’re going to continue in the theme about the AI bubble, and the reason why is because it’s only getting more inflated, in our opinion. Okay, does that mean that it’ll happen? Who knows, right? But we always want to prepare for the worst and hope for the best, as opposed to the opposite, which we think is kind of dumb. So, I want to share with you this week four things you should know about these AI stocks. And by the way, it’s a third of the entire stock market right now, and it’s getting kind of dicey. And little hiccups cause the market to drop dramatically, as we saw, you know, and I’ll talk about that in more detail. The other thing is the Federal Reserve, and now that gas prices have gone back up, and the Hormuz and the Iranians, and now the Houthis and the Saudi Arabians, and this whole thing is spiraling. You know, the Fed now flip has to flip flop again, and so we’re going to go through the ongoing saga of what the Federal Reserve is going to do. And the reason why that’s important is because if they start raising interest rates, then the stock market is way overvalued. And so we watch what these guys do because what they do affects us directly and quickly. So, and they’re going to be meeting next Wednesday. So we got to think ahead about that. So we have a ton to talk about, but before we get going, I have an internal conflict going on, and I need your help. Okay, everybody tells me that I should not wear a tie anymore. Okay, because in today’s world, people are more relaxed, and you know the tie is kind of stuffy, but I look at myself in a tie, Alex, and I think I look marvelous. I look marvelous, you know. And I think without a tie, there’s just something missing. I don’t know. But you guys watching this are the customer. So what we’re going to do, Alex, you’re going to put up a side by side for everybody, right? And then you guys can vote. And based on what you guys say, I will do because that’s what I’m here to do-to serve you. So tell me if I should wear a tie or if I should just be the relaxed guy that you’re seeing right now. So let’s talk about. So first of all, you know, gas prices on Thursday got to $4.09 on average around the country, and we said this would happen last week. We said that oil prices would go up, and they’re at $100 a barrel now. They’re over that because of the heated up war that’s going on. The ceasefire is over. I don’t know that we ever had one. We had a ceasefire in name only. What is that? A S F N O I N O. It’s a Sfanino.

Ken Moraif 4:14
So when you have a Sphinnino, you know that’s going to cause oil prices to go back up again, and so gas prices go up, inflation goes up, and all that stuff. You know, so that’s a big deal. The the big story, though, and we’ve said this before, the whole oil thing and the thing in Iran and all that. Yes, it is a bad deal, but right now, if you look at what’s going on. The Saudis, UAE, you know, a lot of these countries are figuring out how to get oil to the market and not go through the Strait of Hormuz anymore because you can’t with the Iranians. And so a lot of estimates are that by the end of 27 very little, a small. Percentage of the oil in the world will be going through the Strait of Hormuz then. So yeah, it’s a it’s an issue, but it’s not like a big big deal. And we’ve heard this story before, so we’re going to kind of tell you about it and then set it aside. The real one I want to talk with you about is the AI bubble, and there are four things that are going on there that are increasing the risk that this is a bubble. The one is the concentration of basically seven stocks are now over a third of the entire value of the stock market, and the magnificent seven. So that’s Alphabet, Google, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. They’re worth sitting down. 20-$2.7 trillion combined. That’s a third of the entire stock market, and the top 10 companies in the stock market currently are 30-8% of the S&P 500 index, so we have a massive concentration, which is more than the concentration that we saw in Y2K when the market went down 49 percent with all those technology stocks. The other thing that’s happened is that the four biggest technology companies are planning to spend 720-$5 billion on AI infrastructure this year, which is up 70-7% from last year. So they’re they’re basically doubling their spending, and and people are even saying that by next year they’re going to be spending a trillion dollars on building out the infrastructure for AI, and what happened when when they announced that? Well, their stock went you know Alphabet went down 7% on the announcement. So so so the market’s like okay wait a second you guys are spending money like drunken sailors, and you’re not getting a return on that investment. Yeah, your underlying company is making money, but the return on this 700 billion trillion dollars, we haven’t seen it yet, and it doesn’t seem to be coming anywhere soon. So that’s a concern. Now, the other thing that is maybe you don’t know this, and it’s important for you to know, and this will give you something to share with your with your friends, and that is that some of these profits are not real, okay. And here’s the reason: Alphabet, okay, Google, they booked 30-$6.8 billion in equity gains, okay. So they booked a 30- billion gain. How did they do that, though? What they did was they bought a company, and that company’s stock after they bought it went way up, and that then showed them a 30-$6.8 billion gain. So they’re not making a profit. It’s arbitrage. They bought a company, they folded it into themselves, and that company’s stock went up because that happened. And all of a sudden, they show this massive profit. But when you look into, if you X-ray it, that isn’t what’s happening. And you know, Amazon did the same thing. They booked 17 billion in pre-tax gains, and they did the same thing. Microsoft did the same thing with $9 billion of gains that were not. I mean, they’re not real, right? That you buy a company and the value of that company goes up and you book it as profit. I mean, it’s a fun thing to do, but you know it doesn’t pay the bills. So, and then if you want to add another thing, this is the fourth thing, and that is increasingly what’s happening with all this spend and all these purchases of companies that are giving them these gains that they’re reporting. It’s borrowed money, so you have all these massive.

Ken Moraif 8:52
These companies raised $108 billion in 2025 and the projection is that by the time this is over, they’re going to have 1.5 trillion dollars of debt on their balance sheet, and these are companies that five years ago had no debt. Microsoft had no debt. You know, all these companies were debt free, and they are leveraging themselves massively to buy to spend all this money on the infrastructure, so you have companies reporting these profits that aren’t real. I mean, they’re financial engineering. They’re borrowing like drunken sailors. They’re building this thing, and this thing isn’t showing a profit and won’t for the foreseeable future. Is that a bubble or not? I don’t know. I’ll let you be the judge. The good thing, though, well, before I get to that, the final thing that I want to talk with you about is the Fed. So the Fed, they are kind of in a conundrum because it’s like the the betting markets are very interesting to watch because the betting markets are betting on whether the Fed’s going to raise or lower interest rates, and last week. When we got inflation came down, gas prices came down, everything looked hunky dory. All of a sudden, it looked like no, no, they are not going to raise interest rates. Everything’s fine; they don’t need to. But then the opposite happened, and that is inflation picked up, gas prices went up, oil prices went up. So now the odds are they’re going to raise interest rates. So we’re going to have to see what they say on Wednesday, but it will be a market mover. So get your popcorn 830 I think Central Time is when they’ll be announcing what they’re doing. Oh no, they do it at noon on Wednesday. So we’ll see what happens. 104 economists were surveyed. Every single one of them thinks no change, which means there will be a change because they’re always wrong. And so, anyway, just a whole melange of things going on to keep us all interested. The important thing, ladies and gentlemen, is that if inflation picks up and the stock market goes down, if the cost of borrowing goes up, and these AI stock that are these AI companies that are borrowing, their cost of borrowing goes up, and their stock price falls. Or if it’s actually a bubble, and the whole thing bursts, and we see what happened in Y 2k with the technology stocks back then. If any of those things happen, that’s why we have our invest and protect process in place. That’s why we have our our philosophy that growth is important, but protection of principal is even more important. Okay, we don’t want you to experience catastrophic losses, and having invest and protect to backstop us, we think gives us a great deal of peace of mind, and I hope it does you too. And I can tell you personally, it does me because I invest right with you. I eat my own cooking, which I think should be everybody. Everybody should eat their own cooking, right? Don’t don’t ever be with somebody who says invest this way and I invest that way. You know that’s you don’t want that. So we’ll see where all this goes. But I hope you have the peace of mind of knowing that we’re minding the store for you. We’re taking care of business. You guys go play, have fun, enjoy your second childhood without parental supervision. Be a squipper, and enjoy. And we’ll talk soon.

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to employees of RPOA on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of employees of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2026