• The jobs numbers came out this week and absolutely blew the headlines out of the water.
• Economists were expecting 80,000 new jobs. Instead, the economy added 172,000 jobs.
• Not only that, but March was revised up by 29,000 jobs and April was revised up by 64,000 jobs.
• That’s 93,000 more jobs than were originally reported.
• The jobs market continues to be remarkably strong.
• But there is one nuance that we think is important.
• Long-term unemployment rose by 524,000 over the last year and now represents 27.5% of all unemployed people.
• So while the headline numbers are very strong, people who are out of work are staying out of work longer.
• That’s not a good trend, and it may even be an early sign of AI impacting the workforce.
• So what does all of this mean for the Federal Reserve?
• The bond market started this year expecting three interest rate cuts.
• Now the bond market is increasingly expecting interest rate hikes before year-end.
• We believe the Federal Reserve often ends up following the bond market rather than leading it.
• Think of it like a fox hunt. The bond market is the pack and the Fed is the lead dog that keeps running in front after the pack has already changed direction.
• Earlier this year the Fed was talking about cutting rates. Now it looks increasingly likely they may have to raise rates instead.
• That creates a risk for the stock market.
• Markets have been pricing in lower interest rates because lower rates mean cheaper money, higher profits, and potentially higher stock prices.
• If rates move higher instead, those profit expectations may have to be revised downward.
• On the other hand, we still have a very strong jobs market and record corporate profits.
• The stock market also hit new all-time highs this week and is approaching what could be its 10th straight positive week.
• That hasn’t happened since 1985.
• But if you open up the wrapper and look underneath, much of that performance is coming from only a handful of stocks.
• Many investors believe they are broadly diversified because they own an S&P 500 index fund, but the index has become increasingly concentrated.
• And that concentration could become even greater.
• SpaceX is expected to come public at a valuation approaching $1.8 trillion.
• If SpaceX eventually joins the major indexes, it could further increase that concentration.
• So we are starting to see some risk building beneath the surface.
• Yet for the time being, the market doesn’t seem to care.
• Interest rates may go up. The war in Iran continues. The Strait of Hormuz remains a concern.
• Nobody seems to care.
• Right now, the market only seems to care about AI.
• What does all of this mean for us?
• It means we’re going to keep minding the store for you.
• We have our Invest and Protect process ready if conditions deteriorate.
• Our job is to watch the risks and worry about the markets.
• Your job is to enjoy your Second Childhood Without Parental Supervision.
• Go play, have fun, spend time with family and friends.
• Let us get the gray hair for you so you don’t have to.

Transcript:

Hello everyone, and welcome back to our weekly market alert video for today, which is June five 2026 I am so glad you are with us. I hope this is finding you healthy, wealthy, and wise. I hope all you Squippers out there are enjoying your second childhood without parental supervision. And again, if you don’t know what a Squipper is at this point, that’s a client of ours who has retired, and once you retire, Squippers is the acronym for the aforementioned Second Childhood, and for those of you who are still clients who are endeavoring to become Squippers, we’re going to do everything we can to get you there. We have a ton to talk about this week, so first of all, the economy gave us a bunch of really good news, right. The jobs numbers came out, blew the headlines out of the water. The stock markets hit all these new all-time highs. You know, we’ve got SpaceX coming, we got all kinds of stuff to talk about this week, but you know, before I do that, I just want to kind of do maybe an informal survey, so my daughter watches these market alert videos, and she’s one of my, how do I say this, my most honest critics. She thinks my jackets are old fashioned. What do you think, Alex? I mean, I wear these jackets, I’ve had these jackets for a while, you know, because my dad taught me, if you buy 10 suits, you will never run them out. If you buy one or two, you’ll wear them out quickly, but if you buy 10, you just keep rotating them, you’ll never wear them out. And so that’s what I did, you know. I bought 10 suits. And how old are these suits? How old are these suits? I’m not going to tell you, but they’re maybe older than you. I think they might be older than you, but anyway, I, what do you think? I mean, I don’t think it looks bad, anyway. Let’s, let’s, let’s, let’s talk about what we’re supposed to be, the jobs market. So, the jobs market came in. Now you know these economists that make all these predictions about where what jobs are going to be, or what inflation is going to be, and all that. They’re, you know, they’re wrong almost all the time. You remember mr. Rogers, you know, it was like you’re right as usual, you know. King Friday, you’re wrong as usual, King economist. I mean, they said 172,000 I’m sorry, they said 80,000 jobs were going to be what was going to be the announcement this morning, and instead it was 172,000 They were off, I mean, not even in the same universe, and not only that, but March was revised up 29,000 April was up the revised up 64,000 so that’s 93,000 more jobs than at first was reported. So, you got the economists that don’t know what they’re doing, you got the Department of Labor that’s revising jobs up. I mean, how do you run an economy when all the data you’re getting is wrong? All these forecasters, all these people that are doing stuff for you, they’re wrong all the time, and yet they make millions of dollars. It’s kind of like the weatherman, Alex, you know. We love the weatherman. We always want to see what the weather forecast is, even though we know most of the time it’s wrong, but we don’t care. We want more. We want soothsayers. We want people that can tell us the future, even though they’re always wrong. It’s a good job if you can get it now. So, on the jobs front, lot of good news, but there’s one nuance that I think is important, and that is that long-term unemployment rose by 524,000 over the last year. Okay, that’s concerning, because now that represents 27 and a half percent of all unemployed people, so a third, almost, of all, the people who are unemployed right now are long-term unemployed, which means they may not get a job. So, yeah, we have a strong report on the top, but the people out of work are staying out longer, and that’s not a good trend. And that may be AI, you know, something’s going on there. So, what does that mean in terms of the Federal Reserve?

Okay, because we all want to know what the Federal Reserve thinks, and as you guys know, I, there’s another group of incompetence in my view. Every single big bad bear thing that’s happened to our.. I shouldn’t say that, that’s an exaggeration, but the really big bad ones, the Great Depression, many people, including me, think that the Federal Reserve caused the Great Depression. They raised interest rates in a recession. They thought that by raising interest rates, people would have more income, and that would stimulate the economy and cause the economy to do better and come out of that recession. Well, we know now that you do not raise interest rates during a recession, but they apparently didn’t know that at the time, and, and the Great Depression ensued. Then you fast forward to, you know, 2008 the credit crisis, the second largest bear market in history. Why? Because they lowered interest rates so low, relaxed all the standards to borrow money for real estate. Why? To stimulate the economy, and what did that do? Cause another crash, so these guys, you know, they go from one crash to the next, and it’s their fault most of the time, in my view. So, let’s talk about those guys now. I’m on my high horse today, Alex. So, I want.. I want to give you a visual when it comes to the Federal Reserve. So, this is what those guys, you know, just think of old England, okay? The fox hunt, all right. So, you got all the dogs, right? You got a whole pack of dogs, and you have the lead dog. Well, the lead dog in this example is the Federal Reserve. The pack is the bond market, all right. So, the bond market is basically lending money. When you think of a bond, that’s a nice word for people are lending money, so when they lend money, they want to anticipate what the future of interest rates is going to be, right? So they look at, is the economy heating up, is it slowing down, where should interest rates be, and the market, the bond market establishes the interest rates of the future, so they establish mortgage rates, car loans, credit cards, that kind of stuff, and that really affects the economy. So they look at that, so they adjust all the time. Meanwhile, here’s the Fed, and they’re looking at, so they, if you think of the fox hunt, what happens in that scenario is that the lead dog is really not the lead dog. The lead dog in the fox hunt is actually leading from behind. So, if the pack all goes this way and the lead dog is over here, what he does is he runs over and he gets in front. Look at me, I’m in front now. And then when the pack goes that way, he goes over and he goes into, look at me, I’m in front now. So, the Federal Reserve, at the beginning of this year, we’re going to draw up interest rates by three times this year, and the bond markets, like, nah, you know, you’re not, you’re going to raise interest rates before the end of this year. So now you know the Fed probably will raise interest rates before the end of this year. So now, where does that create some risk for us? Well, the market has been pricing in lower interest rates. What that means is, is that the cost of money was going to go down. If the cost of money goes down, companies have cheaper money, they build more stuff, they have higher profits, et cetera. If that’s not going to happen, then the market has to reprice those profits downward, and profits drive stock prices in our view.

So, if that profits are going to go down, that could be bad, but the other side of it is we have unemployment, these jobs are incredible, and then on top of that, you got record profits, so that’s the counterweight, so they might balance each other out, but nevertheless, it is now looking like the Fed is going to listen to the bond market, run in front of the pack, and raise interest rates towards the end of this year, so we have that the next thing we have is we had record highs in the stock market, and in fact we were working on our 10th straight up week, and if that is the case, then that hasn’t happened since 1985 41 years ago, crazy, crazy, crazy, the stock market is going crazy, but the thing that’s concerning is that if you really open up the wrapper and look at what the stock market, the S and p500 index is doing, it’s mostly basically five stocks, so if you’re owning a an S and p500 index fund and you think you’re diversified, you’re really not as diversified as you may think, because it’s so concentrated in basically five stocks, and that’s about to get worse. Why we have SpaceX coming, $1.8 trillion IPO, unbelievable. These numbers are so mind-boggling. 1.8 trillion, Elon Musk is going to own a company or be the biggest owner of a $2 trillion company, that is just mind blowing, it’s crazy. But anyway, so that then they probably SpaceX will probably become part of the s5&P 100 index, and the index is designed to be weighted towards the size of the companies within it, so what happens is that that weighting is going to become even more concentrated if SpaceX joins the fray. So again, we’re starting to get into some risky territory there, but for the time being, nobody cares. Interest rates are going to go up, nobody cares. The only thing we care about is AI, baby, and straight of Hormuz and the Iran war. What happened to that? Oh, we don’t care about that either. So, what does it all mean? It means that we are going to watch Mind the Store for you. You go play, don’t worry about it. Let us get the gray hair for you. Let us worry about it, so that you don’t have to. That’s your job, is to be a SCWPer, or to work on becoming a SCWPer, and go out there and have lots of fun. I hope you have plans for this summer. I hope you enjoy family time, grandchildren time, if you have those. I hope all is well with you. Let us worry about this. We are on it. We have our Invest and Protect process ready to enact if something bad happens. So relax, enjoy. In fact, go sit in a hammock and sip a mint julip, that sounds really good to me. Do that, okay? Just chill. So, thank you for watching. Make sure you share this with your friends and family. Make sure you like and subscribe, that helps us out a lot. 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