• Jobless claims, the Consumer Price Index (CPI), and consumer confidence came in this week, which surprised everybody.
• Consumers were supposed to not be confident at all, and boy, that turned out to be wrong.
• When we consider the AI bubble, our philosophy is we want unlimited upside with a tolerable downside.
• Our strategy is designed to let us ride this bubble wave as long as possible, but when it starts to crash on the rocks, our goal is to get out and protect you from the downside.
• Jobless claims fell precipitously to the lowest level we have seen almost all year, and that is good news.
• We don’t want jobless claims to go up, because that means maybe we are not having layoffs and we are seeing maybe a little bit of hiring coming back online.
• We have always said that jobs do not drive the stock market, but indirectly they do.
• The next important thing is CPI, the inflation number.
• CPI came in right in line with expectations, which is probably good at this point.
• Tariffs have not shown any effect yet.
• Trump has talked about putting out a $2,000 tariff dividend to everybody.
• That could be inflationary, and we would rather see paying down the debt with that money.
• Consumer confidence has been low all year, but finally we saw a big uptick, the best reading in months.
• When people get more optimistic, dollars start being spent again and money moves.
• It seems one day the consumers are confident, the next day they are not, but then Black Monday is the biggest shopping day in the history of mankind.
• Jobless claims, inflation data, and consumer confidence together seem to paint a positive picture.
• What could possibly be the fly in the ointment?
• We are on AI bubble watch, and thank goodness we have our sell strategy to help us.
• If the market goes down significantly, our strategy will, like it did in 2008 (actually November of ’07), tell us to sell and protect.
• The Magnificent Seven technology stocks are a large part of the market, just like technology stocks back in Y2K.
• If you don’t learn from history, you are doomed to repeat it.
• The AI infrastructure may still be in early stages.
• In past bubbles like railroads and the internet, the stocks soared while the infrastructure was being built, and then crashed when no one knew how to use it.
• The gap between the infrastructure being built and the usage happening is where the crash comes.
• All of this brings us back to the Fed.
• Their big interest rate decision is on December 10.
• We have our Invest and Protect Strategy, so if the bubble does pop, we have confidence that it will go a long way to protect you.
• Next week, we are releasing three very important podcast episodes.
• On Tuesday and Wednesday, we are releasing 10 strategies to save you 1000s of dollars before the end of the year, but they expire at year end, so we hope you watch to act on that.
• On Thursday, we are posting about the RMD law change for inherited IRAs, which will result in a 25% penalty if not followed.
• Please like and subscribe and make sure you tune in on Tuesday, Wednesday, and Thursday for all three of our releases.
Transcript:
Ken Moraif
Hello everyone, and welcome to our Weekly Market Alert video. I’m so glad you joined us. I hope you are healthy, wealthy and wise. We have a ton to talk about this week. Let me go over with you what we’re going to do on our weekly excursion into the land of personal finances. First of all, we had jobless claims that came out, surprised almost everybody. CPI, Consumer Price Index, the inflation number also a little bit less of a surprise. And the big surprise was consumer confidence. They’re supposed to like, not be confident at all. And boy, that turned out to be wrong. And then, of course, since we’ve begun this voyage, we are now on bubble watch, and so we’re going to be talking about where we stand versus what we consider to be this AI bubble. And of course, as you guys know, our philosophy is we want unlimited upside with a tolerable downside. So our strategy is designed to let us ride this bubble wave as long as possible, but when it starts to crash on the rocks, our goal is to get out and protect you f
Jordan Roach
you just want to go to Kroger and pick up the can. That’s it. That’s all
Ken Moraif
easy, man. You just pop that puppy. But you don’t agree with that. That’s terrible. It’s not terrible. It’s a polarizing thing. It’s not polarizing at all.
Jordan Roach
If you ever join me at my house, just know you’re gonna have to put in a special okay. So what? It’s not coming in.
Ken Moraif
So, so what’s better than then, cranberries, nothing.
Jordan Roach
Well, first of all, everyone knows the side dishes are better than the main course in thanksgiving. Okay, all right. But of those mashed potatoes, without
Ken Moraif
question, mashed potatoes. Potatoes. Do you like them with the skin in it, like the like chunky style, or just all fry? I’m an
Jordan Roach
equal opportunity eater. First of all, I like them all, yeah. But generally speaking, with thanksgiving, we’re going to go ahead and take the skin off, nice and silky. Lots of butter, lots of cream, delicious.
Ken Moraif
All right. Well, ladies and gentlemen, please vote and tell him that he’s wrong about the mashed potatoes and I’m right about the cranberries. I guarantee you it’s going to be 10 to one cranberries win over mashed potatoes anyway. Let’s Let’s go. Let’s have more fun than a human being should be allowed to have when talking about all this boring financial stuff. And so we have, oh, I have an announcement before we get going. Okay, I want to invite everybody on Tuesday. We’re going to have part one of our podcast of the 10 Strategies to save or make you 1000s, maybe of dollars, okay, but they expire before year end, so you have to act on that. So we’re going to have Part One on Tuesday, we have part two on Wednesday, and then on Thursday we’re going to we’re going to post the RMD. So for those of you who have inherited IRAs, the law changed this year very quietly, with no fanfare, and if you don’t abide by that, there’s a 25% penalty. So we’re going to publish that one on Thursday. Okay, so we have Part One and Part Two, Tuesday, Wednesday, of the 10 strategies with actually, I’ll just say, right now there is a bonus just saying. So make sure you watch. And then, of course, on Thursday, the required minimum distribution on inherited IRAs, so if yo
Jordan Roach
That’s right. Now, there’s always gonna be a balance, because you’re never gonna be that number at zero, right, right? But there is a normal cadence, and that’s usually a couple 100,000 and change. And you know, the Fed has been very worried, and the market as a whole is starting to look at labor weakness. For a
Ken Moraif
while, they’ve been hyper validating about the jobs for, like, months, right?
Jordan Roach
And all of a sudden, now we’ve talked about, you know, how, how good a barometer jobs, any jobs data, is, however, jobless claims Fell Precipitously, the lowest level we really we’ve seen almost all year, certainly in
Ken Moraif
months, right? And at first, when I. Thought I was like, Oh, wait, that’s bad news. Jobless claims fell, but no, that’s good news. That’s good news. We don’t want jobless claims to go up.
Jordan Roach
That’s right, that’s that means maybe, you know, we’re not having layoffs. We’re seeing maybe a little bit of hiring coming back in, back online, as kind of broader economic outlook. We’re getting a better picture of things also. Good news, you know, good news there.
Ken Moraif
Good news there. Yep, although we’ve always said the jobs do not drive the stock market, but I guess you could say indirectly, they do, because if people are losing their jobs, they’re not spending and therefore profits, et cetera. But it is profits. First of all, you could have an economy with no jobs and lots of profits and the stock market. Okay, so let’s talk about the other thing, very important, right, which is CPI, the inflation number.
Jordan Roach
And then this is, again, we talked about this all year, is we see CPI right in line with expectations. So again, this is probably good at this point, CPI, you don’t want it to be, obviously higher and forecast that, you know broader tariffs or inflationary environments
Ken Moraif
coming back in tariffs have not
Jordan Roach
we have not seen where’s the meat? We’ve not seen anything yet. How long we can keep saying but wait and let’s see. At some point we got to say it just didn’t have a bad effect. And even Besant has talked about this recently, that He’s even been surprised, because he’s going back and forth. They’re like, Look. He thought there could be some sort of effect here, but so far, nothing.
Ken Moraif
Now I tell you, and I may stir the pot here, but Trump has talked about putting out a $2,000 tariff dividend right to everybody. I’m not in that camp. You know, I’m not because, you know, that’s kind of what Biden did right during covid, where he got in the helicopter and threw money out at everybody, and that’s why we got all that inflation, yep. So if we’re going to write $2,000 checks to everybody, yeah, that could, that could be inflationary. I’d rather see paying down the debt with that money completely. Our debt is going crazy, and let’s use that money for paying down the debt so that potentially could be inflationary if he gets that. But he may be just saying that right now. But it is interesting. I mean,
Jordan Roach
if you just think about I agree with you, actually, because if you’re giving money to people that it’s not theirs, so give government money that allows them to spend money and drive demand again on limited supply, which pushes prices up. So I think I’m with you there. I hope that one does not
Ken Moraif
go through, and you add to that, the bigger tax refunds than people maybe are anticipating due to the one big, beautiful bill. So they’re going to get a bigger tax refund and 2000 bucks. And you know they’re talking about, well, they’re going to save it. No, this is America. We don’t save we go spend, baby. And if we spend, like you said, if there’s a limited supply and lots of dollars chasing that inflation follows correct. So I am concerned about that. We’ll wait and see. Wait and see, all right. So the other thing we saw this week was consumer confidence. Tell us about that.
Jordan Roach
So consumer confidence, I mean, it’s per one of the you know, there are different surveys here, but it’s basically just saying the average person, how are they feeling about the state of affairs, the economy of jobs, and it’s been low, very low all year, right? So everybody’s been worried. It’s a wall of worry. And what that does is cause people to hold back on spending, on putting money, money to work in the market, on buying houses, all these things. And finally, we’ve seen a big uptick, best reading in months. And that is a good thing, because if you start seeing people that get more optimistic, dollars start being spent again, and money moves.
Ken Moraif
You know, I can’t figure the consumer out. I mean, it’s like one day they’re confident, the next day they’re not, and when they’re not confident, they’re supposed to not spend and then we find out on Black Monday that it’s the biggest shopping day in the history of mankind. And so it’s like all these depressed people who have no confidence, suddenly switch to becoming confident and buying everything they can possibly buy. Right?
Jordan Roach
It’s hard to track. And so this is a data point. And so we’d want to see this to kind of trend upward, not just jump in one month, but if we can start seeing a couple good prints here that does typically for both things, you know, good things in the broader economy and in the market.
Ken Moraif
Yeah, I kind of think of it as a mosaic, as a, you know, it’s a painting that everything kind of gives you a directional feel for where things are going. And right now, if you look at jobless claims, inflation data and consumer confidence, they seem to paint a positive picture, right?
Jordan Roach
That we’ve might have had slowing growth here, but broadly, the economy is still moving forward.
Ken Moraif
So, you know, one of the things that I’ve always believed is that if you’re if you’re rolling along too well, you know, make sure you’re not rolling downhill. And so right now, I’m thinking, okay, to myself, What could possibly be the fly in the ointment of all of this stuff. And so let me bring my prop into this to Okay, so I want to introduce everybody to our bubble. So this right here is the AI bubble. Bubble. And right now, this isn’t very big, you know, if we, if we pop this sucker right now, it probably would cause a little bit of a jolt, but not too bad, not overly inflated. Yeah, that thing could grow bigger. It could get a lot bigger. We could pump this, this one up, and it probably could get, I don’t know, maybe twice as big before it popped. Yep. So we’ve got this AI bubble going on, right? And we’re on AI bubble. Watch, sure, and thank goodness we have our sell strategy to help us. You know, if the market goes down significantly, our strategy will, like it did in 2008 or actually, November of Oh,
Jordan Roach
You know, the good thing is, I think, you know, we’ve read, and the market as a whole has read a lot about the about the bubble potentially. So hopefully there’s positioning outside of that, but that thing can grow bigger. I think right now, to me, we’re still in early stages.
Ken Moraif
Yeah, if you look at, you know, the other infrastructure builds that ended up being big bubbles that burst, like the railroads and like the internet, it wasn’t until they were built out, yes, and then the realization came that, you know, nobody knew how to use the railroads. So while the railroads were being built, the railroad stocks were going through the roof. Because, man, this is incredible. This is going to change everything. It’s going to facilitate, you know, shipping stuff across the country at such low prices, and it’s going to create activity. Cities are going to or towns are going to be built along the railroads, and then they finish the railroads, and it’s like, okay, nobody knows how to build railroad cars at this point. And nobody knows how to transport food in refrigerated cars at this point. And nobody’s built these villages that everybody said was going to be. And so those stocks crashed. And the internet did the same thing, yes, right? As they built out the internet, it was like, Okay, thi
Jordan Roach
Well, I mean, there’s a number of things can stop this, but if you just say, Okay, where are we? You know, percentile of how much battery left we have left before people really start saying, is there an end user to this? Can we actually put this to use? All these things? I think we’re probably 20% into this.
Ken Moraif
Yeah, there are signs though, you know, Microsoft came out and said that the use case is people are trying to use it and they’re not figuring out how to use
Jordan Roach
it, which is good news, actually, because if we can start in the early side, getting some, you know, somebody on the other side saying, Okay, it’s not working early. We didn’t have that in white 2k It was just full go. And we think this will create, if we already start getting some feedback loops early on in the cycle that maybe we don’t know how to do this, maybe we should slow down our spending and do some test cases here that can help where that thing is not going to get too big.
Ken Moraif
Yeah, you know, I as an experiment. I asked because the podcast that we’re going to release on Thursday, which is on the new tax law they’ve changed, by the way, they’ve changed the required minimum distribution tax law nine times since they published it. Confused the heck out of everybody. And so this last one was supposed to clarify it, and basically you got to watch that. If you inherited an IRA, you got to watch it because there is a 25% penalty if you don’t do it. But I read the regs, I kind of got comfortable with what they are. And then I asked three of the big AI things you have right now, right? The one from from Google, the one from Elon Musk and the one from Sam Altman, right? I asked all three of them, yep, what do you think is the law? They gave me three different answers, right? Three different answers. And so it’s kind of like you’re talking to a teenager and asking them their opinion. You know, it’s like, so you can’t trust it. So I don’t know that all this excitement about AI is going to eliminate every job and kill all of us is actually going to come to fruition anytime soon, because we can’t trust it. And if we can’t trust it, I’m not going to adopt it. If something really important right needs to be done, I’m going to talk to somebody who has experience, who knows this stuff. I’m not going to just go online and say, what’s the new law on RMD and then go to a different AI, give me a different opinion, and then go to a third one and give me a third opinion. I’m like, Well, okay, which one do I do? Now, you know, suddenly you’re making that decision, not the AI. So just one last thing about that, you know wh
Jordan Roach
could control the calendar a little bit better and say, Let’s just wait for one more data point. We’re not in a rush here.
Ken Moraif
I guess a week later is too close to Christmas and they want to be home for the holidays or something because they don’t want to. I don’t get it anyhow, so we’ll see what happens. Thank you, Jordan, of course, ladies and gentlemen, I hope you had more fun than a human being should be allowed to have when watching all this and listening to and talking about all this boring financial stuff, always remember that we have our invest and protect strategy there. So if the if the bubble does pop, we have a great deal of confidence that our invest and protect strategy will go a long way to protect you from it. So we’re not here to make you worried, just aware of what we are thinking. So again, I hope this. I hope you enjoyed it. Please like and subscribe and make sure you tune in again on Tuesday, Wednesday and Thursday of next week for all three of our releases. In the meantime, thanks for watching. We’ll talk soon.
Please note: transcript has been modified after the time of recording.
Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif 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 Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023