Government Shutdown Vibe Check

DANO WEIR: Happy Friday. The sun is shining in Northern California. Hope it is wherever you are. And your Federal Government has been shut down for over two weeks, and we're going to talk about it. My name is Dano Weir. I'm the marketing director for Sonoma Wealth Advisors, Fermata family of brands.

DANO WEIR: We're joined shortly by our managing principals, Daren Blonski, CFP, Chris Sipes, CFP, talking about that very government shutdown. We're going to do what's called a vibe check.

DANO WEIR: If you don't, that's like a cool, I'm trying to be cool and use a cool world cool word. What is actually happening with the various asset classes as a result of the government now being shut down for over two weeks and why it might not be as bad as the media might make it seem?

DANO WEIR: Wait, why are we even looking at other asset classes when seemingly everyone in the United States owns U. S. Stocks more than ever? We'll look at concentration. And how often has the S&P actually stayed at record highs like we're near now? Let's get the show started.

SPEAKER 2: The stock market, the economy, your money. What's the latest and what could be next? Find out now with Fermata On The Markets. Straightforward financial market updates for the brands of Fermata Advisors, Sonoma Wealth Advisors, Fermata 401k and Fermata Tax. On The Markets starts now.

DANO WEIR: Let's get the guys in here. Chris, you've got 11 kids. You probably not that many.

DANO WEIR: You know, I love to work in words we have no business using. Do they ever hit you with a vibe check? You ever hear this one?

CHRIS SIPES CFP®: Yes, yes. They hit me with that one. The latest one, Dan, which I was going to ask you what this means. They're always saying six, seven. I hope that's not something bad.

DAREN BLONSKI CFP®: You know, 6-7 is like the perfect way to sum up this weekend in the market. And I apologize to any of our listeners out there who are actually teachers, because teachers have to hear 6-7, 6-7, 6-7 from all these third, fourth and fifth graders like my son is ridiculous. But that kind of stuff in the market, 6-7, man, 6-7.

CHRIS SIPES CFP®: I really hope it's not something awful. If it is, I truly apologize. I have no idea what it means. My kids say it all the time. The smirk on their face like dad doesn't even know.

DANO WEIR: You'll be happy to know that I've done extensive research on 6'7 ", and I know that I'm over 40 now because I still don't understand it. But basically, it's a reference to a song that talks about a basketball player named Lonzo Ball who's hype. Is six foot seven. And the way that it's said in the song is like funny. And so people just started saying it.

DANO WEIR: It's not, it's a carp in the system. Now people are just saying it because other people say it. So that's the best I can understand it. So it's not necessarily something, inappropriate, but it is annoying. And we, now I'm mad because we should have called the episode that, but we're doing a vibe check guys. That's what we're doing today. Okay. We're doing a vibe check.

DAREN BLONSKI CFP®: So, so here's the deal. Like I was asking my four year old, what is six or my 10 year old. What does six, seven even mean? And if you ask 10 different 10 year olds, what six, seven, six, seven even means you'll get 10 different answers. Kind of when you ask a financial advisor, what a value stock is, you get lots of different answers.

DANO WEIR: There you go. Epic fail. This is a content miss. We're canceling the broadcast. We got to do a new broadcast. Start over. All right. All right. We are here, your host today. We are Cinema Wealth Advisors, the Fermata family of brands, Daren Blonski, Chris Sipes, Dana Weir, 900 million across the various firms under management. And Chris, we are talking first about gold.

CHRIS SIPES CFP®: Yeah speaking of a vibe check it seems like every time you look at the at the prices in the market get take away today right but But otherwise, gold just seems to get going up every day and definitely starting to get more interest in it from clients, prospects, just people in general talking about it. Dan, I think you visited a coin dealer recently and mentioned that was quite the experience. So, yeah.

DANO WEIR: Do I have a minute to talk about that, Daren? What do you think? Can I drop that?

DAREN BLONSKI CFP®: I'd say run it, man.

DANO WEIR: Okay, so this is not a paid endorsement. This is a friend of the firm, a friend of ours, who will be a future guest on our other podcast, It's All Money. His name's Jason Bowman. He owns Napa Gold and Silver over in Napa. And after he'd been on the podcast, I said, hey, man, you know, I got some old coins. Do you do old coins? He said, yeah, come on into the shop.

DANO WEIR: So I bring him into the shop, and these are coins that I inherited from my grandpa. And it's like, they're the Silver. Dimes and quarters that, you know, I was told never sell these. These are don't, don't spend these. These are real Silver. And I never really understood what that meant as a kid, but a lot of people don't know.

DANO WEIR: If you look at the side of a quarter, you're going to see a little bit of like Silver color to not actually Silver, but then it's a bunch of other garbage metals in there. So our coins aren't actually made of the actual metal, the valuable metal. So I go into the shop and I have no, no experience at all going into shops like this or what to expect. And the action in there, guys, people were just coming in.

DANO WEIR: I saw a guy come in with a bag of utensils. He was selling his Silver utensils because the Silver price has also been all over the place and up. And so the amount of people, the number of people, the variety of people who are coming in who are suddenly interested in gold, it was just fascinating. And Jason was really great. And so, yeah, it was a unique experience for sure.

DAREN BLONSKI CFP®: Pretty pretty cool to hold that much gold in your hand. Did you get to hold some of those gold coins?

DANO WEIR: He gave me, so I got to talking to him about currency and value and all that type of stuff. And that kind of extends beyond market talk per se, like you might hear from a usual financial advisor, but we really look at holistic approach to things. He handed me this coin guys that was minted by Mexico in like the 20s. And it was...

DANO WEIR: 50 pesos when they minted it and it was solid gold that particular peso is no longer in circulation so they're they like de-decimalized their peso or something like that and changed the way that they were printing money so not only is it worth zero pesos now but the gold that i had in my hand from just the coin was worth five thousand dollars and this was like about the size of a Silver dollar so you know to it.

DANO WEIR: To see that in action in real time and have it in your hand. And I'd also brought in some foreign currency that I had no clue what it was. It was just like, you know, stuff people had gotten from trips and he took a stack of it and he like just threw it to the side. He's like, yeah, that's all worthless. That's not circulating.

DANO WEIR: And then I ended up selling, I ended up selling some of the Silver coins and he gave me American dollars, you know, as part of the exchange. And I sat there and I looked at the American dollars and I looked at the worthless foreign currency. And I thought, wow, those are really close to each other.

DANO WEIR: This paper's worth something and this paper's not. So it was a fascinating experience. So thanks for a minute to share that.

DAREN BLONSKI CFP®: Well, that's similar to the experience I had when he came in to film our podcast in the office. And I had brought this Spanish, I don't forget what you call it, but very old coin, looked very old. I'm like, what is this thing, man? I found this in my mom's old coins and she...

DAREN BLONSKI CFP®: You know, so I don't want it. You can have it. And like, I'm going to go figure out what this thing is. And I gave it to him and he picks it up. I'm like, oh, it's a fake. And I was like, how do you know? He's like, I just know I've felt enough of these things. I know exactly when these things are fake.

CHRIS SIPES CFP®: Snap. Boom. You just knew.

DANO WEIR: You just knew.

CHRIS SIPES CFP®: Well, if you're interested in this topic, and Dan, you and I talked about this. There was the, there was a guy on odd lots and I don't have his name right in front of me, the podcast Odd Lots, who... Was the guy that the character from Uncut Gems was based on. And so he's a jeweler in New York City, and he has a shop, and he deals in jewelry and diamonds and gold.

CHRIS SIPES CFP®: And if you're at all interested in this stuff, you have to listen to that episode because it's really cool to, like you said, hear from a guy who's right there on the ground and can pick something up and knows. Immediately if it's real or fake or whatever. And it's kind of neat.

DAREN BLONSKI CFP®: It's kind of like when we look at a portfolio, right? Someone brings in their portfolio. Right away. Shredding it apart and like, well, this has got this problem because it's over allocation, blah, blah, blah, blah, blah. And then people just look at us like, you guys are nuts, man.

DANO WEIR: That guest, by the way, was, I may say it wrong, but it's Maxud Agajani, I believe is how you would say that name on that episode that you're talking about, Chris.

CHRIS SIPES CFP®: Okay. Yeah, I guess he's been on a couple of times and was one of the most listened to episodes. So why is everybody talking about gold? Well, we hit over $4,000 an ounce, kind of blew right past that price. Looks like we're at about $42,000, $47,000 as of today on spot gold. And so, of course, there's all kinds of- Real quick, Chris.

DAREN BLONSKI CFP®: I just have to say, whenever you see gold go parabolic, that's not a good sign. That is a parabolic sign.

CHRIS SIPES CFP®: Yeah. Typically. It makes you a little nervous, right? And this was from Eric. Balchunas on X, he showed that since the origination of GLD, the SPDR GLD, which is one of the older, it might be the oldest ETF that tracks gold. The origination was in November of 2004. So we've got 21 years of history there. And if you take that history and overlay the S&P 500, Total return.

CHRIS SIPES CFP®: So this is with dividends. This is not just price. That gold ETF has outperformed the S&P 500 over the life of that ETF. Now, you could tell the parabolic move that we've seen here recently accounts for a lot of that. But nonetheless, that's something I don't think most people would guess that. I know I wouldn't believe it if I didn't see it.

DANO WEIR: Daren, what? Can we so we're doing a vibe check on the government shutdown and we're talking about the different asset classes we can never really know until sometimes years later but with everything that's happening can you posit any kind of theory on this spike in gold last couple of months well.

DAREN BLONSKI CFP®: I think we you go back to our special guest we had forget was it mike philbrick yeah and we where we talked about, you know, when the U S a few years back and the. Biden administration decided to start confiscating the Russian gold, pay for the Ukrainian War.

DAREN BLONSKI CFP®: You basically told every major bank in the world, if you don't play our games, we're going to take your dollars. I guess you should say when the US was going to confiscate the Russian dollars to pay to Ukraine to buy bombs to fire back at Russia. Like it, hate it, agree with it, disagree with it.

DAREN BLONSKI CFP®: The bottom line is any rational actor after that point goes, wait a SEC, if we don't play The game that the U. S. Wants us to play, they're going to take our dollars too. So what you're seeing is a lot of banks, central banking, a lot of countries accumulating gold. And that certainly seems to be part of the price push.

CHRIS SIPES CFP®: What's also interesting, Dan, on that point is that, you know, if you go back a few years on some of the episodes, we had talked about, to your point about the currency and the paper, right? And how How much is that paper worth? And how a few years ago, gold was going up dramatically in other currencies.

CHRIS SIPES CFP®: And so gold had shown this performance, but it wasn't really noticed in the US because the US dollar was strong and was getting stronger. However, the dollar has lost around 10% of its value relative to other currencies this year.

CHRIS SIPES CFP®: And so that has added even more of a tailwind to the performance of gold, because if you're pricing something in a unit of measure that is getting less valuable, it takes more of that paper to buy that same amount of gold. So it's gold being maybe the oldest asset in the world.

CHRIS SIPES CFP®: I don't know if real estate is older, probably older. But gold's right there, right? And it's always been looked at as a currency, a medium of exchange for millennia. And so judging where it is relative to your currency is really difficult and a big part of valuing gold.

DANO WEIR: And I'll just say one more story before we move on to the next topics, because this is not the gold hour. But after I came home from the gold shop, I had a bunch of things that he didn't end up buying. One of which was just a little fleck of gold I've had since I was a kid that you got like on the gold country field trip or something like that. And so.

DANO WEIR: I showed it to my son and I've just never had occasion to show it to my son, Harvey. And he goes, he goes, what's that? I said, oh, that's real gold. He goes, it is. And I said, yeah. You see his eyes just light up and he goes, well, can I hold it? And I go, yeah. I take it out and I go, be very careful with it.

DANO WEIR: And to watch someone to just the, the, the visceral reaction of him who knows nothing of it other than people maybe have told him it's valuable, but. Seeing him touch and look at it i could see in real again in real time like this is there's a thing i don't know why but there's a thing with human beings and this metal and it's it's like very primordial and so it was interesting yeah.

CHRIS SIPES CFP®: Absolutely so taking a hard left turn here there's not really a way to segue to this this slide this was from lizanne saunders the average age. Of us passenger cars on the road at 14.5, in 2025. So the average, average car age. Now I put this in here.

CHRIS SIPES CFP®: So you guys would quit nagging me about my old classic cars and my love for, vehicles from the early to mid two thousands. I want you guys to know that it's sort of normal. It's sort of normal to be attracted to these things.

CHRIS SIPES CFP®: But in all seriousness, And, you know, it's... I think it's important to know a lot of people are stealthy with their financial success, right?

CHRIS SIPES CFP®: You don't always have to be driving the brand new car or wearing the brand new clothes or doing whatever it is to show, hey, I've made it. I think people will be really surprised to know how many people...

CHRIS SIPES CFP®: Drive old cars, not because they have to, but because they just don't see the value in spending money on something like that or whatever. And it's not all that, I guess, abnormal to just have a used car. I know when you're driving down the road, you can feel like you're surrounded by brand new cars everywhere.

CHRIS SIPES CFP®: And I always think to myself, I'm like, did somebody just pay $100,000 in cash for that car? Are they paying that off over the next like nine years or some insane thing? How do they feel when their kid spills their smoothie on the floor of that thing?

CHRIS SIPES CFP®: You know? So anyway, this, this slide has literally nothing else to do with anything else in the deck today, but just thought we'd include that.

DANO WEIR: Just to let us know that it's okay to have older cars. I got you, Chris. Thank you. You're, you're, you're forgiven.

CHRIS SIPES CFP®: All right. So, continue with the vibe check here. We talked last week about how the sentiment indicators were likely to drop given the big pullback.

DAREN BLONSKI CFP®: You sound like a bunch of wannabe teenagers with your vibe check.

CHRIS SIPES CFP®: Yeah. Last, last Friday we saw the big sell off, on the, on the tariff talk, right?

DANO WEIR: Byron's crashing out.

CHRIS SIPES CFP®: Mute yourself, Dan. Okay. Okay. He's crashing out.

CHRIS SIPES CFP®: So we had Friday, we had the big sell-off on the tariff threats. And I believe we called it by market open on Monday that things could be totally different, which is exactly what happened. They reversed course on Sunday. Market comes back out doing pretty well, kind of back and forth.

CHRIS SIPES CFP®: So it's kind of surprising to me, actually, that the market keeps falling for it. For lack of a better word, like it's, it's the, the, you know, we keep getting these huge pullbacks on announcements that are less than in my mind, 5% likely to actually go through. Right.

CHRIS SIPES CFP®: But anyway, we had a big jump in bearishness, last week, these reports come out on Thursday, the CNN fear and greed index dropped down to 24, which is just inside extreme fear, so for those that watch this for contrarian indicators, starts to get a little interesting. It was at 31 fear last week and Bitcoin all the way down to 22 extreme fear this week versus 64 greed last week.

CHRIS SIPES CFP®: So who knows, maybe that's just Bitcoin doing Bitcoin things and being, you know, volatile as usual, but, But we're starting to see that sentiment drop into fear or extreme fear. And so contrarian antennas start to go up a bit. Now, why have assets like gold done so well? You know, other central banks buying, but also.

CHRIS SIPES CFP®: It could be investors all over the world saying, you know, rather than holding dollars, rather than holding treasuries, which is a debt obligation in the United States, it's the whole debasement trade, right? Everybody's talking about the debasement trade that's been very well known and accepted as consensus at this point in the market.

CHRIS SIPES CFP®: And this is why Federal Government outlays. And this is from Peter Malouk at Creative Planning. And he says, for the first time ever, for the first time ever, time ever. The U. S. Is spending more on interest payments, which is $1.16 trillion, than on our national defense at $1.13 trillion.

CHRIS SIPES CFP®: The cost of past debt now exceeds the cost of protecting the nation. The bill for decades of borrowing has come due. And I'm sure, like everything in life, there's more than one reason why gold is up, and this is probably one of those myriad of reasons.

CHRIS SIPES CFP®: Is that the profligate spending of the United States government over the decades is finally starting to pile up to the point where it's becoming a concern for professional investors and global investors alike. And so it hasn't seemed to affect the stock market yet, but concerning nonetheless.

CHRIS SIPES CFP®: All right. This is from Bridgewater by way of the Idea Farm. Idea Farm is a free service that anybody can sign up to receive. It's like bullet point investment topics every week on Sunday. It happens to come right about coffee time. So it's a perfect little five minute read if you just kind of read the bullet points.

CHRIS SIPES CFP®: But if you want to dive deeper, it's got articles on all different kinds of topics. And this is from Bridgewater, the hedge fund Bridgewater. Coming out of the financial crisis, households held about half of their financial investments in equities. Today, it has risen to about 80%. The only time it's ever approached this level before was the height of the dot-com bubble.

CHRIS SIPES CFP®: For better or for worse, households' financial fates have become more and more tied to the S&P. And so that's on the left-hand side where they show the allocation to equities. And then on the right hand side, they show the fact that, hey, if you look at an 80-20 portfolio, this always cracks me up when people are like, well, it's okay, I got 20% in bonds or 25% in bonds or 10% in bonds.

CHRIS SIPES CFP®: It's like, look, that's great and all, but that's going to do literally nothing to help you because the correlation of a portfolio that's 80-20 is 0.99 with US equities. And so. That little sliver of bonds really is not going to do much in terms of dampening the portfolio volatility.

CHRIS SIPES CFP®: Now, if you look at the bonds and say, well, that's where I'm going to pull my immediate needs from, and maybe that 20% covers a couple years worth of living expenses for you. Okay, I can see that as a strategy. Say, maybe it takes a couple years for the market to work itself out, and I can use those bonds.

CHRIS SIPES CFP®: In the meantime, so not to sell my equities at an inopportune time. Okay, own it for that strategy. But if you're owning it to dampen the volatility in your equity portfolio, it's not going to do anything. It's going to be a fire hose, or it's going to be a garden hose on a house fire in that situation.

DANO WEIR: Chris, I'm going to do what I love to do. But the only thing I'm good at, which is ask really stupid questions. But some some what you're talking about here is over concentration in U. S. Stocks, a lot of times U. S. Tech stocks for people who can't conceptualize this.

DANO WEIR: I think a lot of people, the average person even just thinks of the market and some people think there's only 500 stocks total. So when you talk about being over allocated in the U. S. Stock market, I'm going to ask the question, well, if I wasn't in the U. S. Stock market, where else would I even be? What else is there?

CHRIS SIPES CFP®: Well, there's diversification within asset classes. So say you're a believer in equities over the long run or stocks. And so there's a whole nother world out there available on stocks.

CHRIS SIPES CFP®: This is from Bank Of America, I believe. No, sorry, Goldman Sachs by way of Mike Zaccardi. And so this shows that out of the global equities on the right-hand side, global equities, this middle pie chart shows if you were to take the global portfolio, if you were to buy assets based on their global value, how would your money be allocated?

CHRIS SIPES CFP®: Now, this is considered the quote-unquote efficient portfolio. If you follow the efficient market hypothesis in that. The market in general has accurate pricing for assets in the world. So if that's the case, then about half of your portfolio would be in equities. Of that equity breakdown, you can see about 64% of that current value is the US.

CHRIS SIPES CFP®: And so the other 56% or 46%, sorry. Would be 36%. I'm doing math on the fly here. 36% would be in global Markets. And that's where you can see the values of the other nations there. So you can diversify within stocks. So diversifying outside of the US, you can also diversify in other asset classes. So you've got bonds.

CHRIS SIPES CFP®: Within bonds, you've got US and global bonds. You've got both inflation protection bonds and what they call nominal bonds. Then you've got the world of commodities, including precious metals and other types of commodities, oil being one of them famously, and real estate. So there are other asset classes that you can be invested in.

CHRIS SIPES CFP®: However, the average American, if you just take the average American investor, has most of their money in two places. One would be the equity of their home and, and two, would be the, the U S stock market. And so for better or for worse, which lately it has been for the better, most people's wealth is tied up in the value of those two assets within the United States.

CHRIS SIPES CFP®: All right. So now, does that mean dump everything and go to cash or dump everything and go all in on international stocks or bonds or something else? Probably not. Because we've talked about before, and Darren made a great point last week about how, yeah, yeah, yeah, I hear what you're saying about valuations, but you can't time the market that way because one, people have been saying that for several years now.

CHRIS SIPES CFP®: And two, there's a lot of smart people that say we're not in a bubble, right? And, here you can see the, that side of the argument, which is that, if you look at the forward price to earnings ratios of blue chip stocks now, which is the light blue or gray there versus blue chip stocks back in the.com era, you can see that they're much more, appropriately priced, when you're rel when it's relative to those stocks at that time.

CHRIS SIPES CFP®: And, the financials of these companies are much, much better now than they were at that time. So that is definitely an argument.

CHRIS SIPES CFP®: So if that, if that side of the argument is correct, and AI does come through and it comes through just as quickly as the market is pricing it in. Then you will have been a fool to have sold everything and moved to cash. And so you don't want to make big rash decisions because the timing of these things can be difficult to say the least. The other thing is that returns in the S&P have tended to group in cycles.

CHRIS SIPES CFP®: And so you can see here. These are the number of trading days. The S&P 500 has stayed within 3% of the all-time highs. So what you should notice by this chart kind of right away is that it goes in cycles and that those cycles tend to group with one another. And so being invested at an all-time high isn't necessarily a bad thing.

CHRIS SIPES CFP®: In fact, most of the time, it's a good thing to be investing. When it's at an all-time high. Now, Investment implications we can read here says, while data shows that Markets have historically remained near record highs for extended periods during strong economic cycles, investors should remember conditions can change and past trends may not repeat.

CHRIS SIPES CFP®: So there's nobody that rings a bell and tells you, hey, conditions are changing. It changes really quickly. And it only makes sense in hindsight, like the gold, like the gold run this year. Like the run in foreign stocks this year. By the time you notice it, it's already happened. And so you got to be positioned for it ahead of time, which is not easy to do.

CHRIS SIPES CFP®: And last chart this week is just showing, you know, going along with those cycles, often people refer to the average of the S&P. You know? And what this illustrates is that there's really no such thing. Of course, there is an average.

CHRIS SIPES CFP®: However, most years do not feel average. Most years, you are either doing much, much better than that average or much worse. You can see that group of only a handful of years have we actually fallen within that 8% average.

CHRIS SIPES CFP®: Sorry, that light gray is showing And. When the annual average return follows between 5% and 10%, which is the quote-unquote average. So very rarely does it have kind of a benign year like that. It's usually much better or much worse, which is what's illustrated here in this chart.

DANO WEIR: I was promised 10%. I heard 10%, Chris. This is 10%, right? S&P 10%? That's the normal, right? It's 10%. So you got my 10% this year? That's what I was told.

CHRIS SIPES CFP®: That's right. That's right. And so because of those cycles and the nature of the S&P, like we just saw, usually goes through 15, 16, 17 year cycles. And within those cycles, the good years are really good.

CHRIS SIPES CFP®: And then it comes out of the cycles and then the bad years are typically really bad. That whole 10% thing only makes sense. Over a very long period of time. And it kind of skips a lot of the nuance that is, is important to, to understand.

DANO WEIR: Darren, do you dare show us the Bitcoin chart this week? Are you able to stomach that?

DAREN BLONSKI CFP®: You able to hang with that stomach, the Bitcoin chart? I thought we've talked about this before.

DANO WEIR: Yeah. You'd not affected. He's unaffected.

DAREN BLONSKI CFP®: I don't even know what you're talking about. The, yeah, I, I mean, we've talked about this a lot, but If you're into the Bitcoin world, then volatility is just an abstract of the mind.

DAREN BLONSKI CFP®: Well, let's look at the Bitcoin chart. So what do we got going on in the Bitcoin world? It doesn't actually look super good, but we're still two hours out from market close. It's almost three o'clock here on Pacific Coast time. We'll reset this candle here at five o'clock Pacific here. In a couple hours, we've got kind of an ugly double top in the form here.

DAREN BLONSKI CFP®: There's a top, there's a top, there's a neckline. When it closes below the neckline, that means there's weakness. But usually, unless some kind of buyer steps in in this moment. The fact that it traded down last week and then continued to print another red candle, I think we're probably to the downside at the moment. There is a fair amount of support in this area. Let's call it 100,000.

DAREN BLONSKI CFP®: You can see we took a nosedive down into that zone here earlier today. The close is always really important. The weekly close is more important than the daily close. The monthly close is more important than the weekly close. Let's look at where we're at for the month. We want to see this pick up this month. We lose this spot. Come down to $100,000, then I think we'll see some downside and a buying opportunity.

DAREN BLONSKI CFP®: That's not advice. That's just usually what happens when Markets sell off. Let's look at the number two crypto, ETH. Lots of discussion in the media today about ETH with Tom Lee and some of their portfolio managers talking about it. Not a good look, though. The fact that we closed, looks like we're going to close this week below these highs here.

DAREN BLONSKI CFP®: Flirting with this one i would want to see this close up above for the week around four thousand to close below four is not to the upside the risk is to the downside at that point so Probably more volatility coming through on that one. Let's take a look at the S&P 500. That is the largest 500 US-based stocks. You can see this big red candle that basically printed as we recorded last week.

DAREN BLONSKI CFP®: We got blown out. You can see it on the daily chart. It was not a bad week and then fell out of bed on Friday. Found support. And we've just kind of stayed inside this week, this candle. Not a particularly strong, not a particularly weak look at things, but not a lot of people willing to step in and say, yeah, let me have some of that risk. Load me up.

DAREN BLONSKI CFP®: That is not looking like it's on the cards. But the fact that we're holding above this support level of 652 and change, or 650, I'd say that's fairly positive. So a whole lot of nothing burger this week in the S&P 500. For those who don't know what the S&P 500 is, never heard of it, this is the S&P 500. So you can see it from a visual standpoint. It's called a heat map and how it did this week.

DAREN BLONSKI CFP®: We can take a look and you can see this week it was pretty neutral for our big Microsoft and NVIDIA. There's been a lot of green on the screen other than that. In fact, these are so neutral, though, they're such a big part of the S&P 500. We really want to see those big stocks participate in order to get an updraft in the overall stock market.

DAREN BLONSKI CFP®: I always like to look at all the facts that came out from the government this week. And guess what? There isn't much. Why? Because the government is still shut down. So we're not getting a lot of data coming out. You know, the conspiracy side of my brain says, well, that's kind of convenient. We can't see how bad the economy actually is because none of it's actually coming out.

DAREN BLONSKI CFP®: But you can see that we did get the Philly Fed Manufacturing Index, which didn't look particularly nice or rosy. Other than that, we don't really have much data coming out from the fundamentals, so we are left for price action in trying to get the market to interpret what's going on. Watching oil closely, U. S.

DAREN BLONSKI CFP®: Oil, crude oil, WTI, flirting with these lows here that we saw back in early part of the year. We're back in that zone with the peace in the Middle East looking like it's holding at least for the moment. Seems there might be some calming in the Russian Ukraine or at least President Trump meeting with.

DAREN BLONSKI CFP®: The Ukrainian president today i did see an interesting tone shift from the Ukrainian president he came out earlier today and said hey you know we just need to all stop fighting where we're at whereas it used to be give us all our land back so that's a little bit of a shift in how he was talking that could be good for oil could be good for overall world peace But with that in mind and the expected slowing down economically and you've got governments getting along, at least on the surface, not bombing each other, well, that looks not as good for oil because it doesn't constrict supply.

DAREN BLONSKI CFP®: So you would think that would be good for peace in the Middle East, but it isn't really in some ways because then we can pump more oil out of the ground if everybody's getting along. In addition to that, the military-industrial complex, what...

DAREN BLONSKI CFP®: Whatever you want to call it, is something that creates a lot of demand for economics, a lot of demand for oil. And if that's slowing down a little bit, well, we're not burning as much oil. That coupled with a slowing economy, which I think is what the data would show if it were coming out. I was just looking at one report that came out of Harvard.

DAREN BLONSKI CFP®: Who knows if the data is correct, but everyone's looking at these extraterrestrial data sources now because the government's not giving us their completely joker data but anyway the the Harvard came out and said that if it hadn't been for the building all these data centers for AI that basically the economy would be flat and i think that feels right like i don't feel like in the way you go out there in the economy and things are moving along but you don't have this sense of things just bustling crazily, but you certainly get that when you talk to people who are in the AI world, in the technology related to AI, in the electricity related to AI, you feel that.

DAREN BLONSKI CFP®: I think that anecdotally feels correct.

DAREN BLONSKI CFP®: When we look at NVIDIA, why NVIDIA? Why do we care so much? Because they're such a big part of the S&P. That's why we care so much. And you can see that it had kind of a red week overall.

DAREN BLONSKI CFP®: And we're sort of just trading sideways. We broke out here above 183. Couldn't really hold it, and now we've come back in, and it looks like we got rejected, right? Underneath that 183, which was an all-time high back here, which was resistance. We broke above, didn't happen for it. And the fact that it closed below resistance again, I'm leaning towards the downside.

DAREN BLONSKI CFP®: Where would I see it going? I could see some support right here at that 173 line. I think that's a pretty strong area. So we're kind of bouncing along this area, and then we broke out. Oops, nope, just kidding. Not going to do that right yet. We are going into the end of the year.

DAREN BLONSKI CFP®: Markets tend to ramp into the end of the year. Although in Trump's first term, the market did not ramp in the end of the year. So we'll see how it plays. Chris talked about gold. I don't think he's going to be doing anything with gold going up like this. A red week on the screen for gold and kind of got this shooting star looking type of...

CHRIS SIPES CFP®: Candlestick i just don't think it's a good thing to see gold do this no i agree tom mcclellan of mcclellan oscillator fame said something to the to the effect of equity Markets top with like a rounding pattern and gold tends to pressure metals tend to top with like a spike pattern so i don't know if you wrote that like just today but that's a little concerning yes it's usually not a good sign when you have governments like diving and tripping over themselves to to get gold it seems like it's the financial equivalent of stockpiling ammo If I was stockpiling ammo, water, and white bread, would I really be in a really positive state of mind?

DANO WEIR: Likely not.

DAREN BLONSKI CFP®: Well, especially when you got a dollar that looks like this. This is DXY, which is comparing the dollar to the other major currencies. And when you got the dollar, that's updated to see what we're down this year. But the value of the dollar right now compared to other currencies is down over 10%.

DAREN BLONSKI CFP®: So, you know, gold going up. Value of the dollar going down, that's not the great look we're looking for here, for a bustling, robust economy in economic set of circumstances. So it's hard to say. This whole move with AI has been so persistent and gone on a heck of a lot longer than I thought it would have.

DAREN BLONSKI CFP®: Remain fairly positive for the outlook for the end of the year just because seasonality even though the seasonality didn't play out in September you know tends to ramp in the end of the year and that's higher probabilities of that anyway but not we're not seeing that strength you're really gonna have to see NVIDIA Microsoft Apple just crush it and they're all kind of trading sort of sideways at the moment also if you look at the vix and.

CHRIS SIPES CFP®: And the spike that we saw on the VIX. It's since calmed down, thankfully. But wow, we got a big ramp up in the VIX. There was a big initial change in the spreads between high yield debt and treasuries. So that is usually a sign of stress in the Markets as well, along with gold going up. And they all calmed down very quickly.

CHRIS SIPES CFP®: I don't know. There was news this week of the regional banks with the issues with the loans for a few of the regional banks. That's on top of news from the auto lenders just a couple of weeks ago, the subprime auto lenders, where they basically over collateralized the loans.

CHRIS SIPES CFP®: And so there was no collateral there for a lot of the loans. And so those were bad as well. And so... We keep getting these like little initial spikes of like, oh, maybe this is like the thing that's been lurking under the surface. And then it seems to quickly disappear.

CHRIS SIPES CFP®: But, you know, it's got to be some explanation for the VIX spiking, the gold market, bonds, catching a bid, all these like flight to safety type of assets under the surface. But the equity market just keeps going up. So it's really... It's a conundrum.

DAREN BLONSKI CFP®: Yeah.

DAREN BLONSKI CFP®: So, yeah, overall, I don't think it was a very eventful week, kind of a boring week for the Markets. And we're trading sideways at this moment. Keep an eye on NVIDIA, Microsoft, Apple to see if they drive this market higher. They're such big portions of the market that they remain the kings when we look at...

DAREN BLONSKI CFP®: Interest rates just to take a look real quick at the 10-year and you can see the 10-year trading below this long-term trend line and the fact that it came in here found resistance so just for everyone's clear this green line this diagonal that's been drawn in for weeks on my charts if you go back to our videos i did not just draw this thing in and it's magical how it goes and trades up into that and gets rejected so that's a rejection of that long-term support for the 10-year.

DAREN BLONSKI CFP®: I think...

DAREN BLONSKI CFP®: Risk is to the downside on the 10-year, which is good for homebuyers. It's good for people that are looking to take out money. It's looking to me like we're going to see some more downdraft in the 10-year, which will help mortgage prices, etc., in theory.

DAREN BLONSKI CFP®: You never know how it carries through the market completely, but it should help. I think we're going to leave it there for the week. I hope everyone has a wonderful weekend. And like always, we'll be back next week.

DANO WEIR: So just so we can wrap up our, our vibe check, I'm going to say that one more time to piss Darren off.

DAREN BLONSKI CFP®: It just makes you sound silly to you.

DANO WEIR: Cringe, cringe. I enjoy, I enjoy being cringe. I think the reason why we wanted to do this and take a look is because there's been so many times this year, aside from the tariff incident, in April, but there's been so many times this year where there have been things where it could be the narrative for, you know, a slowdown or, and, or, you know, a deep dive.

DANO WEIR: And in fact, we've just seen this honey badger resilient market where it's just like, whatever, up and up and up and up and up and up and up. And we're checking in this week and we've got the government shutdown rolling on and it not, not necessarily the major downturn this week, but not, not kind of, kind of going sideways.

DANO WEIR: I mean, not, not a great week either. And, you know, kind of a fear asset, like gold still seeing. Pretty, pretty big spike, even though it was down this week. So, you know, it seems like it's like cautiously unoptimistic if I had to put a number on it, Chris.

CHRIS SIPES CFP®: Yeah, I think that's well, that's well said.

CHRIS SIPES CFP®: Equity market continues to chug ahead, but under the surface, there's all these signs of anxiety and paranoia that spike up every now and then.

CHRIS SIPES CFP®: And it feels like the narrative changes for for one day and people get a panic like we saw last Friday it's it's like everybody's partying in the in the theater and there's like a little door for the exit right and everybody's kind of eyeing that exit and every time something little happens everybody starts rushing for the door and they're like oh it's it's fine it's actually fine we'll be we'll just we'll stay here we we will see as we will always every week every week we're always looking forward to next week.

DANO WEIR: Thank you so much for checking out our show we are On The Markets from formata advisors our family of brands Sonoma Wealth formata tax formata 401k if you are looking for private wealth services if you're one of our clients thank you so much for checking us out if you are a prospective client looking to learn more Sonoma Wealth.com is where you can get started and wherever you found this show whether it's YouTube or maybe Apple podcast we're also on Spotify subscribe follow us That's the best way to make sure you don't miss future episodes.

DANO WEIR: And we really appreciate you listening all the way to the end.

CHRIS SIPES CFP®: We will see you next week here on Fermata On The Markets.

CHRIS SIPES CFP®: Take our free wealth analysis now at SonomaWealth. Com. Fermata 401k, business retirement solutions for small and large companies with a fiduciary commitment. Learn more at Fermata401K. Com. Fermata Tax, personalized tax services for yourself, your family, or your business with an emphasis on efficiency.

CHRIS SIPES CFP®: Find out how at FermataTax. Com. If you haven't already, Like and subscribe to Fermata On The Markets on YouTube, Spotify, and Apple Podcasts. Fermata On The Markets features human hosts, editors, and voiceover talent. Music by Dr.

CHRIS SIPES CFP®: Delight on Soundstripe, voiceover by Joan Alloway Nash. Thank you for listening to the very end. We appreciate diligent viewers and listeners. Fermata Advisors, LLC is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempt from registration requirements.

CHRIS SIPES CFP®: This content was produced by Fermata Advisors, LLC, DBA Sonoma Wealth Advisors, DBA Fermata 401K, DBA Fermata Tax. The opinions expressed by Fermata Advisors, LLC on this show are their own. Information presented on this program.

CHRIS SIPES CFP®: Is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information.

CHRIS SIPES CFP®: A professional advisor should be consulted before implementing any of the options presented. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

CHRIS SIPES CFP®: Investments involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual.

CHRIS SIPES CFP®: Viewers and listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.