Run It Hot

DANO WEIR: Happy Friday. Welcome to On The Markets on Friday, October 24th, 2025. My name is Daniel Weir. I'm the marketing director for Sonoma Wealth and the Fermata Advisors family of brands. And even though we're making our way towards winter, if we're looking at the economy and the market, it is running hot.

DANO WEIR: So this week we are looking at CPI, Consumer Price Index, still burning at 3%. Percent stocks The S&P just hit an all-time high, closing at an all-time high today. Valuations on companies with no profits are through the roof. Do fundamentals even matter? We're going to get into all of it in the show this week. Let's get rolling.

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DANO WEIR: They are your managing principals of Sonoma Wealth Advisors and Fermata Advisors family of brands. Daren Blonski CFP, Chris Sipes CFP. Chris, we're running hot and I put a car engine in there for you because you're a car guy. That's, there's a lot, there's a lot about the market and the economy. It feels like the bottom's falling out, but when it comes to the S and P all time highs today.

CHRIS SIPES CFP®: That's right. Yes.

CHRIS SIPES CFP®: That, that under the hood looks exactly like my car. When I dropped the kid, that's how she looks.

DANO WEIR: Well, let's speaking of the bottom falling out, let's start with the meme. Well, it's not actually a meme. This precedes memes. This is the old school memes. It's a political cartoon.

CHRIS SIPES CFP®: This is, well, this is a financial political cartoon. The best cartoons, if you ask me.

DAREN BLONSKI CFP®: Financial cartoons. Like, that sounds like an oxymoron.

CHRIS SIPES CFP®: You know, Hedgeye seems to always have the best cartoons. This is obviously a guy standing over a huge hole with his... Son it says someday son all of this will be yours and the whole is labeled debt of course maybe these things matter in the long run but just like we were talking about before the show it doesn't matter in the short run there's no logic to it.

DANO WEIR: Nothing's stopping the train in the short run for sure Daren and i just did an episode and it's forthcoming we've been talking about it now for two weeks but we sat down with a local gold dealer, from Napa. And, I just edited that episode this week and it's all about how I, you know, we'll take a diversified approach.

DANO WEIR: And this guy's view and Daren's having a little physical metal is not the, not necessarily a bad idea. By the time I was done with the episode, I was thinking about the debt and I was just like, yeah, maybe I need to get a bar or two. So, it's interesting times to say the least.

CHRIS SIPES CFP®: Yeah, absolutely. Well, interesting times illogical times you know what was the unprecedented that was the word of i think it was 2022 or 21 and here we got a tweet from derrick thompson where he says deciphering the latest candidate for scariest chart in the world and he says for the last 10 years in the last several decades the stock market and job openings rose and fell in tandem Since 2022, that link snapped.

CHRIS SIPES CFP®: Stocks are up 75% and job listings are down 33%. And for those that follow markets, for those that listen to the show, you'll know that 2022, we did see a big sell-off in the stock market, the bond market, the real estate market, pretty much all the markets.

CHRIS SIPES CFP®: And that's also when most of the economic data deteriorated to the point where pretty much everybody thought we were heading for a recession. Then about this time of the year in 2022, the whole AI narrative got started and the market had just taken off since then, while jobs have continued to go down.

CHRIS SIPES CFP®: And so again, when you're looking at things in the market, especially in the short term, we can't stress this enough, you can't use logic because logic will get you burned. And I feel like that's, that applies to both the upside and the downside. And you know, just when you think that, you know, what's going to happen in the future, even if you, even if you do know what's going to happen in the future, the, the.

CHRIS SIPES CFP®: Response of the market is unknown. And that's why you've got to stay invested. You've got to stay diversified. You've got to stay allocated to a portfolio that you can stick with through good times and bad because the market oftentimes defies logic.

DANO WEIR: Yeah, I saw this tweet this week, Chris, and I just thought, because we've been trying, we've been dancing around different ways to explain this dynamic right now. And one way to explain it is someone who's got a lot of money and has a big portfolio is probably pretty happy, especially if they, you know, bought NVIDIA 10 years ago.

DANO WEIR: And yet, how many people do you know that are looking for work? How many companies do you see that are laying off? How many, you know, auto delinquencies are up? You've got all this stuff that's just like, man, this is like bad over here and good over there.

DANO WEIR: And this now this is just job listings, right? So this is one metric. So take it everything with a grain of salt. But that's just, it just nailed it for me. It was just like, yep, you know, the market's taken off and the number of jobs or the people who are listing for jobs are down, which is really interesting.

CHRIS SIPES CFP®: That's right. In times like this, sometimes it's, it's smart wise to zoom out a little bit and look at things over the longer term and, you know, get a perspective from people that have been in the markets longer. And try to gain some wisdom from them.

CHRIS SIPES CFP®: And so Walter Deamer is one of those people and he's retired now. So he really doesn't have, you know, he's not trying to sell anything, you know, which makes his advice worth more, I think to me, but he's citing Bob Farrell here from 2008. Bob Farrell was a strategist with, with, I think it was Morgan Stanley.

CHRIS SIPES CFP®: I could be wrong on that. But he was a strategist for like 50 years, and he had this famous like 10 rules of the market and all these things. But he said this in 2008. This is June of 2008. So this is before the market fell apart in 2008.

CHRIS SIPES CFP®: And he said, when any sector becomes overly dominant and waiting as a percent of the S&P 500, there is ultimately a fall from the pedestal of popularity of major magnitude. What we do not know is how far and for how long a sector's weighting will rise.

CHRIS SIPES CFP®: Examples include the energy sector weighting in 1980 of 30% of the S&P 500, which fell 50% in three years and reached 5% early this decade, and the technology sector weighting in 2000 of 35% of the S&P 500, which is now down to 13%. Percent.

CHRIS SIPES CFP®: From this perspective, the financial sector all-time peak in 2007 of 22%, which is currently down to 14%, still likely has a long way to go in time and in terms of equity valuation contraction. And boy, with hindsight, with the benefit of hindsight, was he right about financials famously in the great financial crisis leading the way all the way down in the market.

CHRIS SIPES CFP®: And he cites here the energy market from the 80s going from 30% down to only 5% in the early 2000s. Well, during COVID, it got down to, I think, 3% of the entire weight of the S&P 500.

DANO WEIR: So- Exxon got kicked off the index.

CHRIS SIPES CFP®: Yes.

DANO WEIR: It was like the most valuable company.

CHRIS SIPES CFP®: Yes. Previously, it was one of the, I think it was the most valuable company in the S&P 500 at one point, and then it got kicked out. You're right. And that's when they replaced it with Tesla. And so these things have cycles. We can't know when, right?

CHRIS SIPES CFP®: And when you're in the midst of the cycles, it's possible to tell where you're at. But I think it's really instructive to kind of take some wisdom from some of these past cycles and maybe temper your expectations just a bit.

CHRIS SIPES CFP®: Good news, though, when you look at the largest five stocks in the S&P 500, I guess this is good news.

CHRIS SIPES CFP®: They traded a valuation of 29 times price to earnings, which is below the tech bubble and it's below the 2021 levels. So I guess if you're looking at it relative to those top five, there's a little bit of good news comparatively. Now notice that the other 495 stocks, this was a news to me that those other 495 stocks really didn't get all that expensive.

CHRIS SIPES CFP®: In 2000, in 2021. It really was just led by a handful at the top. And so that's kind of an interesting marker of, I guess, bubble-like markets is that it's usually very concentrated, at least it has been in these previous couple that we've lived through.

CHRIS SIPES CFP®: Retail's back. And when I say retail, I'm talking about retail traders. And, that is, I think what they're referring to is, you know, the average person and playing, playing options. We all know that the one day till expiration options have hit an all time high in the market.

CHRIS SIPES CFP®: You know, just in general, it feels like our society is very cool with gambling at the moment, gambling on everything. When you look from, you know, Cal she, you can basically bet money on, on literally just about anything. Sports gambling is ubiquitous and easy, and now people can gamble in the stock market, and they're doing so.

CHRIS SIPES CFP®: The 2025 cumulative year-to-date retail buy imbalance has blown past prior years. So still a lot of money out there, still a lot of money that is maybe entertainment money, less so than long-term investment money in the markets. And that works.

DANO WEIR: Yeah, I saw this week, speaking of that platform you mentioned, it was a Bro ad and it's like, hey, Bro. Yeah, Bro. Hey, Bro. I'm betting on the weather, Bro. What, Bro? Yeah, Bro. I'm betting on the weather. I think it's going to be 75 in Phoenix tomorrow. Bro, what's the high though? Oh, it's really easy. And you can literally on this app bet on the weather. And I was just like, man, like, what are we doing?

CHRIS SIPES CFP®: Yeah i i thought when you said that damn that it was a joke and no unfortunately not yeah yeah maybe you could remove our glorious logo there in the corner so we can see the headline yeah yeah yeah just for the ever sure Bro so this is from michael arrow it and he says well this charts from schroeder and on this read the headline a divided u. s market tech companies with no revenues or profits are flying as are the mag seven.

CHRIS SIPES CFP®: The rest are left in the shade. Now, of course, the mag seven are real companies with real profits, probably the best companies, you know, created by man so far in history, right? So that, that is not a thing. However, those, those are also highly priced, but when you look at companies that have no revenue, so that means they, they are not bringing in any money. Let alone having any profits.

CHRIS SIPES CFP®: They're doing the best this year. So, you know, again, I don't know how you call that much other than gambling.

CHRIS SIPES CFP®: You know, it is an expectation of a future return, I suppose. But, you know, things like this happen in times of plenty. And in times when the, when the Fed is easy, when liquidity is easy, when times are good, and they're, they're usually the first ones to go when, when that changes around.

CHRIS SIPES CFP®: So I would just encourage caution, and, and knowing what environment you're in this, I think there's many, many markers that we're in a very high risk taking environment at the moment.

CHRIS SIPES CFP®: So, you know, investors beware.

CHRIS SIPES CFP®: That's a.

DANO WEIR: And, and Chris or Darren, I think there's, yeah, no, I, I want to try to hammer, hammer home this concept because I think that there's a, a, a confluence and a confusion between the average investor between revenues and performance. And so if we were to try to define it, you know, the revenues are take, choose any company. And let's say Ford, Ford trucks, Ford Motor Company.

DANO WEIR: They are a company. They're selling trucks and they're making money. And that's their profits. And they report those profits. And then you as an investor would see the size of said profits and think, wow, that's a good company. I want to put my money in them. And then separate from the profits. The stock is going to do what it's going to do.

DANO WEIR: Theoretically, the more revenues, the stock is going to do better. Theoretically, right? But what this chart is showing is that imagine a car company that's going to be making great cars. Bro, it's going to be great, Bro. But they haven't actually made a dime, but the performance is going up. And so that's all you care about. Darren, yes?

DAREN BLONSKI CFP®: I think what we should have is a little ticker on the screen. Every time you say Bro, we should have one Bro. Yeah, Bro.

DANO WEIR: That's the only way I can describe this environment. It is like that type of thing. It's not a logical thinking.

DAREN BLONSKI CFP®: I think that's the point we started with Chris in saying that like, What's so interesting about these environments and what's so interesting about investing in general is that when we try to be logical when it comes to things like manias, because I think in some ways this is like the stock market's definitely in a mania environment or at least an AI mania.

DAREN BLONSKI CFP®: And I think eventually the tables turn, but who knows when it could go on much longer than anyone expects.

DAREN BLONSKI CFP®: It is. Yeah, I guess you could say it's like. I'm just imagining like two middle school teenager boys with their Robin Hood account saying, yo, Bro, I invested in this stock and this stock. And I was listening to this podcast on my run today where they were talking about the gamification of the stock market and how that's ruined the stock market because it's really gamified it, right?

DAREN BLONSKI CFP®: And I think that's part of what's driving this current move up for sure.

CHRIS SIPES CFP®: I told Darren I went to get my haircut and the talk in the barbershop. And I was just sitting there like, oh, man, I hope nobody knows what I do for a living. I hope nobody knows what I do for a living.

CHRIS SIPES CFP®: Because they were just talking stocks and not like, hey, did you see the earnings on Walmart this week?

DANO WEIR: What were they saying? What were they saying?

CHRIS SIPES CFP®: It was all meme stocks. It was... I'm not going to mention any tickers or anything, but the big guys come in and they crash it down right before they take it really high. So I bought some at $0.06. I'm expecting it to go up to $10 or whatever.

CHRIS SIPES CFP®: So no talk about the business model. No talk about the earnings. To Darren's point, right now, it's all in the gamification of the markets for a large part of the market.

CHRIS SIPES CFP®: Driving a lot of it too is the options activity because not only are people playing the direct, I buy the stock, but they're buying the options, which the options drives notional values on stocks that can make a bigger impact than what, say, just buying 10 or 15 shares of a company might do. I totally agree with you, Darren. I think the market is completely distorted right now.

CHRIS SIPES CFP®: Who knows how long this lasts, but it is what it is.

DAREN BLONSKI CFP®: Here's the thing with that. Chris, when you say it's totally distorted, you can't also at the same time not afford to participate. And that's, I think, one of the most challenging things about this environment. It's like buying with your nose, holding your nose, because if you don't participate, you're going to miss so much potential upside.

DAREN BLONSKI CFP®: I do think it is, though, interesting the last three, four months, how we've seen Bonds really do really well, which I'll cover in my section today. We've seen gold do really well. We've seen precious metals do really well. So these risk-off assets really kicking in, which tells me maybe we're getting later cycle in that.

CHRIS SIPES CFP®: Chris, I want to say it was maybe JP Morgan way back in the day. I forget who said this, but they said something to the effect. Of bear markets return stocks to their rightful owners. And famously, the head of Citibank back before the great financial crisis, he's famous, I think his name is Chuck Prince, he's famous for saying right before the crash that, hey, while the music's playing, you got to dance.

CHRIS SIPES CFP®: You got to dance while the music is playing. And then Citibank went almost belly up if the government hadn't bailed them out. So yes, I agree, you got to dance. But I think you want to be doing the slow dances.

CHRIS SIPES CFP®: I definitely don't think you should be jumping into the options trading, gambling. I agree, you want to stick with your long-term plan. But I think what you're saying is, hey, it's not as fun, it's not as exciting. You're not getting rich overnight like some of these people and or getting poor overnight.

DANO WEIR: Chris, maybe, Darren said Bonds are up, so maybe next haircut. They're going to be asking you about your bond picks, you know, maybe.

DANO WEIR: Your true dream.

CHRIS SIPES CFP®: Yeah. Well, I don't know if you could get a decent style on a haircut, Dan. Anywhere, they're going to be asking you about your bond.

CHRIS SIPES CFP®: Your barber's asking about your bond portfolio. It's probably a bad sign.

CHRIS SIPES CFP®: Okay. We've got the sentiment indicators this week. A, I, I. Were were Kind of normal-ish, nothing crazy.

CHRIS SIPES CFP®: CNN fear agreed is at 28, which is actually fear positioning. It's up slightly from 23. Extreme greed a week ago, Bitcoin at 27. Fear last week was 28 fear.

CHRIS SIPES CFP®: So that's also kind of interesting is that some of these sentiment indicators are not really showing people going crazy, even though the markets. Hitting all time highs, like the sentiment, at least the readings here are not, are not showing, you know, kind of that underlying mania.

CHRIS SIPES CFP®: So that's interesting, but, but I do just anecdotally see a lot of people that are at or near retirement with a lot of their money in, in, you know, one asset class, which is us stocks. And they might be diversified with us tech stocks.

CHRIS SIPES CFP®: So anyway, okay, we've got this slide 10 here. I'm not sure why it's cut off, but this is CPI. We got the CPI number, this week at 3% and that's a year over year number. So inflation is staying stubbornly high. And you can see this is over the last 10 years. So you can see the COVID spike. We had the, we had the inflation come down from there, but we've really just been kind of treading water in the inflation area since then.

CHRIS SIPES CFP®: Meanwhile, we've got the Fed expected to cut. We've got the Fed expected to stop quantitative tightening in the bond market, which should drive interest rates lower. So that's why we chose run it hot, because it looks like the administration for sure, and probably their future heads of the Federal Reserve, I think the market is saying pretty much the administration is going to capture the Federal Reserve.

CHRIS SIPES CFP®: Which is going to drive even more alcohol into the fruit punch at the party. They're going to run it hot. They're okay with inflation being a little bit high. They're going for higher growth. They probably feel it's the only way out of this debt cycle that we have is to try to grow our way out of it slash inflate our way out of it.

CHRIS SIPES CFP®: And so that's likely what they're going to try to do. Austerity is not going to go over well. And of course, an outright default would not go over well. So the only other choice is to inflate the debt away over time and try to outgrow it as well.

CHRIS SIPES CFP®: So this was from last week, but just to pound that home on where we're at from a federal debt level, this is from Peter Malouk at Creative Planning showing that for the first time in US history, the interest payments on our debt have exceeded. The defense spending budget.

CHRIS SIPES CFP®: And, you know, not to be Debbie Downer, but previously and other and other world powers, in history, when they've reached this financial point, it's not been a good, a good side for them. Let's just put it that way. So maybe America will be different, hopefully. But typically that is a cause of many, many problems.

CHRIS SIPES CFP®: It eliminates a lot of options. It's, you know, the famous saying that the, the the borrower is slave to the lender, right? And I believe personally, I believe that applies at the personal level and at the government level. And so too much debt always leads to issues.

CHRIS SIPES CFP®: And we have too much debt, that is for sure.

CHRIS SIPES CFP®: And that's probably one of the major things driving the parabolic move we've seen in gold this year. We did see that big pullback this week, and that's probably just because gold got way ahead of itself. It was kind of like, you know, no surprise that after the run it had that we had that big pullback this week.

CHRIS SIPES CFP®: But global central banks will soon hold more gold than U. S. Dollars. I mean, I think this is just this is mind blowing for somebody in the financial markets. This is this is huge news.

CHRIS SIPES CFP®: And I would not be surprised to start seeing more capital controls, yield curve controls, maybe even possibly, you know, previously during the Great Depression, the U. S. Government seized gold and pegged it. So they've done it before. I don't see why they couldn't do it again. You know, we only find out about these rules after they break them.

DAREN BLONSKI CFP®: Right so there's no rule that says they can't do it again at least that i know of and if there is they probably will just change that rule as my expectation this re-emphasize that because i think that's so important and this will build on kind of some of the stuff i'm going to talk about in a minute but i think so often when it comes to the financial markets to the future the only way we understand the future is from our realities of what we've experienced in life and what our current experience is and there's this temptation to project that things will change or go this direction or that direction will stay status quo whatnot based upon because all we know is the current settled rules and the point being that like if things break they just change the rules they just change what they're doing they just change the reserve currency or take all the debt and unload it in the crypto market like There's ways to change the factors driving the current bubble.

DAREN BLONSKI CFP®: So I think if you bet against the current bubble, oh, it's going to blow up and everything's going to go bad. No, they'll just change the rules. So, and that's what I always tell clients is like, at the end of the day, the only thing that you need to take with absolutely, if you wake up and say to yourself, I don't think the rich want to get richer anymore, then you should be really scared about them.

DAREN BLONSKI CFP®: Markets. But if you can wake up in the morning and say emphatically, the rich want to get rich today, you should not be scared of the markets because the markets will continue to support the rules that the rich create.

DAREN BLONSKI CFP®: It means what we always say about the tax code, right? If you understand the tax code, there's lots of nuance to it. And there's the tax code for the informed and then tax code for the not informed. Same idea with the markets, the economy, and they'll just change the game when things fall off the ledge.

DANO WEIR: Darren, I think that's an important point to make. Oh, sorry, Chris.

CHRIS SIPES CFP®: Go ahead. Go ahead.

DANO WEIR: I think it's an important point to make because it's actually something I've been thinking about over the last year a lot, as I've been seeing, just as one example, you know, AI, all of these video creating platforms are massively breaking copyright, like massively breaking, like beyond, beyond breaking copyright.

DANO WEIR: It got me thinking that's the same thing that happened with YouTube. And that's the same thing that happened with Napster. If you remember Napster, right?

DAREN BLONSKI CFP®: Oh, yeah.

DANO WEIR: And what it got me thinking was, is that, you know, if you're a successful, a generally successful person, you did so by maybe being a good student, by not getting arrested, by following all these rules. And that gets you to a certain level of success. And so you sort of presume that like all of the other successful people do that.

DANO WEIR: But when you get into the massively successful and the major, major powers, it's actually the exact opposite. And they make the rules exactly how they want. So you as, you know, Joe Blow investor, as Jane retiree, I'm not saying change how you operate, but I'm saying factor that into your thinking.

DANO WEIR: Because, you know, when you think, oh, well, this will never change and this will never change and this will never change. Well, you know, whoop-dee-doo. Gambling's legal now. They just decided. And they made up a new set of real rules why it's fine. So, you know, they will do whatever they want to do. And you just, you know, need to be prepared for that, I think, mentally.

CHRIS SIPES CFP®: Absolutely. And before I say this, I want to say, I don't personally believe that the government will back the S&P 500. At least I don't fully believe it. I wouldn't be surprised if they did. But I think that you know, it's a very dangerous idea to assume that the Fed and the regulators are going to, you know, come in with the quote unquote Fed put, and therefore you can take as much risk as you want.

CHRIS SIPES CFP®: I mean, that's the moral hazard that they created during COVID, especially when they did that is it signaled to investors like, look, or the great financial crisis too, like the profits are going to be private. But the, when things blow up, it's going to be a public problem.

CHRIS SIPES CFP®: And, And so shout out to Brandon Ducharme, who's got the Paul Oaks podcast. I was at a conference with him recently, and he has this idea that essentially the S&P 500 is like America's pension system. When he said that, I was like, duh, that makes so much sense. That is literally how a lot of people look at the S&P 500 these days.

CHRIS SIPES CFP®: So to your point, Darren, the rules that are in place now may not be the rules that are in place later. But like I said, I don't want people to take me saying that as, oh, don't worry, just put all your money in there because there's no risk. The government's going to save it. But I'm just saying I feel like people are looking at the stock market as America's pension at this point.

CHRIS SIPES CFP®: Okay, gold. This is a cool chart going back to the 50s showing gold's share of global investable assets. Also, Bonds. You can tell that back in the 40s and 50s, Bonds were actually the largest part of most people's portfolios. Stocks were not really a thing. Stocks became a big part of people's portfolios during the 60s. Towards the end of the 60s, the market got really highly valued. We had the nifty 50.

CHRIS SIPES CFP®: Etc and then and then that cooled off during the 70s when gold really went on a huge run during the inflationary period of the 70s there's a lot of reasons for that but one of which was the well it was the legalization of actually owning gold which i learned in the last couple of weeks so you actually couldn't own gold between like i think it was 20 like 1930 and 19 just gerald Ford eventually made it illegal again to have gold yeah it was they they seized it during the Great Depression and that's because they wanted to peg peg it so that they could manipulate the the value of the u. s dollar and when they when they did the breton woods agreement in 71 then you see gold take off but i guess showing this to just show that even though gold has had this huge run and it's the second largest reserve currency to the US dollar globally now.

CHRIS SIPES CFP®: As a historical global asset, it's still pretty low compared to where it was in the 70s. So there could be more to run there. Who knows?

DAREN BLONSKI CFP®: Interesting side note on gold and oil. I was listening to a stat earlier that in the 70s, you could buy For one ounce of gold, you could buy like, I don't know, it was a barrel of oil. And today, at the current gold price, you could buy 77 barrels of oil with one ounce of gold.

DAREN BLONSKI CFP®: And so there were some traders I was listening to earlier were talking about like, man, this market is so, so overbought. Like this, it's such a, the way gold's moved up, it's just extreme.

DAREN BLONSKI CFP®: Whether or not that's true or not, if we're going to de-dollarize the world and we have a reserve currency change, I don't know. But it is interesting you think about if you have a gold to oil ratio, how extended that is right now. Gold being way more. Yeah.

CHRIS SIPES CFP®: You should listen to, if you haven't already, Daniel Yergin on the Oddbods podcast. Daniel Yergin is a energy expert.

CHRIS SIPES CFP®: He wrote the... Book called The Prize. I think the other one's called Twilight in the Desert. It's huge, huge tomes on the energy market for those that are interested. It took me forever to get through it. But anyway, the point of why I'm telling you that is according to Daniel Yergin, China is stockpiling oil right now, which...

CHRIS SIPES CFP®: That chart that was floating around this week. We didn't include it because I can't exactly verify it. But it shows like this parabolic move in the gold holdings in China. And so if that's the case, if China is stockpiling gold and they're stockpiling oil and et cetera, et cetera, et cetera, that's probably not a great sign, you know?

CHRIS SIPES CFP®: But those two things, there's, there's price. Sensitive buyers in the market right now of course the u. s talking about refilling the strategic petroleum reserve now that the the prices of oil at least are lower But it looks like China could be buying gold even at these extended levels, price-sensitive buyers in the markets for sure.

DANO WEIR: Chris, are you telling me you don't necessarily trust some data coming out of China? I cannot believe that.

CHRIS SIPES CFP®: This chart, I do. Yeah, I don't know. I don't know that that was actually directly out of China. Never.

DANO WEIR: Never.

CHRIS SIPES CFP®: It's hard to tell what's real and what's fake these days.

CHRIS SIPES CFP®: Okay, what is real? At least I think, is that the 30-year mortgage rate has started to come down. So this is from September 17th when the Fed cut interest rates by a quarter percent. We were talking about the fact that interest rates had actually moved up and moved up and moved up.

CHRIS SIPES CFP®: Well, they have made their way back down and now to the point where they're actually lower than they were when the Fed cut rates. And so maybe starting to see a little bit of relief. There in those markets. Now, interest rates are just the price of money. And like we talked about earlier, the lower the price, the more the supply is online.

CHRIS SIPES CFP®: And so it looks like the run it hot thesis, at least for right now, is where we're falling in that quadrant. If you remember back to the different monetary environments that we go through. We're in the second quadrant, which is an inflationary boom, is where I would guess we're at today.

DANO WEIR: Because theoretically, if rates are dropping down, one, you're going to have more real estate start to change hands. So there's money, more cash. And then two, people might start unlocking cash out of their house with HELOCs.

CHRIS SIPES CFP®: Yep, exactly. Credit is money. I mean, if you think about it, you know, if you go to. Borrow money to buy a house. Let's say you borrow half a million dollars. Boom, there's half a million dollars that just got created by the bank and put into the system. That is money in the system.

CHRIS SIPES CFP®: That is more dollars, same amount of goods. And so all else equal, that tends to drive prices a little bit higher than what it's done so far, at least from the numbers they're telling us. It's 3% a year. That's where we're at on the inflation scale today.

DANO WEIR: And the government's still closed. So not even bothering touching that one.

DAREN BLONSKI CFP®: The government's closed. What does that even mean anymore? That was our- Still racking up.

DANO WEIR: That was our headline for two straight weeks. And I said, I can't do it a third week. I just can't. We got to do something different for this week's episode.

DAREN BLONSKI CFP®: It is interesting how it's just like this background noise now.

DANO WEIR: Oh yeah, by the way.

DAREN BLONSKI CFP®: The government's closed. I mean, no biggie.

DAREN BLONSKI CFP®: I mean, I guess we shouldn't laugh because there's real life implications of it, but it's just, it is just interesting how it's.

DANO WEIR: It's a gallows humor. It's a, it's just like, you know, like par for the course these days. I think it was not really laughing, laughing and crying at the same time.

DAREN BLONSKI CFP®: Seriously. So I saw a stat this week that there's nearly $7 trillion in U. S. Money markets. So given everything we've said in this show, if you think the market can't go higher. Think again, because think of this scenario, guys, interest rates go down, people start pushing their money, because we know that a lot of investors do it after the fact instead of before it happens.

DAREN BLONSKI CFP®: So interest rates go down, and they're like, oh, okay, well, I'm going to invest in the stock market now, because I'm not getting interest in the money markets, $7 trillion sitting in money markets right now. I mean, that's a lot, right? So thinking that this market can't go higher would be a massive mistake. And betting against up and to the right would be a massive mistake.

DAREN BLONSKI CFP®: This is looking at the S&P 500 on a monthly chart. So each one of these candlesticks represents a month in the market. We've basically been up, call it six months in a row. We'll see how the month ends, but we're getting to the end here. Six months in a row, just straight up. And this was the tariff tantrum. We more or less tested this all-time high back from 2022 and then ripped up from there.

DAREN BLONSKI CFP®: So it turns out the tariff tantrum was an excellent buying opportunity. If you took it, congrats.

DANO WEIR: I wish I knew two guys who said that in April.

DAREN BLONSKI CFP®: I wish I did too. What is interesting though, when we look at this long-term trend analysis on the SPY, which is the S&P 500. So here's another way to see the S&P 500. Pretty green on the screen. The MAGs were all ripping these big stocks. I mean, that's. A pretty healthy looking market right there today.

DAREN BLONSKI CFP®: I'll just, the one week performance, excuse me. So nice week in the market. When we go back and we look at the SPY though, we look at this long-term trend line and the fact that we've been below it and now are above it and it was resistance before right here, right in the tariff area.

DAREN BLONSKI CFP®: The fact that it broke up, I would expect with the way it went up above this that we're going to get a correction right into this trend line here at some point. I was a buyer at that point. I would like that spot if it held considerably. What that looks like on a daily chart, though, you can see here's this trend.

DAREN BLONSKI CFP®: This is Monday, Tuesday, Wednesday, Thursday, Friday. You can see we are below this trend line. I put this trend line in last week and showed it to people and said, hey, if we break out of this, we're getting ready to make a move. And you can see Monday it broke out, came back in, more or less tested that area.

DAREN BLONSKI CFP®: Of the chart we can get a little bit more specific if we kind of move this guy around a little bit to here i guess i mean you can see that test on that trend line and came right on in and then bounced up and that was a perfect setup right came came in broke out came down found support and ripped up and looks pretty solid right now pretty hard to bet against that one i would not go into the weekend betting against that but Because we know we have lots of diversified investors that watch this show.

DAREN BLONSKI CFP®: And we've got Chris, just to keep Chris happy, because we know Chris likes his bond market. Here's our ag, the U. S. Core Aggregate Bond Index. And you can see it's back to where it was in 2022. Impressive. Boy, that was painful, though. Wow.

DANO WEIR: Here we go. Here we go. Let's see. Yay, nothing but.

DAREN BLONSKI CFP®: Those painful years. Good news. You're back in business, folks. Actually, you've seen pretty good move. Chris, did you know that DBMF, which is like an ETF that tracks managed futures, I was just running the numbers on this. If you can see the low from this year, DBMF is actually up 17% plus since the tariff tantrum.

DAREN BLONSKI CFP®: I didn't realize that. I was looking at that today.

CHRIS SIPES CFP®: Yeah. Trend following has had a really tough year, though, obviously, with all the announcements just in the name. Trends got reversed quickly and often in a lot of different markets. So it's been a rough year for trend following overall. But you're right, since the tariff announcement, it seems to have recovered substantially.

DAREN BLONSKI CFP®: Yeah. But it's a bit interesting, like on a year over year basis, right? So this is something we always tell clients. It's like, hey, you have to look at timelines, right? Because if I show you this chart looking from this point to this point, it doesn't look so good.

DAREN BLONSKI CFP®: But if you happen to be the one who invested down here, trend following sounds like brilliant. It's like, this is the best thing since butter on bread, you know? And there's always that timing, right?

CHRIS SIPES CFP®: And they talk about it too. It's one of the hardest asset classes to hold because it's only positive like 30% of the time. And so, but trend following is one of those things. And when I say positive, I mean like creative to the portfolio.

CHRIS SIPES CFP®: But when it is, it typically is a very powerful piece of the overall portfolio. So it's one of those things you really want to avoid looking at it as a line item. It's a part of the motor. Of the portfolio. You shouldn't just look at it as a single item because of the non-correlation of stocks and Bonds.

CHRIS SIPES CFP®: The timing of when it performs has historically been very accretive to overall portfolio performance because of when it does well.

CHRIS SIPES CFP®: So I love the perfect example of that. It had a great year in 2022 when literally everything else was in that.

DAREN BLONSKI CFP®: In the tank you know so this is interesting though right because you look at DBMF it's designed more or less to track the trend following portfolios it's a very difficult asset class to quantify you have to hang out with some serious nerds to really understand managed futures and how they work and tracking them and trend following but i guess nerds like Chris and i really enjoy that but You should hear some of the conversations at conferences.

DAREN BLONSKI CFP®: What is interesting here, though.

CHRIS SIPES CFP®: Is if you… Get your hair cut at a bond.

DAREN BLONSKI CFP®: They're not talking about trend falling at the hair salon. So what do you see here is you see this trend line, right? Resistance.

DAREN BLONSKI CFP®: Sell resistance sold off and it hit it again and we have an old saying in chart world that if you touch a point multiple times and go back to it it gets weaker and weaker because there's buyers and sellers there's less and less there so it's not as resistant or supportive right so if the chart keeps going down and hitting a certain point eventually it falls through that point right because this the buyers that step in get exhausted and that's true on the upside too if something goes up And then sellers go sell.

DAREN BLONSKI CFP®: It goes down. Sellers go sell. Eventually, people aren't going to sell there anymore. There's not as many sellers. They wear out, right? And then they break out. But look at this. Isn't that interesting setup here? Sell, sell, oops, no more sellers.

DAREN BLONSKI CFP®: It broke above, which actually might be a really bad thing in the sense that if trend starts doing really well, it tends to be negatively correlated to stuff in the stock market's doing really well. Bond market's doing well and we're starting to see a negative correlation there. And we're starting to see trend really move and break out.

DAREN BLONSKI CFP®: So that's interesting, but good news for people who hold managed futures in their portfolios, which again, I think I love as an asset class, it's not a recommendation, but I think it's a great diversifier, but you have to be patient with it or it will not work for you. So I have a special treat for you guys today.

DAREN BLONSKI CFP®: I wanted to go through the timeline of world history with you.

DANO WEIR: Wow.

DAREN BLONSKI CFP®: I know. Look at this, man. So this is, I thought this chart is just fascinating, right? Like just for my brain to image and seeing an image history. And we start off in the Bronze Age and these things we hear about, you know, Stonehenge and the pyramids and et cetera, et cetera.

DAREN BLONSKI CFP®: And we go on all through history and all these things that you read about in the history books. And then we look way down here. When the United States started.

DAREN BLONSKI CFP®: And I think it's so important just to remind ourselves the context of this moment in the scheme of history. I'll never forget this. When I was first starting my business, I actually started my business knocking on doors for those who don't know. And I knocked on this old lady's door and I was talking to her about stocks.

DAREN BLONSKI CFP®: And she said, you know, my husband bought Coca-Cola for me. And before he died, he told me never to sell it. That I should always own Coca-Cola. So I'm sitting on these stock certificates and I just keep them in my closet and I'll never sell it.

DAREN BLONSKI CFP®: And I said, wow, that's good. I commend you for buying and holding a good quality company. But what happens if that, and I have another story of where that happened and the stock went to zero. But the point being is that like, we're such a small, the United States history is such a, such a small point in history and time.

DAREN BLONSKI CFP®: And to get committed to fall in love with any asset class, to fall in love with any stock, it's really quite foolish when you think of history and where things go. And so, so often, we'll have clients call us and be like, oh, my portfolio is down this week, or my portfolio is down today, or my portfolio is down this year.

DAREN BLONSKI CFP®: But when we invest, we're investing for the long term, right? And so when we go back to the charts and we say, okay, well, what's going on in gold? Because that's really interesting that gold looks like a meme stock right now.

DAREN BLONSKI CFP®: And you think about the historical context as gold has been valued. It is the one asset that you could arguably say was important way back in the early Bronze Age. And in the Bronze Age and the Iron Age and the classical antiquity age and the Middle Ages and now the modern period. It was the one asset class that was around.

DAREN BLONSKI CFP®: And so, so fascinating to see, if you think about this really in a historical context, it's the value of gold has literally gone up $1,000 an ounce, which is less about gold and more about the U. S. Dollar. And that every time we've seen behavior like this in gold, we've seen a reset of some sort in reserve currencies.

DAREN BLONSKI CFP®: And if you look historically, that's the case. So the fact that people are piling into gold, that countries are piling into gold, take note of that. Like, I don't think you can dismiss how meaningful this move is. Do I think things are going to end tomorrow and the world's over?

DAREN BLONSKI CFP®: No, I don't think any of that. But I think we're in an era where things are adapting and changing, and they're going to change more rapidly than I think any of us think they are. And whether that's from an AI perspective or whether that's from a monetization.

DAREN BLONSKI CFP®: Standpoint or whether that's from who's the one world power because we're certainly entering into a bi-power world and i think gold's screaming at us and telling us that story that something's changing And we, I think in the last, I don't know, you know, as long as I've been in this business, people have often said, oh, there's stocks and there's gold and there's gold in their stocks.

DAREN BLONSKI CFP®: And, even damn, when we were doing the interview with the gentleman who runs the gold store that we're going to release here in a little bit, even when we were doing that episode, he said to me, he was like, wow, it's kind of unusual for a financial guy to be interested in have knowledge about gold and holding gold.

DAREN BLONSKI CFP®: And Because there is this kind of like this financial world antagonism towards gold because it's, I guess it just doesn't offer the profits per se that manufactured equity does or manufactured products do.

DAREN BLONSKI CFP®: So there's kind of this, ah, we don't want to sell gold because we can't make money on gold. But the fact that gold's doing what it's doing, you have to take note. And you got to pay attention because there's, this is telling you something's changing. All right. I'm going to get off that bandwagon.

DANO WEIR: He, he says much to me too. His name is Jason. And he, he said this, he said it to me later. I saw him a couple of days later and he was like, yeah, I don't, advisors don't usually talk about it. And I'm like, yeah, cause they're not going to, you know, most advisors aren't going to make a commission on it.

DANO WEIR: So, it is, it is really interesting. And I think I'm so glad you showed that history chart because I found myself like when I, When I find out a company's, you know, 100 years old, and like, that's just so much more fascinating to me than, hey, this startup launched yesterday, and they're up 2000%.

DANO WEIR: Like, you tell me like a company's 100 years old, and that's not in the context of that timeline, that's a blip. But you know, in the context of an American company, man, that's something that like, that's a survivor, you know, that's interesting to me.

DAREN BLONSKI CFP®: Yeah. So really, really just interesting. Just, and I think... One of the best things you can do as an investor is just step back and ponder your decisions in the context of history and all these things. I mean, it's just remarkable, right? And this moment, this AI moment, it's a moment in history. Don't get me wrong. I think we are going through the equivalent of the Industrial Revolution, if not more.

DAREN BLONSKI CFP®: Some say that we're going to see 100 years of technological advance in the next 10 years because of AI. I heard this week that the current LLM models, which is a large language model that does the AI, or what most people think of AI, the large language models can now solve every single known math problem. Known math problem. So now we're just into the frontier of... Unknown math problems.

DAREN BLONSKI CFP®: Elon said earlier this year that by the end of the year that AI will basically create a new form of material where I was listening to this show this week where they're talking about how they think the AI is going to start building out of carbon like the strongest material known to man. So things are changing, really interesting. The markets are whispering. They always do. And we're seeing lots happen out there.

DAREN BLONSKI CFP®: On the good note, if you're looking to buy a mortgage anytime soon, guess what? Mortgage rates are down because the 10-year is down. And the 10-year is now under this trend line that I've been tracking for quite a while. And remember, I talked just a few minutes ago, if there's a point and a market visits it, and there's support, there's buyers, there's buyers, and there's no buyer.

DAREN BLONSKI CFP®: And look what happened. Buyers, buyers, buyers, and oops, where's the buyers? So I think rates are headed down. I think economically, that's where we're probably headed. I think the current administration is going to do everything it can to blow this chart higher and higher.

DAREN BLONSKI CFP®: They're going to run the risk of inflation running hot, but I think they're willing to do that to win the... Next election coming up and they'll deal with the inflation as it comes.

DAREN BLONSKI CFP®: I think those are the most meaningful points. I did also want to point out the RSP, which is the equally weighted index. So what made an all-time high today was the MAGs, which is those big stocks, but the equally weighted index, which is an index that tracks the S&P 500. And makes all these boxes the same size.

DAREN BLONSKI CFP®: So it gives equal credit to every company and ignores the capital size of a company. It says, nope, not all-time high. I think that's noteworthy. So you have a diversion there. When you have a diversion, you have other parts of the economy that are sputtering, but the Mag 7, once again, pulling it higher.

DAREN BLONSKI CFP®: And probably will, longer than any of us think it will. I'm going to leave it there. Anything else, guys? I think we wrap up.

DANO WEIR: Oh, yeah, I had one more thing. I just, since we always talk about Chris and his love for diesel and Mercedes cars, I did ask, speaking of AI, Yeah. I asked AI to try to make me a nice tableau of Chris and his Bonds and his diesel Mercedes and just driving off into the sunset. And so since Bonds had a pretty good week, I just, Chris, I don't know, does this get you in the feels? Are you feeling this vibe?

CHRIS SIPES CFP®: It's a beautiful vibe, Dan. That's a beautiful vibe. That looks like maybe an 80s model, early 90s possibly.

DANO WEIR: Yeah. And all we had to do was inject some cadmium into the water to make this happen on AI. Thank you. Hey, guys, thank you for a great show. Thank you for checking out On The Markets from Sinem Wealth Advisors and the Fermata family of brands. If you're one of our clients, thank you so much for tuning in and following along with our continuing education, our support for our clients, which we do here every week.

DANO WEIR: That's the point of the show. If you're wondering what Sonoma Wealth is all about, check out SonomaWealth. Com. And wherever you're listening to the show, whether it's on YouTube or Apple Music or Spotify, subscribe where you are. That way you won't miss future episodes. We do this every single week. Darren, Chris, me, Dano, we will see you next week.

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CHRIS SIPES CFP®: 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 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.

CHRIS SIPES CFP®: Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented.

CHRIS SIPES CFP®: 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. Investments involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives.

CHRIS SIPES CFP®: And is not intended as recommendations appropriate for any individual. 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.