Stock Market vs Economy: The Disconnect Explained

DANO WEIR: It's Friday, May 29th, 2026, and that means you're going On The Markets with Fermata Advisors, our Sonoma Wealth private, our private wealth arm, Sonoma Wealth Advisors. My name is Dano Weir, I'm the Marketing Director, joined shortly by our Managing Principals. In this month, May 2026, the Dow hit a record high on the exact same day that consumer sentiment hit an all-time low.

DANO WEIR: This disconnect, the stock market versus the economy, we're going to Dig into it today. As I said, consumer sentiment, all-time low. Historically, what have the next 12 months of S&P returns looked like in those scenarios? We're going to look at what four categories of loan delinquencies say about the average American family.

DANO WEIR: Only one of those, by the way, isn't near all-time highs. On the other side, the top 20% of America, meanwhile, are on an unprecedented run of growth since 2019. We've got the data to prove that. And S&P 500, Another all-time high, the key resistance line that has Darren thinking we might be headed for blue sky territory, but that also may be something called a melt-up. Let's get started.

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DANO WEIR: Managing Principals of the firm, Darren Blonsky, Chris Sipes. Chris, let's jump right into it. Chart number one. Why am I looking at South Korea?

CHRIS SIPES CFP®: Well, if you remember a week or two weeks ago, Dan, I can't remember now, when the Cavs were, the Cleveland Cavs were up over 20, I think it was 22 points in the fourth quarter against the Knicks. And we showed the betting odds, having the Cavs at 99.9% chance of winning. And guess what? They lost, right? And we were using that as kind of a cautionary tale.

CHRIS SIPES CFP®: When it comes to investing, even things that you think are a sure thing may not be. Well, what you're looking at here, and this is by way of Ben Carlson at Ritholtz Wealth, he's showing South Korea has now outperformed the S&P 500 over the last 10 years. All of the outperformance has come in the past year. Nuts, he says.

DAREN BLONSKI CFP®: That's pretty much like the gold chart.

CHRIS SIPES CFP®: Go back to 2017 and ask 100 people to put money on the fact, which stock market are you banking on 10 years from now? Do you think it's going to be the South Korean stock market or the S&P 500? And I feel like it's similar.

CHRIS SIPES CFP®: Most people are going to be like 99.9% chance it's the S&P 500. Well... You never know. And that's why being diversified is somewhat of an aggressive strategy because you're in places like South Korea that you might never have expected to see performance come from.

DAREN BLONSKI CFP®: You know what's kind of funny too is I think it's still true, but Monster Energy is like the number one performing stock of all time.

CHRIS SIPES CFP®: Yeah.

DAREN BLONSKI CFP®: And you just got to think about like the… And you're just something like so perfect in that, right? Like we spend so much time and energy and effort, like trying to buy the right stocks or buy the right investments. And the one that won it all was Monster Energy.

CHRIS SIPES CFP®: Yeah. I remember the top 10. It hasn't been updated for a while. So it'd be fun to revisit this. But I remember looking at the top 10, like, I don't know, a couple of three years ago or something. And it was like Monster Energy, Domino's Pizza was on there. You know, the old.

CHRIS SIPES CFP®: The good old technology of pizza and there was a pool there was a pool company yes like pool corp yes exactly swimming pools yeah their ticker was actually pool and you're like wait a second what those are the that's just so boring business freight freight liner i think was on there the or for old dominion freight i think it was so all these businesses that you would never guess famously tobacco.

CHRIS SIPES CFP®: Philip Morris was... One of the top performers so yeah you just never know honestly so that's so yeah i just look it up in in over the last 30 years the stocks with the highest total return.

DAREN BLONSKI CFP®: Coming in first place at 444,000% return over the last 30 years, none other than Monster Beverage. And coming in second place at 98,000% return, NVR Home Builder.

CHRIS SIPES CFP®: Oh, right. Of course.

DAREN BLONSKI CFP®: I would have known.

DAREN BLONSKI CFP®: And at a measly 64%.

DANO WEIR: 587 percent is apple so yeah funny funny the best of all time in cumulative returns though on any rate is altria and Nvidia yeah interesting yeah i'll treat you that's i said Philip Morris but i'm in altria yeah Well, Chris, this week, the focus of this week, we're looking at the divide between the market and the economy, particularly the economy with the consumer sentiment so low. What about the investor sentiment first?

CHRIS SIPES CFP®: You know, as measured by AAII, it's kind of normal, I would say. Pretty balanced between the bullish and bearish views. The CNN fear and greed index is at 60, which is greed, but not like extreme greed. Pretty much unchanged from last week at 58 greed. Bitcoin, we've got an extreme fear down from 28 fear last week with the price down a little bit.

CHRIS SIPES CFP®: But if you look at this chart here from top down charts showing consumer confidence in terms of the percentage expecting stock prices to be higher in the next 12 months. And this chart going back to the 80s, the mid 80s. So not a hugely long period of time, but enough that you can tell we're at an extreme in terms of where people think the stock market's going.

CHRIS SIPES CFP®: And I think to encapsulate what we're talking about today is you've got Markets at all time highs and most people expecting them to go higher. Most people are allocated to them. And then you've got consumer sentiment. And some other areas of the economy showing some real signs of weakness.

CHRIS SIPES CFP®: And this is something we've been covering for a while now, this whole K-shaped recovery, right, where I think concentration is the theme of our time, concentration in the Markets, concentration in wealth. And because of that concentration, it has really covered up a lot of things that otherwise might have been laid bare.

CHRIS SIPES CFP®: In the Markets because there's been a handful of companies that have done really well, that's driven wealth to the top, 10%. And, they've continued to spend and invest. And the expectations are that that's going to continue going on, with the AI build out. So I think that we're in a very strange time, in terms of, you know, most of the market indicators?

CHRIS SIPES CFP®: How many did we look at in 20? Late 21 and 22 that were showing like basically all the signs of a recession and we never really got one called and i think that that's largely the reason why is this concentration that we've been experiencing really since Covid now if you look at this is from JP Morgan's guide to the Markets their consumer sentiment index and then the subsequent 12-month S&P 500 returns.

CHRIS SIPES CFP®: Now, this is a reason why we check sentiment repeatedly, not only investor sentiment, but also consumer sentiment. Because historically, when people feel the worst about the Markets, when people feel worst about consumer, their capacity to spend and such, those tend to be market bottoms.

CHRIS SIPES CFP®: Look here in November of 2008. And as we were going through the great financial crisis, August of 11, we were still kind of coming out of the great financial crisis. Remember, that's when Europe was having all the credit problems. The quote unquote pigs countries were going bankrupt, et cetera.

CHRIS SIPES CFP®: And then you look at June of 22 and we got the high inflation, kind of the blues from the opening of COVID was a low. And then what you see where we're at today, which is very close to the same reading. Now, this is strange because at least in 22, inflation was really high. Markets were selling off basically stocks and bonds sold off together.

CHRIS SIPES CFP®: You know, we had a bad market. So you can kind of see why sentiment was low. 2011, same thing. We're kind of still in the doldrums of the housing and great financial crisis. 2008, obviously. April of 2020, people even felt better in April of 2020 when we thought there was a global pandemic coming.

CHRIS SIPES CFP®: And yet the Markets are at all-time highs. So is this indicator broken? Because previously, when people felt this bad, the Markets have tended to do really well because prices were low and because we were at some sort of low in the Markets. Now look at the flip side of that. When did people feel the best?

CHRIS SIPES CFP®: January of 2000, the dot-com bubble. January of 2007, right before we went into the great financial crisis. February of 2020, right before COVID. Remember, things were feeling pretty good right before COVID. And yet, so it's a really strange thing right now where we've got Markets doing so well and sentiment so low.

CHRIS SIPES CFP®: But I think it's explainable when you look at the K-shaped economy. Now, these are... Delinquencies, credit delinquencies, 90 days passed. So banks tend to measure 90 days as like, if somebody hasn't paid you in 90 days, that's beyond like, oh, I forgot.

CHRIS SIPES CFP®: I lost it in the mail. I got sick and I've been in the hospital. You're getting into territory of like, I can't pay it for some reason and I'm behind. And you'll notice that credit cards delinquencies are up near where they were in 2008. Auto loan delinquencies, same thing.

CHRIS SIPES CFP®: Mortgages, thankfully, mortgages are not there. Mortgages are actually much, much lower and kind of more in line with normal. And I think we all know the reason for that with interest rates as low as they've been for a while and a significant amount of homeowners owning their house free and clear.

CHRIS SIPES CFP®: So mortgages are not a problem this time, thankfully. But then you look at student loans. So really everything outside of mortgages when it comes to consumer debt are seeing elevated delinquencies.

CHRIS SIPES CFP®: And so far the market's shaking that off for many reasons, which we'll get to. But then you look at the savings rate. This is from the Fed showing the national savings rate. We're back down to the lows that we saw.

CHRIS SIPES CFP®: In the past i mean this chart goes back to the 50s and we're at very low readings you know maybe only 2005 to 2009 era might have been a little bit lower in terms of the savings rate and and that had a similar feel only at that time everybody was thinking that you can't lose money on homes right i distinctly remember being in college at that time guys and calling my my grandmother who is very shrewd with money.

CHRIS SIPES CFP®: And say grandma i i found a house i'm ready to flip it all i need is some dough and we're gonna be rich and my grandpa thankfully in hindsight my grandma shot me down in about 30 seconds which i was really upset about at the time but looking back boy i'm really glad she she had the wisdom to to keep me steered out of that but you guys that at that time where it just, Oh yeah.

CHRIS SIPES CFP®: Do is you just had to get in and you were going to be rich.

DANO WEIR: Right i i was i i took a tour with a family friend whose wife was spinning him up on buying some house outside of sacramento and he kind of didn't want to do it and she was like well we're not even going to live in it we're going to buy it this would have been in like 2007 2006 and she's like she's like we're gonna buy it and i can the numbers aren't real, but she's like, we're going to buy it now at four.

DANO WEIR: It'll be eight. It'll be seven or eight by the end of the summer. And then we'll just sell it. It's just an investment. Right. And I remember at the time thinking like, man, I'm never, I'm dumb.

DANO WEIR: I don't understand what she's talking about. I'm never going to be rich. She's, she's the smart one. And, you know, that was the, that was, and then of course everything happened, what happened. I just always think about that. I just think that was the mentality because it was a reality for a long time until it wasn't.

CHRIS SIPES CFP®: Yeah, absolutely. So savings rate, savings rate is low. We've got inflation ticking up a little bit. We got the core PCE this week, which was a favored measure by the Fed. Who knows what the new Fed chair, Kevin Warsh, if he's going to be looking as closely at this one. But the core PCE was a...

CHRIS SIPES CFP®: An indicator that the Fed looked closely at this chart going all the way back to the 60s maybe even the 50s you can see the shaded areas are recessions and and you can see where we're at today we went through that that Covid peak in in 22 we recovered from that somewhat and now we've we've definitely seen an uptick and i would say it looks like it's trending upward at the moment who knows this could change of course but but that that looks like we're we're in an uptrend and no longer kind of definitely no longer going down in terms of inflation rate on the PCE personal consumption expenditure is what that stands for.

CHRIS SIPES CFP®: And the core takes out some of the more volatile measures. So we're seeing a little bit more on the inflation front, which is obviously something that people do not like.

CHRIS SIPES CFP®: Now, in terms of why has the market been doing well when it comes to the US stocks, it's the same story where the top 10, we've seen that that index concentration.

CHRIS SIPES CFP®: Now on the plus side, if you look at this chart on the right from JP Morgan showing the earnings of the top 10.

CHRIS SIPES CFP®: So one, I guess, thing in the positive column about this particular market is that we're not seeing quite as high evaluations as we did, say, in the dot-com bubble by certain measures because the earnings have really been accruing to those top 10 companies and the earnings have been higher than expected.

CHRIS SIPES CFP®: So earnings have been backing it up and justifying the need for that concentration in the market. Now, remember, we thought it was elevated and abnormal in 2021 when we saw the earnings and the market cap really accruing to those top 10.

CHRIS SIPES CFP®: We saw that come down in 2022. Only to just jump up even higher than it was previously. And so there's really nothing like this in the modern era in terms of that concentration.

CHRIS SIPES CFP®: But that wealth generation being concentrated within the market in that one area has kind of flowed through in terms of the wealth concentration in the economy as well. Now, if you look at previous...

CHRIS SIPES CFP®: Top 10 largest companies by year we've got 1985 1995 2005 and 2015 here along with 2025 and you'll notice that these companies change obviously with the times apple being you know kind of the main one apple and JP Morgan being the the couple that were on both lists it looks like microsoft but but look at the market cap of those top 10 compared to the market caps of them relative to the Markets in previous decades.

CHRIS SIPES CFP®: So it's a bit unprecedented now.

CHRIS SIPES CFP®: Many would say, well, yeah, but they're also the best companies that have ever been built, revolutionizing the world in terms of the technology that they're offering. So all those things are true. Up until recently, they had a very low CapEx spend.

CHRIS SIPES CFP®: So they had huge margins and not much in the way of CapEx requirements. That's changed with the data center build outs. So we'll see how the market treats that. So far, it has not penalized these companies for that.

CHRIS SIPES CFP®: But the concentration in those companies is a little different this time.

CHRIS SIPES CFP®: And that has funneled through to concentration in the economy as well. Look at the net worth growth. By income cohort. And this is from pre COVID COVID really was a game changer for a lot of folks. And look at that top 20 really taking off in terms of how much wealth has accumulated there, along with the share of total spending.

CHRIS SIPES CFP®: And this is where we talked about like, as, as I don't want to sound cold or crass or anything like that, but it really matters what those top folks are spending and less so what the bottom quintiles are spending because it just has, from an economics perspective, because it has less impact.

CHRIS SIPES CFP®: That top 20% is doing between 40 and 50% of the spending in the Markets or in the economy. And they own the vast majority of the wealth in the Markets too. So as that... As that wealth continues to accumulate in the Markets, it's funneling in through the spending and the Markets continue to do well despite the struggle on those lower income cohorts.

CHRIS SIPES CFP®: And inflation really has a bigger impact on on those lower incomes and that's why i think you're seeing you know the the respondents to these surveys and such just saying you know things are not good right because if you look at this from JP Morgan again showing the consumer if you look at that one on the bottom right the consumer expenditures on energy as a percentage of total income.

CHRIS SIPES CFP®: So the bottom 20% are spending 17% of their income. So it has a huge impact on them versus the top 20%. It's only 2.7%. So it's barely noticeable the increases in energy costs to somebody in the top 20%. And this is despite the fact that the US is really a lot less dependent.

CHRIS SIPES CFP®: On imports of petroleum and related products you know that's that's on the on the good side of things you know we talk about the spike in energy prices kind of helping to lead to the great financial crisis in 2007 well look at the percentage of imports to the us at that time it was much much higher and then with the implementation of fracking in 2012-ish that is what has really driven the us to not really have much dependent on dependence on that foreign oil so even though the us as a whole doesn't have as much dependence on it it does impact the you know basically the other quintiles a lot more than the top 20 percent okay now Another sign of that concentration has not popped quite yet, but is in the process of happening, which is the IPO activity.

CHRIS SIPES CFP®: Notice first off on this, the IPO activity in 1999, there were spikes going into the dot com really from like 96 on. There was kind of elevated IPOs. Now, this makes sense if you're a private company.

CHRIS SIPES CFP®: You feel like you can get top dollar for your company if you go to the public Markets that's typically when those you know insiders and and the people that are making the decisions are going to decide to go public is when it's a good time versus look at 2009 hardly anybody came public because stock prices were completely mowed down the capital Markets were in disarray not you're not going to get much if you come public at that time so therefore most people.

CHRIS SIPES CFP®: Most companies were not coming public then.

CHRIS SIPES CFP®: Same with 2022. But now you look at that's about to change, at least in terms of the size of these IPOs, because you've got SpaceX at 1.75 trillion-ish. You'll have Anthropic and OpenAI, who are expected to probably be over a trillion as well. So in terms of market cap, it's going to be huge.

CHRIS SIPES CFP®: It's not like a company coming public and they're just like a smaller player in the overall Markets. These are going to be top size companies when they come public, which is also going to be a different situation than what has normally been seen.

CHRIS SIPES CFP®: And so I think it is leading to an overall sense of, I think that's why you're seeing more gambling, sports gambling gambling on the weather. There's a real sense of those people that are in, say, not in the top 20 saying, I really only have one chance and that is to try to get rich quickly. So you're seeing it in the meme stocks.

CHRIS SIPES CFP®: You're seeing it in the number of three and four and five X levered ETFs. You're seeing it in the fervor over IPOs and everything else is the whole thought of, you know, I got one shot. I gotta, I gotta make it. I got to make it into that top 20% or I might as well just not even do anything. Right.

CHRIS SIPES CFP®: It's, it's I think leading to that, that sense of desperation for a lot of folks when it comes to wealth building, which I personally, I hope that we can steer as many people away from that as possible. And it's, it's, it's not as easy, it's not as emotionally easy, but it's much easier from a likelihood perspective to get rich slowly.

CHRIS SIPES CFP®: And after working with many people who have done well for themselves over time, there's not usually a silver bullet. It's hard work and saving over time. Not doing dumb things with your money, like, you know, and just kind of avoiding big mistakes.

CHRIS SIPES CFP®: And, of course some luck involved in there as well, but very few people I would say, get rich overnight and sustain that it's, it's usually a built over a long period of time, which is harder to do emotionally, easier to do mathematically.

DANO WEIR: And so that's what, you know, it's boring, but that's what we would advocate for, and try to stay out of the, the to get rich quick schemes Chris i'm so glad you framed it that way because this last slide before we get to Darren's candlesticks is emblematic symbolic did you guys see just last night what happened to the Blue Origin rocket i did oh i didn't i missed this wow okay so so there's Two major things happening in the private space world right now, one of which is the SpaceX IPO, and another of which was right on cue.

DANO WEIR: Jeff Bezos' competitor to SpaceX, Blue Origin, was doing a test launch last night, which, if you can see the screen here, exploded fantastically. Perhaps the best explosion I've ever seen on camera. Put this in a film, it was something to behold.

DANO WEIR: I, when I look at the Markets and when I look for, you know, the vibes that I'm seeing in the country, cause I'm always interested in that type of thing. I thought it was really symbolic of a number of things, which is that in order for a society to be able to launch something off of our own gravity and out into space, a lot of things have to go right.

DANO WEIR: And actually just this week, by comparison, SpaceX launched a new rocket, their Falcon nine rocket successfully.

DANO WEIR: And they're getting ready to IPO. Everything went great for the rocket launch. Then you've got Blue Origin, who's trying to do exactly the same thing. What did it do? Kaboom on the launch pad.

DANO WEIR: And so I think as you're thinking about this IPO, as you're thinking about investing, take a look at these two pictures and tell yourself, you know, everything can be lined up right with some of the smartest people. And you can have similar looking billionaires and one is able to launch their rocket and one's rocket absolutely implodes. And as an investor, thankfully, by the way, no one was injured in this explosion.

DANO WEIR: But as an investor, are you emotionally prepared for either of these outcomes? And I think that's a good question to ask. I don't know if that's too deep, Darren. I don't know if that's too deep for you or not, but that's kind of how I look at it this week.

DAREN BLONSKI CFP®: It's never too deep for me, Dan. Come on.

DANO WEIR: Any any other thoughts on that i mean what am i off base here guys is is this you guys kind of take that same message from it or what did you think it's a good analogy yeah it's it's it's a 50 50 shot right basis is obviously a proven a.

CHRIS SIPES CFP®: Proven person as well and you know didn't obviously something didn't go their way with that and yeah it's it's interesting to see interesting to see that play out i i Can't believe I missed that.

DANO WEIR: I'll have to send it to you. And for the record, SpaceX has had some explosions as well. So Elon actually tweeted to Bezos and he said, rockets are hard.

DAREN BLONSKI CFP®: So I think you bring up some great points.

DAREN BLONSKI CFP®: If there's anything I want to remind investors of for this IPO coming up, because this is going to probably be the largest IPO ever with SpaceX. There's a lot of fantastical elements of it and the way they're lining up.

DAREN BLONSKI CFP®: The average retail investor cannot buy the IPO. Let me say that again. The average retail investor cannot buy the IPO. The reason is because when the IPO happens, there's subscriptions to those shares that go up for auction, more or less. And that's called subscribing to the IPO. Well, you have to have access point.

DAREN BLONSKI CFP®: Now, Schwab is going to allow people, which is one of the more retail, I guess, friendly brokers to, in the past, it's been some of the big Wall Street banks that have had the ability to subscribe their clients to the IPO. The problem is when you want to subscribe, it doesn't mean you're going to get it. It doesn't mean you can choose how much you want.

DAREN BLONSKI CFP®: Most investors won't have direct, and I say direct because there's some other ways to get access to, the IPO until it hits a secondary market so one of my pet peeves with the IPO process is that it comes out and the IPO gets set at, say, like $10. The IPO is $10.

DAREN BLONSKI CFP®: But it doesn't hit the secondary market, which when we show the charts, we're really looking at the secondary Markets. It doesn't hit that price. So everyone goes, well, I thought the IPO was $10, and now it's $200. What happened? Well, because you can't buy it unless you subscribe to the IPO at that price.

DAREN BLONSKI CFP®: And that doesn't happen for you unless you've got a lot of money, typically, and you have a way to get into the subscription. There are some ways to do that with this particular IPO, but I think keep that in mind because when this IPO comes out, everyone's going to be talking about the IPO price. But keep in mind, very, very few people can actually get access to that IPO price.

DAREN BLONSKI CFP®: When you run the numbers on IPOs and how IPOs did one month, six months, one year. All these big IPOs that have happened in the past. For example, Facebook, when Facebook IPO'D at 38, and it, well, excuse me, it IPO'd, I think it was a little bit less, but I'm using the closing day when it first of the IPO closed. Six months after the IPO, it was down 40%.

DAREN BLONSKI CFP®: Alibaba was down 13%. Uber was down 35%.

DAREN BLONSKI CFP®: Airbnb was only up 4% six months later. Coinbase was down 22%. They didn't actually truly do an IPO. They did direct offering. Rivian down 74% six months after the IPO.

DAREN BLONSKI CFP®: Saudi Armaco, which I think was the biggest IPO prior or one of the biggest, was down 10% six months after. So all these major IPOs that happened in recent history. Six months later, we're in the negative. And even a year after, many of them were in the negative. So don't think that just because you don't get in on the IPO that you're missing out on some fantastical investment.

DAREN BLONSKI CFP®: Now, maybe, maybe this IPO, it just goes and it goes to the moon, but that's actually less likely statistically. It's more... More likely that six months after the IPO that it will actually be a negative from the closing day price, the first time that most retail investors could access it.

DAREN BLONSKI CFP®: So in a few weeks, if you're feeling some FOMO, think twice about that FOMO because it's more or less a setup.

DAREN BLONSKI CFP®: All right. So we're looking at the 10-year. I think we need some applause, Dan. Just because.

CHRIS SIPES CFP®: Yeah, right?

DAREN BLONSKI CFP®: Because I know what Chris is going to be doing tomorrow, riding his lawnmower. He's going to be sitting on his lawnmower, mowing the lawn, feeling like a pro because guess what? The bond market looks like it's about ready to go up. We broke out of this downtrend. How do you feel, Chris?

CHRIS SIPES CFP®: That does make me feel better.

DAREN BLONSKI CFP®: Yeah, right? So anyway, bond market looks good. That means it's signaling to us that interest rates might be headed down, that perhaps that's what Kevin Warsh is about to do. The fact that we broke above this trend line here, closed the day above it and held that support.

DAREN BLONSKI CFP®: If we look at it on a shorter time frame, you can kind of see it broke up above, came down and tested and held to close out this week. That's, I would say, on its face, bullish for the bond market.

DAREN BLONSKI CFP®: I would want to see a little bit more support in that area, but I think things could be good for bonds for our diversified investors out there.

DANO WEIR: Chris, you are such a good sport.

DANO WEIR: Chris is the nicest guy. And for no reason, we throw bonds and international at him like it's an insult.

DAREN BLONSKI CFP®: I know.

DANO WEIR: Good sport.

DAREN BLONSKI CFP®: Anyway, because he just spent like 30 minutes telling us not to take risk. Right. So.

DAREN BLONSKI CFP®: We, we got to throw that piece in there.

DAREN BLONSKI CFP®: All right. So SPY, this is the S and P 500. Interestingly enough, I think the FinViz site is broke today, guys. I was, I was pulling up FinViz earlier and I pulled it up to see, we'll check now again. Yeah, it looks, still looks broken. And I was like, man, it sure is like really bland today.

DAREN BLONSKI CFP®: And then I started looking closer, all these percentages, they're all zero. So something's the feeds not working. So, Let me share this tab. Here you go. You can see the feed is not working on the FinViz site today. Some are pulling through, but a lot of them aren't. So not very helpful. Aliens. Aliens. For sure, aliens. I mean, duh.

DAREN BLONSKI CFP®: S&P 500, though, this is the cap-weighted largest 500 US-based stock, looking pretty good. We talked last week about this downtrend that it had to contend with. And on the weekly, we closed handily above that. The market in this is considered a melt-up, Dan, that we talked about earlier.

DAREN BLONSKI CFP®: You can see how it's melting up. It's going higher. Sometimes these melt-ups are the beginning of the end, actually.

DAREN BLONSKI CFP®: It's just kind of exuberant right there's this last dying breath of air before the market implodes so sometimes people say statistically that there's a melt-up that's not a good sign but right now i mean the market is just blue sky and ripping and all the risk indicators i have are saying risk on at the moment which interestingly enough when i run the back testing against those risk on indicators you're actually less likely to make money when all the risk indicators say risk on, you're more likely to make money when all the indicators say risk off.

DANO WEIR: And just to put a pin on exactly what you're talking about there, you're saying price of the S&P going up. And Chris, that prior slide that we have, I'll just show it for a moment with valuations and earnings disconnected. So meaning you're buying it at a really expensive price at a time when maybe it's about to roll over. Is that what you're saying, Darren?

DAREN BLONSKI CFP®: Statistically, that's the case. Statistically, if the market's up higher, PE's up higher, there's less blue sky, there's less room to run. But it's the old Buffett saying, buy when everyone's fearful and sell when everyone's greedy.

DAREN BLONSKI CFP®: It's definitely a greedy market. I don't see how you could argue it's greedy. But to Chris's point earlier on this K-shaped recovery that I think we've really been talking about endlessly since COVID, I feel like.

DAREN BLONSKI CFP®: The the sentiment is low but the market continues to go higher and i think largely because that's the way capital is distributed in the economy and there's a big separation between the two or between i guess the one percenters and the rest of the world interestingly by the way Buffett's still sitting on that pile of cash 397 billion it doesn't he own like Chris you might have seen this headline too i think he owns like five percent of the u.s treasury or something stupid like that yeah it's a huge amount technically he's retired by the way oh that's right it's not Buffett anymore i'm sure he never calls the current CEO though right like he just sits in his house and doesn't voice i don't know he's he's he's deep into his 90s now i don't know exactly how old he is but he's he's deep into his 90s so I feel like when you're that deep in your 90s, though, you're more likely to call people and start yelling at them to do things.

DAREN BLONSKI CFP®: Right.

CHRIS SIPES CFP®: I mean, the guy was running well, Berkshire Hathaway was one of the companies that was on the list of largest companies most predominantly. I mean, the guy running one of the largest companies in the world when he's into his 90s, and he's by no means a health nut. At least he's not known for it.

CHRIS SIPES CFP®: He's known for. Diet cokes and mcdonald's and you know it's just it's the same stuff that like people eat ice cream every day are going to outlive those of us eating sardines every day right so smt looks good i i don't think you can really i mean you don't you wouldn't want to bet against this right.

DAREN BLONSKI CFP®: Buffett certainly and whoever's running and pulling strings for the Buffett empire now is you know they're certainly sitting on cash because they're waiting they They have a long history of looking for big drops and buying things when big drops hit.

DAREN BLONSKI CFP®: But when you really look back, this is 2001, this is 2008, and where we're at today. I mean, that is just one mean climb. And then this last little, as of late, just this market move up is pretty intense.

DANO WEIR: And to put a connection to this week's, if you could go back to that real quick. To draw a connection, show me that big long line you just had, that whole time frame.

DANO WEIR: If we want to try to connect it to this week's main thread, you have people who have been participating in this up and to the right, and then you have people who have not. And so when you talk about that disconnect, this is a piece of that disconnect.

DAREN BLONSKI CFP®: Yeah, it is a piece of that disconnect any.

DAREN BLONSKI CFP®: It's also, I think, frustrating for diversified investors, right? Because they're not watching their portfolios go straight up. And they're like, well, mine's doing okay. It's moving along just fine. But, you know, the downsides are the bigger issues.

DAREN BLONSKI CFP®: And if the market ever goes down again, and I say if with like a smirk on my face and as a joke almost, when it goes down, you know, they'll be significant. You would expect significant things to happen. But I also think that it's become, you know, as of COVID, it's become almost expected that the Fed just steps in and prints money and does something, right?

DANO WEIR: That's what I was going to say. You said, if the market ever goes down again, sort of jokingly, because of the politicization of the performance of the S&P, the president routinely takes credit for its success. And so you have a political motivation to and the next president, whoever is will as well. You have a political motivation to keep this thing going, even if it's completely disconnected from fundamentals in some sense.

DAREN BLONSKI CFP®: Yeah, I don't think I don't think you can. You know, I it was Clinton who said it's the economy stupid. Right. So it doesn't matter the political party. They both. Utilize the Markets and what the Markets do, whether they're the creators of the market behavior or not.

DAREN BLONSKI CFP®: They take claim when it's beneficial and they disclaim when it's not. The difference is, you know, basically since 08, we've really seen more of an active or at least more of a public active engagement by the politicians in the market.

DAREN BLONSKI CFP®: And My baseline thesis in all of my investing these days is that the government can't stop printing the dollar. They just can't get off the debt. And they just have to keep creating dollars, right? And they just keep creating these dollars.

DAREN BLONSKI CFP®: There's no way to stop this, right? That was the whole thing when Elon Musk came in and he's like, oh, we're going to… cut all these different programs and things out. And like, it didn't slow it down any, didn't really matter in the end of the day.

DAREN BLONSKI CFP®: The debt just keeps rolling and has to roll because that's what pushes the economy. It's not, it's the cash going in that's in pushing the market up. And I don't think you can get off the bus at this point. At this point, jumping off the bus as it's about to drive over a cliff.

DAREN BLONSKI CFP®: Is more dangerous than maybe just writing it down and hoping it stays in one piece and that's just kind of the economic truth in the world we live in you know whether this is as some say the late stage of the empire or not it's hard to say i was listening this thing last night on the Olmecs do you guys know who the Olmecs are i've heard the name remind me so the old mac I guess they don't really know.

DAREN BLONSKI CFP®: It was some sort of civilization that existed in Mesoamerica. And they know very little about it other than these stone heads they found.

DAREN BLONSKI CFP®: It was very sophisticated even before the Mayan Empire. Where they are now starting to think that the Mayan Empire actually got all of their calendars and things from the Olmecs. But they don't really know anything about this. There's only just like stone heads about these people.

DAREN BLONSKI CFP®: And it was just so interesting when I thought about that and I was thinking about empires and the rise and fall of empires and how really truly ancient the earth is and how empires have come and been great powers and gone down. And as they were talking about that, they were also talking about the Spaniards and them laying claim to middle and South America.

DAREN BLONSKI CFP®: And how they were the empire and no one would mess with them until Sir Francis Drake came along and started robbing. Basically, he was a pirate is what they were saying. And he started beating up all the Spanish colonies along the Western Americas.

DAREN BLONSKI CFP®: But it was interesting when you think about it, because now, I mean, who thinks about the Spaniards in politics? Who thinks about the Dutch? Nobody like even takes into account what that. Community says and politics and the UN and those kind of things.

DAREN BLONSKI CFP®: But once these were massive empires that controlled the seas at some point or another. And so you have to wonder when you look at the S&P just going straight up like this and the dollar being printed and runaway printing happening with the dollar, like, are we watching in real time, like our final breathing days of the empire?

DAREN BLONSKI CFP®: And I don't mean to rain on everybody's Friday, but it is just kind of an interesting thing to stop and think, because I think there's an assumption in the United States Of America that. We will always be America, that we'll always be the superpower. And as we move from a unite to a multipolar political power world with China, you're going to see more upheaval, ups and downs.

DAREN BLONSKI CFP®: And because of that, I think the politicians have to step in and support the Markets in a different way than they've ever supported them. My point to the investor is it usually pays off the bet that the market. It goes up and to the right. And it certainly has in history so far. Doesn't mean it will forever, though. But that's where we are today.

DANO WEIR: I think it's very important that in the same year that they stopped making pennies, they're going to start making a $250 bill potentially.

DANO WEIR: What a perfect example. What a perfect example of one is so small that because we're so overprinted, it has zero value. It costs more to make it than it's worth. And the other one is like, well, we need a bigger bill.

SPEAKER 7: So yeah, it's pretty wild. Did you guys see that stat? And I wish I had it for the, you know, that we could bring it up right now. But something like 25% of the total U.S. Debt has been accumulated under the Trump administration. Remember me sending that? You guys remember the exact number? I don't. Yeah. It's in that range.

DANO WEIR: It's all i know Darren all i know Darren is that when they find our civilization thousands of years from now they'll go it was an arena they were gathered around an octagon shaped stage this is must where they must have had all of their art we.

DAREN BLONSKI CFP®: We should all go carve a big stone head in our backyard and bury it just so someday that people will sit around and dig it up and try to figure out what we were all about.

DAREN BLONSKI CFP®: Anyway i it's really just kind of fascinating is do you guys know what lidar is yes no so lidar is this really interesting technology where you can look in heavily forested areas and see if the ground has been moved or adjusted or changed and then archaeologists and people looking for treasure will go then to those areas and then look at them closer that you wouldn't be able to see with the naked eye because of you know the bushes and shrubs grow it over but Now that they're using all this really interesting technology in Mesoamerica and all over the world now, we're finding all these things and rewriting history.

DAREN BLONSKI CFP®: And we made a joke about the UFOs and aliens earlier, but we're in this just such a fascinating time to live where so many things that were taken as truth are now being questioned. So many institutions that were once looked at as you know, as loyal and important and valuable are all being put into question in society.

DAREN BLONSKI CFP®: And that's part of like what Chris, you and I talk about the fourth turning, right? Where institutions come under fire and we realize that these institutions of structure and bureaucracy and knowledge were actually not really what we actually thought they were.

DAREN BLONSKI CFP®: And that's where we're at in history. And it's a fascinating time to live. And I think with... The advent of AI and where AI is going, we're going to just see more and more of that because of the ability to take knowledge and synthesize knowledge in ways that the human mind just couldn't do before.

DANO WEIR: And yet people are still buying gold, Darren. So maybe we're not as old as we, as smart as we think.

DAREN BLONSKI CFP®: You know, Dan, they're not even just buying gold. They're still digging in the hills for gold. So, and what you're looking at is the gold chart and it's printing a pretty mean looking double top if you ask me. So here's that double top right there. And we traded down this week right into that neckline and we found support.

DAREN BLONSKI CFP®: So for my gold lovers out there, there's hope that your gold prices might stay up right now. But I don't know, that pattern's looking very questionable. And you can see that this whole area of support right around 4,400 an ounce, that means people are buying.

DAREN BLONSKI CFP®: Trying to hold that up or whoever's buying is buying a lot there and that's what's keeping the price up but the fact that we're trending down and we're that trend looks to me like we might fall through we fall through this and then we could see some really significant move in gold I mean, you could make an argument that we could go down into this range, right into the 3,400 an ounce if we fall through that.

DAREN BLONSKI CFP®: So be on the lookout for that. But if you levered up in gold, you might want to think about some trimming over the last couple of years because it's certainly been good. Oil, you know, that's the talk of the town over the last six weeks. And oil continues to March down.

DAREN BLONSKI CFP®: It continues to look like we're going to see things settle down in the Middle East. We had, I guess you could argue, a double top right here and a close below that neckline, which tells you it goes lower, which is great news for people planning to go anywhere this summer. Now that summer is getting out for the kids and not completely destroy their bank account.

DAREN BLONSKI CFP®: So that's positive. But we're also coming up to midterms. And with midterms coming up, keep an eye on that. Palantir getting an absolute face ripper today. Look at those moves on Palantir, breaking out and breaking up. So Palantir is going higher, folks. They broke out.

DAREN BLONSKI CFP®: Makes sense because they're pretty much at this point, I think, are all embedded in every important institution in the world.

DAREN BLONSKI CFP®: Dare no politician to speak ill against Palantir.

DAREN BLONSKI CFP®: And then video, this is kind of interesting cause this is, that's, you know, gosh, how long will we be like, this thing is going to give up the ghost at some point, but you can see, we broke out in Nvidia this week or so we, what happened is we broke out right here and we came back in, tested it and we held support here.

DAREN BLONSKI CFP®: Not a lot of bounce. I, when we get these tests, I'd like to see a bounce up to feel like it's moving higher, but it did hold it this week. So I would say that I'm, even though we're down 1.4 today, I'm. Constructive on Nvidia at this moment in time.

DAREN BLONSKI CFP®: So overall, we have tenure going down. We have gold going down. We have oil going down. We have bonds going up. We have stocks looking good. It actually looks pretty dang good right now going into summer. We'll see what happens during summer because we get less volume. And as we step into the fall and get closer to the midterms, I do expect more volatility though. So. Make sure you don't take off your seatbelt yet.

DANO WEIR: Thank you for checking out this week's episode. It's happening in the market. As you see, sometimes we get a little deep, and yet there are so many life factors. There are so many different categories that end up influencing ultimately price. Price is the great equalizer.

DANO WEIR: So hope you've enjoyed our insights on the market and the economy and the disconnect therein this week. If this is your first time finding the show, subscribe. Subscribe wherever you are, YouTube, whether it's Apple Podcasts, Spotify.

DANO WEIR: You can go to our website, SonomaWealth.Com, if you're a prospective new client, if you want to learn more about how we help families in Northern California and across the country with wealth management and beyond. SonomaWealth.Com for your wealth analysis. You can book it there. For Darren Blonsky, Chris Sipes, I'm Dan O. And we will see you next week On The Markets.

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