Why Treasury Buybacks Are Not Lowering Bond Yields

DANO WEIR: It's Friday, September 11th, 2026. This is On The Markets from Fermata Advisors. Sinema Wealth Advisors is our private wealth arm. And today we are looking at Treasury buybacks and why they aren't working so far. They're not lowering bond yields. My name is Dano Weir. I'm the marketing director, joined shortly by our Managing Principals, Secretary Bessent.

DANO WEIR: He tripled long-end buybacks to... Push yields down, but the 10-year is holding near 4.95%. The 30-year hit 5.27% as inflation expectations repriced on tariffs and energy. So what is really going on here? We're going to look at Treasury Secretary Besant declaring, I am the House now. What did he mean when he said that?

DANO WEIR: Also, S&P still near all-time highs, then why is consumer sentiment at an all-time low? And of course, NVIDIA just had, quote, record earnings. But what about that half trillion that didn't make it to the balance sheet? We're going to look at the off-book commitments of the hyperscalers. On the Market starts right now.

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

DANO WEIR: Welcome to On The Markets. As I said, I'm Dan O'Weir, the Marketing Director, joined by our Managing Principals, Chris Sipes, CFP, Daren Blonski, CFP. Guys, we hadn't really talked about this, but It is September 11th.

DANO WEIR: It's the 25th anniversary of the attack. So just for a moment, if you could maybe share where you were that day. People like to share that and talk a little bit about your time in your life when that all happened. Chris, you can start just to recognize it.

CHRIS SIPES CFP®: Yeah, I was working a summer job and going into freshman year of college, if I remember correctly. Yeah. And the job was for an electrical contractor. So I was basically the gopher that would in under houses and above houses, wherever the other guys didn't want to go to run wire.

CHRIS SIPES CFP®: And, we were in, it was Lowe's or Home Depot is one of those, I think it was Lowe's and the radio was saying like, Hey, there's a fire, you know, at one of the twin towers in New York, kind of like a passing update. Like we're, we're keeping an eye on it. And we were at the like service desk, you know, getting. Supplies and such. And a couple minutes later, they said, oh, another plane has hit the other tower.

CHRIS SIPES CFP®: And it was just one of those moments that just burned in your head for the rest of your life, where you just realize everything is changing. And yeah, obviously, a major turning point for us then.

DANO WEIR: Daren?

DAREN BLONSKI CFP®: Yeah, I was... Chris, you were... I guess Ohio, so you were on East Coast time when it happened. I was on West Coast time. I was starting, I was on my way to join a hotshot crew, the Fulton Hotshots. It was my first day in the Hotshots, and we were headed up to, I was just being assigned to the crew from a different crew, and was going to meet them up in Tahoe area on the trout fire.

DAREN BLONSKI CFP®: It was...

DAREN BLONSKI CFP®: Burning at that time and I remember it vividly because my dad called me he's like D get up turn on the tv and I turned on the tv and right as I did that second tower went down and I'll never forget what he said he's like this is going to change sociologically you for the rest of your life and boy was he right I mean think about how many things have changed since then I mean before that we would go to the take a plane somewhere and you could walk right up to the gate right and then And I mean, just so much has changed since that moment.

DAREN BLONSKI CFP®: In that moment, though, they grounded all the airplanes. And so we had to fight that fire with no air support, which really wasn't much of a fight. We pretty much just watched it burn. But that's beside the point. Yeah, really a tragic day. And it's near and dear to my heart for sure.

DANO WEIR: I was senior year of high school. And it was early, obviously, in the year at Casa Grande High, and I woke up, and for some reason, I got a call from my friend who was calling me, and he was like, dude, dude, and he was trying to explain it all to me. And I just said, yeah, I know, because for whatever reason, I felt like I had already dreamed it.

DANO WEIR: So I, when I woke up, I felt like I already knew it. And I don't know if that means that my mom told me before and I went back to sleep. I have no idea. But when I woke up, I felt like I already knew about it, which is strange. But I'll say another instance where it kind of came back is because the early days of the early hours of 9-11, it was just a Cessna, right?

DANO WEIR: And that has happened in New York before a small plane crashes into a building. There was a famous Yankees pitcher who did it. And... So when we found out that it was most definitely not a Cessna and much, much worse years later in 2017, when the fires happened here in Northern California in Sonoma County, I woke up and they showed the map of the fires all over the North Bay. And they're like, there's some wildfires going.

DANO WEIR: And I went, oh, no, this is the same as the Cessna. These are not wildfires. This is a nuke. So I had a kind of a flashback to that. Thankfully, that didn't end up being true. But just to what you're saying, Daren, it kind of... Set the expectation of, you know, everything's on the table these days. So it was definitely a moving time for everybody.

DAREN BLONSKI CFP®: You know, in a strange sort of way, it's kind of like our entire coming to adulthood has been the backdrop of that, right? Wars in the Middle East and dealing with this, which a big part of what we're going to talk about today and inflation and oil going up, it's still happening, right? Our entire lifetime, we've effectively been at war in the Middle East. Which is kind of crazy to think about.

DANO WEIR: It is. And so we're going to shift gears here. But I did want to acknowledge that just because today's an important day in America. So we wanted to start the show and acknowledge that and recognize those who were lost that day. This week, we are looking at Treasury buybacks.

DANO WEIR: And we are going to start with a video coming to us here from Scott Besson, who is our Treasury secretary. He was speaking at Southern Methodist University. He had a very interesting comment. This is coming from the Southern Methodist University's YouTube page, as well as via Bloomberg as well. So let's take a look real quick here, guys.

SPEAKER 5: They'll say, oh, well, Treasury Secretary is taking a risk. Well, it's my dream. I have asymmetric information. I am the House now. When we intervene with the Japanese yen, I have pretty good insight into what the Japanese... What the Bank Of Japan is going to do, what Japanese policymakers are going to do.

SPEAKER 5: And you can bet against me if you want.

DANO WEIR: So, Chris, what is he saying here? We're talking a little bit. This isn't necessarily the Treasury buybacks. This is Japanese yen. But what is he implying here?

CHRIS SIPES CFP®: Well, I think overall they're trying to show a lot of confidence that they can help control. The Treasury market right now in, in keep interest rates low.

CHRIS SIPES CFP®: And so it's really, you know, their job to go out, like Besson said before, I am, I am my, my job is to be the number one salesman of us bonds. Right. And so they've, they've got to inspire confidence.

CHRIS SIPES CFP®: And in some ways they've got to inspire a little fear of basically you know investors that are going to bet against that essentially, which is very ironic coming from Bessing given that he's like famous for, being with Soros when they, when they broke the bank of England, because basically at that time, the bank of England said something very similar, like, Hey, we got everything under control.

CHRIS SIPES CFP®: We're going to do this, this and that. And, you know, investor beware. And, Soros and crew famously said, oh yeah.

CHRIS SIPES CFP®: And, bet against that and, and made a ton of money. So, you know, they, they cannot lose the confidence of investors because the more confidence that's lost, the higher the interest rates go, the more expense comes to the U S government for, for the debt.

DAREN BLONSKI CFP®: Think about his, like that moment. Did you catch how he's like, this is a dream for me. Like this guy's because he used to manage a hedge fund, right?

DAREN BLONSKI CFP®: So Besson's entire life, he has been sitting around looking at Markets, making his best educated guess, maybe trading with some knowledge, who knows, on what these policymakers are doing, what they're going to say, how they're going to act. And he's sitting there and saying, this is a dream come true, man. I've been waiting to be in this position my whole life.

DAREN BLONSKI CFP®: What a different psychology this guy has right now.

DANO WEIR: Right. And this is your kid. If your kid plays a football game like Madden and they go on franchise mode and they make their own little 49Ers team, this is the equivalent of your kid becoming... The commissioner of the entire real league. And now you're actually pulling all of the strings. So I think, you know, you can say what you want about Trump.

DANO WEIR: But I would encourage most people to, to look into what Scott Besson says and, and how he acts. And I, I will just say from an optic standpoint, he, he, I mean, he appears to believe what he's saying. So, if you're looking to have any confidence in your government, he, he at least talks the talk. Which is, I think, worth watching. So that's an opening for our episode this week.

DAREN BLONSKI CFP®: On a side note, did you, I forget who it was, he got in another fistfight. Like, the rumor was that he punched Elon in the face and gave Elon that black eye. I think it was earlier in the year or late last year. And then he got in another fistfight with someone else in the administration. Did you guys see that?

CHRIS SIPES CFP®: No. Multi, it was multi. Or I think he threatened him. I don't know if he actually punched him, but yeah.

CHRIS SIPES CFP®: Well, and that's, that's, that's the risk here is like you show all this bravado and confidence and everything, but if you don't follow through on it where you can't meet the obligation, you know, like, and as a parallel, look at, look at the war, like, Hey, we're going to go in there and this is going to be over in a week.

CHRIS SIPES CFP®: And here we are six months later, like you, you are risking, like, you, you know, if you're going to throw that out there that you are going to dominate the bond market, that you're the House. You know, and that bet against us saving the yen if you want, like, and it doesn't come together. Like that, it's a huge risk from a confidence perspective.

DANO WEIR: All right. We're looking at, speaking of his confidence, one of the moves he's making to try to control the bond market is what's called Treasury buybacks. We've got a great meme here with a top lock on a door that should be a metal bolt, but in fact, it's a Cheeto. So it says Warren El Nino inflation, Treasury buybacks. So Chris, what exactly is happening here with the buybacks?

CHRIS SIPES CFP®: Well, they announced a few weeks ago that they were going to increase the capacity of the Treasury buybacks. And it was, it was a small amount. It was from 2 billion to 4 billion, which obviously I said billion, not trillion. So it's, it's an insignificant amount of money when it comes to what we're talking about here. Remember the U S government.

CHRIS SIPES CFP®: Treasure owes 40 trillion so four billion is nothing and then they came back and announced after that actually they're going to move it up to six billion and you know without knowing all the details part of the part of the issue was like they did this kind of in between normal meetings so it's sort of like in a in in a you know emergency meeting not like hey guys don't panic but we're going to go ahead and double our buybacks because we feel like the market is not pricing treasuries correctly.

CHRIS SIPES CFP®: And then this week, even though they said they would do six, they didn't actually meet it. They didn't fully meet it. So the buybacks, again, I think it's more of a confidence thing. We're standing at the ready to make sure that there's liquidity in the Treasury market. And, at least so far, the market is not believing this.

CHRIS SIPES CFP®: And the interest rates have actually gone up, significantly. And even today we've got the hot CPI number rates initially went down saying like, Oh, okay, finally the Fed is going to take inflation seriously. We ended the day with rates higher. So they've got, they got a bit of a problem on their hands.

DANO WEIR: I'll put this in a, in a parent context. If you can remember this just so it's simple. Your child is misbehaving. They're banging a spoon on a plate. And after 30 seconds or a minute, you go, hey, you need to stop that or I'm going to take away your YouTube.

DANO WEIR: And the child, instead of complying, the child with your threat decides to do it even louder. That's what the market's saying to his buybacks. That's what the market's saying to his buybacks right now. So what? So what? Don't need it.

CHRIS SIPES CFP®: That analogy is hit the right spot.

DAREN BLONSKI CFP®: It could also be that he was promising. That Trump was promising 5,000 to every American adult who votes for him in the midterms. And maybe the market's saying, it doesn't matter how many treasuries you buy back. He's going to give us that wall of money. Here comes the TV.

CHRIS SIPES CFP®: Yeah. Well, that, that was combined with, you know, the AI we we've been talking about the fact that AI is taking a ton of capital right now. So even Even if they raise rates...

CHRIS SIPES CFP®: And without doing something that would eventually slow down the build out of AI, it's going to be really tough to slow down the inflation because That last meme said war and El Nino, which is going to probably cause inflation through food prices going up and stuff. But what it didn't have on there was one of the largest CapEx buildouts in history, which is the AI thing.

CHRIS SIPES CFP®: And, you know, this week we saw kind of the resurgence of open AI and it's, we were talking about internally the, the remarkable ability of these companies to go from like. The worst to the best with like every new, you know, release. How long ago was it that it felt like OpenAI was just left for dead and it was Gemini and then it was Claude and now we're back to OpenAI with Astra being, you know, the top of the heap.

CHRIS SIPES CFP®: And famously this week, there was a person that worked for Anthropic and OpenAI that basically said there's a non-zero chance that these things become so autonomous that they just destroy humanity.

DAREN BLONSKI CFP®: 10% chance. Yeah, there was. 10% chance. In Anthropic, he was a researcher from Anthropic.

CHRIS SIPES CFP®: Yeah.

DAREN BLONSKI CFP®: Did you also see the headline that came out today that Anthropic released a report that the IRGC was using Anthropic's models to design ballistic missiles?

CHRIS SIPES CFP®: Wow. Yeah. So it feels. I don't know, as a casual observer, it feels extremely chaotic and a lot of unknowns coming up, which is probably why we're seeing some of the numbers that we'll go through today in the charts from an economic perspective.

CHRIS SIPES CFP®: But the fact that they're on the front of the magazine with Trust Us, the old magazine indicator, let's hope this is not one of those we look back on and go, The signs were all there, guys. The signs were all there. I saw another little clip with Eric Schmidt, the former head of Google, and he basically said, our only chance is to pull the plug on this at this point.

CHRIS SIPES CFP®: It's just a matter of time before these things start talking to each other in a language that nobody even knows and communicating in a way that we can't even understand. So interesting, to say the least.

DANO WEIR: For those that don't follow, the quote magazine indicator is a thought in investing, which is that once it makes it to a time or a Barron's cover that purports to be like, hey, this is a big thing. That's actually a sign of the end times and that it's over. It's about to go the exact opposite way.

DANO WEIR: So we shall see if that ends up being the case for OpenAI. Sure was the case for Elizabeth Holmes, by the way, from Theranos, who popped up on a documentary this week, just as an example, if you remember her. So, let's move on mapping global trade balances, Chris.

CHRIS SIPES CFP®: Yeah. Since, you know.

DANO WEIR: Tariffs fixed everything.

CHRIS SIPES CFP®: Well, tariffs, I feel like are like maybe number five on the list of things people are actually talking about right now. Trade wars, you know, there's just so much other stuff to worry about, but there is a, there, there has been a lot of talk of, trade imbalances, global trade imbalances.

CHRIS SIPES CFP®: And if I remember the threat from President Trump a week or two ago, which I would not want to be worse right now in any way, shape, or form. But it was something to the effect of if they don't lower interest rates, I'm going to basically stop any country we have a trade deficit. That's the word I'm looking for. Anyway, this is cool because it shows the mapping of...

CHRIS SIPES CFP®: Countries with extreme trade deficits, kind of in the middle, which is where the United States and Canada are, and then trade surpluses, which is obviously the blue parts of the map. And I mean, at least for this snapshot in time, I would personally say I wouldn't want to live in any one of the places that are blue.

CHRIS SIPES CFP®: And the common...

CHRIS SIPES CFP®: The common kind of illustration of this is like you you have a trade imbalance with your barber you know and so like i personally believe that you know trade is good and i know there's a lot of nuances to that and i know that there's a lot of tariffs on our goods from other countries so it's not like you know there's there's a clear black and white here but I thought that was interesting that the trade deficit, you know, on a scale here compared to the other countries is really not.

CHRIS SIPES CFP®: Not at an extreme here in the US.

DANO WEIR: Wherever you found this show, whether it's on our YouTube channel, Cinema Wealth YouTube channel, or maybe on Darren, Chris, or myself's social media, we are monitoring comments. We are monitoring your activity.

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CHRIS SIPES CFP®: Okay, so investor sentiment. We've got the AAII results for this week. Pretty much in line with historical averages.

CHRIS SIPES CFP®: Maybe a little more bullish and a little more bearish than normal, but pretty in line. The CNN Fear and Greed Index dropped to 34 fear, which is down from 45 neutral last week. Now that's more of a positioning indicator because they look at six or seven different positioning indicators to come up with their overall number.

CHRIS SIPES CFP®: Then you've got Bitcoin Fearing Greed Index at 56, which is greed, but dropped pretty significantly from 74 greed last week on the Bitcoin side of things. So it seems like we kind of stalled out in that 77, 78,000 range for. For a while and the sentiment indicators are reflecting that.

CHRIS SIPES CFP®: Now if we shift for a second to consumer sentiment, we got the consumer sentiment numbers this week from the University Of Michigan, and not quite down to the lows we saw earlier in the year, but still pretty bad.

CHRIS SIPES CFP®: Of note here, we don't have the chart, but what was interesting on this was that from Joe Weisenthal at Bloomberg, showing the drop in sentiment amongst Republicans because they actually, I guess, asked my party segment, for that, that particular sentiment indicator. And there's been, there's been a little bit of a drop off there, which is of note for, the midterms coming up, but consumer sentiment, very low.

CHRIS SIPES CFP®: We've talked about in the past though, how that It doesn't matter as much in today's economy with roughly the top 10% of income earners accounting for over 50% of the spending in the US.

CHRIS SIPES CFP®: So just like in the Markets, it's really concentrated at the top in terms of what the top companies are doing. Same thing with the consumer sentiment and consumer spending. And as long as the market's been holding in there. That's, that's been able to facilitate a lot of spending despite the fact that the, the inflation has been headed higher.

DANO WEIR: And here's what that looks like in a real world example. If you own Joe's pool service and you are trying to service a thousand pools in Santa Rosa at a hundred dollars a month, you're hurting. If you own Joe's custom pools and you're designing pools at $2 million for six Google executives, you're doing great.

DANO WEIR: So the super high end because of that top 10%, like you're talking about, if you service people like that, you're doing great. And the large bulk of people are not doing so well. Is that kind of the issue there, Chris?

CHRIS SIPES CFP®: I mean, that's I think one of the reasons. I don't think there's like one reason for really anything in economics, but I think that is a big reason for seeing these sentiment indicators because typically you don't see the consumer sentiment this low.

CHRIS SIPES CFP®: With Markets at or near all-time highs with unemployment very very low like you know most of the indicators that you look at in the economy are good and in the Markets are good and so the fact that the consumer sentiment is so low and i i frankly think some of this AI stuff has has to do with it as well i mean like you know like Thank you.

CHRIS SIPES CFP®: Hey, maybe the AI is going to take your job or whatever, displace you in your job. And if it doesn't do that, it might also just wipe out all of humanity. Like it's, you know, you got to, I guess, log off at some point and just hope that this is, somebody has this under control.

DANO WEIR: Touch grass.

CHRIS SIPES CFP®: Yeah, touch grass, right?

DANO WEIR: Touch grass.

CHRIS SIPES CFP®: Okay, so we got the... The PPI, the producer price index on Thursday, which triggered quite the sell-off in the Markets, interest rates. Headed higher.

CHRIS SIPES CFP®: The producer price index is largely looked at as a somewhat leading indicator for the consumer price index for reasons that might be obvious, but maybe not where, you know, if a producer has to pay more for their goods to produce whatever product it is that they're going to sell, likely that is going to flow through to higher prices for the consumer. And so this is a known, or at least it was a known Fed indicator.

CHRIS SIPES CFP®: Something that they keep an eye on to see the trend in inflation. You can see that that ticked up again yesterday. So with that, the odds of a rate increase at the next meeting, the September meeting, which is next week, increased pretty significantly. And then we got the consumer price index today, which also came in hot.

CHRIS SIPES CFP®: And that pretty much solidified. Expectation of a rate hike next week. I think the CME briefly hit close to 100% on the chances of a rate hike next week. I think according to, we'll come back to this chart here. Here's the odds as of this morning at 85%.

CHRIS SIPES CFP®: So right now the market is expecting a hike next week of a quarter percent. On the rate target. I think that Warsh is obviously in a horrible rock and a hard place. There's even some people saying maybe he should hike by more than a quarter percent, that he should go by 50 basis points.

CHRIS SIPES CFP®: And the reason they're saying that is this, which is the two-year yield, the market's expectation of short-term interest rates, the two-year Treasury versus the Fed funds. Now, This chart was created yesterday when the two-year yield was at 439. As of right before filming, it had jumped up to 4.63.

CHRIS SIPES CFP®: So the two-year yield is almost a full percentage point higher than the Fed funds rate, which is the market saying, look, the Fed is just way too loose. And you can see the last time that this started to happen was in 2021. Where the two-year yield just took off with the inflation heading higher.

CHRIS SIPES CFP®: And the Fed ended up playing catch-up the whole way to try to catch up to that inflation spike that subsequently happened. So quarter percent hike is expected next week. I think there's a real argument for a 50 basis point hike should be in the cards if the Fed is paying attention to what the market is saying. On the rates front.

CHRIS SIPES CFP®: Now, if we look at the CPI categories, this is year over year from Lizanne Saunders, where most of the increases are happening are fuel, fuel, oil, gasoline, airfare, airfare is up 23% year over year. Not a great time to be a smoker.

CHRIS SIPES CFP®: And then on the flip side of that, motor vehicle insurance has been dropping. I don't know if that's because People are driving less. I'm not sure. But if you kind of look across the board with a lot of the inflation indicators and from a market's perspective, one that you keep an eye on very closely is commodity prices and commodity prices have been heading higher.

CHRIS SIPES CFP®: And which which says that, you know, whatever the sources are, inflation pressures are high right now in the economy.

CHRIS SIPES CFP®: Okay, so we talked a little bit about that expectation there. Now, what else is driving this on a huge scale is the AI build out. This is from Mike Zaccardi and this Morgan Stanley research here showing the hyperscalers, which would be NVIDIA, Broadcom, Meta, Google, Microsoft, Oracle. These are all the companies that are...

CHRIS SIPES CFP®: Mostly participating in the AI build out at the hyperscale, what they would call the hyperscale, and just showing the amount of borrowing that they're expected to do, which is more than $3 trillion in demand for money. So remember, the interest rate is just the cost of money. It's just the price of money.

CHRIS SIPES CFP®: And when there's a lot of demand for money, like there is right now, it's going to drive those costs higher. And, and so this to the whole point of like, why are the buybacks not making any difference? Well, 4 billion, in, in the shadows of, you know, 3 trillion of AI build out is just not going to, to make a difference, in, in any way, shape or possible.

CHRIS SIPES CFP®: Now, I don't think anybody thinks that those $5,000 checks are going to come out either, but if they were, I mean, that's, that's a trillion dollars in, in money that would go into, the Markets that, you know, would be financed through the Treasury. So, you know, 4 billion in buybacks versus a 1 trillion, stimulus.

DAREN BLONSKI CFP®: You know what the most shocking thing is? The most shocking thing in this chart is that Meta is spending the second most amount of money for hyperscaling and they actually have their own AI named Muse and who even knows about it. Nobody. Who's even using it? Nobody. Like maybe we're using it on Facebook and Instagram. I don't know, but.

CHRIS SIPES CFP®: It's, it's amazing. Wait till next week. Maybe everybody will be using it.

DANO WEIR: Yeah. Wait till the narrative changes. But that's literally what we've been talking about is that it literally, it'll be, and I don't really know what necessarily determines it, but all of a sudden it's just like, Oh, this is the thing. And it's, it's, it's not unlike junior high, to be honest with you. I mean, it's just. It's like, who's cool right now? Who suddenly someone's cool? But Meta is not.

DAREN BLONSKI CFP®: It's not just like, who's cool? It's like, I mean, I jump from platform to platform for sure because things I can't do today, I will be able to do next week on the latest release of something, which is incredible. And so like, yeah, part of it is just this kind of like popularity thing. But the other part is just like, well, who's actually got a true economic benefit to using this tool?

DANO WEIR: Yeah. That's true. Yeah, but I agree with you. It's you would not Meta doesn't feel like a company that's spending on AI. And yet they absolutely are.

DAREN BLONSKI CFP®: I guess the 17 billion they paid for addicting us all to their social media wasn't a big deal after all.

DANO WEIR: Well, when we didn't go into the metaverse, they decided to pivot.

CHRIS SIPES CFP®: Yeah. Okay, so this is from Joseph Wang. And he says, rates are largely the expected. Path of policy. See that ever since the war, the market went from pricing in a rate cutting cycle to a rate hiking cycle as energy prices rose. So the white is the expectations of rates post-war. The blue was the expectations of rates pre the war.

CHRIS SIPES CFP®: So the market's all about expectations and those expectations have changed dramatically just in the last few months. I mean, think about how we started the year off and the expectations around you. It wasn't, were we going to get a cut? It was how many were we going to get? Right. And, and now here we are going, it's not, if we're going to get hikes, it's, it's how many.

CHRIS SIPES CFP®: So it just demonstrates the, the unpredictability of, of the Markets and, and why diversification is so important. And, and from a perspective of Even if you guess the inputs correctly, guessing the results of that are very difficult.

CHRIS SIPES CFP®: Today being a perfect example of interest rates higher, CPI higher, expectations of rates going up higher, and somehow the equity market was up too. Had you known all those other ingredients, I think most people would have expected the equity Markets to be down. They were up. You just never know, especially the shorter the timeframe is, that variability becomes even wider.

CHRIS SIPES CFP®: And so be careful in the investment world of what you know for sure.

CHRIS SIPES CFP®: Now, if they are going to address inflation, they're probably going to have to address that AI build out in some way in the war.

CHRIS SIPES CFP®: Because the other... Areas of the economy that are super rate sensitive and cause interest rates to change. Chief among them being the housing market are really just completely obliterated at this moment. If you look at the US existing home sales, we continue to be very, very low, very close to what we were at the bottom of COVID and very close to what we were during the housing crisis.

CHRIS SIPES CFP®: In 2010. Luckily, this has not been accompanied by a large drop in prices. They were in 2009 and 10. You know, the prices have continued to stay high, but in terms of sales, they are very low at this point. Now, that is also Fed into the single-family housing starts. This is from Rick Palacio Jr. He says, Homebuilders slammed the brakes on housing starts in August.

CHRIS SIPES CFP®: Normally, homebuilders, we survey slow starts. Slow starts. 2% month over month from July to August. This year, however, they slashed the pace of starts per community down 20% month over month. This is the worst August month over month drop in our survey history. So essentially, those home builders are saying there's just no demand for these houses at this point at these prices.

CHRIS SIPES CFP®: And therefore, we're not going to continue to build them, at least in this month. Now, it could have been a one-off. Of course, any one month. Those numbers probably are very noisy, so I wouldn't read too much into this. But every place that you look at on the housing market side of things, it doesn't seem that those are driving prices higher on interest rates.

CHRIS SIPES CFP®: There's just not a lot of demand for money on the housing side of things. And that's probably largely due to housing affordability. This from Nate Garaci and he says, this might be the single most important financial chart in politics right now, which is the qualifying income needed to buy a median priced home. The median price home is in gray.

CHRIS SIPES CFP®: And, and then you look at the, the qualifying income that would be needed and it's just gone, pretty much straight up since 2022. And it continues to look like it's trending higher. And that's largely due to interest rates. You know, they've on They peaked above 7% this week in the mortgage side of things, which is going to continue to drive that income needed higher.

CHRIS SIPES CFP®: And this was from Lizanne Saunders at Schwab. The surplus of sellers over buyers hits a record high. Now, economics, if you continue to let this play out, the market is going to find an equilibrium. Market is going to is going to find the right price at where these things need to clear.

CHRIS SIPES CFP®: The more sellers you have, the fewer buyers, then prices would most likely come down in that situation to create an equilibrium. But you can see right now, at least, the equilibrium is all out of whack.

CHRIS SIPES CFP®: She says this is the biggest gap on record and up 52% from a month earlier. Now, all this is leading to, hey, interest rates are higher, Why would anybody want to own bonds? Bonds are horrible. Bonds got decimated in 2022 with the worst bond market in history of the U. S. And where do we stand today? This is also from Mike Zaccardi.

CHRIS SIPES CFP®: I believe this looks like a JP Morgan chart, but they're showing the fixed income returns in different interest rate scenarios. So the gray is if interest rates rise by 1%. The kind of medium blue is no change. And the dark blue is if they fall by 1%. And so you can see the various types of fixed income. You've got everything from the two-year UST stands for Treasury.

CHRIS SIPES CFP®: Tips are the inflation protected securities. And then you work your way all the way down to leverage loans, which are more of like a floating rate. Type of situation. So when they securitize things like credit cards that are going to have fluctuations in interest rates, floating rates, those would be at the bottom.

CHRIS SIPES CFP®: And the farther out you go, that's called duration, which is going to give you more upside if interest rates fall and more downside if interest rates go up. And you can see that illustrated with the 30-year Treasury there. And that's the part of the market that...

CHRIS SIPES CFP®: Besson is dealing with is the long end of the Treasury market where a lot of these folks are sitting on massive losses already. And if interest rates continue to go higher, that's a real problem for that market and selling that, being the number one bond salesman, selling that part of the curve is tougher with interest rates headed higher.

DANO WEIR: And we'll look at this when Darren shows some of the technicals, but I mean, that's the... Question of this episode is he's saying, okay, well, I'm going to do buyback to try to manipulate that result because I don't like that long end. Can we posit any theories as to why the market is not believing that, Chris?

DAREN BLONSKI CFP®: I'm sure there's probably lots of reasons. And you know, probably chief among them is that.

CHRIS SIPES CFP®: Inflation's already high. And so if they do a massive liquidity event to support the Treasury market, because you got to remember the credit market is huge.

CHRIS SIPES CFP®: The US Treasury market is huge. So for them to actually inject enough liquidity that would put the thumb on the scale there, it's going to relieve itself in other parts of the market, most likely in inflation. And there's just not a lot of room for that at this point. And it creates a lot of civil unrest as inflation goes higher.

DAREN BLONSKI CFP®: There's also another theory that's been posited out there. So typically when interest rates go high, then large institutions that have to, by default, own bonds on their books, like big insurance companies, will start buying those bonds to put on their balance sheet because that's better for them. The problem, though, with rates going up...

DAREN BLONSKI CFP®: So quickly is that it impacts the current bonds on their book. So in order to buy higher rated bonds, they've got to sell the bonds that they had on the book prior. In doing that, they'll take a loss or a write-down, which they don't want to do because then that looks bad and is problematic from a business perspective.

DAREN BLONSKI CFP®: So one of the struggles with rates going up, what should be happening is institutions should be gobbling up the higher rate. Bonds that have to keep bonds on their balance sheet. One of the theories out there is that because so many own such low rate bonds on their balance sheet, they can't sell them.

DAREN BLONSKI CFP®: And so they're not stepping in as the buyer. So thus forcing the Fed to start buying the long end because the institutions aren't doing it because they can't. That's one theory out there why it's continuing to float higher because the marginal buyer is not there and you need the marginal buyer to control price.

DANO WEIR: Okay, now if that's true, theoretically a hot new company that doesn't have those bonds on their books yet should be able to gobble up these high bonds that you're talking about, right? If they were held to the same standard, which would be the AI companies, but they actually don't have any money.

DAREN BLONSKI CFP®: Exactly.

DAREN BLONSKI CFP®: They're the ones issuing the bonds, right? And who wants to buy them? Well, no one wants to buy them because they're, for all the reasons stated.

DANO WEIR: All right, we will get to the technicals in a moment, but I always like to throw in one slide from the vibes. I always read the vibes in my feed, and Darren's going to love that I found a way to put Nintendo into this week's show. I just got a laugh out of this, guys, because obviously there's been all the tariff refunds, and Nintendo is a key example, a prime example of the type of company that would benefit from that refund.

DANO WEIR: As being based out of Japan, they took in... They had to pay, they got a refund, I should say, from the tariffs of $300 million. So a lot of people were expecting, hey, if I bought a console, if I bought a game, I'm thinking I'm going to get a check in the mail, which would be one strategy. Some businesses are doing that. Another strategy would be to say, oh, we're going to use that tariff refund and just offer it as a sale.

DANO WEIR: So that's how Nintendo's choosing to do their refund, is that they're offering the existing products, if you want to give them even more money at a 30%... Percent off sale so maybe scott Besant should take that same strategy to try to move some bonds Darren you want to pull up some candlesticks for us yeah i guess we could do that but we're going to start first with perhaps.

DAREN BLONSKI CFP®: Another reason why we're seeing the environment we're seeing at this moment let's see here so you Let's pull this up. So our global liquidity tracker. So in addition to global oil being jammed up in Saudi, because they blew up the East West West East pipeline.

DAREN BLONSKI CFP®: And literally, I don't know if you both have seen the pictures of those, the pipeline getting blown up. It wasn't like they just knocked out a section. They decimated the entire pump House. So that coming back online and it pumps something like 210 million barrels of oil a day.

DAREN BLONSKI CFP®: Probably not going to happen anytime soon. That's going to be problematic for oil, which I'm going to get into in the charts. We crossed that 100 Mark. That doesn't help inflation at all in the short term or the long term. But what I want to point out is this global liquidity tracker. So what this is doing is it's looking at different indicators like Treasury cash, net liquidity.

DAREN BLONSKI CFP®: It's tracking the liquidity pulse. Trying to figure out if there's money coming through the piping at the market. And the reason for that is a lot of things that we've been through starting with our conversation with September 11th was kind of like the beginning of this extraordinary stimulus behavior by the government in some ways.

DAREN BLONSKI CFP®: And we've had all these events happen since then that have made it easier and easier for the government to intervene and to do things in the market. I'm not saying it's wrong because if they didn't do it, we'd be world hurt. But it is interesting. Here we are looking at September the 11th.

DAREN BLONSKI CFP®: Starting to stare down the midterm elections. Trump's promising every adult in America $5,000 if the Republicans win the House and the Senate. And we have a shift loose in the early flag on our liquidity tracker telling us that it's quite possible that there's a wall of liquidity coming at the market. What does that mean for the market?

DAREN BLONSKI CFP®: It means that you've got cash flowing into the market, easy lending processes potentially to outweigh some of these higher interest rates. So, if we keep that in mind, as we look at the S&P 500, I think it's interesting that earlier, let's look at the daily chart in the week, started to look like we're going to lose this important support area, 764.

DAREN BLONSKI CFP®: We've been talking to everyone for a while about the fact that going into September, the market can sometimes be a little difficult, and going into October, and especially in a midterm year. We almost lost yesterday this important support level, and then we bounced up today quite significantly.

DAREN BLONSKI CFP®: So we're still below that 20-day period moving average, which is that important trading average. And we got rejected on it. You can see the market traded right into that 20 period and went down. But we didn't lose this support level, which is 760, 758 on the S&P 500, telling you that there's still strength in there. You could argue... That this is a bit of a double top.

DAREN BLONSKI CFP®: And the fact that it went below and then back up, that this neckline failed, so that double top isn't going to hold and that its market is positioning to go higher, which would make sense. I think this administration is pro-do-whatever we can to make it look really good going into the midterm to make it look really easy to vote for us again.

DAREN BLONSKI CFP®: And certainly with offering every... Don't buy a thousand bucks. I still get a laugh out of the fact that there isn't pure disgust. Maybe there's disgust, but no one's revolting over him saying that because we're just so used to that garbage. But I mean, talk about buying votes. I thought this was a democracy, but whatever.

DAREN BLONSKI CFP®: So interestingly enough, market still is holding on. And when we look at volatility, we started to spike volatility and it dropped right back down. On our VIX, which is a measurement of how complacent those who trade the S&P futures are. But we use it as a barometer to kind of say, hey, are we expecting volatility over the next 30 days in the market?

DAREN BLONSKI CFP®: And right now, we're not really seeing that. And if we're not seeing volatility, and in fact, you can see just basically all of 26 lower, lower, lower highs in volatility. So things just really settling down. Sometimes when they go down, they...

DAREN BLONSKI CFP®: Bounced back up, but the fact that it bounced back up the last four days and then just got whacked down today is interesting. And that is also interesting. And the market thinks that, guess what? Rates are going up. According to the CMEs, we're going to have a rate increase here on the 16th. So next week, 86% chance statistically that rates are going up.

DAREN BLONSKI CFP®: I did see earlier, and I haven't seen it on the charts yet, but the 30-year mortgage I'm sorry. Crossed the 7% line. So if our housing market was not already on life support, it's really on life support right now. So I think we start to see this extraordinary stimulus and that falls in line with my theory here on U. S. Oil. Talk about these, this, let's look at, yeah, so.

DANO WEIR: Ceasefire coming, ceasefire incoming, I can tell.

DAREN BLONSKI CFP®: Oh, exactly.

DANO WEIR: Look at it.

DAREN BLONSKI CFP®: Yeah. So because it's oil's been up now past a hundred, it's not below 80. It seems like when, when it's at 80, you know, that we can withstand some bombs getting lobbed at each other. And it seems like when we get over a hundred, that's when we start to see some kind of miraculous ceasefire agreement.

DAREN BLONSKI CFP®: Although the fact that the Houthis now took out. The East-West-West-East pipeline for the Saudis. That's big. That's a big permanent thing. And it'll be really interesting to see what happens with Saudi Arabia and the Houthis. Saudi Arabia backs the Yemen government military force.

DAREN BLONSKI CFP®: And it appears that the Houthis now aren't just this spoke IRGC kind of proxy. Now starting to really create some damage because if Saudi can't pump oil out of the Middle East because their pipeline's blown up and no one can get oil through the Hermos Strait, then that really does not bode well.

DAREN BLONSKI CFP®: And that's more of a permanent thing, right? Like, you kind of know people, the politicians are placing bets and being gentle when, you know, we're maybe taking a few boats out here or there, but when you take out a big pipeline, that changes the game.

DAREN BLONSKI CFP®: Completely because you can't just repair those things especially when you obliterate the pumping House right it's not like you can just pull a section out and put another section back in like yeah we'll see a year from now when the pumping House is rebuilt so interesting likely seeing a piece coming through or something you would think but we will see Interestingly enough, we're now chasing territory that we saw back when Russia first invaded Ukraine.

DAREN BLONSKI CFP®: So I would definitely see and look for some kind of geopolitical calming of waters. But it would make perfect sense if I was Iran and I was the Houthis to make life really miserable for the Trump administration going into the midterm election. And it seems to be playing out like that at the moment. We look at the MEGs because we talked a lot today about MEGs, which is, you know, these big, huge AI companies.

DAREN BLONSKI CFP®: Magnificent Seven are the ones that have really driven this market. They've been the leaders in this market. And so everyone wonders, when will the bubble pop? This is a bubble, right? The question is how long it goes. I don't think anyone would argue that it's not. Especially when we see AI companies taking out massive debt at basically any rate.

DAREN BLONSKI CFP®: Like that's a classic bad sign, right? Like, yeah, we'll build an electrical compute station at any price. It doesn't matter. Those are classic signs of a bubble. So I do think we're in a bubble. I think that will pop at some point. I don't think it will go well. I've said all along that I think AI is going to be on an S-curve of adoption.

DAREN BLONSKI CFP®: So it's coming into our lives, and there's some early adopters using it. But generally, people haven't started. Really changing their lives from it. And then I think the AI bubble is going to pop and it's going to implode and a bunch of these companies are going to go under and it's going to all reshuffle. And then when that happens, we'll see things really change.

DAREN BLONSKI CFP®: And we saw that in 2001, right? We saw in 2001 when it was dot-com everything, right? And every college student I was going to Davis with had a startup. And all of a sudden it blew up and it was nothing and the internet was dead. And now it's changed all of our lives. We function on our phones and the internet.

DAREN BLONSKI CFP®: And AI is going to, I think, take a very similar course to that. That's my best guess right now. So I think it's wise, wise, wise, wise to pay attention to how much exposure you have in the AI companies and portfolios. And right now, if you performed really well in your portfolio over the last, say, five years, it's because you had heavy concentration in the AI companies.

DAREN BLONSKI CFP®: I was sitting with a... Client this week or a prospect that was coming to our firm. And we were talking about that. And he's like, yeah, my portfolio has been just doing so great. It's amazing. I was like, and that's because you're very exposed to technology. When we look at the overall S&P 500, so this is what the S&P 500 would look like on a, what we call a heat map.

DAREN BLONSKI CFP®: So the bigger squares represent a bigger company, bigger capitalization. Broken up into 11 different sectors that the S&P 500 is made up of. Now, mind you, a lot of these companies like Amazon is putting consumer cyclical. Well, it's probably a technology company. And so I think the exposure to AI is even more understated in your portfolios when you do your reviews with your advisors than anyone even believes.

DAREN BLONSKI CFP®: When they break up your portfolio, they might show, well, your technology section is over here. Well, yeah, but Amazon and Tesla are consumer cyclical, and those are technology companies. Industrial is SpaceX. Well, that's a big AI company. And don't forget Meta, who's got that loser AI news going on.

DAREN BLONSKI CFP®: To watch next week. I'm going to totally eat my words and next week it's going to be like the coolest thing ever.

DANO WEIR: Yeah.

DAREN BLONSKI CFP®: It's actually scoring pretty well on some of the compute to cost benefit ratios scoring mechanisms. It's like out there, but nobody's talking about it. But maybe they're just using all the AI to put stuff in front of our eyeballs. So maybe it's more at use than we think it is. Point being is that we're...

DAREN BLONSKI CFP®: All way overexposed to AI, even if you think you're not. And so when this thing goes, it's going to go. And the question is, can Besant and his people or whoever's in at that point, because maybe it's the next administration, can they really stop it? Can they prop the market up? And what level of risk are you comfortable with?

DAREN BLONSKI CFP®: There isn't going to be, when the tide goes out of this thing, it's going to go out. It's going to be a low tide in Bodega Bay, if you know what I'm talking about. All you West Coast Sonoma County folk know what I'm saying.

DAREN BLONSKI CFP®: So the, when we go back to the mags, this is what we're watching, right? This is, these mags got to hold it together. They're such a big part of the market in this run up.

DAREN BLONSKI CFP®: Possibly why gold.

DAREN BLONSKI CFP®: Continues to make some runs although some of the run that we had over the last couple weeks going up to forty seven hundred dollars an ounce that's right forty seven hundred dollars an ounce now we're back down to about forty three hundred dollars an ounce so it's cooled off some you could argue that gold is in a downtrend it's making lower highs although you would might probably want to argue that this trend here this broke out and so now it's on its way back up and this with the bottom at 4,000 for gold.

DAREN BLONSKI CFP®: You could argue that too, and that it's just working its way up, and it's making higher highs.

DAREN BLONSKI CFP®: We'll see. This is looking at the weekly chart. Let me get rid of some of this artwork.

DAREN BLONSKI CFP®: On the monthly, you can see the trend up still looks like it's in play. So gold's still looking okay, and we've talked a lot about rates today, and you can see we're into... Okay. Maybe this is different, right? Maybe we're not headed down anymore. You have this double tap of this or let's call it 4.96% on the 10-year.

DAREN BLONSKI CFP®: One of the things I talk about a lot in this show is the more often that price visits a certain price, the buyers and sellers in that area get worn out and it tends to break through. So when it's going up, people go, oh, I'm going to sell this high rate. Is this a really high rate and it's not going to go higher? After a while, if it hangs out up there, all the sellers...

DAREN BLONSKI CFP®: Stop selling and then the buyers start buying. And it looks to me like we're getting ready to break through 5% on the 10-year. Are we headed into an era like we saw here and that that was the low of the low on the 10-year? Man, think of those days, a half a percent on the 10-year back in 21. That's something to behold.

DAREN BLONSKI CFP®: But maybe for a generation, that was the low. We'll see. Certainly would make sense when we think about how much debt the U. S. Government has. Something's got to happen. Besson actually said this week that within the next four years, he expects the next Brentonwood, which is basically be a re-collateralization of the dollar.

DAREN BLONSKI CFP®: They'll do some kind of financial engineering to reset the deck so that the dollar can stay dominant. All these dollar naysayers saying that the U. S. Is just going to roll over and die and not let the dollar be the world.

DAREN BLONSKI CFP®: Currency reserve currency they're just foolish it's not going to happen at least anytime soon and not it's certainly not going to happen unless there's a gun to our head and there's going to be some type of financial engineering to happen to remain dominant out there it just doesn't make sense for any other scenario we looked at oil that's looking silver looking weak on the metals on silver.

DAREN BLONSKI CFP®: Perhaps it's down perhaps that's it for silver you could argue that similar to the gold chart on the weekly chart it's looking looking south i think the risk is the downside on the silver chart looking at 56 is the the low so if you're in the market for silver eagles you might want to keep an eye out the 30 year which is we talked a lot about this is The far end of the curve is where a lot of the buying is happening.

DAREN BLONSKI CFP®: And really going back, we haven't been up in these rates since 2004, 2002, that era. We are now entering, which will likely kill the home owner's market for... A while. Eventually, people will adjust to higher rates and it will take on a new life of its own in a different way.

DAREN BLONSKI CFP®: But when people are used to these bottom level rates and then all of a sudden, a few years later, they're way up at 7%, it's just really hard to afford that House. It's really hard to swallow that debt and people just can't afford as much as they once could afford because of the cost of living, which is really hurting the higher end of, I would say, middle to higher end of the market.

DAREN BLONSKI CFP®: The uber, uber wealthy, it's probably not going to be an issue, but the disparity of income is significant. And anything over like kind of the 800 to one to half million Mark that might have been affordable down when rates were lower, it's not very affordable now. And so those houses are going to sit longer and longer.

DAREN BLONSKI CFP®: So if you're in that range thinking, hey, I'm going to sell mom and pop's House, they're moving into a care home, we're going to get a million and a half out of that. You better be ready for weight. Under current environment. Take a look at Bitcoin. Chris talked earlier about how it kind of stalled out and you can see the pattern here right around that 82,000.

DAREN BLONSKI CFP®: We break above that and things get interesting. We closed on the lower end to 77 today or it looks like we're going to here at five o'clock in two and a half hours. We've got the double bottom. It can't seem to break through this neckline. It looks like it's possibly going to fail.

DAREN BLONSKI CFP®: Let's see what happens here in a little bit. Market's not closed yet, so I want that. Signal first before I would say, hey, that's where we're headed. It looks like, guys, I don't know what to say, but it looks like the Duo Apple phone with the foldable screen in your face. Market likes it. Looking pretty good for the Apple side of things.

DAREN BLONSKI CFP®: I thought it was hideously ugly, and I'm like, who is going to want this thing? And then I stared at it for a while. I'm like, you know, I bet people are going to get used to this and want the bigger screen. I mean. Now you can, in your pocket, fold out your TV and just watch TV on your phone. Do you guys see that this week?

DANO WEIR: I did see it. And then it made me maybe double back to, wait a minute, what about the Vision Pro? I thought we were doing glasses. We're over the glasses now. We should move past that real quick.

DAREN BLONSKI CFP®: Yeah, pretty wild.

CHRIS SIPES CFP®: The glasses thing is kind of, I don't know, it freaks me out a little bit. Like, how do you know if somebody's recording or not? My kids will be somewhere and they're like, dad, he's got glasses on or she's got glasses on. And they notice it right away. And it's like, oh, instantly you're like, okay, am I being recorded right now?

CHRIS SIPES CFP®: Are there any rules around you got to tell people you're recording? Probably not. I mean, it's just kind of creepy.

DAREN BLONSKI CFP®: Well, if you're in public, I don't think you have to. But you have to tell anyone you're recording them in California. I wonder if the glass is going to be like, well, you're in Nevada right now. You're going to, and then, oh, you've entered in California. We can't record anymore.

CHRIS SIPES CFP®: Isn't the watch going to start like recording the last 15 seconds of every interaction or something like that? You can play it back or maybe it does already. I don't know.

DANO WEIR: It's going to, I'm just saying that we're, we're not, it's not doing that. It's not listening all the time. Could have sworn it was whether we knew it or not.

CHRIS SIPES CFP®: As a marketable feature, I should put.

DANO WEIR: Oh, right. Right. Not as an NSA feature. Gotcha. Yeah, I think Apple right now, you know, riding a little bit of juice from a new CEO. And it will be very interesting to see what happens because the new CEO, John Ternus, is a hardware guy. And the last two... A what guy? A hardware guy.

DANO WEIR: He is...

DANO WEIR: In the tech world, you have like the sales software guys and you have the hardware guys and gals, but a lot of times it is guys. And so... It'd just be interesting to see how that company, whose hardware has been highly regarded for a long time, with someone like that in the seat, an engineer type, it'll be interesting to see how that company changes.

DAREN BLONSKI CFP®: Yeah, that will be interesting. I wonder if he's been in the background like, okay, here's what we're going to launch. We're going to launch the fold-out phone.

DAREN BLONSKI CFP®: I still just can't get over how these...

DAREN BLONSKI CFP®: Screens are not just going to like after six months like start cracking but right i'm sure they've had that figured out by now i don't know it'd be interesting to see what happens with that but didn't look like a lot of changes to the new iphone but the market certainly seemed to like what it saw and think something's exciting there i also kind of think Apple's become a compute play and a utility play right like you know you could You could pretty much foreclose on someone, their House, their car, they're still going to pay their phone bill, right?

DAREN BLONSKI CFP®: It's like the last thing to cut in someone's existence as a human. The only people that like cut their cell phone bills and they're like, get rid of their iPhones or people that are like, have developed some like extraordinary commitment to discipline. And, you know, like I have a friend, they lock up their phone for three hours a day. So they're not looking at their phone or something like that.

DAREN BLONSKI CFP®: I don't know. Interesting. SpaceX, let's take a peek on that because that was all the rage a few months ago and it looks like we're going to get a breakout. So we revisited 150 a couple times and we closed above 150 there. So there could be a rocket launch on this one. That would be interesting.

DAREN BLONSKI CFP®: Some of the stuff that they're doing over at Grok, I'll just say, and GrokBot. I'm not advocating for any of the models, but I'm definitely a connoisseur. And some of the stuff that they've done is just phenomenal, what you can do with GrokBot on your computer. And running agents.

DAREN BLONSKI CFP®: I literally have 40 agents running for me right now on all kinds of things. And it's really impressive. I think that's starting to take off, but it's not quite there yet. I think the only reason it's not taking off is it looks kind of juvenile the way they did it, but whatever.

DAREN BLONSKI CFP®: Dollar, nothing really to report on the dollar and the dollar index. And so overall, I mean, I got to say, like S&P almost lost it yesterday, closed right below the 20-period moving average. We've got global liquidity ticking up, shifting loose. You know, maybe we don't get that pullback in September this year.

DAREN BLONSKI CFP®: Just maybe, I don't know. But the fact that global liquidity is kicking up and the President of the United States promising every adult American who votes for Republicans a $5,000 check. I think it... It's a sign that there might be some interested stimulus in the environment.

DANO WEIR: Can we pull up one more at the door before you go?

DAREN BLONSKI CFP®: Yeah.

DANO WEIR: Pull up Nike because Nike just.

DAREN BLONSKI CFP®: Oh gosh. There are some great memes this week on Nike. I just got to say.

DANO WEIR: Oh, I mean, just imagine giving back 12 years, revisiting a place you haven't been in 12 years as an investor.

DAREN BLONSKI CFP®: It almost looks like the Disney.

DANO WEIR: Disney, yes, not too far, actually.

DAREN BLONSKI CFP®: That's good. Or Peloton.

DANO WEIR: Yeah, Peloton. Disney's basically been in a channel for the last decade.

DANO WEIR: They've been hanging out in 100 after a much higher high.

DAREN BLONSKI CFP®: Let's take a look at DIS on this puppy. I'm throwing Nike, Peloton, and Disney all in the same camp.

CHRIS SIPES CFP®: I wish you could throw the price to earnings ratios on with that because get this guys, Nike hit a price to earnings ratio of 83. Let's just call it 83 because it's showing 83.82 on January 11th, 2021. The price to earnings was 83 on Nike. And now we're back down to 17.55. So.

CHRIS SIPES CFP®: You know, expectations changed dramatically along the way to here with Nike.

DAREN BLONSKI CFP®: And Nike removed from the S&P, which, hey, in fairness, a lot of stocks have been removed. It's bullish. Yeah, right. Be careful here. But look at that double top. Double top. Like there's a mean, a lot of people hear me on the show talking about double top. That's a mean double top right there.

CHRIS SIPES CFP®: On a weekly chart the and then this is Peloton okay that that peak you're looking at right there Peloton hit a price to earnings ratio of 2138.

DAREN BLONSKI CFP®: What could go wrong what possibly could go wrong well in speaking of bubbles like what could go wrong with all these AI companies what possibly could go wrong right and what was Disney's, can you look at Disney's price to earning ratio in 2001? 2021?

CHRIS SIPES CFP®: 2021, Disney hit a peak of 200, oh sorry 303, September 8th, 2021.

DAREN BLONSKI CFP®: What could go wrong?

DANO WEIR: Yeah, so if you're looking at these, are these a portent of things to come for AI companies? I mean, it's going to be true for some, we just don't know for which. Yeah, it's like.

CHRIS SIPES CFP®: Did the fundamentals actually change that much? Or was it the expectations of those earnings that changed dramatically?

DANO WEIR: Well, and I can speak to Disney very well because it's something I follow just as my side project, a company I like. And the fundamental, like the business of Disney is better today than it was in 2021 across all phases. But that doesn't matter.

DANO WEIR: The expectations are much worse. So, you know, is Nike making worse shoes right now? Absolutely not. In fact, they're probably better. But the, quote, vibes or whatever they, you know. The sentiment around Nike is absolutely in the toilet.

DAREN BLONSKI CFP®: Yeah, interesting. Well, I think we'll leave it there. We've done enough damage for the day.

DAREN BLONSKI CFP®: Close it out.

DANO WEIR: Thank you for checking out our show On The Markets. We are Fermata Advisors and our private wealth, Arm Sonoma Wealth. You've heard from our Managing Principals, Darren Blonsky and Chris Sipes. My name is Daniel Weir. However, you found this show. We appreciate our live streaming audience right now. Thank you very much. Make sure you subscribe.

DANO WEIR: That's how you get updated on future episodes. Hit that bell too. So you don't miss them. You'll get a notification about it. You can also give us some feedback and a review or a comment section. And we'd love to hear what you think about the show, what you might want to see on the show. And, remembering September 11th today, 25 years later. And moving on.

DANO WEIR: Have a great weekend.

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