00:00:00
Speaker 1: Good afternoon. We are getting right down to business here. We are doing it live, doing more at four weekday afternoons, right after the Guy Benson Show and just before the News Blitzer in seven ninety KBC Motech on Money Live on the air in seven ninety streaming live online worldwide at KBC dot com, and you're on demand Motech of Money podcast at KBC dot com, Apple, iTunes, YouTube, and all your favorite podcast platforms. Another big day in the financial markets, this time on the downside, with the now coming off the record highs hit earlier this week and SpaceX seeing its first down day and it's following It's a story IPO on Friday. Socks moving lower today. Treasury yields surged as investors grew uncertain over the path of monetary policy. After we heard from the new Fed Shairman Kevin worsh today after several federal reserve authorities indicated there could be a great hike this year to deal with inflation that's been running hot lately. They're now coming in for a closing loss of five hundred and seven points fifty one thousand, four ninety two, this after blowing past fifty two k in the previous session and closing it at all time high just below fifty two thousand, The S and P five hundred down ninety one today seventy four hundred twenty and the Nasdaq down three hundred and fifty five points of twenty six thousand, twenty two, the yield and the tenure note now at four and a half percent. Watching the cryptos today as well, looks like at Bitcoin hovering it around sixty four thousand, three hundred, Ethereum at seventeen hundred and forty three doze at the moment at eight cents. Looks like some of the major tech names that led the losses today, with Microsoft, Meta Alphabet, and Amazon all closing lower. In SpaceX also moving lower for the first time since going public on Friday, we see SpaceX shares moving lower by nearly ten dollars at one ninety one and change. At the conclusion of the Fed's two day meeting today, the first under the new FED share Kevin Walsh, the Fed left interest rates unchanged. Number of FED officials see rates increasing this year. According to the summary of the economic projections that came out today and the news conference at Warshell, the FED funds rates median estimate for year end now stands at three point eight percent. That's an increase from three point four percent in the previous projections from March. The Fed's first statement under warsh clocked in at only one hundred and thirty two words. According to the Wall Street Journal, Wall Street was troubled by the final six of them, and that is the committee will deliver price stability, holding its benchmark rate steady today as expected. In the news conference, Walsh also repeatedly emphasized that the Fed's unambiguously and unanimously committed to bringing inflation back to the fed's two percent target. Investors took that as a sign that the new chairman would preserve the Fed's independence and be open to rate increases despite his appointment by President Trump, who has pushed for lower rates. Stocks moved lower and as did bond prices today, pushing treasury yields higher. In fact, every sm P five hundred sector lost ground today, dragging the broad index down one point two percent. Will be focusing on all of this with extended coverage here today, and of course talking more about the price of oil, which has been coming down given the latest developments in the Middle East with this Iran US deal coming together as supposedly going to be formally signed on Friday, if not before. We see BRENKRWD in London hovering it around seventy six dollars seventy two cents a barrel now and in New York covering also at around seventy six dollars a barrel. How extended covers this hour with prominent economist Kevin Clouden, fellow at the Milkin Institute on cryptos Today, I'll be speaking live with Eleanor Arrett, host of the Cryptos in America podcast. But right now let's get right to it on your money, the markets, the economy, the FED decision today and the whole works under the new FED share Kevin Warris. Joining us now is Brian Perry, veteran market strategist at Brian Perryinvesting dot com and author of the twenty five percent Cash Machine. Brian Perry, thank you very much for taking the call on this big day today.
00:03:54
Speaker 2: It is humpday in America on Wall Street here, Frank, thanks very much for having me. SMB bottom out you know about a week ago this time here just below seventy three hundred and has now since you know, really staged a very you know, sharp multi day rebound here thankfully to you know, two major events, one being the space x I p O and then the ceasefire announced over the weekend by President Trumplich ignited a big you know rally on Monday. So, you know, the major shift in sentiment here has you know, it's spilled over for a while, but the market is still very bifurcated here. You've got basically the AI trade, uh still leading the way, and that would be more or less the hardware and semiconductor trade doing that all the heavy lifting here for the most part, and some of the industrials too, like the power generation companies like ge and and and other names that are in the you know, high end utility space that are that are providing the power for the data center business here. What we're seeing though, is it's the mags haven't became kind of a source of funds here for the SpaceX trade, even though you know, it was said eighty five you know billion dollars offering to the most part when it came through. Uh, you know, there's nearly about you know, two to three trillion dollars where the stock was sold going into that and so a lot of the big names that we you know, come to believe ours are you know, storehouses of wealth have really come under a lot of pressure here, you know, like like you noted Microsoft for instance, and Salesforce dot Com hitting new lows here, Adobe hitting new lows here, Autodesk, you know, Meta. It's just it, It goes right across the software space. It's very very doom and gloom in that space. Whereas on the chip and hardware side, you know, big moves up to the upside today by Dell and Vertive, you know, which is the big you know, cooling company for a lot of the data centers here and as well as Dell you know, providing servers for the for the data center business. So the market's getting more selective here in the whole business of AI, the next generation of the AI winners versus losers. And we need to be all conscious as investors as to you know, just because you have an AI tag name you know, to your to your business doesn't mean you're you're doing well. It really depends on how you're executing the whether or not the market has glombed onto our business model. So with that said, and then you know these these the themes of the last week here which took hold were like new capital raises here by massive equity offerings here, and that's a big deal.
00:06:19
Speaker 3: We saw that.
00:06:19
Speaker 2: Coming out of out of Alphabet.
00:06:22
Speaker 3: You know, eighty billion, eighty five billion.
00:06:24
Speaker 2: Dollars, saw that out of Oracle, and we're seeing that again, you know, with other names that are going to be coming with more equity offerings here to continue to foster their CAPEC spending where the market's calling that, you know, where's the return on equity and all this spending here going on because now you're going to bring in equity, which the loot turnings and that's you know a huge issue with the street right now. So the by the dipinstitutional trade frank that did that did come back in the AI leaders but the leadership is getting narrower in the space here, and it's you know, the semiconduct equipment is like you know, applied materials and things like that, and also and you know names like the video six trillion dollars great stock, I own it. But at the same time, the law of diminishing returns. When you're six trillion, it takes a lot to move the needle at that at that space, even though the stock is cheap. So the market's really being more determined about the pure plays for the next agentic and physical AI buildouts, which is really where the concentration of focuses. And so that's that's an interesting play on the market here because not much else other than some of the industrial names like I mentioned, and some of the travel names because we have this big blowof in oil prices. That's that's a good trade, but I don't know if it's a really good long term investment at this point here. And the market in general is keeping one eye open at night because, like you said, with the ealds moving higher here and you know, half of the FED eight nine out of eighteen FED members now anticipate a rate hike before the end of the year, that put the market on pause here today. And so it's going to take you know, a very determined, you know, investment crowd that gets around certain names here to continue to you know, maintain leadership here. And that's what's really driving the you know, the bears and the bulls at this point in time.
00:08:13
Speaker 1: Either you're live with the veteran market strategist Brian Perry, Brian Perry, Investing dot com and author of the twenty five percent Cash Machine. It's been a while since we've tatted behind live microphones. Haven't talked since the SpaceX ipo on Friday and a couple of record chattering days for SpaceX and today the first down day. So history being made today once again for SpaceX, which closed down nearly ten dollars at one ninety one and change a Tesla also pulling back more than eight back below four hundred. What about the SpaceX ipo and what do you see ahead for SpaceX doc here?
00:08:46
Speaker 2: Okay, let's you know, we've been in prior shows have said, you know, we own this through the Baron Fund, the bpt RX, which has moved up nicely from like two fifty to two ninety, you know, during this whole big pop on the on open day and the two days of subsequent now here we are with the first down day and you know it up overnight, you know, the two twenty back here to one ninety five. Here in the extended hours, I started buying some of us SpaceX in the open market here today, full disclosure, I think that there is you know, at this point between next week, and then within the next fifteen days SpaceX is going to be added to the Russell one thousand, the Nastac one hundred, and I believe that, you know that that's forced buying there for index funds that had come into this. Frank not to mention that Elon Musk was talking about possibly a trillion dollars worth of revenues from SpaceX between now in twenty and thirty five. Those are eye watering numbers, and you know where that all comes from is anybody's guests. But you know, at this point here, to bet against him after this is really I think, you know, it's not wise to to. I mean, I remember back when Tesla was fifty dollars and then Fidelity came in and put huge money behind that kind and they're doing it right now too. The biggest funds are piling into SpaceX violence at this you know, two hundred range, and I think when you've got that kind of institutional accumulation heavy duty, that that it's you know that retail investors should have a piece of this, because I think this is a multi year compounder. I don't think it's just a trade. So I'm buying SpaceX for the next you know, five to seven years, and there will be competition for sure, but they have such a lead right now and based upon you know, their ambitions here and if they even do fold in Tesla, which is some of the talk out there, that'll even help, you know, just migrate the two businesses together here and just you know, the synergies will be fantastic. They already do a lot of business together, but that'll just you know, be another catalyst for the stock.
00:10:47
Speaker 1: One big story after another today and then the new FED share spoke and made the decision to hold the line on rates for the time being. But looks like the FED overall is hinted more strongly at a rate hike. You're given the cards on the table and some wild cards still out there. What do you think of his performance today? In the market reaction we saw.
00:11:08
Speaker 3: Well, I think you talked too long.
00:11:09
Speaker 2: You know, it was getting kind of palaesque in the in the latter parts of his commentary there, and when you talked about I'm going to keep it short and sweet, and the market started to kind of pull back on you know, just you know, you said you were going to let the data do the talking. And then you know, we won't try to forecast going forward. I think the market saw a bit of a you know, a bit of the same culture come out here, you know, in terms of you know, his presentation on you know, after what the market saw as a we're going to stand pat until we know more.
00:11:41
Speaker 3: And that's fine.
00:11:43
Speaker 2: You know, the market the earnest fhere for the quarter are supposed to be up nearly twenty percent year over year. That's just ginormous, you know, from the standpoint of historical comparison. So if the market does do that, and it's fine to be in a three to four percent world of inflation as long as your economy is cooking at you know, sixty eight percent. So that's that's you know, a nice problem they have. It's on a matter of everybody's getting wage increases and being able to adjust for it, you know, with the war now and we've got oil back down here to seventy five, we're going to see that some of the you know, some of the off of the oil prices here, and that's going to show up here in the future PPI and CPI numbers, so I think, you know, and all things are tethered to petroleum everything that's made almost you.
00:12:23
Speaker 3: Know that you name it. I don't even would have done the list.
00:12:27
Speaker 2: But but with the oil prices pulling back here and it looks like, you know, they're going to continue to work on this deal, you know, which is it's got some bumps in the road still, but it does seem like there's there's traction for the really for the first time here with the Iranian cease fire deal. And so with that said, I think that you know, we're going to see very strong earnings here at this quarter here, and we're going to see some of the inflation start to have here, you know, coming forward here. So because you know, energy is such a large component too in the inflation number can't say much about food and other things, but also dwellings, apartment dwellings. Finally, a lot of apartment listings are coming down the for rents, and they're coming down rather dramatically in some of the cities. So owners equivalent rent, which is a big part of CPI, is also going to come and tame. And that's been a stubborn part and sticky part of inflation for months. So I do like the path forward for inflation. I think Warris was being very cautious here, and rightly so, but I do think that the path of least resistance is lower for bond interest rates going forward.
00:13:31
Speaker 3: Here.
00:13:32
Speaker 2: I think we saw the I think we're seeing, you know, the ten year here at four forty six today four point four to six, probably four and a half percent is probably going to crest and then probably start to pull back.
00:13:42
Speaker 3: That's my call.
00:13:43
Speaker 1: The other big story, of course, the Middle East story of the President defending the iron the ceasefire deal. We also heard from the International Energy Agency forecasting an oil glut next year if the straight or four moves opens. We're still waiting for this deal to be signed and to be moving forward. In the meantime, suddenly oil is back at around seventy six dollars a barrel. What about oil here? And what about oil stocks and any thoughts on investing in that sector at the moment.
00:14:11
Speaker 3: Not at the moment here.
00:14:13
Speaker 2: I think, you know, right now, you're gonna you know, you probably want to be in companies that are going to you know, benefit from lower oil prices here, and and certainly that would probably be the refiners, you know, because they're going to be selling more fuel. So that's Vallero. That's Phillip sixty six, and you know and and names in that that that particular space right now. But that's a you know, that trade really you know has happened here and that's you know that left the station, you know when the ceasefire took place here that you know over the weekend and really has come in quite hard. It's hard to say where the bottom of oil is going to be here because every spigot in Texas is wide open.
00:14:50
Speaker 3: It has been wide open, so there's a lot of supply coming now.
00:14:53
Speaker 2: They do have to refill the the Strategic Oil Reserve here, the s ro UH and you know they they're down to like three hundred million barrels I guess and change. But you know at the high water mark or at the high volume levels around seven hundred to seven hundred and twenty million barrels here, you know for the US to stockpile their oil, so that needs to you know, get refilled. And at the same time, you just you know, with the with the Middle East here looking to try you know, open up again the straight up hornor moves, We're going to see a lot of flow here going back and forth. And I just think that at this point here, the shipping stocks, you know, they've locked in a lot of long term contracts during this whole time here, so those those were those shipping stocks may do okay. But again, Frank, the tide is moving out in the oil patch, and you just don't want to fight the trend or the tape when it comes to something like that. Give it a chance to settle in here. I think oil will probably settle in the sixty five to seventy dollars range. And then from that standpoint, then look at your the big dogs, you know, like Exxon and Chevron.
00:15:57
Speaker 1: All right, and the audience is getting their pen and pay for out, Brian Perry. Any specific places where you are putting money now and or taking it off the table.
00:16:06
Speaker 3: Well, sure enough.
00:16:08
Speaker 2: As I noted earlier, SpaceX here I think is a generational buy Okay, people should really, you know, if you don't own it, buy it, buy it in here. I don't think you may be wrong for a few days, but I think you'd be right for the next ten years. Hewlett Packard Enterprises HPE just below out numbers here. Apparently the PC cycle is going through a massive you know reset here and in a real upgrade here. This is global from the standpoint of all the future. You know, PC offerings are going to be offering AI and that's a massive reset for that particular industry here. So not just doalt computers, but but HPE is you know, is a big name and their enterprise. You know, they're bringing AI to all the enterprise names that are really having a hard time now, you know, generating the kind of interest that you know that that made them such powerful names in the past. But they came out with great numbers here. HP it ran up to sixty five if it's pulled back here to roughly forty five here forty two, forty three. I think it's a goodbye on this pullback here, and people should take a look at that Global Founderies here. This is one of the companies that the Trump administration has poured a lot of a lot of money into here for the reshoring of the fabrication of chips and semiconductors here and in the US. GFS is a really solid name here, trades it around eighty one, traded up toward ninety, pulled back here, So these are good stuck to buy. And then definitely the quantum computing names. Frank, you know, I O n Q and qbit's QBTS. I was at a conference o of the weekend here in New York City here called Q Day, and that was just it's very surreal because it's another you know, y two k on steroid situation here shaping up here. So if you don't have a really good you know, anti quantum threat you know protocol in place, then you know you're subject to massive cybersecurity violations. We'll talk about another show when when I can get into it more. But it's something that it was new to me and a lot of very keynote speakers. You know, we're very very serious about it, and it's going to be something that everyone's going to be. You know, at every next quarterly earnings report, people are going to say, what's your Q day strategy as opposed to what's your AI strategy? So bear that in mind when we get into the next set of earnings calls and coming off. You know, Microsoft they got accused of some really bad stuff here and filed actually yesterday that they have cut their numbers here basically on all their co Pilot sales and their their Azure sales here and there's you know, the the the Michigan pension fund is leading this class action lawsuit. It's it's a big deal and the stock is really coming hard last two days. Uh, you know, God forbid, there's something that that's true to form here with the with what's going on, because they're they're bringing Nodella, you know, the CEO and the CFO to task on this one here saying you guys really overstated what's going on here with your with your business model, and that's got everybody in it tizzy. And then I took a trade on Lamb Research Frank, which is one of the leading seven conducted clar names. It just went kind of flagpole here in most of these stocks will retrace and come back. It's around three eighty five. I think it can come back around three fifteen, three ten, and I'll try to buy it back down there sure.
00:19:18
Speaker 1: By Brian, Well, thank you very much for taking the call on this big day and doing such a confrehensive job forst As always, that is Brian Perry, veteran market strategist at Brian Perryinvesting dot com and also author The twenty five Percent Cash Machine. Brian, thanks for taking the call and look forward to speaking with the end very very soon.
00:19:35
Speaker 3: Okay, very good, Frank, thanks so much.
00:19:37
Speaker 1: Thank you very much. Seven ninety KBC. Motech on Money continues here in seven ninety kab C. Good afternoon, Well, big day for the stock market, this time on the downside, the now coming off the all time high achieved in the previous session and in the prior session to that on Monday. The now coming in for a closing loss of five hundred and seven points today at fifty one thousand, four ninety two, the SMP five hundred, down ninety one at seventy four hundred twenty, and the Nasdaq down three point fifty five to twenty six thouy twenty two. Stocks moving lower, Treasury yield surged investors growing uncertained over the path of monetary policy under the new FED chair Kevin Warsh, after several Fed officials indicated there could be a rate hike this year to deal with stubborn inflation. The yield and the tenure note now at four and a half percent. Among the tech names taking hit today, Meta, the parent company of Facebook, not getting any likes today, down more than thirty two dollars at five sixty seven and change, Microsoft taking a hit down nearly fifteen at three seventy eight ninety one in Wall Street drawling SpaceX after moving higher since the IPO on Friday, having its first down day today, down nearly ten dollars, down nine ninety eight at one ninety one eighty two. Tesla also pulling back by more than eight dollars at three ninety six and change in video down nearly three at two oh four sixty five. Taking a look at the price of oil, it is pulled back and looks like oil fuel sensitive names moved higher today, including the airlines, which have been rising since this Iran deal has been announced. Right now Brentkrud in London hovering it around seventy six dollars seventy two cents a barrel, and in New York we're also harboring around seventy six dollars a barrel. We'll be taking a closer look at crypto's coming up with the next stamp fire with Eleanor Terrett, host of Cryptos in America podcast Bitcoin right now harbing it around sixty four three hundred eighth at around seventeen hundred and forty in Doze at the moment at eight cents MO. Tack of money continues here in seven ninety KBC. Looks like we'll painted forward with possibly higher interest rates before the year is over. Based on what we heard today from the new FED Chair Kevin Warsh. The Federal Reserve holding its benchmark rate steady today as expected in the new FED chair Kevin Walsh's first meeting is FED chair, but looks like the FED officials. Quarterly economic projection showed that nine of nineteen FED policymakers penciled in at least one rate increase by the end of the year, up from zero in March. At the new FED shares and news conference, he repeatedly emphasized that they're unambiguously and unanimously committed to bringing inflation back to the Fed's two percent target. Investors took down as a sign that the new FED share would preserve the Fed's independence and be opened to rate increases despite his appointment by President Trump, who has pushed for lower rates. In all this, the now came in for a closing loss of more than five hundred points off the all time high, back to fifty one thousand and four ninety two. The S and P five hundred, down ninety one at seventy four hundred and twenty and the Nasdaq down three fifty five to twenty six twenty two. Our extended coverage continues now at Joining US Live now as prominent economist Kevin cloudon fellow at the Milkoine Institute based here in southern California. Kevin, thank you very much for taking the call here this afternoon.
00:22:50
Speaker 4: My pleasure, Frank and best to all of you.
00:22:53
Speaker 1: Thank you very very much. Give us your impressions of what we heard today from the new FED share and some of your big takeaways.
00:23:00
Speaker 4: Well, it's interesting in what he said and what he didn't And Kevin Warshead made a point of telling people even before he was confirmed as FED chair that he really isn't as much of a fan of these forward looking prognostications coming out of the FED. That he feels like they are often misinterpreted, that they might send messages or lock the FED into policy decisions that don't necessarily align with the way the economy is moving. Obviously, there is on record this sentiment that nine out of the nineteen members the FED Board are expecting a rate increase this year, and there's some speculation that actually a lot more might believe it. That they don't also want to get locked into any kind of prediction because they want to see what happens in the Mid East and the Gulf. They want to see what's happening in terms of the frothiness and it's been going on around the SpaceX Ipo and some of the other moves in the market, and acting prematurely could obviously change market sentiment and have a few other impacts.
00:24:16
Speaker 1: What was your impression of his communications style compared to some of the other recent de FED shares, most recently, of course Jerome Powell and before that Janet Yellen and before that Ben bernanke.
00:24:29
Speaker 4: Well, I think that he's a bit more terse. I think that he's very much more careful about what he says. There's always the story of every FED share, basically post Alan Greenspan, being very aware of Greenspan's irrational exuberance comment and how it spooked the markets, and how there is a very real sense from Kevin worsh that he wants to play it a little bit more close to the vest in terms of how he does it and how he presents things. But he's also still clearly trusted, and there is a general sense in terms of both from the confirmation hearings in now that he's somebody that the markets generally trust, even if they're off from record high, that the market didn't react with any kind of massive move one way or the other. There isn't a sense of panic or negative negativity out of the way he speaks, which is very reassuring for a lot of people.
00:25:35
Speaker 1: And of course Alan Greenspan proceeded Ben Bernanke and I remember back in those I remember talking to Paul Kagis from the Nightly Business Report about Alan Greenspan's style and jokingly said that that people needed to get a green Spanish dictionary to understand what he was saying. And then Ben Bernanki kind of was very understandable, made it a point to be to be speaking in plain English and all that. What about Kevin Worsh's performance, So from that standpoint, is he ambiguous or was he clear?
00:26:06
Speaker 5: To you?
00:26:07
Speaker 4: Well, I think it's Well, here's the thing, I think he's relatively clear. But when somebody describes it as being a little economical with words or being very considerate of that, I think he's not trying to he's not trying to dance around the subject the way Greenspan did, which is why when Greenspan was very direct or what people's post was, the markets were often to be acting very wildly. There every trying and breathe something. Ben bernanke you know very much was the product of the Great Recession. In terms of how he's presenting and doing things. I think Kevin worsh is a product of some of the uncertainty right now. But also, you know, he is an appoint appointee by President Trump, and he's very aware that the way that Jerome Powell spoke, in the way that Powell suggested things tended to get negative reactions out of the White House. I don't think that necessarily that's going to change his policy. It's pretty clear right now with the fact that he didn't lower rates, that he wasn't pushing for lower rates, that he was holding and saying, let's see given what happened in the Middle East, that he's clearly independent, but he's also very aware of being able to work with the president. And it's clear that Jerome Powell, by the you know, by the last several months that he was in the role wasn't particularly trying to to do that and had at some point given a bunch of the other pressures, kind of given up and made statements that went his own way.
00:27:44
Speaker 1: Very interesting, and like Powell, he's not an economist, right, it looks like he's an attorney as well. Graduated from Stanford with a bachelor's degree in public policy and Harvard Law School with the jd in nineteen ninety five. He's a financier and attorney. What is that enough firepower to get him through this position?
00:28:06
Speaker 4: Well, I think that it can be. I think that he has. It's worth remembering he's used to dealing with very large lots of data being generated by economists. You know, he had been on the FED board before. He does have some clear experience in terms of managing and interpreting that information. And it means to some extent though that yes, he does need to rely on this interpretation of the markets and on where the actual data is going. And the FED still has the most robust data access of any part of the federal government in some ways, even more so now given some of the dose cuts, and so that does put him in a relatively strong position. The key thing really is his communication is credibility. The other thing that's really important with Kevin Wors, which we'll wait to see how it plays out, is that he, unlike powelland very much onlike Bernanki, believes in the tighter monetary supply, and he's made multiple comments in the past about that. And the real question is that given some concerns about a bubble in the market, some concerns about the overall monetary supply, he's raised the idea of potentially tightening the monetary supply, which is something that Powell played with but didn't really stick with, and if that happens, that could be far more profound in his economic impact and policy than almost anything else he does.
00:29:44
Speaker 1: Kevin Cloud wish we had more time, but thank you very very much for joining us here at this same afternoon with that thorough assessment or the new fed Share in his first appearance as fed share today following the big announcement on the interest rates and a statement on the economy. That is prominent economist Kevin clouden fellow with the Milkin Institute based here in southern California. Kevin Cloud, thank you again very much here for joining us live this afternoon.
00:30:06
Speaker 4: My pleasure Frank on.
00:30:07
Speaker 1: Seven ninety KBC. Attack of money continues here in seven ninety KABC stock slip, Bitcoin two moving lower following the fans' decision to hold benchmark interest rates steady today under the leadership of new fed Share Kevin Warsh, still getting used to saying his name fed Share, Kevin Walsh, fed Share, Kevin Warsh, fed Share Kevin Warsh. He was the guy in the spotlight today instead of Jerome Powell. The dip and the cryptos occurred as investors took in the latest policy statement, and this after Bitcoin has been rebounding lately from a recent low below sixty k. And joining us live now, the lighted to say we're joined now by Eleanor Terrett, the host of the Crypto and America podcast. Ellen, thank you very much for joining us live here this afternoon.
00:30:53
Speaker 5: Thanks brand, good to be with you.
00:30:55
Speaker 1: Wonderful to have you with us here. It's been a while since we chatted behind live microphones. We did see a bitcoin dip below sixty k not too long ago. It's harvering. Let's see it around sixty four thousand here at the moment. Give us your update on what's happening. With the crypto prices and the reaction that we saw today following the new FED Scheer's comments.
00:31:14
Speaker 6: Right, So, I think the story of today really was that crypto investors were watching closely the Fed's decision to leave interest rates where they are, But like most equity traders, they're wondering where the central bank is going to go next, and if it's a hike, then what that could mean for the crypto market. Remember, crypto usually benefits from a lower rate environment because liquidity increases and some of those more speculative assets become more attractive. But as you mentioned, looking at bitcoin right now, trading around the sixty four thousand dollars mark, that's roughly fifty percent off of its hall time highs, and it has bounced back from the lows we saw earlier this month when Michael Saylor sold some of his bitcoin for the very first time. We saw bitcoin's price move a little higher this week in reaction to the peace agreement between.
00:31:57
Speaker 5: The US and I ran as well. You've seen the recovery.
00:32:01
Speaker 6: It is still being characterized by traders that I see to as a sideways market. Some of these analysts are saying that these cryptostocks are really competing.
00:32:10
Speaker 5: For capital with some of these other high growth sectors of the moment. Of course, we've got SpaceX that went public on.
00:32:16
Speaker 6: Friday that's delivering outside returns. We've also got the AI trade that's continuing to dominate the headline headlines. One of the crypto analysts they spoke to last week said the AI trade is really sucking the air out.
00:32:28
Speaker 5: Of the crypto narrative right now. So how long that particularly particular market narrative.
00:32:33
Speaker 6: Laughs, will have to see, but it's definitely part of the crypto narrative and sort of why we're seeing this crypto market trade sort of sideways as it were.
00:32:42
Speaker 1: Frank and you are lie with eleator Chart, hosts of the Crypto and America podcast, and here we have bitcoin at sixty four thousand. The sixty four thousand dollars question is where does a bitcoin go from here? Among the movers and shakers you talked to in the crypto world, and you span the globe for information that global cryptoconferences, what's the consensus view on where bitcoin goes from here?
00:33:08
Speaker 6: So I think the question now is really whether bitcoin can build on this recovery and make a run towards that seventy thousand dollars mark or not. I think a big part of the story is going to continue to be the Michael Sailor story. Of course, you know, I mentioned before he bought more bitcoin this week, but he did actually sell a small portion of Strategy supply.
00:33:28
Speaker 5: Earlier in the month.
00:33:28
Speaker 6: It was thirty two bitcoin out of a treasury of over eight hundred thousand bitcoin, So thirty two is not a significant amount. But what really mattered, I think to the market story was that investors took that as a sort of a sign because the Sailor himself is promoted forever that you should never sell your bitcoin. I think one of his more famous quotes, Frank was you sell a kidney, but never sell your bitcoin. And investors weren't necessarily reacting to the size of the sale, but they were really, you know, reacting to the fact that the sale happened at all. So, you know, looking at Strategy, I think, you know, they continue to buy bitcoin aggressively, but then some of the newer securities that have been issued to fund some of these purchases that come under pressure. There's investors that are asking tougher questions about the dividend coverage, dilution, and sustainability. So definitely strategy is going to continue to kind of hinge as that you know, market narrative surrounding bitcoin. But you know, as far as the rest of the market's concerned, you know, we can take a look atit. Ethereum. Tom Leave's company Bitmine recently launched a preferred stock offering with a nine and a half percercent dividend raised capital so it can continue buying ethereum, kind of taking a page out of.
00:34:36
Speaker 5: Sailor's own playbook.
00:34:38
Speaker 6: Bitcoin owns I'm sorry, Bitmine owns over five percent of the total ethereum supply at this point. And some of these all coins, I've mentioned this before, they tend to rise when Bitcoin rises, they tend.
00:34:48
Speaker 5: To fall when Bitcoin falls.
00:34:50
Speaker 6: This week, we've seen the standout with the UNISWAP token, which is the central token, the native token of the decentralized exchange by the same name. It's over thirt two percent this week after Standard Chartered issued a bullish long term price target. So some of these old coins do sometimes trade, you know, off of Bitcoin's momentum. Sometimes they trade independently, but overall it's it's a wait and see market at the moment.
00:35:13
Speaker 1: Frank on the You're Live with Eleanor Churtt for the Crypto in America podcast, And the reason why Sailor sold by the way should also be mentioned right apparently to pay dividends that he was set to paint.
00:35:27
Speaker 6: Yes, dividends for his stretch stock, which is part of the Strategy portfolio.
00:35:34
Speaker 5: And there's no questions now as you know bitcoin's.
00:35:37
Speaker 6: Price continues to move sideways, we'll say, you know, we could move lower.
00:35:41
Speaker 5: If the fear really with analysts is.
00:35:43
Speaker 6: That if it continues to move lower, then where will that money come from? How will he continue to pay the dividend for those stocks, for the preferred stow he issues to fund those purchases of bitcoins. That's the fear, that's the talk among analysts and investors around bitcoin now. But you know, as long as a bitcoin price continues to go up, you know, Michael Salor will not have a problem. But we've seen lots of you know, talk in the market in the last few months or so, as Bitcoin's price has come down a lot, how much Sailor himself has been in the hole when it comes to you know, his purchases a bitcoin, but he remains he remains bullish frank as you see his narrative. His his Twitter account always.
00:36:23
Speaker 1: Shows very interesting Give us an update on what's happening on the regulatory and indeed on the tax front as well as it relates to cryptos.
00:36:33
Speaker 5: Yeah, so I just.
00:36:34
Speaker 6: Go back from a cryptoconference in Chicago yesterday and then today Governor jab Pritsker signed a fifty six billion dollars state budget that includes apparently the industry's first state tax aimed specifically at cryptocurrency.
00:36:47
Speaker 5: So basically what it is.
00:36:48
Speaker 6: Starting in twenty twenty seven, Illinois will impose a twenty basis point tax on certain crypto transactions, which means you could end up getting taxed not just when you trade crypto, but potentially when you move it between platforms, workers.
00:37:01
Speaker 5: Or wallets.
00:37:02
Speaker 6: Right now, you get taxed when you sell bitcoin. You get taxed on those capital gains. This isn't getting taxed on, you know, when you sell. This is getting taxed when you actually, you know, trade your your crypto. So you know, everybody in the industry is very concerned about this. One and two leader told me that it's going it's basically going to be an encouragement for crypto businesses to leave.
00:37:23
Speaker 5: The state of Chicago. And it's particularly sensitive.
00:37:26
Speaker 6: For businesses in Illinois because Chicago has long been home to some of the country's biggest financial hubs, like the CME, the CBOE. The CME actually has spent the last several years expanding aggressively into digital assets themselves. So what this means for them, you know, remains to be seen. And how effective or how you know, how exactly that potential outflow of investors and businesses in Illinois.
00:37:50
Speaker 5: Will We'll have to see. But it's it's definitely the story in the crypto space right now. Is this tax in Illinois?
00:37:56
Speaker 3: All right?
00:37:56
Speaker 1: And then you got the the Clarity Act. Looks like the Congress getting ready to take another vacation soon. Where where do things stand with that?
00:38:04
Speaker 5: Yeah, so cave.
00:38:05
Speaker 6: It's just a quick update here the Clarity Act stands, and you know, the Clarity Act. Just for your listeners, a quick reminder.
00:38:10
Speaker 5: It's crypto's biggest piece of legislation to ever moved through Congress.
00:38:13
Speaker 6: It was passed in the House in July of last year. The Senate has taken it. It's reworked it and now it's waiting for leaders soon to bring.
00:38:19
Speaker 5: It to the floor for a vote.
00:38:20
Speaker 6: They got passed through the Senate Banking Committee last month. Basically, it there's a lot of competing priorities on the Senate floor right now, as you know, Frank, We've got you know, the d funding which went through the Housing bill, which the Senate and the House are currently working on, and then you've got the fight over FISA and whether that will.
00:38:35
Speaker 5: Happen or not.
00:38:36
Speaker 6: But basically, the White House wants to see this bill passed into law by July.
00:38:39
Speaker 5: Fourth, just the deadline.
00:38:41
Speaker 6: That is impossible with Congress leaving in nine days or seven days actually to go on recess. So can they do it before the August recess, which is what whose lawmakers will leave after that to go on mid terms.
00:38:52
Speaker 1: The Eleanor Cherich, host of the Crypto and America podcast, Live with us yere On Mochech on Money on seven ninety KBS eight
Speaker 1: Good afternoon. We are getting right down to business here. We are doing it live, doing more at four weekday afternoons, right after the Guy Benson Show and just before the News Blitzer in seven ninety KBC Motech on Money Live on the air in seven ninety streaming live online worldwide at KBC dot com, and you're on demand Motech of Money podcast at KBC dot com, Apple, iTunes, YouTube, and all your favorite podcast platforms. Another big day in the financial markets, this time on the downside, with the now coming off the record highs hit earlier this week and SpaceX seeing its first down day and it's following It's a story IPO on Friday. Socks moving lower today. Treasury yields surged as investors grew uncertain over the path of monetary policy. After we heard from the new Fed Shairman Kevin worsh today after several federal reserve authorities indicated there could be a great hike this year to deal with inflation that's been running hot lately. They're now coming in for a closing loss of five hundred and seven points fifty one thousand, four ninety two, this after blowing past fifty two k in the previous session and closing it at all time high just below fifty two thousand, The S and P five hundred down ninety one today seventy four hundred twenty and the Nasdaq down three hundred and fifty five points of twenty six thousand, twenty two, the yield and the tenure note now at four and a half percent. Watching the cryptos today as well, looks like at Bitcoin hovering it around sixty four thousand, three hundred, Ethereum at seventeen hundred and forty three doze at the moment at eight cents. Looks like some of the major tech names that led the losses today, with Microsoft, Meta Alphabet, and Amazon all closing lower. In SpaceX also moving lower for the first time since going public on Friday, we see SpaceX shares moving lower by nearly ten dollars at one ninety one and change. At the conclusion of the Fed's two day meeting today, the first under the new FED share Kevin Walsh, the Fed left interest rates unchanged. Number of FED officials see rates increasing this year. According to the summary of the economic projections that came out today and the news conference at Warshell, the FED funds rates median estimate for year end now stands at three point eight percent. That's an increase from three point four percent in the previous projections from March. The Fed's first statement under warsh clocked in at only one hundred and thirty two words. According to the Wall Street Journal, Wall Street was troubled by the final six of them, and that is the committee will deliver price stability, holding its benchmark rate steady today as expected. In the news conference, Walsh also repeatedly emphasized that the Fed's unambiguously and unanimously committed to bringing inflation back to the fed's two percent target. Investors took that as a sign that the new chairman would preserve the Fed's independence and be open to rate increases despite his appointment by President Trump, who has pushed for lower rates. Stocks moved lower and as did bond prices today, pushing treasury yields higher. In fact, every sm P five hundred sector lost ground today, dragging the broad index down one point two percent. Will be focusing on all of this with extended coverage here today, and of course talking more about the price of oil, which has been coming down given the latest developments in the Middle East with this Iran US deal coming together as supposedly going to be formally signed on Friday, if not before. We see BRENKRWD in London hovering it around seventy six dollars seventy two cents a barrel now and in New York covering also at around seventy six dollars a barrel. How extended covers this hour with prominent economist Kevin Clouden, fellow at the Milkin Institute on cryptos Today, I'll be speaking live with Eleanor Arrett, host of the Cryptos in America podcast. But right now let's get right to it on your money, the markets, the economy, the FED decision today and the whole works under the new FED share Kevin Warris. Joining us now is Brian Perry, veteran market strategist at Brian Perryinvesting dot com and author of the twenty five percent Cash Machine. Brian Perry, thank you very much for taking the call on this big day today.
00:03:54
Speaker 2: It is humpday in America on Wall Street here, Frank, thanks very much for having me. SMB bottom out you know about a week ago this time here just below seventy three hundred and has now since you know, really staged a very you know, sharp multi day rebound here thankfully to you know, two major events, one being the space x I p O and then the ceasefire announced over the weekend by President Trumplich ignited a big you know rally on Monday. So, you know, the major shift in sentiment here has you know, it's spilled over for a while, but the market is still very bifurcated here. You've got basically the AI trade, uh still leading the way, and that would be more or less the hardware and semiconductor trade doing that all the heavy lifting here for the most part, and some of the industrials too, like the power generation companies like ge and and and other names that are in the you know, high end utility space that are that are providing the power for the data center business here. What we're seeing though, is it's the mags haven't became kind of a source of funds here for the SpaceX trade, even though you know, it was said eighty five you know billion dollars offering to the most part when it came through. Uh, you know, there's nearly about you know, two to three trillion dollars where the stock was sold going into that and so a lot of the big names that we you know, come to believe ours are you know, storehouses of wealth have really come under a lot of pressure here, you know, like like you noted Microsoft for instance, and Salesforce dot Com hitting new lows here, Adobe hitting new lows here, Autodesk, you know, Meta. It's just it, It goes right across the software space. It's very very doom and gloom in that space. Whereas on the chip and hardware side, you know, big moves up to the upside today by Dell and Vertive, you know, which is the big you know, cooling company for a lot of the data centers here and as well as Dell you know, providing servers for the for the data center business. So the market's getting more selective here in the whole business of AI, the next generation of the AI winners versus losers. And we need to be all conscious as investors as to you know, just because you have an AI tag name you know, to your to your business doesn't mean you're you're doing well. It really depends on how you're executing the whether or not the market has glombed onto our business model. So with that said, and then you know these these the themes of the last week here which took hold were like new capital raises here by massive equity offerings here, and that's a big deal.
00:06:19
Speaker 3: We saw that.
00:06:19
Speaker 2: Coming out of out of Alphabet.
00:06:22
Speaker 3: You know, eighty billion, eighty five billion.
00:06:24
Speaker 2: Dollars, saw that out of Oracle, and we're seeing that again, you know, with other names that are going to be coming with more equity offerings here to continue to foster their CAPEC spending where the market's calling that, you know, where's the return on equity and all this spending here going on because now you're going to bring in equity, which the loot turnings and that's you know a huge issue with the street right now. So the by the dipinstitutional trade frank that did that did come back in the AI leaders but the leadership is getting narrower in the space here, and it's you know, the semiconduct equipment is like you know, applied materials and things like that, and also and you know names like the video six trillion dollars great stock, I own it. But at the same time, the law of diminishing returns. When you're six trillion, it takes a lot to move the needle at that at that space, even though the stock is cheap. So the market's really being more determined about the pure plays for the next agentic and physical AI buildouts, which is really where the concentration of focuses. And so that's that's an interesting play on the market here because not much else other than some of the industrial names like I mentioned, and some of the travel names because we have this big blowof in oil prices. That's that's a good trade, but I don't know if it's a really good long term investment at this point here. And the market in general is keeping one eye open at night because, like you said, with the ealds moving higher here and you know, half of the FED eight nine out of eighteen FED members now anticipate a rate hike before the end of the year, that put the market on pause here today. And so it's going to take you know, a very determined, you know, investment crowd that gets around certain names here to continue to you know, maintain leadership here. And that's what's really driving the you know, the bears and the bulls at this point in time.
00:08:13
Speaker 1: Either you're live with the veteran market strategist Brian Perry, Brian Perry, Investing dot com and author of the twenty five percent Cash Machine. It's been a while since we've tatted behind live microphones. Haven't talked since the SpaceX ipo on Friday and a couple of record chattering days for SpaceX and today the first down day. So history being made today once again for SpaceX, which closed down nearly ten dollars at one ninety one and change a Tesla also pulling back more than eight back below four hundred. What about the SpaceX ipo and what do you see ahead for SpaceX doc here?
00:08:46
Speaker 2: Okay, let's you know, we've been in prior shows have said, you know, we own this through the Baron Fund, the bpt RX, which has moved up nicely from like two fifty to two ninety, you know, during this whole big pop on the on open day and the two days of subsequent now here we are with the first down day and you know it up overnight, you know, the two twenty back here to one ninety five. Here in the extended hours, I started buying some of us SpaceX in the open market here today, full disclosure, I think that there is you know, at this point between next week, and then within the next fifteen days SpaceX is going to be added to the Russell one thousand, the Nastac one hundred, and I believe that, you know that that's forced buying there for index funds that had come into this. Frank not to mention that Elon Musk was talking about possibly a trillion dollars worth of revenues from SpaceX between now in twenty and thirty five. Those are eye watering numbers, and you know where that all comes from is anybody's guests. But you know, at this point here, to bet against him after this is really I think, you know, it's not wise to to. I mean, I remember back when Tesla was fifty dollars and then Fidelity came in and put huge money behind that kind and they're doing it right now too. The biggest funds are piling into SpaceX violence at this you know, two hundred range, and I think when you've got that kind of institutional accumulation heavy duty, that that it's you know that retail investors should have a piece of this, because I think this is a multi year compounder. I don't think it's just a trade. So I'm buying SpaceX for the next you know, five to seven years, and there will be competition for sure, but they have such a lead right now and based upon you know, their ambitions here and if they even do fold in Tesla, which is some of the talk out there, that'll even help, you know, just migrate the two businesses together here and just you know, the synergies will be fantastic. They already do a lot of business together, but that'll just you know, be another catalyst for the stock.
00:10:47
Speaker 1: One big story after another today and then the new FED share spoke and made the decision to hold the line on rates for the time being. But looks like the FED overall is hinted more strongly at a rate hike. You're given the cards on the table and some wild cards still out there. What do you think of his performance today? In the market reaction we saw.
00:11:08
Speaker 3: Well, I think you talked too long.
00:11:09
Speaker 2: You know, it was getting kind of palaesque in the in the latter parts of his commentary there, and when you talked about I'm going to keep it short and sweet, and the market started to kind of pull back on you know, just you know, you said you were going to let the data do the talking. And then you know, we won't try to forecast going forward. I think the market saw a bit of a you know, a bit of the same culture come out here, you know, in terms of you know, his presentation on you know, after what the market saw as a we're going to stand pat until we know more.
00:11:41
Speaker 3: And that's fine.
00:11:43
Speaker 2: You know, the market the earnest fhere for the quarter are supposed to be up nearly twenty percent year over year. That's just ginormous, you know, from the standpoint of historical comparison. So if the market does do that, and it's fine to be in a three to four percent world of inflation as long as your economy is cooking at you know, sixty eight percent. So that's that's you know, a nice problem they have. It's on a matter of everybody's getting wage increases and being able to adjust for it, you know, with the war now and we've got oil back down here to seventy five, we're going to see that some of the you know, some of the off of the oil prices here, and that's going to show up here in the future PPI and CPI numbers, so I think, you know, and all things are tethered to petroleum everything that's made almost you.
00:12:23
Speaker 3: Know that you name it. I don't even would have done the list.
00:12:27
Speaker 2: But but with the oil prices pulling back here and it looks like, you know, they're going to continue to work on this deal, you know, which is it's got some bumps in the road still, but it does seem like there's there's traction for the really for the first time here with the Iranian cease fire deal. And so with that said, I think that you know, we're going to see very strong earnings here at this quarter here, and we're going to see some of the inflation start to have here, you know, coming forward here. So because you know, energy is such a large component too in the inflation number can't say much about food and other things, but also dwellings, apartment dwellings. Finally, a lot of apartment listings are coming down the for rents, and they're coming down rather dramatically in some of the cities. So owners equivalent rent, which is a big part of CPI, is also going to come and tame. And that's been a stubborn part and sticky part of inflation for months. So I do like the path forward for inflation. I think Warris was being very cautious here, and rightly so, but I do think that the path of least resistance is lower for bond interest rates going forward.
00:13:31
Speaker 3: Here.
00:13:32
Speaker 2: I think we saw the I think we're seeing, you know, the ten year here at four forty six today four point four to six, probably four and a half percent is probably going to crest and then probably start to pull back.
00:13:42
Speaker 3: That's my call.
00:13:43
Speaker 1: The other big story, of course, the Middle East story of the President defending the iron the ceasefire deal. We also heard from the International Energy Agency forecasting an oil glut next year if the straight or four moves opens. We're still waiting for this deal to be signed and to be moving forward. In the meantime, suddenly oil is back at around seventy six dollars a barrel. What about oil here? And what about oil stocks and any thoughts on investing in that sector at the moment.
00:14:11
Speaker 3: Not at the moment here.
00:14:13
Speaker 2: I think, you know, right now, you're gonna you know, you probably want to be in companies that are going to you know, benefit from lower oil prices here, and and certainly that would probably be the refiners, you know, because they're going to be selling more fuel. So that's Vallero. That's Phillip sixty six, and you know and and names in that that that particular space right now. But that's a you know, that trade really you know has happened here and that's you know that left the station, you know when the ceasefire took place here that you know over the weekend and really has come in quite hard. It's hard to say where the bottom of oil is going to be here because every spigot in Texas is wide open.
00:14:50
Speaker 3: It has been wide open, so there's a lot of supply coming now.
00:14:53
Speaker 2: They do have to refill the the Strategic Oil Reserve here, the s ro UH and you know they they're down to like three hundred million barrels I guess and change. But you know at the high water mark or at the high volume levels around seven hundred to seven hundred and twenty million barrels here, you know for the US to stockpile their oil, so that needs to you know, get refilled. And at the same time, you just you know, with the with the Middle East here looking to try you know, open up again the straight up hornor moves, We're going to see a lot of flow here going back and forth. And I just think that at this point here, the shipping stocks, you know, they've locked in a lot of long term contracts during this whole time here, so those those were those shipping stocks may do okay. But again, Frank, the tide is moving out in the oil patch, and you just don't want to fight the trend or the tape when it comes to something like that. Give it a chance to settle in here. I think oil will probably settle in the sixty five to seventy dollars range. And then from that standpoint, then look at your the big dogs, you know, like Exxon and Chevron.
00:15:57
Speaker 1: All right, and the audience is getting their pen and pay for out, Brian Perry. Any specific places where you are putting money now and or taking it off the table.
00:16:06
Speaker 3: Well, sure enough.
00:16:08
Speaker 2: As I noted earlier, SpaceX here I think is a generational buy Okay, people should really, you know, if you don't own it, buy it, buy it in here. I don't think you may be wrong for a few days, but I think you'd be right for the next ten years. Hewlett Packard Enterprises HPE just below out numbers here. Apparently the PC cycle is going through a massive you know reset here and in a real upgrade here. This is global from the standpoint of all the future. You know, PC offerings are going to be offering AI and that's a massive reset for that particular industry here. So not just doalt computers, but but HPE is you know, is a big name and their enterprise. You know, they're bringing AI to all the enterprise names that are really having a hard time now, you know, generating the kind of interest that you know that that made them such powerful names in the past. But they came out with great numbers here. HP it ran up to sixty five if it's pulled back here to roughly forty five here forty two, forty three. I think it's a goodbye on this pullback here, and people should take a look at that Global Founderies here. This is one of the companies that the Trump administration has poured a lot of a lot of money into here for the reshoring of the fabrication of chips and semiconductors here and in the US. GFS is a really solid name here, trades it around eighty one, traded up toward ninety, pulled back here, So these are good stuck to buy. And then definitely the quantum computing names. Frank, you know, I O n Q and qbit's QBTS. I was at a conference o of the weekend here in New York City here called Q Day, and that was just it's very surreal because it's another you know, y two k on steroid situation here shaping up here. So if you don't have a really good you know, anti quantum threat you know protocol in place, then you know you're subject to massive cybersecurity violations. We'll talk about another show when when I can get into it more. But it's something that it was new to me and a lot of very keynote speakers. You know, we're very very serious about it, and it's going to be something that everyone's going to be. You know, at every next quarterly earnings report, people are going to say, what's your Q day strategy as opposed to what's your AI strategy? So bear that in mind when we get into the next set of earnings calls and coming off. You know, Microsoft they got accused of some really bad stuff here and filed actually yesterday that they have cut their numbers here basically on all their co Pilot sales and their their Azure sales here and there's you know, the the the Michigan pension fund is leading this class action lawsuit. It's it's a big deal and the stock is really coming hard last two days. Uh, you know, God forbid, there's something that that's true to form here with the with what's going on, because they're they're bringing Nodella, you know, the CEO and the CFO to task on this one here saying you guys really overstated what's going on here with your with your business model, and that's got everybody in it tizzy. And then I took a trade on Lamb Research Frank, which is one of the leading seven conducted clar names. It just went kind of flagpole here in most of these stocks will retrace and come back. It's around three eighty five. I think it can come back around three fifteen, three ten, and I'll try to buy it back down there sure.
00:19:18
Speaker 1: By Brian, Well, thank you very much for taking the call on this big day and doing such a confrehensive job forst As always, that is Brian Perry, veteran market strategist at Brian Perryinvesting dot com and also author The twenty five Percent Cash Machine. Brian, thanks for taking the call and look forward to speaking with the end very very soon.
00:19:35
Speaker 3: Okay, very good, Frank, thanks so much.
00:19:37
Speaker 1: Thank you very much. Seven ninety KBC. Motech on Money continues here in seven ninety kab C. Good afternoon, Well, big day for the stock market, this time on the downside, the now coming off the all time high achieved in the previous session and in the prior session to that on Monday. The now coming in for a closing loss of five hundred and seven points today at fifty one thousand, four ninety two, the SMP five hundred, down ninety one at seventy four hundred twenty, and the Nasdaq down three point fifty five to twenty six thouy twenty two. Stocks moving lower, Treasury yield surged investors growing uncertained over the path of monetary policy under the new FED chair Kevin Warsh, after several Fed officials indicated there could be a rate hike this year to deal with stubborn inflation. The yield and the tenure note now at four and a half percent. Among the tech names taking hit today, Meta, the parent company of Facebook, not getting any likes today, down more than thirty two dollars at five sixty seven and change, Microsoft taking a hit down nearly fifteen at three seventy eight ninety one in Wall Street drawling SpaceX after moving higher since the IPO on Friday, having its first down day today, down nearly ten dollars, down nine ninety eight at one ninety one eighty two. Tesla also pulling back by more than eight dollars at three ninety six and change in video down nearly three at two oh four sixty five. Taking a look at the price of oil, it is pulled back and looks like oil fuel sensitive names moved higher today, including the airlines, which have been rising since this Iran deal has been announced. Right now Brentkrud in London hovering it around seventy six dollars seventy two cents a barrel, and in New York we're also harboring around seventy six dollars a barrel. We'll be taking a closer look at crypto's coming up with the next stamp fire with Eleanor Terrett, host of Cryptos in America podcast Bitcoin right now harbing it around sixty four three hundred eighth at around seventeen hundred and forty in Doze at the moment at eight cents MO. Tack of money continues here in seven ninety KBC. Looks like we'll painted forward with possibly higher interest rates before the year is over. Based on what we heard today from the new FED Chair Kevin Warsh. The Federal Reserve holding its benchmark rate steady today as expected in the new FED chair Kevin Walsh's first meeting is FED chair, but looks like the FED officials. Quarterly economic projection showed that nine of nineteen FED policymakers penciled in at least one rate increase by the end of the year, up from zero in March. At the new FED shares and news conference, he repeatedly emphasized that they're unambiguously and unanimously committed to bringing inflation back to the Fed's two percent target. Investors took down as a sign that the new FED share would preserve the Fed's independence and be opened to rate increases despite his appointment by President Trump, who has pushed for lower rates. In all this, the now came in for a closing loss of more than five hundred points off the all time high, back to fifty one thousand and four ninety two. The S and P five hundred, down ninety one at seventy four hundred and twenty and the Nasdaq down three fifty five to twenty six twenty two. Our extended coverage continues now at Joining US Live now as prominent economist Kevin cloudon fellow at the Milkoine Institute based here in southern California. Kevin, thank you very much for taking the call here this afternoon.
00:22:50
Speaker 4: My pleasure, Frank and best to all of you.
00:22:53
Speaker 1: Thank you very very much. Give us your impressions of what we heard today from the new FED share and some of your big takeaways.
00:23:00
Speaker 4: Well, it's interesting in what he said and what he didn't And Kevin Warshead made a point of telling people even before he was confirmed as FED chair that he really isn't as much of a fan of these forward looking prognostications coming out of the FED. That he feels like they are often misinterpreted, that they might send messages or lock the FED into policy decisions that don't necessarily align with the way the economy is moving. Obviously, there is on record this sentiment that nine out of the nineteen members the FED Board are expecting a rate increase this year, and there's some speculation that actually a lot more might believe it. That they don't also want to get locked into any kind of prediction because they want to see what happens in the Mid East and the Gulf. They want to see what's happening in terms of the frothiness and it's been going on around the SpaceX Ipo and some of the other moves in the market, and acting prematurely could obviously change market sentiment and have a few other impacts.
00:24:16
Speaker 1: What was your impression of his communications style compared to some of the other recent de FED shares, most recently, of course Jerome Powell and before that Janet Yellen and before that Ben bernanke.
00:24:29
Speaker 4: Well, I think that he's a bit more terse. I think that he's very much more careful about what he says. There's always the story of every FED share, basically post Alan Greenspan, being very aware of Greenspan's irrational exuberance comment and how it spooked the markets, and how there is a very real sense from Kevin worsh that he wants to play it a little bit more close to the vest in terms of how he does it and how he presents things. But he's also still clearly trusted, and there is a general sense in terms of both from the confirmation hearings in now that he's somebody that the markets generally trust, even if they're off from record high, that the market didn't react with any kind of massive move one way or the other. There isn't a sense of panic or negative negativity out of the way he speaks, which is very reassuring for a lot of people.
00:25:35
Speaker 1: And of course Alan Greenspan proceeded Ben Bernanke and I remember back in those I remember talking to Paul Kagis from the Nightly Business Report about Alan Greenspan's style and jokingly said that that people needed to get a green Spanish dictionary to understand what he was saying. And then Ben Bernanki kind of was very understandable, made it a point to be to be speaking in plain English and all that. What about Kevin Worsh's performance, So from that standpoint, is he ambiguous or was he clear?
00:26:06
Speaker 5: To you?
00:26:07
Speaker 4: Well, I think it's Well, here's the thing, I think he's relatively clear. But when somebody describes it as being a little economical with words or being very considerate of that, I think he's not trying to he's not trying to dance around the subject the way Greenspan did, which is why when Greenspan was very direct or what people's post was, the markets were often to be acting very wildly. There every trying and breathe something. Ben bernanke you know very much was the product of the Great Recession. In terms of how he's presenting and doing things. I think Kevin worsh is a product of some of the uncertainty right now. But also, you know, he is an appoint appointee by President Trump, and he's very aware that the way that Jerome Powell spoke, in the way that Powell suggested things tended to get negative reactions out of the White House. I don't think that necessarily that's going to change his policy. It's pretty clear right now with the fact that he didn't lower rates, that he wasn't pushing for lower rates, that he was holding and saying, let's see given what happened in the Middle East, that he's clearly independent, but he's also very aware of being able to work with the president. And it's clear that Jerome Powell, by the you know, by the last several months that he was in the role wasn't particularly trying to to do that and had at some point given a bunch of the other pressures, kind of given up and made statements that went his own way.
00:27:44
Speaker 1: Very interesting, and like Powell, he's not an economist, right, it looks like he's an attorney as well. Graduated from Stanford with a bachelor's degree in public policy and Harvard Law School with the jd in nineteen ninety five. He's a financier and attorney. What is that enough firepower to get him through this position?
00:28:06
Speaker 4: Well, I think that it can be. I think that he has. It's worth remembering he's used to dealing with very large lots of data being generated by economists. You know, he had been on the FED board before. He does have some clear experience in terms of managing and interpreting that information. And it means to some extent though that yes, he does need to rely on this interpretation of the markets and on where the actual data is going. And the FED still has the most robust data access of any part of the federal government in some ways, even more so now given some of the dose cuts, and so that does put him in a relatively strong position. The key thing really is his communication is credibility. The other thing that's really important with Kevin Wors, which we'll wait to see how it plays out, is that he, unlike powelland very much onlike Bernanki, believes in the tighter monetary supply, and he's made multiple comments in the past about that. And the real question is that given some concerns about a bubble in the market, some concerns about the overall monetary supply, he's raised the idea of potentially tightening the monetary supply, which is something that Powell played with but didn't really stick with, and if that happens, that could be far more profound in his economic impact and policy than almost anything else he does.
00:29:44
Speaker 1: Kevin Cloud wish we had more time, but thank you very very much for joining us here at this same afternoon with that thorough assessment or the new fed Share in his first appearance as fed share today following the big announcement on the interest rates and a statement on the economy. That is prominent economist Kevin clouden fellow with the Milkin Institute based here in southern California. Kevin Cloud, thank you again very much here for joining us live this afternoon.
00:30:06
Speaker 4: My pleasure Frank on.
00:30:07
Speaker 1: Seven ninety KBC. Attack of money continues here in seven ninety KABC stock slip, Bitcoin two moving lower following the fans' decision to hold benchmark interest rates steady today under the leadership of new fed Share Kevin Warsh, still getting used to saying his name fed Share, Kevin Walsh, fed Share, Kevin Warsh, fed Share Kevin Warsh. He was the guy in the spotlight today instead of Jerome Powell. The dip and the cryptos occurred as investors took in the latest policy statement, and this after Bitcoin has been rebounding lately from a recent low below sixty k. And joining us live now, the lighted to say we're joined now by Eleanor Terrett, the host of the Crypto and America podcast. Ellen, thank you very much for joining us live here this afternoon.
00:30:53
Speaker 5: Thanks brand, good to be with you.
00:30:55
Speaker 1: Wonderful to have you with us here. It's been a while since we chatted behind live microphones. We did see a bitcoin dip below sixty k not too long ago. It's harvering. Let's see it around sixty four thousand here at the moment. Give us your update on what's happening. With the crypto prices and the reaction that we saw today following the new FED Scheer's comments.
00:31:14
Speaker 6: Right, So, I think the story of today really was that crypto investors were watching closely the Fed's decision to leave interest rates where they are, But like most equity traders, they're wondering where the central bank is going to go next, and if it's a hike, then what that could mean for the crypto market. Remember, crypto usually benefits from a lower rate environment because liquidity increases and some of those more speculative assets become more attractive. But as you mentioned, looking at bitcoin right now, trading around the sixty four thousand dollars mark, that's roughly fifty percent off of its hall time highs, and it has bounced back from the lows we saw earlier this month when Michael Saylor sold some of his bitcoin for the very first time. We saw bitcoin's price move a little higher this week in reaction to the peace agreement between.
00:31:57
Speaker 5: The US and I ran as well. You've seen the recovery.
00:32:01
Speaker 6: It is still being characterized by traders that I see to as a sideways market. Some of these analysts are saying that these cryptostocks are really competing.
00:32:10
Speaker 5: For capital with some of these other high growth sectors of the moment. Of course, we've got SpaceX that went public on.
00:32:16
Speaker 6: Friday that's delivering outside returns. We've also got the AI trade that's continuing to dominate the headline headlines. One of the crypto analysts they spoke to last week said the AI trade is really sucking the air out.
00:32:28
Speaker 5: Of the crypto narrative right now. So how long that particularly particular market narrative.
00:32:33
Speaker 6: Laughs, will have to see, but it's definitely part of the crypto narrative and sort of why we're seeing this crypto market trade sort of sideways as it were.
00:32:42
Speaker 1: Frank and you are lie with eleator Chart, hosts of the Crypto and America podcast, and here we have bitcoin at sixty four thousand. The sixty four thousand dollars question is where does a bitcoin go from here? Among the movers and shakers you talked to in the crypto world, and you span the globe for information that global cryptoconferences, what's the consensus view on where bitcoin goes from here?
00:33:08
Speaker 6: So I think the question now is really whether bitcoin can build on this recovery and make a run towards that seventy thousand dollars mark or not. I think a big part of the story is going to continue to be the Michael Sailor story. Of course, you know, I mentioned before he bought more bitcoin this week, but he did actually sell a small portion of Strategy supply.
00:33:28
Speaker 5: Earlier in the month.
00:33:28
Speaker 6: It was thirty two bitcoin out of a treasury of over eight hundred thousand bitcoin, So thirty two is not a significant amount. But what really mattered, I think to the market story was that investors took that as a sort of a sign because the Sailor himself is promoted forever that you should never sell your bitcoin. I think one of his more famous quotes, Frank was you sell a kidney, but never sell your bitcoin. And investors weren't necessarily reacting to the size of the sale, but they were really, you know, reacting to the fact that the sale happened at all. So, you know, looking at Strategy, I think, you know, they continue to buy bitcoin aggressively, but then some of the newer securities that have been issued to fund some of these purchases that come under pressure. There's investors that are asking tougher questions about the dividend coverage, dilution, and sustainability. So definitely strategy is going to continue to kind of hinge as that you know, market narrative surrounding bitcoin. But you know, as far as the rest of the market's concerned, you know, we can take a look atit. Ethereum. Tom Leave's company Bitmine recently launched a preferred stock offering with a nine and a half percercent dividend raised capital so it can continue buying ethereum, kind of taking a page out of.
00:34:36
Speaker 5: Sailor's own playbook.
00:34:38
Speaker 6: Bitcoin owns I'm sorry, Bitmine owns over five percent of the total ethereum supply at this point. And some of these all coins, I've mentioned this before, they tend to rise when Bitcoin rises, they tend.
00:34:48
Speaker 5: To fall when Bitcoin falls.
00:34:50
Speaker 6: This week, we've seen the standout with the UNISWAP token, which is the central token, the native token of the decentralized exchange by the same name. It's over thirt two percent this week after Standard Chartered issued a bullish long term price target. So some of these old coins do sometimes trade, you know, off of Bitcoin's momentum. Sometimes they trade independently, but overall it's it's a wait and see market at the moment.
00:35:13
Speaker 1: Frank on the You're Live with Eleanor Churtt for the Crypto in America podcast, And the reason why Sailor sold by the way should also be mentioned right apparently to pay dividends that he was set to paint.
00:35:27
Speaker 6: Yes, dividends for his stretch stock, which is part of the Strategy portfolio.
00:35:34
Speaker 5: And there's no questions now as you know bitcoin's.
00:35:37
Speaker 6: Price continues to move sideways, we'll say, you know, we could move lower.
00:35:41
Speaker 5: If the fear really with analysts is.
00:35:43
Speaker 6: That if it continues to move lower, then where will that money come from? How will he continue to pay the dividend for those stocks, for the preferred stow he issues to fund those purchases of bitcoins. That's the fear, that's the talk among analysts and investors around bitcoin now. But you know, as long as a bitcoin price continues to go up, you know, Michael Salor will not have a problem. But we've seen lots of you know, talk in the market in the last few months or so, as Bitcoin's price has come down a lot, how much Sailor himself has been in the hole when it comes to you know, his purchases a bitcoin, but he remains he remains bullish frank as you see his narrative. His his Twitter account always.
00:36:23
Speaker 1: Shows very interesting Give us an update on what's happening on the regulatory and indeed on the tax front as well as it relates to cryptos.
00:36:33
Speaker 5: Yeah, so I just.
00:36:34
Speaker 6: Go back from a cryptoconference in Chicago yesterday and then today Governor jab Pritsker signed a fifty six billion dollars state budget that includes apparently the industry's first state tax aimed specifically at cryptocurrency.
00:36:47
Speaker 5: So basically what it is.
00:36:48
Speaker 6: Starting in twenty twenty seven, Illinois will impose a twenty basis point tax on certain crypto transactions, which means you could end up getting taxed not just when you trade crypto, but potentially when you move it between platforms, workers.
00:37:01
Speaker 5: Or wallets.
00:37:02
Speaker 6: Right now, you get taxed when you sell bitcoin. You get taxed on those capital gains. This isn't getting taxed on, you know, when you sell. This is getting taxed when you actually, you know, trade your your crypto. So you know, everybody in the industry is very concerned about this. One and two leader told me that it's going it's basically going to be an encouragement for crypto businesses to leave.
00:37:23
Speaker 5: The state of Chicago. And it's particularly sensitive.
00:37:26
Speaker 6: For businesses in Illinois because Chicago has long been home to some of the country's biggest financial hubs, like the CME, the CBOE. The CME actually has spent the last several years expanding aggressively into digital assets themselves. So what this means for them, you know, remains to be seen. And how effective or how you know, how exactly that potential outflow of investors and businesses in Illinois.
00:37:50
Speaker 5: Will We'll have to see. But it's it's definitely the story in the crypto space right now. Is this tax in Illinois?
00:37:56
Speaker 3: All right?
00:37:56
Speaker 1: And then you got the the Clarity Act. Looks like the Congress getting ready to take another vacation soon. Where where do things stand with that?
00:38:04
Speaker 5: Yeah, so cave.
00:38:05
Speaker 6: It's just a quick update here the Clarity Act stands, and you know, the Clarity Act. Just for your listeners, a quick reminder.
00:38:10
Speaker 5: It's crypto's biggest piece of legislation to ever moved through Congress.
00:38:13
Speaker 6: It was passed in the House in July of last year. The Senate has taken it. It's reworked it and now it's waiting for leaders soon to bring.
00:38:19
Speaker 5: It to the floor for a vote.
00:38:20
Speaker 6: They got passed through the Senate Banking Committee last month. Basically, it there's a lot of competing priorities on the Senate floor right now, as you know, Frank, We've got you know, the d funding which went through the Housing bill, which the Senate and the House are currently working on, and then you've got the fight over FISA and whether that will.
00:38:35
Speaker 5: Happen or not.
00:38:36
Speaker 6: But basically, the White House wants to see this bill passed into law by July.
00:38:39
Speaker 5: Fourth, just the deadline.
00:38:41
Speaker 6: That is impossible with Congress leaving in nine days or seven days actually to go on recess. So can they do it before the August recess, which is what whose lawmakers will leave after that to go on mid terms.
00:38:52
Speaker 1: The Eleanor Cherich, host of the Crypto and America podcast, Live with us yere On Mochech on Money on seven ninety KBS eight
