Broken Pie Chart

Derek Moore and Jay Pestrichelli cover markets including the news on the CEO of United Healthcare, the Hawk Tuah meme coin alleged scam, unpacking the latest unemployment report, how markets go up 29% or more in a year more often than you'd think, and how the rotation of voting members of the FOMC might be hawkish in 2025. Plus, checking in on the ratio of returns of MicroStrategy vs. Bitcoin. Plus, looking at the 53-month drawdown in the US Aggregate Bond Index and corresponding ETF.

Hawk Tuah crypto meme coin alleged scam, pump and dump, rug pull etc (alleged)

What is a pump and dump, or rug pull?

Why would anyone buy a meme coin?

Reacting to the news on United Healthcare's CEO being murdered

Understanding single stock risk and hedging

Reviewing the components of the latest unemployment numbers

Difference between the household and establishment employment survey

Was there more unemployment or more new entrants that drove the number?

US Aggregate Bond Index ETF AGG's years long drawdown

Bitcoin vs MicroStrategy relative performance since the recent all-time high in MicroStrategy

Looking at the relative ratio of performance on the way up and since it's retraced

Who's out and who's in at the Fed FOMC voting committee in 2025

US Average Hourly Earnings

Bloomberg's AI program to identify how many S&P 500 companies mentioned job cuts

Contribution to the US Unemployment rate

Mentioned in this Episode

US Unemployment report (the one with the unemployment rate percentage)

https://www.bls.gov/news.release/empsit.nr0.htm

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli join up once again to talk about whether the forward PE ratio is getting overextended. Then, they discuss where we are in the 4-year Presidential market cycle, years with the most all-time highs, the US Dollar and interest rates, and PCE inflation numbers. Later, they get into the dynamics of the MicroStrategy convertible bonds and how they resemble options. Finally, they talk through the option dynamics on MicroStrategy include what the implied volatility is, what it is implying for a move over the next year, and what the breakeven levels would be on a 1-year option. Hint, it may be crazy!

MicroStrategy convertible bonds explained

MicroStrategy option implied volatility

Price of the 1-year MicroStrategy straddle and breakeven levels

2025 Wall Street S&P 500 Index year end targets

Looking at how many times the markets are average

Inflation is still above the 2% Fed supposed target so what now?

US Dollar index and interest rates

Which year had the most intra-year all-time highs?

1st year of the presidential cycle and the market

Forward PE ratios are extended so is that an issue?

Makeup of the S&P 500 Index companies is different today than 40 years ago

Checking in on earnings estimates

Mentioned in this Episode

Historical Market returns S&P 500, Tbills, Tbonds, gold, and housing since 1928 from Professor Aswath Damodaran and NYU Stern School of Business

https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli are back on the big 300th episode to discuss whether Michael Saylor's 'Bitcoin Yield' makes sense and looking at why people are buying MicroStrategy vs just buying Bitcoin. Then they talk Nvidia earnings and how it is getting cheaper on a forward 12-month PE ratio basis even as the price has moved higher. Plus, they look at the options action on Nvidia right before earnings. Speaking of semiconductors, they look at a potentially bearish pattern in the SOX Index, the Dollar Yen pair getting back to August levels, and ask the question if you could have bought Dominos Pizza or Google at their respective IPOs, which one would you have taken and how its worked out.

MicroStrategy market cap value vs the value of their total Bitcoin holding

Wall Street Journal Jonathan Weil article on Bitcoin vs MicroStrategy

What is the Bitcoin Yield?

Forward PE ratio of Nvidia vs its price

Nvidia earnings options action

Performance of Dominos Pizza vs Google since their respective IPOs

Median S&P 500 Index historical performance post-election and after inauguration

US vs international vs The Dollar post-election performance

Argentia ETF post Javier Milei's election victory bullish move

The Dollar Yen pair moves back towards the old August highs, but does it mean anything?

Morgan Stanley and Goldman Sachs put a 6500 year end 2025 price target on the S&P 500

Mentioned in this Episode

MicroStrategy's Magical Bitcoin Machine article in WSJ by Jonathan Weil

https://www.wsj.com/finance/investing/microstrategys-magical-bitcoin-buying-machine-uses-some-wacky-math-da7d85d0?st=AUzUiM

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli talk through the latest market action including the forward PE ratio looking frothy, yields continue rising, probability of rate cuts dropping, and when and if the US Dollar strength will be a problem. Plus, talking about Barron's article comparing the market cap of MicroStrategy vs the value of their Bitcoin holdings. S&P 500 Index earnings yield vs the 10-year Treasury yield. Then, they discuss why people are saying we are going to have a coming second surge for inflation. Later, they talk about volatility on Nvidia a week out from earnings and their options, 90+ days delinquent credit card debt rising, and comparing post-election rallies around close Presidential elections.

MicroStrategy market cap value vs the value of their total Bitcoin holding

Post election rallies around close Presidential elections

10-Year Treasury Yields acting different than normal post Fed cutting action

US 2-year Treasury yield vs the Fed Funds target rate

Probability of interest rate cut in December update

US Inflation progress stalled in October?

US Dollar Index pushing through resistance

When the US Dollar strength matters and when it doesn't

Comparing where we are today with inflation against the 1970s chart

S&P 500 Index risk premium (forward earnings yield minus 10-year treasury yield)

Percentage of US credit card debt that is delinquent reaches highest level in over a decade

S&P 500 Index forward EPS estimates

Barron's article evaluating MicroStrategy's premium to its Bitcoin holdings

Mentioned in this Episode

Barron's Article on Bitcoin vs MicroStrategy valuation

https://www.barrons.com/articles/microstrategy-stock-price-bitcoin-valuation-702281bd

Explanation of US sugar tariffs and the history of behind them https://www.cato.org/policy-analysis/candy-coated-cartel-time-kill-us-sugar-program#an-overview-of-u-s-sugar-policy

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli decide who got the S&P 500 Index 6000 prediction right. Then they talk about Bitcoin running to new highs and some theories about a Bitcoin strategic reserve now that Trump is the President Elect. Later, they review some data pointing to bond yields remaining high (or going higher). Then discussing how investment banks S&P targets rise to follow the markets. All that plus a listener email.

Small Cap fund flows into IWM

TLT ETF bond flows

Bitcoin makes new highs and ETF fund flows surge

Hussman 12-year forward estimate nonfinancial market cap divided by gross value-added

Goldman Sachs 12-month S&P Price Target

Markets 12-month forward performance after Fed cuts rates near all-time highs

10-Year Treasury Yield vs. Nominal GDP Growth

Trump to stockpile Bitcoin in a strategic reserve?

VIX and implied volatility collapse post-election

Jay and Derek discuss who correctly called S&P 500 6000 by the end of the year

Mentioned in this Episode

Trump – Stockpile Bitcoin in strategic reserve

https://www.politico.com/newsletters/morning-money/2024/08/05/trumps-latest-crypto-gamble-00172611

Podcast where Jay and Derek predicted S&P 500 6000 back in mid June https://open.spotify.com/episode/5kEdjbbXKuCJ114381jYL8?si=420ed5b0864e4aea

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli go through the recent unemployment numbers to see whether it was as bad as reported. Plus, did the recent hurricane throw off the surveys? Then they look at next week's prediction for interest rates for the Fed Meeting. Derek and Jay pull up the 30-year mortgage rate vs the 10-year treasury and talk about what's happened since the first Fed cut. Later they look at housing starts vs completions and try to make sense of whether it's bullish or bearish, the market concentration of the top 10 stocks, seasonality in the S&P 500 index, and looking at earnings so far including whether companies are beating and what sectors are doing well. Then stay tuned as Spencer Wright joins Derek to review the data in the upcoming election. Are the polls accurate? How is Trump performing vs Biden and Clinton in previous races? The electoral college states that matter and even a potential election tie. Unemployment disappoints? How the predictions all missed except for Bloomberg survey that was closer Analyzing the jobs data and is it the bad news is good news again scenario ahead of the Fed? Earnings beats and evaluating the EPS and revenue by sector S&P 500 Index seasonality post elections and non-election years Housing starts minus completions and what it means if anything The stock markets current bullish streak Top 10 S&P stocks now 37% of the index US Federal government spending vs. tax revenue 30-year mortgage rates and the 10-year treasury go higher since 1st Fed cut What are fed funds futures predicting for rate cut at next week's Fed meeting? Is bad weather to blame for low respondent rates to employment surveys? Trump vs. Harris based on the latest polling data Will the polls be accurate this time (correcting polling errors?) Predictions on who will win Comparing Trump's numbers this year 2024 vs 2020 and 2016 in the swing states Mentioned in this Episode 2024 Presidential Election Interactive Map https://www.270towin.com/ BLS October Employment release https://www.bls.gov/news.release/empsit.nr0.htm 30 Year Fixed Rate Mortgage US Average https://fred.stlouisfed.org/series/MORTGAGE30US US Market Returns by Political Party Historical https://zegafinancial.com/blog/should-investors-be- worried-about-the-election-and-what-to-do-if-you-are Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected]

Derek Moore and Jay Pestrichelli talk about everyone talking about Goldman's 3% annual return target for next 10 years. What's behind their analysis includes whether the S&P 500 Index has too much concentration. Then they discuss what is responsible in retrospect for markets going up or down including profit margins, sales, buybacks, dividends, and EPS. Later, they talk about gold and its huge jump in 2024. Finally, how underwhelming the small caps have been relative to past bull markets, S&P 500 Index constituent turnover, and Apple's options volatility pre-earnings.

Goldman Sachs base case of 3% annualized return next 10 years

Vanguard's June 2024 10 year forward annualized return estimates

How market movement is attributed to EPS, Sales, Dividends, Margins, and Buybacks

Historical 10-year constituent turnover for S&P 500 Index

Touching on Meb Faber's observation of both Gold and the S&P 500 above 25% return for year

Small caps lowest bull market return covering 13 bull markets since 1949

Apple earnings and the option volatility

Cost of the Apple straddle a week before earnings

Uber's implied volatility pre-earnings week

Spread between the 30-year mortgage and the 10-year treasury yield

What if mortgage rates and long bonds go up not down?

MBS bonds (mortgage backed securities) nuances

Mentioned in this Episode

Goldman Sachs forward baseline 3% annual return forecast next 10 years full report https://www.gspublishing.com/content/research/en/reports/2024/10/18/29e68989-0d2c-4960-bd4b-010a101f711e.pdf

Vanguard June 30th 2024 10 year forward returns forecast https://corporate.vanguard.com/content/corporatesite/us/en/corp/vemo/vemo-return-forecasts.html#:~:text=The%20largest%20shift%20was%20in,Capital%20Markets%20Model%20(VCMM)

Mortgage Spreads and The Yield Curve Economic Brief Richmond Federal Reserve Bank https://www.richmondfed.org/publications/research/economic_brief/2023/eb_23-27

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

296

Derek Moore and Jay Pestrichelli are discussing what segments of the market are now working on in October plus whether new auto loan delinquencies are something to worry about. Then, reacting to Barron's headline saying Warren Buffett selling Apple shares may have resulted in leaving $25 billion on the table. Later, they get into whether the comparisons of Nvidia today to Cisco in the late nineties is a fare comparison and if Nvidia is as overvalued as Cisco was in retrospect. Finally, they delve into the options action on Netflix and earnings, S&P 500 Index changes, and whether this bull market is young or really young depending on how you gauge the start of one.

Russell 2000 Index vs S&P 500 Index vs Nasdaq 100 Index performance in October

Auto Loan Serious Delinquent by 90 days move up to 2011 highs

The age of the bull market and length of previous bull markets

When do bull markets begin?

CSCO Cisco Systems vs NVDA Nvidia comparisons

Forward PE ratio of Nvidia today vs CSCO in 1999 and 2000

Net profit margins comparing NVDA today to CSCO in late nineties early 2000's

Barron's article saying Berkshire left $25 billion on the table by selling Apple shares

Amentum AMTM joins the S&P 500 Index while BBWI Bath & Body Works exits

Netflix option volatility at earnings

Would the long or short straddle have worked after earnings on Netflix?

Mentioned in this Episode

Where Markets Go After All-Time Highs by VIX Level | Crazy Earnings Estimates | CPI is Rarely 2% | Latest Interest Rate Probabilities https://open.spotify.com/episode/6U5IIpZmeY3s01GsUS0trt?si=a9a3be7a9a504882

Guggenheim info on Historical cycle trend periods https://www.guggenheiminvestments.com/advisor-resources/interactive-tools/dow-jones-historical-trends

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli are back again to discuss whether the level of the VIX Index at all-time market highs is a predictor of future market moves. Then, with earnings season kicking off in earnest, reviewing the analyst lofty estimates including some very surprising numbers for Russell 2000 Index companies. Later, Derek goes through some data that basically says the CPI YoY % change isn't around 2% too often despite the Feds "mandate" of 2% inflation target. Finally, they discuss NFLX earnings and what the options market is saying plus a few other companies including United Healthcare.

The level of the VIX Index at all-time S&P 500 Index highs and the next 60 days, 3&6 months

Does where the VIX Index is at all-time market highs really matter?

The Fed's elusive 2% target when looking at monthly data back to January of 2012

How often the year over year (YoY) percent change in CPI is at different levels

VIX Index vs bond volatility seen via the MOVE Index

Netflix (NFLX) and United Healthcare (UNH) options market pre-earnings check in

Implied volatility of options prior to earnings releases

Predictions for the November Fed meeting

Quarterly earnings estimates for the S&P 500 Index over the next two years are bullish

Reviewing the Russell 2000 Index earnings estimates and how lofty they are currently

Looking at growth of next 12 months earnings estimates vs the S&P 500 Index itself

Mentioned in this Episode

VIX Too High at All-Time Market Highs? | Employment Surprises | Interest Rate Cut Expectations Drop| No More Port Strike | Technical Analysis on Markets https://open.spotify.com/episode/7uOX1CRDw8T9q1lNpx2lHc?si=2078c3e6fbec4a2c

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli ask whether the VIX is too high given markets are at all-time highs and compare today to some previous periods. Then, they delve into the employment report which surprised in a positive way. Was good news good news for once? What this means for probabilities of future rate cuts by the Fed, the port strike that wrapped up, and a look at some individual tickers and markets from a technical analysis standpoint. Resistance, support, wedges and more on this week's episode.

Why is the VIX so high with the market at all-time highs

VIX historically at market all-time highs

Looking at 2000 and 2007 VIX at all-time market highs

Dissecting the employment report

Why good news is bad news for those wanting massive rate cuts

Looking at bond yields since the first Fed rate cut

The port strike wraps itself up which is good news for markets

Technical analysis of the S&P 500 Index, Apple, Nvidia, and more

Mentioned in this Episode

S&P 500 Going to 7000? | NAV Erosion Myth | Fed HAS Cut Rates at All-Time Highs| China & Emerging Markets Surge | Answering Audience Questions https://open.spotify.com/episode/4rcKF9Df3YNHkBrlY2yekg?si=253cf93f379a4111

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek [email protected]