Broken Pie Chart

Derek Moore explains what it would take interest rate wise for bonds and TLT to get back to breakeven on price. A lot of misunderstanding is out there on buying bonds at the bottom and what that means. How bonds have different drivers than stocks. Plus, inflation is ticking back up and what that means for the Fed. Finally, a deep dive into TLT components and the math behind what those buying TLT are hoping for.

What would make bonds go back up?

Examining TLT iShares 20+ etf components

Effective Duration to show how interest rates affect bond etfs and bonds.

Math behind movement in bonds

What would it take for TLT to get back to breakeven with regard to interest rates?

Looking at 30-year treasuries issued in 2020 that are down greater than 50%

Inflation ticked back up with CPI year over year reaching 3.7% YoY from its low of 3%

What does inflation moving back up mean for the Fed and interest rates?

Earnings seasons begins with expectations rising

Are earnings still the most important driver of price?

Multiple expansion vs earnings falling

Mentioned in this Episode:

Bond Market Collapse https://podcasts.apple.com/us/podcast/bond-market-collapse-oil-price-problems-bond-stock/id1432836154?i=1000630742799

Government Shutdowns & Markets | Short ITM Puts Alternative to Covered Calls | Why Hedging Works

https://podcasts.apple.com/us/podcast/government-shutdowns-markets-short-itm-puts-alternative/id1432836154?i=1000629813419

John Hussman 12-year forward nominal return estimates chart https://www.hussmanfunds.com/comment/mc230724/

Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser

https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, observe the destruction in long term treasury bonds due to the reflation of the yield curve. How does the market do with higher rates? What does a flattening yield curve mean for the economy? Bond and Stock correlations mean bonds not protecting portfolios? The Hussman 12-year forward return gauge. Strategic petroleum reserve (SPR) now only has 17 days of supply left. And by the way, there is still a lot of good news like improving mortality rates around the world. That and more including some recommendations.

How much long-term US Treasury Bonds have dropped from the high

The yield curve is getting flatter meaning long rates are rising

Cam Harvey's 10/3 yield curve inversion is on the path the un-inverting?

How the yield curve un-inverts before recessions

Examining a 100-year Austrian bond and how it once was up 250% and now down 40%

Stock and bond correlations going closer to 100%

Starting interest rates vs. the stock market since 1926

Starting inflation rates vs. the stock market since 1926

Comparing the yield curve today vs. early September

John Hussman estimated 12-year annual nominal total returns

SPR Strategic Petroleum Reserve and the days left of inventory (it is getting lower)

Infant mortality rates continue falling and are at lowest levels back to 400 BC

Mentioned in this Episode:

Government Shutdowns & Markets | Short ITM Puts Alternative to Covered Calls | Why Hedging Works

https://podcasts.apple.com/us/podcast/government-shutdowns-markets-short-itm-puts-alternative/id1432836154?i=1000629813419

John Hussman 12-year forward nominal return estimates chart https://www.hussmanfunds.com/comment/mc230724/

Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser

https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, look at how markets have done during past Government Shutdowns. The S&P 500 Index during, and 3 and 6 months later. Then they get in dept on why selling in-the-money puts is the same as selling covered calls on stock. What are cash covered puts? How US Treasuries yielding 5% plus may tip the scales. The risks and payoffs of one versus the other. How cash settled European style options differ from American style options at expiration (and before). Finally, they touch on why hedging works to take pressure off investors while reducing the need to time markets. Of course, some recommendations as well.

How have markets historically performed around government shutdowns

Should investors fear government shutdowns?

How long do government shutdowns typically last?

What was the longest government (or partial) shutdown?

Why hedging all the time helps investors stay invested.

The hedgers opportunity where potential exists to buy more shares lower.

What is an in-the-money (ITM) cash secured put?

What are the mechanics of a cash secured put?

What are cash settled European style option characteristics?

What are American style options with assignment and exercise components?

Risk of American style options vs cash settled options.

How selling ITM Cash Secured Puts is like buying the underlying and selling covered calls.

Why do investors get confused with cash secured puts or in-the-money put selling?

Payoffs and risks of ITM cash covered puts.

Why interest rates on short-term treasuries above 5% are a potential game changer.

Treasuries with ITM short puts vs long stock with covered calls

Mentioned in this Episode:

Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser

https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discussed the fallout in the markets during Jerome Powell's press conference post Fed decision. Then, they talk about high yield spreads and current interest rates across relative fixed income like investment grade, high yield, and treasuries. Finally, they explore how options are priced and which options are considered expensive or cheap vs one another. It might surprise you to take a step back looking at the per day costs. How options are priced using various inputs like implied volatility, interest rates, and time value. How Warren Buffett and Charlie Munger at Berkshire Hathaway have used options. Charlie Munger says Black Scholes is useless to price longer term options. Finally, some recommendations.

The Federal Reserve has no action, but rates move higher.

Rising long end of the yield curve

Does the bond market finally believe the fed?

Jerome Powell post press conference market selloff

When all the high yield is due to be refinanced in the debt maturity wall.

Looking at 0 DTE option with a half hour left compared to 3-day options.

Comparing 0 DTE options all the way out to 5year+ options prices

What is the per day cost of an option?

Comparing longer vs shorter-term options from a cheap vs expensive standpoint

How implied volatility currently is higher in much longer options.

What implied volatility says about 1 standard deviation expectations for price?

Cost of carry and interest rates in the pricing of options

Constructing hypothetical option trades holding treasuries with long term calls

Is Charlie Munger right that Black Scholes mispriced long term options?

ISDA agreement Big Short Brownville Capital talking about mispriced long-term options.

Warren Buffett talks about selling very long term options to get paid to have an option

Mentioned in this Episode:

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831

Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout

https://podcasts.apple.com/us/podcast/recession-predictions-still-wrong-synthetic-options/id1432836154?i=1000626691109

0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes?

https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, talk through the recent CBOE analysis on impact of 0DTE options. Contrary to popular belief, 0DTE options may not be causing imbalances according to the data. Plus, explaining how cash settled (European) style options differ from American style where you can be assigned (or auto exercised). How short puts can mirror covered calls. Not surprisingly, Jay and Derek get detailed into some of the similarities. Plus, is inflation coming back after the CPI report and the recent push higher in oil prices? How a strong US Dollar impacts companies and how the price of the new Apple iPhone is more expensive around the world. Finally, some recommendations and a Tim Tebow Johnny Manziel comparison.

What CBOE (Chicago Board of Options Exchange) data says about 0DTE options

Evaluating net buyers vs sellers of 0DTE options

How CBOE data on 0DTE options seems to indicate more balance in positioning

What is the difference between cash settled index options and American style options?

How cash settlement differs from getting assigned or auto exercising into underlying shares

Comparing the structure of covered calls with selling ITM in the money cash settled puts.

Comparing risk of owning shares and selling covered calls vs selling cash secured puts

How a strong US dollar impacts multinational corporation's earnings.

Using the new Apple iPhone as an example of strong dollar impact to prices around the world

Latest CPI (Consumer Price Index) came in hotter than expected.

Is inflation making a comeback?

How rising oil prices can impact inflation given its place in the CPI.

Using the 1994-95 example of higher rates with a rising market

Are people too worried about higher rates?

Existing US mortgages are still primarily at much lower rates.

Tim Tebow vs Johnny Manziel statistical comparison

Mentioned in this Episode:

Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia

https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout

https://podcasts.apple.com/us/podcast/recession-predictions-still-wrong-synthetic-options/id1432836154?i=1000626691109

0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes?

https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore is back with ZEGA CEO Jay Pestrichelli where they discuss whether higher real yields are an issue for markets and how this period seems similar to the 1990's. Then they dive into implied volatility using companies like Tesla TSLA and Nvidia NVDA as examples to explore how options markets express views on expected moves based on options prices. What are the drivers of volatility moving higher or lower. How earnings affect implied volatility and what typically happens after the announcement. They also have a side bar discussion comparing the debt of Tesla to Ford for no reason than that it's quite different. Finally, some recommendations.

What is implied volatility?

How to calculate implied price moves using implied volatility

Comparing the implied volatilities of NVDA Nvidia vs TSLA Tesla as examples

How implied volatility often rises and falls with earnings.

How option prices bake in expectations

The rule of 16 and implied volatility

Stories about implied volatility rising around major events.

Debt of Tesla vs Ford

What is enterprise value?

What are real yields?

Real yields vs nominal yields

Are higher real yields a problem for markets?

10-year real yield rising

Comparing real yields today vs the 1990's bull market in equities

Why investors should want positive real yields.

GameStop armchair analysts in the end weren't right about the company.

Upcoming GameStop movies and whether sensationalizing this hurts investors.

Did the Big Short Movie cause investors to always be trying to bet on the next big thing?

Mentioned in this Episode:

GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained

https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446

The Big Short Movie and Credit Default Swaps Explained

https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6

Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp

Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout

https://podcasts.apple.com/us/podcast/recession-predictions-still-wrong-synthetic-options/id1432836154?i=1000626691109

0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes?

https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore is joined once again by Jay Pestrichelli, CEO of ZEGA Financial where deep dive into the latest employment numbers. Plus, they ponder whether once everyone flips a recession finally comes? Later, they noticed some technical analysis on crude oil prices and a stealth rally. Then Jay and Derek talk through the idea of synthetic option positions including synthetic long stock and its attributes. Q2 earnings wrap up and how analysts over promised worse earnings and what's ahead.

Unemployment BLS methodology deep dive

The unemployment rate rises in August to 3.8% due to anomalies in the report.

Yellow Trucking shutdown causes spike in transportation unemployment.

Hollywood writers and actors' strikes cause unemployment rise.

Labor force participation rate has been highest since Feb of 2020

25 to 54 age bracket labor force participation rate rises to highest since May of 2002

What are synthetic option positions?

What is synthetic long stock using options?

Mixed bag of economic data

Everyone predicted wrong on recession.

US Crude Oil inventories are declining.

Q2 S&P 500 earnings wrap up.

Q3 earnings and beyond preview

How earnings predictions have declined over time

Are we passed the trough in earnings?

Why do people still hold money at large banks getting almost zero interest?

What is a cup and handle technical pattern?

Crude oil breaks out from cup with handle pattern.

Mentioned in this Episode:

0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes?

https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803

EconPi website http://www.econpi.com/

Employment Numbers from the BLS https://www.bls.gov/ces/

Fed Funds CME probability tracker tool https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

www.zegafinancial.com

Derek Moore is joined by Jay Pestrichelli, CEO of ZEGA Financial, to discuss the Bank of America piece saying maybe Goldman Sachs got 0 DTE option effects wrong. Plus, what did Jay Powell's speech mean if anything? New Fed Funds futures probabilities point to the Fed raising yet again. Then, they go through some odds and ends like how participation in employment surveys is dropping, the high Atlanta Fed GDP now numbers, and more.

The Fed on track for more interest rate hikes?

Jay Powell will do what needs to be done!

Fed Funds futures probabilities

What are 0 DTE Options?

Bank of America says 0 DTE options were not the cause of a late-day market drop.

Explaining how market makers hedge based on delta.

Interest rates and the cost of carry in option prices

Small discussion on what option Gamma is.

Liquidity in the options market

What is the Atlanta Fed GDP Now indicator?

Surprising Q3 GDP Now reading over 5.7%

What is the establishment employment survey?

Dropping participation rate of the unemployment surveys

Mentioned in this Episode:

Bank of America Disputes Goldman Logic on Zero-Day Option Threat to Stocks https://finance.yahoo.com/news/bank-america-disputes-goldman-logic-185606310.html

S&P 500 Forward PE Valuations vs Future Returns | Volatility in Stock & Option Markets https://podcasts.apple.com/us/podcast/s-p-500-forward-pe-valuations-vs-future-returns-volatility/id1432836154?i=1000624302870

Everyone Wrong on Interest Rates and what Fed Funds Probabilities Mean

https://podcasts.apple.com/us/podcast/everyone-wrong-on-interest-rates-what-fed-funds-probabilities/id1432836154?i=1000625408660

Fed Funds CME probability tracker tool https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

Derek Moore discusses how everyone seemed to get the direction of rates across the yield curve wrong. How adding duration in hindsight was the wrong choice. Comparing market prognostications in 1995 to today. What the Fed Funds rate probabilities really measure. Plus, explaining why bonds make or lose money based it their duration (sensitivity to interest rates).

The bond market got rates wrong.

What is happening at the long end of the yield curve?

Why doesn't the Fed have to lower rates without a recession or weakness.

Explaining what "duration" means with bonds.

How changes in interest rates make bonds go up or down.

Comparison of 10 year and 30-today year treasury yields vs June 1st.

Comparing yield curve today vs. 1995

What does the Fed Funds futures probability tracker measure?

Explaining what the implied interest rate is from looking at futures prices.

How Fed Funds futures are the markets' view TODAY of where rates might be in the future.

How the Fed Funds futures market got interest rate trajectory wrong

Mentioned in this Episode:

S&P 500 Forward PE Valuations vs Future Returns | Volatility in Stock & Option Markets https://podcasts.apple.com/us/podcast/s-p-500-forward-pe-valuations-vs-future-returns-volatility/id1432836154?i=1000624302870

Liz Young's article showing current forward PE ratios and subsequent 10-year market annualized returns https://www.sofi.com/article/investment-strategy/liz-looks-at-wrong-calls/

Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishnesshttps://podcasts.apple.com/us/podcast/cheapest-spx-put-protection-youve-ever-seen-s-p-500/id1432836154?i=1000623047871

Fed Funds CME probability tracker tool https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

LA Times Jan 1995 article on stock and bond market views https://www.latimes.com/archives/la-xpm-1995-01-01-fi-15454-story.html

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]

Derek Moore and Jay Pestrichelli return this week to discuss what current forward PE rations and whether that informs future market returns. Reasons PE ratios may go up or down including earnings increasing or markets going lower. Have there been a jump in forward earnings expectations? Then they check in on the high yield spread against treasuries and relationship to the VIX Index. Later they discuss the moving average of the unemployment rate and whether that is leading or lagging as an indicator. Finally, before some recommendations, Jay and Derek take a win vs. the Fed when looking at the supply chain pressure index vs. the CPI.

What is the Forward PE Ratio definition?

What is the current forward pe on the S&P 500 Index?

Is the forward pe ratio high in relation to the 25-year average?

How markets falling or earnings rising can lower the forward PE ratio

What is the high yield spread against treasuries?

High Yield spread vs the VIX Index

Global Supply Chain Pressure Index vs Consumer Price Index

How inflation was a supply side issue

Moving average of the unemployment rate as a leading indicator of recession?

Do higher ranges of market intraday highs and lows mean anything?

Next year's earnings estimates

2024 and 2025 S&P 500 earnings estimates

Mentioned in this Episode:

Liz Young's article showing current forward PE ratios and subsequent 10-year market annualized returns https://www.sofi.com/article/investment-strategy/liz-looks-at-wrong-calls/

US Debt Down Grade Effects | Interest Rates Effect on Option Prices | US Treasury Yield Curve Dis-inverting? | US Debt Massive Expansion https://podcasts.apple.com/us/podcast/us-debt-down-grade-effects-interest-rates-effect-on/id1432836154?i=1000623596920

Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishnesshttps://podcasts.apple.com/us/podcast/cheapest-spx-put-protection-youve-ever-seen-s-p-500/id1432836154?i=1000623047871

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

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek [email protected]