Tape Talk | Investing, Business, Wealth, and Your Money

On this week's episode of Tape Talk, Quint and Daniel discuss the recent yield curve inversion and what that means to the market. 

Inverted What?!?

The headlines and watercooler talk this week is all about the recent inverted yield curve across the 2-year and 10-year Treasuries.  However, all the fantastic headlines tend to leave out why this matters to investors and what it really means. Quint and Daniel spend some time explaining the yield curve and why there is so much focus on inversion here. 

Main Street Interest Rates

It's all fine and good to know what's going on in Treasury yields but how is this trickling down into real-life economics of consumers who are affected by interest rates daily. What might be surprising to some is the vast divergence in the effect of the recent Treasury rate retreat on actual consumer rates. While mortgages are down some, many other rates have held steady or even rose!

Recession on the Horizon?

So if the yield curve is a recession indicator, does that mean we're on a direct road to this adverse economic event? Quint reviews what else is going on in the economy here to question whether we really need to be concerned at this point.

Your Required Rate of Return, It's the Foundation!

The one thing that is certain is markets will move both up and down. Sometimes they'll move calmly and other times more violently. Through these ups and downs, it's critical for investors to know precisely what they need from the market to achieve their goals. Understanding their required rate of return gives investors a metric by which to judge whether volatility is having a real-world impact on their current goals or is simply static to ignore.

On this week's episode of Tape Talk, Quint and Daniel discuss the recent volatility across markets and what that means for investors.

Trade War

While stocks moved on the Federal Reserve's implication that the recent rate cut was not the start of a new trend, the move was propelled much further by matters worsening on the trade war front. After the Trump Administration broadcasted additional tariffs set to take effect, China released news of decreased purchases of United States agriculture products.

7.0, A Key Level

Over the weekend, the Chinese Yuan broke the all-important 7.0000 psychological level which indicated the country was allowing their currency to devalue versus the US-dollar. This move effectively shifted the trade war from a matter of goods and services to a currency scuffle which US markets, with their volatile trading on Monday, indicated would be a fearsome escalation.

Required Return

While seeing your investing and retirement accounts gyrate with the forces of the market is never palatable, it does help to understand how the moves affect your investing goals. By understanding your required rate of return you might be able to sleep easier at night by knowing if recent volatility is something to be concerned about or just already factored into your plan.

On this week's episode of Tape Talk, Quint reviews what's been happening in the market recently and what may lay ahead.

Market Anomalies

Often times the time to invest in particular companies or sectors is during a time when the waters appear choppy on the surface. Quint looks at Fastenal as an example of this particular strategy while considering whether Capital One Financial may be next on the list. 

Opportunity in a Breach?

Capital One Financial dropped on news that it is navigating a data breach but is it possible that the market is overreacting? Quint continues his discussion on finding value in adverse times by reviewing the company for potential opportunity. 

Fed Flip Flop

The Fed appears to be struggling with how to communicate clearly its intentions to investors. During his most recent press conference after the July FOMC rate decision, the future forecast became murky and the stock market sold off in response. 

Know Thy Risk

With markets entering a more turbulent period than they've been over the past couple months it is again important to understand your risk tolerance and temperament. The time to consider, review, and change your risk level is in the quiet times of the market, not when emotions are running high.

On this week's episode of Tape Talk, Quint and Daniel discuss strategies to navigate the diverse newsflow here. From the Fed's upcoming rate hike, corporate earnings, and negative headlines, investors have a lot to digest while stocks push to new highs.

Rate Cut Imminent 

The market is pricing in a definite rate cut at the FOMC's next meeting at the end of the month. While it's hard to see strong evidence to support this cut beyond a simple precautionary step, it does appear the Fed has broadcasted this move heavily and the market is listening.

Corporate Earnings

Corporate earnings for this most recent reporting season have seemed to broadly beat investors' expectations. It appears many companies have been able to navigate the trade hurdles well. However, many seem to point to potential or actual price hikes in the future.

Negative Headlines

If you didn't know where the stock market was trading recently, many recent headlines might lead you to believe we are in the midst of a significant correction. This is a good example of how news can move from informative to static which investors need to be cautious about digesting.

At 21, Mindy Wetzel was miserable and bored as a chemist within a cement company. Just a few years later she found herself on an archaeological expedition in Egypt unearthing a 3,000-year-old cemetery. In this unique and fascinating Tape Talk, Quint takes a break from the norm and discusses the fascinating career path of a modern-day Indiana Jones.

On this week's episode of Tape Talk, Quint and Daniel discuss this week's news of tariff fallout hitting the industrial sector and headlines around the upcoming FOMC meeting.

Tariff Fallout

In their earnings report this week, industrial giant Fastenal reported negative impacts of the recent trade war between the US and China with both top-line revenue and bottom-line earnings coming in under expectations. This underperformance combined with increased income tax costs had investors selling the name aggressively. However, Quint and Daniel break down what might be an opportunity for investors here.

Cuts Baked In

At this point the market, as represented by interest rate futures, are baking in 100% chance that the Federal Reserve cuts interest rates at their FOMC meeting this month. What Quint and Daniel find interesting about this move is that the economy overall is not in bad shape here which leads to the discussion, "why cut?"

This week Tape Talk welcomes friend and client Brent Beckwith owner of Beck Travel. Quint interviews Brent about his new venture and why after over 30 years in the corporate world why he chose to start a new travel advisory business. At 65 years young, Quint and Brent discuss the ins and outs of starting a new business and just why Brent chose the competitive field of travel.

On this week's episode of Tape Talk, Quint and Daniel welcome Kelly Karls, Lexington Kentucky's "Queen of Real Estate."

Headlines

Before getting into real estate, Quint and Daniel review the headlines from this week's Federal Reserve FOMC meeting at which the Fed left rates unchanged with a hint that cuts may come. The market clearly supported the Fed's views, rallying after the meeting and continuing the rally into Thursday. What might be more notable though was the movement in gold which hinted that investors may believe the Fed doesn't have inflation under control.

Hot Housing

It's been another great start to the year for housing according to the Lexington's "Queen of Real Estate," Kelly Karls. While we are starting to see more price cuts than we had last spring it seems to be due more in part to hopeful pricing on sellers front rather than an actual dip in prices. Furthermore, the recent pullback in interest rates, with some 30-year mortgages now under 4%, is certainly getting buyers interested.

On this week's episode of Tape Talk, Quint and Daniel examine the quiet week so far in the market and ask, "where is the smart money flowing to right now?"

What the Money

While people may have all types of opinions about what happens next in the financial markets, their real vote is made with their money. For this reason, it can be important for investors to pay less attention to headlines and more to where the money is actually flowing around in the financial world. Recently, a look from this perspective reveals that semiconductor stocks have been under pressure and may become the unfortunate casualty if trade tensions between the US and China persist for some time.

Interest Rate Uncertainty

Over the past month interest rate futures, tied to the same short-term rates set by the Federal Reserve, have swiftly begun indicating a rate cut is on the immediate horizon. The chances priced in by the market are getting closer to certain for a cut by the July meeting of the FOMC. Quint and Daniel review these probabilities given the context of an otherwise fairly healthy economic background.

What Can You Stomach

When investing for your financial plan and retirement goals it's not all about maximizing your gains. In fact, one of the more important factors for investors may be their risk temperament. This is the risk level at which they can sleep at night even while the markets are volatile. Understanding what this level is for them may be a key component of investor success as inevitable volatility perks up from time to time.

On this week's episode of Tape Talk, Quint and Daniel review the recent volatility around Mexico Tariffs and speculations surrounding the Federal Reserve's next moves.

The Mexico Front

Tariffs and trade wars have still been in the news as of late but the battlefield may have shifted. Recently the President announced increasing tariffs on goods from Mexico in an effort to ward off illegal immigration by persuading the country into complying with requests to take a more active role in deterring the flow of people across the border.

A Battle On Many Fronts

The news about Mexico isn't just about the potential tariffs but the reality that tariffs may be the bargaining chip with other countries beyond China moving forward. As the message soaks in that the trade war has moved beyond just a spat between the US and China, companies and investors alike must consider the ramifications for any products and materials brought in from overseas.

The Copper Tell

While the economic outlook is not currently bleak it's important for investors to watch for changes. Quint gives investors a look at what he's watching here to keeps tabs on the evolving economic outlook to take action with early signs of changes ahead.