The Cents of Things

The Federal Reserve has been cutting interest rates, but long-term Treasury yields keep climbing.

The 10-year Treasury reached approximately 5.3% this week, while the 30-year approached 5.7%—levels not seen in roughly 24 years.

So what's driving rates higher despite Fed cuts?

In this episode of The Weekly Read, Jeff Kikel explores several forces influencing the global bond market, including strong economic growth, enormous AI infrastructure spending, persistent inflation, and government borrowing.

But one of the most interesting explanations may be coming from Japan.

For years, investors borrowed money at extremely low Japanese interest rates and invested in higher-yielding assets, including U.S. Treasuries.

Now, as Japanese rates rise and the yen strengthens, some investors may be unwinding those positions.

That selling pressure could be contributing to rising Treasury yields worldwide.

Jeff explains the yen carry trade in plain English, why the AI investment boom and rising interest rates are connected, and why he's watching the 6% level on the 10-year Treasury as a potential warning sign.

The takeaway: Don't assume Federal Reserve rate cuts automatically translate into lower long-term borrowing costs. Global capital flows matter.

Exit Rich…Retire Free — The Weekly Read

Hosted by Jeff Kikel

Educational content only. Not investment advice.

Companies mentioned in this episode:

• OpenAI
• Apple Inc.
• Delta Air Lines
• JPMorgan Chase & Co.
• Goldman Sachs
• PIMCO
• NASDAQ
• Exit Rich

Earnings season is underway, and two companies just demonstrated one of the most important lessons investors can learn.

Taiwan Semiconductor beat Wall Street expectations, but its stock fell roughly 2%.

Pepsi also beat expectations, lowered its outlook, and discussed layoffs—yet its stock rose approximately 2%.

Why would investors react so differently to two positive earnings reports?

In today's episode of The Daily Read, Jeff Kikel explains why stock prices are driven by expectations rather than headlines.

You'll learn why companies priced for perfection can fall even after strong results, why beaten-down stocks sometimes rally on modest improvements, and why management guidance often matters more than last quarter's performance.

Jeff also shares his personal three-day rule for avoiding earnings-related volatility and looks ahead to Delta and major bank earnings.

The takeaway: During earnings season, don't just watch whether a company beats expectations. Watch how the market reacts.

Exit Rich…Retire Free — The Daily Read

Hosted by Jeff Kikel

Educational content only. Not investment advice.

How much money do you really need to retire?

$2 million? $5 million?

The problem with those numbers is simple: whose retirement are we talking about?

Two people can have identical portfolios and need dramatically different amounts depending on their spending, Social Security, pensions, housing, taxes, retirement age and other income.

In this episode of Retire Free, I show you a simple four-step framework for finding your retirement number:

1. Estimate your annual retirement spending

2. Add up your reliable income — Social Security, pensions, annuity income, etc.

3. Subtract that income from your spending to find the gap

4. Divide the gap by an appropriate withdrawal rate

That's the basic math. How Much Do You Need To Retire …

Then we look at a hypothetical couple spending $200,000 per year with $45,000 of Social Security income. Their portfolio needs to cover roughly $155,000 annually, putting their target near $3.9 million at a 4% starting withdrawal rate.

Reduce spending to $180,000, however, and the target falls to roughly $3.4 million.

A relatively small lifestyle change moved the retirement number by approximately half a million dollars. How Much Do You Need To Retire …

We also cover:

• Why the 4% rule is a starting point, not a guarantee

• How Social Security fits into the calculation

• Why $4 million in a pre-tax 401(k) isn't $4 million of spending power

• RSUs, stock options and company-stock concentration

• Healthcare costs

• Why you should stress-test retirement against bad markets, inflation and longevity

• What to do if you're 5+ years out, 2–3 years out, or already retired How Much Do You Need To Retire …

Your retirement number isn't somebody else's headline. It's the number that supports the life you actually want to live.

Learn more at Freedom Day Wealth Management.

Freedom Day Wealth Management

More Than A Finish Line.

Educational content only. This is not individualized investment or tax advice.

Two days ago, AI was being called the “greatest money-making opportunity in human history.”

Today, investor Michael Burry is warning that the market may be in denial about the AI trade ending.

Same market. Just 48 hours apart.

So which side should investors believe?

In this episode of The Daily Read, Jeff Kikel argues that the answer starts with separating two very different questions:

Is AI real?

And:

Are AI stocks priced right?

The evidence for the AI build-out is real. Companies are committing enormous amounts of capital to chips, data centers, connectivity and power infrastructure.

But history reminds us that a transformational technology doesn't automatically make every stock tied to it a good investment at every price.

Railroads changed the world—and railroad stocks crashed.

The internet changed the world—and the dot-com bubble still burst.

Both things can be true at once. Daily Read #37

Jeff also looks beneath the major indexes, where market breadth has remained surprisingly thin despite recent record highs, and explains why the behavior of NVIDIA, semiconductor stocks and AI-related power companies on down days may tell us more than the latest bullish or bearish headline.

The takeaway:

The theme is real.

The breadth is thin.

The price is in debate.

When bulls and bears are both screaming, don't buy certainty from either side.

Watch the evidence, maintain your discipline, and don't let either hype or fear make your decisions for you. Daily Read #37

Exit Rich…Retire Free — The Daily Read

Hosted by Jeff Kikel

Educational content only. Not investment advice.

The hottest AI stock today isn’t a chip company. It’s a nuclear power company.

Constellation Energy jumped roughly 12%, and that move tells us something important about where the AI boom is heading: the trade is broadening beyond the famous names.

In today’s Daily Read, Jeff Kikel looks at the “picks and shovels” behind the AI gold rush. NVIDIA and AMD may design the chips, but the AI ecosystem also needs manufacturers, testing equipment, connectivity—and enormous amounts of electricity.

That’s why companies involved in power and nuclear energy are increasingly becoming part of the AI infrastructure story.

Jeff breaks down why broader participation across the AI supply chain can be a healthy sign for the market, including strength in NVIDIA, AMD, Taiwan Semiconductor, Teradyne, Astera Labs and Constellation Energy. Daily Read #36

But there’s also a reason for caution.

As enthusiasm around AI reaches increasingly euphoric levels, discipline becomes even more important. One analyst went so far as to describe AI as the “greatest money-making opportunity in human history.” Jeff’s response is simple: the hotter the rhetoric, the tighter you hold your rules. Daily Read #36

In this episode:

• Why a nuclear power company suddenly looks like an AI stock
• The “picks and shovels” strategy behind major investment booms
• Why AI’s enormous electricity demand matters
• What broader AI leadership tells us about the health of the rally
• Why the power sector may be one of AI’s newest tells
• Why even a booming theme doesn’t protect weak companies
• How to participate in a powerful trend without getting caught up in the hype

Bottom line: Don’t just stare at the famous names. Follow the entire chain of companies enabling the boom. That’s often where the next opportunities—and some of the best clues about the strength of the trend—can be found. Daily Read #36

Exit Rich…Retire Free — The Daily Read

With Jeff Kikel

Educational content only. Not investment advice.

The September jobs report was BAD.

Only 29,000 jobs were added.

Unemployment ticked higher.

And the stock market?

Welcome to a market where:

And there's one reason for it:

For weeks, rising rates have been the villain bullying this market.

The 10-year Treasury climbed as high as 5.26%, its highest level in years.

The 30-year reached levels we hadn't seen since 2004.

And investors became increasingly worried that the Federal Reserve wasn't finished raising rates.

Then this week...

Three economic reports chipped away at the rate-hike story.

And Friday delivered the knockout. Weekly Read #35

We entered the week with rates firmly in control.

📈 10-year Treasury → 5.26%

📈 30-year → Highest levels since 2004

The fear was straightforward:

Higher rates continued putting pressure on stocks and valuations.

Then Wednesday brought the first crack.

Core PCE—the Fed's preferred inflation measure—came in cooler than expected.

For the first time in a while:

📉 Yields eased.

📈 Stocks got some relief.

But the rest of the economic data complicated the story.

Economic growth was revised higher.

Private hiring remained strong.

Normally?

That's good news.

But this market interpreted it differently.

A strong economy gives the Fed more room to keep rates high—or raise them again.

So Wednesday gave us:

Then Friday flipped the story completely.

The government's September jobs report came in weak.

Only:

That was barely a third of what had been expected, while unemployment ticked higher.

Suddenly the prospect of an October rate hike faded dramatically.

And stocks?

Bad economic news produced a bullish market reaction.

Why?

Because this market is looking at virtually everything through one lens:

Wednesday:

🔥 Strong economy → Fed might keep hiking → BAD for stocks.

Friday:

❄️ Weak jobs → Fed may back off → GOOD for stocks.

That's the signature of a market being ruled by interest rates. Weekly Read #35

At the beginning of this story, the market's villain was:

🛢️ OIL

Then the driver changed.

Oil fell, but stocks weren't responding.

Why?

Because the villain had become:

📈 INTEREST RATES

And this week, enough softer economic data finally accumulated to crack the rate story.

That's the lesson:

Then watch for the moment it turns.

This week...

The market's leadership was loud and clear:

NVIDIA announced an enormous buyback and reached new highs by Friday.

Teradyne, Arm and Marvell were among the chip names showing major strength.

Tesla also jumped following a strong delivery report.

Capital is moving aggressively toward AI and technology leadership. Weekly Read #35

A roaring market doesn't rescue a bad company-specific story.

Nike plunged following a weak outlook.

Seagate and Western Digital were hit by competition news involving Toshiba.

That's an important reminder:

The backdrop has clearly improved.

📉 Rate pressure is easing.

🛢️ Oil is back near $90.

🤖 AI and chips are breaking out.

📈 Market leadership is showing conviction.

That's constructive.

But it isn't an all-clear.

Inflation remains above the Fed's target.

And a weakening labor market can eventually become something considerably less bullish than a reason for the Fed to stop hiking.

Next week I'm watching:

📈 10-Year Treasury

👷 Labor-market data

🤖 AI & chip leadership

💰 Beginning of Q3 earnings season

Friday's jobs number answered one question.

Now we need to know:

For two weeks, one thing has bullied this market:

Every day, the 10-year Treasury seemed to climb—and stocks had to fight against it.

This morning?

The Fed's preferred inflation gauge came in cooler than expected, Treasury yields finally ticked lower, and stocks responded.

The S&P 500 and Nasdaq moved higher.

AI stocks bounced.

Nebius gained roughly 4%.

Intel climbed about 3%.

NVIDIA recovered from Tuesday's weakness.

And the catalyst was inflation.

Core PCE—the inflation measure watched closely by the Federal Reserve—rose about 3% over the past year, cooler than economists expected.

That helped push the 10-year Treasury yield back toward:

That's not a dramatic drop.

But after two weeks of relentless increases, it's the first genuine crack we've seen in the rate pressure.

And there's another encouraging trend in today's report: inflation has continued ticking lower over the past several months. Daily Read #33

We didn't get just one economic number this morning.

We got three.

And they don't all tell the same story.

🟢 INFLATION: Cooler

🔥 GDP: Revised up to 2.2%

🔥 PRIVATE PAYROLLS: +90,000

That's where today's story gets interesting.

Cooler inflation is clearly positive.

It takes pressure off the Fed.

It takes pressure off Treasury yields.

And that helps stocks.

But stronger economic growth and hiring?

That's a double-edged sword.

A strong economy is good for corporate earnings.

But it also gives the Federal Reserve less reason to ease monetary policy.

So today's message isn't:

And it certainly isn't:

Instead:

One cooler inflation report is meaningful.

But the 10-year Treasury remains around 5.25%.

The economy remains strong.

And the Fed hasn't signaled an all-clear. Daily Read #33

Two major events remain this week.

💾 MICRON — TONIGHT

Micron reports after the close.

With earnings expected in the episode to grow more than 900% from a year ago, this is an important test of AI memory demand.

As a memory-chip bellwether, Micron's report could influence the entire semiconductor group tomorrow.

Then:

🇺🇸 SEPTEMBER JOBS REPORT — FRIDAY

Today's private hiring data came in strong.

Friday gives us the government's official employment report.

Are you paying more for an investment fund that isn't beating the market?

In Episode 164 of The Cents of Things, Jeff Kikel and Ron Lang look at historical data showing how difficult it has been for actively managed large-cap domestic funds to outperform the S&P 500.

That raises an important question for everyday investors: What are you actually getting for the fees you're paying? COT 164

But that's only one part of this week's conversation.

Ron digs into recent retail spending data, including gasoline, department stores, furniture, home improvement and credit-card activity. Jeff and Ron then look at one of the biggest promises surrounding artificial intelligence: Is AI actually saving businesses money yet? Early survey data suggest some companies are beginning to see measurable savings, while many are still figuring out how to integrate AI into their business processes. COT 164

Then there's the M&A story.

Deal activity is picking up in commercial and industrial services, with larger companies and private-equity firms acquiring owner-operated HVAC, plumbing and other service businesses. For aging business owners without an internal successor, that could create an increasingly important exit path. COT 164

In this episode:

• Why beating the S&P 500 is so difficult for active fund managers
• Active mutual funds versus ETFs
• What recent retail spending tells us
• Why home-improvement spending is slowing
• Whether businesses are actually saving money with AI
• Jeff's own experience measuring AI-related cost savings
• Why M&A activity deserves investors' attention
• Private equity's appetite for HVAC, plumbing and service companies
• The opportunity for Baby Boomer business owners looking to exit
• New-home sales and mortgage rates
• Initial and continuing jobless claims
• Next week's ADP, PCE, GDP and ISM reports
• Why the upcoming employment data could move markets
• Why investors may want to tune out political noise

Plus, Ron's This Week in History takes us from the Bill of Rights and Rosetta Stone to Stonehenge, the B-29, the beginning of the nuclear age and old Yankee Stadium. COT 164

Smart Conversations. Stronger Financial Futures.

#CentsOfThings #Investing #SP500 #MutualFunds #AI #BusinessOwners #MergersAndAcquisitions #Economy #FinancialEducation

Check out the full article and visuals at: www.profitpilottax.com/augusta-rule-rent-home-to-your-business

Can your business pay you to use your own home—and can you receive that money tax-free?

Under the right circumstances, that's exactly what the Augusta Rule (IRC Section 280A(g)) can allow.

In this episode of Exit Rich, Jeff Kikel explains how qualifying business owners may be able to rent their personal residence to their business for 14 days or fewer during the year. The business may deduct the legitimate rental expense while qualifying rental income isn't reported by the homeowner.

But simply writing yourself a check isn't a tax strategy.

Jeff walks through a hypothetical example involving 12 monthly leadership meetings at a market-supported rental rate of $1,500 per day. That's $18,000 of rental expense to the business and $18,000 of qualifying rental income to the homeowner. After considering the impact on the QBI deduction, the hypothetical produces approximately $5,000 of federal tax savings at a 37% marginal tax rate.

Then there's the cautionary tale.

In Sinopoli v. Commissioner, approximately $291,000 was claimed over three years, while only about $16,500 was ultimately allowed.

The lesson?

The file is the strategy.

You'll learn why rental agreements, third-party market quotes, agendas, minutes, attendee lists and properly timed payments matter—and why those same business disciplines can become valuable when it's eventually time to sell your company.

Build Profit. Build Process. Build Value. Exit Rich.

Learn more at www.ProfitPilotTax.com

Educational purposes only. This is not individualized tax, legal or investment advice.

The stock market looks relatively quiet today.

But underneath the surface?

On one side:

🤖 NVIDIA + AI

NVIDIA just announced an enormous $150 BILLION stock buyback, while chip names including Applied Materials and Marvell are showing significant strength.

On the other:

📈 INTEREST RATES

The 10-year Treasury yield has climbed to roughly 5.26%—its highest level in years.

And here's the clue that tells us which force is really driving this market:

Oil dropped toward $90.

If oil were still the market's primary problem, falling oil should be giving stocks a meaningful lift.

It isn't.

That's the tell.

In today's Exit Rich…Retire Free Daily Read, Jeff Kikel breaks down the tug-of-war happening underneath a deceptively quiet market—and why NVIDIA's massive buyback is helping the AI trade fight against one of the biggest valuation headwinds investors have faced in years. Daily Read #32

What exactly does a stock buyback do?

When a company buys back its own shares, two things happen.

First, it reduces the number of shares outstanding.

That means each remaining share represents a slightly larger piece of the company.

Second, the company itself becomes a buyer of its own stock.

And in NVIDIA's case we're talking about:

That's an enormous potential source of demand.

It's one reason NVIDIA can trade higher even while rising interest rates are putting pressure on much of the rest of the market. Daily Read #32

The 10-year Treasury has climbed to approximately:

That's important well beyond the bond market.

Higher long-term rates affect:

🏠 Mortgages

💳 Borrowing costs

🏢 Business financing

📊 Stock valuations

And particularly:

That's why today's market is such an interesting tug-of-war.

You have one enormous force pulling downward:

📈 5.26% Treasury yields

And another pulling upward:

🤖 AI leadership + NVIDIA's $150 billion buyback

The result?

A market that looks quiet on the surface but is anything but quiet underneath. Daily Read #32

For much of September, oil was one of the biggest forces driving markets.

Today oil fell toward $90.

But stocks didn't surge.

Meanwhile, yields climbed and gold and silver came under significant pressure.

That tells us something important:

When the old driver reverses and the market doesn't respond the way you would expect, look for the new driver.

Right now:

🤖 OPENAI DEVDAY — TODAY

OpenAI's keynote could produce announcements capable of moving AI-related stocks.

💾 MICRON — WEDNESDAY AFTER THE CLOSE

Micron earnings provide another important read on AI memory demand and could influence the broader semiconductor group.

📈 10-YEAR TREASURY

This remains the big one.

If the 10-year keeps moving higher from roughly 5.26%, eventually even the strength in NVIDIA and AI may have trouble offsetting the pressure.