Jason Jacobi, CFP® (00:00.907)
Welcome to your Friday Closing Bell. Coach Boyer, Jason Jacobi, Salt and Pepper, we are here live on a holiday shortened week. Coach Boyer, with a big B, you ain’t boring like we said last week. Are you ready for another edition of the Closing Bell?
Coach Boyer (00:16.917)
I don’t know where that Coach Boer thing came up. So I just added that in today. So feeling like a coach right now. Maybe it’s a football playoff time. Maybe that’s why, I don’t know. But anyway, Coach Boer.
Jason Jacobi, CFP® (00:27.575)
Maybe, but you’re coaching and educating people on the economy and fixed income, stock market. So it applies. It applies. You’re still a great coach, right? So
Coach Boyer (00:36.697)
Yeah, yeah, that’s what it does. Basic life, basic life stuff, coaching on life things. Finance is a big part of that.
Jason Jacobi, CFP® (00:42.367)
Absolutely. Yes, absolutely. It’s a huge. Absolutely. All right. So we got a good one for you this week. Our theme of the week, which we want to kind of talk about. So we’re just trying to figure out how to best optimize our time with you all watching or listening. So we’re navigating market highs. We got tech triumphs and global economic tides, which are always turning the world is a turning. So
Coach Boyer (00:45.858)
The biggest part or the big part?
Jason Jacobi, CFP® (01:11.363)
S&P on track to potentially close out a record which dates back to 2022, which is fantastic Mark, you know Obviously, we’ve seen a quite an incredible run in the tech sector. We talked about the rise of the tech era Again after the dot-com bubble internet 2.0. I feel like this is kind of internet 3.0 Semiconductors give us your thoughts
Coach Boyer (01:34.69)
Yeah.
Yeah, I mean, I think we’re getting some good news out of Taiwan semiconductor came out just within the last 48 hours basically and they kind of blew earnings away. Their first quarter revenue guidance was 18 billion, 18 to 18.8 billion, which implies a 10% increase over the 16.7 billion.
Jason Jacobi, CFP® (01:47.003)
this week.
Coach Boyer (02:05.542)
recorded in the first quarter. So, management’s with Taiwan management believes that their full year 2024 revenue will increase by low to mid 20% rate of return. That’s incredible on dollar terms. So, semiconductors are sort of, they’re cyclical, right? I mean, I think, so there’s semiconductors in everything we use today. It’s crazy, like they’re everywhere.
Jason Jacobi, CFP® (02:19.879)
Yes.
Coach Boyer (02:34.246)
AI is the big thing now because AI is another, oh, we talked about this in former podcasts or here on the closing bell. But the fact is, we all know semiconductors are everywhere. And Taiwan semiconductor, because of their location there in China, they’ve always been a big area of manufacturing and of semi-Gundigers coming out of that area.
They’ve expanded. We talked about this before. They’ve expanded now. They’re opening up plants in the U.S. in different areas. And so, you know, they’re sort of a because it’s semiconductors are sort of a forerunner to actually economy. A lot of people look like when you when you see semiconductors starting to say, Hey, we’ve got more increases coming. We’ve got more people buying semiconductors. It possibly gives you an idea of what’s happening in the economy. So
All said is that when somebody like Taiwan Semiconductor comes out with these kind of numbers, it bodes well for everybody. If they’re growing demand with semiconductors means that lots of companies are ordering those semiconductors to put in their products or whatever. So anyway, that’s part of the deal. And so you’re seeing this, it’s relatively.
It’s a bullish sign for the market. And here at the end of the week here, we’re getting some, especially in the NASDAQ and the SIM, we’re busting out to new highs. NASDAQ actually today, Friday, this is Friday’s busting out not to new highs, but over a short term sort of area that it’s had a little bit of resistance at. So that could be positive going over the next few weeks. We’ll see how that plays out.
Jason Jacobi, CFP® (04:22.519)
And I just want to touch on Taiwan Semi again, because that was something that a company that I was quite fond of the past two years is kind of severely underperformed the rest of the semiconductor space because of China’s influence. China kind of saber rattling saying that the reunification of Taiwan and China is inevitable. That’s what he said this past week, president Xi of China.
So whether to be seen if they want to start World War three or, you know, how that kind of affects and elevates more geopolitical tensions, not only in the area, but around the world, uh, which we’ll kind of get into a little bit later that had a serious, uh, effect on investor sentiment. It was like, do I want to buy Taiwan? Have they taken over by China, which will have their kind of fingernails kind of ingrained into the company at that point. Um,
But Taiwan Semi, a lot of people don’t understand is they’ve been deglobalizing their supply chain, which is very key. I think since COVID, a majority of your companies out there are looking for ways to deglobalize their supply chain. Take for example, what’s going on in the Red Sea in the Suez Canal right now. Companies are also looking for ways around that because that is such a major hub for shipping containers and oil exports through the region and imports.
depending on which country you are. So I think you’ve seen that decoupling from globalization to de-globalization. You got Taiwan, semi now in Arizona. They’re now they’re having trouble finding people to fill those, uh, those jobs because they don’t have the training. So they’re having to send the Taiwanese over here to train, uh, the U S, uh, citizens and workers to make these chips, uh, because they’re the largest chip manufacturer in the world, uh, chip foundry, excuse me. But, uh, but again,
Not only here in America, but they’re looking to open other factories all over the world. So again, as we get away from that kind of overarching theme of the Taiwan, China narrative, then it could be really good for, for Taiwan semi and it could kind of join and catapult and catch up to the Nvidia’s the AMD’s Intel’s, uh, even super micro now, which blew up today. I’m up almost 36%. So like you’ve been saying.
Coach Boyer (06:45.546)
Yeah, they didn’t even come out with earnings. So another AI kind of stock that, you know, again, will possibly benefit from increased exposure there and, you know, this bullishness in the semiconductor. So anyway, you know, yeah, all that is right. You know, you’re talking about there’s an expanding there, you know, China, it’ll be interesting to see geopolitically what China does, you know, because they had the elections that this last week or so that.
Jason Jacobi, CFP® (06:47.183)
But, but unless, really.
Jason Jacobi, CFP® (07:11.351)
Mm-hmm.
Coach Boyer (07:14.178)
You know, didn’t go in China’s favor. You know, Taiwan really wants to be separated and kind of go with the West and a lot of ways continue there. And that’s, we’ll see what leadership in China decides to do. So, you know, you could hear about more saber rattling right now. Yeah. So it’s, it’s going to be interesting to see, but as far as the market today and where we’re at, I mean, based on those numbers, you know, you know, don’t forget, you know, China’s in a pickle too. Their economy is in the.
toilet, they’re not doing very well, they’ve got commercial real estate issues like crazy. They’ve got consumer demands low, they got jobless rates, especially amongst young Chinese that want jobs, so I can’t get them. So there’s a lot of negatives going on there that’s causing them to try to get their house back in order. And then you’re talking about these attacks and…
Jason Jacobi, CFP® (07:51.031)
Yep. Consumer demand’s low.
Coach Boyer (08:13.406)
Red Sea, right? A lot of that’s Chinese goods going out, another headwind for them. So you got Taiwan and then semiconductor coming out with positive news. It’s like, holy, from there, they don’t have a lot of good news going on there. So we’ll see what happens. They’re in a pickle right now just with all of what they’ve got in store and what’s happening there.
Jason Jacobi, CFP® (08:19.694)
Yeah.
Jason Jacobi, CFP® (08:28.628)
Yeah.
Coach Boyer (08:44.25)
And to your point, and so because of that, like you said, I think the key thing to take away here is that a lot of people are looking for diversification away from being so strong, you know, in need of what China has to produce. So they’re going elsewhere. And yeah, that’s a good thing. And that’s a good thing.
Jason Jacobi, CFP® (09:00.075)
Yep. Totally. Yeah. Yep. Absolutely. So let’s talk about earning season or Q4 earning seasons kicked off. Um, you know, and it’s been a little bit of a mixed bag at this point from the banking sector. Some financial giants did surpass expectations. Others signaled caution. Uh, ahead with projected dips in net interest incomes.
Um, but there’s a silver lining, you know, the S and P 500, like we had mentioned, it’s on track to potentially close a record high here. Um, their forward earnings estimates, um, are way beyond the 2022 peak. So it’s painting a potentially rosy picture for, for stocks. But again, we’ve gone into this quite a bit already. It’s it, you know, this year again, always election years are more volatile. Um,
more geopolitical headwinds is inflation getting a rear, rear its head, which we can talk about due to supply chain issues or because of supply demand, more than supply side for the U S uh, moving forward, it’s going to be an interesting one.
Coach Boyer (10:05.89)
There’s a lot of moving parts, right? I mean, that’s part of, so there’s so much to look at and to analyze. And again, yeah, and that’s the excitement about this profession that we’re in. And when investing, you keep your eyes on all these things. But.
Bottom line is nobody really knows what’s gonna happen tomorrow, but you can see trends happening. And right now, like you just said, it looks like we’re headed to new highs, or at least potentially there, especially here now in the S&P. And then with the NASDAQ, if it gets to its former highs and then we’re able to break that, like it or not, that’s actually trend-wise. I mean, the trend is to the upside.
even though we’re more expensive, stocks P ratios are higher, it means all that, but it does mean that if you have exposure right now in the markets, it’s important to be diversified, but it’s important to not to be panicking out at the moment. That’s for now, that’s this week, but that’s looking pretty positive. And again, I can’t emphasize enough that the semiconductor being cyclical.
This whole idea is actually an early indicator that the markets and that the economy does look pretty positive, which then counter to that is going to put in the is going to cause, you know, everybody’s talking about rate increases, right? That’s what the Fed was talking about. The stem are going to increase the market, I think, overshot the bond markets. You know, there was talk about six maybe rate cuts in this year, which, you know,
Jason Jacobi, CFP® (11:40.975)
Yeah.
Coach Boyer (11:52.386)
Who knows, again, anything’s possible, but that seemed to be over, might be, it might still think the rates are going lower, that the Fed will cut eventually, but may not be six. And so thus you’re getting a little bit back up in 10 year yields to the above 4%, want 4.1, 4., it looks like somewhere in that range right now. So, a little bounce back to its 50 day moving average. And so we’ll see how that plays out. But.
Jason Jacobi, CFP® (12:13.477)
4.1 Saturday night.
Coach Boyer (12:22.903)
Anyway, a lot of fun things to look at and watch.
Jason Jacobi, CFP® (12:25.591)
Yeah. Markets pricing in 50 rate cut here in March. Again, I, I would not be surprised to see if they even hold off on March. Obviously we’re still early here, but with, with retail sales, uh, numbers that came out this week, you know, it showed a 0.6% increase, which was actually quite a bit higher than they thought for December, against the holiday season, people still spending strong at the end of the year, showing consumer resilience. Now the numbers of delinquencies that we see this year will kind of
Coach Boyer (12:45.42)
Sim.
Jason Jacobi, CFP® (12:55.095)
be a byproduct of that? Is it actually going to play out where it’s more widespread or is it going to be a soft landing and potentially not be as severe as we once thought? So that’s a good thing. Again, consumer spending could increase GDP growth, right? But again, it could stoke inflation. Again, we had inflation numbers that came out last week if you didn’t watch or read in the news.
I kind of had a little bit of an uptick as well as a surprise on the upside. So, uh, we, we see potentially see those numbers coming back down, uh, over the next month or two. Uh, but again, that the Fed will be data dependent. So, um, but the main thing that I want to talk about besides kind of the consumer on the, uh, on the retail side here, but the housing market. So let’s talk about.
different kind of buying and selling homes. We saw a 20 year low, 28 year low for the 28 year low for existing home sales. Okay. So 23 years ago, that was like 2001, 2000, 2001, since we’re new in 2024.
Coach Boyer (14:15.266)
I’ll rate you about 10.
Jason Jacobi, CFP® (14:19.131)
Hey, yeah, it’s about 10. Yep. Exactly. Don’t tell the audience that I’m that young. But, uh, but yeah, so we had a housing low, obviously we’re not telling you anything new here, we’re telling you basically what we all knew and what the real estate market’s been telling you for a long time as well, that it was tough. Inventory was low. People didn’t want to sell if they had existing mortgages in two to 4% range.
Coach Boyer (14:20.964)
Yeah, right? Okay.
Coach Boyer (14:25.994)
I won’t even tell you how old I was. That’s sad. Anyway.
Jason Jacobi, CFP® (14:49.475)
And that put a lag on the existing home sales. So nothing to write a home about there. Do potentially see that easing up if rates do continue to go down. They already started to in the mortgage industry, but if it continues to fall, then potentially it could be a tailwind for the housing market in 2024. But again, that is to be seen.
Coach Boyer (15:15.082)
Yeah, it’s a really interesting call. I’ve never seen anything like it because the fact is, is yeah, I mean, existing sales are down. And so you would think that prices would come down, right? Because the man, you know, but reality is because of the lack of supply of homes, when a house does come on the market, there’s so many people that want to jump on it. So it’s so strange that the number of sales are significantly down, but the prices are not coming down, which is, you know,
Jason Jacobi, CFP® (15:36.379)
Yeah.
Coach Boyer (15:45.954)
We’ve also printed a ton of dough in the last couple of years, so there’s a lot of money there, and so we saw a huge rise there. But at the same time, it’s interesting to see that prices aren’t coming down, which I don’t know. It’s going to be… That’s a challenge, challenge for people, young people, young families that are trying to buy homes, can’t get into them, too expensive. But yeah, it’s going to be interesting to see how that plays out. So…
I don’t know, I think rates are gonna, I think lower rates will help the housing market, but I think they’re gonna have to come down fairly significant for a lot of people to get off and actually get off the sidelines and selling their places. But that’s my take.
Jason Jacobi, CFP® (16:26.247)
That’s true. The worst could be behind us. That’s yet to be seen, but it could potentially be possible. Now last thing I want to talk about real quick here, shipping costs and global tensions. So can you just briefly touch on, Mark, geopolitics? We’ve talked a lot about geopolitics. Does it really affect portfolios? Does it not?
I know that’s kind of a loaded question because you have short-term, long-term goals. You know, there’s a lot to play into that. But is there something like this? Let’s just use, we’re not talking about Gaza, we’re not talking about Ukraine. Let’s just more focus on the more recent conflict. Again, the proxy war, Iran backed Houthi rebels kind of destroying a lot of container ships or taking them hostage.
and how the UN’s kind of retaliated. Now, the Suez Canal and the Red Sea, we mentioned briefly in this podcast, it affects a lot of the shipping and oil that come through the region, a lot of the global supply. So.
Is it a big deal? I mean, is this something real that we need to monitor for inflation purposes for Europe maybe more than us? But what are your thoughts on that?
Coach Boyer (17:48.102)
Yeah, I mean, I think all these things I’m concerned when, you know, we get all these different characters and groups out there who are getting emboldened with, you know, to attack thing, you know, I just like it. I just, you know, I’m a peace through strength guy, it makes me, you know, I don’t feel like we’re coming across as very as a US very strong and where people have, you know, this idea that they can just do whatever, you know, to
ships or whatever. So that’s concerning. And I think that you see some more tension happening there. But longer term, I just say in the short term, can things like this affect us? Absolutely. If you’re a ship owner and your business is to move supplies of something from this country to that country, and you have to go through a place that’s under a lot of tension where you might get bombed or whatever, some type of danger
You’re not going to take that trip unless like, okay, what’s going to entice me to still want to take that trip? Well, uh, maybe you could give me some more money. I mean, I could, I’ll maybe do it if I’m paid more. Right. So again, so they, you know, the shipping contract and then they, they up their prices, which then in essence, you know, flows through an economic system flows through to the end, you know, to the suppliers. They got to pay more, you know, and then, you know, it ends up
Jason Jacobi, CFP® (19:04.969)
Mm-hmm.
Jason Jacobi, CFP® (19:11.919)
consumer.
Coach Boyer (19:15.574)
that the consumer pays more. That’s inflation, right? I mean, that’s how that works. It works through it. And it’s kind of like here in California. No, it’s crazy. Like we, you know, we got this minimal wage thing I was talking, you know, just about, you know, some of these companies that are trying to now make it and they’ve increased minimum wages, you know, and that’s, it’s, you know, we want people to make money. I’m not saying that. But if you increase wages, and
you know, on a company and they trying to produce a food product or something, they’re going to up their prices, right? I mean, they have to up their prices to pay for the increased wages, which then in effect then makes us all have higher inflation. So sometimes, you know, it’s just it’s just how it works. It’s just how an economic, you know, it’s just how economies work. So anyway, so, yes. So in the near term, inflation can be higher. It could cause problems that way.
Longer term, it’s interesting wars and different things like that, geopolitical issues in the country. I mean, you could have those short term issues, but longer term, a war or a conflict causes some type of company. Those would be like defense right now, or you build munitions, tanks, things like that. They need more of them. There’s a demand for that. And so you have certain companies that make more money in those kind of.
areas. You know, you see it when you in World War II. I mean, I didn’t, I wasn’t there, but my father was in World War II and my mom and they used to talk about how they, you know, they all when all that was going down in Europe and in the Pacific that everybody went to work. Mom, you know, the women here, everybody and then, you know, the economy just exploded even to a war. So yeah, short term definitely can have moves long term, you know, not as a
Jason Jacobi, CFP® (20:47.952)
Hehehe
Jason Jacobi, CFP® (20:58.403)
Yeah.
Coach Boyer (21:11.498)
not as big a deal and actually can be beneficial. That’s why as investors, always important when investing to have a longer term, determine what part of your portfolio is short term, three, six months, one year, even moderate three to five years and then long term. If it’s longer term, then you don’t really, shouldn’t sweat it. You just look for opportunities to make adjustments in those types of times.
Jason Jacobi, CFP® (21:23.515)
Mm-hmm.
Jason Jacobi, CFP® (21:40.227)
Yep. And bad times, there’s always opportunities. You know, oils come down quite a bit since, uh, since last year. So good opportunity. Um, and some tailwinds and, and energy this year specifically, um, consumer staples have taken a hit cause tech’s done so well. They kind of are on opposite ends of the teeter totter, but, uh, but yeah, there’s always going to be bad times to invest. So how do you take advantage of that? How do you position your portfolios? I think you did a great job explaining that.
kind of the three different time horizons there and, uh, and then playing off your cash needs, income needs, goals, things of that nature. But, but, uh, but there’s always going to be a bad time to invest. I mean, there’s a lot of uncertainty in the world besides the election. That’s that happens every, every four years, the presidential election. So, I mean, how do we take advantage? Do we look for opportunity to look for companies that maybe are kind of all weather, uh, that we can kind of maybe withstand different market cycles and try to position yourselves in that way.
and take advantage of those opportunities when they arise. So have some of that dry powder ready to go.
Coach Boyer (22:45.474)
No doubt. Good, that’s good. Man, that’s having a good, that’s why I’m Coach Boyer near Coach Jacoby. We gotta change our names. I know we’re salt and pepper and all having fun with that. But the fact is that you gotta have a game plan and you gotta be diversified and able to do different things. If you’re one dimensional, it’ll work in a certain time, but then it won’t work. So you gotta have the ability to.
Jason Jacobi, CFP® (22:46.958)
But yeah, that’s.
Jason Jacobi, CFP® (22:57.699)
Tom Pepper’s out the window.
Coach Boyer (23:15.098)
to have not all your eggs in one basket, but to be able to prosper in all kinds of different areas. And we talked about that last, you know, bonds, right? You know, we had, last week we did our talk on the fixed income market, which, you know, if in fact rates do come down, it can be really positive for bonds. And I read today that they, I saw somewhere, like we saw, what did we say there was, we saw that there was like $6 trillion or five.
$6 trillion on the sidelines. I got a new number today was like eight something, eight trillion or plus. So that’s a crazy amount of money on the sidelines. Everybody’s wondering where that’s gonna go when it comes off the sidelines. We think it’ll probably benefit, go to the next level of bonds, which then if it does that, then that’ll, you know, as interest rates come down, that could be really beneficial for you. So all that said is diversify.
Jason Jacobi, CFP® (23:50.341)
There you go.
Coach Boyer (24:12.246)
Diversify, diversify.
Jason Jacobi, CFP® (24:14.519)
Absolutely. And it could, it could be a very interesting springboard, uh, for a risk on scenario once, you know, a lot of these geopolitical tensions if and when they do clear up after you kind of figure out who the president’s going to be, uh, Congress, things of that nature, where is that again, flowing down the pipeline? If it, if those money market and cash, you know, if a majority of the goes to bonds and then from bonds, once things kind of clear up and uncertainty kind of fades a little bit more,
that could be an incredible springboard for, for the economy and for, for the markets as well. So again, all of this is speculation at this point because we don’t have a crystal ball. Something could break tomorrow. Something could go really well tomorrow. We could get the numbers either way. So again, it’s fun to do this with you and be able to kind of keep a real time pulse on it and see how this goes. But we really don’t know. We’re not wizards. We don’t have a crystal ball.
Coach Boyer (25:12.59)
Yeah, so it’s important to keep your emotions in check. You know, when you get excited, like, oh, man, stocks are running. Let’s go, you know, Nvidia, you know, Supermicro, all these different stocks, you know, you can be up. And it’s great. I mean, if you have some of those positions, you know, let them run. Like I said, you know, those are good places to be. But when you just got to keep your head about you, you know, get too excited, keep the longer term.
view in your perspective and you’ll be just fine. So you gotta stay, we talked about, you gotta stay like that quarterback, right? And you gotta stay cool, calm and collected. When all the stuff around you is going nuts, you gotta be able to keep your wits about you, focused on your job and get it done and stay even keel. That’s where the great athletes are able to do in the tough times.
in the high stress times, they stay even keel. And so I think that’s really important for us as investors too.
Jason Jacobi, CFP® (26:17.519)
Good points. Well, that’s it for this week’s Closing Bell. We’ll see you next week. Thanks so much for listening, watching. Give us a call, shoot us an email. We’re always here for ya. Till next time.
Coach Boyer (26:28.258)
God bless.
