Afternoon podcast 10-8-26

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Welcome to the afternoon Rob Black Show podcast, a guaranteed human podcast, which can also be heard on AM 1220 KDOW weekdays at 5 p.m. and on 860 AM The Answer weeknights at 11 p.m. The views and opinions expressed in the program are not necessarily those of this radio station or its sponsors and should not be construed as legal tax or investment advice. You should always consult the appropriate advisor before making any financial decision.

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Now, new focus on wealth, new focus on wealth, get a new focus on personal finance, wealth management, Wall Street and the economy. Now, Rob Black.

Rob Black (0:43)

These days on the Wall Street stress me out at times. SP500 is down one half of one percent, kind of where it started the day, but it went a little bit lower and rallied back up. The Dow Jones Industrial Average finished up 51 points. After starting the red, dipping, dipping, dipping, dipping, and then rallied to break even. The NASDAQ started a little bit lower, down 1.25 percent of the day. I'm not stressed. It's an all-time high this week. I'm okay with that. You can give up one to two percent here and there, and I don't even bat an eyelash. I know you're saying, I like it when you bat an eyelash, Rob. I can't quit you. Russell 2000 broke even a day of the 10-year treasury. Bit of a reverse. It was at 5.28, it hit 5.29, 5.3, 5.31, and it closed down to 5.23. And that's how the markets came back. It's the same old story. It's, we've heard this record before. Higher oil prices in the Gulf this morning, up 4 percent. Trump said, we're not going to negotiate. In fact, we may bomb them before the election.

So oil moves higher. And then we go, okay, oil moves higher, and the diesel moves higher, and everything we buy at the grocery store has diesel prices, whether the farmer is planting with diesel tractors or he's harvesting with diesel tractors, whether he's storing the lettuce with refrigeration, putting it in a truck, driving across the country in refrigeration and in diesel costs. We're freaked out by it. So it's the same old story right now. When oil moves up, inflation expectations move up. When inflation expectations move up, yields move up. When we refinance our national debt or corporate debt or individual debt, those higher yields stink. And thus stocks have been a little bit prone to drop. Now Tom Lee, he have magnificent hair. I don't often get jealous about other men's hair, but holy mackerel, he's got good hair.

And no, I don't have a dream scenario where I'm waking up in a grassy field, maybe at 6,000 feet in Colorado at a lake, where I'm running my fingers through Tom Lee's hair. But if I did have that want and wish, he's got the head of hair that I want to do that with. So he said today, I think there's a pretty good probability that yields and oil will drop in the next six months and inflation expectations will drop. And right now, if that's on a daily basis from what we saw, and when oil is a higher, inflation expectations are higher, yields were a little higher early in the morning, and the stocks were like, no, not going to do anything. But when all three of those ease, market's like, yeah, yeah, yeah, yeah, we're in. Kind of with Tom Lee on this one.

I know you're saying, can you slow down and repeat what you just said about his hair? Not a chance. So today's session ended with a notable divergence between tech stocks and the broader market as a sharp semiconductor sell off kept the S&P 500 down one half of a percent, the NASDAQ down 1.3 percent, tech stocks were the central source of weakness today, particularly after a Financial Times report. Do you read the Financial Times? It is ridiculously expensive, but I find that they're reporting is so spot on.

They're mechanical, if you will, on how they approach financial stories. So they did a report that open AIs annualized revenue is running 20 billion below earlier estimates, and that raised fresh questions about the pace of revenue growth, supporting the AI infrastructure build out. I'm not getting massively concerned, but I do see areas that are going to get decimated in the AI build out, because companies don't have the cash flow and or the revenue generation to support what's happening. I think the Financial Times is pointing to, would I buy open AI today? Probably not.

Would I buy artificial intelligence investments? Absolutely.

I'm not sure I'm in with the large language models and their revenue slash pricing slash earnings.