Afternoon podcast 9-17-26

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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, all rights reserved.

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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)

Thanks for listening. September 17th, Thursday, 2026 Over the past three years, weekly cyber attacks per organization, and by organizations, I'm talking about Palo Alto Networks. Zscaler and CrowdStrike. They disclosed that cyber attacks have surged by 70% driven largely by 89% increase in AI-enabled cyber attacks. I'm going to underline that. An 89% increase in AI-enabled cyber attacks. Every major enterprise, every business that stores a credit card on file, every bank absolutely has to have enterprise-level cyber defenses. And that's where you look at Palo Alto Networks and CrowdStrike and Zscaler. I like CrowdStrike and Palo Alto Networks on pullbacks.

Remember in March, this just shows you how much things can change on Wall Street, especially when it sounds so definitive. In March, there was a 0% chance of a hike this year from the Federal Reserve. Yesterday, we got that hike.

Many were talking about cuts. That didn't make a lot of sense when you take a look at where the inflation is in the market. So we're in an inflationary growth environment. The AI growth is honestly making things a little bit tougher, especially seeing that it's pushing up bond yields, as there's competition between governments and AI companies to raise money through the debt markets. The bond market is sending a message. Investors should not ignore that inflation may not be defeated and interest rates may stay higher for longer. The 10-year treasury moved above 5%. The 30-year climbed to roughly 5.35%. The two-year reached around 4.67%.

I have a friend that's selling a house, and he's debating, do I rent it? And this is how much I'll make. And if I sell it, this is how much I'll make. And I said, you do realize that if this is part of your income for retirement planning, you can take your profits from that home and put it into a 30-year treasury at 5.35% and get a pretty high income off of that with almost 0% chance of the United States government defaulting on that debt. Not a bad idea if that number works for you. Now, he still has growth in his portfolio, so this is not investment advice you should run out and think about without understanding the big picture of it.

The reason many on Wall Street think that inflation is a concern right now is Brent Crude is above $100 a barrel. Inflation remains above the Fed's 2% target. Unemployment is still near historically low levels. Wage and operating costs remain stubbornly high. Goldman Sachs CEO David Solomon warned that higher costs may be here to stay, suggesting the era of easy disinflation is over. I think this is important to hear. The era of easy disinflation, you know, when Trump says things will come down fast, prices will fall quickly. Goldman Sachs CEO saying, I don't think so.

JP Morgan CEO Jamie Dimon delivered a similar message, saying, it's not clear to me that we've slayed inflation. He urged businesses to prepare for confined and continued volatility in interest rates. That is not exactly the bedtime story that bond market wants to hear. It's not reassuring, especially coming from two very powerful, in the know, financial CEOs.

The setup is difficult for investors. Higher treasury yields increase borrowing costs for consumers, businesses and the government. They also put pressure on stock valuations, particularly growth stocks, whose expected profits are further out in the future. President Trump has argued that rates should be close to 1% or lower, but the bond market is currently focused on inflation, energy prices, wages, and the possibility that rates may need to remain elevated. The lesson is real simple. The Federal Reserve can influence short-term rates, but the bond market ultimately prices the economy investors are actually getting. That's why so many people think the Federal Reserve has to have independence, is that the bond market will do their job for them. That's why so many people got mad at Scott Besson for using US dollars to buy down debt. Didn't work. The bond market was smarter than he was by a lot.