Is A Market Pivot Ahead? Key Moves For A September Shift

**Justin Nielsen** (0:07)
Hello, and welcome to another episode of the Investing With IBD podcast. It's Justin Nielsen here, your host, and we're coming to you live at 5 p.m. as we typically do on YouTube.
Every Wednesday afternoon or evening, depending on where you're at. It's September 2nd, 2026 today, and man, we have had a choppy market lately. And the AI trade has been a little tougher, and we're looking at what other sectors might be coming to take the leadership mantle and to help walk us through it. We have returning to the show Nancy Tengler. She is, of course, the CEO and CIO of Laffer Tengler Investments. She's also an author, one of the books that I actually haven't read yet, but I'm going to add to my bookshelf, the author of The Women's Guide to Successful Investing, originally published in 2014 and the second edition came out in 2023
The specialization here is in active equity management research and portfolio management. Welcome back to the show, Nancy. How are you?

**Nancy Tengler** (1:08)
I'm well. Thank you, Justin. It's so good to be with you.

**Justin Nielsen** (1:11)
Good to have you. And let's get right into it. I think what's certainly on a lot of investors' minds right now, and in the notes that you sent, you brought it up almost immediately. Interest rates, right? I mean, we got kind of spoiled with this low interest rate environment for so long. And I mean, when the first time that Jerome Powell, gosh, this was almost a decade ago, tried to normalize things, the market started freaking out, don't take our punch bowl away, please. And now we've got a new Fed chair in Kevin Warsh.
And he's had a couple goes in terms of in front of the press. And now the Jackson Hole just recently passed. So give us your take.
A lot of talk about interest rates, a lot of angst over it. Is it well founded?

**Nancy Tengler** (2:07)
No, I don't. Okay.
Let me just provide a little bit of background. As you know, I've been talking about the analogy, this market being analogous to the 1990s, when I was actually managing money.
And it's because, and we've been talking about this for about four years. And it's because of the productivity driven growth that we are getting from all of the new technologies. Originally, it was digitization. We were talking about that for a year. And then it was cloud computing, and then it was AI and robotics. And what I think we can all agree on is that these technologies will change the way we're going to live. We have an economy that's in transition, or some are calling it the fourth industrial, fourth technological revolution. Regardless, we are going to do things differently as a nation and as a culture. I mean, my kids won't have to take my keys away because I can just hop in a cyber cab or a robo taxi. And they may not have to come over and help me around the house eventually, because I'll have optimists holding my laundry and shaking my martini. Whatever the issue is, we are going to live differently and we're going to live more efficiently. So if you look at the traditional way of looking at interest rates, you could understand why everyone's wringing their hands. But in the 90s, we had a tenure that went from 5-8 percent throughout the decade and back down again. We had a Fed Chairman in Greenspan who understood productivity-driven growth. He did hike rates in the middle of the regime, but then held steady and I think actually cut again. So what we hear from Warch is very Greenspan-esque. I think he's trying to pull back the guidance, which is spoon-feeding Wall Street traders and that's why they're so upset.
It's half the data dependence, it didn't work very well for QualFed and really look at trends over data points. And so in that regard, I think it's going to be difficult, he's getting pushback, but I think he's wise to make that transition. Last thing I'll say, Justin, is in the 90s, Greenspan rarely spoke, and when he did, none of us knew what the hell he was talking about.

**Justin Nielsen** (4:31)
I was just going to say that, Nancy. You really needed a translator, you know, because even when he did, you had no idea, what did he say? What does that mean?

**Nancy Tengler** (4:42)
Exactly. The only thing we all can remember is the rational exuberance. But he was an obvious gator, that's what he thought his job was.
I think he's right.
We're spending all this time critiquing Warsh's credibility after three months, when there was a lot of credibility problems to go around with the Fed over the previous five, six years. So I think he's doing the right thing. I think rates are demonstrating. We're hearing that people are nervous, and what if the 10 year gets to 5%? Goldman did a study and they found effectively the relationship between stocks and bonds that there was no correlation between interest rates and stock performance. 3% yield on the 10 year stocks did quite well. Above 5%, they also did quite well. What matters is the rate of change, and we've had a pretty slow rate of change, and then the reason for it. I think one of the reasons that we're seeing the 10 year creep up a little, but not back to 2023 levels of over 5% is because of growth, and growth is pretty robust. So, I'm optimistic for a whole host of reasons, that's one of them.