CIO Chris Perras discusses the recent yield curve inversion, what it typically means for the stock market, and whether it affects our view for the markets going forward. Chris Perras: Good afternoon. I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group, and welcome to the August 16th edition of our weekly Stock Talk Podcast: Keeping You Connected to The Money. It’s summer. It’s blistering hot in Houston with about seven straight days over 100 degrees temperature. The stock market is down about 6% to around 2850 on the S&P 500 off its 3025 all-time highs only three weeks ago. While uncomfortable, yes, listeners so far it’s a normal summer in both Texas and the stock markets. As we have laid out all year, we expected a normal year in the markets through the end of the third quarter. Our second half outlook first laid out in mid-June, called for a 5% to 6% pullback in the S&P 500 in the third quarter. This can be found on our website at oakharvestfg.com under the investment management section or by Googling Oak Harvest Second Half, 2019 Outlook. This week’s topic [unintelligible 00:01:02] for the markets in financial press has been the impact of the recent yield curve inversion on the markets. First off, for new listeners, the term yield curve is just a fancy way to say the difference between long-term interest rates and short-term interest rates. How much more does it cost to borrow money for 10 to 30 years first borrowing money for say three months or two years. Investors worry about the yield curve inversions because historically there is a pretty good forecaster of major slowdowns in future economic activity, which in turn lowers earnings for stocks and ultimately leads to lower stock prices. As we’ve pointed out for well over a year, the rate of economic growth, inflation, and corporate earnings peaked quarters ago. It was never Goldilocks as many strategists called it in 2018. In fact, by almost every metric, the US economy has been…

On the 8/9/2019 edition of Stock Talk, CIO Chris Perras returns and recaps the action of the last week since the president’s latest tariff announcements, dives into some of the mechanics behind the volatile moves, and puts everything happening into the context of a “Normal Year.” Chris Perras: Hi, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group. Welcome to the August 9th edition of our weekly Stock Talk Podcast. Keeping you connected to your money. Having skipped last week’s Friday broadcast for a day with my family and our three golden retrievers at the lake, I wanted to cover the past week’s market moves. I’m going to title this episode, A Normal Summer, a Normal Third Quarter, and a Normal Pullback. Have you been watching the financial news the last week? The sound and fury of what you hear on TV might lead you to believe that our economy is going into a tailspin and the stock market is at risk of another 2008-ish episode. This is literally two weeks after the same TV shows were out quoting longtime bearers on the market who were out quoting year-end melt-up targets in the S&P 500 of 3500. The Oak Harvest team immediately called out those melt-up forecast and upside targets as both fanciful and absurd. Earlier this week, we sent out a note to clients calling this week’s end-of-the-world downside moves and calls from the same pundits are equally as ludicrous. First and foremost, as we’ve laid out all year, we expected a normal year in the markets through the end of the third quarter. Our first-half outlook first published in early January was spot on almost to the week. Our second-half outlook was first laid out in mid-June calling for a 5% to 6% pullback in the S&P 500 in the third quarter. Both of these outlooks can be found on our website at oakharvestfg.com, under the Investment Management section. Or go ahead and just Google Oak Harvest 2019 Outlook. Just to put things in perspective, from…

Senior Portfolio Manager James McFarland fills in for Chris Perras and discusses what’s happening this week in the markets, and goes over a few important things to remember in light of several recent Presidential tweets. James McFarland: Good afternoon, everyone. This is James McFarland, Senior Portfolio Manager and Head of Trading for Oak Harvest Financial Group. Welcome to the August 2nd edition of Stock Talk: Keeping You Connected to Your Money. CIO Chris Perras is taking a break today, so I’m privileged to be able to join you all once again. Each week here on Stock Talk, we share with you our views on the market, what we see happening now, and what we see coming down the pipe for the economy and the markets. We also focus on education, sharing with you what we’ve learned about how the stock and bond markets work and what makes them tick. I’m recording this on August 2nd, 2019 at 9:30 AM Central Time. Today, we’re going to take a quick look at what’s happening this week in the market, and particularly what’s come out in just the last couple of days. Let’s just jump into it. Yesterday, August 1st, 2019, the President sent out four tweets. In these four tweets, he let the world know China had decided to renegotiate the trade deal just prior to signing, China had failed in their promise to buy large quantities of US agriculture, China had failed to stop the flow of fentanyl to the United States and that Americans were still dying, and that because of these things, on 9-1-2019, an additional 10% tariff would be placed on $300 billion worth of products and goods coming from China to the United States. The markets did not respond well to this. The S&P, the Dow, small caps, Japan, and most international markets dropped sharply and heavily on this news. Bonds rallied and yields fell. As of the time of recording, the S&P is down about 2% for the week. Big picture, what does this latest development…

On the 7/26 episode of Stock Talk, CIO Chris Perras recaps the Q2 2019 earnings reports and covers the lack of the predictive power of the oft-quoted Fictionary term, “Fed Funds Futures.” Plus, a new “I don’t want to invest now because…”! Chris Perras: Good afternoon. My name is Chris Perras and I am the Chief Investment Officer at Oak Carver’s Financial Group in Houston, Texas. Welcome to the July 26th edition of our weekly stock talk podcast keeping you connected to your money. This week we’re going to cover two topics. First, we’re going to recap the second quarter-to-date earnings report. Secondly, we’re going to educate you on the lack of importance, the fictionary term often quoted on interest rates. It’s a prognostication tool for the Fed Funds futures markets. The S&P 500 sits near an all-time high of $3015. I’m going to repeat this. This should not be a concern for investors. I repeat once again, stop listening to the TV and all the talking heads on TV. If you didn’t invest in the market when the market was at a new all-time high, you would have stopped investing in mid-2013 and you would have now missed 100% return on stocks the past six years. Please stop reading Doomsday articles. Second-quarter earnings are about half over and a quick recap is in order. Financial stocks like JP Morgan, Morgan Stanley, and Charles Schwab, all beat expectations, and they are all undervalued in front of what Oak Harvest believes will be a pickup and an acceleration in both inflations in the second half of 2019 and a pickup in global growth in 2020. Technology stocks like Google and Texas Instruments beat low bar estimates and they confounded negative financial analyst opinions, with the stocks jumping 7.5 to 10% on their earnings reports. Consumer staple stocks like Coke, Pepsi, and Hershey have all beaten earnings expectations, but the team at Oak Harvest believes that the safety trade represented by staples, utilities, and real estate investment trusts that all act like…

CIO Chris Perras gives an update on the markets and then explains all about the”Smart Money,” and how the term can be misused in the financial media today… Chris Perras: Hey, I’m Chris Perras, chief investment officer at Oak Harvest Financial Group. Welcome to the July 19th edition of our weekly Stock Talk Podcast: Keeping you connected to your money. This week’s episode is going to expand in our new educational section on our website that we titled Fictionary, your Oak Harvest guide to financial terminology commonly used in the financial press. Today’s segment is entitled Smart Money, Fact First Fiction. Before we get to our topic, a recap on the markets this week. The S&P 500 peaked a week ago today around 30/30 on the S&P 500. It’s not a coincidence that that was the mid-month payday timing of passive investment flows entering the market by way of 401(k) contributions. We now sit around 3,000 on the S&P 500 and are entering the meat of the earnings reporting period. As we expected, financial stocks like JP Morgan and Charles Schwab have mostly reported better than expected earnings. Over the next 12-18 months, we expect these financial institutions’ earnings to accelerate, their valuations to expand, and investors to return to the group that they are now underweight after touting it for over a year as long-term interest rates fell. Management teams in the semiconductor space think of stocks like Applied Materials and Texas Instruments express renewed optimism for a pickup in their business in the second half of 2019, and even further in 2020 on continued data center build-outs as well as initial equipment purchases for fifth-generation wireless infrastructure build-outs. This will be followed then by a 5G cell phone purchase cycle in 2020 and beyond. Apple as well as other semiconductor companies will be the beneficiary of this secular technology build-out that should last two to three years. Now, onto our topic for the week, the financial press often-used term “Smart Money.” This term is used almost daily on…

On the 7/12/2019 edition of Stock Talk, Chris Perras introduces a new educational tool up on Oak Harvest’s website, www.oakharvestfg.com, entitled “The Fictionary”! Chris explains what the Fictionary is, how it can benefit investors, and also goes over a new “I don’t want to invest now because…”! Chris Perras: Hey, there. This is Chris Perras, Chief Investment Officer at Oak Harvest Financial Group, and welcome to the July 12th edition of our weekly Stock Talk Podcast, keeping you connected to your money. This week’s episode is going to highlight a new educational section on our website that we are titling, Fictionary, your Oak Harvest guide to financial terminology used commonly in the financial press. Before we get into that topic, as we first laid out early in the year, the S&P 500 now sits at a new all-time high record of about 3,000. This has occurred during the normal Summer Rally period of early July through early August. Our second-half outlook, which we first laid out almost four weeks ago, can be found in both audio and written form on our website by Googling ‘Oak Harvest Financial Group second half outlook’. Now, onto the topic of the week, Fictionary. Besides being a financial fiduciary for our clients, the team at Oak Harvest prides itself on being educators for our clients and the people interested in our services. I have managed money for over 25 years. My career has been pretty unique in that, during that period, I’ve had the fortunate opportunity to manage money for a very diverse group of end investors with very different goals and objectives. Pension funds have very different goals than mutual funds. Mutual funds have very different goals than hedge funds. Hedge funds have very different objectives than high-net-worth clients, who have different objectives than retirees looking for their money to last them through the rest of their life or leave a legacy to family, foundation or church. Each one of these groups tends to use different terminology in describing the investment and financial world….

CIO Chris Perras talks about what “TINA” has to do with the media and stock market returns on the 7/5/2019 edition of Stock Talk! Chris Perras: Hi, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group, and welcome to the July 5th edition of our weekly Stock Talk Podcast: Keeping You Connected To Your Money. This week episode is entitled, Calls For TINA Rejoining The Goldilocks Party Are Financial Press Spin. As of today, the S&P 500 sits at 2,975. With the Federal Reserve expressing a willingness and desire to ease financial conditions first, on January 4th, and second, on June 3rd, the S&P 500 has rebounded to an all-time high of 2,975. Please review our second half outlook first released three weeks ago. It can be found on our website by googling Oak Harvest’s second half of 2019 outlook. So far so good on our outlook as the normal summer rally has begun pretty much on cue. This week’s rally, excuse was one, the positive effects of the recent US trade truce with China, and two, all the financial pundits talking about the Federal Reserve meeting coming up in July where they had cut by 50 basis points. This, in turn, led the financial press to return to their often quoted term of TINA, T-I-N-A, standing for there is no alternative, meaning that with long-term interest rates so low, money was flowing into stocks. While this phrase is certainly catchy and memorable, the reality of the situation is blatantly wrong. The stock market has rallied impressively year-to-date with the S&P 500 regaining all of its losses from last September 2018’s highs of around 2,950. The US ten-year Treasury yield has rallied from over 3% to 2% in the same time span. Year-to-date, almost $230 billion, I’ll repeat that, $230 billion has moved into bond funds while over $150 billion, yes, $150 billion has left equity funds year-to-date. In fact, investors sold over $15 billion in equities last week alone. Clearly, the data says there are alternatives to…

On the 6/28/2019 edition of Stock Talk, CIO Chris Perras explains “the Dead Zone” and why it matters for the stock market. Chris also reaffirms our second-half outlook and does a new “I don’t want to invest now!” segment! Chris Perras: Hey there. This is Chris Perras, Chief Investment Officer at Oak Harvest Financial Group. Welcome to the June 28th edition of our weekly Stock Talk Podcast: Keeping you connected to your money. This week’s episode is entitled 2019 halftime show, exit the dead zone. As of today, the S&P 500 sits at 2925. As one would expect, the exact same financial press that a mere four weeks ago was out in mass playing the guess the next recession timing game show, or the how low is the stock market going to go at the end of May, when the S&P 500 was around 2750 is today out there touting June as the best June since 1938. These are unproductive and meaningless headlines, aimed at investors’ emotions, and the team at Oak Harvest sees these articles and exclamations as an out-and-out waste of time for investors. With the Federal Reserve expressing a willingness and desire to ease financial conditions first on January 4th, and for the second time on June 3rd, the S&P 500 has rebounded back to its late third quarter 2018 highs of around 2925. However, I want to remind investors that the stock market has gone absolutely nowhere since late January 2018, when investor optimism peaked on the Trump tax passage. These periods of sideways for 18 months or more are very normal in stock markets, and even more normal in bull markets. We are now entering July. We are exiting the dead zone. That’s the period when few companies can buy back their stock due to them being prohibited from transacting in their stock in the few weeks before they report earnings. The SCC does not want them essentially insider trading on their own non-public information. Stock buyback momentum is troughing with roughly only 5% to…

In a “Stock Talk Only” exclusive, CIO Chris Perras covers Part Two of Oak Harvest’s H2 2019 outlook for the markets! Listen in and find out our view on whether “Goldilocks” is going to return to the markets. Chris: Good afternoon, I’m Chris Perras, Chief Investment Officer at Oak Harvest Financial Group, and welcome to the June 21st edition of our weekly Stock Talk podcast: Keeping You Connected To Your Money. This week’s episode is the second part of a two-part series addressing our second half 2019 outlook. For next week, our outlook can only be found on these audio podcasts by way of an email, or directly on our website. Go ahead and Google Oak Harvest 2019 second-half outlook if you want to direct others to listen to what we have to say. Broadly speaking, I’m calling our second-half outlook, Goldilocks returns, and she kicks the three bears out of the party. Today’s episode, addressing the second part of our outlook is entitled, Did You Say Goldilocks, or Was It GoGo-dilocks? As we have repeatedly said throughout the second half of last year and the first half of this year, we see in an almost perfect analogy in the economy, in both the bond and stock markets to 2015 through 2016 for the period 2018 through 2019. Our first-half outlook for this year can still be found on our website at oakharvestfg.com/2019-first-half-outlook/. This week’s stock market rebound was based on a more dovish Federal Reserve, driving the S&P 500 right back to new all-time highs. Pessimistic hedge funds were forced to cover shorts, and investors who sold calls against their long positions were forced to buy back those positions in front of today’s option expiration. For the third time in six months, the Federal Reserve said they would act to stimulate the economy if the data continued to slow. We said it last week, and we will say it again, the number one most sacred rule for macro investing is, do not fight the Federal Reserve. Repeat after us, don’t…

CIO Chris Perras returns and, in a special “Stock Talk Only” exclusive, dives into Part One of Oak Harvest’s H2 2019 outlook for the markets! Join us for the discussion “Goldilocks: Let’s Get It Started…Slowly!” Chris Perras: Hi, my name is Chris Perras. I’m Chief Investment Officer at Oak Harvest Financial Group, and welcome to the June 14th edition of our weekly Stock Talk Podcast: Keeping you connected to your money. This week’s episode is the first part of a two-part series addressing our second half 2019 outlook. For the next two weeks, our outlook can only be found on these audio podcasts by way of this email or our website. Go ahead and Google Oak Harvest 2019 Second-half Outlook, if you want to direct others to listen to what we have to say. Broadly speaking, I’m calling our second-half outlook Goldilocks returns, and she kicks the three bears out of the party. Today’s episode addressing the first part of her outlook is an ode to a great song by the Black Eyed Peas. I’ve entitled it Goldilocks. Let’s get it started slowly. As we have repeatedly said throughout the second half of 2018 and the first half of 2019, we see an almost perfect analogy in the economy in both the stock and bond markets to 2015 through 2016 for 2018 and ’19. Our first-half outlook can be found at our website at oakharvestsfg.com/2019-first-half-outlook. So far so good as the markets have done almost exactly what we laid out in early January of this year. The investment team at Oak Harvest believes the second-half of 2019 returns will come largely during two very short time windows. First, we believe that there is a very short term window for an end of the second quarter pullback in the market toward around 2,800 on the S&P 500 into July 1st through 3rd at the end of the quarter, largely on disappointment in trade negotiations or the Federal Reserve, or positioning by hedge funds. Beyond that time window, we believe that the…