Hey everyone, Chris here with another Stock Talk. In today’s episode, we’re taking a step back from the usual episode and looking at the bigger picture. Specifically, what could actually go right for the markets as we head into the fourth quarter and into next year? Historically, this is a choppy time of year. September is often the weakest month for stocks, and we’ve all seen those October selloffs before. But in today’s conversation with Charles Scavone from the Oak Harvest Investment Team, we dig into some of the factors that could provide tailwinds instead of headwinds. Things like earnings momentum, potential Fed rate cuts, tax law changes, and even consumer spending trends. So if you’ve been wondering whether the setup heading into year-end might be more positive than the headlines suggest, stick around. Let’s jump into the discussion. What Could Go Right in Q4 and Beginning of 2026? Chris Perras: So topic is not what can go right tomorrow or next week. We’re thinking about what can go right in the fourth quarter, what can go right at the beginning of next year. And this is historically actually the weakest time of the year for markets is usually September. There’s tax law selling from large institutions when Charles and I used to run money at AIM. Was there a September or August? Charles Scavone: Yeah, so people wonder, you know, sort of why did why did stocks, you know, crash in October, way back in September and October? And that’s because back in the day when we were managing very large mutual funds, those funds, fiscal year, the year, the calendar, the fiscal year for those funds typically ended right around those those months. It didn’t necessarily follow a calendar. So our bonuses were determined based upon your performance to that date. And if there was any sign of trouble, you’d been having a pretty good year and there was any sign of trouble, we’re hitting the exits, right? Because that’s going to determine how you’re paid at the…

Hey, hey, hey, yeah Hey, hey, hey yeah When Dove’s comes to town, that’s a doomdayers bain When Dove’s comes to town, shorts go down in flames Maybe they are wrong to think that stocks can’t do down, But they did what they did before doves came to town The Fed Reserve had paused interest rate cuts for ten months.  The President has enacted the highest tariffs in American history, tariffs which are taxes, in over 100 years.  The Feds balance sheet has shrunk by over $2.7 Trillion.  The war in Ukraine rages on quickly approaching year 4, and still, the S&P 500 sits at new ATH around 6466 as this is written. The equal weighted S&P 500, that’s the RSP, just broke out to new all time highs and breadth exploded higher on Friday August 22, as Federal Reserve Chairmen Jerome Powell brought out the big guns, dropped a quite dovish speech versus most traders positioning, focusing on labor market weakness over Tariff induced inflation, and made it rain stock gains and short covering on a illiquid Friday afternoon in august. I’ve been managing money for almost 35 years, and the bearish arguments almost always sound so much smarter and well thought out than bullish ones. Sometimes they are hard to resist, but most of the time, they well-put together, coherent, data driven, noise is a sea of an expanding economy and expanding earnings, and inheritly hard to pull off when one of the first rules traders and professional money managers lear is, don’t fight the Fed.  Which nowadays is a bit narrow of a saying in my book and should be modified to, “don’t fight liquidity”.  Don’t fight the money train.  Don’t fight the money wave wherever it comes from.  Our Federal Reserve accelerated federal government spending, lower regulation, lower taxes, high employment levels which leads to high and consistent 401k inflows on paydays into an increasingly passive flow, price agnostic, driven index market. The saying goes that patience is a virtue, well when it comes to Fed…

Let’s get right to the point, I am surprised how high we are in the S&P 500 at this point of August, 6450 as I wrote this, but pleasantly surprised.  While our team discussed past V-bottom rallies in stocks months ago, paying attention to the late 90’s Dotcom/internet infrastructure buildout/Y2k period versus our current AI infrastructure, Federal reserve cycle, I didn’t have high confidence we would mirror it out beyond the 4 month window, particularly during late summer months when markets tend to slow, reverse and decline due to lower stock buybacks, earnings uncertainty, and lower liquidity. That said, overlaying the -21% S&P500 drop caused by LTCM blowup in October 1998 early to mid-Dotcom buildout with the -21% S&P500 drop in  early April 2025 caused by Trumps tariffs and “Liberation day” we continue to mirror Dot.com almost to the week and day. We had the V-bottom in stocks from mid to late April well before the historic rally took hold and while many others were talking about doom and crashes. However, I had expected a summer stall and pullback in stocks of a little over -5%, call it back down to 6125-50.  We haven’t gotten that.  In fact, so far, we barely got -3.5% peak to trough decline on the S&P500 into the August 1st low of around 6212.  And that if you were perfect! Here is an updated overlay of the S&P500 then and now. How remarkable is this. We are still mirroring the same pattern back during Dotcom almost to the day and week.  Looking back in time, the % drop during the first stall after the LTCM v-bottom 4 months out was only -3.5% in the S&P 500.  If one uses that as the drop from our high of 6427 on 7/31 one gets? 6202 on the cash S&P 500.  The low print for the 2h of 2025 so far has been right at 6200 and on 8/1 the first day of August was 6212 so far.  Almost exactly 3.5% off the top. Given what I am…

Investors we skipped last week because the OHFG investment team was busy producing what should be the first in a series of monthly investment videos covering our long/short, hedged equity strategy, our moves in that strategy, and its outcomes.  This is a very unique alternative growth equity strategy and if you want more information on it search OakHarvestfunds.com. Also, starting in September we are probably going to change some of our video editing for Stock Talk so Erik can spend more of his time on some other Oak Harvest video productions.  Expect our content to remain the same, but the look and feel to change a bit.  It’s been an incredible 4 months, V-bottom rally in stocks since peak market fears over the economic uncertainty caused Liberation Day tariff spreadsheet chaos.  We are still in the Earnings reporting window for the 2q reports so our team is trying to sort out the good from the bad and figure out what and when we might want to make changes to our client’s holdings for the remainder of 2025 and 2026. I’m getting right to the point, the last 2 weeks in the market has surprised even me albeit in a good way. We had the V-bottom in stocks from mid to late April well before the historic rally took hold and while many others were talking about doom and crashes. However, I had expected a summer stall and pullback in stocks of a little over -5%, call it back down to 6125-50.  And while that is still possible, its looking a little less likely that we drop back to those levels.  Why?  Here’s what I’m seeing. Over 2025, our team has discussed and compared the current economic cycle, uncertainty sand outcomes to a couple of time periods.  With President Trump in his second term, we have discussed Trump 2.0 vs. 1.0.  He threw the markets a curveball this year focusing on frictionary economic policies first, tariffs, trade, deportations all things that raise costs and slow growth and then secondly focused more…

It’s been an incredible 3.75 months, V-bottom rally in stocks since peak market fears over the economic uncertainty caused Liberation Day tariff spreadsheet chaos.  This is going to be a pretty short video as its peak Earnings reporting window for the 2q reports so our team is trying to sort out the good from the bad and figure out what and when we might want to make changes to our client’s holdings for a summer stall and then a 4q-1h26 rally. The investment team at OHFG discussed the likely V-bottom in stocks from mid to late April well before the historic rally took hold and while many others were talking about doom and crashes. The good news is we did V-bottom and it happened WITHOUT Federal Reserve intervention and interest rate cutting. More Fed cuts are in front of us. What’s their timing? I’m with Treasury Secretary Scott Bessent on this one, I’ll let the academic economists at the Fed discuss that one ad nauseum.  And I’ll let the strategists and financial commentaries on TV discuss irrelevant things in my view such as “dot plots and “fed funds futures”.  Study after study of data says that the Fed is a momentum investor.  Cuts beget cuts, and their timing is much less important than most think.  Direction first. Think investors, we are at marginal new ATH’s, up about 5% above previous ATHs in stocks, and the Fed is paused. Think about it, all those bear calls for a market collapse as the Fed reduces its balance sheet are near 6350 on the cash SP500, as I write this and the Feds balance sheet has shrunk by $2.5 Trillion since they began QT. Theres good news and bads news.  First the good news. Investors, we are in a bull market.  Against the most recent calls for an inflationary spiral caused by tariffs, we are in a bull market. Plain and simple. If you didn’t get scared out or pulled the plug for emotional reasons congratulations.  You might be with a good planner,…

It’s been an incredible 3.5 months, V-bottom rally in stocks since peak market fears over the economic uncertainty caused Liberation Day tariff spreadsheet chaos.  The administration has walked back some of the most draconian tariff levels touted by Peter Navaro even seeming to play nicer a bit with China on many points. The investment team at OHFG discussed the likely V-bottom in stocks since mid to late April well before the historic rally took hold and while many others were talking doom and crashes.  We discussed for weeks in our videos, looking back April 7th “was what we thought was “The Low” for the overall S&P500 index and USA stocks most likely for the rest of 2025, ex the unforecastable Black swan event.  The -20% bear market correction was largely event induced by the President’s unforeseen tariff policies. And investors, the really good news we V-bottomed and this V-bottom happened WITHOUT Federal Reserve intervention and interest rate cutting. More Fed cuts are in front of us. What’s their timing? I’ll let the academics, economists, strategists, and financial commentators in social media discuss that one ad nauseum discussing irrelevant things in my view such as “dot plots and “fed funds futures”.  Chris “irrelevant”? how can that be!.  Because as I’ve messaged for th better part of 5 years, they have near zero predictive power in detecting the level of future interest rates.  Study after study of data says that the Fed is a momentum investor.  Cuts beget cuts, and their timing is much less important than most think.  Direction first. Think investors, we are at marginal new ATH’s in stocks, and the Fed is paused. Think about it, all those bear calls for a market collapse as the Fed reduces its balance sheet!  Remember those smart calls 2 years ago?  Those calls that the stocks market was near perfectly correlated with the Feds balance sheet expansion.  Well, we are near 6275 on the cash SP500, as I write this and the Feds balance sheet has shrunk by $2.5 Trillion since they…

If you have been following Oak Harvest and our investment commentary for any time, let alone for the last 5+ years we’ve been posting publicly, its safe to say, you’re aware of my love of the study of stock and economic cycles and market history including Presidential cycles and seasonal trading behavior in the markets.  Why do these things keep working out more often than not?  Most likely because most investors are creators of habit, and when certain external stimulus hits, they repeat their emotional behaviors and investment actions in similar fashions time and time again. The investment team at OHFG had been discussing the likely V-bottom in stocks since mid to late April well before the historic rally took hold and while many others were talking doom and crashes.  We discussed for weeks in our videos, looking back April 7th “was what we thought was “The Low” for the overall S&P500 index and USA stocks most likely for the rest of 2025, ex the unforecastable Black swan event.  The -20% bear market correction was largely event induced by the President’s unforeseen tariff policies. Ex the GFC in 2007-08 and the popping of the speculative Dot.com bubble frenzy in 2000-01, which did proceed longer and deep recessions. History said enough damage had been done and we would V-bottom in a similar fashion as the V-bottoms in the last 20 to 30 years.  And investors, the really good news here?  This V-bottom happened WITHOUT Federal Reserve intervention and interest rate cutting. More Fed cuts are in front of us. Think of that investor, we are at marginal new ATH’s in stocks, and the Fed is paused. For months we’ve discussed how the charts and the economy look remarkably similar  to the period that was mid Dot/com not peak Dot.com back in late 1998.   The period into the October 1998 bear market selloff caused by the event of the hedge fund LTCM blowing up. After the 3 month 20%+ rally, a few strategists have caught on, are racketing back up their 2025…

The first half of the year is behind us and what 6 months it was. Post election rally, followed by a -20% bear market cyclical correction, followed by a fast and furious, historic, non-Fed induced, V-bottom in stocks.  History would say that the initial V-bottom move in stocks off the bottom that started the 2nd week in April is now about 95% complete in price and 90% in time. However, while stocks might look over valued and as chartists call it “overbought”, history says that neither factors will tell you that the bull market for stocks that we’ve been in since October 2023 is itself “over”.  That you should dump your stocks and hunker down. While our team does expect the usual summer slowdown and likely 3qtr pullback in stocks into late fall, history says, if this happens, it is most likely a buying opportunity for year end 2025 and forward returns in stocks in 2026. Many in the financial press try to scare investors even when stocks are making new highs.  Investors, new highs are rarely bearish.  In fact, new highs tend to cluster and trend, so making new highs, historically, has proven good news for further positive returns over the next 9-15 months. A great chart from Ben Carlson showing the clustering of new highs in bunches.  The average year since 1990 has had 20 new ATH in a year. In fact, more great data from Ben, the average 1, 3, and 5 year return in stocks since 1950 have been? Marginally higher not lower when investing at all time highs than other days, The pattern for the overall market remains bullish and yes, historically July is one of the better return months for the S&P500 with earnings and buybacks around the corner. Up and to the right is good.  New ATH’s are not bearish historically.  That said expect the pace to slow.  What groups might slow?  Well technology names that have led the rally USUALLY slowed their gains late in the 3rd quarter.  I would expect the…

The investment team at OHFG has been discussing the likely V-bottom in stocks since mid to late April while many others including numerous retired hedge fund billionaires taunting low-lows, crashes, or retests.  We discussed for weeks in our videos, looking back April 7th “was what we thought was “The Low” for the overall S&P500 index and USA stocks most likely for the rest of 2025, ex the unforecastable Black swan event.  The -20% bear market correction was largely event induced by the President’s unforeseen tariff policies. Ex the GFC in 2007-08 and the popping of the speculative Dot.com bubble frenzy in 2000-01, which did proceed longer and deep recessions. History said enough damage had been done and we would V-bottom in a similar fashion as the V-bottoms in the last 20 to 30 years.  And investors, the really good news here?  This V-bottom happened WITHOUT Federal Reserve intervention and interest rate cutting. More Fed cuts are in front of us. Think of that investor, we are at marginal new ATH’s in stocks, and the Fed is paused. The Zweig Breadth thrust on April 24th, created the first of what many chartists call a bullish “Island Reversal” pattern. I read at least 10 articles pooh-poohing this data set at that time. This is why one of our follow-on video titles was “V-bottoms, no one gets in”. One can rationalize why markets have V-bottomed since early April on walking back of tariff extremism, better jobs, and wage inflation data, but viewers who know me know I like real time market data.  The bond market data since early April was saying real growth was “ok” and inflation peaked early in April, not the stagflationary doom biased call many have suggested. For months we’ve discussed how the charts and the economy look very similar to the period that was mid Dot/com not peak Dot.com.   The period into the October 1998 bear market selloff caused by the event of the hedge fund LTCM blowing up. I haven’t been able to find many who believes this…