Investors had plenty to watch this week as markets continued climbing toward new highs, leadership broadened beyond mega-cap technology stocks, and investors evaluated what could shape the second half of 2026.
The first half of 2026 delivered strong results across much of the market, with equities posting impressive gains and major indexes pushing toward new highs.
Chris and Noah recap the second quarter’s performance and highlight how broad participation across sectors and asset classes has helped support the rally. While technology remains an important driver, the market story is becoming much bigger than just a handful of large-cap names.
One of the biggest themes in this episode is the broadening of market leadership.
For the past several years, much of the market’s gains have been concentrated in mega-cap technology stocks. Now, that trend appears to be shifting. Small-cap, mid-cap, and value-oriented investments have shown meaningful strength, signaling healthier market participation across a wider range of sectors.
Chris and Noah discuss why this rotation matters and how diversification continues to prove its value during changing market conditions.
The conversation also explores the latest economic data and how it may influence the path of interest rates moving forward.
With inflation showing signs of moderation and labor market data remaining relatively stable, investors continue searching for clues about what comes next for monetary policy. Chris and Noah discuss why economic data, rather than headlines or speculation, remains one of the most important factors to watch in the months ahead.
Artificial intelligence continues to shape market conversations, but the discussion is evolving.
Rather than focusing solely on the largest technology companies, Chris and Noah explore how AI-related infrastructure spending could ultimately benefit a much broader range of businesses. From industrial companies to value-oriented sectors, many businesses may become long-term beneficiaries as AI improves efficiency and productivity.
The episode highlights how this shift may help explain the growing rotation taking place beneath the surface of the market.
Another major topic is the continued excitement surrounding SpaceX and its historic public debut.
Chris and Noah discuss investor enthusiasm surrounding the company, the long-term potential of Starlink, and how markets are evaluating innovation-driven businesses. The conversation also touches on valuation, growth expectations, and the challenges of pricing transformative technologies in rapidly evolving industries.
The episode closes with an important reminder about investor behavior.
Whether markets are reacting to economic data, shifting interest rate expectations, or major market headlines, emotional decision-making can often create unnecessary challenges. Chris and Noah discuss why staying disciplined, remaining diversified, and focusing on long-term goals continues to be one of the most effective ways to navigate market volatility.
Welcome back to the market enthusiast.
I’m Noah Brooks, and obviously this is Chris Needs. Hello, hello. First half is over. Yeah. Halfway through the year already. We had a great quarter. We did. NASDAQ best since I think it’s the second quarter of 2020, just rocking and rolling. Yeah. SP lagging a lot of stuff, but had a good quarter as well. Well, it was is up 15% for the quarter. only up about nine and a half for the year. But
I mean, if you miss that quarter, I I feel like I keep saying this, if you miss these big moves upwards, it’s really hard to make back up. biggest return of the quarter sector wise, tech. Tech, yeah. Socks. The semiconductor index had its best quarter ever. Super strong. I don’t I don’t have the percentage number. I just know it was its best return ever. Technology was up forty three percent in the quarter. Yeah.
Right. So I I re ran the Morningstar Direct. Like, is this accurate? Yeah. Checked on facts it. Holy crap. I double checked it because when you see that for one quarter, I mean, that I don’t know if there’s ever been a quarter higher than that. but that’s a monster. And I think it went now it’s up twenty-nine percent for the year. technology, massive quarter. growth, really big quarter up almost twenty percent for the quarter, but for the year, only up about four percent.
And we’re gonna chalk that up to the lag seven. Lag seven. Yeah. They are technically negative for the year. And you have the other four ninety-three up over fifteen percent. So really strong breath. Finally, the participation. We always sort of wondered like what would happen with this high concentration, you know, almost forty percent of the S P five hundred in the top ten companies. What would happen if they underperform? Well, we got our answer in the second quarter, market did just fine. Yeah.
We could do it. Yeah, absolutely. I mean, I don’t know that you can see them have massive underperformance and the market’s still okay because they do represent, as you just pointed out, a giant portion of the of the top, you know, the top ten represent a giant portion of of the entire thing. And so, I mean, I think it’s okay that the the mag seven become the lag seven for a little bit. Let the rest of the market take care of it. Mid caps had a a great quarter, they’re up almost 18% for the year.
Small caps up over twenty percent for the year. They had another great quarter, they were up like twenty-two. you know, so the rest of the market and you I think you might emerging and developed, also chugging along. Absolutely. So it’s not we’re not just relying on those seven companies or even ten companies for the returns in the market. And and that was a major concern last year and the year before. by a a lot of market technicians, a lot of economists were really concerned that those big companies
Represented all of the gains. And what we’re starting to see is we call it the rotation, but we’re starting it to actually see it. Small caps knew all time highs. Mid caps new all-time highs like a week ago. small caps have a heck of a base too. So hopefully it holds true. Bigger the base, higher into space. We’ll see. This is why we stay diversified. People say, Why are you in small caps? They’re just such losers. Do people say that? I’ve never heard
Never heard that before. So this is why we stay why we stay diversified because years like this, it really pays off. Yeah. And value had a big quarter, right? yep, up 14% for the year, new all-time highs, and sorry, up 17% for the year and up 14 for the quarter. I mean, the difference now between growth and value is actually widening. It was like nine percent a few weeks ago.
And now we’re we’re close to thirteen percent on on the delta between growth and value. I think it’s great. You’re starting to see the manufacturing companies really come alive, obviously mids and smalls. but industrials were up about fifteen percent in the second quarter. The only other sector to be double digits were industrials, right? It was technology up forty-three, industrials up thirteen, fourteen. And then the one laggard for the quarter, on a little bit of energy, right? Down about twelve percent.
you remember that whole Iran thing? Yeah. How’s that going? Random deals, random strikes, random discussions, yada yada yada. More noise. We said there would be fits and starts, even with the memorandum of understanding. And spanning out. But you know what? Oil has come back in, which is really nice. We’re at 70 bucks a barrel today on on Brent Crude, a bit less for wet West Texas. my local station had, you know.
the cheapo stuff for three seventy five yesterday and for I don’t put the cheapo in it, but like I’m like, okay, I’m pretty good. Yeah. Looks like a better number. Yeah, it was like it was like two months ago it was like four forty or something. Yeah. Mine was five twenty, five twenty five. Now I think it’s four fifty. I’m like, okay, that feels a little bit better. And I already said this, but I don’t get a lot of MPGs. No. No. and good old Bitcoin.
it it took a major head major header yesterday, down to about fifty-seven seven and back up to around sixty-two for anybody that’s paying attention. It does not seem to be the real true diversifier that people have wanted it to be. Michael Saylor definitely is on the hot seat right now. Ooh. Strategy, not so good. Selling Bitcoin to selling Bitcoin to pay the yield on those preferreds they put out.
Strange. That seems like selling one, robbing Peter to pay Paul a little bit. And I think the I don’t know. Just financial structuring, financial engineering. Well, you would set around. There’s nothing illegal going on, but selling the Bitcoin you said you would never sell to pay the yield on your preferred that used to fund previous Bitcoin purchases, just boy, is that levered. Does that sound like Enron a little bit? Yes. Probably not. Probably not.
I don’t know the inner workings, but I mean they’re allowed to sell whatever they want to to cover dividends. I mean, truly, if you think yields are gonna top out and start going down, maybe that’s a very, very aggressive way. I was saying to you earlier, instead of buying the TLT, let’s get the five times levered TLT Bitcoin. So speaking of well, that is that is levered. Tongue in cheek, not serious comparing those two securities. We were we were talking earlier in the week about this night ETF.
Right. So there’s this ETF out there that tracks the price of Bitcoin during off hours. Whenever the market’s closed. Whenever the US market is closed, it buys Bitcoin futures. And when the US markets are open, it’s buying, I guess, treasuries or possibly treasury futures. I don’t think they buy the futures. does that the is there a rationale for that, Chris? What what are you?
What do you think about that? Well, I don’t think the return looked too good year to date. I don’t know about Bitcoin return isn’t all that good either. Yeah. But like that seems like a lot of work. I thought the three would be it interestingly somehow outperformed during those hours. So people just, you know, take their market gambling addiction and take it over to Bitcoin as soon as markets close. Well, I think that’s I mean, you know, the the big thing on all the thesis behind the product. Well, all of the back testing.
Right. I mean, it’s always the back testing that says, Well, if we do this, we’re gonna outperform. And then the back testing blows up in your face when you actually bring a product to market. I don’t really like the back testing. Yeah. But interesting product. I have no idea why someone would buy it, but I guess I mean, because to your point about the the DGENS trading Bitcoin after the US markets are closed, this is an ETF for it. Yeah. So I mean, and the ETF.
I think only trades during market hours that are open. There’s always like a stale dating there or something. Clearly, yeah. Yeah. we’ll not be buying any. No, no, we’ll we’ll not be buying any. I I’ve been having some technology issues. I feel like it’s because of the heat that we have here. Yesterday we had a real feel of one nine here in in you know, southeastern Pennsylvania.
Today’s supposed to be a little bit higher than that. And things are starting to get a little bit sticky. People are starting to get a little bit weird. We have this July 4th holiday. Happy 250th to us, right? Are you doing anything special for that? No. Just tons of fireworks. Everyone’s having fireworks and parade, and hopefully they’re all going like really hard about it for 250. But you’re talking about the temperature. How about Europe? The back and forth. There was Britain and Europe where they’re like limiting, or in in some cases, apparently.
deconstructing air conditioning units as they’re in the midst of like one of the worst heat waves over there as well? We you know, here in the US, I think it’s the the stat is like ninety-one percent of all living spaces have AC here in in the United States. And in it’s it’s not ten percent in Europe, but all the new builds have air conditioning. Most of the old builds do not any of the certainly the older housing unless it’s been retrofitted does not.
And none of the bars, restaurants, unless they’re brand new, have any AC. It is really tough to get out of the heat in Europe. Don’t they like not serve ice like we do as well? So how do they cool down over there? They put a fan on. I don’t what? Yeah. we we were there, everybody knows this. So we spent a day in in Windsor Castle, and I don’t know if I said this on here before, but it was really hot that day. It was close to a hundred degrees, and went into a gift shop and they didn’t even have any sunblock.
I mean that’s I I think that’s gotta change. I mean, the other day in Bordeaux it was like one seven. I look I look at those those heat maps all the time. They’re not they’re not used to that stuff. Yeah. And they’re getting a lot more there’s a lot of deaths too, because again, like you said, most of them they’re not outfitted like we are with percentages of air conditioning units and houses. People are just stuck stuck in there. Yeah. Speaking of deaths, I hate to bring this up, but there was obviously that.
Dramatic to back to back earthquakes in Venezuela, and they are still looking there’s still fifty thousand people that are unaccounted for, which geez, that is that is a crazy number. I mean, last night on the news they were talking about finding, you know, a few people here or there, but now it’s been like security guard like seven stories down or something. Yeah. Yeah, the buildings kind of all collapsed on top of one another. So
Even though there might be space and might be somebody there, and even though they might be able to hear them with their with their technology, it could be ten or twenty stories down below. Yeah. And there’s just no way to get to them. Well, he had his lunch pill with them and can reach it. I don’t know if one I thought you were about to go with Alan Greenspan. Rather than Which obviously that’s a much larger tragedy. Alan Greenspan lived a good long life. Yeah. He was like he was like a hundred years old, like ninety eight or something. Yeah. I don’t know how well.
Yeah, no, I think I think he was a hundred. you know, Greenspan coined irrational exuberance in the nineties before the dot-com bubble. There’s lots of pros and cons with with Alan Greenspan. I mean, he was appointed by George Bush in I think eighty-six. He was around for you know, the Black Monday crash in nineteen eighty-seven. He was around obviously for the dot-com bubble, he was around for
the nineteen ninety eight long term capital management collapse. He was around for Y Y2K, if anybody out there remembers that. And then obviously, you know, 9 11, he was around for. he’s controversial in the sense that, you know, after a dot com bubble, he probably kept rates too low, which gave us a real estate bubble. People were scarred from what the market just did to him. So yeah, everybody ended up not everybody, but
A lot of people capital flowed into real estate really hard because of where rates were at. And you hear all these stories where people had two or three homes with little to no documentation, what’s it? Ninja loans, no income, no job, verification, anything like that. yeah, with low rates, you can understand why the GFC happened.
Well in addition to the financial products that sort of exacerbate yeah, no question. The no no interest or interest only loans, things like that. but you know, in terms of being controversial, I don’t know that he’s controversial. I think he did a really good job for for those twenty years that he was around. he may have you know, one of the things that he believed in that’s a little controversial is that markets will regulate themselves.
And I think we I think we all know that regulation doesn’t happen naturally. I don’t think and and he came to that conclusion after the global financial crisis. He wound up testifying in front of the Senate. Didn’t he say he was completely wrong about that? When in his testimony he’s like, I’m sorry, my whole world view is incorrect. Yeah, yeah. He he definitely and and there were some other things obviously that led to You gave the Fox the key to the hen house and thought it all work out.
I don’t I don’t think markets regulate themselves. No, I I haven’t seen that in in my lifetime. you know, there’s an order to the chaos and everything, but in terms of regulation, I I don’t think they’re gonna regulate themselves. And that’s probably his biggest criticism, I would say. Well, after what was it, ninety four, the little rate tantrum he created, I think that sort of taught him early on, like, now let’s try and keep financial conditions
slightly easier than they should be and just sort of let this thing run rather than causing a kerfluffle. Yeah. By raising rates. I think he raised rates for the first time in like four or five years, four years in February of ninety two. Ninety two? February of ninety three. No? February February of ninety four he raised rates. That’s what I said. Yeah, yeah. Feb February of ninety four he raised rates. I remember where I was on that day. I was in the car listening to it.
down in South Florida. And that shook the market pretty, pretty bad. At that time, there was all these inverse floating preferred. That was the big thing that people were were selling out there when when advisors or when brokers, you know, were on commission and they were selling new preferred. That’s what they were doing because rates had been trending down all this time, right? and then all of a sudden they start, you know, trending upward.
And boom, all of those things really got crushed. Real estate got crushed in ninety-four. but then obviously the rest of the nineties were just go, go, go, go, right. I mean, obviously technology took over and best return of the nineties was was certainly technology, and which is very similar to what we’re seeing today. You also have a similarity in the sense that you know.
We may have kept rates, I say we, not not you and I, but rates that were artificially low for probably too long. And that’s one of the reasons that they had to be jacked up so quickly when when inflation really came in hard and fast af after COVID. It’s probably also one of the reasons that real estate went up so much. And now we’re kind of facing this dilemma. There’s not enough supply. Interest rates are, I don’t know if the word is too high.
you’re going through some interest rate crisis or interest rate looking. It’s not fun, yeah. Yeah, you’re don’t like interest rates where you’re you’re looking for a new place. Yeah. What what type of rate are you looking at? six and a quarter is where we’re kind of locked in at hoping to keep that rate as is or hopefully it can go a little bit lower and we can reset it a little bit lower. You’re you’re lower than the national average. National average for a thirty is about six and a half percent right at the moment.
It got it did get below six for a few days and then after Iran war broke out, you know, rates back up and now we’re back up to six and a half. But it’s so six and a quarter is not the worst thing. Yeah, at the end of twenty twenty five rates were down below six. And I remember getting quoted like a five point eight interest rate. I’m like, Ooh, okay, this is nice because they came down. and then yeah, this turned things right back up. I had said on this show before.
That I don’t know if I use the word guarantee because I hate that word. And you know, obviously compliance doesn’t like that word, but I said, I probably said they’re already listening. I guarantee, you know, interest rates, they’re not going to raise rates in 2026. It’s possible I was wrong on that. Right? The market’s pricing in rate hikes, certainly. I’m I’m on I’m in your camp still, despite the odds that they’re putting out there. I don’t think we’re gonna get a rate hike either. It’s possible though.
Possible. It’s a lot more possible today than it was three or four months ago. Yep. Even though War Warsh is, you know, we know he’s been installed to lower rates and that’s his agenda. but he didn’t sound very dovish in that first press conference where we came in like right as he started on our last podcast. We saw his like first five minutes and then we had to bounce. yeah, he I think he his whole goal with that was pass the test.
Make people trust the Fed and understand we’re not here to just cut. And he sold it off. It was a hawkish tilt to his statement and yields went up on it. So the market believed him. They it wouldn’t have gone up if they just said, he’s just talking out of his you know what, if you know, they would have stayed where that or even went down. But they listened to him. It’s gonna be quite an interesting second half of the year.
we started out, you know, the last day or two has been relatively flat, a little up, a little down. but standard quarterly rebounds, strange stuff going below the index, but the index didn’t really do too much. Yeah. All the winners got sold and all the losers got by, it seemed like yesterday on first day of the quarter. Yeah. First half of the year, across the board, besides energy, even though energy’s up really big for the year, not for the for the quarter, but
First half of the year has been pretty stellar. you can’t annualize those returns. You know, you’d like to think whether they keep going at that same same rate, but you can’t annualize them. but if we ended it doesn’t mean anything. Yeah, it doesn’t mean anything. If we ended the year right now, everybody would be pretty happy with the returns, I I think in the portfolios. fixed income still not, you know, really rallying. we’re gonna need to see rates go down pretty dramatically for for fixed income to come into play.
spreads, right? The the difference between corporate rates or high yield rates and and treasuries are some of the lowest that they’ve been. And, you know, this this is this is code for investors. When those spreads get bigger, essentially that means that bonds are going down. But we want to see larger spreads. right now there’s not a lot of juice in those high yields for taking on that additional risk. And perform well in second quarter, but yeah, going forward it they’re so tight.
I think I think the investment takeaway from the first half of the year when, you know, we expand on that lag seven discussion is, you know, buy the companies making the shovels and sell the companies buying the shovels. Those hyperscalers doing the crazy CapEx numbers that we wait for every earnings season to see how much they’re going to put into CapEx for the next year to keep the AI story going. Those you have to sell those. The cash flow’s been getting hit a little too hard.
But look at memory, you know, DRAM, we I think we talked about maybe a month or two weeks after it launched. They’re up to 25 billion in assets. I think the thing to watch out in the second half of the year is if we can get lucky and yields and inflation come back in, maybe we can start getting some multiple expansion again because everything this year, all the returns have been on earnings. Yeah. Earnings have been so strong. And then secondarily,
Seeing South Korea waiver, they’re being they’re super volatile right now. Obviously, over about half of their cospie index is SK high index and Samsung. And they’re going up eight percent, you know, down eight percent every other day. Would love to see that not result in a bust situation, even though memory has gone up like crazy. So of the fundamentals. So we’d love for the market to keep performing.
It’s lot of leverage in the system over there, apparently, going into these trades. Yeah. well, obviously I think we everybody would like to see the market continue to perform. I don’t know what the third quarter is going to look like if I did. I probably wouldn’t be probably wouldn’t be working if I if I knew what the third quarter looked like, right? Yeah, it’d be on a be on a yacht somewhere. But I I think just go back to what I said earlier. I mean, these are the types of quarters that
Some people miss out on because they make emotional decisions. You see the beginning of the Iran situation at the end of the first quarter. And if you got spooked out and you missed it and you said, Well, I’ll wait till the market comes back, you missed, you know, monster double digit returns almost across the board and in every sector and and most every asset class that we follow here, with the exception of energy, right? Because it’s come back down so much. yeah, I mean, that’s just one of those things.
that emotions can get you get you messed up and now the market’s up and you think, well, now I have to sell because we’re, you know, close to an all-time high and technology was up forty-three percent. I don’t know, that’s that’s that’s really the case. I think you just gotta let it ride a little bit. You know, for people that are a little bit more conservative, maybe you take some off the table. For people that are aggressive, you just let it ride. It seems like we’re preaching to the choir here because I feel like we say this
Exact line a lot, but it’s so true as people who allocate and manage portfolios. We see it all the time where someone’s like, I want to go to fifty percent cash because it’s just it can’t keep going up like this. And then second core just kept going up. Just kept going up. And it’s like, you know, and then we have to reallocate, and then they want to get rid of their cash restriction and invest it. It’s like, Yeah, well, fifteen percent later, you know, you hate to see it. So yeah.
Maybe dial back the risk, something like that, but you don’t want to go all in, all out, back and forth. Yes. You’re never gonna win that battle. The numbers are against you. Absolutely. And and most people cannot time the market. I’m I’m not a market timer. I don’t think I can. I’ve tried over the years. I’ve had some success. I’ve had some losses in the end. It’s probably flat, you know, from for market timing. And and most people can’t do it. So, you know, stay stay invested as long as you can.
don’t make the ultimate mistake, which is selling at the bottom. speaking of selling at the bottom or buying at the top, we have SpaceX that came out. over kind of back to the original selling price. I don’t know where it’s well, not the offer price, but one fifty. Yeah, it got near one fifty. So priced at one thirty five. First trade was roughly one hundred fifty. in a matter of two or three days, it had touched over two hundred and twenty bucks a share.
And I think when we came in this morning it was around one fifty eight. Mm-hmm. so what’s where do you think it’s gonna be next year? I I I well, we can’t give price targets out on here, Noah. But what I said you asked me like where where would I look at buying that? I was, you know, not making a call, price time saying, Well, one thirty five sounds pretty good. The smartest people in the room decided this is the fair value that we could sell it at and get, you know, full participation, have no issue selling it. So that’s where I would look to
Below that is where you could get like a waterfall effect though. The problem is, you know, a lot of people, you know, on the inside, the institutional people who got in right away got at 135. If you break 135, I feel like it’s an unspoken rule. Like you screwed us, you you broke the rules, you went below the price, and they might unload. But there’s there’s lockup coming, right? Or uncoming, and you know, a lot of insiders are gonna be able to sell it.
I’ve heard reports that there’s you know, real estate being put on the market to time it with the SpaceX IPO because there’s all these new, you know, millionaires and billionaires out there. That seems a little bit is it four hundred and forty millionaires were created by the IPO? Yeah. And and one trillionaire. And one trillionaire. How wild is that? Yeah.
it’s it’s wild. We it’s wild. We could have that discussion another. It makes really great cars. What can I say? That guy’s smart. I don’t I don’t know. I don’t know. I know you’re a big, big Tesla lover. Your second car. so we got some economic stuff over the last, you know, week and a half. We had jolts that came in last week. basically job open flee labor turnover survey, how many jobs are are open or being advertised out there? Same amount as last month, about seven point
six million jobs and then consumer confidence came in a little bit lower than expected. I think that’s probably a result of what’s going on in Iran. That would that’s that would be my take on that. not that that’s a major issue, but it’s you know, it’s it’s a survey of of what people are thinking and can provide some insight into what’s gonna happen in the future. And then this morning we got some jobs. Yeah. Fifty seven K versus a hundred K expectation. So
Below the number, we also had some revisions downward as well. We did have two back to back pre strong reports. So this report coming in pre week and yields came back in a little bit today, not on the very long end. I think you said the thirty was still up, but it seemed like from down from there yields mostly went downwards so far today after that report.
So w you mentioned revisions for the year, right? So we’ve had six months of data come in. We’ve had ninety-two thousand average a month. We had one month that was negative a hundred and thirty six thousand. The best month was two hundred fourteen, which was March. Some people are suggesting that those those numbers were anticipation of the World Cup, right? Trying to get ready in the hospitality interest in
hospitality industry for the World Cup. And so, you know, I’m I’m be curious, like every time the jobs number comes out, you’re like, well, next month. And this is one of those prime examples. Okay. So obviously World Cup is going to be ending here in July. And the hiring for that already happened, it already took place. You’re not hiring for it today. And so, you know, if we get a a really good number, say a hundred or a hundred and twenty thousand,
Okay, that seems like we’re on track. But if we’re back down and like you said, we’re at fifty seven, which came in under the expectation of a hundred thousand. But next month, if we’re at fifty seven or below, then you could chalk up some of that hiring to World Cup hiring, which would not be great, you know, long term. And then it sets yourself up for maybe a decline after the World Cup ends, where some of those places don’t need those hospitality workers anymore. Yeah.
great win by the US last night. Two nothing. Absolutely two nothing. And are we sweet sixteen now? Or don’t they say sweet sixteen in soccer? I don’t know. I don’t think I don’t think it’s the sweet sixteen, but definitely round of sixteen. I think we’re playing in Seattle. Okay. Right? On the fourth, if I’m not mistaken. Really? Hopefully it won’t be hot like it is here. it definitely will be. No, Monday is the sixth. Is that when they’re playing? I think I don’t know.
I I’m I’m not actually a soccer fan, so I I can’t really say. I thought I thought I saw it was on Monday. So that’d be the sixth. You’re yeah. Who knows? I w I That’d be far too awesome to have that game on the fourth. Every party would have it. I think it is though. Maybe not. Maybe not. It it doesn’t matter. We have the ability to find out. but yeah, I mean that has brought a lot of tourism to the United States. Certainly a GDP booster. I did some traveling last weekend.
And we saw the Scottish guys in the airport wearing the kilts. That was pretty funny. We’re in Philadelphia seeing them. some of them traveling to Boston, some of traveling to some other places. But great to hear their accents, great to have w with us here in the United States. And even though they they got knocked out, hopefully some of stayed and hang out, spent a little bit more money. Yeah, I’ve been seeing some happy posts on the internet about Europeans coming over and doing like Tictus Roadhouse.
Or waffle house and being like, this is insane. They give you free refills. Like say something like, in America you have to be like, I want a tip. These people are awesome. I wonder how that’s going videos. I wonder how that’s going with the tips. I wonder if they’re 50-50, probably. Yeah. I doubt that they’re they’re probably like excited the tip. They’re like, Great, we can do this. Yeah, you’re our guy. I I doubt it. I doubt it. You know what I have noticed though is certain places.
It pops up on the register like before you can, you know, finish your transaction. And then other places it doesn’t. I got some pizza yesterday. and the person asked me if I wanted the receipt. And I took the receipt, but there was no spot for a tip on it, and there was no tip jar or anything. And I just thought, well, maybe they pay their employees more. But that’s probably not the case. Yeah, probably not. Right. So if you’re not if if they’re not asking for the tip and it’s not mandatory that you have to hit a button on there.
I wonder how many people actually tip because I walked out thinking, if there was a spot for it, I would have done it. I appreciate businesses that for takeout orders do not like have the 10, 15, 20 percent. It’s like, don’t judge me. I’m not giving you 20% for a takeout order. I’m sorry, like I’m just not doing it. Yeah. eating in San Diego, we were down in Mission Beach at a place called Water Bar.
And ordered some food. We were watching a a game, ordered some food, and at the end they came over with their little thing. And one of the choices on the the card reader was fifty percent for the tip. And I was just How many drunk people do you think accidentally clicked that? Well, I I guess if you’re just ordering a single drink.
And you wanna give the the server something nice, maybe a fifty percent tip on ten dollars, like okay, here’s five bucks. But you’re ordering a few hundred dollars worth of food and drinks watching the game, you’re I don’t think it’s anybody’s gonna give fifty I wasn’t gonna give fifty percent. The service wasn’t all that great. Wait, was this at the race? No, if we talked about your race or not, they had some
Issues with the the course? Well we we hit the we hit the NASCAR race in San Diego on the military base on Coronado. the biggest issue for me was the Uber dropped us off 2.7 miles from our seats. Get your steps in before you sit for two hours. We I had I had a lot of steps that day, and then the area that we were at ran out of food. And for some reason, I thought I was gonna eat at the race.
And I so I did I had a little bit of breakfast. So you were little hangry. I was a little, I was a lot of hangry. So I just drank like three or four bottles of water, didn’t have any alcohol, didn’t really have anything except water. And that was probably we went to San Diego to watch the race. That was the whole impetus to go there. And that was probably how many laps did you make it through? well, it was red flag for like an hour and fifteen. So we probably made it through thirty laps out of seventy in total.
And then we walked another 2.7 miles back to the Uber pickup. Red flagged because the manhole covers were not secure. Yeah. So lap kind of a problem when you have NASCAR running over. So Coronado, you know, the military base there was the first time they ever ran any type of race that I’m familiar with. first, first NASCAR race, obviously. And so it’s a street circuit. Some of it is actual streets, some of it is part of old runway.
And the streets have manhole covers. So first race, first lap of the race, manhole cover came up, hit the number 17, knocked out, I don’t know, a radiator or something like that. And so they red flagged the race for an hour and a half so they could re weld the manhole covers on the on the circuit. But you would think if you’re gonna have a race that you might No one checked that. This actually happened on the checklist. Yeah, this this happened in Vegas.
last year or the year before, same exact thing, manhole cover. And so I’m just like I don’t underst I’m not in charge of the race, the operations, but you would think that that would be something that they would they would check. And it was hot. I mean God’s flashlight was on you. I was I had SPF 50 on and it was wasn’t enough. It wasn’t enough, man. I hats, glasses, the whole thing. It it was pretty rough. But fun racing Coronado’s a a great town.
Don’t need to go back for a NASCAR race though. That was definitely the the low point of the entire weekend. We took Nolan there at eighteen months to normal people to San Diego. And we had a wedding out there and we did the SeaWorld stuff, you know, all all the touristy things. We actually went out to Coronado as well. beautiful, beautiful city. Love San Diego. Yeah. Traffic’s great.
Drive up to Torrey Pines? I didn’t go to Torrey Pines. We went up to the Sea Lions. yeah, Karen took us to the Sea Lions and the seals and all that. It it stunk like crap. Ooh. Yeah, there’s a lot of poop out there. It was it was cool to see but good on that as well. Yeah, good on that. One one’s good. Good good on that. That was that was fun. San Diego’s a cool town, lots of stuff to do. Very expensive. Indeed.
Very expensive, 50% tips. let’s see here before we we wrap up a few more things. as you probably remember, I’m a Dish Network subscriber. Sometimes I wonder why. They just filed for bankruptcy, right? Everybody’s moving to streaming. And I think if Dish is streaming, you’re streaming from a satellite. What what did you and Eiler say the other day? Like, why do we have this for W W Fn Z and for local television and CMBC and Bluebird, right?
But you can get them. Yeah. Yeah. You can find them for free a lot of places. So I don’t know what we’re gonna do, but we have all the streamers. I’ve I’ve said talked about death by subscription. We we have all the streamers. We watch some of them and we have dish. Everybody’s cutting back on Dish, right? Because of streaming in general, just like they’re cutting back on Comcast or any of any of the traditional, you know, cable services. And
You just really look at your expenses and you’re like, I don’t know that I need that. And there you go. They’re they’re filing filing bankruptcy. Or they filed this week. you remember those crazy robots from Boston Dynamics? Yes. The dogs with no heads? Yeah, all of those things. this week ha Hyundai wrapped up its final purchase. They bought the remaining steak from SoftBank. So now the South Korean company
owns a hundred percent of Boston Dynamics. Wow. Yeah. I don’t know if that means anything. It just means that some of the world’s leading robotics is no longer owned by any Americans. I mean there are other there’s tons of private robotic companies. well that’s it’s interesting because I would love to get access to them. There’s some vehicles and ways to do it, but yeah. Yeah. The other one you can get access to Agility Robotics.
Is one that Amazon uses in a lot of their warehousing and light manufacturing. They’re going public via SPAC. it’s not out yet, but it’s it’s coming as we speak. That’s something interesting. you know, we often talk about jobs and what jobs are going to be taken, but these robots are throughout Amazon’s warehouses and certainly some of the other companies’ warehousing as well. And it’s not going away.
No. Right? As far as trends in the future? No. Not not going. No, they’re gonna perfect it. They’re just getting started. Yeah. Every year the technology l gets a little bit better, a little bit smaller. I mentioned earlier in in the year the fastest half marathon run by a robot and almost, you know, cut his time in half versus the year before. I mean it it’s just gonna keep getting better and better and better. Yeah. We better be on the lookout.
T 2000 model really sweats. Uh-huh. Yep, absolutely. so what else do we have? Anything for the good of the order? I think just general comments. You know, I feel like everyone sees the all-time highs and immediately thinks bubble, bubble, bubble, whatever, because they see what memory stocks have done or something like that. But the general market is not overpriced, it’s not bubblish yet. Forward earnings for the next 12 months, so you know, two quarter or
For the next 12 months, the next two quarters this year, two quarters of 2027. numbers look good. 20.3 price earnings on the SP 500. That is below one standard deviation above historical average. Yeah. And we’ve already talked about profit margins and how it looks like they’re going to parabolic if you look at on a chart. So it makes sense where we’re at.
You have NVIDIA, I said because they’re the world’s largest company at twenty-four times, as they’ve done everything perfect. We’ve talked about price to perfection. They’ve done everything perfect, and they only get a twenty-four times valuation with a 75% profit margin. That’s not bubblish. That would be like 40 or 50 PE if we were in bubblish territory. But absolutely unfortunate part with those mega caps is I think investors themselves doubt that they can get because you just assign a 10 trillion dollar market cap, that’s where they have to get the double.
That’s really hard to wrap our heads around, you know. We’re just monkeys. You know, we can’t really handle that scale. And, you know, that would just be a hundred percent return from here for them. Totally doable in the next couple of years, but people aren’t assigning them dollars or giving them the valuations, you know, just because of how large they are already. Well, they’re not going away. Definitely not. Yeah. Right. that’s that’s not happening. And so, you know, they could double over the next few years. I I don’t have an opinion on whether it’s gonna happen or not.
but you know, I heard people say, just to go back to the SpaceX for a second, I heard some people say, Well, SpaceX is gonna be the next NVIDIA. And I had to push back on that a little bit. I I don’t know the inner workings. We went over some of the stuff from SpaceX in here, and they have Starlink, which is highly profitable. They have the satellite launches, which are doing really, really well. you know, I’m sure there’s some crazy technology coming out from SpaceX.
But in order for them to be the next NVIDIA, they’d have to go from you know where they are one trillion to trillion, a hundred trillion. Right. I mean, it’s it’s just not gonna happen. They came out at a trillion dollar company. Like they didn’t come out as a small company. If they came out ten years ago Right. You know, that could be a like when Tesla came out, it was a small company. Yeah. And it grew into a much larger company with a much larger valuation. but I think
I think SpaceX is already, you know, priced a lot of the gains have been had prior to coming from the public from the insiders, which is great. Good, good for them. I don’t own any at the moment. Nor do I. If it gets below that one thirty five level, I’ll start taking a look at it. There you go. All right, everybody. Hey, thank you so much for listening. it’s July fourth coming up. America’s two fifty. love it or leave it. Keep all your fingers, people. Keep all your fingers. Stay away from the fireworks.
check out a drone show or something, right? Thanks so much for listening. Happy two fifty to America. We’ll see you next time on The Market Enthusiast.
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The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you consult the appropriate qualified professional prior to making a decision. Economic forecast set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Markets Keep Climbing as Leadership Expands Beyond Big Tech
Investors had plenty to watch this week as markets continued climbing toward new highs, leadership broadened beyond mega-cap technology stocks, and investors evaluated what could shape the second half of 2026.
In Episode 64 of Market Enthusiast, Chris Needs and Noah Brooks discuss the strong second-quarter market performance, the growing market rotation beyond Big Tech, and what these shifts could mean for long-term investors.
Markets Continue Climbing
The first half of 2026 delivered strong results across much of the market, with equities posting impressive gains and major indexes pushing toward new highs.
Chris and Noah recap the second quarter’s performance and highlight how broad participation across sectors and asset classes has helped support the rally. While technology remains an important driver, the market story is becoming much bigger than just a handful of large-cap names.
Leadership Expands Beyond Big Tech
One of the biggest themes in this episode is the broadening of market leadership.
For the past several years, much of the market’s gains have been concentrated in mega-cap technology stocks. Now, that trend appears to be shifting. Small-cap, mid-cap, and value-oriented investments have shown meaningful strength, signaling healthier market participation across a wider range of sectors.
Chris and Noah discuss why this rotation matters and how diversification continues to prove its value during changing market conditions.
Interest Rates and Economic Outlook
The conversation also explores the latest economic data and how it may influence the path of interest rates moving forward.
With inflation showing signs of moderation and labor market data remaining relatively stable, investors continue searching for clues about what comes next for monetary policy. Chris and Noah discuss why economic data, rather than headlines or speculation, remains one of the most important factors to watch in the months ahead.
AI Spending and Market Rotation
Artificial intelligence continues to shape market conversations, but the discussion is evolving.
Rather than focusing solely on the largest technology companies, Chris and Noah explore how AI-related infrastructure spending could ultimately benefit a much broader range of businesses. From industrial companies to value-oriented sectors, many businesses may become long-term beneficiaries as AI improves efficiency and productivity.
The episode highlights how this shift may help explain the growing rotation taking place beneath the surface of the market.
SpaceX and Market Innovation
Another major topic is the continued excitement surrounding SpaceX and its historic public debut.
Chris and Noah discuss investor enthusiasm surrounding the company, the long-term potential of Starlink, and how markets are evaluating innovation-driven businesses. The conversation also touches on valuation, growth expectations, and the challenges of pricing transformative technologies in rapidly evolving industries.
Staying Disciplined Through Market Moves
The episode closes with an important reminder about investor behavior.
Whether markets are reacting to economic data, shifting interest rate expectations, or major market headlines, emotional decision-making can often create unnecessary challenges. Chris and Noah discuss why staying disciplined, remaining diversified, and focusing on long-term goals continues to be one of the most effective ways to navigate market volatility.
Listen to the Full Episode
Full Episode Transcript
Welcome back to the market enthusiast.
I’m Noah Brooks, and obviously this is Chris Needs. Hello, hello. First half is over. Yeah. Halfway through the year already. We had a great quarter. We did. NASDAQ best since I think it’s the second quarter of 2020, just rocking and rolling. Yeah. SP lagging a lot of stuff, but had a good quarter as well. Well, it was is up 15% for the quarter. only up about nine and a half for the year. But
I mean, if you miss that quarter, I I feel like I keep saying this, if you miss these big moves upwards, it’s really hard to make back up. biggest return of the quarter sector wise, tech. Tech, yeah. Socks. The semiconductor index had its best quarter ever. Super strong. I don’t I don’t have the percentage number. I just know it was its best return ever. Technology was up forty three percent in the quarter. Yeah.
Right. So I I re ran the Morningstar Direct. Like, is this accurate? Yeah. Checked on facts it. Holy crap. I double checked it because when you see that for one quarter, I mean, that I don’t know if there’s ever been a quarter higher than that. but that’s a monster. And I think it went now it’s up twenty-nine percent for the year. technology, massive quarter. growth, really big quarter up almost twenty percent for the quarter, but for the year, only up about four percent.
And we’re gonna chalk that up to the lag seven. Lag seven. Yeah. They are technically negative for the year. And you have the other four ninety-three up over fifteen percent. So really strong breath. Finally, the participation. We always sort of wondered like what would happen with this high concentration, you know, almost forty percent of the S P five hundred in the top ten companies. What would happen if they underperform? Well, we got our answer in the second quarter, market did just fine. Yeah.
We could do it. Yeah, absolutely. I mean, I don’t know that you can see them have massive underperformance and the market’s still okay because they do represent, as you just pointed out, a giant portion of the of the top, you know, the top ten represent a giant portion of of the entire thing. And so, I mean, I think it’s okay that the the mag seven become the lag seven for a little bit. Let the rest of the market take care of it. Mid caps had a a great quarter, they’re up almost 18% for the year.
Small caps up over twenty percent for the year. They had another great quarter, they were up like twenty-two. you know, so the rest of the market and you I think you might emerging and developed, also chugging along. Absolutely. So it’s not we’re not just relying on those seven companies or even ten companies for the returns in the market. And and that was a major concern last year and the year before. by a a lot of market technicians, a lot of economists were really concerned that those big companies
Represented all of the gains. And what we’re starting to see is we call it the rotation, but we’re starting it to actually see it. Small caps knew all time highs. Mid caps new all-time highs like a week ago. small caps have a heck of a base too. So hopefully it holds true. Bigger the base, higher into space. We’ll see. This is why we stay diversified. People say, Why are you in small caps? They’re just such losers. Do people say that? I’ve never heard
Never heard that before. So this is why we stay why we stay diversified because years like this, it really pays off. Yeah. And value had a big quarter, right? yep, up 14% for the year, new all-time highs, and sorry, up 17% for the year and up 14 for the quarter. I mean, the difference now between growth and value is actually widening. It was like nine percent a few weeks ago.
And now we’re we’re close to thirteen percent on on the delta between growth and value. I think it’s great. You’re starting to see the manufacturing companies really come alive, obviously mids and smalls. but industrials were up about fifteen percent in the second quarter. The only other sector to be double digits were industrials, right? It was technology up forty-three, industrials up thirteen, fourteen. And then the one laggard for the quarter, on a little bit of energy, right? Down about twelve percent.
you remember that whole Iran thing? Yeah. How’s that going? Random deals, random strikes, random discussions, yada yada yada. More noise. We said there would be fits and starts, even with the memorandum of understanding. And spanning out. But you know what? Oil has come back in, which is really nice. We’re at 70 bucks a barrel today on on Brent Crude, a bit less for wet West Texas. my local station had, you know.
the cheapo stuff for three seventy five yesterday and for I don’t put the cheapo in it, but like I’m like, okay, I’m pretty good. Yeah. Looks like a better number. Yeah, it was like it was like two months ago it was like four forty or something. Yeah. Mine was five twenty, five twenty five. Now I think it’s four fifty. I’m like, okay, that feels a little bit better. And I already said this, but I don’t get a lot of MPGs. No. No. and good old Bitcoin.
it it took a major head major header yesterday, down to about fifty-seven seven and back up to around sixty-two for anybody that’s paying attention. It does not seem to be the real true diversifier that people have wanted it to be. Michael Saylor definitely is on the hot seat right now. Ooh. Strategy, not so good. Selling Bitcoin to selling Bitcoin to pay the yield on those preferreds they put out.
Strange. That seems like selling one, robbing Peter to pay Paul a little bit. And I think the I don’t know. Just financial structuring, financial engineering. Well, you would set around. There’s nothing illegal going on, but selling the Bitcoin you said you would never sell to pay the yield on your preferred that used to fund previous Bitcoin purchases, just boy, is that levered. Does that sound like Enron a little bit? Yes. Probably not. Probably not.
I don’t know the inner workings, but I mean they’re allowed to sell whatever they want to to cover dividends. I mean, truly, if you think yields are gonna top out and start going down, maybe that’s a very, very aggressive way. I was saying to you earlier, instead of buying the TLT, let’s get the five times levered TLT Bitcoin. So speaking of well, that is that is levered. Tongue in cheek, not serious comparing those two securities. We were we were talking earlier in the week about this night ETF.
Right. So there’s this ETF out there that tracks the price of Bitcoin during off hours. Whenever the market’s closed. Whenever the US market is closed, it buys Bitcoin futures. And when the US markets are open, it’s buying, I guess, treasuries or possibly treasury futures. I don’t think they buy the futures. does that the is there a rationale for that, Chris? What what are you?
What do you think about that? Well, I don’t think the return looked too good year to date. I don’t know about Bitcoin return isn’t all that good either. Yeah. But like that seems like a lot of work. I thought the three would be it interestingly somehow outperformed during those hours. So people just, you know, take their market gambling addiction and take it over to Bitcoin as soon as markets close. Well, I think that’s I mean, you know, the the big thing on all the thesis behind the product. Well, all of the back testing.
Right. I mean, it’s always the back testing that says, Well, if we do this, we’re gonna outperform. And then the back testing blows up in your face when you actually bring a product to market. I don’t really like the back testing. Yeah. But interesting product. I have no idea why someone would buy it, but I guess I mean, because to your point about the the DGENS trading Bitcoin after the US markets are closed, this is an ETF for it. Yeah. So I mean, and the ETF.
I think only trades during market hours that are open. There’s always like a stale dating there or something. Clearly, yeah. Yeah. we’ll not be buying any. No, no, we’ll we’ll not be buying any. I I’ve been having some technology issues. I feel like it’s because of the heat that we have here. Yesterday we had a real feel of one nine here in in you know, southeastern Pennsylvania.
Today’s supposed to be a little bit higher than that. And things are starting to get a little bit sticky. People are starting to get a little bit weird. We have this July 4th holiday. Happy 250th to us, right? Are you doing anything special for that? No. Just tons of fireworks. Everyone’s having fireworks and parade, and hopefully they’re all going like really hard about it for 250. But you’re talking about the temperature. How about Europe? The back and forth. There was Britain and Europe where they’re like limiting, or in in some cases, apparently.
deconstructing air conditioning units as they’re in the midst of like one of the worst heat waves over there as well? We you know, here in the US, I think it’s the the stat is like ninety-one percent of all living spaces have AC here in in the United States. And in it’s it’s not ten percent in Europe, but all the new builds have air conditioning. Most of the old builds do not any of the certainly the older housing unless it’s been retrofitted does not.
And none of the bars, restaurants, unless they’re brand new, have any AC. It is really tough to get out of the heat in Europe. Don’t they like not serve ice like we do as well? So how do they cool down over there? They put a fan on. I don’t what? Yeah. we we were there, everybody knows this. So we spent a day in in Windsor Castle, and I don’t know if I said this on here before, but it was really hot that day. It was close to a hundred degrees, and went into a gift shop and they didn’t even have any sunblock.
I mean that’s I I think that’s gotta change. I mean, the other day in Bordeaux it was like one seven. I look I look at those those heat maps all the time. They’re not they’re not used to that stuff. Yeah. And they’re getting a lot more there’s a lot of deaths too, because again, like you said, most of them they’re not outfitted like we are with percentages of air conditioning units and houses. People are just stuck stuck in there. Yeah. Speaking of deaths, I hate to bring this up, but there was obviously that.
Dramatic to back to back earthquakes in Venezuela, and they are still looking there’s still fifty thousand people that are unaccounted for, which geez, that is that is a crazy number. I mean, last night on the news they were talking about finding, you know, a few people here or there, but now it’s been like security guard like seven stories down or something. Yeah. Yeah, the buildings kind of all collapsed on top of one another. So
Even though there might be space and might be somebody there, and even though they might be able to hear them with their with their technology, it could be ten or twenty stories down below. Yeah. And there’s just no way to get to them. Well, he had his lunch pill with them and can reach it. I don’t know if one I thought you were about to go with Alan Greenspan. Rather than Which obviously that’s a much larger tragedy. Alan Greenspan lived a good long life. Yeah. He was like he was like a hundred years old, like ninety eight or something. Yeah. I don’t know how well.
Yeah, no, I think I think he was a hundred. you know, Greenspan coined irrational exuberance in the nineties before the dot-com bubble. There’s lots of pros and cons with with Alan Greenspan. I mean, he was appointed by George Bush in I think eighty-six. He was around for you know, the Black Monday crash in nineteen eighty-seven. He was around obviously for the dot-com bubble, he was around for
the nineteen ninety eight long term capital management collapse. He was around for Y Y2K, if anybody out there remembers that. And then obviously, you know, 9 11, he was around for. he’s controversial in the sense that, you know, after a dot com bubble, he probably kept rates too low, which gave us a real estate bubble. People were scarred from what the market just did to him. So yeah, everybody ended up not everybody, but
A lot of people capital flowed into real estate really hard because of where rates were at. And you hear all these stories where people had two or three homes with little to no documentation, what’s it? Ninja loans, no income, no job, verification, anything like that. yeah, with low rates, you can understand why the GFC happened.
Well in addition to the financial products that sort of exacerbate yeah, no question. The no no interest or interest only loans, things like that. but you know, in terms of being controversial, I don’t know that he’s controversial. I think he did a really good job for for those twenty years that he was around. he may have you know, one of the things that he believed in that’s a little controversial is that markets will regulate themselves.
And I think we I think we all know that regulation doesn’t happen naturally. I don’t think and and he came to that conclusion after the global financial crisis. He wound up testifying in front of the Senate. Didn’t he say he was completely wrong about that? When in his testimony he’s like, I’m sorry, my whole world view is incorrect. Yeah, yeah. He he definitely and and there were some other things obviously that led to You gave the Fox the key to the hen house and thought it all work out.
I don’t I don’t think markets regulate themselves. No, I I haven’t seen that in in my lifetime. you know, there’s an order to the chaos and everything, but in terms of regulation, I I don’t think they’re gonna regulate themselves. And that’s probably his biggest criticism, I would say. Well, after what was it, ninety four, the little rate tantrum he created, I think that sort of taught him early on, like, now let’s try and keep financial conditions
slightly easier than they should be and just sort of let this thing run rather than causing a kerfluffle. Yeah. By raising rates. I think he raised rates for the first time in like four or five years, four years in February of ninety two. Ninety two? February of ninety three. No? February February of ninety four he raised rates. That’s what I said. Yeah, yeah. Feb February of ninety four he raised rates. I remember where I was on that day. I was in the car listening to it.
down in South Florida. And that shook the market pretty, pretty bad. At that time, there was all these inverse floating preferred. That was the big thing that people were were selling out there when when advisors or when brokers, you know, were on commission and they were selling new preferred. That’s what they were doing because rates had been trending down all this time, right? and then all of a sudden they start, you know, trending upward.
And boom, all of those things really got crushed. Real estate got crushed in ninety-four. but then obviously the rest of the nineties were just go, go, go, go, right. I mean, obviously technology took over and best return of the nineties was was certainly technology, and which is very similar to what we’re seeing today. You also have a similarity in the sense that you know.
We may have kept rates, I say we, not not you and I, but rates that were artificially low for probably too long. And that’s one of the reasons that they had to be jacked up so quickly when when inflation really came in hard and fast af after COVID. It’s probably also one of the reasons that real estate went up so much. And now we’re kind of facing this dilemma. There’s not enough supply. Interest rates are, I don’t know if the word is too high.
you’re going through some interest rate crisis or interest rate looking. It’s not fun, yeah. Yeah, you’re don’t like interest rates where you’re you’re looking for a new place. Yeah. What what type of rate are you looking at? six and a quarter is where we’re kind of locked in at hoping to keep that rate as is or hopefully it can go a little bit lower and we can reset it a little bit lower. You’re you’re lower than the national average. National average for a thirty is about six and a half percent right at the moment.
It got it did get below six for a few days and then after Iran war broke out, you know, rates back up and now we’re back up to six and a half. But it’s so six and a quarter is not the worst thing. Yeah, at the end of twenty twenty five rates were down below six. And I remember getting quoted like a five point eight interest rate. I’m like, Ooh, okay, this is nice because they came down. and then yeah, this turned things right back up. I had said on this show before.
That I don’t know if I use the word guarantee because I hate that word. And you know, obviously compliance doesn’t like that word, but I said, I probably said they’re already listening. I guarantee, you know, interest rates, they’re not going to raise rates in 2026. It’s possible I was wrong on that. Right? The market’s pricing in rate hikes, certainly. I’m I’m on I’m in your camp still, despite the odds that they’re putting out there. I don’t think we’re gonna get a rate hike either. It’s possible though.
Possible. It’s a lot more possible today than it was three or four months ago. Yep. Even though War Warsh is, you know, we know he’s been installed to lower rates and that’s his agenda. but he didn’t sound very dovish in that first press conference where we came in like right as he started on our last podcast. We saw his like first five minutes and then we had to bounce. yeah, he I think he his whole goal with that was pass the test.
Make people trust the Fed and understand we’re not here to just cut. And he sold it off. It was a hawkish tilt to his statement and yields went up on it. So the market believed him. They it wouldn’t have gone up if they just said, he’s just talking out of his you know what, if you know, they would have stayed where that or even went down. But they listened to him. It’s gonna be quite an interesting second half of the year.
we started out, you know, the last day or two has been relatively flat, a little up, a little down. but standard quarterly rebounds, strange stuff going below the index, but the index didn’t really do too much. Yeah. All the winners got sold and all the losers got by, it seemed like yesterday on first day of the quarter. Yeah. First half of the year, across the board, besides energy, even though energy’s up really big for the year, not for the for the quarter, but
First half of the year has been pretty stellar. you can’t annualize those returns. You know, you’d like to think whether they keep going at that same same rate, but you can’t annualize them. but if we ended it doesn’t mean anything. Yeah, it doesn’t mean anything. If we ended the year right now, everybody would be pretty happy with the returns, I I think in the portfolios. fixed income still not, you know, really rallying. we’re gonna need to see rates go down pretty dramatically for for fixed income to come into play.
spreads, right? The the difference between corporate rates or high yield rates and and treasuries are some of the lowest that they’ve been. And, you know, this this is this is code for investors. When those spreads get bigger, essentially that means that bonds are going down. But we want to see larger spreads. right now there’s not a lot of juice in those high yields for taking on that additional risk. And perform well in second quarter, but yeah, going forward it they’re so tight.
I think I think the investment takeaway from the first half of the year when, you know, we expand on that lag seven discussion is, you know, buy the companies making the shovels and sell the companies buying the shovels. Those hyperscalers doing the crazy CapEx numbers that we wait for every earnings season to see how much they’re going to put into CapEx for the next year to keep the AI story going. Those you have to sell those. The cash flow’s been getting hit a little too hard.
But look at memory, you know, DRAM, we I think we talked about maybe a month or two weeks after it launched. They’re up to 25 billion in assets. I think the thing to watch out in the second half of the year is if we can get lucky and yields and inflation come back in, maybe we can start getting some multiple expansion again because everything this year, all the returns have been on earnings. Yeah. Earnings have been so strong. And then secondarily,
Seeing South Korea waiver, they’re being they’re super volatile right now. Obviously, over about half of their cospie index is SK high index and Samsung. And they’re going up eight percent, you know, down eight percent every other day. Would love to see that not result in a bust situation, even though memory has gone up like crazy. So of the fundamentals. So we’d love for the market to keep performing.
It’s lot of leverage in the system over there, apparently, going into these trades. Yeah. well, obviously I think we everybody would like to see the market continue to perform. I don’t know what the third quarter is going to look like if I did. I probably wouldn’t be probably wouldn’t be working if I if I knew what the third quarter looked like, right? Yeah, it’d be on a be on a yacht somewhere. But I I think just go back to what I said earlier. I mean, these are the types of quarters that
Some people miss out on because they make emotional decisions. You see the beginning of the Iran situation at the end of the first quarter. And if you got spooked out and you missed it and you said, Well, I’ll wait till the market comes back, you missed, you know, monster double digit returns almost across the board and in every sector and and most every asset class that we follow here, with the exception of energy, right? Because it’s come back down so much. yeah, I mean, that’s just one of those things.
that emotions can get you get you messed up and now the market’s up and you think, well, now I have to sell because we’re, you know, close to an all-time high and technology was up forty-three percent. I don’t know, that’s that’s that’s really the case. I think you just gotta let it ride a little bit. You know, for people that are a little bit more conservative, maybe you take some off the table. For people that are aggressive, you just let it ride. It seems like we’re preaching to the choir here because I feel like we say this
Exact line a lot, but it’s so true as people who allocate and manage portfolios. We see it all the time where someone’s like, I want to go to fifty percent cash because it’s just it can’t keep going up like this. And then second core just kept going up. Just kept going up. And it’s like, you know, and then we have to reallocate, and then they want to get rid of their cash restriction and invest it. It’s like, Yeah, well, fifteen percent later, you know, you hate to see it. So yeah.
Maybe dial back the risk, something like that, but you don’t want to go all in, all out, back and forth. Yes. You’re never gonna win that battle. The numbers are against you. Absolutely. And and most people cannot time the market. I’m I’m not a market timer. I don’t think I can. I’ve tried over the years. I’ve had some success. I’ve had some losses in the end. It’s probably flat, you know, from for market timing. And and most people can’t do it. So, you know, stay stay invested as long as you can.
don’t make the ultimate mistake, which is selling at the bottom. speaking of selling at the bottom or buying at the top, we have SpaceX that came out. over kind of back to the original selling price. I don’t know where it’s well, not the offer price, but one fifty. Yeah, it got near one fifty. So priced at one thirty five. First trade was roughly one hundred fifty. in a matter of two or three days, it had touched over two hundred and twenty bucks a share.
And I think when we came in this morning it was around one fifty eight. Mm-hmm. so what’s where do you think it’s gonna be next year? I I I well, we can’t give price targets out on here, Noah. But what I said you asked me like where where would I look at buying that? I was, you know, not making a call, price time saying, Well, one thirty five sounds pretty good. The smartest people in the room decided this is the fair value that we could sell it at and get, you know, full participation, have no issue selling it. So that’s where I would look to
Below that is where you could get like a waterfall effect though. The problem is, you know, a lot of people, you know, on the inside, the institutional people who got in right away got at 135. If you break 135, I feel like it’s an unspoken rule. Like you screwed us, you you broke the rules, you went below the price, and they might unload. But there’s there’s lockup coming, right? Or uncoming, and you know, a lot of insiders are gonna be able to sell it.
I’ve heard reports that there’s you know, real estate being put on the market to time it with the SpaceX IPO because there’s all these new, you know, millionaires and billionaires out there. That seems a little bit is it four hundred and forty millionaires were created by the IPO? Yeah. And and one trillionaire. And one trillionaire. How wild is that? Yeah.
it’s it’s wild. We it’s wild. We could have that discussion another. It makes really great cars. What can I say? That guy’s smart. I don’t I don’t know. I don’t know. I know you’re a big, big Tesla lover. Your second car. so we got some economic stuff over the last, you know, week and a half. We had jolts that came in last week. basically job open flee labor turnover survey, how many jobs are are open or being advertised out there? Same amount as last month, about seven point
six million jobs and then consumer confidence came in a little bit lower than expected. I think that’s probably a result of what’s going on in Iran. That would that’s that would be my take on that. not that that’s a major issue, but it’s you know, it’s it’s a survey of of what people are thinking and can provide some insight into what’s gonna happen in the future. And then this morning we got some jobs. Yeah. Fifty seven K versus a hundred K expectation. So
Below the number, we also had some revisions downward as well. We did have two back to back pre strong reports. So this report coming in pre week and yields came back in a little bit today, not on the very long end. I think you said the thirty was still up, but it seemed like from down from there yields mostly went downwards so far today after that report.
So w you mentioned revisions for the year, right? So we’ve had six months of data come in. We’ve had ninety-two thousand average a month. We had one month that was negative a hundred and thirty six thousand. The best month was two hundred fourteen, which was March. Some people are suggesting that those those numbers were anticipation of the World Cup, right? Trying to get ready in the hospitality interest in
hospitality industry for the World Cup. And so, you know, I’m I’m be curious, like every time the jobs number comes out, you’re like, well, next month. And this is one of those prime examples. Okay. So obviously World Cup is going to be ending here in July. And the hiring for that already happened, it already took place. You’re not hiring for it today. And so, you know, if we get a a really good number, say a hundred or a hundred and twenty thousand,
Okay, that seems like we’re on track. But if we’re back down and like you said, we’re at fifty seven, which came in under the expectation of a hundred thousand. But next month, if we’re at fifty seven or below, then you could chalk up some of that hiring to World Cup hiring, which would not be great, you know, long term. And then it sets yourself up for maybe a decline after the World Cup ends, where some of those places don’t need those hospitality workers anymore. Yeah.
great win by the US last night. Two nothing. Absolutely two nothing. And are we sweet sixteen now? Or don’t they say sweet sixteen in soccer? I don’t know. I don’t think I don’t think it’s the sweet sixteen, but definitely round of sixteen. I think we’re playing in Seattle. Okay. Right? On the fourth, if I’m not mistaken. Really? Hopefully it won’t be hot like it is here. it definitely will be. No, Monday is the sixth. Is that when they’re playing? I think I don’t know.
I I’m I’m not actually a soccer fan, so I I can’t really say. I thought I thought I saw it was on Monday. So that’d be the sixth. You’re yeah. Who knows? I w I That’d be far too awesome to have that game on the fourth. Every party would have it. I think it is though. Maybe not. Maybe not. It it doesn’t matter. We have the ability to find out. but yeah, I mean that has brought a lot of tourism to the United States. Certainly a GDP booster. I did some traveling last weekend.
And we saw the Scottish guys in the airport wearing the kilts. That was pretty funny. We’re in Philadelphia seeing them. some of them traveling to Boston, some of traveling to some other places. But great to hear their accents, great to have w with us here in the United States. And even though they they got knocked out, hopefully some of stayed and hang out, spent a little bit more money. Yeah, I’ve been seeing some happy posts on the internet about Europeans coming over and doing like Tictus Roadhouse.
Or waffle house and being like, this is insane. They give you free refills. Like say something like, in America you have to be like, I want a tip. These people are awesome. I wonder how that’s going videos. I wonder how that’s going with the tips. I wonder if they’re 50-50, probably. Yeah. I doubt that they’re they’re probably like excited the tip. They’re like, Great, we can do this. Yeah, you’re our guy. I I doubt it. I doubt it. You know what I have noticed though is certain places.
It pops up on the register like before you can, you know, finish your transaction. And then other places it doesn’t. I got some pizza yesterday. and the person asked me if I wanted the receipt. And I took the receipt, but there was no spot for a tip on it, and there was no tip jar or anything. And I just thought, well, maybe they pay their employees more. But that’s probably not the case. Yeah, probably not. Right. So if you’re not if if they’re not asking for the tip and it’s not mandatory that you have to hit a button on there.
I wonder how many people actually tip because I walked out thinking, if there was a spot for it, I would have done it. I appreciate businesses that for takeout orders do not like have the 10, 15, 20 percent. It’s like, don’t judge me. I’m not giving you 20% for a takeout order. I’m sorry, like I’m just not doing it. Yeah. eating in San Diego, we were down in Mission Beach at a place called Water Bar.
And ordered some food. We were watching a a game, ordered some food, and at the end they came over with their little thing. And one of the choices on the the card reader was fifty percent for the tip. And I was just How many drunk people do you think accidentally clicked that? Well, I I guess if you’re just ordering a single drink.
And you wanna give the the server something nice, maybe a fifty percent tip on ten dollars, like okay, here’s five bucks. But you’re ordering a few hundred dollars worth of food and drinks watching the game, you’re I don’t think it’s anybody’s gonna give fifty I wasn’t gonna give fifty percent. The service wasn’t all that great. Wait, was this at the race? No, if we talked about your race or not, they had some
Issues with the the course? Well we we hit the we hit the NASCAR race in San Diego on the military base on Coronado. the biggest issue for me was the Uber dropped us off 2.7 miles from our seats. Get your steps in before you sit for two hours. We I had I had a lot of steps that day, and then the area that we were at ran out of food. And for some reason, I thought I was gonna eat at the race.
And I so I did I had a little bit of breakfast. So you were little hangry. I was a little, I was a lot of hangry. So I just drank like three or four bottles of water, didn’t have any alcohol, didn’t really have anything except water. And that was probably we went to San Diego to watch the race. That was the whole impetus to go there. And that was probably how many laps did you make it through? well, it was red flag for like an hour and fifteen. So we probably made it through thirty laps out of seventy in total.
And then we walked another 2.7 miles back to the Uber pickup. Red flagged because the manhole covers were not secure. Yeah. So lap kind of a problem when you have NASCAR running over. So Coronado, you know, the military base there was the first time they ever ran any type of race that I’m familiar with. first, first NASCAR race, obviously. And so it’s a street circuit. Some of it is actual streets, some of it is part of old runway.
And the streets have manhole covers. So first race, first lap of the race, manhole cover came up, hit the number 17, knocked out, I don’t know, a radiator or something like that. And so they red flagged the race for an hour and a half so they could re weld the manhole covers on the on the circuit. But you would think if you’re gonna have a race that you might No one checked that. This actually happened on the checklist. Yeah, this this happened in Vegas.
last year or the year before, same exact thing, manhole cover. And so I’m just like I don’t underst I’m not in charge of the race, the operations, but you would think that that would be something that they would they would check. And it was hot. I mean God’s flashlight was on you. I was I had SPF 50 on and it was wasn’t enough. It wasn’t enough, man. I hats, glasses, the whole thing. It it was pretty rough. But fun racing Coronado’s a a great town.
Don’t need to go back for a NASCAR race though. That was definitely the the low point of the entire weekend. We took Nolan there at eighteen months to normal people to San Diego. And we had a wedding out there and we did the SeaWorld stuff, you know, all all the touristy things. We actually went out to Coronado as well. beautiful, beautiful city. Love San Diego. Yeah. Traffic’s great.
Drive up to Torrey Pines? I didn’t go to Torrey Pines. We went up to the Sea Lions. yeah, Karen took us to the Sea Lions and the seals and all that. It it stunk like crap. Ooh. Yeah, there’s a lot of poop out there. It was it was cool to see but good on that as well. Yeah, good on that. One one’s good. Good good on that. That was that was fun. San Diego’s a cool town, lots of stuff to do. Very expensive. Indeed.
Very expensive, 50% tips. let’s see here before we we wrap up a few more things. as you probably remember, I’m a Dish Network subscriber. Sometimes I wonder why. They just filed for bankruptcy, right? Everybody’s moving to streaming. And I think if Dish is streaming, you’re streaming from a satellite. What what did you and Eiler say the other day? Like, why do we have this for W W Fn Z and for local television and CMBC and Bluebird, right?
But you can get them. Yeah. Yeah. You can find them for free a lot of places. So I don’t know what we’re gonna do, but we have all the streamers. I’ve I’ve said talked about death by subscription. We we have all the streamers. We watch some of them and we have dish. Everybody’s cutting back on Dish, right? Because of streaming in general, just like they’re cutting back on Comcast or any of any of the traditional, you know, cable services. And
You just really look at your expenses and you’re like, I don’t know that I need that. And there you go. They’re they’re filing filing bankruptcy. Or they filed this week. you remember those crazy robots from Boston Dynamics? Yes. The dogs with no heads? Yeah, all of those things. this week ha Hyundai wrapped up its final purchase. They bought the remaining steak from SoftBank. So now the South Korean company
owns a hundred percent of Boston Dynamics. Wow. Yeah. I don’t know if that means anything. It just means that some of the world’s leading robotics is no longer owned by any Americans. I mean there are other there’s tons of private robotic companies. well that’s it’s interesting because I would love to get access to them. There’s some vehicles and ways to do it, but yeah. Yeah. The other one you can get access to Agility Robotics.
Is one that Amazon uses in a lot of their warehousing and light manufacturing. They’re going public via SPAC. it’s not out yet, but it’s it’s coming as we speak. That’s something interesting. you know, we often talk about jobs and what jobs are going to be taken, but these robots are throughout Amazon’s warehouses and certainly some of the other companies’ warehousing as well. And it’s not going away.
No. Right? As far as trends in the future? No. Not not going. No, they’re gonna perfect it. They’re just getting started. Yeah. Every year the technology l gets a little bit better, a little bit smaller. I mentioned earlier in in the year the fastest half marathon run by a robot and almost, you know, cut his time in half versus the year before. I mean it it’s just gonna keep getting better and better and better. Yeah. We better be on the lookout.
T 2000 model really sweats. Uh-huh. Yep, absolutely. so what else do we have? Anything for the good of the order? I think just general comments. You know, I feel like everyone sees the all-time highs and immediately thinks bubble, bubble, bubble, whatever, because they see what memory stocks have done or something like that. But the general market is not overpriced, it’s not bubblish yet. Forward earnings for the next 12 months, so you know, two quarter or
For the next 12 months, the next two quarters this year, two quarters of 2027. numbers look good. 20.3 price earnings on the SP 500. That is below one standard deviation above historical average. Yeah. And we’ve already talked about profit margins and how it looks like they’re going to parabolic if you look at on a chart. So it makes sense where we’re at.
You have NVIDIA, I said because they’re the world’s largest company at twenty-four times, as they’ve done everything perfect. We’ve talked about price to perfection. They’ve done everything perfect, and they only get a twenty-four times valuation with a 75% profit margin. That’s not bubblish. That would be like 40 or 50 PE if we were in bubblish territory. But absolutely unfortunate part with those mega caps is I think investors themselves doubt that they can get because you just assign a 10 trillion dollar market cap, that’s where they have to get the double.
That’s really hard to wrap our heads around, you know. We’re just monkeys. You know, we can’t really handle that scale. And, you know, that would just be a hundred percent return from here for them. Totally doable in the next couple of years, but people aren’t assigning them dollars or giving them the valuations, you know, just because of how large they are already. Well, they’re not going away. Definitely not. Yeah. Right. that’s that’s not happening. And so, you know, they could double over the next few years. I I don’t have an opinion on whether it’s gonna happen or not.
but you know, I heard people say, just to go back to the SpaceX for a second, I heard some people say, Well, SpaceX is gonna be the next NVIDIA. And I had to push back on that a little bit. I I don’t know the inner workings. We went over some of the stuff from SpaceX in here, and they have Starlink, which is highly profitable. They have the satellite launches, which are doing really, really well. you know, I’m sure there’s some crazy technology coming out from SpaceX.
But in order for them to be the next NVIDIA, they’d have to go from you know where they are one trillion to trillion, a hundred trillion. Right. I mean, it’s it’s just not gonna happen. They came out at a trillion dollar company. Like they didn’t come out as a small company. If they came out ten years ago Right. You know, that could be a like when Tesla came out, it was a small company. Yeah. And it grew into a much larger company with a much larger valuation. but I think
I think SpaceX is already, you know, priced a lot of the gains have been had prior to coming from the public from the insiders, which is great. Good, good for them. I don’t own any at the moment. Nor do I. If it gets below that one thirty five level, I’ll start taking a look at it. There you go. All right, everybody. Hey, thank you so much for listening. it’s July fourth coming up. America’s two fifty. love it or leave it. Keep all your fingers, people. Keep all your fingers. Stay away from the fireworks.
check out a drone show or something, right? Thanks so much for listening. Happy two fifty to America. We’ll see you next time on The Market Enthusiast.
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The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you consult the appropriate qualified professional prior to making a decision. Economic forecast set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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