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Good Jobs, Bad Market

• Before we get into this week’s video, we want to make a special moment to talk about the wildfires in California.
• We have three offices in California with employees and many clients.
• Our hearts and prayers go out to all of you.
• We are available to you. Please call us if you need any assistance, help with looking at insurance claims, or anything that you need. We want to be there to facilitate for you as fast as possible.
• This week, we got the jobs numbers in, and they were very strong.
• It looks like the labor market is strong, but the market dropped like a stone on the news.
• Why on earth did that happen?
• Well, it all goes back to profits.
• The stock market was banking on inflation coming down, and the Fed lowering interest rates.
• If that happens, then the cost of money is lower.
• Companies can borrow more cheaply, grow their businesses.
• Consumers can buy stuff at lower interest rates, borrow money to build houses and buy cars, et cetera.
• That’s all good for growth, good for profits.
• A lot of the investors were thinking that was the course that we were on.
• We’ve been saying all along that that isn’t the case, that inflation has not come to heal, and that it is still not under control.
• In fact, we said that it would be trending upwards into the end of last year and potentially into the early part of this year, and it appears that is exactly what’s happening.
• Jobs numbers that are this strong mean inflation is likely going to stay high.
• If that’s the case, then the Fed is not going to lower interest rates as people were expecting once again.
• As a result, people are taking money off the table, taking profits.
• Our view is that this is potentially a correction, which means a drop of more than 10% but less than 20.
• It’s not a full-fledged bear market, and these are normal, if not pleasant.
• The market is currently down about 4% from its peak back in December.
• Is it something to panic about at this point? No.
• The reason why is because, after all, the news was good.
• People have jobs, and that’s good news.
• That means the consumer still has a job, the consumer can still spend, and 70% of our economy is the consumer.
• In the long run, this is good news, but in the short run, investors are focused on wanting lower interest rates, cheaper money, and faster profits.
• The bond market got hit too, but always remember, with the bond market, there are two components to it.
• One is the value of the bond, which goes down when interest rates go up, generally.
• But the other thing is the dividend, or the interest that it pays.
• If interest rates stay around 5% that’s not bad for us.
• Yes, the price has come down here in the last few days, but the interest rate has stayed nice and high, so we’re getting paid while we wait.
• Overall, this is not a reason to panic.
• We have a nice cushion right now between our sell signal, so if the market does turn into a correction and goes down, we should not get triggered out.
• Overall, we’re in good shape, and the news is good, even though the market reacted badly to it.
• If you know someone that we could help, then please send them our way. We’re always looking for to help more clients and create more SCWPerS, and that’s our goal.

Hello and welcome to our Market Alert video for today, which is Friday, January 10, 2025 did not say 24 I’m determined to not do that. Thank you for watching. I hope this video finds you healthy, wealthy and wise. I want to say a special hi to SCWPerS Nation out there. I hope you guys are all out there, SCWPering your tails off. And for all you clients, our goal is to get you to be a SCWPer so you can enjoy that second childhood without parental supervision that we want for you so much. Before I get going on this week’s video, I want to make a special moment to talk about the wildfires in California. You know, when I think about how tragic, how awful that is, I can’t even begin to imagine what it would be like to, you know, see the home that you’ve lived in for years, all your belongings just burning to the ground like that, just the pain, the tragedy, the awfulness of it, it’s unimaginable. And we have, as you guys know, we have offices in Los Angeles. We have four of them, we have employees, we have many clients. And our hearts, our prayers go out to all of you. And also, you know we are available to you. Please call us if you need money, if you need you know, any assistance, help with looking at insurance claims, anything that you need. We want to be there to facilitate for you as fast as possible. And our employees in LA, you know, we’ve, we’ve reached out to all of them, and as far as we know, right now, as I record this, everyone is safe and they’re okay, and that’s, you know, in the end, that’s really the most important thing, isn’t it? When we see these kinds of horrible things, it just makes you stop for a moment and think, you know all this stuff that we talk about in this video, the stock market, inflation, the Federal Reserve, you know, all these things. You know, how important are they really relative to that? Not, not, not much, right? But they are important, and so we march on. So this week, I want to talk with you about, you know, we got the jobs numbers in this morning, and they were very strong. People are holding on to their jobs. It looks like the labor market is strong, but yet the market dropped like a stone on the news. Why on earth did that happen? Well, it all goes back to as we’ve always said, profits, right? Stock market is all about companies making profits as we see it. So what the stock market was banking on was that inflation is coming down, the Fed is going to lower interest rates. And if that happens, then the price of money, the cost of money is lower. Companies can borrow cheaply, or more cheaply, grow their businesses. Consumers can buy stuff at lower interest rates, borrow money to build houses and buy cars, et cetera. So that’s all good for growth, good for profits. And so therefore a lot of the investors were kind of thinking that was the course that we were on. Now, of course, we’ve been saying all along that, No, that isn’t the case, right? We’ve been saying all along that No, inflation has not come to heal, and that it is still not under control. In fact, we said that it would be trending upwards into the end of last year and potentially into the early part of this year, and it appears that is exactly what’s happening. If you have jobs numbers that are this strong, then what that means is that inflation is going to stay high. And if that’s the case, then the Fed is not going to lower interest rates as people were expecting once again. And if that’s the case, then people are taking money off the table, taking profits. So our view is that this is potentially a correction, right, which means a drop of more than 10% but less than 20 so it’s not a full fledged bear market. And these are normal. They’re not pleasant, they’re no fun, but they’re normal. And as I record this, the market is down about 4% from its peak back in December. So we may be about, you know, maybe halfway to, you know, 40% of the way there for a normal correction, which is about 10% so is it something to panic about at this point? No. And the reason why is because, after all, the news was good, right? People have jobs, and that’s good news. That means the consumer still has a job, the consumer can still spend, and 70% of our economy is the consumer. So in the end, in the long run, this is actually good news, but in the short run, it’s like, oh no. We wanted lower interest rates, we wanted cheaper money, we wanted faster profits. And it looks like we’re not going to get it. Profit taking ensues, in our view, on the bond side, we also see that the bond market thought interest rates were going to go down dramatically, and they have not, and it looks like they’re not going to for a while. And that being the case, the bond market got hit too. But always remember, with the bond market, there are two components to it. One is the the value of the bond, which goes down when interest rates go up generally. But the other thing is the dividend, the interest that it pays, and if interest rates stay around 5% that’s not bad for us. So yes, the price has come down here in the last few days, but the interest rate has stayed nice and high, so we’re getting paid while we wait. So it’s not all terrible news on the bond side of the equation. But overall, this is not a reason to panic. We have a nice cushion right now between our sell signal, and so if the market does turn into a correction and goes down, we should not get triggered out. And so we have confidence in that. So overall, you know, I think we’re in good shape, and the news is good, even though the market reacts badly to it. But that’s what the market does. It’s illogical, it seems on the surface, but if you unwrap it, you find out, yeah, maybe it’s not that illogical, little emotional, but maybe not illogical. So I hope this video is finding you healthy, wealthy and wise, and I hope that you and yours are safe and you know, always, always make sure that you know, that you know, in our case, we believe you should always have a sell strategy in your investments, just in case, right? And I hope that gives you peace of mind, knowing that if the market takes a big dive, that our strategy should help to protect on the downside. So we appreciate you. We thank you. Make sure you send as many of your friends and family and business associates our way. You know we’re open for business. You know we’re always looking for to help more clients and create more SCWPerS, and that’s our goal. And so if you know someone that we could help, then please send them our way. We’d appreciate it, and that’s all I have for you this week. So for those of you in California, our hearts, our prayers, our good wishes, go out to you, and anything we can do to help, we’re here for you. Okay, so thank you for watching, and we’ll talk soon. Bye.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023 

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RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”) is an SEC registered investment adviser with a primary business location in Plano, Texas. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that Retirement Planners of America has attained a certain level of skill, training, or ability. The “Invest and Protect Strategy” (the “Strategy”) refers to a strategy that Retirement Planners of America fundamentally employs for its clients. Retirement Planners of America previously employed a similar strategy that it referred to as the “buy, hold, and sell” strategy or “buy hold, and protect” strategy. Past performance does not guarantee future results. 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