• Current read is 25 on the fear greed index vs 37 last week.

• The Fear & Greed Index fell from 35 to 25 this week.

• Given that the market is within a few percent of ATH… I do not agree with the 25 read. I think we are closer to 60.

• Market Fearful = Potential Opportunity/Deals. (consider buy calls/sell puts/buy shares)

• Market Greedy = Potential Over Valuation. (consider buy puts/sell shares/take on less risk)

• I like to be bullish when there is extreme fear

• I like to be bearish when extreme greed.

• Opportunity is out there, just gotta find it!

• 30 year fixed mortgage rate decreased to 6.35% Today, vs 6.45% last week.

• 10 year treasury bond yield decreased to 4.37% Today, vs 4.45% last week

• 2 year treasury bond yield decreased to 4.09% Today, vs 4.17% last week.

• Yields fell a little this week as oil fell and that lowered inflation expectations a little. Good!

• As I always say, interest rates are gravity!

• As interest rates/bond yields INCREASE, stocks become LESS attractive because bond yields go UP which makes the risk free bond look MORE attractive.

Here is the brutal truth about the stock market right now as we come to the end of June… (I know you may not wanna hear this... but you kinda need too)

YTD the nasdaq $QQQ & SP500 $VOO have absolutely ripped higher & it's a little too much...
I personally think we are a little disconnected from the fundamentals & the market is about 5 to 10% over valued… Some single stocks are much worse.
(very possible you have some of them in your portfolio now too)

So when we see the market not making a huge move up or even trending down in the last month ish, it should not shock you one bit. Things are a little hot and the market just needs time for EPS to catch up before we can take the next leg higher.

Good thing about the EPS growth is that it’s VERY strong right now.
Check out this image below.

Let’s combine this with a few other key areas of the economy to understand how the big picture looks.

The economy on balance is fine.
Unemployment is low.
Job growth is ok.
Not a lot of layoffs.

Interest rates on balance are fine too. We’re currently at 3.5% to 3.75%. That’s historically low. All this talk about raising rates because inflation is out of control is largely BS in my opinion. Inflation will take a breather when oil does and the data is laggy. I expect to see more inflation progress in the next few quarters. FYI, Truflation is showing inflation is at about 1.8%. I think this is more accurate vs the government data. So that shows you where are at in relation to the feds 2% target.

So since EPS growth is VERY strong overall coming in at over 20% YoY and the economy looks ok, the slightly elevated valuations are not as many people make it seem IMO. Yes, I do think we went up a little bit more vs what was justified, but I do not see a bubble right now. So the market should continue up and to the right IN THE LONG TERM because EPS is driving it. If EPS growth collapses… the market will too. Also, keep in mind during big new transformational shifts, there is always HUGE volatility. Ai is bring lots of great things but also some uncertainty too. Volatility should be viewed as a gift to allocate to great companies when they trade at good prices.

So really the main concern is valuations being a little hot. If the market were to fall 10% from here, that would be a very normal and healthy correction back to fair value. But what would happen in that dip is social media will be in a complete panic. Me? I’ll be excited as more deals will be popping up. So I urge everyone to bring your expectations back to earth.

So the plan remains the same. Buy great companies for less than they are worth and only do options to magnify ultra high confidence plays. Keep ratios in check to be fine in 40%+ market crashes. Always. I expect lots of volatility in the coming years as all major new waves (Ai wave now) bring uncertainty. Keep your pants on and keep emotions in checks there has never been a better time to be an investor!

Q2 earnings fires up in a few weeks and I will be covering it along with everything else in discord in real time as always!

That’s my thoughts for this week.
See you next week!

-Brandon

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Economic/Earnings Calendar For June 29 - July 3
(all times in pst)

Monday June 29:
See how market reacts to Iran volatility

Tuesday June 30:
6a Home Price Index
7a JOLTS Job Openings
Nike Earnings (post market)

Wednesday July 1:
5:15a ADP Employment Report
6:45a Manufacturing PMI
7a Construction Spending

Thursday July 2:
5:30a Jobs Report
5:30a Initial/ContinuedJobless Claims
7a Factory Orders

Friday July 3:
U.S. Stock Market Closed (Independence Day Observed)

Everything will be broken down in real time in Discord!