• Current read is 39 on the fear greed index vs 37 last week.

• Iran, Oil, Inflation, AI, Interest rates, Capex, Mid terms, Q2 earnings… The market has a lot to “worry” about. That being said, the SP500 is within a few percent of ATH. We are not in fear now. This is neutral IMO. Everyone needs to relax.

• 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 increased to 6.72% Today, vs 6.48% last week.

• 10 year treasury bond yield increased to 4.68% Today, vs 4.55% last week

• 2 year treasury bond yield increased to 4.33% Today, vs 4.18% last week.

• The Iran/Oil situation is making the market nervous and pricing in rate hikes from the fed. I think the market is getting this wrong and I think we hike a max of 0.25%. Not the 0.5% to 0.75% like the market is pricing in.

• 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.

The Market Needed To Take A Breather

What’s going on everybody.

The market has been a little bumpy recently, but honestly, that should not shock anybody.

We had a huge move off the lows in April. The Nasdaq ripped higher. A lot of AI names went straight up.Then the market finally pulls back a little bit and everyone starts acting like the world is ending. Margin calls are happening somehow and many people are down 30 or even 40%+ despite the SP500 being within a few percent of ATHs…

This is just normal stock market volatility!
Everyone always tries to get mental closure and “blame” something. Dude… The market ran up A LOT! More than the fundamentals justified… This is ok & healthy. We knew this was coming.

The big thing I want people to remember is that stocks are not just tickers on a screen. They are REAL businesses.

When a stock is down on Friday and up on Monday, that does not mean the actual business changed that much over the weekend. Most of the time, it is just Mr. Market being emotional and trying to figure out how to price everything.

In the short term, price and business value can be totally disconnected.
In the long term, the stock is going to follow the fundamentals.

That is why I try not to stress about day to day moves. I care way more about earnings, margins, interest rates, valuations, and whether the business is actually getting better or worse.

Right now, there is a lot going on.

We have AI. We have earnings season. We have interest rates. We have inflation data. We have oil. We have the Fed. We have a bunch of companies reporting numbers. So it makes sense that the market is bouncing around a little bit.

But the main thing I am seeing right now is that earnings are still strong.

Q2 earnings season is underway and so far, the numbers have been pretty good. A lot of companies are beating expectations, profit margins are still strong, and earnings growth is still moving in the right direction.

Now, I do want to be careful here.

Some of the earnings growth numbers are a little messy because a few giant companies have accounting gains that can make the numbers look better than they really are. So you cannot just look at the headline number and say, “Everything is perfect.”

You have to understand what is actually driving the number.

That is why I spend so much time inside Discord breaking this stuff down in real time. The headline usually does not tell the whole story.

But even after you adjust for some of the weird accounting stuff, earnings growth still looks good.

That is the part that matters & is the real signal!

The market is not screaming cheap right now, but I also do not think we are in some giant bubble. I think the market is somewhere around fair value, maybe a little expensive, maybe a little opportunistic in certain areas.

It really depends on what you are looking at.

Some stocks are expensive.
Some stocks are fair.
Some stocks are starting to get interesting again.

The other thing people need to understand is that opportunity does not show up every single day. Sometimes the best thing you can do is nothing.

I know that is boring.
Nobody wants to hear that.

People want trades. They want action. They want something exciting. But we are not here for entertainment. We are here to make money.

There is a big difference.

If you want entertainment, the stock market will gladly take your money and give you a dopamine hit. But if you want to actually build wealth over time, you need patience.

Continue to buy good companies for less than what they are worth.
Do 1+ year portfolio secured puts when it makes sense.
Keep your risk in check.
Do not chase hype.
Do not panic on normal pullbacks.
Do not force trades just because you are bored.

The market is only down a little bit from the highs. We are not in some crazy crash right now. If this little pullback already has people panicking, they are not ready for what the stock market can actually do.

And I do not say that to be mean.
I say that because it is true.

The market is going to have ugly periods. It is going to have scary days. It is going to have weeks where nothing feels good. That is part of investing.

But those are also usually the moments where the patient investor gets rewarded.

My view right now is simple.
I still think the long term setup for the market is good.
I still think AI is going to help companies become more efficient over time.
I still think earnings are strong.
I still think there will be volatility.

And I still think the people who stay patient, stay disciplined, and focus on great businesses are going to do well over the next 3 to 5 years.

That does not mean every week is going to feel good.
That does not mean every stock goes up.
That does not mean there will not be pullbacks.

But when I close my eyes and think about where a well built portfolio can be 3 to 5 years from now, I still think they are likely a lot higher. (no guarantees)

The steps we take right now are the boring steps that matter to get from A to B & make money.

Keep your emotions in check.
Keep your risk in check.
Do not do anything stupid.
And remember that the money is usually made in the patient long game.

Simple and to the point this week!
See you next week!
- Brandon

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Economic/Earnings Calendar For July 27 - July 31
(all times in pst)

Monday July 27
5:30a Durable Goods Orders
Applied Digital Earnings (post market)
Celestica Earnings (post market)
Cadence Earnings (post market)

Tuesday July 28
5:30a Advanced Trade Balance
7a Consumer Confidence
Paypal Earnings (premarket)
Coca Cola Earnings (premarket)
UPS Earnings (premarket)
Boeing Earnings (premarket)
Visa Earnings (post market)
Seagate Technology Earnings (post market)
Bloom Energy Earnings (post market)

Wednesday July 29
11a Fed Interest Rate Decision
11:30a Kevin Warsh (fed chair) Press Conference?
Sofi Earnings (premarket)
Vertiv Earnings (premarket)
Meta Earnings (post market)
Microsoft Earnings (post market)
Robinhood Earnings (post market)
Arm Holdings Earnings (post market)
Qualcomm Earnings (post market)
Starbucks Earnings (post market)
Lam Research Earnings (post market)

Thursday July 30
5:30a Q2 GDP
5:30a PCE Inflation
5:30a Personal Income & Spending
5:30a Jobless Claims
Mastercard Earnings (premarket)
Apple Earnings (post market)
Amazon Earnings (post market)
Reddit Earnings (post market)

Friday July 31
Chevron Earnings (premarket)
Exxon Mobil Earnings (premarket)

Everything will be broken down in real time in Discord!