Alpha Report Issue #98

• Current read is 54 on the fear greed index vs 53 last week.

• I think this should be closer to 65, so still greedy IMO.

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

• Market Greedy = Potential Over Valuation. (consider buy puts/sell calls/sell shares)

• I like to be bullish when there is extreme fear

• I like to be bearish when extreme greed.

• So right now, I am being VERY careful!

• Opportunity will come. BE PATIENT!

• 30 year fixed mortgage rate falls at 6.10% Today, vs 6.11% last Sunday.

• 10 year treasury bond yield flat at 4.07% Today, vs 4.07% last Sunday.

• 2 year treasury bond yield climbs to 3.56% Today, vs 3.50% last Sunday.

• Interest rates didn’t move too much this week as we approach the feds meeting to potentially cut rates.

• Remember, as interest rates/bond yields DECREASE, stocks become MORE attractive because bond yields go DOWN which makes the risk free bond look LESS attractive.

What’s up everyone!
Hope you’re having a great weekend!

Let’s break down what’s going on right now:

• We got more confirmation this week that the economy is slowing down & now all eyes are on Jerome Powell and the Fed.

• The jobs data was weak again. Nonfarm payrolls only added about 22,000 jobs in August, and past months were revised lower.

• Unemployment ticked up to 4.3%.

• That’s not “catastrophic”, but it’s a clear sign the labor market is losing steam.

• Bond markets reacted instantly & yields dropped across the board, and investors are now fully pricing in a 25-basis-point rate cut at the Fed’s meeting this week.

• There is a chance being priced in of a 50 bps cut, but with inflation still a little sticky, Powell is more likely to take the smaller step.

• Here’s the catch: that cut is already priced in. If Powell delivers the 25 bps but hints at fewer cuts ahead, stocks could actually pull back.

• On the other hand, if he sounds more dovish, risk assets may rip higher.

• It’s all about the guidance baby!!!

So what does this mean for us as investors?

1. Fixed income is still attractive… but don’t wait. Even with yields coming down, Treasuries, CDs, bonds, & fixed products still offer food risk/reward. Especially since the stock market is fundamentally expensive, it makes sense to be more diversified in fixed assets now and collect cash flow until better deals pop up. If the Fed keeps cutting, those yields won’t be around for long. But as I have said 9 million times, interest rates are gravity on the stock market. So if rates fall quite a bit, this helps justify the markets lofty valuation. Time will tell, but I am watching closely!

2. Refinancing might become the money move of the year. If you bought a home in the last couple years, odds are you locked in a high mortgage rate. With borrowing costs sliding, this could be the window to refinance and free up serious cash flow. I have a few rental properties that I will plan to refinance, but I am waiting for rates to hopefully fall more.

3. Stocks are priced for perfection. The S&P is still hovering near highs, led by big tech. But valuations leave little room for error. If earnings soften or the economy dips harder than expected, stretched multiples could snap back fast and the market will likely correct lower. Understand what you own, why you own it, at what valuation level, and your minimum hold period. This will keep you out of trouble vs just chasing the hot stock.

4. IPOs are coming in HOT. When markets are lofty, companies rush to go public. High valuations let them raise more money while giving up less ownership. But that surge in IPOs is also a sign of froth… we saw it in 2000 and again in 2021. Some IPOs work out, but many hit the market overpriced. A busy IPO calendar usually means optimism is running ahead of fundamentals.

The bottom line: The Fed is walking a tightrope. Cut too little, and the slowdown deepens. Cut too much, and inflation reignites. Valuations are lofty, but if growth continues, the show may go on. I will cover more about this in my YouTube that I upload later today.

Unconventional Take:
Bonds (and even private credit) deserve attention.

For the first time in years, bonds are offering real yields worth locking in. If the Fed keeps cutting, today’s yields could look generous in hindsight. Treasuries and high quality corporates not only provide steady income, they also act as ballast if stocks wobble. Also, if yields fall, prices go up. So there is opportunity to capitalize here potentially.

For investors looking beyond the public markets, private credit has been gaining traction. With banks pulling back on lending, private funds are stepping in often with attractive yields. It comes with more risk and less liquidity, but for those who can stomach it, private credit can be a powerful diversifier alongside traditional bonds.

A Quick Note — New Client Openings

A lot of you ask me what I actually do beyond the InvestingWithBrandon X, Youtube, & this newsletter.

The short answer: I ensure my clients navigate the world of finance & investing with clarity & capitalize on the major opportunities right in front of us.

For my wealthier clients, that means navigating market volatility without losing sight of opportunities. For busy professionals, it’s about creating a path out of the 9–5 grind so money works for them… not the other way around. For parents, it’s about protecting your family’s future while leveraging investing to gain more time with your kids and the freedom to live on your own terms.

I’ve got a few spots left to take on new clients at my advisory firm.

Here’s what we cover together:

• Comprehensive Financial Planning - a full 360° approach that ties together your investments, cash flow, insurance, taxes, and estate plan so every part of your financial life works in sync.

• Investing & Asset Management — building portfolios that match your goals

• Cash Flow Planning — making your money work harder

• Insurance — life, disability, and protection strategies

• Estate Planning — making sure your family is taken care of

• Tax Strategy — keeping more of what you earn

• Private Equity & Private Credit — unique opportunities that can make sense in today’s market

If you’ve been thinking about getting your financial plan in order, now’s the time. Click the button below to set up a free meeting with me and my team 👇️