Alpha Report Issue #99

• Current read is 62 on the fear greed index vs 54 last week.

• I think this should be closer to 70, so 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 climbs to 6.20% Today, vs 6.10% last Sunday.

• 10 year treasury bond yield climbs to 4.13% Today, vs 4.07% last Sunday.

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

• Interest rates moves up a tad this week. Nothing too major.

• As I always say, interest rates are gravity!

• 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!
Here is what we got going on right now.

Let’s Break It Down:

On Wednesday, the Fed cut rates by 25 bps, lowering the federal funds range to 4.00% - 4.25%. This is the first cut of 2025.

In Jerome Powells press conference that followed, he showed concerns for the things below:

• The labor market is weakening

• Job growth has slowed

• Uemployment is creeping higher (4.3%)

• It’s getting harder for people to find work

• Inflation progress has stalled above 2%

• CPI came in at 2.9% yoy in August

• With core inflation at 3.1%.

• Producer prices are also elevated, showing cost pressures are sticking around, which is putting J pow in a tough spot.

• His job is to maintain max employment and stable inflation.

• If he cuts too much, inflation may pop higher.

• If he cuts too little, the economy may take a crap.

• Housing costs remain sticky & this is part of the problem why inflation isn’t back to target.

• J Powell did signaled two more cuts are likely this year, but stressed it’s all “data-dependent.”

• One Fed member (Miran) dissented, pushing for a 50 bp cut, showing internal debate over just how weak the economy is.

• Also keep in mind, Miran was appointed by trump, so of course that’s where the 50bps push will come from.

• Time will tell what happens with the economy & labor market, but the thing we do know is that there will be lots of volatility.

• Be prepared and take a hard look at your portfolio to ensure you are ok with your risk profile.

• There is still lots of opportunity out there, you just gotta be patient and understand what you are exposing yourself to.

Why It Matters for Investors:

• Valuations Remain Stretched – The S&P is still kinda priced for perfection, led by big tech. With earnings risk rising and unemployment ticking up, there’s little margin for error. Understand that everyone is a genius in a bull market. Volatility always happens & it’s often when it’s least expected.

• Labor Market Risk – It’s getting harder for people to find jobs. Maybe some is because of AI, maybe some is cause companies simply don’t need the help. Rising unemployment signals the slowdown is real, which is what J pow seemed worried about at the most recent press conference post rate cuts.

• Fixed Income Window – Yields on Treasuries, CDs, and high corporates remain attractive ish. With more cuts on the horizon, today’s rates may look generous in hindsight. Bonds not only generate steady cash flow but could gain in price if yields fall further. (remember, if yields fall, bond prices go up) So this may be a hedge play, yield play, and appreciation play. Warren Buffett is allocated in this bucket at historically high levels.

• Housing & Refi Boom – Mortgage rates have dropped to the low 6% range, which is the lowest in nearly a year, and refinancing applications have surged over 50% in just one week. If you bought a home or investment property recently at higher rates, refinancing could free up cash flow. But if you think rates will continue to fall, consider waiting so you don’t keep chasing rates down and keep paying refi costs.

• Earnings to Watch – Costco & Micron are the only big dogs this week to watch. I cover the schedule of this below on the economic calendar.

Bottom Line:

The Fed has begun easing, but the economy & valuations are in a delicate spot:

• Growth is slowing.

• Unemployment is drifting higher.

• Inflation progress has stalled.

• Stocks remain priced for perfection.

For investors, this is a time for patience & discipline. Lock in attractive yields while they’re available, diversify your portfolio, and avoid chasing overheated stocks. The best opportunities often come when others PANIC. As I always say, opportunity is coming. When it comes, I strike, and I strike hard.

The Bullish Zone:

• I want to be clear, I am very bullish in the long run.

• Short term will be bumpy though.

• The markets always climb a wall of worry.

• It will never feel “just right”

• Know what you own & why.

• Diversify.

• Yes, the SP500 is my favorite, but that doesn’t mean it’s all I have exposure to.

• Just cause it did great the last 10 years, does NOT mean it will outperform in the 10 years going forward.

• BULLISH LONG TERM.

IF ALL OF THIS IS TOO MUCH & YOU DON’T WANNA DEAL WITH IT, I AM NOW A FINANCIAL ADVISOR AND BRINGING ON NEW CLIENTS.

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.

• That means navigating market volatility without losing sight of opportunities.

• Creating a path out of the 9–5 grind so your money works for you… not the other way around.

• Protecting your family’s future while leveraging investments to gain more time with your kids and the freedom to live on your own terms.

• High net worth & don’t know who to trust? I GET IT! I got you covered too.

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

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• Insurance — life, disability, and protection strategies

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

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