WEBVTT - Market Trends: Predicting 2025 Through Historical Patterns

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<v Speaker 1>Earners. What's up.

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<v Speaker 2>to you by P and C Bank, a lot of

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<v Speaker 3>The SMP last year did twenty five percent, and twenty

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<v Speaker 3>twenty three it did twenty six percent, So back to

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<v Speaker 3>back twenty five percent years. Now, you know how many

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<v Speaker 3>times in history the S and P has done over

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<v Speaker 3>twenty percent three years in a.

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<v Speaker 4>Row, very rare, the late nineties out, which is my

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<v Speaker 4>start in the business.

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<v Speaker 1>I can't think of another example.

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<v Speaker 3>One, yeah, exactly, one time ninety five, ninety six, ninety seven,

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<v Speaker 3>one time in history that it's ever done that. And

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<v Speaker 3>then presidential cycles. The first year of a presidential cycle

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<v Speaker 3>usually is a weak market. The second year is a

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<v Speaker 3>bad market, third year is a great market, in the

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<v Speaker 3>fourth year is a good market. Okay, So that those

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<v Speaker 3>two things that I just named are not good for

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<v Speaker 3>the market in twenty twenty five, But we also have

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<v Speaker 3>a historical presidential cycle, historical presidential candidate that has been elected.

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<v Speaker 3>It's a lot of things that traditionally might might not

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<v Speaker 3>have happened that can happen this year. But history would

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<v Speaker 3>point that this would be a down year in the market,

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<v Speaker 3>or at least a down year compared to the last

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<v Speaker 3>two years. What are your thoughts on that?

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<v Speaker 4>So I think I think it's it's too complex to

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<v Speaker 4>take you know, three or four historical examples that we have,

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<v Speaker 4>because guys keep in mind, like we're not playing with

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<v Speaker 4>a thousand years worth of data. We're playing with We

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<v Speaker 4>use CRISP database, so we have like one hundred years.

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<v Speaker 4>We have ninety nine years worth of stock market data

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<v Speaker 4>that we would consider it to be reliable. When you

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<v Speaker 4>see people do studies on stock market performance, most of

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<v Speaker 4>those studies start in nineteen twenty six, because that's like

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<v Speaker 4>where the reliable data that we have on stocks really starts.

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<v Speaker 4>You'll see a lot of studies begin in nineteen fifty

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<v Speaker 4>nineteen fifty, which is the earliest that we can really

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<v Speaker 4>take like S and P five hundred data, So we

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<v Speaker 4>I just I would say, we don't have a big

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<v Speaker 4>enough sample set to know that the presidential cycle or

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<v Speaker 4>the amount of years with back to back double digit

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<v Speaker 4>returns are enough to make a definitive statement. But I

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<v Speaker 4>don't ignore it, and I'm with you, guys, It's definitely

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<v Speaker 4>something to be aware of. There's a couple of distinctions here, though.

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<v Speaker 4>The first is the FED is easy. We're in the

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<v Speaker 4>first ball markets that's ever started while the FED was

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<v Speaker 4>raising rates.

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<v Speaker 1>I don't know. I don't know if you know that.

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<v Speaker 4>So like, it's a really unique situation that we're in,

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<v Speaker 4>and we don't know how many FED rate cuts there

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<v Speaker 4>will be this coming year. I think the market is

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<v Speaker 4>forecasting two or three. Let's assume it's just two. They're

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<v Speaker 4>not raising rates. We don't think they're going to have

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<v Speaker 4>to raise rates. The labor market slack that we now

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<v Speaker 4>have the amount of people who are having difficulty finding

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<v Speaker 4>the job, credit card delinquency rates, all of these things

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<v Speaker 4>are taking higher, which I think keeps the FED from

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<v Speaker 4>scaring the market about you know, staying high or raising.

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<v Speaker 4>So now we know we're getting cuts, we just don't

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<v Speaker 4>know how many, and we don't know what the timing

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<v Speaker 4>will be, so that throws a wrinkle in that. The

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<v Speaker 4>second thing is that are growing. We should see eight

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<v Speaker 4>percent earnings growth this year.

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<v Speaker 1>It would be pretty rare.

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<v Speaker 4>To find ourselves in a in a bear market so

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<v Speaker 4>long as the feed is cutting and earnings are growing.

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<v Speaker 1>So I think it's I think it's not going to

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<v Speaker 1>be simple.

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<v Speaker 4>This particular president wants to make a lot of noise

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<v Speaker 4>about tariffs. He kind of wants to have a clean

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<v Speaker 4>slate with all of our trading partners and start over

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<v Speaker 4>as though there are no presidents and just like see

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<v Speaker 4>what he can get so that he can tweet about

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<v Speaker 4>it like it's.

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<v Speaker 1>A whole different world.

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<v Speaker 4>I think the tariff announcements are going to introduce more

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<v Speaker 4>volatility in the first quarter of this year. So I

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<v Speaker 4>use the term landmine potential landmine before about in video's

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<v Speaker 4>earnings call. Another potential landmine is how vocal Trump wants

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<v Speaker 4>to be about tariffs, even if they don't start implementing

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<v Speaker 4>them in the first couple of months, just talking about it.

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<v Speaker 4>I think if you look at twenty eighteen could definitely

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<v Speaker 4>introduce some volatility.

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<v Speaker 3>So you think it's gonna be a good year for

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<v Speaker 3>the market, I do. Look, I I mean, I'm with you.

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<v Speaker 3>I just I just I'd like to just have you know,

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<v Speaker 3>play Devil's Advocate on this situation.

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<v Speaker 4>Yeah, I'm with you, guys. And and you know, for

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<v Speaker 4>the last fifteen years, I've been reading about the recession

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<v Speaker 4>that's coming. We've we've been in recession two months out

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<v Speaker 4>of the last fifteen years.

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<v Speaker 1>I don't know if most of the viewers even realize that.

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<v Speaker 3>But it's also been unprecedented amount of money that's been printed.

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<v Speaker 1>But that's not the whole time I'm saying fifteen years.

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<v Speaker 4>So look, if if if we say, if we say,

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<v Speaker 4>right now, here are the big pieces to the puzzle

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<v Speaker 4>s and p earnings growth that we think is coming.

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<v Speaker 4>We think about eight percent tech it'll be a huge

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<v Speaker 4>contribution to that.

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<v Speaker 1>But so what.

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<v Speaker 4>And then we think the FED is probably cutting twice,

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<v Speaker 4>maybe even three times. By the way, if the economy

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<v Speaker 4>gets materially worse, that number could be seven times. There,

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<v Speaker 4>you got ten FED meetings this year, nine FED meetings

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<v Speaker 4>this year, So like those things are in our favor.

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<v Speaker 4>What's working against us is a very volatile administration that

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<v Speaker 4>likes to throw out a lot of ideas, some of

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<v Speaker 4>them they don't even follow through with. So I think

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<v Speaker 4>like the right way to phrase how I feel about

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<v Speaker 4>this year is I'm bullish with the expectation of these

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<v Speaker 4>bouts of volatility. Now I also reserve the rights change

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<v Speaker 4>my mind. If these technology companies start warning and lowering guidance,

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<v Speaker 4>all bets are off. We're at twenty one times earnings.

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<v Speaker 4>The only way you stay at twenty one times earnings,

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<v Speaker 4>which is substantially elevated relative to history, is if the

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<v Speaker 4>news flow stays good. You ain't keeping that multiple. If

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<v Speaker 4>the biggest companies in the index start telling you, okay,

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<v Speaker 4>things are still good, they're just not great. So there

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<v Speaker 4>you could a situation where earnings grow but the stock

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<v Speaker 4>market is flat or down because we get multiple contraction

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<v Speaker 4>and people are just will less willing to pay up

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<v Speaker 4>for the earnings that actually materialize. So I try to

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<v Speaker 4>give people both sides and not just present here are

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<v Speaker 4>all the reasons to be invested and not worry.

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<v Speaker 1>I think you should be invested, but also you could

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<v Speaker 1>worry a little bit. That's okay too, that's healthy. Yeah,

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<v Speaker 1>also really quick?

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<v Speaker 3>Can we tell them that twenty five percent should not

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<v Speaker 3>be the expectation for any X.

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<v Speaker 1>If we do fourteen, I think we're happy. You know,

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<v Speaker 1>seven to twelve is.

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<v Speaker 4>A nor If I sat you down at the end

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<v Speaker 4>of twenty twenty one and I said, I don't make

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<v Speaker 4>a deal with you for the next three years, one

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<v Speaker 4>year the S and P will be will close down

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<v Speaker 4>twenty percent, one year up twenty seven, one year up

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<v Speaker 4>twenty five. I can't tell you the order. Would you

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<v Speaker 4>sign up for that? You probably would sign up for that.

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<v Speaker 4>Most people would. Well, that's what we just lived through.

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<v Speaker 5>An illegal alien from Guatemala charged with raping a child

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<v Speaker 5>in Massachusetts. An MS thirteen gang member from Al Salvador

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<v Speaker 5>accused of murdering a Texas man of Venezuelan charged with

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<v Speaker 5>filming and selling child pornography in Michigan. These are just

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<v Speaker 5>some of the heinous migrant criminals caught because of President

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<v Speaker 5>Donald J. Trump's leadership. I'm Christy Noman, the United States

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<v Speaker 5>Secretary of Homeland Security. Under President Trump, attempted illegal border

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<v Speaker 5>crossings are at the lowest levels ever recorded, and over

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<v Speaker 5>one hundred thousand illegal aliens have been arrested. If you

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<v Speaker 5>are here illegally, your next you will be fined nearly

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<v Speaker 5>one thousand dollars a day, imprisoned, and deported. You will

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<v Speaker 5>never return. But if you register using our CBP home

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<v Speaker 5>app and leave now, you could be allowed to return legally.

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<v Speaker 5>Do what's right. Leave now. Under President Trump America's laws,

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<v Speaker 5>border and families will be protected.

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<v Speaker 1>Sponsored by the United States, the Department of Homeland Security,