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Speaker 1: This episode is brought to you by P and C Bank.

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Speaker 1: A lot of people think podcasts about work are boring,

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Speaker 1: National Association Member FDIC.

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Speaker 2: So let's talk about some other economic factors. The jobs

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Speaker 2: report was canceled for the first time in our instruy.

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Speaker 2: So what does this say that amongst other things, but

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Speaker 2: what does it say about the state of the economy

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Speaker 2: and what's your thoughts on where we're headed into twenty six?

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Speaker 3: Yeah, the fact that we haven't gotten the government jobs data,

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Speaker 3: that is troubling for you know, business journalists like me

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Speaker 3: on the one hand, but we're getting so much data anyway.

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Speaker 3: We get great stuff from ADP every month on the

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Speaker 3: private payrolls. I think that tells you a lot more

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Speaker 3: than the BLS survey of households and businesses, when they

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Speaker 3: literally calling tens of thousands of them on the phone

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Speaker 3: and emailing and saying are you hiring? How many people

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Speaker 3: are you hiring? Are you planning to hire in the

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Speaker 3: next three months. They do it in the first two

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Speaker 3: weeks of every single month, so by the time you

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Speaker 3: get it anyway, it's already three weeks late, and it's

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Speaker 3: based on a certain extrapolation.

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Speaker 4: Of all those phone calls and emails.

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Speaker 3: So I never thought it was that exact, and it

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Speaker 3: was getting muddier by the second getting everything that was

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Speaker 3: going on in the labor.

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Speaker 4: Department with the Trump administration.

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Speaker 3: So the economy, I think, is in better shape than

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Speaker 3: people think, and certainly than the way people feel. People

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Speaker 3: feel terrible about the economy right now. Consumer confidence, guys,

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Speaker 3: as you know, is almost as low as it was

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Speaker 3: during the Great Financial Crisis, and we're in much better

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Speaker 3: shape than we were back then. Just people feel terrible

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Speaker 3: because inflation, they feel it's coming even going to come

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Speaker 3: even more in twenty twenty six, especially in the form

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Speaker 3: of higher healthcare payments and healthcare premiums. They feel like

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Speaker 3: prices have gotten out of control, that nobody can control it,

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Speaker 3: so they blame the government and they blame corporations for that.

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Speaker 3: But in reality, if the unemployment rate really is somewhere

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Speaker 3: between four point four and five percent, that's still relatively

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Speaker 3: low right now. Wages has been increasing like three and

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Speaker 3: a half to four percent, that's decent. We are hearing

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Speaker 3: about growing, drumming about more layoffs and you know the

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Speaker 3: AI fears about it taking people's jobs. Those are significant

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Speaker 3: and just that psychology can weigh in on people. But

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Speaker 3: we continue to spend because that's what we're really good at,

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Speaker 3: is consumers. And as long as we're doing that, and

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Speaker 3: you have all these you know, multi trillion dollar companies

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Speaker 3: pledging to spend tens hundreds of billions of dollars with

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Speaker 3: each other, that's driving the other part of the economy.

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Speaker 4: Economic growth is going to be there.

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Speaker 3: Economic growth is going to be there with lower interest

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Speaker 3: rates next year, and we're going to hear that on

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Speaker 3: Wednesday when the Fed comes out with its decision, which

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Speaker 3: will probably lower rates by a quarter point, but it'll

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Speaker 3: signal through the dot plot it's you know, it's sort

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Speaker 3: of summary of where FED governors think interest rate should

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Speaker 3: be a year from now, that they're going to be

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Speaker 3: probably a full percentage point lower one year from now.

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Speaker 3: So this combination of lower interest rates in the economy

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Speaker 3: not falling off a cliff, and tariffs being more smoke

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Speaker 3: than fire really at this point in time, and corporate

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Speaker 3: profits are growing. All these things signal the fact that

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Speaker 3: the economy is probably going to grow and might be

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Speaker 3: actually okay, although people on the low end of things

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Speaker 3: are not going to feel it, and they never do.

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Speaker 3: They're just going to feel worse as the investing class

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Speaker 3: does even better.

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Speaker 5: I saw you on your skateboard today talking about the

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Speaker 5: Fed dut plot. I appreciate that that content. So there

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Speaker 5: was a report today all over the weekend when they

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Speaker 5: were talking about the Max seven and how it's had

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Speaker 5: this amazing run and at some point the reality check

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Speaker 5: is going to happen, and some analysts are saying it

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Speaker 5: will happen in twenty twenty six. The same analyst was

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Speaker 5: saying that the S and P is going to have

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Speaker 5: a great year next year. I find it kind of

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Speaker 5: hard to figure out how the two things are going

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Speaker 5: to work, right, if the max seven you're talking about

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Speaker 5: some of the biggest companies, these big hyperscales the MAX

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Speaker 5: I think they make up thirty five to thirty six

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Speaker 5: percent of the SMB. So if those don't do well,

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Speaker 5: how do we see the rest of the S and

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Speaker 5: P picking up that lift and saying, all right, we'll

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Speaker 5: carry the market from here.

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Speaker 4: What are your thoughts on this? Yeah, great question, And

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Speaker 4: you guys know this well.

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Speaker 3: If you look at the S and P five hundred

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Speaker 3: versus the equal weight S and P five hundred, Remember

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Speaker 3: the S and P.

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Speaker 4: Five hundred is market weighted.

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Speaker 3: The biggest stocks weigh the most and account for the

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Speaker 3: biggest part of the index like in video, Microsoft, Meta, Amazon, Apple,

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Speaker 3: you name it. But if you just take an equal weight,

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Speaker 3: it is underperforming the SMP five hundred by a fair amount,

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Speaker 3: by about ten percent this year. But what we've seen lately, guys,

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Speaker 3: which is I find very interesting. After that five percent

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Speaker 3: pull back a few weeks ago, which seems like forever ago, now,

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Speaker 3: the market rebounded almost almost to where it was. We're

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Speaker 3: about one percent away from all time highs. And in

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Speaker 3: that rebound, we saw with the technical analysis like to

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Speaker 3: call breath thrust sounds like a fencing term, but what

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Speaker 3: it really is is a majority of stocks rallying at

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Speaker 3: the same time, right, And that's what you want to

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Speaker 3: see in a healthy bull market. You want to see

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Speaker 3: a lot of stocks rallying, not just ten stocks, twenty

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Speaker 3: stocks rallying into to make the market make new heis,

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Speaker 3: And that's really what it was with all these big

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Speaker 3: megacap tech socks and AI socks. Now you're seeing better breath,

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Speaker 3: and you're seeing better breath in sectors that actually matter.

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Speaker 3: You're starting to see a little bit in commodities because

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Speaker 3: interest rates are cooling out a little bit on the

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Speaker 3: short term. You're starting to see it in healthcare, which

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Speaker 3: we haven't seen in a long time. You're starting to

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Speaker 3: see it in financials because lower rates are coming. That's

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Speaker 3: going to be good for them in terms of their

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Speaker 3: net interest margins. So you're seeing broader participation in the market,

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Speaker 3: and that's a healthy sign of a bull market in

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Speaker 3: its fourth year. And this bull is getting a little

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Speaker 3: bit tired. That said all, we're going into a midterm

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Speaker 3: election year. Those are always a little volatile, but the

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Speaker 3: trend is up until the right, especially with lower interest

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Speaker 3: rates on the horizon that power small to mid cap

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Speaker 3: stocks and sectors outside of megacap tech. That's actually good

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Speaker 3: news for momentum. I'm not saying we're going to get

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Speaker 3: another eighteen nineteen percent year. Probably will get annoy normal

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Speaker 3: a year unless something terrible happens.

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Speaker 6: Do you to follow up in Short's question, do you

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Speaker 6: think we have a reformulation of the MAX seven Well,

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Speaker 6: do you think it'll be a consolidation into five or

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Speaker 6: do you think they'll keep the MAX seven and just

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Speaker 6: change the waiting in the structure of it.

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Speaker 3: I think just by the nature of investor preference, it'll change.

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Speaker 3: As you know, you've seen investors, especially big investors like

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Speaker 3: Berkshire Hathaway another stocks like Apple, But the leadership is

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Speaker 3: still the leadership and the biggest stocks in the index

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Speaker 3: right now.

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Speaker 4: So you know MAX seven.

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Speaker 3: I think that was Kramer who came up with that term,

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Speaker 3: along with Fang to come up with a name for that.

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Speaker 3: It's really ben as you guys know, more like you

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Speaker 3: know a dozen stocks and you named a few that

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Speaker 3: were a real part of the rally or the oracles

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Speaker 3: of the world, the sales forces of the world. They

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Speaker 3: were a big part of that rally as well. Anybody

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Speaker 3: that was tied to the AI build out and has

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Speaker 3: a big market cap was useful and helpful in bringing

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Speaker 3: the market to record highs eighteen times already so far

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Speaker 3: this year. But you'll get a broadening out of participation

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Speaker 3: and you're seeing stocks making record highs. You know, you're

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Speaker 3: seeing the banks start to roll back and the record highs,

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Speaker 3: the JP Morgans and Goldman's, those were dancing our record

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Speaker 3: high So when you see financials doing well and you

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Speaker 3: see starts to see other sectors rallying along with it

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Speaker 3: outside of tech, that's a good sign. So I you know,

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Speaker 3: you'll you'll always have leadership. But well, we'll come up

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Speaker 3: with a new name in the next year or two

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Speaker 3: whatever next group of stocks outperforms the rest of them.

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Speaker 5: Yeah, we got to figure out how to get broad

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Speaker 5: Common to your seven side there.

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Speaker 4: Yeah, Broadcom has been an outstanding stock. Yeah, also Walmart too.

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Speaker 6: Can I do a follow up? Real quicker shot? The

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Speaker 6: stock is valued of what forty times earnings? They think

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Speaker 6: the stock is up twenty five percent this year? Why

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Speaker 6: do you think Walmart doesn't get the same respect in

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Speaker 6: Amazon may receive even though if you look going back

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Speaker 6: to twenty eighteen, less parts at twenty cents currently a

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Speaker 6: one thirteen fifty six. Despite classification of where they landed,

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Speaker 6: why do you think that they aren't put in that

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Speaker 6: Mad seven or Elite eight type of range.

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Speaker 4: Well, did you notice what just happened in the last

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Speaker 4: couple of weeks? Where did that? What happened with Walmart?

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Speaker 4: What exchange did it move to?

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Speaker 3: It moved to the Nasdaq, great point, right, It's been

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Speaker 3: on the nearest stock exchange forever, right, and it decided

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Speaker 3: that it needed to be listed on a different exchange,

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Speaker 3: the NASDAK. Now why the Nasdaq, Right, that's where the

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Speaker 3: fastest growth stocks in the world live. That's where growth stocks,

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Speaker 3: that's it, that's where you list. And so it wanted

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Speaker 3: to be included in those conversations. So you're not the

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Speaker 3: only one that noticed it. And they noticed it themselves.

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Speaker 3: They are much more than the biggest retailer in the world,

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Speaker 3: and they are that, but they are a logistics company, right,

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Speaker 3: They're a data company, right, that is what they're into

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Speaker 3: these days. And I was just out in Bettonville for

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Speaker 3: the first time. If you guys haven't been out there.

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Speaker 3: First of all, we should go out there and do

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Speaker 3: a market Monday's out there. There's nothing it is outstanding

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Speaker 3: that it blew my mind being in that town and

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Speaker 3: you see the history of Walmart, which is really the

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Speaker 3: history of America, and just just all over the place,

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Speaker 3: in the infrastructure that's around the Walmart trooper centers there,

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Speaker 3: it's phenomenal.

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Speaker 4: So it wants to be a tech company.

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Speaker 3: It wants to be thought of as a growth company,

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Speaker 3: and so it changed where it was listed and maybe

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Speaker 3: able to get that respect because now you've got to

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Speaker 3: include it in the qqqs of the world, right, you

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Speaker 3: got to include it.

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Speaker 4: With growth stocks.

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Speaker 3: Indexes and portfolio managers that own those sectors are going

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Speaker 3: to have to buy it if they.

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Speaker 4: Don't own it already.

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Speaker 3: And it's actually outperformed I was checking this out. It's

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Speaker 3: outperformed the NASAC over the past five years. So it

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Speaker 3: definitely belongs in that exchange and maybe it'll get the

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Speaker 3: respect that it deserves.

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Speaker 2: What opportunities do you see in twenty twenty six.

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Speaker 3: Well, I think this sector rotation is helpful and good.

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Speaker 3: We have all been piled into the same group of

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Speaker 3: stocks forever and it's been great. It's been very rewarding

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Speaker 3: for shareholders. Right, if you picked the five to ten

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Speaker 3: fastest growing stocks in the market, especially in tech, especially

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Speaker 3: in Internet and communications and AI, you have had an

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Speaker 3: incredible run as a shareholder. And no surprise that we

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Speaker 3: have more four to one k millionaires than any time

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Speaker 3: in history. We've all been piled into the same socks.

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Speaker 3: But when everyone's piled into that side of the boat,

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Speaker 3: you can see what happens.

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Speaker 4: We saw, you know, the.

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Speaker 3: NVIDIAs of the world, the Oracles of the world, of Microsoft,

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Speaker 3: the Matters, these were down beyond correction territory. They're almost

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Speaker 3: down in baar market territory. So you've had a healthy

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Speaker 3: valuation resizing there, which is good. But in a lot

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Speaker 3: of ways they've become value stocks or safety stocks.

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Speaker 4: Right.

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Speaker 3: It's either gold or that, right, and it all depends

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Speaker 3: on the equity risk premium for investors right now. So

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Speaker 3: I think you're going to see a rotation into a

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Speaker 3: little bit more defensive, but also a little bit more

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Speaker 3: broadening into the healthcare sector. As I mentioned earlier, biotech

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Speaker 3: finally caught a bid and then smaller down the market

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Speaker 3: value chain as you get into the midcaps and the

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Speaker 3: small caps that are going to benefit from lower interest rates.

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Speaker 4: There's a lot of.

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Speaker 3: Good companies there that are doing business in a way

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Speaker 3: that's not necessarily tearff sensitive, that are operating great businesses.

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Speaker 3: So I watch midcaps. You can buy the MidCap ETFs

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Speaker 3: if you want, or you can buy the small caps.

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Speaker 3: You have to get some exposure to.

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Speaker 2: Explain because some people might not be familiar from your website.

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Speaker 2: Can you explain the difference when you say mid caps

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Speaker 2: small cap?

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Speaker 4: Oh? Sure, large cap? Yeah, small cap stocks.

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Speaker 3: We're talking like five billion to ten to fifteen twenty

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Speaker 3: billion in marketcap, right, and market cap means the stock

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Speaker 3: price time, the amount of shares outstanding. The more shares outstanding,

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Speaker 3: the bigger your stock price, the higher your market cap.

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Speaker 3: And videov obviously the biggest of the mar of the

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Speaker 3: companies in the world in terms of market caap. Mid

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Speaker 3: caps are more in that twenty five I would say,

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Speaker 3: two hundred billion dollars market cap range. And these are

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Speaker 3: manufacturing companies, these are financial services companies. Some of these

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Speaker 3: are even tech companies or working on the fringes of

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Speaker 3: AI or on the fringes of semiconductors, and they have

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Speaker 3: fabulous businesses that are super profitable, and right now, you

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Speaker 3: want to have very strong profit margins. If you are

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Speaker 3: a publicly traded company, this matters more than anything revenue

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Speaker 3: per employee, how much productivity are you squeezing out of

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Speaker 3: your labor force, how are you using a AI to

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Speaker 3: do that, and how is that powering your profit margins

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Speaker 3: and your profits Because at the end of the day,

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Speaker 3: as investors, that's what we're paying for. Grow your profits

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Speaker 3: because it's going to be reflected in your share price

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Speaker 3: and in the dividends you pay back to investors. So

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Speaker 3: in that mid cap range, they're going to benefit from

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Speaker 3: lower interest rates because these companies borrow a lot of

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Speaker 3: money and as rates go down and they refinance their debt,

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Speaker 3: that eases the stress on their balance sheets and they're

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Speaker 3: more profitable and that's usually a benefit to shareholders. So

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Speaker 3: I would look down down the chain a little bit

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Speaker 3: as well.

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Speaker 2: And then large cap did you talk about large gap?

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Speaker 3: Yeah, large cap are the biggest companies in the world.

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Speaker 3: The two hundred billion to now five trillion megacap, Oh mega,

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Speaker 3: those are megacaps. Those are the one trillion to five trillion.

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Speaker 3: Large cap would be the two hundred billion to one

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Speaker 3: trillion dollars in market CAAP now, but that you know,

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Speaker 3: those ranges have expanded over time because we live in

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Speaker 3: the land of the giants.

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Speaker 5: You had to update Invesclopedia because we didn't have a

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Speaker 5: trillion dollar company until like recently. You're right, I gotta

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Speaker 5: all get right now that I want it because you

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Speaker 5: sit in a unique seat and we're trending towards the

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Speaker 5: end of the year. I wonder from a retail investors side,

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Speaker 5: what are you seeing in people searching?

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Speaker 3: Like?

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Speaker 1: What are the things that people are looking into? I

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Speaker 1: know there's a lot of talk of recession and what

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Speaker 1: the future is going to look like? Becker, what are

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Speaker 1: those trends that you're seeing from the investorpedia side that

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Speaker 1: retail investors or any investor really is looking forward to.

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Speaker 1: On your site, Earners, what's up? You ever walk into

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Speaker 1: is fast, or seats are digital, tipping is a breeze,

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Speaker 1: and you're out the door before the line even builds.

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Speaker 1: Odds are they're using Square? We love supporting businesses that

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Speaker 1: run on Square because it just feels seamless, whether it's

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Speaker 1: a local coffee shop, a vendor at a pop up market,

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Speaker 1: or even one of our merch partners. Square makes it

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Speaker 1: easy for them to take payments, manage inventory, and run

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Speaker 1: their business with confidence, all from one simple system. One

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Speaker 1: of the things we love most is seeing neighborhood businesses

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Speaker 1: level up. Dises's West Indian Spired writing our community that

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Speaker 1: kind of growth that inspires us, and it's powered by Square.

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Speaker 1: Square is built for all types of businesses, from the

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