Why U.S. Stocks Are Flashing Code Red

Stansberry Investor Hour

Stansberry Research

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4.4 • 677 Ratings

🗓️ 25 September 2023

⏱️ 65 minutes

🔗️ Recording | iTunes | RSS

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Summary

On this week's Stansberry Investor Hour, Dan and Corey are joined by Joel Litman, the founder of our corporate affiliate Altimetry. But first, Dan and Corey kick off the podcast by discussing the latest Federal Reserve meeting, a recent study about what happens to stock price when artificial intelligence ("AI") gives answers at earnings calls instead of humans, and the emergence of a robot CEO for a rum company. (00:00)

Next, Joel joins the conversation and gives the reasons for his growing bearish sentiment. He points out some significant red flags that have caught his and his fellow analysts' attention, including the historical pattern of a credit crisis preceding every major bear market. Joel explains that the current sentiment and valuation trends are heading in the wrong direction. (16:42)

Joel then moves on to the impact of high interest rates on the market. He explains that he and the folks at Altimetry employ "Uniform Accounting" principles, meaning they do not use the same price-to-earnings multiples as Bloomberg or CNBC. Instead, they perform their own calculations. Joel argues that, to control inflation, interest rates need to be maintained at a level higher than what Fed Chair Jerome Powell seems to favor. (20:56)

Finally, Joel discusses U.S. stocks being overallocated in investors' portfolios today and why this serves as a concerning indicator of market conditions. Plus, looking globally, he details why he finds Chinese and Russian stocks unattractive for investment. (37:36)

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Transcript

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0:00.0	Hello and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and the Ferris Report, both published by Stansberry Research.
0:09.1	And I'm Corey McLaughlin, editor of the Stansberry Daily Digest. Today, Dan interviews Joel Littman, founder of Altimetry Research.
0:17.0	And today, Corey and I will talk about, of course, the Fed meeting recently, but we'll also talk about chat GPT and the new robot CEO.
0:28.6	Looking forward to that. And remember, if you want to ask us a question or tell us what's on your mind, email us at Feedbackandinvestorhour.com.
0:37.0	That and more right now on the Stansberry Investor Hour.
0:42.4	Okay, so we got to talk about the Fed because it's like an elephant in the room and
0:47.1	everybody wonders about it and doesn't mean anything, et cetera, et cetera, et cetera.
0:50.6	I think it kind of does mean something because I think Jerome Powell is crystal
0:54.2	clear. He's finally beating it into people's heads. Don't think about cuts. We've got at least one more
1:01.6	hike coming in 2023. Maybe next year, higher for longer into 24 and 25. So just chill out. Yes. It seems like to me, based on, you know,
1:15.1	the price action last week, that was reflected in the moves last week. Stocks at a rough week,
1:21.0	bond yields up again, the dollar up again. So it's more of that same hire for longer story.
1:27.0	If you look at the futures, the Fed Fund's futures, it's more of that same hire for longer story. If you look at the the futures, the Fed Fund's
1:29.2	futures, it's kind of they've are pricing in 50 less basis points of hikes next year and pushing
1:39.6	back the expectations for cuts the second half of next year. So yeah, that's that's to me what I saw
1:46.2	happening off of that Fed meeting, which in and of itself, as I mentioned to you just before here,
1:51.6	it was a plate of hot garbage to me in terms of the messaging. It was just a mixed bag of
1:57.7	messaging from what they were saying and then the projections that they put out which was
2:03.4	one of those quarterly meetings where they did projections it was just a little confusing as if you
2:08.9	know as as we've come to expect here from the projections of the fed so yeah the summary of economic
2:16.8	projections right i've actually i read it once of the Fed. Yeah, the summary of economic projections,
2:18.0	SEP.
	...

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