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0:00:02 – Announcer

Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street. 

0:00:16 – Daniel Creech

How’s it going out there? It’s Wednesday, March 12th, and you’re listening to the Wall Street Unplugged podcast, normally hosted by Frank Curzio, and he breaks down what’s really moving markets. He can do that much better than I, but he is out of town. Rest assured he will be back tomorrow, leaving me Daniel Creech, research analyst here at Curzio Research, behind the mic for today’s show. Frank, it’s all his fault. The market sell-off is all Frank’s fault. Every time this guy leaves the Jacksonville area, markets are basically guaranteed to sell off. We ought to buy short-term puts. This one’s on me. I didn’t realize that he was going to leave Jacksonville and be gone for a day or two or miss this podcast, so we email him for this market pullback. I’m kidding, of course, but it does seem to be odd how Frank cannot leave Jacksonville without seeing market fluctuations, usually to the downside. We’re going to decipher all that.

I will break down markets, both stocks and crypto, volatility, the irony and what I believe saves them both, and give you a few checkpoints or deadlines to pay attention to Current market conditions, volatile as can be. Yes, year-to-date S&P 500. This is before this morning’s open. The S&P was down 5% year-to-date. Dow down 2.5%. Nasdaq down almost 8%, small caps getting absolutely wrecked 9% down year to date, although the pain feels even more than that. If you were to ask your typical person or if you were going to bet a beer in a bar and say, hey, is the market down 5% or more year to date, probably people would say more, because we are further from the highs. Of course, the pace of change, the rate of change, how quickly it’s happened, several percentage moves back-to-back days in markets and such all crazy.

Now the market did catch a bone today on the CPI and I’ll switch over here. This is a useful tool, in my opinion from the BLSgov chart and this is just and it’s maybe a little hard to read here on our YouTube channel. I apologize, but the point is we caught a bone because, as you can see from this chart, looking back at the February consumer price index or CPI, this is the consumer price index. This is not core. So remember, core is where you strip out food and energy, but this all items shows that the reading came in at 2.8% running inflation. The good news is that is down, as you can see, from 3%, so we are heading in the right direction. On a year over year basis, this is frozen in time, of course. We’re going to get more data tomorrow in the PPI. We’ll get more data next month. Obviously, we want to see what this happens. I know I’m not providing great value and saying expect volatility, expect all these to bounce around, but the market needed this right now. We’ll see, because we are in this new environment and you ought to expect uncertainty. You ought to expect volatility in everything from markets and asset prices and crypto to even inflation prices. A couple more things to pay attention about with tomorrow’s PPI.

Next week we have the Fed meeting. On Wednesday, fed Chair Jerome Powell will make comments, take questions and such. We want to look and listen for his tone, or dovishness or hawkishness. We know that they don’t pay attention to one reading. They always say that, but remember their goal there, meaning the Fed is 2% inflation. We are currently at 2.8 in core or not core, excuse me in all index items. My point to tell you that is that what if we go sideways for a while? What if we trend higher here and there or lower. The point is we are not anywhere close to 2%. Now. The Fed and Jerome Powell has CYA backed themselves into a corner, covered their bases. However, you want to say this, it’s a difficult game, but they have already said and hinted they’re not going to lower rates. They’re not going to wait to lower rates until they get to their target of 2%. So that leaves it open for all kinds of interpretation and such, which we need.

There is a ton of uncertainty right now in the markets, but I want to explain why. I have some clarity in the markets and I understand I’m going to talk politics here and let me just say this I understand that it makes a lot of you upset, but remember, with politics, we have to talk about it, in my opinion, because policies impact the economy, which is what we’re all concerned about and navigating through here. In my opinion, it is the most important thing for our society. In this sense, remember, we’re not talking about the gospel here, people, we’re talking about markets and such, and I know that a lot of you disagree with me. The only other thing certain when Frank leaves town is the markets are going to sell off.

Typically, I piss somebody off, go ahead, take it out on me, danielkerziaresearchcom. The reason I’m pointing this out is because I’m not telling you how to think. I’m encouraging you to think. I’m going to explain what I’m thinking about, what I’m thinking through and why. You can agree or disagree, I can take it, go ahead, but I’m not trying to convince you of anything, so don’t get angry at something I’m not telling you.

All right, when it comes to this clarity and uncertainty, what I got wrong let’s start out with that was I didn’t think I’m surprised about the rate of the sell-off or how quickly and volatile markets can be, because Trump is being Trump and you can love him or hate him. I’m not trying to convince you of anything, but he’s been running on this and I thought, hey, I didn’t think markets would pull back such as this, this quickly, only because he can always use the bully pulpit jawbone, get people to say things, talk up markets. Hey, you know, all this good news is coming and as long as the market has a thesis or a catalyst, it can be very powerful. You can trade on no news and just ah well, we’ll look forward to earnings and earnings growth and all that, and you can have these melt up and melt down effects. I say all that because on Sunday, this past Sunday, sunday Morning Futures with Maria Bartiromo, she interviewed President Trump and she was trying to pin him down on a recession and tariffs and higher prices and policies and such, and he did what all politicians are going to do he dodged the question on recession.

Hey, do you think there’ll be a recession? Well, I don’t like to predict things like that. All politicians do that. He is a politician, no doubt. The clarity that I have is that they are not watching markets and they are okay with pain because they, in my opinion, the Trump administration, president Trump believes that he can get away with blaming Biden for everything that’s bad until it’s his economy, which I believe and I could be dead wrong, but I believe that starts when he gets legislation through. More on that in a moment. So he dodged the recession question, of course, because you don’t want to ever say, yeah, we may have a recession and it’ll be painful, but we’ll get through it. Just trust us. That’s not how you communicate to voters. I don’t know why. That’s just not the game they play.

The other thing that I thought funny or I chuckled at, but it’s not funny, as in ha-ha is. She was asking him about clarity or uncertainty, and how our business is supposed to respond when tariffs can go up or down 25% tomorrow or yesterday or next week and all these threats and such, and Trump and I’m paraphrasing here but he simply said oh well, they’ll get clarity and they’ll get under certainty, but with tariffs, they could go up tomorrow, maybe they’ll go up in the future, maybe they won’t. I mean literally just talked out of both sides of his mouth on that one and absolutely gave nobody any more clarity except me. Okay, and here’s what I want to get to the reason that I am shifting towards being more bearish for this year. And that is not the sky is falling and sell everything. It is simply listening to what the people in charge are telling you, and I want to take you down this caveat here and just put some bullet points or put some pieces of this puzzle together into how Daniel Creech and my crystal ball is shaping the future in this gray area of probabilities that we live in.

Now there has been and I showed some of these quotes before, but I’ll share them here if you’re following along and I just threw in and pulled these from different AI sources, from Grok to OpenAI and such. But the reason I have clarity is because, if you look at some past comments from President Trump, Secretary of Treasury Scott Besson and even Press Secretary Caroline Levitt I butcher names, I apologize the clarity that I have is again President Trump and again right, wrong, indifferent, doesn’t matter. I think he can get away with blaming Biden for all things bad until he gets his legislation, because he has talked about and again he’s used words like disturbance and there might be a little disturbance, and these are in conversations with tariffs or trade policies and uncertainties and the market’s dropping and all that. And he skips forward through the short-term pain, says hey, long-term it’s going to make our country a fortune on tariffs and reciprocal trading ideas and such. Scott Bessett has said there could be a detox period and, honestly, the person that gives me the most clarity is Treasury Secretary Scott Bessett. And I want to talk about something because he talks about this detox period with different interviews and he’s talked about and this is the biggest thing that I want you to pay attention to with different interviews, and he’s talked about and this is the biggest thing that I want you to pay attention to Bessett is telling you we are going from a transition from a government spending or government focused economy to a private sector growth or private sector focused economy.

That is a massive change and what I want to drill into your heads, what I want you to think about not telling you how to think what I want you to think about is, regardless of whether that transition is going to be good or bad, regardless if that’s going to work, help the majority of the people, help a select few, punish hurt. Whatever. That transition, that journey from one to the other, from a government run or government focused spending economy to a private one, in my opinion, is going to be volatile and painful. How long of a journey, that is, how long that pain lasts, is up for debate. Again, we’re only 5% into a correction year-to-date, a little bit further off the highs.

But Besset said there is no Trump put, meaning markets can continue to fall, trump’s not going to change his policies. That’s what they say. People are going to change all the time, as the song from the 60s. What’s Bob Dylan times? They are a changing, but he is talking about no Trump put, but a Trump call, meaning the call is hey, I would bet on Trump, I would bet on his policies, but that’s after, or those effects are going to be after, legislation’s passed, and then time where that legislation implements itself and you can actually point to and see results through economic data, like we got from the CPI today.

The other reason I have clarity or other comments I want to highlight here is Treasury. Besant has said not only we are going from a government to a private sector, but he’s also talking about manufacturing, and even he used the R word, which I love, not recession. I know that’s what everybody thinks, it’s a swear word, but he talked about regional banks and talked about, hey, we want a strong regional banking community and that is key. I think Mr Bessett is helping the market or trying to foreshadow you or lead you down this path of saying, hey, we’re going to have disturbances, detox, painful periods here. We are going to be transitioning from the past to what we believe is the future, and I think that they are willing to blame Biden until the Fed has to be forced to step in Now. When that happens, who knows? I don’t expect any earth shattering remarks from Fed Chair Powell next week.

Now let me say this I don’t agree with President Trump on how he handles everything. I don’t agree with anybody on anything. Here’s what really pisses me off about politicians, and this is where I can get accused of being a Trump supporter or an anti-Trump. There is nothing new under the sun. And again, love him or hate him, I personally believe, and this is where I could be wrong. But I’m just telling you how I think and why, and you can understand that and think for yourselves. I think that the policies that he is talking about President Trump implementing, which is pro-growth, lower taxes, less regulation, better energy infrastructure I think that is a positive overall. I think if you play or implement that playbook, I think that that is going to be a positive and you’re going to have rising asset prices. I think that’s a bull market. Rising tide lifts all boats for basically every sector. Now, why do I believe that? It’s not because, president Trump, there is nothing new under the sun.

Those are capitalistic ideas, free market ideas, australian theory ideas. Those have been around since economics. Okay, it is not. You shouldn’t favor Trump for coming up with those ideas. If he can implement them, I would give him credit. Now, that’s not to say that other government-run or government-focused bureaucracies and such don’t work. We had record highs in asset prices under President Biden. The point is that I do think that if you can get some of the stuff that he’s talking about and his cabinet members through, I think that will be a positive overall. But the $10,000 question is, when will you see those results? And I don’t think you see those until next year before the midterms. That’s just Daniel Creech’s crystal ball. So that’s kind of how I’m thinking about the next markets. I would look at this as an accumulation period and buy the very best on these rips and dips that we’re going to see. Now. I would focus on regional banks there. I will, tomorrow, in Wall Street Unplugged Premium, I’ll go over a regional bank that I like tease a little bit that. Make sure you check us out on Wall Street Unplugged Premium.

Now a couple of deadlines to move to quickly. Here is House Speaker Mike Johnson was on CNBC this morning and he was very adamant and optimistic about getting legislation through, and I’m going to talk about crypto in just a moment. But the irony here for me is the new catalyst for stocks and the catalyst to help the pain and bleeding and sell-offs in crypto are the same thing, and that is legislation, and what I mean by that is. House Speaker Johnson was on CNBC this morning and he was talking about getting this funding bill so that the government doesn’t shut down. In a couple of days it’s through the House and onto the Senate, so we’ll see how that branches out. Any sell-off on a government fear or shutdown if you can tie a sell-off to a government shutdown fear, I would use that as a buying opportunity. I don’t think the sky is falling there and that’s a rinse and repeat thing.

He then went on to say and they’re trying to get a clean bill through September. That’s important because before September you have the August recess and if you can try to balance and get everything you want, knowing you have until September to worry about anything else, that’s a win, in my opinion, for the party in power, which is Republicans. Speaker Johnson went on to say he expects to try to get a bill to the president’s desk by Easter or by Memorial Day. Now that is much faster and more quickly than the August recess that I have been on par with or thinking through. We’ll see what happens. Washington can delay and kick cans down the road and who knows, but as an investor, I want you to keep those deadlines and write them down and keep them in mind, because the legislation is going to kick off a couple of things Once you get legislation passed.

In my opinion, it is Trump’s economy and, whether or not he takes he won’t take any blame for anything negative, of course, because that’s the way he is but if that bill gets passed, if a bill or legislation gets passed by April or May, that is when you take the hourglass and you turn it upside down and you start that process. You start the timer there, because now those policies, at least you get to the point where you’re pushing chips over and see how they fall, and to me that’s a great situation to be in. Yes, you want them to work out and I want everybody to be more rich and wealthy and all that kind of stuff, but at least you know, hey, is this working or not? And you can judge that and you can see that by checkpoints and looking at data and such. So pay attention to what is being talked about in past, whether or not you agree with that being pro-growth or pro-markets or whatever and look at those deadlines as to when it’s coming, because once it gets passed and it starts to get into the economy and become law, that’s when we have this new, normal or new environment to take off, and quickly. On.

This new environment that I think we are in right now is this sideways to lower markets. I don’t think Trump is going to try to save markets or jawbone, use the bully pulpit to push asset prices up as much as he has in the past, during his first term, until next year in the midterm elections. I could be totally wrong, but listen, the reason I feel like I can provide value here is to try to break down this macro standpoint, and I can be a child and selfish, as anybody Trust me. Okay, and if I put my shoes in politicians, do I agree that Trump is running trade policy and tariffs like children arguing over who’s going to ride shotgun to dinner? No, but that’s the way it is All right. Well, I’m not sitting in the back or I’m not riding in the middle, but this is the largest economy we’re doing.

What 2023? I think the US did 28, 28-ish trillion in GDP, but again, this guy, president Trump, acts like he’s just arguing over a shotgun ride, and I don’t think that that’s smart, I think it’s crazy, I think it’s ridiculous, I think it’s childish. However, that’s the world we live in right now. So you can either accept it the way it was, have a grin on your face, take a deep breath and understand the environment, and that’s what I want to help you do Just understand the environment we’re in. Understand the environment, and that’s what I want to help you do Just understand the environment we’re in. So you look for legislation and I do think that that’s a big deal. There have been many comments. I just when you see markets selling off and you think, man, who you know what’s going to be the bottom of this, just understand markets can fall very far and if Trump sticks to his guns and if the Fed sticks to their gun and says, no, fed put, we’re going to have a lot more pain, but it will be short-lived until legislation and stuff moves.

Speaking of volatility, speaking of crypto and pain, let’s talk about Bitcoin. Let’s talk about Galaxy Digital. Quickly, I just throw that out there because you guys know that’s my biggest holding. I’ve been a component on there. Check out Curzio Research YouTube channel. I’ve done some videos on there on stop losses, but also Galaxy Digital. I’ll be adding more to that. But crypto catching a bounce here, we’ll see how this is short-lived, but you had and we’ll talk about more of this in Wall Street Unplugged Premium tomorrow.

But crypto is selling off, turns out. The Bitcoin Strategic Reserve that was big announcement and it is a huge announcement was a buy. The rumor, sell, the news event. Obviously, a lot of this was already priced in after the election victory last November and President Donald Trump. But what is coming down the pike to help crypto?

Well, again, it’s that legislation and Tim Scott, who I’m not going to Google it, but I believe he’s the head of the Financial Banking Services Committee. I was reading last night that he has a lot of momentum with a stable coin bill and some momentum in other bills, talking about clarity and who gets to oversee digital assets and what is a digital asset and all that kind of stuff, and they’re talking about jurisdictions and who has the power over the SEC or the different agencies. The exciting thing with Tim Scott and the legislation over stablecoins is that they could be bringing it to a vote this week and that’s powerful because if it passes one chamber either the House or the Senate and then moves on, if you know that it’s getting momentum, that is important because it’s showing you that the people that ran and we have a lot of members in Congress and it’s a bipartisan effort in a lot of ways that are pro-crypto in the sense of pro-legislation, for clarity over stable coins, over meme coins, over tokenization et cetera, and that is a very powerful piece of legislation and momentum, because if you can get well it’d be great to see bipartisanship If you can get a bill passed, and especially on a bipartisan level, then that signals to the industry, to the sector, to entrepreneurs, to builders, to investors. Not that you have an all clear signal, but it definitely is a paradigm shift from the last administration, knowing that you’re going to be attacked or you’re going to war, versus now you have a tailwind and a friend, or at least a partner, and that is absolutely amazing.

So, yes, we are in this gray chaos bouncing around area and in my opinion, I think the people that are out there saying they know exactly what’s going to happen, or short term, and you know market’s going to pull back two more percent and then rally I think they’re being very misleading and disingenuous. Because I’m at least humble enough and smart enough because I get my teeth kicked in constantly or I’ve learned from the past. I don’t know exactly what’s going to happen. I’m okay with saying hey. I believe, because of a lot of the comments that President Trump has made, Treasury Secretary Besset has made, I believe that they are okay with putting up with a lot more pain than I believe that I initially thought and the markets still think. We’ll see how that plays out, if I’m right or wrong. The other thing is that I’m okay with saying, hey, this new environment, this sideways to lower until legislation is passed, I think that’s a new environment of less opportunities and shorter holding periods.

So if you’re a trader or an investor, when the environment changes, if you don’t change your process, I think that’s a big mistake. And I’m not trying to beat you up here. I’m simply trying to tell you clearly things have changed in markets and politics and policies with the election, of course, but just in investor sentiment and investor confidence and consumer confidence, and things can change quickly. But whatever change, you think and maybe you don’t think anything has changed and you’re just going to continue doing whatever it is you want, that’s fine. You make your investment decisions and you’re a smart, free thinker.

My point and the value I want to provide is to say, hey, things have changed. So therefore, change your process and change your trading and or investing, and for trades like the Dollar Stock Club, that may mean less or quicker holding periods, shorter timeframes and such, and maybe a few less possibilities or opportunities For longer holding periods, such as CRA. That may be hey, buy on pullback, but only buy as long as you expect. You want exposure to a certain company or sector because you think this is a good price, even if prices go lower. You’re never going to pick the top or bottom consistently, so try to get over that and learn from me, because that’s a hard lesson to get over, but the sooner you do it the better, I promise. So we have this new environment. We have to wait on legislation. I’m not a big fan of that, but it’s the world we live in and I think that if you can understand and here’s what I want you to constantly be thinking about, and I’m going to leave you with a silver lining here that is different, which is good If you don’t agree with me on and forget Trump for a moment, because, again, he didn’t create these policies, he didn’t come up with these.

These are nothing new under the sun but if you don’t think that the policies he’s pushing for are going to work, are going to be good for the stock market, for the economy, then how do you handle that? Well, you can look to lighten up your exposure to different assets or stocks or whatever, or even crypto, and you can look to take profits. You can just trim your position sizing and there’s nothing wrong with that. If you want to take your allocation from X down to Y, that’s fine. I would do whatever you need to do so that you can sleep at night, and I’m not trying to be a smart ass and I’m not joking about that.

If you are worried about this to an emotional standpoint that it’s impacting everything around you, then maybe you have too much exposure and just take some off. You don’t have a gun to your head. I want you to make as much money and retire and be comfortable. However, nothing goes in a straight line and if we continue to sell off, it’s not going to go in a straight line. You’re going to see rallies, you’re going to see bounces, you’re going to see head fakes and all kinds of things. The point is that you can lower your exposure and the silver lining here and again if you believe that his policies, or these certain policies, if they’re implemented, will work over time next year and such then you want to be buying on pullbacks. Think about that. The silver lining here and this is fantastic is because today, if you want to say, hey, I want to lower my exposure, this guy’s an absolute crazy mother. I don’t want to invest with him. I don’t like this guy or I don’t like this company. I’m voting with my feet, I’m taking my money and running. That’s fine.

Here’s the good news and the silver lining you can go park your money and earn a decent or competitive interest rate. And you couldn’t do that, if you rewind, just several years ago. So if you wanted to sit out during the great financial crisis, when the smartest guys in the room ran the economy into the ground and had to get bailed out, they cut rates to zero. If you wanted to do that during COVID and say, man, I’m a little nervous and that was a quick head fake because they turned the printing press on and saved the markets and boosted asset prices. But if you put money on the sidelines or you sat out, you earned zero for the longest time because they pushed interest rates. They the Fed manipulated interest rates. I won’t rain on that.

At least today you can put your money in a money market. Yes, you still have the opportunity cost and you could miss out and the fear of missing out and all that kind of stuff. But the excitement is you have the silver lining, is you have the ability to earn interest so you can put I think Interactive Brokers was advertising just yesterday they’re still around 4% in a money market. That’s better. That’s a hell of a lot better than zero and helps you offset inflation and purchasing power decreasing as you’re sitting on the sidelines or lowering your exposure. So hopefully you take advantage of that and don’t be afraid to lighten up your exposure or understand. Listen, we’ve just come off two back-to-back years of over 20% returns in the S&P 500. That in and of itself is great. So a down year is nothing out of the cards.

Then you add a regime change from one party to another. That’s one thing and that’s going to cause significant volatility and change. You add to that a guy like President Donald Trump and you’re mixing chemicals and fire and matches alcohol and you’re telling the parents hey, just stay away for the week and let us look over everything and we’ll be fine. You got to have chaos. Things are going to break, but do not stop right here and do not end the conversation, because you can’t talk about tariffs and trade policies and volatility without understanding. You don’t have to agree with it, but without understanding that is a piece of an entire package and the other package, or the other pieces to that, are legislation, is energy, infrastructure bills, is tax cuts, is pro-growth policies and deregulation. Don’t get hung up on just one. I’m not trying to defend President Trump. I’m trying to help you understand the volatility and manage that from an emotional standpoint and understand how I’m thinking through that. What deadlines, what legislation? What do I think makes these markets turn around from this environment we’re now in, which is sideways to down? All right, just about 30 minutes here, so I’ve covered quite a bit. I’ve gone on some rabbit trails, rants, talked about the new environment.

I will share one of my favorite regional banks tomorrow on Wall Street, unplugged. I blame Frank for the sell-off. I think I have done about everything that I wanted to talk to you with. Of course. No, I’ve made many mistakes. Call me out, love me, hate me, don’t ignore me. Daniel@CurzioResearch.com. That’s Daniel@CurzioResearch.com. I, let’s see here, just wanted to. Oh, I’ll also make a comment.

I want to talk about oil and energy prices tomorrow, because they are. They have pulled back significantly. But there was a great soundbite and snapshot of Scott Sheffield, who used to be the CEO of Pioneer Resources. He was on CNBC and made a few comments that a lot of people are taking and running with and I want to explain why.

I’m a big component and bull in energy. I don’t need energy prices to rise to be bullish on that. I know that can sound goofy, but I think that the soundbite that they are playing for Mr Scott Sheffield is being abused and taken out of line. I’ll opine more on that tomorrow in Wall Street Unplugged Premium. Thank you so much for joining us. Thanks for tuning in, like us, share us, subscribe. You have no idea how much I appreciate being able to fill in for Frank and to do this podcast and to be in front of you guys and to try to help grow the network. Thank you from the bottom of my heart. Have a wonderful rest of your day and I’ll see you guys tomorrow on Wall Street Unplugged Premium with Frank Curzio. Cheers.

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Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.