Broken Pie Chart

Jay Pestrichelli, CEO of ZEGA Financial, is on a special 200 th episode of the Broken Pie Chart Podcast to go over their predictions for 2023. Will we have a recession? What will the earnings be? What will be the highs, lows, and year end 2023 10 year yield, S&P 500 Index, gold, bitcoin, oil, fed funds rate, and more. Off course these should not be traded on, but instead hear some of our thought p...

What's the saying, history doesn't repeat itself but often rhymes? In 1994 the Fed was raising rates all the way through the Feb 1995 meeting. How does that period compare to now? And does that mean we are in for a repeat of markets? Derek Moore explores that period and makes some comparisons.     1994 Fed interest rate hikes 1994-95 interest rate cycle and market returns The 1995 Fed pivot When d...

Every time you tune into CNBC you hear predictions about when the recession will hit. Then, when the Fed will pivot. But are people focused on the wrong things? Jay Pestrichelli is back with Derek Moore to discuss markets, earnings, and why the contrarian take is everyone can't be right. Plus, the more the yield curve inverts, the harder it will be for a recession to arrive in 2023.     2023 Earni...

Last week the payroll and unemployment numbers came out. They surprised to the upside but does the Fed really want people to lose their jobs? How are the unemployment numbers calculated? And an under the radar demographic trend on working age population. Plus, the 2023-year end S&P 500 Index targets are coming out and they are bearish!     What are investment banks 2023-year end S&P 500 Index pric...

Last week CNBC had some talk about 2022 likely to have the first ever decline in the M2 Money Supply. Is that really a big deal given 2020 record 25% growth followed by 2021 12% growth? Then, why velocity of money may not mean anything for inflation after all.     What is the M2 money supply? What is the M1 money supply? Comparing M2 vs M1 money supply Discussing massive increase in money supply i...

Jay Pestrichelli, CEO of ZEGA Financial, is back with Derek this week where they talk FTX bankruptcy and whether it means the end for crypto? Then they discuss the 3-month treasury bond yield inverting with the 10-year treasury bond. Yes, every time that has happened there have been recessions, so what about this time? Earnings continue to be the thing to watch. A quick game of who is right after...

Derek gives his thoughts on the FTX crypto collapse and bankruptcy. Why crypto are NOT currencies. Then, why everyone should be paying attention to the US Dollar. Why the US Dollar is so important for multi-national companies and their revenues. How those revenues are impacted when the dollar is strong (or weak). Then finally a check in on the Fed Funds probabilities for future rate hikes.   Why c...

Derek is joined again by ZEGA CEO Jay Pestrichelli to discuss what market capitulation looks like and are we there yet? Plus, how markets tend to turn up prior to the economy bottoming historically. Before some recommendations they discuss why the VIX isn't higher and what the VIX curve is telling us now and in the past.     What is market capitulation? Historical examples of markets bottoming mon...

Derek is joined by Spencer Wright of Halbert Wealth to discuss historical impact on markets Plus, they discuss the house, senate, and the prevailing polls and other indicators to sift through the noise. Finally, they give their picks in the 5 senate races that matter.     Market performance post midterm elections since 1962 Why markets might like split government What the polls and adjusted polls...

The Fed is paying out more in interest than it is taking in, resulting in an IOU to the US Treasury. Is this a big deal? Did the Fed believe this was possible? Understand why you may see in the news the Federal Reserve is running a deficit. Plus, is the Treasury about to do bond buybacks to increase liquidity in markets?     What is a Federal Reserve deferred asset liability How much of a deficit...

The Federal Reserve shows no sign of slowing down rate hikes in the near term. But are they doing anything? ZEGA CEO Jay Pestrichelli is back on the show with Derek Moore to debate. Plus, why we care about England's BOE moves. Finally, some recommendations.     What is the deal with the UK's pensions and government bonds? Is the Fed doing it all wrong? Container shipping rates back to normal? The...

As Q3 earnings season is about to kick off we'll look at what the drivers of returns are for the S&P 500 Index and individual stocks. Annualized returns are a mix of sales growth, margin growth, dividends, share count, and PE multiple growth. See how to think about these levers in relation to price.     What are the return attributions of the S&P 500 Index returns? PE multiple growth vs multiple c...

The rise of interest rates has been all over the news, but is there a silver lining? Yes, due to higher rates in short-term US treasuries hedged equity strategies now can further manage risk by substituting out short duration high yield to short term treasuries. ZEGA Financial CEO Jay Pestrichelli and Derek Moore are back to explain how a flagship strategy Buy and Hedge is leveraging the new envir...

Does anyone who makes predictions in the financial news media know anything? Lots of headlines are making predictions so why not add some perspective from past bear markets (and bull markets) where many things' people say never came true. Why investors make bad decisions due to news. How investors opt to stay in cash even as markets firm up.  We'll go through some past predictions to see how the m...

Inflation surprised to the upside last week. Although it was close to the Cleveland Fed's nowcast estimate. So, what would it take for inflation to get back to the 2% level and when? We'll go through the numbers today to illustrate what rate of monthy inflation would be needed to get there buy the spring. Its just math, so here we see the Feds base rates come into plan.     How is inflation month...

Do markets always go up after the midterm elections? What about market performance during the presidential cycle? Interesting data points to historical numbers being bullish for markets next year. What could go wrong? Plus, why it may not matter what political party is in power.     Market performance before and after midterm elections When are midterm elections held? Significant swings in power d...

Why Hedging Is the Answer for Portfolios | Can Hedgers Buy Markets Lower?   Show Summary:   Rather than try to time markets or worry about whether there is a selloff around the corner, look to stay invested but be hedged. But what is hedged equity? What are the benefits for investors who may be barraged by various predictions and news? How do hedged equity strategies work? All this and more plus s...

Was Bed Bath and Beyond a Gamma Squeeze? How the options market can sometimes drive buying and selling. Plus, Jerome Powell does a short press conference talking tough about taming inflation.     Ryan Cohen option positions in Bed Bath and Beyond What is a Gamma Squeeze? How market makers hedge their book to remain flat When gamma squeezes don't move the markets Jerome Powell talks tough in his pr...

Jay Pestrichelli once again joins Derek Moore whether stocks never make new lows after retracing half a bear market drawdown. Plus, how many in the industry have never see a rising rate environment. Then, deconstructing earnings, profit margins, and revenues to go under the hood and how the US dollar strength plays into all of this.     Have stocks ever went on to new lows after retracing half a b...

Derek Moore is back to talk about the difference between diversifiable risk and systematic market risk. Diversification might fail the very time you want it most. The argument for diversification + hedging. Why bonds didn't act as a diversifier this year.     Diversifiable risk Systematic market risk 2007-2009 Period where diversification failed Why diversification is better than concentrated stoc...

Derek Moore is back to discuss the war on share buybacks after a rumored 1% excise tax announcement. What are share buybacks? Why do companies do them? Plus, when you'll officially here whether we are in a recession.     Recessions are called long after they start NBER Nation Bureau of Economic Research committee dating business cycles What NBER criteria uses to call recessions Are share buybacks...

Jay Pestrichelli once again joins Derek Moore to discuss the disconnect between the market's expectation of future interest rate raises and the Fed's stated intentions. Did the market hear the right things from Jay Powell? How earnings through Q2 have held up and are still growing despite pessimistic calls otherwise. Plus, the debate about what a recession is and is not.     Someone is wrong on in...

The US Dollar has been surging (getting stronger) as the Fed is raising rates more than some other countries or regions central bank. So why is a strong dollar problematic? How does a strong or weak US Dollar hurt or help US companies? Derek Moore is back to give some easy to understand examples plus how USD denominated debt from other countries will come under pressure with a stronger dollar.    ...

Michael Lewis wrote the book "The Big Short" that later was turned into a movie starring Christian Bale, Steve Carrell, and Ryan Gosling, Brad Pitt, and Jeremy Strong. The movie focused on 3 different investors who bet against mortgage bonds before the Great Recession and housing market collapse using credit default swaps. Want to get a primer on swaps and how they work before you watch or re-watc...

This week Derek Moore notes the historic start to the year in bonds given the rise in interest rates and how low they were at the beginning of this cycle. Then Derek discusses target date funds. Popular in 401k plans, many investors don't fully understand what they are and the different types of risks inherent in them.   Historic first half drawdown in the US Aggregate Bond Index What are target d...