Top 10 Economic Indicators Every Investor Should Follow - The Cents of Things

Welcome to the Cents of things podcast, where your money talks and we listen, join host Jeff Kickel and Ron Lang as they explore the economy, financial planning, and the stock market, adding a splash of fun to make your financial journey engaging. Each episode, they break down complex topics to give you the clear edge in your financial decisions. Stay tuned and let's make Cents of things together.

Good morning, Cents of things audience. We're glad to have you guys here again. Once again, we've got some fun things to talk about. We'll also Have some economic indicators that ron's going to share with us and a little bit about the markets ron. How you doing, brother? Good

morning. No, good morning doing you got a political season's heating up. So get your popcorn out or get your vomit bucket out i'm not sure which one vomit bucket

or either that or your no dos so much has been made of this this upcoming presidential debate. My my theory is it's going to be because my theory is that once I, the president is going to be not as exciting as he, as everybody thinks he's going to be. And I think. The former president is going to be muted. So I think it's going to be like watching slugs call across the ground. So

my, my, my two thoughts are number one, you're not going to learn anything. Nope. Number, and number two, they're not supposed to be exciting debates. They're not supposed to be fireworks. You're supposed to learn. You're supposed to learn. How would you handle this situation? Yes. What would your solution be? I go back to boring. Let's learn something not going to

happen. It's not going to happen. And once again, CNN has made such a big deal about this. I've seen it. Yeah. Every countdown clocks and all the, Fox is going to have a simulcast and all this stuff and it's going to be boring. So every year you're going to learn nothing. As Ron said, And it's just not going to be exciting. I've never watched a presidential debate because they bore the living tears out of me. And nothing is ever, it's just a bunch of gobbledygook in most cases.

Gobbledygook's a good

word,

or

maybe that's two words, I'm

not sure.

You've got some fun stuff to talk about, I'm assuming. I

absolutely do. All right, let's see. Here we go. All right. You see my screen? I do. Wizard of Oz, 1939 movie. The horse, the iconic horse of a different color was used creating jello. Jello. I didn't even know. I knew Jello has been around for a while. I didn't know it was bad. I didn't know it went all the

way back to then. Yeah, that's crazy.

Yeah. So it was they did they coated the horse with Jello crystals. But here's the funny thing. Buddy Epson was the original Tin Man and they used to spray literally silver on him so that to a point where he inhaled it into his lungs, got sick. And he was taken off the, he couldn't perform for the movie and probably the last two last generation doesn't remember that story. But yeah. So you want to talk about back, 1939, what they were trying to do for special effects and makeup.

Yeah. And didn't didn't the cowardly line, it was like, it caused him all kinds of like. the stuff that they put on him or the glue that they put on him to get the stuff on. I think he broke out from that too. So these poor guys are like just getting destroyed.

And then of course, Judy Garland, who the hell knows how any of this affected her? She she certainly went south pretty quick within a few years. Did not last too long. All right, next one burger king introduced wine in 1915 I was unaware of this and then you read it, right? It was called the so called Whopper wine they were pairing wine with whoppers, but it was only in spain that they tried this out Because they did some ridiculous marketing study that people in spain loved wine with their meal So in order to draw them into burke Wow for dinner they wanted to Simple and pair a wine with your whopper,

it's what goes well with a whopper. What goes well with a, whatever their version of a McFish is. I don't know. It's, this goes with a good white Spanish wine. This goes with a good, Tempranillo and.

I'm thinking of a pinot a pinot noir with my Oreo cookies tonight. I'm not sure. That's

probably true. It's maybe a cook for Dunking, but as we talked about in the previous podcast, the Oreos are smaller now, so you gotta eat more of 'em.

Yeah, you just gotta put your fingers a little further into the glass, that's all. And he, this was interesting because I was born about 18 years too late. 'cause all my favorite music was from 65 to 71. Me Too. Led Zeppelin turned down Woodstock to avoid being typecast. Typecast is what? And here's the crazy thing. They were only, they'd only just formed as a band. I think the year before, because remember they came out of the Yardbirds.

Yeah.

So they were only out there for a year and they were afraid of being typecast.

Yeah. I'm like yeah, this is the biggest stage on the nobody knew it was going to be as big as it was, it was some of the most, or some of the biggest stars of their time,

yeah, I thought it was fun and interesting, but it's hilarious. Anyway, I got to go back. So our market has been at ridiculous levels and you and I put together our forecast in the beginning of the year, they just might've been in December, early January, and here we are. We're already well past all of it. Yeah, I still think we're gonna end up in the 4900 to 5100 range. It all depends on how deep of a pothole we step in prior to the election. I believe we're gonna be higher after the election, but I just cannot see unless there's a clear winner going into the election. I'm talking about five to six or more points ahead. I can't see how With a market won't get thrown around and get a pullback, which will be a great time to get back in to buy the dip. What are your thoughts?

Oh, no, I agree. And I could have never thought that it's as high as it is today. It's just been a ridiculous year and it's one of those ones, as a, and I'm sure you feel the same way as a money manager. Okay. I, I just am waiting for the shoe to fall and, you have your hand on the trigger finger or you have your trigger finger on the trigger. But I just, at this point, I'm like, I can't not be involved in this and be part of that ride. But we're just going to have to be fast about shifting gears. If it decides to move the other way pretty quick and I don't know what the

trigger is. Here's the conundrum. I have people that are one to three years away from retirement So as you get closer to retirement you de risk, but then they're saying i'm also missing some of the upside here Yeah, and the whole thing is like we don't know we're gonna wake up tomorrow and another october 7th will happen Yep, who knows? Not wishing for any of that, but The whole goal is to be a risk manager. And the idea is, okay, you're missing some of the upside, but we get a five or 10 pull five or 10 percent pullback in the next two months. You're protected, right? You're not, you're either you're protected or you're not going to see that much of a pullback. It's definitely a conundrum and had some tough conversations with clients, but many of them are just scared crapless about what's going on out there. And they have been for 12 to 18 months.

Yeah. Yeah. Once again, it's just, it's, I just don't know what the answer is. The answer for me is I watch this like a hawk every day and it just keeps rolling rolling. We had that minor little pullback throughout April. And early may, pull back towards the end of May, but, it's off to the races again here in June. And, we're going into the summer months, which it's anybody's game. Yeah, we, the volume goes down, so the magnitude can be up or down either direction. And if. If the volume's down, and all of a sudden the sentiment slides to we're concerned about the market. It's anybody's game on what can happen during that time period. So just have to be prepared, and we're getting pretty far away from the 50 day moving average at this point. So I think there's that chance of seeing things work their way downward again, during the summer months.

Absolutely. Absolutely. So I got two economic indicators. One we covered in our last podcast, which was the PCE. And, this isn't just going back five, 10 or 15 years. We've been to the. com. This is going back 45, 46 years. And we've never seen the depth of the negativity with the 10 year yield. And the three month, this is, a lot of, look, I, we, we've talked about the two and 10 the two year being higher than the 10 year, the fed looks at the three month over the 10 year and everybody talks about the consumer and the spending and everything else, but realistically credit conditions have tightened. Yep. So unless we get some type of a flush out or a reset, so the fed rate could come down 50 percent in the next 18 to 24 months. I don't see where the next bull push in the economy is going to be because What'd they say? 60, 70 percent of the profits of the entire S& P 500 is from five or six stocks. Yeah. So how are we going to get that next push up if it's not going to be broad based? And I think a lot of it has to do with the interest rates and the credit tightening.

It's just companies, those few companies are, I think largely because of AI. They're major players in the AI world right now. So there, or they have some AI component and that's what just keeps pushing them. So people just put aside logic and they just look at this is the next push in the economy. But yeah, it's not been broad based and it really has not been broad based for the last two or three years, and there's one or two ways that can happen. It could be that those, now probably five stocks. Pull back and they become less important and that money scatters out a little bit more to the broad base or they're the last ones to fall and it pulls the market down So I don't know what the answer to that is You know, I think the most important thing is keeping an eye on it and making sure that you risk manage However, you risk manage whether it's through asset allocation whether it's through trading whatever it is You want to be aware of that and you want to be able to make those adjustments when you need to.

So now we got to follow the most important indicator. It's not the underwear indicator. It's the lipstick recession indicator. Oh, Jesus. So this is monitoring sentiment in lipstick sales. Okay. And right now it's almost like sentiment from excellent, good, only fair to poor and things are trending down. Okay. So lipstick sales are down. I have no idea what this means or why this means this, but I understand the underwear sales, lipstick sales. I'm not sure as far as an indicator.

Yeah. Guys don't replace underwear that often, but women have to replace lipstick. Hopefully they're

washing it.

Yeah. That's true. And hopefully if you're going to donate it, you washed it before you donated it, but.

You throw those skivvies out. That's what you do. All right. So then we have an investment idea. I thought this was interesting. And solar has been around forever. Certainly in the last 15 to 20 years, it's it's certainly grown. I know you were involved in a solar industry of solar business for a while. And I thought this was interesting because in a correlation with AI and data warehouse power, I think you're going to see a lot more of these data centers if they don't have them already having a complete bank of solar panels on their roofs and their property to just help combat the skyrocketing price of power and utilities. And I will say this I'm talking industry specific. I could not tell you. What a solar company would be a winner here. I have no idea. Maybe you have a better idea. No. And yeah, the funny part is,

and I was actually just going through this as an investment theme, did some research and I'm like, they all suck. I can't find a 1 that makes me excited at this point. They've all been on this kind of gradual downtrend. And I've not seen anything, the problem with solar companies is they rely so much on subsidies and, subs subsidies are that you just don't have any control of it in the in the solar business. Yeah, you get subsidies in the form of a tax credit for an individual and for businesses. But that only lives for one year, and you're going and going and they can change the subsidies. Those can go down over time. There's just an immense amount of changes that happen. And that's really the only reason solar gets sold in a lot of cases. Now, I will tell you, I, I added solar to my home. The good part is, we're going into the hot months of the year and I know exactly what my bill is going to be every month. I, it, my, it will go up slightly because we just can't produce enough power on my roof. I could add double the solar panels. And, in peak times of usage, we just can't keep up and it drains the battery down and, it's pulling from the grid at that point. But. My bill will not be over 150 bucks during the summer. Wow. I'm surprised it was even that I have my solar bill, which is consistent every single month. So when everybody's talked about this increase, in, in electric costs and all that, electric costs over the last three years are up 25 percent and they're getting higher this summer, I know pretty much, I'm going to be in a pretty tight range when it comes to that. So that's. That was the reason I did it. I didn't do it as a mathematical calculation of when it would get paid back and all that I did it as you know what I want to be able to know that I'm going to be consistent from that perspective.

And the problem is the cost of making solar panels, the materials are still so expensive, and I was going to bring up subsidies if you didn't bring it up, because without those subsidies it's a lot tougher to justify the cost.

Yeah, it was funny because my dad was involved in the solar industry in the seventies and that's what killed the solar industry in the seventies, they were massively subsidizing all this and then all of a sudden they shut that down and boom, the solar industry went away and it really didn't come back again for another 30 to 40 about 30 years. And even

today, I could have said it 20 years ago, the price has got to get cut half, when we live in two, we live in two states where the sun is out most of the year and it's pretty hot, but if they could cut it in half without subsidies I think you could see. I don't know what percentage of houses have it or apartment complexes, whatever, but it should be appreciated approach 50%. If it makes it worthwhile. I don't know what that does for margins and if you can attract the right talent, but at some point we'll get there right. At some point we'll get there, but I just thought that was interesting. I

think it's a power solution, but it's not, the, the people that are all about the, the planet and everything else. The only solution is solar and wind. And I drove through West Texas, God, awful, ugly country to begin with. And it's now even uglier with, all these windmills out there. And the funny thing is, we're going through there and it's 20, 25 mile per hour winds. It was somewhat windy day and half of them are shut down because they can't run them, when you get upwards of 30 mile per hour wind. So it's what's the point?

I don't understand that. Cause I actually sat on a plane with a guy that was very big in the wind turbine industry, and he said, in order to make a windmill worthwhile, you There has to be at least an eight or a nine mile an hour per wind. You figure 30, you'd have, you'd have plenty of energy being generated there. Yeah.

But they, there's a limit to how fast they can turn at that point. And so then it puts a lot of stress on 'em. So they only turn it at. A certain amount of revolutions per minute and just jamming more wind in there doesn't help. So then they end up shutting down and, it's okay, all right. So you've put multi billions of dollars into these things. And just because it's windy, it's the West Texas plains, it's flat as a frigging pancake and there's always wind out there, and okay. How often are these things shut down? What's the deal with it? It's insane. And God forbid, they are just the most ugly things I've ever seen. So I just can't even imagine it. And especially the ones offshore, you're sitting there at the beach watching these stupid things twisting off the beach. And still they're only producing about 15 percent of our power in Texas and there are tons of the damn things. I got you. So until next time. Thanks folks. We're appreciate you guys coming on. Hopefully this was something you learned and we'll continue to do stuff like this for you. We will see you back here the very next time.