David Stryzewski, CEO of Sound Planning Group, joined Cheddar News to discuss what drove gains this month and what to look out for in the month ahead. 

David Stryzewski, CEO of Sound Planning Group joined Cheddar News to discuss what drove gains and what to look out for ahead. “I don't think that the bear market is behind us. I think that we are in a global recession right now, and we may refer to this timeframe in history as the great global reset as we just have so many different headwinds today that are taking place.”

Closing Bell

Dow Posts Best Month Since 1976 but Economy May Be in 'Great Global Reset'

let's turn back to the major averages joining us now. David Straczynski, Ceo of sound planning group, a financial services firm. David welcome back another day. Another rollercoaster on Wall Street. Especially as Halloween. What do you make of today's activity? Well, today is, uh, is another very interesting day. I obviously had this incredible month best since 1976. Love that. Uh, you know, as we're looking at things today. Yeah, metas down again. Obviously saw Microsoft take big hits here. Um, I think that what we're seeing right now is, is we're seeing, um, you know, Chairman Powell could have been dovish was really the expectation and, and that is what really drove markets. Obviously we're gonna see what happens here in the next couple of days. But I also think that, that we need to be paying attention to the fact that october traditionally tends to be a pretty strong month, especially as we move into midterms. And so we're obviously expecting, or at least polls are expecting, um, a red wave, which would mean that there would be more of a neutralizing. So, uh, you know, president, I would honestly power, but he would be losing some of the Congress and the House potentially within that. So maybe there's a sentiment amongst people here today that, yes, that's a good thing. But maybe it's, it's, it's, it's cool enough and it's not quite enough to keep things running. It was the final trading day for the month of october with the dow soaring its best performance since 1976. What's the reason for this huge comeback. David, uh, well, it it's important for what I just said just a moment ago that uh that that we had, you know, this, this wonderful october with the Fed potentially pivoting. But then ultimately, what was interesting is that the NASDAQ underperformed by 10%. So I would just even say it's kinda interesting, we see a shift right now and, and what is, is in favor or not and fundamentally, uh, you know, these companies like meta are not standing up to uh, you know, things in the very same way that some of the big organizations like the dow uh and not even the biggest names in the dow, but but the dow has ultimately been uh been producing with. So uh, you know, these are, these are important things for us to be looking at right now, but I don't think that we're seeing much more than just a bull bounce in the midst of what is a recession at least Based on how we used to define them and what most people think that we're ultimately heading into. So it doesn't seem like a super peachy world right now, especially given, you know, some of the new information that came out about about housing and so maybe that's another part of the reason why things are beginning to taper as we are seeing 86% fewer loan applications here today than the previous year, which is staggering. But more importantly, we're seeing more inventory show up right now as, as the housing purchases have hit their 2010 low. So that number just came out on friday staying in the month of october, the S and P rose 8% the dow rose 14% the NASDAQ rose 3.9%. Is it safe to say that the bear market is behind us? I don't think that the bear market is behind us. Um, I think that, that we are in a global recession right now and we may refer to this timeframe in history as the great global reset as we just have so many different headwinds today that are taking place. Look at our friends in UK that are sitting here experiencing, you know, 16 17% inflation right now. Um, you know, one thing to also understand is that our oil prices have been down in the United States over the last, you know, several months as a result of some of what the biden administration's been doing is, Uh, they've been selling, uh, oil from our strategic petroleum reserve and ultimately we're sitting about half of what we would normally have. And so that's a record low. But, but one last concern here is that we have literally three weeks worth of diesel left according to reports, uh, November 25 first is going to be the day that the United States will run out of diesel fuel, which, if any of us understand how important that is. That's our semi trucks, that's generators, that's fuel, that's heat as we're heading into the winter. And we don't really have an answer for it. But I will share with you that there's a little bit of oil and left and that strategic petroleum reserve enough to last six hours. So when, and how do we know if markets have bottomed? Um, I think that what we will see is we, we need to see the Fed begin to taper right? And, and, and that's not gonna happen until we've meaningfully seen inflation be reduced. And so right now, we've seen it kind of go down a little bit, but is that because of the oil, the Saudi arabians think so. And, and, and so that's a problem when we see a turn though. Well, the Fed is gonna have to pivot. Additionally, I think that we're gonna need to, to see some supply side adjustments here. Um, you know, the United States has all the tools to affect supply side. It just seems like we're politically motivated to not be doing it right now. And so that's a real big challenge, uh, to, to our nation. Because, you know, as an example, if we got oil figured out, if we just started, you know, producing more at home, well then our allies would have more, the price would go down. Putin wouldn't have the same dollar, uh, to be able to wage a war with which, you know, because you can't have a war, there's, there's not high oil prices, um, we would, we would become more stable as a, as a nation again. And so I don't think until we see supply side changes that the, the demand impact that the Federal Reserve is doing, it's just not going to allow the consumer to uh, to really make, you know, these things happen. And we are drowning right now in inflation specifically from those that are in the low or middle class. And this is just an erosion right now, as we have two years of this high inflation that, you know, if you're just even hitting 8.3 a year, which were higher than that for sure this year, um, you know, you've lost a full paycheck each year, that are a full month of paychecks actually each year and there were now two months into their two years into that. So I'm very concerned about the american consumer right now, if we do not get some things figured out, if we cannot get interest rates low, We're on housing mortgages, just understand this housing is a lagging indicator of economic health. And when we get numbers that come in and say that we have the lowest housing, uh, sales since 2010, well then that should cause us to pause for a moment. And the biggest difference here is that the federal reserve has raised the rates so fast. And so if they're going to continue to raise rates quickly, if we're going to continue to see heights of maybe, you know, 4.5 5% potentially fire higher than 5% from the Fed funds rate. Um, I don't think that we're out of the woods quite yet. So Jamie Diamond might have had it right that we're in the middle of an egg economic hurricane right now and we need to kind of brace for a minute as, as this impact is continuing to unfold and I think that the data is ultimately coming in right now as you all know, earning season is in full swing. We have some results from being companies in different sectors, your biggest takeaways. Well, I, I think that earnings have been mixed. Right. So we've seen some good, we've seen some bad, the companies have been bad have been hit. But could we think about this maybe from a step back for a second, We just talked about inflation. What about inflation adjusted earnings because see I own a company, my wife owns, a roofing company actually. And so what's amazing is they're gonna have record sales this year, but they have the exact same amount of cruise, the exact same Amount of jobs. And part of the reason why the, the amount is higher is because, well, the prices of everything have gone up and they had to charge more effectively. So if we think about that and abstract that from earnings right now, when we look at 8% earnings and maybe a two or 4% growth, hopefully it's positive, not negative. I would say that that's actually a confirmation that we went backwards and so the the economy is able to, you know, project and of course, you know, we're driving, you know, forward, but we're looking through the rear view at, you know, a month or two ago, those uh C. P. I. We're gonna take a look at jolts. We're gonna be taking a look at a lot of these different things as they're coming out right now. And I just don't see an awesome backdrop unfolding when we look at this from an inflation adjusted or real expectations of what we should be receiving. The Federal Reserve is meeting again this week. Another rate hike may be on the way. Any chance it will pivot or pause this time around. David. I vote that they pivot or pause. Um I feel like they would be uh intentional to to understand that that we're in some challenging places, but the Fed is really in a challenging place because let's just say that they do pause. Okay, so what happens is the stock market's going to go through the roof. That's the exact opposite that they want. Treasuries will reduce people start spending more money, can't do that. I think that they're gonna come in strong. I think that they're gonna stay steady. I think that the Federal Reserve is going to be very clear that they are going for that they need to see a 1 to 1 unemployment ratio to those that are seeking, we're seeing, you know, not quite a 2 to 1, but you know, obviously we get the numbers here tomorrow. Um, I think that the Fed is going to just continue on as they shared, but note this, they definitely know how to pivot. Uh, and Canada last, I think it was last week on Wednesday, did pivot, they did a 50 basis point instead of a 500.0.75. So hey, Canada just did it. I think there's observations that there can be some cooling, but at the same time if the Fed does, so it could be very, very bad because the market will go up and that's what they're trying to not have happened. They need to destroy demand and they need to ultimately inhibit the consumer from spending more money. That's a not a great story for the consumer, but we need to get our economy just right. And unfortunately, the balance sheet is still full as well, trillions and trillions of dollars that they have not yet offset. So, uh, it doesn't look like a, like a great picture here today. I wouldn't want to be Chairman jerome Powell. Um, you know, he was about a year late from starting this, uh, uh, these increases that began in March and we can't go back and redo it again, We have to, you know, play this thing forward. So I just wish and hope that supply side economics would come into play, that we could loose up some regulations and not put more on oil companies, not add 87,000 I. R. S. Agents, you know, which ultimately kind of tells me that they don't think that the Us people are, are doing things appropriately or right. So that may be a significant surprise to us as we start 2023. And we look at a much higher tax need that the internal revenue service is going to need to be generating given all the spending that's taking place. David Ceo of Sound Planning Group, we always appreciate your insight. Thank you so much.