Rashad (2:05)

Hey, Ryan Reynolds here for Mint Mobile. You know one of the perks about having four kids that you know about is actually getting a direct line to.

Troy (2:13)

The big man up north.

Rashad (2:14)

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Podcast Host (2:26)

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Troy (2:34)

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Rashad (3:18)

Let'S talk about some other economic factors. The jobs report was canceled for the first time in American history. So what does this say? That, amongst other things. But what does it say about the state of the economy? And what's your thoughts on where we're headed in 2026? Yeah, the fact that we haven't gotten the government jobs data, that is troubling for, you know, business journalists like me on the one hand. But we're getting so much data anyway. We get great stuff from ADP every month on the private payrolls. I think that tells you a lot more than the BLS survey of households and businesses when they're literally calling tens of thousands of them on the phone and emailing and saying, are you hiring? How many people are you hiring? Are you planning to hire in the next three months? They do that in the first two weeks of every single month. So by the time you get it anyway, it's already three weeks late. And it's based on an extrapolation of all those phone calls and emails. So I never thought it was that exact. And it was getting muddier by the second, giving everything that was going on in the Labor Department with the Trump administration. So the economy, I think, is in better shape than people think and certainly than the way people feel. People feel terrible about the economy right now. Consumer confidence, guys, as you know, is almost as low as it was during the great financial crisis. And we're in much better shape than we were back then. Just people feel terrible because inflation, they feel like it's coming, even going to come even more in 2026, especially in the form of higher healthcare payments and healthcare premiums, they feel like prices have gotten out of control and nobody can control it. So they blame the government and they blame corporations for that. But in reality, if the unemployment rate really is somewhere between 4.4 and 5%, that's still relatively low right now. Wages have been increasing like 3.5 to 4%. That's decent. We are hearing about growing drumbeat about more layoffs and, you know, the AI fears about it taking people's jobs. Those are significant and just that psychology can weigh in on people. But we continue to spend because that's what we're really good at as consumers. And as long as we're doing that and you have all these, you know, multi trillion dollar companies pledging to spend tens, hundreds of billions of dollars with each other, that's driving the other part of the economy. Economic growth is going to be there. Economic growth is going to be there with lower interest rates next year. And we're going to hear that on Wednesday when the Fed comes out with its decision, which will probably lower rates by a quarter point. But it'll signal through the dot plot. It's, you know, it's, it's sort of summary of where Fed governors think interest rates should be a year from now that they're going to be probably a full percentage point lower one year from now. So this combination of lower interest rates and the economy not falling off a cliff and tariffs being more smoke than fire really at this point in time and corporate profits are, are growing, all these things signal the fact that the economy is probably going to grow and might be actually okay. Although people on the low end of things are not going to feel it and they never do. They're just going to feel worse as the investing class does even better.

Troy (6:05)

I saw you on your skateboard today talking about the Fed dot plot. I appreciate that that content. So there was a report today over the weekend where they were Talking about the Max 7 and how it's had this amazing run and at some point the reality check is going to happen and some analysts are saying it'll happen in 2026 y those same analysts were saying that the S and P is going to have a great year next year. I find it kind of hard to figure out though how the two things are going to work right? If the Max 7, you're talking about some of the biggest companies, these big hyperscalers, they max, I think they make up 35 to 36% of the S and P. So if those don't do well, how do we see with the rest of the S picking up that, that, that lift and saying, all right, well, will carry the market from here. What are your thoughts on this?

Rashad (6:49)

Yeah, great question. And you guys know this. Well, if you look at the S P500 versus the equal weight S P500. Remember, the S P500 is market weighted. The biggest stocks weigh the most and account for the biggest part of the index like Nvidia, Microsoft, Meta, Amazon, Apple, you name it. But if you just take it equal weight, it is underperforming the S&P 500 by a fair amount by about 10% this year. But what we've seen lately, guys, which is I find very interesting after that 5, 5% pullback a few weeks ago, which seems like forever ago now, the market rebounded almost, almost to where it was. We're about 1% away from all time highs. And in that rebound we saw what the technical analysis like to call breath thrusts. Sounds like a fencing term, but what it really is is a majority of stocks rallying at the same time. Right. And that's what you want to see in a healthy bull market. You want to see a lot of stocks rally, not just 10 stocks, 20 stocks rallying into, you know, to, to make the market make new highs. And that's really what it was with all these big mega cap tech stocks and AI stocks. Now you're seeing better breath and you're seeing better breath in sectors that actually matter. You're starting to see a little bit in commodities because interest rates are cooling out a little bit on the short term. You're starting to see it in healthcare, which we haven't seen in a long time. You're starting to see it in financials because lower rates are coming. That's going to be good for them in terms of their net interest margins. So you're seeing broader participation in the market and that's a healthy sign of a bull market in its fourth year. And this bull's getting a little bit tired. That said all, we're going into a midterm election year. Those are always a little volatile. But the trend is up into the right, especially with lower interest rates on the horizon. That powers small to mid cap stocks and sectors outside of mega cap tech. That's actually good news for momentum. I'm not saying we're going to get another 18, 19% year, probably will get a normal year unless something terrible happens. Do you, to follow up on Troy's.

Troy (8:39)

Question, do you think we have a reformulation of the Mag 7? Well, do you think it'll be a consolidation into 5 or do you think they'll keep the max 7 and just.

Rashad (8:48)

Change the, the weighting and the structure of it? I think just by the nature of investor preference it'll, it'll change. As you know, you've seen investors, especially big investors like Berkshire Hathaway and others pulling bigger stocks like Apple, but the leadership is still the leadership and the biggest stocks in the index right now, earners.

Troy (9:09)

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Podcast Host (10:10)

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Doug (11:27)

And Doug, what a horrible call.

Rashad (11:30)

Hey ref, open your eyes. Ref. You're really not gonna call that?

Doug (11:33)

Come on.

Rashad (11:34)

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Troy (11:43)

We're all just giving him advice.

Rashad (11:45)

You guys on sports, me on saving money.

Troy (11:48)

Nope, that's not it.

Rashad (11:49)

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Doug (11:56)

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Rashad (12:56)

So you know Mag7, I think that was Kramer who came up with that term along with Fang to come up with a name for that. It's really been, as you guys know, more like you know, a dozen stocks and you named a few that were a real part of the, the rally. The oracles of the world, the sales forces of the world, they were a big part of that rally as well. Anybody that was tied to the, to the AI buildout and has a big market cap was, was useful and helpful in bringing the market to record highs 18 times already so far this year. But you'll get a broadening out of participation. You're seeing stocks making record highs. You know, you're seeing the banks start to roll back into record highs. The J.P. morgans and Goldmans, those were dancing on record high. So when you see financials doing well and you see start start to see other sectors rallying along with it outside of tech, that's a good sign. So I, you know, you'll, you'll always have leadership but we'll have, we'll come up with a new name in the next year or two for whatever next group of stocks outperforms the rest of them.

Troy (13:48)

Yeah, we got to figure out how to get Broadcom and TSM inside there.

Rashad (13:51)

Yeah, Broadcom has been an outstanding stock.

Troy (13:54)

Yeah.

Rashad (13:55)

Also Walmart too.

Troy (13:57)

Can I do A follow up real quick, Rashad. The stock is valued at what, 40 times earnings? They think the stock is up 25 this year. Why do you think Walmart doesn't get the same respect in Amazon may receive? Even though if you look going back to 2018 was priced at 28.10, it's currently at 113.56.

Rashad (14:18)

Yeah.

Troy (14:19)

Despite classification of where they land. Why do you think that they aren't put in that Mag 7 or Elite.

Rashad (14:25)

8 type of range? Well, did you notice what just happened in the last couple of weeks? Where, where did that, what happened with Walmart? What exchange did it move to? It moved to the Nasdaq. Great point.

Doug (14:35)

Right.

Rashad (14:36)

It's been on the, it's been on the New York Stock Exchange forever.

Troy (14:38)

Yeah, right.

Rashad (14:39)

And it decided that it needed to be listed on a different exchange, the Nasdaq. Now why the Nasdaq? Right. That's where the fastest growth stocks in the world live. That's where growth stocks. That's it, that's where you list. And so it wanted to be included in those conversations. So you're not the only one that noticed it. And they noticed it themselves. They are much more than the biggest retailer in the world and they are that. But they are a logistics company. Right. They are a data company. Right. That is what they're into these days. And I was just out in Bentonville for the first time. If you guys haven't been out there, first of all we should go out there and do a market Mondays. Out there there is nothing. It is outstanding. It blew my mind being in that town. And you see the, the, the, the history of Walmart, which is really the history of America and just, just all over the place and the infrastructure that's around the Walmart super centers there. It's phenomenal. So it wants to be a tech company, it wants to be thought of as a growth company. And so it changed where it was listed and maybe it will get that respect because now you got to include it in the QQQs of the world. Right. You got to include it with growth stocks, indexes and portfolio managers that own those sectors are going to have to buy it if they don't own it already. And it's actually outperformed. I was checking this out. It's outperformed the NASDAQ over the past five years. So it definitely belongs in that exchange and maybe it'll get the respect that it deserves. What opportunities do you see in 2026? Well, I think the sector rotation is helpful and Good. We have all been piled into the same group of stocks forever and it's been great. It's been very rewarding for shareholders. Right. If you picked the 5, 10 fastest growing stocks in the market, especially in tech, especially in Internet and communications and AI, you have had an incredible run as a shareholder. No surprise that we have more 401k millionaires than any time in history. We've got all been piled into the same stocks. But when everyone's piled into that, that side of the boat, you can see what happens. We saw, you know, the Nvidias of the world, the Oracles of the world, the Microsoft, some metas. These were down beyond correction territory. They're almost down in bear market territory. So you've had a healthy valuation resizing there, which is good. But in a lot of ways they've become value stocks or safety stocks. Right. It's either gold or that. Right. And it all depends on the equity risk premium for investors right now. So I think you're going to see a rotation into a little bit more defensive but also a little bit more broadening into the healthcare sector. As I mentioned earlier, biotech finally caught a bid. And then smaller down the market value chain as you get into the mid caps and the small caps that are going to benefit from lower interest rates. There's a lot of good companies there that are doing business in a way that's not necessarily tariff sensitive, that are operating great businesses. So I watch mid caps. You can buy the mid cap ETFs if you want or you can buy the small cap ETFs to get some exposure. Explain because some people might not be familiar from your website. Can you explain the difference when you say mid cap, small cap?

Troy (17:32)

Oh sure.

Rashad (17:33)

Large cap. Yeah, small cap stocks. We're talking like 5 billion to 10 to 15, 20 billion in market cap.

Doug (17:40)

Right.

Rashad (17:40)

And market cap means the stock price times the amount of shares outstanding. The, the more shares outstanding, the bigger your stock price, the higher your market cap. Nvidia obviously the biggest of the mar of the, of the companies in the world in terms of market cap. Mid cap are more in that 25, I would say 200 billion dollar market cap range. And these are manufacturing companies, these are financial services companies. Some of these are even tech companies or working on the fringes of AI or on the fringes of of semiconductors. And they have fabulous businesses that are super profitable. And right now you want to have very strong profit margins. If you are a publicly traded company. This matters more than anything. Revenue per employee, how much productivity Are you squeezing out of your labor force? How are you using AI to do that? And how is that powering your profit margins and your profits? Because at the end of the day as investors, that's what we're paying for. Grow your profits because it's going to be reflected in your share price and in the dividends you pay back to investors. So in that mid cap range they're going to benefit from lower interest rates because these companies borrow a lot of money and as rates go down and they refinance their debt, that eases the, the stress on their balance sheets and they're more profitable and that's usually a benefit to shareholders. So I would look down the, down the chain a little bit as well. And then large cap. Did you talk about large cap? Yeah, Large cap are the biggest companies in the world. The 200 billion to now 5 trillion mega cap. Oh mega. Those are mega caps. Those are the 1 trillion to 5 trillion large cap would be the 200 billion to $1 trillion in market cap now. But you know those ranges have expanded over time because we live in the land of the giants.

Troy (19:15)

You had to update investcoped. We didn't have a trillion dollar company until like recently.

Rashad (19:22)

You're right. I gotta get, I'll get right on that.

Troy (19:25)

I want it because you sit in a unique seat and we're trending toward the end of the year. I wonder from a retail investor side, what are you seeing and people searching like what are the things that people are looking into? I know there's a lot of talk of recession and what the future is going to look like? Bitcoin, what are those trends that you're seeing from the investcopedia side that retail investors or anybody, any investor really is looking forward to on your site? Earners, what's up? You ever walk into a small business and everything just works like the checkout is fast, the receipts are digital, tipping is a breeze and you're out the door before the line even builds. Odds are they're using Square. We love supporting businesses that run on Square because it just feels seamless. Whether it's a local coffee shop, a vendor at a pop up market or even one of our merch partners, Square makes it easy for them to take payments, manage inventory and run their business with confidence all from one simple system. One of the things we love most is seeing neighborhood businesses level up. There's this West Indian spot right in our community that started with a small takeout counter. Now with Square, they've been able to expand into a full Sit down restaurant and even started catering events across the city. That's the kind of growth that inspires us. And it's powered by Square. Square is built for all types of businesses, from the corner bagel shop that turned into a local chain to the specialty market with thousands of unique items to the stylist who's been holding you down for years. If you're a business owner or even just thinking about launching something soon, Square is hands down one of the best tools out there to help you start, run and grow. It's not just about payments, it's about giving you time back so you can focus on what matters most. Ready to see how Square can transform your business? Visit square.comgoeyl to learn more. That's square.comgoeyl don't wait, don't hesitate. Let Square handle the back end so you can keep pushing your vision forward. What a matchup we got, y'.

Rashad (21:29)

All.

Troy (21:29)

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Doug (21:39)

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Troy (21:41)

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Doug (22:14)

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