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Redfish Healthy, Wealthy, and Wise Podcast April 411

Updated: Aug 16, 2022

Welcome to the Redfish, Healthy, Wealthy, and Wise podcast. Our focus is to deliver information that helps you become healthy, wealthy, and wise. This podcast is sponsored by Redfish Capital Management, the views and opinions expressed here and do not necessarily represent the views and opinions of SCF securities, Inc, or any SCF related entity. This material is for general information only and is not intended [00:00:30] to provide specific advice or recommendations for any individual securities offer through SCF securities, Inc. Member FINRA, S I P C investment advisory services offered through SCF investment advisories Inc office at 1 55 east Shaw in Fresno, California, SCF securities, Inc, and Redfish Capital Management are independently owned and operated. SCF is not associated with other podcasts. And the messages contained within. Brad [00:01:00] Murrill and Redfish Capital does not offer legal or tax advice. This material is not intended to replace the advice of a qualified tax advisor or attorney please consult legal or tax professionals for specific information regarding your individual situation now for your host, Brad Murrill.


Everybody. And welcome back to another edition of the Redfish Healthy, Wealthy and Wise. This is the four 11 podcast. Today is the 4th of April. Of course, April means tax time. And so tax time means, of course, we've been really busy around here, but that's not all that's been keeping us busy here at Redfish Capital. These markets have been bananas. And so that's what I'm gonna talk about today is a little bit about what's going on in the markets, what I'm seeing and what I'm hoping we can expect to see in the future. However, my crystal ball, I told you a long time ago has got a big old crack in it. Um, so I've never been able to predict the future. If I could, I wouldn't be here today talking to you. Uh, we have just finished the first quarter. And so the, the, as of I'm talking right now, you know, the S and P five hundreds at about 45 70, which means we're down for the year 4.6%.

But the, the big story has been over on the NASDAQ, which holds a lot of the tech stocks. The NASDAQ's at 14,489. So that's now down 8.4%. But remember just on March the 14th, the NASDAQ was at 12 5 81 or down 20.5%. So why is that all going on? Obviously the Russia situation's going on. We have some inflation here, which has come on the back of, uh, commodity, uh, price increases, uh, crude oils up to 1 0 2. We started at the year at what, a little over $76 natural gas is at 5 76. We started out at 3 71. That's a major, major move to the upside. And the yield curve has also jumped, um, which we expected to do. When I say the yield curve. I'm referring to the prices of the treasury yields. The two year treasury yield right now is at 2 43 guys. We started at the year at 0.8, 3%.

That's what you were getting for a two year treasury note 0.83. Now the yields at 2 43, the 10 years at two 40 or 2 44, is it somewhere right in there? So just basically flat with the two year we started that started out the year at 1.6, 5%, the 30 years at 2 46, where we started at 2 0 8. So if the two years at 2 43, the 30 years at two forty six, that's what we call a flat yield curve. So let's look at, from normally you would expect the short, the shorter term maturities to be the lowest, the longest term maturity to be the highest that's called a, the yield curve. And so if you looked at it on a chart, it would start out low, it would start working its way up, and then it would flatten out as you got the 30 years. Now, what we have is a flat yield curve, which basically means that it's, you're getting the same amount of yield as you are a two year bond as you would a 30 year bond.

So obviously people are not buying 30 year bonds that are trying to say on the front end of that yield curve. What we also refer to this as is the dreaded inverted yield curve. When people start talking about the inverted yield curve, they often say, well, these are times, um, of inflation and an inverted me yield curve means the stock. Market's gonna go into a bear market. Uh, that's not always true. We'll talk about that also in just a little bit, but so we've got a lot of the things going on with interest rates. And one of the things that I continue to point out that I continue to hold strong to is that one of the reasons why we're having this yield curve is because we're having chins in the supply chain. And so, and this is not caused by anything other than COVID.

Now, granted you had some, uh, tailwinds pushing those yields up with commodity prices going up that came on the heels of what's going on in Russia. But if you also look at the supply chain, that's, what's causing a tremendous amount of the inflation. So you have the commodity side, which is oil and, uh, fertilizer, okay. For the chemicals that go into fertilizer, that's up almost double. So therefore food prices sh should and are following that curve up. So, but the supply chain, I think, is something that can be healed quicker than the Russian situation. The, the supply chain situation. We, we got into this because of the shutdown at COVID. And it's funny, you go on the TV and you listen to the politicians and you listen to the talking points that, uh, the Democrats have put out and the Republicans have p