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00:09Welcome to the Myers Report Fast 15. It is Friday, February 6th. Today we have with us,
00:16as usual, Don Day, our weather and climate guru. Don, six months, more than six months ago,
00:24you told us this year was going to be cold and a very snowy winter and that there would
00:29be price hikes and fuel shortages, particularly in Europe. Boy, you were right. You also told us
00:37that there would be power outages. Brother. Okay, can you let us know just how bad has it been out
00:47there? Well, you know, pretty significant, especially over the last three weeks. The amount
00:53of snow and ice, it's fallen in the deep south. The cold has set records. I mean, we had three
00:59nights of freezing temperatures around Orlando in a row. You know, you don't, you don't see that very
01:06often. I think we saw, we had like eight inches of snow in Pensacola. Oh yeah. And we, three to
01:12one,
01:13people were snowboarding in Myrtle Beach.
01:18So yeah, it's, it's, it's, it's been quite remarkable. And you brought up energy prices
01:23and, you know, during the cold wave about a week ago, at one point in time, natural gas prices
01:29spiked to nearly $8. Now they've gone back down kind of the baseline to where they were before,
01:34but Europe is getting pretty low in their natural gas supplies. And keep in mind that a lot of the
01:43natural gas exports that have been going over there got slowed down by some work at some of our
01:50facilities over here on the U.S. side. And so we've got places like Croatia, which has less than 20
01:56%
01:56of reserves left. And it's only, it's only the first week of February. And there has been, you know,
02:04just as cold as it's been here in the, in the Eastern and Central U.S., it's been just as
02:08cold in
02:09Eastern Europe. While Western Europe, like the UK and, and France have been able to avoid the real
02:16big cold, you get into Eastern Europe, Ukraine, Germany, Western Russia, they have had a very cold
02:24winter and they've got more coming. So natural, you know, energy prices in Europe have spiked as you
02:31would expect with those low reserves. So if they end up with a cold March, there could be some real
02:37problems over there, especially in the far Eastern, Eastern countries that are in the 20% of reserves
02:43right now. Do you think they will have a cold March? Well, certainly, you know, March has all
02:50indications of being cold. Now you don't get the severe cold in March that you would in January or
02:55February, but just a basic geography reminder that the good part of Europe is pretty high latitude,
03:05higher in latitude than the U.S. So you can still have some pretty cold, cold snaps into the month
03:10of March. So when we get into the end of the winter season, it's going to be really interesting
03:14to see if there's any discussion over in Europe that maybe they're having some second thoughts on
03:21some of their energy policy, like, oh, maybe blowing up nuclear power plants and other things like
03:26that. Maybe this could be a nice incentive to encourage peace, because the war is not helping
03:33anybody. No, not at all. How's it looking for Iran? Well, Iran has been available to avoid the cold. But
03:41as we discussed last week, the weather there has been pretty busy in terms of rain and snow going
03:46through in several systems. And that's going to be the case here for another week. So any military action,
03:52if it does come up, is going to be fighting the weather again. Don, you said the Midwest was going
03:58to be hit in February. First, the warming, which we've had, and now another cold spell. Is that still
04:06good through February? And does it extend to March? Well, we're going to have a bit of a warm up
04:13across a lot of the Central and East United States relief from this three-week cold wave. I mean,
04:18this weekend is still going to be very cold in the Great Lakes in the Northeast and snowy again.
04:24But as we get into next week and beyond, there will be a moderation in temperatures. However,
04:30that doesn't mean winter's over. What we should expect now, as we go into mid to late February and
04:36March, is we're going to be talking about snow across a good part of the country, really
04:43ratcheting up. Into March? In February and March. February and early March. I expect the second half
04:51of February and all of March to be very stormy coast to coast. This is going to make it rough
04:56on
04:56you, Isaac. We've got more weather challenges coming for sure. What's your forecast for the
05:02weather for the Super Bowl? Looks good. Don't ask me what the score is going to be, but the weather
05:07looks like picture-perfect Northern California weather. What's your forecast for who's going
05:14to win the halftime show for the Super Bowl or the alternate halftime show? Well, it'll be
05:21interesting to see. A lot of it depends on what the score is at halftime. If the Seahawks are running
05:28away with it, that could really drop viewership for the halftime show. Okay. Isaac, our truck fleet
05:38logistics guy. Isaac generally, well, no, generally, his information gives us early warnings on the
05:46expansions and contractions of the economy almost in real time. Isaac, how is the cold and spike in
05:54fuel prices impacting the trucking business? Well, thank you, Gary. Cold weather and the higher fuel
06:00prices, they're creating short-term disruptions clearly across the network right now. And there's
06:05been a huge tightening of capacity after a three-and-a-half-year recession that has bled out
06:13a lot of capacity. And we're seeing it in a very, very big way right now. And it naturally pushed
06:17rates
06:18up. We hit a rate per mile, average rate per mile last week of $2.75 a mile. That's up,
06:26I think,
06:27right about $2.03 from 12 months ago. So significant uptick in rates. You're talking about a 25%
06:35increase. Correct. Correct. But Gary, that doesn't necessarily mean that demand is coming back.
06:40It's definitely very obvious that it's temporary pressure on the system. The question becomes,
06:45once conditions normalize, will the volume follow? Well, can you tell, is freight volume activity
06:53increasing, decreasing, or is it too early to say? They're modest. And in many cases,
06:59they're down year over year, Gary. Even though rates are showing pockets of strength, it's really
07:05capacity-driven. Data showed a small bump in December, but nothing that suggests a surge at all.
07:10Volume was up about 4% month over month, but we're still down 3% year over year.
07:16Can you tell? Go ahead.
07:18Now, that's on the drive-in side. Now, flatbeds and reefers have mostly been mixed,
07:23but post-holiday volumes have definitely settled back to last year's levels, which tells us
07:28that demand isn't going to be crazy this year. Again, our industry is really betting
07:33on a capacity drop-off. So, are we seeing a freight recovery or just volatility hiding
07:41underlying weaknesses right now? It's definitely not a freight recovery,
07:46definitely volatility, but I don't think it's going to be short-lived. Capacity is going to be an issue
07:53throughout the entire 2026, which I think tremendously benefits carriers in terms of pricing power.
07:59And I think it really sets us up for a ban of year 2027, which many predict in the industry
08:06is where we'll see that volume really come back.
08:08So, that means that's also going to be inflationary.
08:12Correct.
08:13Okay. Bob, this week, the stock market took a hit. How bad was it? And was that hit meaningful?
08:22Well, it wasn't all that bad. It seemed bad because it was like almost 3% for the week and
08:31a little less than 3% off its high. So, that's not a huge significant hit.
08:37And it's an all-time high is what you're saying.
08:39Yeah, it's an all-time high. So, we're close to the all-time high. And today,
08:43we've had a nice recovery. Now, does that mean that the decline was insignificant?
08:49Well, when you look back at history, just to say, when we've had sharp declines in the past,
08:56such as we've had over the past week, they've often been followed by a resurgence in the market
09:02upward. And we're starting to see that this morning, early markets coming back. However,
09:08the last time I saw such a decline, it was sharply down in one day, gave us a one-day
09:15sell signal in
09:17our model, which I would not pay a whole lot of attention to. And the next day, it went right
09:21back up to a buy signal. But the day after that, it went back down to a sell signal. And
09:27we had a
09:27three-month decline in the stock market. But the point is, there's a lot of daily volatility that
09:33I think we have to pretty much ignore. The one thing that was consistent was that we have a short
09:39-term
09:39model. And yesterday, the model fell to a daily sell signal. And I wrote in my report that if the
09:47market were to stay down below this level, this particular level, that the sell signal would become
09:54stronger and stronger. So unless we had a rebound, it looked pretty bad for the market. This morning,
10:00we've had a rebound, and it looks again like things are fine. But that can reverse itself in
10:06another day. So I think you need three, four or five days of a pattern here to see where the
10:11market
10:11is going. My belief is, even if the market is down, any weakness is likely to be temporary. I believe
10:19we're going to have a great year. Now, the January figures so far are not really all that strong. It
10:26shows the economy moving ahead. But in some cases, it's at a fast pace. In some cases, it's at a
10:33slow
10:33pace. So it's kind of indecisive, a lot like what Isaac was talking about. The volumes are not
10:40spectacular. However, beneath the surface, there are some positive developments that appear to be
10:47occurring in terms of investment, in terms of a rebound in manufacturing. And I think what the
10:52problem is, is we have a big economy. It's over $30 trillion of final goods and services.
10:59And it's much more than that, many times more than that, if you talk about all transactions.
11:05And the economic data are just giving us small pictures of what's happening in different areas.
11:11And that can be completely confusing. So you have to look at what's the big picture. I think the big
11:17picture is, we've had major positive policy changes. They're going to be building in the coming
11:23year. They're not building every month, the cold weather and the snow is going to have an effect.
11:29But on balance, I think things are going to continue to improve and get a lot better.
11:34We were expecting low inflation. We still are. However, Don Day and God gave us severe
11:42winter weather, which obviously rose fuel costs and heating costs. What does this mean for inflation
11:49and our inflation forecast going forward?
11:53Well, interestingly, the inflation is going to be moving just like the rest of the economic data.
11:59We have a CPI report due out this coming week, which the Fed and we believe is going to be
12:06very
12:07modest. But it's modest because it's going to reflect what happened in January. January,
12:12there was a decline in oil prices and some other factors that have pushed the inflation rate down.
12:18So we're going to get a really good report, I think, this coming week. And that's going to cause some
12:23optimism. But then because of the cold weather, we'll probably get a better or a worse report in March.
12:35So again, up and down. And what people have to do is simply look through all of this. There are
12:40temporary things that are going to send monthly figures up and down. Ignore that. The general decline
12:47and inflation that we've been predicting appears to be still underway. And I think it's going to
12:52continue. I agree with you. I think it's going to be interesting. I think the February numbers,
12:58when they come out in March, are going to show a significant increase in inflation.
13:03And when they come out, and when the March and April numbers come out in April and May, it's going
13:11to
13:11go back. And it's going to look like inflation is significantly declining. The increase is going
13:18to be overstated. And so will the April and May decline. That's I agree completely. Despite fears of
13:26the appearance of inflation, interest rates have barely moved. I mean, they've barely moved up a
13:33couple of basis points. What do you think we should expect going forward?
13:37Well, again, the financial markets are concerned. They're concerned about the Fed perhaps being
13:42politicized and actually putting more money into the system. I have no concerns at the moment that
13:49the Fed is doing that. In fact, my only concerns are in the opposite direction. I believe with the
13:55economy set to grow very rapidly, it has to have enough money to do this. And a couple of measures
14:02of money that I look at are not increasing at a very rapid pace. They're increasing at a fairly slow
14:08pace. So I'm more concerned about there not being enough money than there being too much money.
14:13And unfortunately, the new member of the Fed is someone who I think was right about the inflation.
14:21He said the Fed should not have produced all that money and set the inflation up to a 40%.
14:25But if we go back further in history, he was on the Fed in 2008 when the Fed took a
14:32lot of money out of
14:33the system. And we ended up with a major financial crisis. So while he's good on inflation, he's got a
14:41terrible record in terms of not making sure there's enough money when the system really needed it.
14:47And I think a lot of people have overlooked that part of it.
14:51Okay. So we shall see.
14:55I think the money is going to turn out fine. It's easier for the Fed to produce money than it
15:01is to
15:01tighten money. So I think eventually they will have enough money in the system to let the economy grow
15:08strongly. But I think they're going to have to put more money in sooner as opposed to later to get
15:15that
15:15effect in the summer and fall for a strong growth in the economy.
15:20Okay. Isaac, go ahead.
15:23Bob, where do you see crypto going? They've taken a huge dive over the last couple of days.
15:28I don't see crypto going, mainly because the crypto does not have a fundamental basis to price it.
15:38So the prices are going to swing with psychology of people getting greedy and just paying any price
15:45to drive it higher and higher or lower and lower. Over time, I do believe this is a viable way
15:53of
15:54transacting business. And I think the prices will be going up because of the natural tendency
15:59of the crypto market to produce less crypto each year than is available. And the demand is increasing.
16:08It's increasing around the world. The usefulness is increasing. Investors are putting part of it
16:14into portfolios. There's a lot of potential demand building over time for something that's going to
16:21have less and less of surprise. But in terms of not having a fundamental makes it a real crapshoot
16:28in terms of where the price is going next. Isaac, are you generally optimistic or pessimistic this
16:35week? I'm very optimistic. It's a year of, again, it's all about capacity. So he who has the truck
16:42driver will win 2026. Thank God I used to be a truck driver. I know how to talk truck driver.
16:49Yes. Are you going to, what Super Bowl halftime are you going to watch?
16:55Oh, you're going to, you're going to, you're going to throw something at me. I stopped watching
16:58after the Bears got out. So I have no idea who's been playing. We'll be watching it, right? We'll be
17:03watching it. Are you going to watch the alternate halftime is my point? I'll watch whatever's on my
17:08screen. Don, how's your feeling about optimism going forward? Well, good. You know, I'm more optimistic
17:17optimistic about things than if I was living in New York City about getting my snow removed or my
17:22garbage. But I'm still optimistic on things. Well, actually, it could be like in New York City,
17:30it's more than just the garbage. It used to be animal excrement all over the streets, which
17:40gave New York its own flavor. And Robert, are you optimistic going forward?
17:48Nothing has happened to dampen my optimism. I'm keeping a close eye on the Fed, because I think
17:53the only thing that could really slow this economy down is the Fed becomes too restrictive in response
18:00to the higher interest rates. And that would be a shame. It would delay the recovery. I believe
18:06right now the recovery is on track to really start moving ahead in the spring and summer. And we'll
18:11just have to see how that turns out. Okay. I continue. I remain optimistic. I think that
18:20basically the world is going to have to be investing in the United States, because I think we're the
18:24best place to invest. And if the midterms go the right way, then I think our future is going to
18:32be
18:32assured for the next bunch of years. With that, I want to say thank you. Have a good weekend.
18:38Be well, stay safe, and God bless America.
19:04You
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