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00:11Good morning. Welcome to the Myers Report Fast 15. It is Friday, April 10th. We would have had
00:19our weather guy, Don Day, today, but he reported in last night that aside from some minor drought
00:25conditions in parts of the Central Plains and the West, there's not a lot happening in weather this
00:30week, so Don took off. We have with us our logistics guru, Isaac Issa. He's back and enduring the pain
00:40of high fuel prices. We have with us today Carlos Legaspi, our international finance broker-dealer,
00:48who will be discussing the markets and filling in for Dr. Robert Janetsky,
00:57who is vacationing in Mexico. Isaac, one month into the fuel issue, prices are exceeding $5. How are
01:09truckers managing to handle this increase? Prices are exceeding $5.50. I saw $5.70 on my way home
01:16yesterday, and you know what? It's obviously top of mind every truck driver, every trucking company
01:21right now in the nation. Truck drivers are putting a tremendous amount of pressure, and I think
01:27rightfully so, on trucking companies to pay an appropriate fuel surcharge. Most companies, you
01:34know, benefit from getting fuel surcharge from their customers, but not all of them do. So a lot of these
01:39companies, especially the midsize smaller companies, are coming out of pocket right now, paying their
01:44drivers the additional fuel just to retain driver capacity right now. Again, you know, and trucking
01:50companies across the nation, I've been on the phone all month with our customers trying to get our fuel
01:57surcharge where it needs to be. You'd be surprised, you'd be surprised the challenge we're having right
02:02now when the entire planet is seeing fuel play out on the global stage. But yeah, we're managing it as
02:08best as we can. We're recouping as much cost as we possibly can, but it's certainly not covering all
02:15of it, Gary. How are volumes going, and how's driver capacity, and where are the freight rates trending?
02:22Driver capacity is continuing to lead the market. Indiana just moved forward with passing their
02:30version of the Delilah law, the non-domiciled English speaking. So they're one of the first in
02:35the country to actually pass it through like legislation. In Indiana, right here in our backyard
02:40Midwest, we already are seeing the ripple effects of truck drivers that aren't going to Indiana. We
02:46got guys who are legal citizens who struggle with English, especially across the entire Chicagoland area
02:53that won't even enter certain states because of the rumors that they're hearing right now. So driver
02:58capacity is continuing to lead the marketplace. Demand is coming back in a huge way.
03:04Rail just hit their big month, the month of March, I'm sorry, was the biggest month we saw on rail
03:11since
03:132021, which was in the guts of the COVID era, right? The super cycle we experienced. So things are
03:20definitely moving fast in terms of the right track. So we're thankful for that.
03:26Are we seeing any regional imbalances in capacity that could create pricing power?
03:33Oh, absolutely. The epicenter by far, arguably the epicenter is Chicago. A lot of this nonsense
03:41unfortunately took place in Chicago in a post-COVID environment.
03:47What nonsense, what do you mean by nonsense? The biggest one by far is the double log books, Gary.
03:53Drivers running 22 hours a day. That's the biggest one by far. Team ghost drivers. And then you got the
04:00non-domicile, you know, nonsense. You mean dishonesty. Dishonesty, correct. I'd say
04:07illegal, running an illegal operation. I'd say, you're giving the, you know, so yeah, running illegally.
04:14Carlos, boy, it's been a hell of a week, a hell of a couple weeks. With everything going on in
04:22Iran,
04:23which market segments, which stock market segments do you think will benefit if there is a peace
04:29settlement? Well, right now, we're still, base case scenarios right now, the market as a whole will
04:37be treading water. You know, after the relief rally, post-cease fire, everything seems to be holding.
04:46So we kind of had a big shift back to the economy. We had the CPI just came out this
04:52morning,
04:53came in hot as expected. So how hot was it? The survey was for CPI to come in at 0
05:03.9,
05:04which would take us to a 3.4 year-on-year basis. And then, so it came in right in
05:13line with what's
05:14expected. The good thing is that the core came out, came in also in line at 23. So the move
05:27in energy
05:28prices has not trickled down yet to 4. And so that's why the market is pretty much flat this morning.
05:38All the indices are flat. Interest rates and your bonds still at around 4.3. Nothing really moved.
05:45I don't think anybody wants to move until, especially ahead of a weekend, that there's going to be talks in
05:53Pakistan. So everybody's kind of on hold trading water. So, so right now we're looking at a core
06:00year-on-year of 2.7%.
06:04That's not, that's not too bad.
06:06Well, the concern is that if you look deeper, is that this only captures about a 20% increase in
06:15the price of gasoline. And it, so it's moved around about 40%. So that means that it's not
06:22fully reflected yet. So we'll be looking at the April numbers to see. So we anticipate another hot
06:30number in April. So there is some, there is some good news, uh, that can relate to that, uh,
06:36a little bit of hope and a prayer in that wholesale diesel prices came down about 60 cents a gallon
06:43over
06:44the last few days and gasoline wholesale gasoline prices came down about 20 cents. So hopefully if we
06:52can, if the settlement holds and prices fall by the time we get higher inflation numbers that are
06:58temporary, we'll already see that lower inflation as well on its way.
07:04Well, well, well, well, well, also the market seems to believe that it's going to hold
07:09because it's like I said, it's, it's, it's holding the gains of the, of the, of the rebound have
07:16been maintained. So, so right now it's kind of like, um,
07:21cautiously optimistic. That's kind of what I would put it.
07:24Uh, which market segments will benefit, excuse me, which market segments will be hurt, uh, if
07:33there is a peace settlement?
07:35Well, I think everybody, where everybody hit, you know, when the conflict started,
07:39um, there was a big rotation from, from, um, some of the growth names into defensive names,
07:48you know, consumer staples, things like that, toothpaste and, and, you know, household items and things
07:54like that, because that's normally what happens is it's a quasi gold, you know, it's like, uh,
08:00when there's fear, go to stuff that people will continue to consume.
08:04So we believe that if there's a settlement and the market turns around and continues to recover,
08:12then people will just rotate out of where they hid into some of the growth names.
08:18So I think, so I advise caution. It's a little bit too late to go defensive right now because you
08:25might get hurt if it, if it, um, if it reverses.
08:28So what you're saying is in the times of stress, what they may do is park their money in some
08:33stocks
08:34that seem relatively stable. And when the dust settles, then they pull out of those markets,
08:40those markets. So I guess you were talking, uh, the other day about cereals and cosmetic stuff that
08:46that's flat usage. Correct. So how are, how are stocks doing this week?
08:53Um, so we're still up for the week. Um, you know, like I said, the gains, um, the gains recovered.
09:01So, so just as a, just as a reference for the S and P 500. So we, we closed
09:12Friday at 65, 82 and then we're at 68, 24. So in a week, you know, and that's, and that's,
09:22that's only off by about 150 points from the S and P all time high. Yeah. The all time high
09:30was, um, but 7,000, 7,000 right around at the end of January. Yeah. So, so it's recovered
09:39significantly significant, uh, of the, of the loss where, where we're looking at is, um,
09:47the, kind of the 50% retracement level was 67, 65. So we went north of that. So we believe
09:55that
09:55that's the new support. And so I think that's where it's going to be kind of trading sideways
10:00at around this level to see where the ball rolls regarding the, uh, the, the Iran conflict.
10:06Even with, uh, the uncertainty and the higher inflation numbers, uh, how are interest rates
10:13doing? They seem to be holding. They're holding. So the, um, like I said, the level was already
10:21anticipating the high inflation numbers. So it was already baked in the cake. The, um, where we're
10:28seeing is, uh, expectations of a rate cut in the fed funds and the short end of the curve
10:34this year have continued to go down. So right now, consensus is maybe just one cut
10:40this year, later in this year, we're in the, we're in a little bit on the outlier. We believe
10:46there's going to be no cuts this year, even with a change of helmet, the fed, just because of, of,
10:51you need to let these inflation numbers, even if the conflict resolves, it has to push this bubble,
10:59has to push through the system. And so that's a hard, it's a hard environment to cut rates.
11:05Um, when you have this thing over the next couple of days, we'll huddle with you and with Isaac and
11:11revise and review our forecast to see what's going to hold and what's not. How's the labor market
11:16looking? Labor market continues to be kind of a no higher, no fire. So, uh, weak job creation,
11:24but, um, but also the look below forecast, uh, jobless claims. So the, um, the, uh, uh,
11:35there were some high, you know, high publicity layoffs and tech companies, you know, all blaming it on,
11:42on, on AI. Um, however, that still has not reflected on the labor statistics. So maybe those guys are able
11:50to
11:51find jobs because it hasn't gone into the jobless claims. So it is interesting how, um, you know, uh,
11:59headlines and data, sometimes there's a, there's a lag. We're still waiting for those things to converge.
12:06So, you know, it was interesting that, uh, this, with the, the war and with the stock market falling
12:13a few weeks ago, falling a little, there was an anticipation that there could, that the market could
12:19fall lower and that there would be a buying opportunity. Uh, I don't see that happening now.
12:25Do you? Oh, it depends on the trajectory of the conflict right now. The, the, the, the market seems
12:33to believe that, uh, somehow the ceasefire will cold. So, and, uh, if the conflict ignites again,
12:44um, you know, we may revisit the lows of 6,400 lows on the SMP. So, um, so it's wait
12:52and see. So,
12:53kind of like I said, I'm cautiously optimistic. I think that it's going to hold. So, um, so enough
13:00to not to sell, but not good enough to commit more capital, just kind of just a holding pattern.
13:08Isaac, from the people, you know, over, uh, overseas, is there any idea of whether or not
13:14there's any optimism that this, this piece, uh, this piece will hold?
13:19It's a mixed bag, Gary. It's all about who you asked. It's, it's, it's, if people,
13:24the optimistic people are the people who are more moderate, who want to see this hold. And,
13:29you know, you got the pessimistic people that want to see war continue, truly a mixed bag. And it's,
13:33you know, it tells you everything you need to know about the, uh, complexity of this conflict.
13:39Well, of the people that I speak to, uh, over the last few days, including our mutual, uh, IDF
13:48retired general, nobody really knows. Um, and the president has added that deliberately added
13:58that level of uncertainty, uh, in to improve his negotiating position. And I think he's done
14:04it quite successfully in that nobody really knows what's going to happen next.
14:11That being said, Carlos, going forward, are you optimistic or pessimistic?
14:18I'm always optimistic. There's always ways of making money, long or short.
14:22So, okay. Isaac, what about you?
14:26I'm optimistic. Uh, again, the industries, uh, we're, we're, we're tightening up on the capacity.
14:31Demand is coming back. Rates are, rates are headed up. So things are, things are looking bright,
14:36Gary optimistic. I am also very optimistic and I want to share something, which I think we will find
14:45everything. I think this is interesting. This is the description of socialism versus capitalism
14:54and the utter stupidity of the left. They live in a capitalist society, complain about it, and they
15:01want to destroy it. The same society that gave them what they, what they've got. Bizarre. Anyway,
15:08with that, have a great weekend, be safe and God bless America.
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