Us via Zoom.
This is Ted Thatcher.
He is a president at Bright Lake Wealth Management.
Ted, happy S&P 7000.
Happy all-time highs.
It's great to have you here.
What is driving, you think this massive disconnect we're seeing between a record market rally with the S&P at 7000 and change and weakening consumer sentiment happening at the same time?
Ted, what's going on here?
Yeah, JD, it's impossible to look at the landscape and not see this incredible discrepancy between what's happening on Wall Street and what's happening on Main Street.
It's like the equity markets have totally forgotten about the war in Iran entirely.
You know, if we look at what's happened since the March 30 lows, the last 12 trading days have just been incredible.
Of course, Kind of being sparked this rally by those semiconductor names, the Microns, the Nvidia, the Broadcoms of the world.
And now, of course, we've kind of seen a little bit of some of that reconcentration narrative that we saw a lot in 2025.
You know, you mentioned, of course, the sectors that have done well, driving us to the 2nd consecutive close above 7000 today.
Are markets underpricing the impact of weak real income growth as well as rising household debt?
I know you're tracking these metrics closely, Ted.
Yeah, you know, when we think about where the consumer is, you know, I think about that consumer sentiment number the University of Michigan put out, JD, it's at 47, you know, that number did print before the ceasefire talks, but the consumer's in a hard spot in several ways.
You know, we talk about, certainly, uh, wages, we talk about the housing piece, and really, I think it just bleeds.
Into a broader discussion about inflation.
You know, we saw CPI come in, you know, with a 3.3% annualized handle.
We saw PCE bump up.
And one number I've really had my eye close on throughout this conflict in the Middle East actually has been the PPI number that we saw come in with a 4 annualized handle.
Why is that number so important?
Of course it's because the number.
It's the number that businesses are getting, you know, that being a leading indicator for other parts of the economy.
And so, even if we are able to sweep the entire Iran war somehow under the rug on the market side, the consequences of it will have to move through the real economy and how it will affect consumers, uh, you know, in their day to day lives.
Ted, we're still talking a lot about the AI led rally.
How sustainable is that AI led rally, especially with software state, uh, a lot of these big software names, they're still pretty deeply oversold.
Yeah, you know, a couple of names stand out.
You know, you mentioned Microsoft had a great tape day.
Microsoft's been a name I've been, I think, really bullish on, kind of through the J curve here.
They got all the way down to 375, a share closing today at, you know, 420 or so, if I got my number right there.
You know, Microsoft, it's interesting, it's trading so far below the, the broader S&P at about a 26 times multiple compared to the S&P's 30.
That's, you know, Microsoft, you know, obviously getting crushed because of so many of these anthropic headlines.
It seems like every time, you know, Anthropic releases a new clouded plug-in service, agent, whatever it is, these names have gotten drugged down.
We're starting to see that again, come back up.
Why?
Well, I think that the market is starting to realize that they have, Microsoft has.
It's just an incredible amount of distribution in the business place.
You know, think about just how entrenched they are at Fortune 500 level in businesses across the country.
The narrative that I'm seeing with Microsoft, to me, actually mirrors a lot of the narrative we saw with Alphabet last year, and it's worth spending some time on.
You know, Alphabet, you know, May, June of last year, was on the Green Mile.
We were sending them out.
Chat GP. was gonna destroy their search business.
It's almost like we think Anthropic's gonna do the exact same thing to Microsoft.
Well, what has happened to, you know, Alphabet since then?
They've gone on a huge rise, increasing their valuation by 80%, going from a, you know, 19 times multiple to trading where the S&P is at over 30%, I think it is now.
And Microsoft, I believe, is kind of poised to make the same sort of narrative, you know, change.
Yeah, a lot of revaluation happening for the software names, the tech names.
Ted, you're an outstanding guest to kick off the broadcast.
Please come back anytime.
Ted Thatcher, president at Bright Lake Wealth Management.
My man, nice to have you.
