Hosts Doug Johnson, Senior Investment Strategist, HCM Wealth Advisors and CPAs Dan Rinck, Investment Strategist and Investment Committee Member

In this episode

• [00:00] Welcome and introductions
• [01:00] The Fed hikes 25 basis points with a hawkish tone, and why Chair Warsh's committee is showing more independence than expected
• [02:45] Can rate hikes fight inflation driven by energy prices and the Iran conflict?
• [03:15] A hot PMI sends the 10-year Treasury through 5%, and why this is a global move
• [05:00] Preview of the PCE inflation and payroll reports
• [06:30] Is the yield spike overdone?
• [07:30] Muni bonds and tax-equivalent yields near 7%
• [09:00] Stocks near all-time highs and a VIX around 16 despite the rate move
• [10:50] Weakening breadth: equal-weight vs. cap-weighted S&P 500 and the struggle in small caps
• [12:50] Dan's outlook: yields back under 5% by year-end and an "everything rally"
• [16:00] Alternatives and gold: real yields, debt and deficits, and buying opportunities
• [17:50] What the 2-year yield signals about future Fed hikes
• [21:00] The Fed has never hiked in October before a midterm. Will that change?
• [22:00] Getting past the "PTSD of 2022": the case for fixed income now
• [24:00] Rebalancing a drifted 60/40 portfolio
• [25:00] Money markets vs. CDs and Treasuries: locking in yield
• [28:00] How today's Fed differs from 2022
• [29:45] Wrap-up and potential portfolio adjustments ahead
• [30:50] Doug and Dan's PCE and payroll predictions
• [32:30] Closing and upcoming quarterly webinar

Key numbers mentioned

• 10-year Treasury: about 5.25%, peaking near 5.30%, up from about 4.7% a month ago and the highest since around June 2007
• 2-year Treasury: about 4.9%; 3-month: 4.18%
• 3-year Treasury: about 4.99%
• Money market yields: about 3.7–4%
• VIX: about 16
• Equal-weight S&P 500: down about 7% since August 15, vs. less than 2% for the cap-weighted index
• Gold: about $4,170, trading in a $4,000–$4,350 range

Coming up Watch for HCM's quarterly webinar, with charts and visuals, in about two weeks.

Questions? Reach out to your HCM advisor to talk through anything discussed in this episode.

[00:53] Fed Meeting Preview Recorded the day before the Fed's rate decision. Doug and Dan discuss the market-implied 80–90% odds of a 25 bps hike, driven by bond market pressure (10-year near 5%, 30-year around 5.3%). Dan argues it's a likely policy error, since the Fed funds rate already sits above inflation and a small hike won't address the real driver — Middle East-linked oil prices. They compare the setup to 2022 (very different — inflation was near 8% then) and discuss "fast vs. slow" hiking cycle research from Ned Davis, concluding this looks more like a slow, one-off move than an aggressive cycle.

[~14:00] Portfolio Positioning Ahead of the Decision What they're watching post-decision: equity reaction, and how the firm's gold/commodities-driven "debasement trade" (in place since June 2025) responds to a potential dollar strengthening. Notes on current bond positioning — concentrated in investment-grade corporates and defined-maturity products to limit rate sensitivity.

[20:51] The Weekend AI Story A widely discussed essay from Anthropic's CEO calling for more oversight and a slower pace of AI development. Doug recaps market reaction (modest, not the "crash" some social media takes suggested) and notes on Sam Altman and Elon Musk's public agreement, contrasted with pushback from President Trump and Chinese officials.

[23:28–29:22] Why Now? Two Theories Doug and Dan each offer a theory on the essay's timing and motive — one centered on a possible internal incident prompting a public oversight push, the other on monetization and IPO-timing pressure across major AI labs. Side discussion on the risks of engineering AI outputs to reflect particular viewpoints.

[29:22] Comparing to the Citrini Report A look back at an earlier fictional "future scenario" research report (the Citrini piece) that triggered a bigger software-sector selloff, for context on how this weekend's essay compares. Both agree this isn't the event that pops any AI "bubble," pointing to continued heavy compute investment and productivity gains at major companies.

[33:33] Tying It Together — Current Positioning No planned major portfolio changes right now; the firm continues to lean on objective data over prediction. Notes on diversification and alternatives contributing positively to returns. Brief mention of upcoming year-end tax planning season and balancing tax efficiency with sound portfolio management.

[36:50] Off-Topic: NFL Week 1 Bengals season-opener recap, fantasy football talk, and some good-natured banter to close out the episode.

[38:52] Sign-Off Listeners encouraged to reach out to their advisor with questions. Next episode in about two weeks.

In this episode of the HCM Market Brief, Doug Johnson, CFA, Dan Rinck, APMA, and Senior Financial Advisor Greg Middendorf, CFP®, CCPS® discuss the challenge of managing investor expectations after several years of exceptionally strong market returns. While strong earnings and continued growth—particularly around artificial intelligence—have supported the market, investors may be starting to view unusually high returns as the new normal. The team explains why expectations matter and why a diversified portfolio should be evaluated based on a client's goals rather than its performance relative to the market's hottest investments.

The conversation explores the risks of FOMO and concentration, particularly as AI-related companies continue to attract investor attention. The advisors emphasize that diversification remains important even when a handful of companies are driving market returns. They also discuss investor psychology, including hindsight bias and loss aversion, and the importance of making investment decisions based on a disciplined process rather than emotions or headlines.

For retirees, the team highlights HCM's use of bond ladders as a "calm bucket." Having stable assets available for spending during a market downturn can help retirees avoid selling stocks when prices are depressed and give the rest of the portfolio time to recover.

The discussion also highlights the opportunities that can emerge during market declines. Tax-loss harvesting can turn investment losses into potential tax benefits, while lower market values may create attractive opportunities for Roth conversions. By integrating investment management with tax planning, HCM seeks to look beyond the immediate market decline and identify strategies that can improve a client's long-term after-tax outcome.

Ultimately, the episode reinforces a core HCM philosophy: financial plans should be built around the client—not around the headlines. Markets will experience periods of strong growth, corrections and significant downturns. Rather than chasing what's hot or reacting emotionally to volatility, investors can benefit from a comprehensive approach that combines diversification, risk management, financial planning and proactive tax strategies.

In this episode of the Market Brief Podcast, Doug Johnson and Dan Rink discuss how markets are responding to signs that the Iran conflict may be nearing an end. Falling oil prices, improving risk appetite, and strong performance from technology and AI-related stocks suggest investors are increasingly optimistic about the economic outlook. The hosts explain why they believe market action is often a better indicator than headlines and why current conditions continue to support a constructive view on equities.

The conversation also explores the ongoing strength of the AI investment boom, the implications of new Fed Chair Kevin Warsh's first policy meeting, and whether higher interest rates are still a meaningful obstacle to market growth. Finally, Doug and Dan break down the highly anticipated SpaceX IPO, discussing investor enthusiasm, valuation expectations, share lockups, and what the offering could mean for future IPOs from AI leaders such as OpenAI and Anthropic. Throughout the episode, they emphasize the importance of focusing on fundamentals while remaining mindful of risks and market expectations.

In this episode of the HCM Market Brief Podcast, Doug Johnson, CFA, and Dan Rinck examine the market's recent pause after a powerful first half of the year and explain why a period of sideways trading may actually be a healthy sign. They discuss the rotation between growth and value stocks, the sharp pullback in momentum investing, and why the long-term outlook for artificial intelligence remains supported by strong demand for computing power and semiconductors.

The conversation also previews the upcoming earnings season, explores the risks of elevated investor expectations, and explains why market reactions to strong earnings may be more muted than in previous quarters. Finally, Doug and Dan discuss why investors should avoid making portfolio decisions based on election headlines and examine how changing index classifications are reshaping traditional value and growth investing. Whether you're focused on AI, market leadership, or long-term portfolio strategy, this episode provides timely insights to help you stay informed and invested.

Episode Notes

In this episode of the HCM Market Brief, Doug Johnson CFA and Dan Rinck APMA discuss the market's continued strength despite geopolitical tensions, elevated interest rates, and inflation concerns. They examine whether today's AI-driven rally truly resembles the dot-com bubble, explore the fundamentals supporting AI-related stocks, and discuss why corporate earnings remain a key differentiator from previous speculative cycles.

The conversation also dives into the unprecedented demand for AI infrastructure, including GPUs, data centers, and semiconductor technology, and what that could mean for future market performance. Finally, Doug and Dan analyze the upcoming IPOs of SpaceX, Anthropic, and OpenAI, highlighting potential opportunities, valuation concerns, and the broader impact these massive offerings could have on market liquidity and investor sentiment.

Topics Covered

• Why markets continue to rally despite inflation, higher rates, and geopolitical uncertainty
• Comparing the current AI boom to the dot-com bubble
• The role of corporate earnings in supporting higher stock valuations
• GPU demand, data center expansion, and AI infrastructure trends
• Risks that could slow the AI investment cycle
• SpaceX's highly anticipated IPO and valuation concerns
• Potential public offerings from Anthropic and OpenAI
• How mega-IPOs could affect market liquidity
• AI's impact on productivity and the broader economy
• The importance of diversification in an AI-driven market

Key Takeaways

• Strong earnings growth continues to support market valuations.
• Today's AI leaders differ from many dot-com-era companies because they generate meaningful revenue and profits.
• Demand for AI computing power remains robust, suggesting the infrastructure buildout may have further to run.
• Upcoming IPOs could create both opportunities and volatility as investors digest new information.
• Diversification remains critical, even as AI becomes an increasingly important market driver.

Resources

For questions about your portfolio, retirement planning, or current market conditions, contact your HCM Wealth Advisors team to schedule a conversation with an advisor.

Subscribe to the HCM Market Brief for weekly insights on markets, investing, retirement planning, and the economic trends shaping your financial future.

Despite geopolitical tensions and rising interest rates, strong corporate earnings and continued AI investment are supporting the market. Doug Johnson and Dan Rinck discuss inflation risks, oil prices, Federal Reserve policy, and why investors may need to move beyond traditional 60/40 portfolios toward alternative assets like commodities, managed futures, and precious metals.

In this episode of the Market Brief Podcast, Doug Johnson and Dan Rinck break down a pivotal moment for markets as a massive wave of earnings reports—led by the largest technology companies—tests whether today’s elevated valuations can hold. With expectations running high, the conversation explores why even strong results may not be enough to push stocks higher, and what investors should be watching as companies attempt to justify heavy AI spending and deliver meaningful returns.

The discussion also dives into the growing influence of artificial intelligence on both corporate strategy and market sentiment, including concerns around rising capital expenditures and the uncertain timeline for profitability. Beyond earnings, Doug and Dan examine the market’s surprising ability to shrug off geopolitical tensions in the Middle East, while highlighting key indicators like oil prices and interest rates that could quickly shift the narrative.

Finally, they explore the potential impact of upcoming mega-IPOs from companies like SpaceX, OpenAI, and Anthropic, and what new financial transparency could mean for AI valuations across the market. The episode wraps with a thoughtful look at macro risks—from debt concerns to earnings slowdowns—and what could drive markets higher or derail the current rally as the year unfolds.