PODCAST: Durable Goods Spike, CEO Confidence Drops, and the Fed Stalls Out | COT 111

good morning friends welcome to the

sense of things once again this week we

had a week off last week where our we

had sickness in the family and that was

Ron and he is back and up and running

this week so glad to be back uh Israel

and Iran have fought an entire war in

the time period that it took us to come

back which was 12 days we’re going to

share some cool fun facts that Ron has i

have one that I’m going to share this

morning and then we’re going to get into

the meat and potatoes of the show which

we’re going to cover leading economic

indicators ron’s going to share that i

sat and listened to the the Pentagon

briefing this morning about the strike

and I thought there were some really

interesting things that came out of that

and some interesting things I think are

going to have some effect on the Iran

situation in the future that we’re we’ve

been dealing with last but not least I’m

going to cover a little bit on what Wall

Street can start worrying about now

because they’ve they always have to have

something new to worry about and so

what’s probably the next thing that

they’re going to worry about and

complain about so stay tuned we’ll be

right back on in just one second

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[Applause]

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hey everybody welcome to the show ron

how you doing bud good morning still not

100% but I’m getting there based on what

you were just talking about I’m actually

I’m wrapping up my Q3 newsletter to send

out to clients next week and I was

thinking think about what’s happened in

the last three months geopolitically

economically the market you name it i

it’s like we crammed a year of news and

events in three months i don’t know if

people number one realize what has

happened in the last three months and

number two whether it’s just at this

point it’s so p Yeah yeah whatever yeah

yeah it’s it’s I think people have to

get used to the operational tempo of of

the administration and what’s going on

i’m shocked quite frankly to even see

we’ll talk about the tax deal and stuff

like that i’m shocked to see how fast

even that has come together and I don’t

know if it’s I don’t know if the

Senate’s going to get through this or if

they’re going to screw it up and then

the House is going to have to because

then now the House is whining and

complaining about stuff and I’m like

“Okay guys just get it together you can

always do more stuff down the road this

is not the one and only thing we’re

doing ever with tax stuff but I just

think it’s really interesting to see the

Yeah I agree with you just the

operational tempo of how much stuff has

gone on and how much stuff especially on

the geopolitics side holy crap how much

stuff has changed in in this very short

period of time yeah yeah all right so

what do we got on your end so I got some

fun facts i found a bunch of these i got

five this week five next week okay so

number one Walmart loses three billion

to shoplifting each year now that’s a

hell of a lot of money but it’s only

about 1% of their revenue i think it’s

less than that actually but I just think

it’s amazing that even with all the

cameras and they got undercover people

it’s still three plus they’ve got

retirees standing there at the door as

loss prevention what are they going to

do hunt people down that’s not going to

happen

all right next one when a male penguin

falls in love with female penguin he

searches the entire beach to find the

perfect pebble to present to her if

that’s not love and romance I don’t know

what is you know the original pet rock i

was watching something the other day on

on one of the shows I watch on TV and

they were talking about the pet rock

this is the original pet rock now my

question is when he finds this and he

presents it to her where’s she putting

it

maybe under an arm i don’t know maybe

that’s what they used to make their nest

that’s the cornerstone of their marriage

and their new nests all right just

figured I’d ask next now here’s

something funny and I will personally

share something ing with a pillow

between your legs may help reduce back

and hip pain improve posture and keep

your spine aligned i’ve been doing this

for decades i have a couple pillows that

I use that I lean into because I like to

sleep somewhat on my stomach but I have

a cat that sleeps between my legs all

night long so that ensures that I have

back pain my legs are twisted around my

spine is not aligned mine does not do

like this one where it’s sitting over

there by the side he lays directly in

between my legs all night long and and

this little eight pound cat is like a

radiator so

I wake up sweating in the middle of the

night watermelon seeds have one of the

highest nutritional content of any seeds

okay in protein good fat and mineral

like magnesium zinc and copper now I

will tell you I like watermelon but the

one thing I hated about watermelon was

dealing with the seeds and I know that

there are people during the fall time

frame that do cook pumpkin seeds but I

but if that’s the case why don’t people

cook watermelon seeds i don’t know and I

don’t if you cook them does it ruin the

thing I’ve always laughed about is that

people do cook the water or the pumpkin

seeds because oh it’s gonna it’s good

for your health and all that but if you

cook it doesn’t it get rid of most of

the good stuff that’s in it

i personally I think they’re slimy and

nasty myself but I agree yes

that’s probably why maybe people don’t

cook them but you mash them up or

whatever yeah i don’t like or do you

just eat them straight up but I really

don’t want to now this actually I’ve

heard different numbers but it takes

approximately 66 days for a new behavior

to become a habit whether that’s waking

up earlier exercising

changing your routine 60 60 days so if

you think about it this is roughly a

little over two months that’s about

right two months of just every day

habitual procedure to do that if you

could do it they talk about 10,000 hours

or whatever but this is the foray to

that you’ve got to be able to start

somewhere and build up some type of

conditioning in order for this to occur

so I thought this was pretty interesting

but I think let I use that i’ve There’s

a book called Micro Habits that I think

is just phenomenal and I I implement

this into my day i actually have a

little checklist basically in the

morning that I follow and it’s just

consistently like when people tell you

“Oh I don’t have time to do a LinkedIn

post every day it’s just part of my

checklist.” Boom i get in get that done

boom sometimes I do like a weeks ahead

of time or something like that but yeah

there’s multiple things on my little

checklist every morning that I do and it

just helps me stay it just helps make it

into a habit that you don’t even have to

think about so the more you can do that

the better off your life will be in the

end 100% 100% okay so talking about LEI

now LEI they pulled their call for a

recession over a year ago but here’s the

interesting thing about the LEI just

look at the declining number 21

straight down yep and now they said that

it triggered a recession based on the

May numbers now what about a year and a

year and a half ago it triggered too and

then they pulled that call a year ago

now it triggered again my whole point is

what what triggered this thing’s been

declining for almost four years now

anyway what’s what’s the bottom line I

was trying to read here the black line

is the coincident economic index their

CPI which has been going up i’m not

really sure necessarily in the

relationship to it but it’s the LEI but

but it’s interesting you look at in in

history so I’m just as a chartist you

look in history it’s really been both of

those having to decline at one time for

it to really be triggered as a recession

and I the CI I’ve never really looked at

before but if I look at this chart I’m

like okay yeah the LEI has been

declining which it’s really weird

because it typically they work together

in a lot of cases but it’s CI just keeps

going straight up after the the you know

I I think what they’re looking at is

when the LEI crosses down on the CI it

caused a recession here i’ll leave these

but here it crossed here that’s why they

were saying “Hey it triggered.” Yep but

I don’t know what triggered it here i

read all the articles i didn’t see it

but drilling down into the numbers a

little bit this is where it gets a

little spooky because the market’s going

up it’s up again today it’s just

levitating the momentum there’s wind at

its back it just keeps going the 10-year

is coming down which is interesting to

see but if you’re just taking a look at

the numbers ISM is still going negative

right consumer expectations are negative

for business conditions the work hours

are going up i just some of these things

are all over the place and the last

thing and then you could comment is just

taking a look at the negative six-month

growth rate and contraction in the index

and we’re just taking a look at it here

and this is where it said the

contraction this is where it triggered

now I don’t have the data on what that

specific formula was but again it had

all these recession I know it’s only

going back 25 years here but it didn’t

trigger here or here it has triggered in

other spots what are your thoughts yeah

I’m honestly I’ve always been an LEI guy

i’ve always thought that it but

something’s hanky this time and it’s

just not been an accurate predictor of

where things are going for not the last

three years three years and I don’t know

if it’s so much manipulation by the

Federal Reserve and monetary policy and

stuff like that that it’s just taken

some of this off the off the wire or it

the the usual effect that it is i will

tell you up till this up till about a

year and a half ago I would tell you if

it tells me recession I believe it’s

recession and it burned me last year by

being a little bit more conservative

with portfolios because I’m like I it

always says the right thing but this has

not been that the right thing i think I

would now look a little bit closer at

the CI to see if it’s if the CI starts

tumping over along with the LEI being

down then that to me says okay we’re

we’re definitely going to face a

recession more at that point but some of

the stuff that I’ll share one of the one

of the points that I’ll share this

morning on on where we are as far as the

durable goods durable goods were off the

charts this morning and I will say

there’s a difference between slowing and

contracting slowing is trending down

contraction means it’s getting smaller

raining back and we’ve seen contraction

in different areas over the last couple

of years there just hasn’t been a

catalyst thought it was going to happen

in April with the whole liberation day

tariff BS which still needs to get

resolved only Britain has signed other

than that we’ll wait till July what 7th

or 9th find out when that happens and

we’ll go from there but and then just a

couple of other quick things from the

LEI report ceo confidence is at a

multi-year low over the last 12 months

in the CEO index their ex their

expectation of a recession jumped 83%

now I know it was even worse back in in

mid late April before obviously the

market came back and then of course it’s

the same two issues the top two issues

tariffs and geopolitical instability

back to the beginning of the year i

don’t think these two are going to go

away for a while but we talked about

this in in one of our last podcasts that

if you were a CEO or a CFO you’re a

multinational company or you import or

you export quite a bit how do you

provide guidance when you don’t know

where the tariffs are going to be

because number one that affects how much

you’re going to pay for goods and number

two is that going to contract demand no

yeah yeah totally and I think it’s still

not there yet i think we’re getting

closer to some kind of answer on a lot

of this stuff and it sounds like there’s

going to be a flurry of of deals coming

out here over the next several weeks

we’ve got to get past our own tax deal

and all that but then like I said that

that flurry of deals that’s going to

happen here hopefully in the next month

and I I personally think if the

administration’s close on some of this

stuff it’s not going to be hard and fast

okay on July 9th if you’re pretty close

okay we’ll we’ll keep working and then

we’ll get the deal done at that point

gotcha what do you got let me share what

we got here

can you see that yep all right a summer

fun fact most of you know that D-Day

anniversary every year is June 6th 1994

one of the interesting facts I was

sitting here i saw this come up today

and I said I want I I love this picture

because you’ve got reenactors you’ve got

a veteran and then you’ve got currently

serving members of the US Army looks I

was just kind of looking at sleeve

patches and actually this looks 17th

Airborne Division or something like that

so these guys are active duty

paratroopers hanging out with a

paratrooper here i And I just decided

you know what let me Google how many

Normandy veterans are left and Ron and I

were talking about this at the beginning

of the conversation today it’s

surprising there’s still the estimated

61,000

D-Day or Normandy veterans i I don’t

think it’s just D-Day i think it’s

Normandy veterans that are left still

which means these guys have all got to

be up in their mid to late 90s at this

point and they’re still hanging out

there talk about the greatest generation

they just keep on coming and they won’t

stop if you know a veteran of Normandy

and you’re connected with them please

cherish them while we still have them

get their stories whatever else you can

do all right so let’s move on to the

next this morning during our little

hiatus of a week like I said an entire

war was fought and ended during that

time period largely ended on June 22nd

2025 by what’s called Operation Midnight

Hammer and I would highly if you’re

interested in any of this I would highly

recommend you can probably find it on X

or somewhere on YouTube watching the

morning briefing from today the with our

fourstar general Dan Raisen Kaine he

actually gave possibly the best briefing

I’ve ever I’ve been through military

briefings they’re usually boring as

dishwater this probably was the best

military briefing I’ve ever heard in my

life he made he brought it down to the

point of even the people that were on

the ground that took the incoming in in

in Qatar he broke it down to what it was

like for them and it was just it was

really good but one of the things that

they laid out during this briefing was

the fact that the the 14 bombs the

massive ordinance penetrators I think

they’re the GBU57s or whatever it is

what they actually laid out and told

everybody this morning is this is

something we’ve actually been watching

the Ford plant or the Ford facility

being built for the last 15 years

there’s been a team that’s watched that

whole thing and these bunker buster

bombs were actually created specifically

for the purpose of blowing up this

facility ron and I were talking about

this is it why are we sharing so much

information i personally think it’s more

of you know what guys we’ve got these

capabilities and we’ll use them if we

have to uh to try and lighten up some of

the geopolitical issues that are out

there what’s your thoughts Ron

yeah it’s basically to say “Hey look we

have the bigger stick of being nice.”

I’m just saying that could be part of it

too to say “Hey look we’re going to use

these again we showed you that where it

was successful get it.” Basically what

they’re what you want to try to say is

right why do we move aircraft carriers

to certain parts of the world not

because we want to use them we’re just

trying to show people hey we’re here

we’re close by and we’re going to show

force if we need to all this is a

potential future deterrent to say we

don’t want to use these again but we

want to show you how we use them so if

we need to use them just to let you know

if it’s potential and capability i get

it i get it but there are so many things

and I know Trump said this a long time

ago you never discuss strategy i

understand this is post event but my

point is you basically showed them step

by step tick for tick exactly how this

was laid out how it was executed and the

aftermath people can future enemies can

use that to say how do we counter that

I’m just saying yep I agree but once

again I think it shows the strategy of

what let’s take out and it got the

Iranians supposedly to the table to

negotiate

they’re getting their butts kicked

non-stop so we’ll see how long it lasts

but I I mean the thing is their entire

air force is basically gone at this

point they have no anti-aircraft weapons

at all left but they still have about

1,500 to 2,000 missile launchers pointed

at Israel yeah i personally don’t even

though they got rid of half they still

have 152,000 left yeah but I think the

problem is you’re seeing weaker and

weaker as they’ve been going on weaker

and weaker they just don’t have the

capability to bring more of those online

um and I think that’s going to be a big

part of this whatever gets worked out is

okay guys you’re not going to you’re not

going to start rebuilding all this stuff

and giving it to the your proxies and

all that

i just think it takes a big

issue out of the Persian Gulf area and

starts to get us moving in maybe some

kind of agreements god forbid we not

fight in the Middle East for the next

five years at least just wanted to share

that i thought it was just a really

interesting thing okay so what have we

got to worry about now of course we’ve

got the one beautiful bill which is big

and it’s not necessarily beautiful but

it’s something and it’s a step in the

right direction so I think that’s going

to be the next thing people worry about

and Wall Street worries about i think

the next thing after that is the trade

stuff and they’ll worry about that what

does that mean it just means I think we

could still see a few more months of

this up and down every every few days

the news cycle has got to worry about

something else and something new so I

don’t think it’s all up from here i

think we’re in a better geopolitical

position than we’ve been we’ve still got

to do something with the Russia and

Ukraine issues and get that off i think

hopefully with with NATO’s commitment to

everybody throwing a few more dollars in

it will help to move that in the right

direction and get that war over and the

meat grinder of that mess to to stop and

hopefully we will get to some form of

peace before year end and all around the

world and we can actually focus on doing

good things like making money and and

everybody not dying

yeah I agree i’m not crazy about some of

the items in the bill the one main thing

I’d like to see them do away with is

taxes on social security yeah that

should go through i’m not happy about

some of the other things we won’t

outline all those yeah no and I think no

tax i have always said this it is

important to me that we tax people’s

social security check it came from a tax

originally taxation yeah why are we

taxing it again when it comes out and

why are we taxing it more for people

that make more money once again it’s and

I absolutely and I’ll stop my rant stop

calling it a entitlement program it’s

not an entitlement people put their

money the government took the money away

and kept it for 40 50 years before you

got to use it that’s not entitlement i

want my money back you’re entitled to it

yes if you put money into it all the

years there’s a lot of people that put

very little in Yeah and that are getting

larger amounts for other reasons that

I’d rather Yeah that’s how the system

works and yes whatever but once again if

you’ve paid into it in any way shape or

form it is not an entitlement it’s

you’re getting your money back and the

government kept it for a very long

period of time and we can argue that

different ways okay last couple things I

thought were interesting durable goods

orders this morning off the freaking

charts it was expected to be up I think

po I think it was up 7% because they

expected some durable goods orders out

of the aircraft industry and things like

that way off the charts up 16.4% it was

driven by aircraft military stuff

computers things like that i I don’t

think and the argument is oh it’s got to

be because of tariffs all they did you

don’t go buy airplanes because of

tariffs it it says that there’s

something going on from that perspective

even without transportation it was up

like 0.5% it was affected zero so great

jobless claims initial claims dropped to

245 they’re expected to be at 255

that’s good i just see as okay that’s

staying in check it’s been that same

thing for a while and we’re not seeing

unemployment go up or jobless claims go

up good news on those fronts

we still got a lot of stuff to go at

this point but but I think it’s moving

in the right direction in some of the

aspects yeah we’ll see what happens

sometimes you get the summer doldrums

you get a summer rally in the market

august is the big vacation month for

Wall Street if there’s no geopolitical

stuff I think we continue to rally here

but I think we’ll we’re just going to

rally to rally and I think corporate

earnings aside we’re going to rally but

I will want to see what happens July 9th

with tariff situation because I think

that will

foster either conversation or direction

for many of the corporate announcements

for those multinationals i if I had to

guess I think they’re going to kick the

can down the road another 30 to 60 days

yeah I could probably see that happening

just from the simple fact these are

complicated things and I think the

biggest thing is everybody’s so focused

on the number oh well no what this

country is going to pay or whatever i

think the bigger part of these

negotiations and I think what’s taking a

little bit longer is the other side of

the coin which is opening up some of

these markets more to US companies

because there’s been a lot of

restriction against just beef alone like

we we haven’t been able to sell our beef

into England or into the European Union

they’ve been very protectionist about

that and they come up with all the BS of

oh it’s because of you guys use

antibiotics and blah blah blah blah blah

blah blah blah no you’re just trying to

protect your beef industry in those

countries you know so I get it i

understand but I think there’s going to

be more of that opportunity for us to

sell into those markets and I think that

in the end is going to be the biggest

thing that comes out of this the numbers

and the you know whatever the tariffs

are it really doesn’t matter but I think

podcast in two weeks because next week’s

July 4th but the interesting thing is by

the time we do the next podcast we’ll do

a midyear review july 7th or July 9th

we’ll be right there so we’ll see what

happens uh lot of lot to talk about

midway also I will update the the S&P

targets by the analysts nice couple of

revisions in the last week of course and

it’s the typical usual suspects that are

always revising let’s just keep moving

it around and we’ll look like we always

are every year we were right on money

you only changed your mind we’ll see but

it’ll be good it’ll be a good

conversation perfect folks we’re here

for you enjoy your July 4th and enjoy

Independence Day get out wave a flag

hopefully an American flag we just

saying but let’s let’s enjoy those

holidays we’re kicking off summer just

kicked off summer the other day we’re

now on the back side of the the daylight

so now we’re getting shorter and shorter

every day but enjoy it while we still

have it and we will see you guys back

here the very next time