PodcastThe Real Investment ShowLance Roberts

9-2-26 Q&A Wednesday: What Are Markets Waiting For?

The discussion links potential September and pre-midterm volatility to political uncertainty, Iran, oil prices, labor data, and a Federal Reserve decision with expectations roughly split on a rate hike. Market weakness is framed through pressure on technology and semiconductor stocks, possible buyback-blackout and CTA selling, and a potential near-term bounce despite a continuing sell signal. The speakers also focus on retirement planning, including RMD timing, inherited IRA rules, future tax exposure, IRMAA cliffs, portfolio concentration, Treasuries, and risk-based rebalancing.

Market VolatilityInterest RatesRetirement PlanningSemiconductorsTechnology StocksTax Planning

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Key Takeaways

The speakers see several potential sources of near-term volatility: midterm-election uncertainty could produce a 3% to 10% drawdown, while oil-related inflation and weak JOLTS and ADP payroll readings may complicate the Federal Reserve’s rate decision. They characterize the oil shock as potentially transient if tensions between Iran and the United States ease, meaning the Fed may not hike solely in response to it.

U.S. equities were showing broad-based weakness, with futures indicating declines of about 200 Nasdaq points, 20 S&P 500 points, and 100 Dow points, while buyback restrictions and possible CTA selling could reduce support. The speakers nevertheless expect a bounce within the next day or so as the market tests support and its 50-day moving average, while warning that it remains on a sell signal and could pull back toward 7,500 to 7,300.

The speakers view Bloom Energy, Eaton, and Arista Networks as exposed to data-center construction over the next one to two years, but they emphasize disciplined position sizing. Bloom has high beta and a rich valuation after a meaningful correction, while the discussion identifies roughly $170 as a running stop for Arista and about $370 as a potentially attractive level for Eaton after basing.

Retirement-account decisions are becoming more important as required minimum distributions move from age 73 to 75 beginning in 2033 and inherited IRAs generally must be distributed within 10 years. The speakers argue that withdrawals can raise taxable income, affect Medicare premiums and Social Security taxation, and reduce legacy value if future tax rates are higher, supporting consideration of earlier distributions, Roth conversions, and other tax-flexible vehicles.

Distribution planning also has to account for Medicare’s IRMAA income cliffs, where exceeding a threshold by even one penny can increase premiums for both spouses. The speakers therefore suggest that strategically managing withdrawals or Roth conversions may help avoid unnecessary jumps in taxable income and Medicare costs where possible.

GEO-POLITICS

Election Uncertainty — September weakness and the approaching midterm elections could increase volatility through political wrangling, uncertainty over House and Senate control, and potential tax or policy changes. The speakers do not anticipate a 20% pre-election decline, but say a 3% to 10% drawdown remains possible depending on Iran, oil prices, and other developments.

“We don't there's going to be a lot of kind of political wrangling over the next two months going into the midterm elections. a lot of conversation about policy changes…”—

TECHNOLOGY

Bloom Power — Bloom Energy provides energy and power to data centers. The speakers describe the stock as having undergone a meaningful correction, but caution that its valuation is rich and its beta is high, making careful position sizing essential.

“So, Bloom is fine. No problem at all. They've been under a fairly, you know, decent correction here as of late…”—

ECONOMY

Labor And Fed — Weak JOLTS data may foreshadow a softer employment report, while ADP payroll growth was expected at about 45,000 to 46,000 jobs. The speakers identified these labor readings as important Federal Reserve inputs, with market expectations for the next meeting roughly split on a rate hike.

“Yesterday we had the Jolts, economic report came out pretty weak and really kind of portends to maybe a weaker employment number on Friday from the BLS…”—

Oil Inflation — Rising oil prices are adding to inflationary pressure and can push interest rates higher as those costs move through the economy. The speakers say this risk may be transient if tensions between Iran and the United States ease, allowing the Federal Reserve to avoid hiking solely in response to the oil shock.

“In the meantime, oil prices on the rise again, we've talked about this. that feeds into inflationary pressures. That certainly brings up interest rates here…”—

RMD Timing — The Secure Act moved required minimum distributions from age 70½ to 73, while Secure Act 2.0 moves the threshold to 75 beginning in 2033. Required withdrawals can increase taxable income and affect Medicare premiums, Social Security taxation, and tax brackets; the speakers suggest considering earlier distributions or Roth conversions.

“Secure Act changed it from 70 and a half to 73. Secure Act 2.0 know therefore moved the goal goalpost back a little bit to 75…”—

MARKETS

Equity Weakness — U.S. equities were experiencing moderate, broad-based weakness, with futures indicating declines of about 200 points for the Nasdaq, 20 points for the S&P 500, and 100 points for the Dow. Semiconductor and technology stocks were also under pressure. A corporate buyback blackout and possible CTA selling could reduce market support, while roughly 7,420 was identified as initial S&P 500 support.

“This morning, futures are pointing a bit lower. NASDAQ's down about 200 points right now. The S&P's down about 20 points and the Dow's down about 100 points…”—

Utility Seasonality — Utilities historically average about a 1% gain in September. The speakers caution that this is only a historical average, but say defensive sectors may perform better or buffer portfolios if broader-market weakness continues.

“The month of September, by the way, tends to be very favorable for utilities. they typically average about a 1% gain in the month of September…”—

Employer Stock Risk — The speakers suggest limiting employer stock to no more than 20% of a 401(k), regardless of the employer, because a company-specific shock could severely damage a retirement plan. Stock held outside a 401(k) can be hedged with puts, but investors often delay taking profits because of taxes.

“I don't think there's any set requirement whatsoever, and I and everybody kind of approaches this different, but if you're acquiring company stock in your 401k plan, it should not…”—

FORECASTS

Near-Term Bounce — After about three consecutive days of selling, the speakers say the market is testing support near the prior week's low and moving toward its 50-day moving average. They say a bounce is likely within the next day or so, while the market remains on a sell signal.

“We talked about yesterday that the market was going to try to work its way down towards this 50-day moving average. Exactly what's happening…”—

Data-Center Stocks — The speakers say Bloom Energy, Eaton, and Arista Networks are in the right space for data-center construction over the next year or two. They recommend caution on position size, identify roughly $170 as a running stop for Arista, and suggest Eaton may become attractive near $370 after basing.

“So, if you want to own the company, it's fine, but I would just kind of keep a running stop at right around 170 right now…”—

INTRO

The hosts review weak JOLTS data, preview ADP and Friday’s payrolls, and explain why labor reports matter for the Federal Reserve’s upcoming decision.

JOLTS Report Review, ADP/Jobs Preview

Rising oil prices are adding inflation pressure, but the hosts consider that risk temporary because reduced Iran-related tensions could quickly reverse crude’s gains.

Oil Prices on the rise (oil risk is transient): What's feeding into Inflation?

Broadcom’s upcoming earnings are presented as an important test for semiconductor stocks already weakened after Nvidia’s report.

Broadcom report preview

The S&P 500 is moving toward its 50-day average and testing support near the lower edge of its recent consolidation range.

Market working down towards 50-DMA to test support

September’s historically weak seasonality, low volatility, upcoming buyback blackout, and possible CTA selling could create additional pressure despite the likelihood of a short-term bounce.

Seasonal weakness for September is present; volatility remains low

The hosts discuss whether defensive sectors such as utilities, healthcare, energy, and consumer staples may outperform or decline less during September weakness.

Any market Rotation?

Company stock in a 401(k) should generally remain below roughly 20%, while taxable holdings offer more opportunities to hedge, diversify, and realize gains.

Guidance for Acquiring company stock in 401k

The hosts recommend moving from an aggressive 2055 target-date fund only with awareness that the proposed alternatives increase concentration and reduce diversification.

Recommendation for Rotation in and out of funds - how & why & controlling risk

A gradual fund transition is acceptable, but 401(k) trading restrictions, available cash, long-term goals, and disciplined risk management should guide the decision.

Dividend yields or reinvest in Creation of Retirement Paycheck?

Retirement income should combine Social Security, pensions, interest, dividends, portfolio growth, and potentially Treasuries rather than relying exclusively on high-yield dividend stocks.

Where to hide money from the "coming doom..."

Dividend yield is only a mathematical ratio; investors must investigate why a yield is high because declining prices and dividend cuts can create severe traps.

Dealing with the risks in September

There is no universal place to hide from an apocalypse, while economic downturns historically send capital from equities and corporate bonds toward Treasuries.

Portfolio Management Rebalancing, & Target Weighting

The hosts recommend patience and somewhat higher cash during September, when midterm politics, Iran, oil, taxes, and policy uncertainty could produce a three-to-ten-percent pullback.

Data Center & related stocks: Bloom, Anet, ETN

Portfolio rebalancing should begin with target weights based on beta, volatility, risk tolerance, and desired returns rather than arbitrary percentage triggers.

Money flow & Breadth Indicator, Momentum signals: Tax avoidance investing

Gold’s position size must reflect its purpose, such as inflation protection or market hedging, and a ten-percent rebalance trigger is different from a ten-percent allocation.

Is anyone big enough to move the market to influence the election (Situational Awareness)

Bloom Energy, Arista Networks, and Eaton are viewed favorably within data-center infrastructure, but high valuations, beta, entry points, and stop levels require caution.

Changes to mandatory withdrawals

Money-flow, breadth, and momentum systems can reduce exposure when signals turn negative, but they work only when investors follow them systematically despite taxes and emotions.

Sensible policies to "fix" SS: remove restrictions on IRA's vs need for revenue

A systematic strategy may conflict with tax avoidance, so investors choosing not to realize gains should accept a lower-beta buy-and-hold approach instead of pretending to trade risk.

Brookfield Corp?

A hedge-fund failure can move markets even without a giant institution, particularly when leveraged positions must be liquidated rapidly.

Worry about IRMAA?

The hosts reject claims that credit markets are structurally broken, while noting that oil, tariffs, and hedge-fund Treasury basis trades can distort market signals.

Pullback # for S&P

RMD ages moved from 70½ to 73 and will reach 75 in 2033; Roth conversions and diversified account types can reduce future tax and Medicare pressures.

Gold & Silver to run in future?

The discussion covers Social Security financing, inherited IRA ten-year distribution rules, IRMAA cliffs, future tax exposure, Brookfield’s valuation, S&P pullback levels, and tempered expectations for gold and silver.

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

No Guarantees: Past performance does not predict future results; investing carries risk.

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