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Pavlov's Stock Market Update july 20 2026

Pavlov’s dog refers to a series of experiments by Russian physiologist, Ivan Pavlov, which discovered classical conditioning during his research on dogs’ digestion. He accidently stumbled upon the conditioning reflex by noting that repeating a bell ring prior to feeding eventually stimulated salivation in the animal even though no food was present.

It is now a well-accepted theory and, as we know now, obviously applies to more than just animals.

Take the stock market for example. Decades back the markets reacted to positive economic news, plain and simple. Good earnings and a healthy employment market drove investors into stocks. Conversely, bad economic news generally eroded investor confidence and the market would sell off.

A Pavlovian response for sure. As the years clicked off and with the advent of a central monetary authority, the Federal Reserve (FED), weak markets brought about the idea that a proactive FED could use a variety of monetary tools and mitigate severe market downturns.

Although certain economic theories argue that capitalistic markets cannot be manipulated into submission, other economists believed that careful implementation of FED actions could successfully manage economic downturns.

Those actions-such as the raising or lowering the cost capital, (known as interest rate adjustment) , buying government debt (allowing an increase in deficit spending), and a variety of other actions, are designed to make money either cheaper or more expensive-which can influence investor behavior.

Some economists argue, however, that these FED actions will only exasperate economic turbulence. Others believe the FED had found the holy grail for preventing market catastrophe by using the tools at their disposal.

Regardless of which side of the economic aisle one is on, the FED has apparently come to the point where it constantly tries to micromanage the economy, much like a ship negotiating an ocean full of land mines.

Economies are constantly in a state of flux. There are many moving parts of a complex industrial society. As a result, bad news and good news hit in varying degrees and at varying times. Reading the proverbial tea leaves of where an economy might be headed therefore is no easy task.

Despite this tricky environment, some argue that the FED thinks that it is omnipotent.

That belief is somewhat self-evident as it is constantly implementing their various policies at any sign of trouble.

The FED’s tools are powerful and supercharged. Any one adjustment can make significant changes to both the stock market and the economy under it.

These ongoing movements by the FED have occurred for decades. Market participants have learned, like Pavlov’s dog, that when economic news hits the newswires, the FED will act by turning one or more of these powerful economic knobs to either juice or starve the markets.

This anticipation of FED action on even the slightest piece of economic news causes the market to move in the opposite direction of what was once regarded as rational.

Investors now think that bad news means the FED will act to juice the markets and so they buy stocks. Conversely, good economic news might cause the markets to fall in anticipation of FED action in the opposite direction. Good economic news may mean inflation is building so the FED tightens the money supply and starves the markets to harness rising prices

The anticipation of FED action is now arguably a major factor in markets on whether investors hit the buy or sell button.

An example of this was last week when a negative employment number came out and the markets rose thinking the FED will act to stimulate the economy, which would be good for stocks later down the road.

Decades ago, a bad jobs number would have likely led to a market sell off. Not so today apparently.

There is more to this story that I haven’t included here because of the lack of space but hopefully you get the picture.

The bottom line is bad news might be good news for stocks and good news just might be bad for stocks,

Kind of crazy I know and, unfortunately, it makes negotiating the stock market just that much more difficult.

“Watching the markets so you don’t have to”

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(As mentioned, please use the below disclaimer exactly) THANKS (Regulations) This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com.

Treasury investing SAFE? UPDATE

Are U.S.debt investments safe?

The U.S. Government finances its massive spending in three ways:

It collects revenues from taxes, tariffs and other income sources.

Discretionary Spending vs Inflation

Are Sales Increasing?

Could be a sign the economy is contracting

When inflation hits, many consumers who feel the pinch will do the obvious and cut back on their spending.

Theoretically, for every penny of higher inflation, a certain number of consumers will go under and not be able to make ends meet. It sounds implausible that one penny more would cause people to go bankrupt but since price increases are infinitesimal and their effect on consumers is incalculable, the threshold to go from liquid (able to afford things) to illiquid (no longer make ends meet) can be stated as fact that a penny more can push at least someone, if not many someones, into financial ruin.

Consumers have many expenses. Some are the necessary costs we regard as must be paid in order to survive such as the food we eat and the energy to heat our homes while other expenses are ones that you can do without.

The “must-have” expenses are called essential or non-discretionary spending while the ones we can do without are called discretionary.

As inflation rises, the discretionary items are eliminated first by the consumer. One by one the consumer might start cutting back on the things they want but don’t absolutely have to have in order to keep within their budget.

As inflation rages on, if there is not an increase in income, one by one the discretionary purchases are eliminated. Many items are deemed more discretionary than others. Dinners out, expensive foodstuffs, new clothing, vacations and entertainment purchases might be the first to go while items that are deemed more important, but still discretionary, might be eliminated later. These might be music lessons for the kids, keeping the house at a comfortable temperature, streaming services, or gym memberships.

What things one eliminates and in what order they are eliminated in is obviously different for different people and what one family cuts back on might not be the same as what another family chooses to eliminate.

When looking at the economy as a whole, there are certain sectors that can signal the start of discretionary cutbacks. These usually include entertainment, dining, retail and travel. Next might be personal hobbies, subscription services and self-care services. Medical services could also be reduced as budgets get tighter as well as a host of other discretionary goods and services.

You can tell when cutbacks are occurring within the general population, when prices start to drop and product markdowns start to increase. This is a part of the self-correction mechanism that can start to slow the inflationary environment within an economy. Some companies might reduce locations, reduce inventory or cut staff. If the inflation is persistent, more companies will undertake more drastic measures such as filing for bankruptcy or just close entirely.

Food banks will see more clientele and the evening news will soon fill up with stories about how hard it is to make ends meet. The housing market will likely slow and the calls for the government to “do something” will increase.

The human factor will become more painful to watch and retirement plans like pensions and the like will suffer.

The grand shrinking of the economy will become more and more prevalent and widely acknowledged in the evening news. All of these mechanisms will reduce consumer demand and inflation will slow.

The extent of the economic contraction will depend on how much inflationary damage has preceded the slowdown, with that damage being the inflationary economic events that preceded it.

The question becomes how much damage is inflicted on the consumer before demand drops to the point of recession or even a deeper economic contraction.

It remains to be seen how many people will be affected and how severely, but if inflation stays persistent and stubbornly unyielding, the damage will be ongoing and difficult to measure, let alone forecast.

“Watching the markets so you don’t have to”

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You Can Do it update 6 10 2026

Work hard, complain less, get up early and watch things get a little bit easier?

For literally decades, people have asked me how they can make more money. The answer is pretty easy. It may not be palatable to some, but there is a methodology to making more money than most.

When I was growing up, most fathers taught their kids to “work hard, get up early and be an honest and forthright person (whatever that is), and you’ll die rich”.

Well, that last part wasn’t too encouraging but that’s exactly what my dad told me.

Most people I grew up with did work hard and get up early and most of my high school friends now are doing just fine. Those that are still alive that is.

Growing up in the 60’s and completing high school and college in the 70’s, it was really that simple. Get up early, work hard and the jobs were out there and the money would come.

Not so come the following decades. Government overspending started the buying power erosion of the once mighty U.S. dollar. This subsequently resulted in decades of inflation leading up to this very day. Inflation is the thief of affordability and is the silent killer to one’s financial security.

I am not going into the weeds of the whys and how of inflation but just know overspending governments print up paper dollars at will to accomplish that spending and that leads to inflation. Inflation eats away at your finances because wages never go up at the same rate as inflation does so it’s a race you slowly lose.

That said, although the effect of inflation is worse now than it was a few decades ago (because it’s gone on so long), today it IS easier to make a buck than it was 25 years ago or so.

Explaining that was eloquently done by a guy named David Goggins. He holds the world pull up record, passed both Navy Seal and Army Ranger training, and is the epitome of one hard working SOB (Look him up).

Goggins says it’s easy to be successful nowadays because most people have lost the work ethic or worse, are downright indolent.

Goggins says the examples of both types of people are everywhere we look.

In fact, I, myself, come across both types almost every single day.

For example, I ran across a 17-year-old high school student looking for yard work. I contacted him and instead of a 9:00 am start, he told me he starts at 7:00 am. Upon my inquiry, he mentioned he hits the gym at 5:00 am so he is up early and works all day.

I am like “wow”, what a breath of fresh air this kid is.”

Some motivational speakers say, “Tell me your daily schedule/plans, and I’ll tell you if you are going to be rich.”

I already know this 17-year-old kid will not be anyone society will have to worry about and he will probably be very well off in a few decades.

I know a handful of friends that get up at 5:00 am, work a solid 8-10 hours a day and live a full and active life. Not one of them are struggling. Or at least not like most.

This breed of people runs the restaurants that are always packed, the stores that are always busy and are the service folks that are dependable and do a darn good job. They’re the people we say “wow, that person does great work, always responds, fixes problems and doesn’t procrastinate”.

They are the people that put their heads down and keep swimming. They don’t quit, they keep fighting and it shows in most everything they do. Whatever the service, wherever they work, they just keep pushing.

And then there’s the other side of the spectrum where the majority lie says Goggins. “These folks are the ones making it easy for the rest of us.”

I won’t say what these folks do because it’s more like what they don’t do.

They don’t respond, they pay little attention to detail and simply don’t give it their all.

It’s not rocket science. It’s not what you do, but how you do it.

In conclusion, my gardener is only 17, and he’s just pulling weeds. But he’s damn good at it. He works hard and long and knows the secret that so many seem to not understand.

I have no doubt that with that kind of work ethic, he will go a long way.

It’s not always fun. It’s not always easy. But neither is the world today in which we live in.

Swim a little faster, work a little harder, get up a little earlier and complain a little bit less, and watch how your world will start to seem just a little bit easier.

“Watching the markets so you don’t have to”

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Know your annuity Update May 24 2026

Is there money in annuities?

Years ago, on more than a few Money Matters radio shows, I covered annuities with a bit of disdain and with good reason. In my opinion, the annuity universe was like the wild west, and frankly, I was no fan.

Back then, I found them confusing and as a financial analyst and stock market participant for decades, I never advocate putting money into anything confusing.

I have always said, “Your money should be regarded like your child. Always know where they are and what they’re doing, or some not-so-good things may occur.

Kind of an odd comparison and knowing where your money is might not be as important as knowing where your children are, but damn near.

As a financial analyst, I believed back then, and still do, knowing at least something about what one is invested in is wise advice.

I used to attend sales presentations from annuity companies and would sit in these meetings looking at all the different strategies offered and frankly scratch my head at almost all of them.

I don’t know. Maybe it was me, but most were so complicated as to how they worked, I would throw my hands up and walk out thinking if I, not a complete neanderthal about all things money, couldn’t understand how these investments worked, there was no way I would recommend one.

Graduating way back in 1979 with a degree in economics with honors and having been investing in the market since literally age 13 (with the help of my dad), I know a thing or two about financial matters. Complicated investments are just not for me nor anyone I might advise.

Fast forward to today, and although many annuities I still find way too complicated, I have found a handful that fulfills some niches and are simple enough for even the novice investor to understand.

Some triggered annuities can be easy to understand as well as what I call participation annuities. Triggered annuities may promise a fixed rate of return if the underlying index moves up but may offer a no-downside protection feature. Participation annuities center around offering a split of some percentage of a stock market increase, but like a triggered annuity, may have a no-downside clause.

I view these types of annuities as simple to explain with paper and pen. My father used to tell me that visually illustrating something can cut right through to someone’s conceptualization of whatever it is you are trying to explain. Drawing it out on paper while explaining the terms and conditions usually provides an investor with a clearer understanding of how the investment works.

Investors often say they want to make some money but not lose any. Although it sounds silly, it’s a valid petition to offer up such a desire.

After all, a bank savings account or CD offers such a feature. You won’t lose any money, but being FDIC insured and all, the investor will still make some money, right?

An annuity might have such a feature but may offer a better return than the current bank rate, which is why someone might invest in an annuity.

The bottom line is that annuities may have had a bad name at some point and no doubt; there are many annuities I still wouldn’t touch with the proverbial ten-foot pole.

But for investors who just can’t stomach any losses whatsoever, and there are many of them, a well-structured annuity with a simple strategy that almost anyone can understand might be just the right fit.

Keep in mind, annuities are not FDIC insured, and investors should read the prospectus in its entirety. That said, most advisors can and should sit down with anyone interested in an annuity and explain in full detail all the features, benefits and conditions that an annuity may have.

I will conclude today’s musing by saying if you don’t understand completely what is being presented, ask more questions. When in doubt, seek out a second opinion from a tax professional or perhaps even another advisor. And before making any annuity investment, although some insurance agents are allowed to sell annuities, in my opinion, also run it by an advisor at a reputable firm.

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com.

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