Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Stocks Flip on Jobs Report + Stock Market News 05 July 2024

Transcript

Felix Prehn - Stocks Flip on Jobs Report + Stock Market News 05 July 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: I've been.
• 0:01
  Speaker 1: We've just had massive, massive jobs data in which I think the media is likely to misinterpret.
• 0:09
  Speaker 1: So let me explain it to you so you understand what's going on here.
• 0:12
  Speaker 1: I also talked to you about the bigger picture.
• 0:16
  Speaker 1: I'll also walk you through a couple of trade ideas I've got my eye on and much, much more, and, of course, you can ask this old banker questions.
• 0:22
  Speaker 1: That's why we do this live.
• 0:23
  Speaker 1: It's good to be back.
• 0:25
  Speaker 1: I hope you enjoyed your 4th of July celebrations.
• 0:28
  Speaker 1: Some of you Brits in the chat called it Traitor's Day.
• 0:32
  Speaker 1: So now you have a Labour government Enjoy.
• 0:36
  Speaker 1: Let me share my screen with you so I can show you the key data that just came out Jobs and data.
• 0:42
  Speaker 1: So I can show you the key data that just came out Jobs and data super, super important.
• 0:48
  Speaker 1: There we go, there we go.
• 0:49
  Speaker 1: Okay, this is also some data super, super important.
• 0:52
  Speaker 1: You know I run a.
• 0:52
  Speaker 1: I trade a small portfolio, live for the community.
• 0:55
  Speaker 1: That's a $30,000 portfolio because I want to encourage responsible trade size and we're up 16K so far this year.
• 1:03
  Speaker 1: It's not too shabby, is it Not too shabby at all?
• 1:06
  Speaker 1: And July so far kicking off very nicely.
• 1:09
  Speaker 1: We're up already $3,600 on July.
• 1:12
  Speaker 1: So if you want to learn how we do that, I'll teach you what trades to open and when, how to take the profits and risk management in an automated fashion, so that this can be done in a couple hours a week.
• 1:24
  Speaker 1: Come and join me on Tuesday, and that is thanks to largely some of you Brits who said can we please do another training that is suitable for European time zone?
• 1:34
  Speaker 1: So it's 10 am Eastern time and 3 pm London time this coming Tuesday.
• 1:39
  Speaker 1: Don't miss it.
• 1:40
  Speaker 1: Don't miss it.
• 1:41
  Speaker 1: It'll be the last one for a long time.
• 1:45
  Speaker 1: And this is the data just out, and I just put a tweet on this up because it made me chuckle.
• 1:50
  Speaker 1: Guillaume, hello there.
• 1:54
  Speaker 1: Maybe see you on Tuesday.
• 1:55
  Speaker 1: So what just came in?
• 1:57
  Speaker 1: Non-farm payrolls, which is arguably more important than the unemployment rate, because Wall Street cares more about non-farm payrolls than the unemployment rate.
• 2:03
  Speaker 1: More important than the unemployment rate because Wall Street cares more about nonfarm payrolls than the unemployment rate.
• 2:05
  Speaker 1: So unemployment has gone up to 4.1% from 4% last month.
• 2:10
  Speaker 1: Right, and that is arguably a good thing.
• 2:13
  Speaker 1: I'll explain in a second.
• 2:14
  Speaker 1: But nonfarm payrolls is 40,000 higher than the forecast, and you might therefore be thinking oh no, oh no, jerome Powell can now not possibly cut interest rates because all these jobs are being created.
• 2:31
  Speaker 1: The job market is strong, right, like Biden, who just said he's proud to be the first black woman who served with a black vice president.
• 2:40
  Speaker 1: It's that general direction where this data comes from, president.
• 2:42
  Speaker 1: It's that general direction where this data comes from.
• 2:44
  Speaker 1: And why is that?
• 2:47
  Speaker 1: Well, zoom down the rest of the data and see if you spot the difference.
• 2:50
  Speaker 1: It's like where's Wally Government payrolls?
• 3:01
  Speaker 1: 70,000 jobs created.
• 3:02
  Speaker 1: We were expecting 30,000.
• 3:03
  Speaker 1: So look, we found the difference.
• 3:04
  Speaker 1: The government simply employed 40,000 Muppets extra to gloss over the general disaster in the labor market.
• 3:09
  Speaker 1: Simple, isn't it?
• 3:10
  Speaker 1: And they didn't even have to manipulate any data.
• 3:13
  Speaker 1: They just employed 40,000 people.
• 3:14
  Speaker 1: It wasn't their money, it was yours.
• 3:16
  Speaker 1: Who cares?
• 3:16
  Speaker 1: Right?
• 3:17
  Speaker 1: It's all debt.
• 3:17
  Speaker 1: You know the Japanese own it.
• 3:19
  Speaker 1: We don't care.
• 3:20
  Speaker 1: So baffling stuff here again.
• 3:22
  Speaker 1: And here comes the real data May jobs were revised from 270,000 jobs created down to just 218,000 in April.
• 3:35
  Speaker 1: Jobs you can revise months later, by the way, you don't have to do it immediately, you can do it at some time in the future.
• 3:41
  Speaker 1: You could do it at some time in the future.
• 3:42
  Speaker 1: They went from 165,000 jobs created to just 108,000 jobs created.
• 3:47
  Speaker 1: Had we had these data points in May and April.
• 3:57
  Speaker 1: You think we'd have a rate cut by now.
• 3:58
  Speaker 1: Probably right, but no, no, no, somebody needs to get reelected.
• 4:01
  Speaker 1: And for all you Democrats here in the chat tearing your hair out and going Felix is now a Trumpian or something.
• 4:09
  Speaker 1: No, I don't care.
• 4:10
  Speaker 1: You guys elect in the US.
• 4:12
  Speaker 1: They're all as bad as each other with stuff like this, but it is amusing.
• 4:19
  Speaker 1: Yet it's important to understand.
• 4:20
  Speaker 1: So you make better trading decisions and investing decisions on the basis of this right, because this is actually what moves the market.
• 4:26
  Speaker 1: So a bit more data for you.
• 4:27
  Speaker 1: I always warn you there is data on these live streams.
• 4:30
  Speaker 1: The long-term unemployment rate People who've been unemployed for more than six months has gone up from 1.1 million a year ago to now 1.5 million.
• 4:42
  Speaker 1: Is that a strong jobs market?
• 4:44
  Speaker 1: No, of course it bloody isn't.
• 4:47
  Speaker 1: It's a shambles.
• 4:48
  Speaker 1: It's just the government's lying to you about the data, the headline data that you know the sort of more simple-minded mainstream media picks up, and that's why we do what we do, right.
• 5:01
  Speaker 1: And David, yeah, macro data in the US is like about as bad as it is in Zimbabwe.
• 5:07
  Speaker 1: It's about as reliable.
• 5:08
  Speaker 1: Maybe they share the same adjustment, chap, before we look on Tesla.
• 5:14
  Speaker 1: Actually, I wanted to pull up for you.
• 5:17
  Speaker 1: What does the market think about rate cuts now?
• 5:23
  Speaker 1: Because this is traded, and then we look at a couple of trade ideas, we look at the market and a bunch of other things and, of course, I'll answer your questions.
• 5:30
  Speaker 1: Cme largest options place in the world.
• 5:35
  Speaker 1: One of our head coaches is a former CME trader and what are we now saying?
• 5:41
  Speaker 1: We're saying that For July rate cuts, no, it's not happening, not happening.
• 5:49
  Speaker 1: What about September?
• 5:50
  Speaker 1: And I appreciate most of Wall Street is still like hung over or on a yacht on the Hamptons or something you know.
• 5:57
  Speaker 1: A lot of people are not going to today.
• 5:58
  Speaker 1: It's not going to be a lot of trading volume, so be a little careful.
• 6:00
  Speaker 1: Today, not a lot going to happen.
• 6:01
  Speaker 1: Today, 71% of the market plus these 3%, so 75% chance of a September rate cut.
• 6:09
  Speaker 1: This is priced in traded information and by the end of the year, 47% of the market is now saying we're going to get two cuts.
• 6:19
  Speaker 1: 24, 25% are now saying three cuts or more.
• 6:23
  Speaker 1: So the cuts are coming.
• 6:25
  Speaker 1: It's just a question of when.
• 6:26
  Speaker 1: It won't be July, no, no, no.
• 6:28
  Speaker 1: This lot is too far.
• 6:34
  Speaker 1: They've got PTSD right from the 70s, when inflation went down and up and then down and up.
• 6:36
  Speaker 1: And then you know every central banker is at sleepless nights about that.
• 6:38
  Speaker 1: They don't want to be that person again.
• 6:40
  Speaker 1: So that's why we're getting what we're getting.
• 6:42
  Speaker 1: But you better be prepared for rate cuts, your portfolio better be prepared for rate cuts.
• 6:48
  Speaker 1: Your portfolio better be prepared for rate cuts.
• 6:50
  Speaker 1: There's still some opportunities out there.
• 6:51
  Speaker 1: We talk about them a lot.
• 6:52
  Speaker 1: Happy to talk about them again today.
• 6:53
  Speaker 1: Just ask Now here is a Tesla bull who says generative AI acceleration spurs energy demand Massive.
• 7:08
  Speaker 1: The energy demand is going to go so huge as Trump would say.
• 7:09
  Speaker 1: It's going to be so big.
• 7:10
  Speaker 1: It's going to be bigger than anything we've ever seen.
• 7:12
  Speaker 1: This is probably what Trump says when he gets undressed and is about to.
• 7:16
  Speaker 1: That's gross, isn't it?
• 7:17
  Speaker 1: Oh, imagine that.
• 7:19
  Speaker 1: A lucky porn star.
• 7:21
  Speaker 1: So all these data centers are going to consume so much freaking electricity that we're all going to have to go back to Uncle Bill and say Bill the kind, please build some more nuclear power stations for us and save humanity.
• 7:36
  Speaker 1: And Bill Gates if you hadn't thought about who I was referencing there will gladly do that.
• 7:42
  Speaker 1: He's been lobbying for the last 10 years to make nuclear energy green.
• 7:47
  Speaker 1: And he's achieved it.
• 7:48
  Speaker 1: It's now ESG friendly nuclear energy, which is just baffling.
• 7:52
  Speaker 1: Like when I was a child, there were nuclear power plants near where I grew up and everyone was like, oh my God, they're going to explode, chain wobble and cut them off and it's the worst.
• 8:01
  Speaker 1: And what do you do with the?
• 8:02
  Speaker 1: You know the waste and everything.
• 8:03
  Speaker 1: And now it's green technology.
• 8:05
  Speaker 1: It's masterful what you can do with a lot of money and a long time horizon, right?
• 8:09
  Speaker 1: Anyway, tesla Energy is now worth apparently $36 per share, or $130 billion, as the business, uniquely positioned to benefit from investments in the US electric grid, will accelerate by the AI boom.
• 8:22
  Speaker 1: I will do a bit more of a deep dive into that.
• 8:24
  Speaker 1: I was actually just doing some research on Tesla Energy and that's going to come up fully cooked in the next few days.
• 8:31
  Speaker 1: Bigly yes, bigly demand, absolutely.
• 8:34
  Speaker 1: I hear Trump got a three-inch killer.
• 8:35
  Speaker 1: Do you mean three centimetres?
• 8:38
  Speaker 1: Isn't he of Scottish descent?
• 8:40
  Speaker 1: What's up with Winston?
• 8:47
  Speaker 1: Winston's sleeping in the kitchen and is hoping to get his hand on some fish.
• 8:51
  Speaker 1: We're just being prepared for one of the cats who really likes fish and he gets the head, you see.
• 8:56
  Speaker 1: So he's very, very happy.
• 8:57
  Speaker 1: He gets the raw head of the fish, and there's nothing better than that.
• 9:00
  Speaker 1: So if you've got a dog golden retriever, get him some nice fresh fish.
• 9:07
  Speaker 1: He'll thank you for it.
• 9:09
  Speaker 1: Okay, two ideas.
• 9:10
  Speaker 1: I'll be watching.
• 9:11
  Speaker 1: Actually, let's look at the market first, shall we?
• 9:13
  Speaker 1: That's probably a little bit more important.
• 9:14
  Speaker 1: Here's pre-market Tesla still going up, google, meta, microsoft, apple, all flat Nvidia down just a little, not a lot, just a little.
• 9:23
  Speaker 1: Don't really see much of it.
• 9:24
  Speaker 1: It's kind of a quiet Friday, it's sort of the Friday after holidays and so on.
• 9:34
  Speaker 1: What about NeoPower, says Guillaume?
• 9:36
  Speaker 1: I don't think it's quite on the same scale.
• 9:38
  Speaker 1: I think what you're referencing there is they've got these swap stations which are used as energy storage and they can feed back into the grid.
• 9:45
  Speaker 1: I think that's true.
• 9:45
  Speaker 1: It's a question of scale.
• 9:48
  Speaker 1: Ultimately, the difference is that Tesla's energy storage is in people's houses, so the people have the battery at home.
• 9:57
  Speaker 1: I think that's pretty powerful.
• 10:01
  Speaker 1: But yeah, voters should be required to pass an IQ test.
• 10:08
  Speaker 1: You could start with the people you're voting for.
• 10:10
  Speaker 1: I mean, you select these people.
• 10:13
  Speaker 1: You only have yourself to blame, just like the Brits.
• 10:16
  Speaker 1: They just elected a nice, friendly, business-friendly socialist there.
• 10:22
  Speaker 1: Who knows?
• 10:23
  Speaker 1: I actually reckon in the UK the conservative government said we've ruined this so badly, why don't we let someone else deal with this and we go and sit in our country homes and give them 10 years and then we come back and we'll blame them for it and that'll work out quite well, probably.
• 10:39
  Speaker 1: I think that's what happened over there in the UK.
• 10:41
  Speaker 1: Been fast, danzo, don't tease me.
• 10:46
  Speaker 1: So this is what the market looks like.
• 10:49
  Speaker 1: If you want to see and you get two alerts per day now email go over to tradevisionio and you can also see what's trending up.
• 11:00
  Speaker 1: We're also adding breakouts to the screener in the next couple of days.
• 11:05
  Speaker 1: Lots of stuff coming up over there.
• 11:07
  Speaker 1: So grab yourself a 30-day free trial to Trade Vision.
• 11:10
  Speaker 1: And here is one trade I wanted to walk through XLU utilities, energy utilities, sort of a related thing, and the colorful red and green chart there.
• 11:24
  Speaker 1: Let me make this a little bit less crazy.
• 11:24
  Speaker 1: It's declined a lot, right, it's come down pretty harshly, but it's bouncing up here a little, a little bit of a bounce.
• 11:29
  Speaker 1: Is it enough of a bounce?
• 11:31
  Speaker 1: Well, one thing I look at is RSI, which is that white line here.
• 11:35
  Speaker 1: Let me see if I can get a palish pen and if you look at that, where we are right now or where we were.
• 11:44
  Speaker 1: We were at these levels, which, over here on the RSI, is sort of 35.
• 11:48
  Speaker 1: That's pretty low and the last time we were at such levels was here in January, and then we rebounded and the stock, I mean, really really rebounded.
• 11:56
  Speaker 1: Right.
• 11:56
  Speaker 1: We are similarly here, low again.
• 11:58
  Speaker 1: We rebounded, so reasonable assumption that we might therefore end up rebounding.
• 12:04
  Speaker 1: And our little indicator, well, the trend is still pretty bad.
• 12:08
  Speaker 1: Yeah, the trend is still pretty bad.
• 12:10
  Speaker 1: We haven't broken any of the moving averages here yet 20, 50, and so on.
• 12:14
  Speaker 1: They sit at about 68, 69.
• 12:17
  Speaker 1: But it might be something to put a little bullish flutter on.
• 12:25
  Speaker 1: I think that might be something we will contemplate today.
• 12:29
  Speaker 1: That might be the only thing actually I trade today.
• 12:32
  Speaker 1: The other thing I wanted to show you was this Presidential elections, whether you elect geriatrics or orangutans, the outcome for the market is very much the same.
• 12:42
  Speaker 1: I could not care less.
• 12:43
  Speaker 1: You know, I used to be very passionate about politics and the older I got and the more money I made, the more I realized I don't care, I no longer care.
• 12:53
  Speaker 1: I'm not going to try and change politics or the world, because the politicians don't run the country.
• 13:01
  Speaker 1: I think once you realize that it's kind of a bit of a waste of time.
• 13:05
  Speaker 1: So the better thing to do is just to be responsible for yourself, your family, care for the people around you and learn and educate yourself and learn how money markets work right, like what you guys are doing here, and then you can actually make an impact.
• 13:20
  Speaker 1: But what happens Well, in presidential elections which is here in November elections which is here in November the VIX, the volatility, shoots up very, very significantly on average and median.
• 13:36
  Speaker 1: We're not going to go into the statistics of that, but it goes up a lot.
• 13:38
  Speaker 1: So is it still time to put on that trade on VIX?
• 13:43
  Speaker 1: I would argue yes, and of course it's not financial advice.
• 13:47
  Speaker 1: This was Winston's idea while he was chomping on a head of a dead fish.
• 13:51
  Speaker 1: Um, but vix is pretty low.
• 13:54
  Speaker 1: It's trading at 12 if you zoom out two years.
• 13:58
  Speaker 1: It's pretty much the lowest it's ever been, and not ever, but it's very, very low and there is therefore a reasonable argument to be made that this could be a brilliant opportunity to maybe just buy a call option that expires just after the election or something, or round about the election.
• 14:14
  Speaker 1: When's the election?
• 14:15
  Speaker 1: Sometime in November.
• 14:16
  Speaker 1: So it's fairly inexpensive thing to do, could make, could pay off very nicely.
• 14:22
  Speaker 1: Set a profit target, maybe set up.
• 14:24
  Speaker 1: Yeah, that's what I would do.
• 14:25
  Speaker 1: I've already done it actually.