Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Something Terrifying is Happening to + Stock Market News 05 September 2024

Transcript

Felix Prehn - Something Terrifying is Happening to + Stock Market News 05 September 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: And welcome to a beautiful Thursday.
• 0:01
  Speaker 1: Well, until you see what's happening in the market, let me walk you through the combination of horror.
• 0:07
  Speaker 1: But there is a bit of a silver lining.
• 0:09
  Speaker 1: In fact, there are two items that are rather making me cheerful this morning.
• 0:12
  Speaker 1: So let me walk you through it up to the best informed investor out there, so you're in a place where you can make more money, but also walk through what we can do.
• 0:19
  Speaker 1: Today we can actually make money maybe some trades.
• 0:22
  Speaker 1: Look at your favorite stocks.
• 0:23
  Speaker 1: All you got to do is ask them in the live chat, of course, after you've destroyed the like button, and I'm going to share my screen with you and we'll dive nose drive straight into it.
• 0:35
  Speaker 1: So two bits of data.
• 0:36
  Speaker 1: We had out, one yesterday, one this very, very morning.
• 0:38
  Speaker 1: And yesterday at 10am the manufacturing data came in.
• 0:42
  Speaker 1: Not yesterday, tuesday, right, it was lower than expected.
• 0:46
  Speaker 1: That was bad, okay.
• 0:48
  Speaker 1: Then yesterday we got the jolt job openings how many jobs are available for the masses?
• 0:54
  Speaker 1: And that came in at 7.6 million.
• 0:57
  Speaker 1: We were expecting about 8.1 million.
• 0:59
  Speaker 1: So that's a miss of about 400,000 vacancies, which is pretty significant and pretty beastly because it screams recession, recession.
• 1:14
  Speaker 1: I'm going to get your gains.
• 1:16
  Speaker 1: And then this morning at 8.15, the ADP employment data came out.
• 1:24
  Speaker 1: Adp private company I'm actually a shareholder, and it gets very noisy here by the way, there's a hurricane going on outside just kicking off, just to make the morning a little bit more exciting and we only created 100,000 jobs.
• 1:37
  Speaker 1: We were expecting 115,000 to 145,000 jobs.
• 1:42
  Speaker 1: So what does that say to you?
• 1:43
  Speaker 1: Less jobs created Recession.
• 1:46
  Speaker 1: I know, I know.
• 1:47
  Speaker 1: And well, the Nasdaq wasn't a fan.
• 1:50
  Speaker 1: It came in here at that purplish dotted line there and we dropped, as you can see, right, not a fan, but but but.
• 1:59
  Speaker 1: But.
• 2:00
  Speaker 1: 15 minutes later on this glorious morning, what happened?
• 2:03
  Speaker 1: The initial jobless claims came out, which is what Papa Biden still puts out, and it came in at exactly as forecast, like spot on.
• 2:15
  Speaker 1: It's almost as if somebody looked at the forecast and said can we match it?
• 2:20
  Speaker 1: Because above it is bad, below it is bad, let's just match it.
• 2:23
  Speaker 1: Of course, the US government would never manipulate data like that.
• 2:27
  Speaker 1: No, never.
• 2:29
  Speaker 1: Lunar Chris thought.
• 2:30
  Speaker 1: So that's quite good news, right, and, as I say, praise the Lord, right, the job market is strong after all.
• 2:37
  Speaker 1: The White House was correct.
• 2:39
  Speaker 1: And before you say I'm sort of, you know, some sort of Biden basher, you'll see me do exactly the same thing, no matter who's in the White House after November.
• 2:47
  Speaker 1: Couldn't care less.
• 2:48
  Speaker 1: So what did the market do about that?
• 2:50
  Speaker 1: Let me show you QQQ 8.30 was here there and you can see the lovely little recovery right.
• 3:00
  Speaker 1: So everything is all right again.
• 3:02
  Speaker 1: Hence my little praise, the Lord emoji meme.
• 3:07
  Speaker 1: Now, how are we doing?
• 3:08
  Speaker 1: I'm sure you're terribly concerned about how Felix is doing with his portfolio.
• 3:11
  Speaker 1: This is our teaching portfolio.
• 3:13
  Speaker 1: We closed out a couple of positions this week and we are now at $24,567, which is originally a $30,000 portfolio.
• 3:23
  Speaker 1: That's the gain, right?
• 3:24
  Speaker 1: So we're now at $54,000.
• 3:26
  Speaker 1: And before you think, felix, that's nothing, well, we still have $6,000 in open trades.
• 3:32
  Speaker 1: We're doing quite all right.
• 3:33
  Speaker 1: A couple of nursing and the PayPal trade, which is absolutely flying, which is brilliant.
• 3:40
  Speaker 1: Am I suggesting manipulation, says my dog?
• 3:42
  Speaker 1: Wait till I show you the next bit of data and then you can judge yourself If we look under the hood of the official government data that's just come out from El Presidente.
• 3:55
  Speaker 1: Well, what do you notice?
• 4:01
  Speaker 1: Construction job openings, which is that red line here?
• 4:05
  Speaker 1: They seem to be at sort of Covid lows or nearby.
• 4:10
  Speaker 1: Not exactly what you would expect in September, typically still a pretty big construction month.
• 4:19
  Speaker 1: Right, the weather is good, the birds are chirping, the skies are blue and everyone wants to build, build, build, don't they?
• 4:24
  Speaker 1: So that's pretty bad, but that's not enough, because the data is, I should not say, manipulated.
• 4:33
  Speaker 1: No, no, it's never manipulated, it's seasonally adjusted.
• 4:36
  Speaker 1: You see the little magic phrase.
• 4:38
  Speaker 1: Seasonally adjusted does the following it takes the jobless claims, the initial ones in blue, that the data had, and they look pretty bad.
• 4:48
  Speaker 1: Right, it's a pretty nasty drop here, from all the way up there to all the way down here, the blue line Bad stuff.
• 4:55
  Speaker 1: Hard to get reelected with that kind of data.
• 4:57
  Speaker 1: So what do you do?
• 4:59
  Speaker 1: Well, well, you just take a green pen and you make it up.
• 5:02
  Speaker 1: I'm sorry, you seasonally adjust it and then you bring it to here.
• 5:06
  Speaker 1: So you just increase it, just increase it, just match expectations, just magically uplift it, and yeah, that's what they do.
• 5:18
  Speaker 1: You know, venezuela would be proud.
• 5:20
  Speaker 1: I think so.
• 5:28
  Speaker 1: In reality, I think the economy is slowing down.
• 5:31
  Speaker 1: That's kind of what the data says.
• 5:32
  Speaker 1: Not horribly, but it is slowing down, and that's kind of what we want to see there.
• 5:38
  Speaker 1: Swing trade tips.
• 5:39
  Speaker 1: I'd love to not have the ads there.
• 5:40
  Speaker 1: I have turned them off.
• 5:41
  Speaker 1: I have nothing I can do about it.
• 5:43
  Speaker 1: I've complained to YouTube about a dozen times and they tell me we're looking into it, but they're obviously not because they don't care.
• 5:48
  Speaker 1: So there are no ads on during my live streams, but I know some people will get them.
• 5:53
  Speaker 1: It probably depends on your location or something.
• 5:55
  Speaker 1: No idea why.
• 5:56
  Speaker 1: I don't know what to do about it, my friend.
• 5:59
  Speaker 1: No idea why I don't know what to do about it.
• 6:04
  Speaker 1: My friend, we could stage a sit-in outside a YouTube office or Google office near you.
• 6:06
  Speaker 1: Maybe that'll work.
• 6:06
  Speaker 1: You could start a protest, a hunger strike might be appropriate, perhaps, but no, in all seriousness, I don't know what to do about it.
• 6:11
  Speaker 1: So what is happening, then, to the market with this sort of dubious jobs data here?
• 6:16
  Speaker 1: Well, goldman Sachs, the people with a big golden heart they're saying we see potential correction if jobs data is weak.
• 6:24
  Speaker 1: So they're saying and they're not talking about this jobs data the biggie, the really big one, is coming in on Friday, and on Friday it's called NFP and it's not a non-fungible token that you can trade.
• 6:37
  Speaker 1: It's the non-farm role data.
• 6:40
  Speaker 1: And if that comes in lower than expected, the recession headlines will be whirring around everywhere, and then this chap will be right.
• 6:51
  Speaker 1: Now the job data comes in better than expected, possibly because somebody has extensively seasonally adjusted them, then everything is going to be all right and you can sing that with Bob Marley.
• 7:05
  Speaker 1: So that's kind of the crux of this week.
• 7:08
  Speaker 1: It's going to be Friday.
• 7:11
  Speaker 1: There is a bit more going on.
• 7:12
  Speaker 1: Remember that Bloomberg said yesterday that NVIDIA got hit with subpoenas by the Department of Justice.
• 7:19
  Speaker 1: Well, turns out that wasn't true.
• 7:22
  Speaker 1: So I don't know whether somebody put that out there to make a lot of money on a short or something.
• 7:28
  Speaker 1: But NVIDIA says we have not been subpoenaed by the Department of Justice.
• 7:33
  Speaker 1: And even Bloomberg had to put that out because, well, you can only make stuff up so much.
• 7:38
  Speaker 1: And they're saying because, well, you can only make stuff up so much.
• 7:45
  Speaker 1: And they're saying NVIDIA has been in touch with government agencies, but they haven't been subpoenaed.
• 7:48
  Speaker 1: And NVIDIA is saying NVIDIA wins on merit, as reflected in our benchmark results, value to customers, and customers can choose whatever solution is best for them.
• 7:56
  Speaker 1: We have inquired with the US Department of Justice and have not been subpoenaed.
• 8:00
  Speaker 1: Nonetheless, we're happy to answer any questions regulators may have about our business.
• 8:05
  Speaker 1: So Doomberg was once again nonsense on that, wrong on that one.
• 8:11
  Speaker 1: So I don't always believe headlines, but it certainly didn't help.
• 8:15
  Speaker 1: In video yesterday Somebody just asked who's Bob Marley Just out, you and the rest of the lot who hasn't hit the like button out with you.
• 8:34
  Speaker 1: So All right, there we are.
• 8:37
  Speaker 1: So anything else?
• 8:38
  Speaker 1: Oh, yes, the yield curve inverting, uninverting.
• 8:42
  Speaker 1: Does anybody know what that means?
• 8:43
  Speaker 1: I don't think anybody knows what that means.
• 8:45
  Speaker 1: I think most people just talk about it and they go.
• 8:47
  Speaker 1: Sounds very smart If I mentioned the world yield curve.
• 8:50
  Speaker 1: You know the thing about the yield curve.
• 8:51
  Speaker 1: I'm a bit concerned about it.
• 8:52
  Speaker 1: I don't think anybody knows what it means.
• 8:53
  Speaker 1: So what does it actually mean?
• 8:55
  Speaker 1: Let's change that here.
• 8:56
  Speaker 1: Well, I wrote it out just in case you know.
• 8:59
  Speaker 1: I couldn't string it together.
• 9:01
  Speaker 1: So it means when the yield curve un-inverts, it means that what it means that the market expects interest rates in the next two years to be lower than in the following 10.
• 9:14
  Speaker 1: Why would that happen?
• 9:15
  Speaker 1: Because the fed, in its infinite idiocy, cuts rates which they should have done a while back, obviously, and it's often seen as kicking off a recession like right here, right now.
• 9:31
  Speaker 1: Today is the first day when it will be un-inverted and therefore today should be the kickoff of a recession.
• 9:36
  Speaker 1: No recession, though I haven't seen any t-shirts or long-lived recession or anything like that.
• 9:41
  Speaker 1: So does it have to happen?
• 9:43
  Speaker 1: No, no, it could also just happen, because we expect rate cuts to come down and, given that the Muppets in Washington, no matter what side of the aisle they're on, will continue to spend our way into nirvana, we probably won't get a proper recession, because either they're going to cut taxes or they're going to give money away.
• 10:03
  Speaker 1: That sort of seems to be the options that you two have.
• 10:05
  Speaker 1: You have out over there in the US, up to you who you vote for and so but yeah, that's, you're going to see a lot of that.
• 10:12
  Speaker 1: A lot of people are going to scream recession could kick off a recession, but at these spending levels, the US is basically spending as if it's the middle of World War II, which it isn't, if you hadn't noticed.
• 10:24
  Speaker 1: I know there are wars going on, but they're entirely unnecessary and just there to fund the defense contractors.
• 10:29
  Speaker 1: Harsh opinion, apparently.
• 10:32
  Speaker 1: I got really, really some aggressive opinions about that last year and I was like bagging on the Ukraine war and so it was just there to make people richer.
• 10:39
  Speaker 1: Some people were very upset about that.
• 10:41
  Speaker 1: Seems to be coming more and more of a mainstream opinion, a bit like the vaccines, right, anyway.
• 10:46
  Speaker 1: So don't care about what other people say, this is what I say.
• 10:51
  Speaker 1: Here is what I'm worried about very, very, very worried about it is the Fed making just a little cut, a little incision, in September.
• 10:59
  Speaker 1: What does this say?
• 11:01
  Speaker 1: This here is a 0.25% cut.
• 11:04
  Speaker 1: This here is a 0.5% cut.
• 11:07
  Speaker 1: And what are these numbers?
• 11:08
  Speaker 1: They are the expectations of the market out there and it's not some sort of poll by some seasonally adjusting statistician.
• 11:28
  Speaker 1: It is actually based on tradable instruments, so it's actually the market voting with its feet.
• 11:30
  Speaker 1: So 47% of the market now expects half a percentage rate cut in September, on the 18th of September.
• 11:35
  Speaker 1: And I don't think we're going to get it, because I think Papa Powell is a weird sort of conservative.
• 11:42
  Speaker 1: Print 4 trillion, yay, but don't cut too quickly.
• 11:46
  Speaker 1: You know it's sort of very odd.
• 11:48
  Speaker 1: And if we only get a quarter percent, well, 47% of people will be disappointed.
• 11:54
  Speaker 1: And what are they going to do?
• 11:55
  Speaker 1: Well, they're going to be disappointed.
• 11:57
  Speaker 1: What do people do when they're disappointed?
• 11:59
  Speaker 1: They sell stocks.
• 12:00
  Speaker 1: So, yeah, it's kind of the September unpleasant September seems to be coming true somehow.
• 12:10
  Speaker 1: So an inverted yield curve spells doom, absolutely, and an un-inverted yield curve also spells doom.
• 12:24
  Speaker 1: Precisely, you got it absolutely right.
• 12:26
  Speaker 1: That's the way the market works.
• 12:28
  Speaker 1: And here is something I just thought I'd cheer people up by giving you something that'll really create some anger here in the chat.
• 12:34
  Speaker 1: I'd like to see some anger.
• 12:36
  Speaker 1: If Donald Trump plans to cut the cup, his plan is to cut the corporate tax rate to 15% from 21%.
• 12:43
  Speaker 1: It would boost the S&P by about 4%, says Goldman Sachs.
• 12:48
  Speaker 1: So throw the eggs at Goldman.
• 12:49
  Speaker 1: But if Kamala Harris comes in, she will apparently increase the corporate tax rate to 28%, which would result in profits of the S&P dropping by 5%.
• 13:03
  Speaker 1: So which direction do you think the market's going to go, depending on who goes in?
• 13:06
  Speaker 1: You might love Kamala, you know, might be your favorite person in the world, and you might loathe the orange one.
• 13:13
  Speaker 1: But this is what the market expects.
• 13:16
  Speaker 1: Just showing it to you, not giving you any.
• 13:18
  Speaker 1: You know that's what it is.
• 13:27
  Speaker 1: Somebody writes Trump 2024.
• 13:29
  Speaker 1: Well, yes, completely up to you, of course.
• 13:32
  Speaker 1: You see, there there we go.
• 13:32
  Speaker 1: Now we've got some Trump people.
• 13:34
  Speaker 1: Are we going to get some hate in there?
• 13:36
  Speaker 1: Probably right.
• 13:40
  Speaker 1: Somebody understands yield curves now.
• 13:41
  Speaker 1: That's good.
• 13:43
  Speaker 1: Now, what matters more than the president of the US what BlackRock says absolutely why BlackRock owns the president.
• 13:49
  Speaker 1: It doesn't really matter who's in power.
• 13:51
  Speaker 1: At least that's my opinion.
• 13:53
  Speaker 1: We're a bit, you know, controversial this morning.
• 13:59
  Speaker 1: I'm feeling controversial today.
• 14:01
  Speaker 1: Blackrock says we see a disconnect between the short-term lens of some investors talking about you and the long-term vision of tech and cloud service providers.
• 14:13
  Speaker 1: Bit of a.
• 14:14
  Speaker 1: You can see where they're going with this right, and that divergence has spurred jitters among investors.
• 14:20
  Speaker 1: How dare you?
• 14:22
  Speaker 1: But we think patience is needed.
• 14:24
  Speaker 1: Some big spenders on AI have earmarked capital expenditure for building new data centers and exponentially multiply processing power, and such plans take years, not quarters, to complete, so it may take time for revenues to fully materialize.