Latest / Felix Nikolas Prehn's Podcast / This isn’t Going to End Well… + Stock Market News 05 June 2024

Transcript

This isn’t Going to End Well… + Stock Market News 05 June 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: And welcome to this pre-market live stream.
• 0:02
  Speaker 1: The job market has just flipped on its head, and when the job market flips on its head, the economy tends to follow.
• 0:11
  Speaker 1: It might take a little bit of time for that to show up in the data, but it's gonna have a significant impact on interest rates.
• 0:18
  Speaker 1: Where the stock market is going, which sector is gonna do well, and I wanna walk you through that data here so you are the best informed investor out there and actually walk you through some real trade ideas today, some medium term investment ideas.
• 0:32
  Speaker 1: That's the premise of the video.
• 0:34
  Speaker 1: So stick around.
• 0:36
  Speaker 1: In fact, I've got something better for you, because there's going to be some volatility in the market, which basically is a fancy way of saying some things will tank and if you want to protect your portfolio from that, you can actually basically for free, you can protect and ensure your portfolio for absolutely naught.
• 0:55
  Speaker 1: All you've got to do is what Learn how to hedge, and it sounds complicated, but it's actually quite simple.
• 1:01
  Speaker 1: I put together a full document for you.
• 1:03
  Speaker 1: It's like I don't know how many pages 10 pages or something like that.
• 1:06
  Speaker 1: Where is it?
• 1:07
  Speaker 1: Here it is, and actually it's four pages.
• 1:10
  Speaker 1: There's a video at the top as well, which walks you through it.
• 1:13
  Speaker 1: If you are sick of losing money when the market goes down, watch this, read it, understand it, practice it.
• 1:21
  Speaker 1: It explains exactly how to do it.
• 1:22
  Speaker 1: If you have questions on it, ask me down below in the comments, or on this live stream or on the next video, and I'll gladly walk you through it.
• 1:29
  Speaker 1: This is something that should have been taught to you in kindergarten, primary school, high school and every single day of your life, because it allows you to protect your money.
• 1:38
  Speaker 1: So go and learn it.
• 1:40
  Speaker 1: We put it out there for free, because that's what the community is all about here.
• 1:43
  Speaker 1: Okay, so let's jump straight into the big, bold news.
• 1:47
  Speaker 1: As you look at the live market, we look at what's really moving today.
• 1:50
  Speaker 1: The big news out today, just a few minutes ago, 45 minutes ago depends on whether you think that's a lot or not is this ADP employment change, and ADP is private, so it's not government.
• 2:06
  Speaker 1: I was going to say manipulated, I meant seasonally adjusted.
• 2:10
  Speaker 1: You see, I'm learning.
• 2:12
  Speaker 1: We were expecting 175,000 private sector jobs to be created.
• 2:16
  Speaker 1: Only 152,000 were created.
• 2:18
  Speaker 1: That's massively down, good or bad.
• 2:21
  Speaker 1: Think it through what happens.
• 2:24
  Speaker 1: Less jobs means what?
• 2:27
  Speaker 1: Less economy, right?
• 2:32
  Speaker 1: Less economic growth Economy.
• 2:35
  Speaker 1: Let's sort of simplify this means what Lower rates the Fed can finally cut.
• 2:41
  Speaker 1: That's basically what that's saying.
• 2:42
  Speaker 1: So it should be good news, but it's also signaling recession, recession, recession.
• 2:48
  Speaker 1: If we had a little pop-up for that, that would be fun, wouldn't it?
• 2:50
  Speaker 1: So, lula, can you prepare a little pop-up for that?
• 2:53
  Speaker 1: What does she say?
• 2:54
  Speaker 1: Too sleepy, hey, how many hours do you think cats sleep a day?
• 3:00
  Speaker 1: I'm thinking like 16 or something.
• 3:02
  Speaker 1: That's a pretty good life, isn't it Okay?
• 3:05
  Speaker 1: Combine that with yesterday's data job openings.
• 3:09
  Speaker 1: Job openings is exactly how many jobs are available.
• 3:12
  Speaker 1: Pretty significant drop here and the whole area now.
• 3:16
  Speaker 1: Pretty significant drop, more than we've seen since what?
• 3:19
  Speaker 1: Pretty much ever over a concentrated period of time.
• 3:21
  Speaker 1: Pretty much ever over a concentrated period of time.
• 3:24
  Speaker 1: So what does that mean?
• 3:27
  Speaker 1: Well, do you remember Jerome Powell, the Fed bigwig, saying last year, all of last year, there are too many job openings per unemployed worker.
• 3:41
  Speaker 1: That was the whole premise of raising rates.
• 3:43
  Speaker 1: He kept saying it.
• 3:44
  Speaker 1: He kept saying there are basically two jobs for every unemployed person.
• 3:49
  Speaker 1: That's why we need to raise rates, we need to destroy job openings.
• 3:53
  Speaker 1: Well, guess what?
• 3:54
  Speaker 1: He's done it?
• 3:55
  Speaker 1: We are basically back to pre-COVID levels of job openings.
• 4:00
  Speaker 1: Pre-covid levels.
• 4:02
  Speaker 1: What does that mean?
• 4:03
  Speaker 1: They've done that job.
• 4:04
  Speaker 1: They've destroyed jobs, right?
• 4:06
  Speaker 1: Plenty of them.
• 4:06
  Speaker 1: What does it also mean?
• 4:09
  Speaker 1: Rate cuts?
• 4:09
  Speaker 1: Very simple, right?
• 4:11
  Speaker 1: They hit the target rate cuts.
• 4:14
  Speaker 1: Now, what about this?
• 4:18
  Speaker 1: Birth-death adjustments?
• 4:20
  Speaker 1: What the heck are you talking about, felix?
• 4:22
  Speaker 1: We don't care about deaths and births.
• 4:25
  Speaker 1: These are birth and death adjustments of businesses.
• 4:31
  Speaker 1: The US government makes assumptions about how many businesses were created every month.
• 4:38
  Speaker 1: Seriously, they're assuming they come up with a number and apparently more businesses were just created than at any time in the last 20 years.
• 4:51
  Speaker 1: Do you believe that?
• 4:55
  Speaker 1: Do you believe that more businesses were created in the last quarter than at any period in the last 20 years?
• 5:01
  Speaker 1: Of course not.
• 5:02
  Speaker 1: Complete fabrication.
• 5:03
  Speaker 1: It's just a way to create fictitious jobs.
• 5:09
  Speaker 1: That's literally how they come up with the data.
• 5:11
  Speaker 1: They go yeah, let's make that number higher and nobody will notice.
• 5:13
  Speaker 1: This is going to get revised down monstrously.
• 5:17
  Speaker 1: Now, when do they do those revisions?
• 5:20
  Speaker 1: About a year and a bit after they put the data out.
• 5:23
  Speaker 1: I know you can't make this up, right?
• 5:25
  Speaker 1: Sometimes I think we all live in North Korea, but bear with me for a moment.
• 5:31
  Speaker 1: This is important, right?
• 5:32
  Speaker 1: So we've got the governments birth company creation numbers up here, so it's apparently shot up massively, higher than it's ever been, and more companies and businesses are created.
• 5:52
  Speaker 1: Now estimates are that in reality there is a gap here of 300, 400,000 companies jobs essentially and that's going to tank very, very significantly to down here, which means we'll be short somewhere like minus 600,000 jobs.
• 6:17
  Speaker 1: We're going to start to see those numbers in reality feed into some of the data points we'll see by early September, two days before the Fed meets.
• 6:29
  Speaker 1: Two days before the Fed meets, jerome Powell is going to get a little memo that says whoops, we just lost 600,000 jobs.
• 6:38
  Speaker 1: What do you think he's going to do?
• 6:39
  Speaker 1: What do you think he's going to do?
• 6:41
  Speaker 1: Do you think he's going to cut rates or do you think he's going to be like hell?
• 6:44
  Speaker 1: Let's really really destroy this economy.
• 6:46
  Speaker 1: Then I go down as the Fed president printed the most money, cost the most inflation and destroyed the economy.
• 6:52
  Speaker 1: Think that's what he wants to be known for?
• 6:54
  Speaker 1: Probably not right.
• 6:55
  Speaker 1: And then you look at some of this here the growth of the S&P 500 in real terms, we are kind of in crazy land, right.
• 7:12
  Speaker 1: We're kind of in like bubble land from that level, right, ai craze.
• 7:17
  Speaker 1: And then, if you look at, how much money are you retail investors putting into the market?
• 7:24
  Speaker 1: It's that black line here.
• 7:25
  Speaker 1: That's stocks.
• 7:26
  Speaker 1: Is it high?
• 7:29
  Speaker 1: Let me draw a line across it and you tell me this goes back to 1987.
• 7:34
  Speaker 1: Who was president in 1987?
• 7:36
  Speaker 1: Reagan or something?
• 7:37
  Speaker 1: Right Goes back to Reagan years.
• 7:38
  Speaker 1: Reagan or something right.
• 7:39
  Speaker 1: It goes back to Reagan years.
• 7:42
  Speaker 1: Okay, dot-com bubble we were higher.
• 7:44
  Speaker 1: Financial crisis.
• 7:47
  Speaker 1: We touched the level 2017, we touched the level and we're there right again.
• 7:51
  Speaker 1: So are we near the top or are we near the top?
• 7:55
  Speaker 1: Is the party going to keep going?
• 7:57
  Speaker 1: Well, let's get into it in a moment.
• 8:02
  Speaker 1: What's the other thing we look at?
• 8:03
  Speaker 1: I look at this every single day because I trade VIX, which is volatility or it's fear.
• 8:09
  Speaker 1: You've got the VIX down here.
• 8:12
  Speaker 1: That's VIX.
• 8:14
  Speaker 1: The black line is the S&P 500.
• 8:17
  Speaker 1: We are at insanely low levels.
• 8:21
  Speaker 1: I mean really, really, really low levels.
• 8:24
  Speaker 1: Right Again, when we were there 2017, just before things turned a little bit dodgy.
• 8:29
  Speaker 1: We were there in 2014, which was just before things became rather dodgy, and yeah, that's sort of pretty much the low that we've been ever been at, and it means the market's complacent, no one's thinking about risk, everyone's going.
• 8:44
  Speaker 1: The world's wonderful Things can only go up.
• 8:49
  Speaker 1: Nothing will ever go wrong.
• 8:51
  Speaker 1: And this time is different, right, and we'll get onto that in a moment.
• 8:53
  Speaker 1: What do we actually do about this?
• 8:54
  Speaker 1: How do we make money out of this?
• 8:55
  Speaker 1: I'm not a doomer, I'm not a gloomer.
• 9:02
  Speaker 1: We're making money right.
• 9:02
  Speaker 1: Let me show you we're making money.
• 9:03
  Speaker 1: Last two days $3,178 created right, realized May.
• 9:09
  Speaker 1: This is a small portfolio.
• 9:11
  Speaker 1: I'm trading here with $30,000.
• 9:12
  Speaker 1: May, we made $4,000, right April we made $6,500 and so on, and we're going to keep making money.
• 9:20
  Speaker 1: Don't really care which way the market goes, and I'll walk you through some actual trades here.
• 9:25
  Speaker 1: I mean, you can see what we've got open.
• 9:26
  Speaker 1: Right now, we're up about $1,500.
• 9:28
  Speaker 1: I don't count those as profits until they're realized right.
• 9:33
  Speaker 1: Paper profits are not real money, but there are reasons to be a little bit cautious and concerned.
• 9:40
  Speaker 1: They're really making money.
• 9:41
  Speaker 1: We've got Nvidia, they've got amazing margins and then everyone's buying it and it's all true.
• 9:51
  Speaker 1: But that's what they say every time.
• 9:53
  Speaker 1: It's the same for the internet.
• 9:54
  Speaker 1: It was the same in 2008.
• 9:57
  Speaker 1: It was the same in every crisis and crash we ever had.
• 9:59
  Speaker 1: And afterwards, what did we say no one could have seen it coming.
• 10:03
  Speaker 1: Say no one could have seen it coming.
• 10:05
  Speaker 1: No one could have seen it coming.
• 10:06
  Speaker 1: It was all so perfect.
• 10:06
  Speaker 1: It's made complete sense.
• 10:08
  Speaker 1: In hindsight you can see it coming.
• 10:13
  Speaker 1: What do you do in advance?
• 10:15
  Speaker 1: Well, the first thing you do is you ensure your bloody portfolio, you protect it.
• 10:18
  Speaker 1: Go to felrenzorg slash, felixfrenzorg slash, hedge, download that document so you actually know how to protect your portfolio.
• 10:27
  Speaker 1: It's practically free.
• 10:29
  Speaker 1: I mean the document's free, but actually hedging is basically free.
• 10:32
  Speaker 1: You can even make money with it.
• 10:34
  Speaker 1: So what are we going to do here?
• 10:35
  Speaker 1: Do you want to see some trade ideas, or should I?
• 10:37
  Speaker 1: Beata says, is it all from your 30k portfolio?
• 10:44
  Speaker 1: Yeah, it's all from my 30k portfolio.
• 10:46
  Speaker 1: You can see how much money we're using right now.
• 10:47
  Speaker 1: At the moment, we are using half of that 30k portfolio $16,000 right now.
• 10:52
  Speaker 1: Right, we traded with an extra 8,000 yesterday or something like that on an S&P call trade, so 5,000, can't remember.
• 11:00
  Speaker 1: So, yeah, we're not using a lot of money here.
• 11:03
  Speaker 1: Intentionally, I want to trade small because, a I want to show that it's possible and, b I want to encourage people to make small trades and not crazy big trades, because that's not important.
• 11:14
  Speaker 1: Okay, thanks for the Microsoft trade idea.
• 11:16
  Speaker 1: Okay, you made money out of that.
• 11:18
  Speaker 1: I lost money on that.
• 11:19
  Speaker 1: I lost $400 on that?
• 11:20
  Speaker 1: Oh, bastard, but that's okay.
• 11:23
  Speaker 1: So you want to see the trades?
• 11:25
  Speaker 1: Yeah, jimmy, but that's okay.
• 11:27
  Speaker 1: So you want to see the trades?
• 11:28
  Speaker 1: Yeah, jimmy wants to see the trades.
• 11:29
  Speaker 1: Anybody else wants to see the trades?
• 11:29
  Speaker 1: Crowd, yeah, crowd looking good, right, you see my, what I said about crowd before earnings and everyone's like jumping on the bandwagon.
• 11:36
  Speaker 1: Yeah, birdie's got GME.
• 11:41
  Speaker 1: I was thinking of shorting GME today, actually, not shorting it, maybe buy a put.
• 11:45
  Speaker 1: Okay, here is a trade idea, not one.
• 11:48
  Speaker 1: You'd probably think of the VIX.
• 11:50
  Speaker 1: This is the seasonality of the VIX.
• 11:53
  Speaker 1: Who knew that fear is seasonal, right?
• 11:55
  Speaker 1: So fear comes around in March and October.
• 11:59
  Speaker 1: Not quite sure why March.
• 12:02
  Speaker 1: What happens in March?
• 12:02
  Speaker 1: It's just before Easter.
• 12:04
  Speaker 1: October is no idea.
• 12:07
  Speaker 1: Pumpkin season, for some reason.
• 12:09
  Speaker 1: Okay, maybe October makes sense, but typically we get out of the summer months and we get fearful.
• 12:15
  Speaker 1: Now there is another thing happening in November.
• 12:17
  Speaker 1: Here You're going to elect a new or old.
• 12:21
  Speaker 1: Actually, you're going to elect an old president either way, aren't you?
• 12:23
  Speaker 1: They're both pretty old for some reason.
• 12:25
  Speaker 1: You know what I think if you're not an American.
• 12:27
  Speaker 1: There is something very humorous in your presidential elections, because you've selected two pretty unusual people.
• 12:37
  Speaker 1: I'd say One can barely walk in stumbles, and the other one's orange.
• 12:42
  Speaker 1: So it's kind of like 350 million people and you pick those two, it's, it's, it's.
• 12:51
  Speaker 1: It's quite amusing really for us, maybe less so for you, but that also happens, and that tends to cause a little bit more um worry in the market, because the market hates what hates unpredictability right, look at the india election, which could be a trade opportunity today.
• 13:02
  Speaker 1: Look at the mexico election, that could be potentially probably less of an opportunity.
• 13:07
  Speaker 1: So what am I probably going to do and I haven't done it yet I'm probably just going to buy a call option that expires in October or November.
• 13:14
  Speaker 1: Quite simple, really.