Latest / Felix Nikolas Prehn's Podcast / The $10 Trillion BUY Warning! + Stock Market News 29 January 2024

Transcript

The $10 Trillion BUY Warning! + Stock Market News 29 January 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Let me get my life.
• 0:01
  Speaker 1: Good morning to you.
• 0:02
  Speaker 1: Welcome to the craziest stock market week of the year.
• 0:06
  Speaker 1: We've got everybody who matters reporting earnings this week, $10 trillion worth of stocks reporting in the next couple of days.
• 0:15
  Speaker 1: We've got the Fed meeting.
• 0:18
  Speaker 1: We've got jobs numbers, we've got more jobs numbers on Friday and just everything happening at the same time war in the Middle East brewing more and more, and we've got, so far, earnings out.
• 0:31
  Speaker 1: We're going to cover all of that and match much more.
• 0:33
  Speaker 1: I'll run you through some key data points, because I want you to be the best informed investors out there, and then you can hit me with some good questions or simple questions, or questions or good questions pretty much, and I miss these.
• 0:48
  Speaker 1: I haven't done a lot of lives the last week because I was traveling.
• 0:51
  Speaker 1: I was in Portugal and I was in London.
• 0:52
  Speaker 1: We did some exciting things.
• 0:53
  Speaker 1: You're very welcome to ask me about that too, but the one thing I want you to do, the one thing, one thing and one thing only.
• 1:01
  Speaker 1: This is the last chance in January of this year to actually implement your goals of making 2024 the best money year for you yet, and if it's the best money year, every other target becomes so much easier.
• 1:18
  Speaker 1: So I'm running a life trading training tomorrow, tuesday, 10am Eastern time.
• 1:23
  Speaker 1: Go, grab yourself a seat.
• 1:24
  Speaker 1: Felixfriendsorg slash webinar link is above and below and somewhere in the description FelixFriendsorg slash webinar.
• 1:31
  Speaker 1: Grab yourself a seat and I'll break down how we trade.
• 1:33
  Speaker 1: Just one stock, three rules perfect for beginners If you are already trading brilliant.
• 1:39
  Speaker 1: Also, I think you'll still learn a lot and you can again ask me for questions.
• 1:43
  Speaker 1: We do some live trading together so you get to see the whole process from the beginning to end, and I think that's really really valuable.
• 1:50
  Speaker 1: No matter whether you want to be a trader or not, I think it's still very valuable to understand the market better.
• 1:54
  Speaker 1: So do that and let's jump into what's really going on here.
• 1:59
  Speaker 1: And it's a little nippy here today in Hong Kong, hence the jumper.
• 2:02
  Speaker 1: We've got a whopping let me grab my pen a very, very whopping 32% of the S&P 500 report this week, so a third of all the companies that matter report this week, and that's staggering.
• 2:21
  Speaker 1: And it's mostly the ones we really really care about, the big ones.
• 2:26
  Speaker 1: So we look at that, here we go.
• 2:28
  Speaker 1: Here's the actual schedule.
• 2:30
  Speaker 1: We really only care about the stuff at the top, so let me zoom in a bit on this.
• 2:34
  Speaker 1: So we had so far today that just finished.
• 2:36
  Speaker 1: We'll talk about the key numbers and especially guidance, which I think is what really matters, but stocks mooning.
• 2:42
  Speaker 1: So if you are in that so-fi trade that I am in, you'll be very happy.
• 2:47
  Speaker 1: Tomorrow we've got Microsoft, amd, google, starbucks and a bunch of other smaller outfits such as UPS and GM and so on.
• 2:56
  Speaker 1: Jetblue I was only on one JetBlueFly once and the flight attendant essentially sexually assaulted the passengers next to me who I believe were, I want to say, nba players, but I'm not quite sure what they were.
• 3:12
  Speaker 1: It was a really bizarre display of desperation.
• 3:16
  Speaker 1: And then on Thursday we've got Apple and Amazon and Meta.
• 3:20
  Speaker 1: So put Thursday into your thing.
• 3:21
  Speaker 1: And then on Wednesday we've got Papa Powell speaking on Wednesday two to two thirty.
• 3:27
  Speaker 1: And Friday we get our oil friends and so on in the Chicago Board of Options exchange.
• 3:34
  Speaker 1: Obviously the one thing we really really care about around here More space living.
• 3:39
  Speaker 1: You miss me too.
• 3:40
  Speaker 1: That's very kind, very, very kind of you to say Jolt's reports.
• 3:51
  Speaker 1: Yeah, we've got non-farm payroll on Friday.
• 3:54
  Speaker 1: It's a big-ass week but it's looking pretty good so far.
• 3:59
  Speaker 1: And why do I say that?
• 4:00
  Speaker 1: Because it's looking pretty good.
• 4:01
  Speaker 1: So far.
• 4:02
  Speaker 1: We've got earnings surprises.
• 4:04
  Speaker 1: 54% of all companies who've reported so far have beaten earnings by a significant margin.
• 4:14
  Speaker 1: Only 10% have missed by a significant margin.
• 4:16
  Speaker 1: So we're pretty good.
• 4:18
  Speaker 1: We're above average.
• 4:19
  Speaker 1: Yeah, we're coming down a bit compared to the last quarter, but that's kind of to be expected and I just think expectations were modest going into this earning season and therefore were likely to come out swinging.
• 4:32
  Speaker 1: And typically what happens if you beat well, you get an outperformance, like so far this morning, up 13% or something crazy.
• 4:40
  Speaker 1: We look at that in a moment as the pre-market settles and beats are slightly below historic averages.
• 4:50
  Speaker 1: I mean the reaction to the beats.
• 4:52
  Speaker 1: The market's going a bit like it's better than we thought.
• 4:55
  Speaker 1: But we knew it'd be better than we thought because we'd set the bar pretty low.
• 5:00
  Speaker 1: But we actually quite like that.
• 5:01
  Speaker 1: We don't want massive overreactions.
• 5:03
  Speaker 1: I find overreactions very disconcerting and on the MIS front, the MISs are being punished a little bit less than they have been historically.
• 5:15
  Speaker 1: So the market's kind of just going well.
• 5:18
  Speaker 1: Someone's going to bail us out and we'll talk about that some more in a moment as well.
• 5:22
  Speaker 1: But let's run through a few more data points and of course, I'll also take your questions.
• 5:25
  Speaker 1: So we've got and it gets.
• 5:27
  Speaker 1: You know what?
• 5:27
  Speaker 1: It's the lights.
• 5:28
  Speaker 1: When I turn the lights on, it gets warmer.
• 5:30
  Speaker 1: So we're going to have to lose the scarf.
• 5:34
  Speaker 1: There we go.
• 5:35
  Speaker 1: Cat can make use of it behind me.
• 5:37
  Speaker 1: You guys want a scarf?
• 5:39
  Speaker 1: I'm not sure I was appreciated.
• 5:41
  Speaker 1: I threw that in that direction.
• 5:43
  Speaker 1: Oh, dang you.
• 5:44
  Speaker 1: You should have walked over here and placed the scarf very gently on me and asked whether it was all right.
• 5:50
  Speaker 1: So I'm getting an evil eye there from behind me.
• 5:54
  Speaker 1: There are two cats behind me actually.
• 5:56
  Speaker 1: Now, why, why?
• 5:57
  Speaker 1: Why is earnings estimates so exciting?
• 6:00
  Speaker 1: Because, in the long run, all we really care about are our future profits.
• 6:06
  Speaker 1: As in earnings, earnings are a fancy word for profits.
• 6:08
  Speaker 1: Pps would be better, wouldn't it?
• 6:10
  Speaker 1: Earnings per share profit per share would not be better.
• 6:14
  Speaker 1: Pps, I think, would be better.
• 6:15
  Speaker 1: Anyway, we are expecting them to accelerate towards year end and that's kind of interesting.
• 6:22
  Speaker 1: So we're kind of thinking, saying as a market that the worst is almost behind us, just kind of like soft landing, miracle.
• 6:30
  Speaker 1: Here we come, so deposit right.
• 6:32
  Speaker 1: So the fourth quarter this year, earnings are expected to grow about 18%, which is pretty good in my books, but there is always a but isn't there A very, very large but in this case?
• 6:47
  Speaker 1: And the large but is that the magnificent sevens, their earnings revisions for the fourth quarter, which we're getting now, we're up 4%.
• 6:56
  Speaker 1: So people are thinking, oh, it's going to get better.
• 6:58
  Speaker 1: For the rest of the market SMP 493, and that was a catchy title it's minus 15%.
• 7:06
  Speaker 1: So our expectations for everybody but the mark seven are a minus 15% fall in profits, or rather expectations of profits.
• 7:17
  Speaker 1: So you see, the market is very, very unequal, much like society.
• 7:22
  Speaker 1: And, yeah, returns of companies are exactly that.
• 7:34
  Speaker 1: You look at the Magnificent Seven and you get whopping returns right 82% up over the last year.
• 7:43
  Speaker 1: The S&P is only up 21% and the S&P without the Mag7 is only up 10%.
• 7:51
  Speaker 1: So if it wasn't for the glorious Seven, then it would have been a pretty average year last year.
• 7:59
  Speaker 1: So you would have had 10% returns in an index fund rather than 21%.
• 8:04
  Speaker 1: So it's pretty much all those guys.
• 8:06
  Speaker 1: Now, this is very unfortunate, isn't it?
• 8:08
  Speaker 1: Iran distanced itself from US-based attack.
• 8:10
  Speaker 1: No, that's not the unfortunate part.
• 8:11
  Speaker 1: Three US servicemen killed 25, apparently injured, in a drone attack somewhere near the Jordanian border.
• 8:21
  Speaker 1: Why there is a US-based and the Jordanian border is a question for another day.
• 8:27
  Speaker 1: But Biden's going to have to do something if he wants to get reelected and not look like a wet lettuce or like my cucumber plants.
• 8:34
  Speaker 1: When I got back, people did not water my cucumber plants.
• 8:37
  Speaker 1: They looked very sad, they were just like.
• 8:40
  Speaker 1: So Biden doesn't want to look like a dying cucumber plant and therefore he's going to have to bomb something Anything really and make it look like they hit something important.
• 8:51
  Speaker 1: Now let's hope he doesn't actually hit Iran, because that would be a whole nother escalation.
• 8:55
  Speaker 1: But there are plenty of things to hit right Yemen, syria, iraq.
• 9:00
  Speaker 1: You know lots of places you can bomb without anybody caring particularly.
• 9:04
  Speaker 1: So I suspect he's probably going to do something like that Just hit a shed somewhere.
• 9:09
  Speaker 1: Hopefully there are no goats inside.
• 9:10
  Speaker 1: We'd like our goats around here.
• 9:12
  Speaker 1: But what does it have to do with stocks?
• 9:14
  Speaker 1: Well, it has to do something with stocks, and that's oil and energy prices.
• 9:19
  Speaker 1: Now I was literally a week ago sitting at my desk thinking I had oil written out positive and I just couldn't really decide on an energy trade because of earnings and the stocks.
• 9:30
  Speaker 1: And if I'm the think or swim, you can't trade oil futures or options on oil futures.
• 9:36
  Speaker 1: So I didn't do anything at the end.
• 9:38
  Speaker 1: But I think probably would have been a wise move.
• 9:40
  Speaker 1: But bizarrely, the market is still selling off energy.
• 9:47
  Speaker 1: So the market is actually pulling money out of energy.
• 9:51
  Speaker 1: Same the long short ratio of prime books.
• 9:55
  Speaker 1: So people are basically still leaving the energy trade.
• 9:58
  Speaker 1: That starts to turn around again, I'd say, and part of the reason is because energy made a lot of money in the previous years, so people are kind of taking profits Now.
• 10:09
  Speaker 1: This is a chart that is the sexiest chart of the day.
• 10:11
  Speaker 1: I'd encourage you to take a screenshot and show it to the people who used to love you, because once you show it to them, they will run and never talk to you Again.
• 10:18
  Speaker 1: And what is it?
• 10:19
  Speaker 1: It's essentially showing you how cheap is it to hedge your portfolio.
• 10:24
  Speaker 1: It's never been cheaper, never, ever, ever been cheaper.
• 10:28
  Speaker 1: And that always happens at the top of the market or near the top of the market, when everyone goes.
• 10:32
  Speaker 1: But it's only going to go one way.
• 10:34
  Speaker 1: Who needs insurance?
• 10:35
  Speaker 1: Well, it's a little bit like the racing driver on a motorbike who goes around the last quarter and takes off his helmet and goes I don't need insurance.
• 10:43
  Speaker 1: And then you know it's a wall.
• 10:44
  Speaker 1: So if you know how to hedge.
• 10:47
  Speaker 1: It's a really, really cheap thing to do.
• 10:49
  Speaker 1: If you don't know how to hedge, google a little video of mine called never lose money again.
• 10:53
  Speaker 1: Just type in Felix, never lose, and it'll pop up in the search bar and you'll learn it completely for free.
• 11:00
  Speaker 1: Because that's what we're all about, right?
• 11:01
  Speaker 1: Our channel is all about teaching you to become better investors and money managers.
• 11:05
  Speaker 1: So, yeah, really really really really cheap to hedge at the moment.
• 11:09
  Speaker 1: Now, with all of this going on this week Fed meetings, jobs, data, non-farm payroll data, apple, google, amazon, microsoft and yes.
• 11:21
  Speaker 1: So if I reporting this week, you'd think the market would be a little bit on tenterhooks, wouldn't you?
• 11:28
  Speaker 1: It's not.
• 11:28
  Speaker 1: The market is pricing in a 1.5% move by Friday, which is staggeringly low.
• 11:36
  Speaker 1: I mean, a percent and a half in a week on the S&P really isn't all that much.
• 11:40
  Speaker 1: So the market is just going.
• 11:43
  Speaker 1: Yeah, it's all happening.
• 11:44
  Speaker 1: We're chilled.
• 11:46
  Speaker 1: I mean, maybe they're all living in California and really are chilled, but something weird going on there.
• 11:52
  Speaker 1: And then I look at this, which is the Fed's reverse repo facility.
• 11:56
  Speaker 1: That's sexy chart number two for your next date.
• 11:58
  Speaker 1: You'll definitely be alone for the rest of your life and that's well.
• 12:03
  Speaker 1: There is almost no money left?
• 12:04
  Speaker 1: There are now 570, I was going to say millions.
• 12:12
  Speaker 1: Is that millions?
• 12:14
  Speaker 1: Is that billions?
• 12:16
  Speaker 1: No, it's millions Must be millions.
• 12:18
  Speaker 1: Is it millions?
• 12:19
  Speaker 1: Is it billions?
• 12:19
  Speaker 1: Anyway, there's very little left.
• 12:21
  Speaker 1: We can establish that much.
• 12:22
  Speaker 1: There is less than 20% of the facility left.
• 12:26
  Speaker 1: What does that mean?
• 12:27
  Speaker 1: It means the Fed will have to stop shredding money.
• 12:31
  Speaker 1: Maybe not in March, but at some point They'll start to slow down the shredding and the market will like that a lot, because that's essentially stimulus in a sense.
• 12:41
  Speaker 1: Talking of stimulus, that was a nice connection there Wasn't that?
• 12:47
  Speaker 1: Papa Biden, el Presidente, is throwing money at anybody who knows how to mix chips.
• 12:54
  Speaker 1: So if you've got a deep fryer, no, you can't apply.
• 12:57
  Speaker 1: You need to have a few dozen billions and decide to build a semiconductor manufacturing place somewhere in the US.
• 13:08
  Speaker 1: Arizona's got TSMC and Intel, texas has got Samsung, the Koreans Ohio's got Intel.
• 13:14
  Speaker 1: Is that New York State?
• 13:19
  Speaker 1: Micron?
• 13:20
  Speaker 1: 3000 jobs, that is so the government.
• 13:25
  Speaker 1: If you add these jobs up, it's about maybe 20,000 jobs tops.
• 13:31
  Speaker 1: How much are these jobs going to cost the US taxpayer?
• 13:34
  Speaker 1: A lot.
• 13:35
  Speaker 1: So normally, when the government and this is not political statement, but any government that throws out a lot of billions of dollars, generally achieves very little.
• 13:45
  Speaker 1: No one's going to put these factories up until there's actually demand for it, but US government and it's infinite idiocy decides to do something, and this all comes from the whole on-shoring thing.
• 13:58
  Speaker 1: I think probably less regulation than a better tax system would have achieved the same outcome, but they're going to throw some money at these guys.
• 14:08
  Speaker 1: So, yeah, you're going to get 10,000 or something like that extra, maybe 20 of the most semiconductor manufacturing jobs out there.
• 14:18
  Speaker 1: So that's something good for TSMC and Intel than everybody else.
• 14:24
  Speaker 1: And then let's have a look here at SOFA, sofa, sofa, sofa.
• 14:28
  Speaker 1: These are the results out, and what do a lot of these numbers mean?
• 14:31
  Speaker 1: Well, the one thing everybody cared about was that it would be profitable, and it's two cents.
• 14:36
  Speaker 1: Two cents a share profitable, which is pretty good.
• 14:38
  Speaker 1: One cent would have been a bit disappointing.
• 14:40
  Speaker 1: Two cents is OK.
• 14:41
  Speaker 1: Three cents, we would have been over the moon, but we are nevertheless, I think.
• 14:45
  Speaker 1: 13% up last time I checked and a bunch of good stuff in here.
• 14:51
  Speaker 1: Deposit growth was 2.9 billion.
• 14:54
  Speaker 1: They always guide to 2 billion plus, and there was something also in here in their loan book has grown, I think 500 million somewhere.
• 15:05
  Speaker 1: I don't know where the number came from.
• 15:06
  Speaker 1: Maybe it's not up on that, but yeah, revenue is up 34% year by year.
• 15:11
  Speaker 1: So very, very stellar numbers.
• 15:12
  Speaker 1: Considering their core business got muted, or buy-dent as some might call it.
• 15:18
  Speaker 1: But this is the guidance and this is pretty extraordinary.
• 15:23
  Speaker 1: They're saying that, while lending is going to slow a little, financial services and tech platform is going to have 50% plus growth, and they're guiding to seven to eight cents profit per share, and I love how narrow that is.
• 15:43
  Speaker 1: It's not six to 10 or something, it's just like 78.
• 15:47
  Speaker 1: Like we know we're doing, so it's basically give or take $10 million, which is pretty extraordinary.
• 15:53
  Speaker 1: So I think management's got a pretty good handle on what they're doing.
• 15:56
  Speaker 1: So I like it.
• 15:57
  Speaker 1: I will dive a little deeper into this.
• 15:58
  Speaker 1: I'll put out a video, probably tomorrow, because I'd rather give you one that actually has insight than one that just regurgitates a bunch of numbers.
• 16:05
  Speaker 1: So for you, so far, a lot out there.
• 16:07
  Speaker 1: I will definitely do that.
• 16:08
  Speaker 1: And then there was a little bit on this here as well.
• 16:10
  Speaker 1: For the periods through to 2026, so longer term guidance, they're looking for 50% compound growth, financial services, 20% for tech, mid teens for lending, and they expect 55 to 80 cents profit per share in 2026.
• 16:32
  Speaker 1: That's pretty staggering stuff.
• 16:34
  Speaker 1: That would probably get Anthony Noto his bonuses because he doesn't get paid really, unless he pulls this off.
• 16:41
  Speaker 1: So, yeah, pretty extraordinary.
• 16:44
  Speaker 1: And they think that profits will grow 20 to 25% beyond 2026 per year.
• 16:49
  Speaker 1: So that's some pretty bullish statements there for management.
• 16:54
  Speaker 1: And remember they've always under promised and over delivered, so you can't really say much there.
• 17:02
  Speaker 1: Danzo, saying no to the God of FinTech Absolutely it's an interesting one.
• 17:07
  Speaker 1: Make sure you join me live tomorrow to make 2024 also your year of finance.
• 17:13
  Speaker 1: And this is really for beginners.
• 17:15
  Speaker 1: So walk through.
• 17:17
  Speaker 1: So through how we trade.
• 17:19
  Speaker 1: I give you the actual rules.
• 17:21
  Speaker 1: We do some live trading together and then you can ask me anything at all about why I do what I do and why we teach it and how.
• 17:29
  Speaker 1: Me and a bunch of retired investment bankers I've taught about 8,000 people so far exactly how we do this, and our mission continues to be make a million people financially free and we're going to get that.
• 17:41
  Speaker 1: We're going to get that as long as it takes.
• 17:43
  Speaker 1: So join me tomorrow, tuesday, live, not here on YouTube, but at FelixFansorg slash webinar.
• 17:48
  Speaker 1: Help yourself a seat.