Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - The US Economy Just Went Into Crisis Mode + Stock Market News 26 September 2024

Transcript

Felix Prehn - The US Economy Just Went Into Crisis Mode + Stock Market News 26 September 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Welcome to this morning.
• 0:01
  Speaker 1: There is so much good news it's almost off-putting.
• 0:04
  Speaker 1: Today it's absolutely raining good news and money and stock prices going up this morning.
• 0:11
  Speaker 1: So enjoy this little breakdown because I think it's important to understand why.
• 0:18
  Speaker 1: Everything is green like a Christmas tree.
• 0:20
  Speaker 1: Anything down Oil stocks, non-durables maybe, but everything else looking absolutely fantastic.
• 0:27
  Speaker 1: Tesla up another 2%, nvidia up 2.5%, google and Meta both up a percent, anda, half pre-market Amazon up a percent, amd up 3%.
• 0:36
  Speaker 1: Everything is up, lvmh to the moon.
• 0:38
  Speaker 1: Everything is looking fantastic.
• 0:41
  Speaker 1: And let me explain to you exactly why, after you have lovingly caressed the like button, and I shall share my screen with you here.
• 0:50
  Speaker 1: Look at all that green.
• 0:51
  Speaker 1: You need sunglasses today, don't you?
• 0:53
  Speaker 1: So let me walk you through one.
• 0:57
  Speaker 1: The market had widely expected horrible economic data out today.
• 1:02
  Speaker 1: Why?
• 1:03
  Speaker 1: Well, largely because the Fed cut by 50 basis points and we thought that must mean the data coming out is pretty bad.
• 1:10
  Speaker 1: They do say that they get the data early at the Fed, which kind of makes sense, but the GDP numbers that we got in came in at 3%, which is staggeringly wonderful.
• 1:23
  Speaker 1: I mean it's, like you know, start dancing kind of wonderful and it's as we expected.
• 1:29
  Speaker 1: So it's brilliant.
• 1:30
  Speaker 1: People were expecting a miss on the expectation.
• 1:32
  Speaker 1: Just to get that straight the jobless numbers are lower than expected.
• 1:38
  Speaker 1: Continuing jobless claims are in line with expectations.
• 1:42
  Speaker 1: Core PCE, which is inflation, is as expected.
• 1:45
  Speaker 1: Corporate profits are double what we were expecting.
• 1:49
  Speaker 1: I mean, everything is good, everything is wonderful, everything is amazing.
• 1:55
  Speaker 1: Now, the only thing is, this data is almost so good.
• 1:58
  Speaker 1: It's almost as if somebody made it up to win an election.
• 2:05
  Speaker 1: Oh, no, they would never do that, not in the US.
• 2:08
  Speaker 1: No, they would never do that.
• 2:10
  Speaker 1: It's never been done before.
• 2:12
  Speaker 1: Okay, so yeah, the data is suspiciously glorious, but let's look at some more data.
• 2:19
  Speaker 1: This is our teaching portfolio.
• 2:21
  Speaker 1: It's up 93% so far this year.
• 2:23
  Speaker 1: That's also suspiciously good, isn't it?
• 2:26
  Speaker 1: We had a lot of fun the last two days.
• 2:28
  Speaker 1: We run a two-day trading challenge for about 700 of you or something showed up live, which is absolutely fantastic.
• 2:35
  Speaker 1: I appreciate you for wanting to learn more, and I received a lot of complaints, not from the people showing up, but from the people who couldn't, because it was in the middle of the night for them.
• 2:45
  Speaker 1: Serves you right for living in the wrong time zone, but no, in all seriousness, I got so many emails and messages, especially from you pesky Brits out there and Europeans and everybody else who's apparently not available, at 8pm Eastern time, which seems like a perfectly good time.
• 2:59
  Speaker 1: So we're running the same thing again to satisfy everybody.
• 3:03
  Speaker 1: Running the same thing again to satisfy everybody, but next week at 8am New York time, which is 1pm London time.
• 3:10
  Speaker 1: So if you are in Europe or in the UK, or maybe even in Asia or wherever, hopefully you'll be able to join us for that and that'll be our roundup of this month's September with this double challenge, and then I think we'll probably take a break on a challenge for quite a few months.
• 3:26
  Speaker 1: So join us at FelixFriendsorg slash challenge.
• 3:29
  Speaker 1: If you couldn't make the last one, come and join the one next week at 8 am New York time and 1 pm London time.
• 3:36
  Speaker 1: We've got more China stimulus.
• 3:37
  Speaker 1: The Chinese government is, you know, printing money and everything is up.
• 3:44
  Speaker 1: Everything in China is up.
• 3:45
  Speaker 1: There's also a significant short squeeze, I imagine, because anybody who was short on China will be feeling some serious pain here.
• 3:52
  Speaker 1: Here's the CSI 300, which is sort of the equivalent of the S&P 500.
• 3:57
  Speaker 1: And here is LVMH going straight up.
• 4:01
  Speaker 1: So luxury goods are going to enjoy this little run.
• 4:05
  Speaker 1: No idea if it lasts, but enjoy the party while it's there.
• 4:09
  Speaker 1: That's what I always say Pesky Brits yes, nick, you're one of those.
• 4:12
  Speaker 1: I gather the UK we ended.
• 4:17
  Speaker 1: I know everything should be Greenwich Mean Time.
• 4:20
  Speaker 1: You know what they've done, right?
• 4:21
  Speaker 1: They've called it Universal Standard Time.
• 4:24
  Speaker 1: They've wiped out your empire completely, bastards, right?
• 4:28
  Speaker 1: I don't know why it's no longer Greenwich meantime, it is now universal standard time Some sort of attempt to, I don't know, appease the woke crowd, or some nonsense like that.
• 4:41
  Speaker 1: Now, look at the beauty of this Now.
• 4:46
  Speaker 1: Like that.
• 4:46
  Speaker 1: Now look at the beauty of this.
• 4:47
  Speaker 1: Now.
• 4:47
  Speaker 1: This is in green jobless claims.
• 4:48
  Speaker 1: So these are the unemployed for the first time, you know, the virgin unemployed, and that number is coming down substantially.
• 4:55
  Speaker 1: The unemployment rate in the US is also down substantially to just 4.2%, and I have to smile when I look at these numbers.
• 5:09
  Speaker 1: I just don't believe them.
• 5:10
  Speaker 1: I just don't believe them.
• 5:12
  Speaker 1: I'm a non-believer when it comes to these, because look at this why is the Fed cutting rates by 50 basis points when we have pretty much the lowest unemployment in 50 years, when the economy is brimming at full speed according to the data and everything is fantastic?
• 5:32
  Speaker 1: Why would they cut interest rates like that?
• 5:35
  Speaker 1: You only cut interest rates because the economy is starting to stutter a little bit.
• 5:40
  Speaker 1: But the Labour Department doesn't seem to think so.
• 5:48
  Speaker 1: I would expect, and I was expecting today.
• 5:51
  Speaker 1: I can't spell, why can I?
• 5:52
  Speaker 1: I was expecting a massive revision downwards in the numbers today, as was most of Wall Street, so we were thinking they're going to have to come clean.
• 6:00
  Speaker 1: But little did we know that they could just kick the can down the road.
• 6:04
  Speaker 1: So I would expect us to get worse numbers now after the election.
• 6:10
  Speaker 1: Well-timed right.
• 6:18
  Speaker 1: Stephanie says how do you lie with statistics?
• 6:20
  Speaker 1: Well, you can seasonally adjust them.
• 6:22
  Speaker 1: You can pretty much do anything you want with them.
• 6:24
  Speaker 1: You know they make up how many people are in the workforce.
• 6:27
  Speaker 1: They also make up how many jobs are created.
• 6:30
  Speaker 1: They just make it up.
• 6:31
  Speaker 1: And they come up with some sort of statistical model and they just make it up.
• 6:35
  Speaker 1: Sorry, it's called assumptions.
• 6:37
  Speaker 1: Of course that sounds more reasonable, doesn't it?
• 6:40
  Speaker 1: But yeah, they just make it up.
• 6:41
  Speaker 1: So I don't believe the data.
• 6:43
  Speaker 1: But anyway, for the moment we're going to enjoy it.
• 6:44
  Speaker 1: Gold is at a record high.
• 6:46
  Speaker 1: Partially Gold is at a record high partially because of the Fed rate cut and also because China is rallying like crazy.
• 6:53
  Speaker 1: We've had the best inflow this year into US stocks no real reason.
• 6:57
  Speaker 1: I wrote that in small letters and it's this little red line here.
• 7:00
  Speaker 1: That is 2024.
• 7:03
  Speaker 1: What's inflow?
• 7:03
  Speaker 1: How much money is going into stocks?
• 7:05
  Speaker 1: Fresh and new, virgin money.
• 7:08
  Speaker 1: So looks like definitely the best start for ages.
• 7:13
  Speaker 1: So that's very, very nice.
• 7:14
  Speaker 1: And guess what?
• 7:15
  Speaker 1: This is the fund flow, moving average, weird right.
• 7:20
  Speaker 1: Well, we're here, which means if you go back 15 years, we've been higher right 2021, we were a lot higher.
• 7:31
  Speaker 1: If we get rate cuts, we might go there again 2013,.
• 7:34
  Speaker 1: We're a lot higher.
• 7:34
  Speaker 1: 2011, we're a lot higher.
• 7:35
  Speaker 1: Even 2017, 18, we were higher.
• 7:37
  Speaker 1: So it's entirely possible that we're going to see a lot more money flowing in there, especially if some of that money market fund, that bond money is going to slowly make its way back into the stock market because rates are coming down and those bonds are therefore less appealing.
• 7:55
  Speaker 1: Stephanie, you were mentioning the book how to Lie with Statistics.
• 7:57
  Speaker 1: Ah, okay, thank you very much, stephanie.
• 8:00
  Speaker 1: I thought you were wondering it's what is it?
• 8:02
  Speaker 1: Lies and statistics or something like that, isn't it?
• 8:04
  Speaker 1: I studied economics and a lot of what we did.
• 8:06
  Speaker 1: They called it econometrics, which is basically the science of lying with numbers.
• 8:11
  Speaker 1: So very, very complex.
• 8:14
  Speaker 1: So it looks so complicated.
• 8:15
  Speaker 1: Nobody really understands it, and I think that's the idea.
• 8:17
  Speaker 1: More good news Remember buybacks, and I've said to you before that basically, the whole market is driven virtually entirely by buybacks.
• 8:26
  Speaker 1: Well, our lovely dearest and nearest at Goldman and Sachs there's no, and just Goldman Sachs are saying that 2025 is going to be the biggest, biggest buyback year ever, ever.
• 8:44
  Speaker 1: And what does that mean?
• 8:45
  Speaker 1: Stock market should go up next year, unless something idiotic happens.
• 8:49
  Speaker 1: Obviously, payment yeah, that's what you get post-grad degrees for, right To lie with numbers and make it look like it was something interesting.
• 9:03
  Speaker 1: Can you tell how much the flow is US versus international?
• 9:07
  Speaker 1: I did have that chart, but I didn't put it in.
• 9:09
  Speaker 1: The flow into the US is significantly more than any other market in the world.
• 9:14
  Speaker 1: Yeah, so the world loves US stocks.
• 9:16
  Speaker 1: I didn't bother putting it in, but it's there.
• 9:19
  Speaker 1: The world also loves our portfolio, which is why we're up 93% so far this year.
• 9:24
  Speaker 1: Come under, and that's obviously not accounting for today's gains, because we only count gains when we close out trades, which is why we get these sort of these little rallies there.
• 9:33
  Speaker 1: That typically means we closed a bunch of stuff out right, so come and join us if you like, for the last chance at the beginner trading challenge for two days.
• 9:44
  Speaker 1: I'll teach you how we do that, why we do it, the rules and we do some aerial trades together and everything.
• 9:49
  Speaker 1: We're a tremendous fan the last two days doing it.
• 9:51
  Speaker 1: But, as I say, I'm going to do another one for mostly the pesky Brits on this chat here, 1 pm London time, because the last one, I think, was 4 am in the morning for you to learn about trading.
• 10:03
  Speaker 1: I don't know what you get us up to at four in the morning.
• 10:05
  Speaker 1: Obviously you have something better to do.
• 10:07
  Speaker 1: So come and join us.
• 10:07
  Speaker 1: 8 am New York time, 1 pm London time.
• 10:09
  Speaker 1: This coming Tuesday and Wednesday.
• 10:12
  Speaker 1: Can I tell how much of the flow is domestic versus international?
• 10:18
  Speaker 1: No, but it'll be.
• 10:20
  Speaker 1: Majority will be domestic because the US is just that big.
• 10:24
  Speaker 1: That's really how big it is.
• 10:25
  Speaker 1: So there we are.
• 10:30
  Speaker 1: We've got 900 people watching.
• 10:32
  Speaker 1: We've got 166 likes, which is pretty measly, pretty mean on a day where the market is this glorious in green.
• 10:39
  Speaker 1: But I can't force you.
• 10:41
  Speaker 1: I wish I could.
• 10:42
  Speaker 1: You know, electric shock if you don't do it, or something like that.
• 10:45
  Speaker 1: Let's look at a few of our favorite stocks here.
• 10:48
  Speaker 1: We've got something in Trade Vision that's rather updated charts, I think, easier to read to see our trend indicators and so on.
• 10:56
  Speaker 1: So Tesla, for example, where our little buy indicator is delivered 81% while the market is delivered minus 44, called a buy signal on Tesla yesterday, maybe a tad late, like I've already been in this for about at least a week, maybe two weeks, and that's looking pretty sweet and we're trading right now.
• 11:18
  Speaker 1: Do blotted, do blotted, dotted blue line here, blotted, do line.
• 11:22
  Speaker 1: What's going on with my brain today?
• 11:24
  Speaker 1: I did a workout before this.
• 11:26
  Speaker 1: I've got this new personal trainer and he just really tortures me horribly.
• 11:33
  Speaker 1: Chap in Israel, we do it on Zoom.
• 11:37
  Speaker 1: Horrible man.
• 11:38
  Speaker 1: He's actually lovely but, yeah, shattered.
• 11:40
  Speaker 1: So why is that line important?
• 11:42
  Speaker 1: Because Important, because let me get a pen.
• 11:44
  Speaker 1: Because he says, let me show you peak, peak.
• 11:52
  Speaker 1: We need to break through this.
• 11:54
  Speaker 1: Right, you take out these two peaks and you're flying with Tesla.
• 11:59
  Speaker 1: So that looks very, very positive.
• 12:01
  Speaker 1: What else we got?
• 12:01
  Speaker 1: We've got buy signals on CRM, probably most things Chinese.
• 12:08
  Speaker 1: This is still all from yesterday's close.
• 12:11
  Speaker 1: We updated midday and at the end of the day.
• 12:14
  Speaker 1: But yeah, everything is looking pretty sweet here.
• 12:18
  Speaker 1: So I would imagine we're going to get quite a few more buy signals today on stuff, because everything is going up Obviously.
• 12:25
  Speaker 1: Especially Chinese stocks are going up today.
• 12:28
  Speaker 1: Just the momentum of that stimulus being thrown at the market.