Latest / Felix Nikolas Prehn's Podcast / Warning: Inflation Data Just Out! 😰 + Stock Market News 10 April 2024

Transcript

Warning: Inflation Data Just Out! 😰 + Stock Market News 10 April 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Is it just the backend?
• 0:00
  Speaker 1: Okay, we are live.
• 0:01
  Speaker 1: We are live.
• 0:02
  Speaker 1: Youtube just said live streaming is not available, which I thought is incredibly irritating.
• 0:09
  Speaker 1: Inflation data is out and it is well.
• 0:13
  Speaker 1: It's higher than expected.
• 0:15
  Speaker 1: And were we expecting it to be higher than expected?
• 0:19
  Speaker 1: I was Were you, I was Were you.
• 0:22
  Speaker 1: So the real question is is the market expecting it to be higher than the market expected it to be?
• 0:31
  Speaker 1: Does that make sense?
• 0:31
  Speaker 1: Probably not a lot.
• 0:32
  Speaker 1: Let's jump straight into it and we'll look at it.
• 0:36
  Speaker 1: We'll understand that you'd be the best informed investor out there.
• 0:40
  Speaker 1: That can go no, whether or not today.
• 0:45
  Speaker 1: I'm going to move a little bit into the middle of the screen here.
• 0:47
  Speaker 1: So what have we got?
• 0:48
  Speaker 1: Let's just look at the key data here that we've got in.
• 0:50
  Speaker 1: I've got the underneath data as well, so you can see a little bit more what's going on here.
• 0:54
  Speaker 1: Core inflation rate coming in at 0.4%.
• 0:57
  Speaker 1: We're expecting 0.3.
• 0:59
  Speaker 1: That's bad news, right?
• 1:01
  Speaker 1: Inflation rate month to month at 0.4% higher than expected that's also bad news.
• 1:08
  Speaker 1: The core inflation is basically 3.8.
• 1:12
  Speaker 1: We're expecting 3.7 and headline inflation 3.5.
• 1:15
  Speaker 1: We're expecting 3.1.
• 1:16
  Speaker 1: So inflation is essentially 0.1% higher than we wanted it to be.
• 1:21
  Speaker 1: And you might think well, what's 0.1% between friends.
• 1:24
  Speaker 1: Well, if it's 0.1% out of 0.3%, which is what we were expecting, that is 33% higher than expected, which is quite a lot.
• 1:35
  Speaker 1: So does it matter, yay or nay?
• 1:38
  Speaker 1: Well, the only way to really find out is to have a look at probably, qqq, pre-market QQQ and have a look on a minute chart.
• 1:56
  Speaker 1: And, yeah, it mattered.
• 2:00
  Speaker 1: You see that we dropped down about 1.5 percentage points.
• 2:06
  Speaker 1: So it does matter.
• 2:07
  Speaker 1: Pre market it does.
• 2:09
  Speaker 1: Now is it going to matter when the market opens and the grownups wake up or at least recover from the hangover or whatever substance that they abused yesterday?
• 2:19
  Speaker 1: Well, let's look a bit underneath the hood to really understand this.
• 2:25
  Speaker 1: So what made up most of this?
• 2:30
  Speaker 1: Gasoline contributed 50% of the increase.
• 2:34
  Speaker 1: Gas, that's oil and gas.
• 2:36
  Speaker 1: Meanwhile, energy prices rose 1.1%.
• 2:39
  Speaker 1: Food costs went up a little.
• 2:40
  Speaker 1: Food away from home, excluding food and energy, core consumer prices rose 0.4 percent, the same as in february, higher than forecast, with costs for shelter, motor vehicle insurance, medicare apparel, personal care weighing, and I actually have the data broken down for you here and you can see what really had an impact compared to February.
• 3:05
  Speaker 1: So, yeah, food away from home not a huge problem, I would have thought for most people.
• 3:11
  Speaker 1: Gasoline at 1.7% up is quite significant, as is just energy.
• 3:22
  Speaker 1: Overall Electricity 0.9%.
• 3:26
  Speaker 1: That's related to energy.
• 3:27
  Speaker 1: And then, okay, apparel, that's a huge deal shopping and transport, medical services.
• 3:37
  Speaker 1: But really this is an oil thing, right?
• 3:40
  Speaker 1: This is an energy oil thing.
• 3:41
  Speaker 1: This isn't like the normal market out there.
• 3:48
  Speaker 1: So I'm a little bit less worried about this than if this was just like widespread everything inflation, shelter particularly yeah, flat, not what we want, but it's not increasing, is it?
• 4:03
  Speaker 1: And that's quite important.
• 4:05
  Speaker 1: In January it was 0.6, 0.4, now it's 0.4 again.
• 4:09
  Speaker 1: That's the same place we were in November and December when the Fed decided to cut rates six times.
• 4:14
  Speaker 1: Obviously, they've backtracked on that by now, but it's not horrific, I would think.
• 4:22
  Speaker 1: Now you can, of course, draw up charts like this Core services, excluding shelter, which is super cool, I think they call it, and, yeah, that's re-accelerating a little bit, not brilliant, but it's doing exactly that.
• 4:38
  Speaker 1: If you look at and you're going to see this chart quite a lot, I imagine what have we got here?
• 4:45
  Speaker 1: We've got in red inflation now, and then in green we may have some green.
• 4:55
  Speaker 1: You've got 1983 inflation.
• 5:03
  Speaker 1: And the concern is, what if we do the same thing Now?
• 5:08
  Speaker 1: I've made these charts.
• 5:10
  Speaker 1: I used to work in a bank and I would make charts like this you can make a chart, say anything, and you know how you do that.
• 5:17
  Speaker 1: You have two axes and that way you can squash and do whatever you want to do and pretty much any two lines will match.
• 5:27
  Speaker 1: So I would not call this little blip down here a massive move or a massive relevant move.
• 5:37
  Speaker 1: We were to move up like a percentage point or something, then, yeah, I would be concerned, but right now I don't think this is that big a deal.
• 5:45
  Speaker 1: To be honest with you, that would be my take.
• 5:54
  Speaker 1: I would just say chill out a little bit and wait for the grownups to wake up.
• 5:59
  Speaker 1: Premarket and that's the thing you want to zoom out right.
• 6:03
  Speaker 1: So, yeah, premarket looks like this.
• 6:04
  Speaker 1: Everything is basically getting hit.
• 6:06
  Speaker 1: Everything is down Amazon, nvidia, microsoft, tesla down 2%, jp Morgan down 1.2%, meta down 1.8%.
• 6:16
  Speaker 1: But other bit of perspective this is the week, right, this is the week's performance.
• 6:24
  Speaker 1: Most things are still up over the week.
• 6:27
  Speaker 1: Right, this is the week's performance.
• 6:27
  Speaker 1: Most things are still up over the week.
• 6:28
  Speaker 1: And if you look at the month, you know the month still looks pretty good.
• 6:34
  Speaker 1: Okay, nvidia is down 10%.
• 6:36
  Speaker 1: Look at the last six months and you know, you see some pretty staggering numbers there, right.
• 6:42
  Speaker 1: Nvidia up still 80%, amazon up 40%, and so on.
• 6:46
  Speaker 1: Tesla down 32%.
• 6:47
  Speaker 1: That's kind of interesting.
• 6:48
  Speaker 1: So I think we're kind of overreacting here.
• 6:53
  Speaker 1: That would be my view on it.
• 6:54
  Speaker 1: We already know that commodity prices are going up.
• 6:58
  Speaker 1: We don't know, but we have an inkling that they are going to go up.
• 7:01
  Speaker 1: So what's the smart thing to do in a situation like this?
• 7:04
  Speaker 1: Let me see if I've got something for you.
• 7:07
  Speaker 1: I do have something for you Exactly, brilliant, just in time.
• 7:11
  Speaker 1: Use days like this to take advantage of these situations.
• 7:22
  Speaker 1: How do you take advantage of these situations?
• 7:24
  Speaker 1: You buy the stuff that's brilliant.
• 7:26
  Speaker 1: Let me just see how I do that.
• 7:28
  Speaker 1: Hang on, bit of technology shenanigans here.
• 7:34
  Speaker 1: We've just made this document for you.
• 7:37
  Speaker 1: This is actually for one of our premium programs.
• 7:42
  Speaker 1: If you go to felixfrenzelogcom, you will get a document that's 50 pages long that will walk you through the moats of the largest companies in the world and you'll understand what makes a truly amazing business that lasts and does not care about a 1% blip today, and I'd use days like today as opportunities to buy more of those kind of companies.
• 8:06
  Speaker 1: I'm not saying to you should buy the particular companies I'm mentioning here.
• 8:09
  Speaker 1: But if you really want to understand what actually drives stocks, then read this document that's what I would say to you in Forbes about 20, 26 pages or so, and it really explains to you all the different modes, all the different reasons that companies are great, that stocks are great and continue to be.
• 8:29
  Speaker 1: So get your paws on it.
• 8:30
  Speaker 1: It's completely free, and I think today is the kind of day where this is a good read, rather than reading about the panic and the fear and turning CNBC on and everyone going no my God, it's the crash, it's the end of the world.
• 8:43
  Speaker 1: We're down 1.5%.
• 8:45
  Speaker 1: Let's have some perspective here, right, and this is pre-market.
• 8:48
  Speaker 1: Let's wait for the actual market to open.
• 8:50
  Speaker 1: Now we do think we me and Winston particularly that commodities are going to go up somewhat.
• 8:57
  Speaker 1: Oil traders are getting more bullish.
• 8:59
  Speaker 1: This is Bloomberg.
• 9:00
  Speaker 1: When Bloomberg reports it, it's usually a little late.
• 9:02
  Speaker 1: We have a commodity trade open which is doing quite nicely I believe I haven't opened my brokerage yet this morning, but it should be and they're basically saying we're going to get into $90 oil, maybe even $100 oil, and it kind of makes sense.
• 9:20
  Speaker 1: It kind of makes sense if you look at where the world's going, because we've got a lot of interruption in the oil markets and Middle East and Ukraine and Russia and everything else.
• 9:29
  Speaker 1: So OPEC doing a great job holding back just enough oil to keep this market tight, but it's back capacity and it can release it at any time.
• 9:38
  Speaker 1: So they basically are in the control seat.
• 9:41
  Speaker 1: So that's something.
• 9:43
  Speaker 1: Now, tsmc just reported massive earnings Sales grew most since 2022.
• 9:49
  Speaker 1: And let's have a look at that as well.
• 9:52
  Speaker 1: Tsmc here, which is Doesn't trade pre-market, apparently not TSMC.
• 10:05
  Speaker 1: Where is that listed?
• 10:10
  Speaker 1: In Argentina?
• 10:14
  Speaker 1: Adr futures in Singapore?
• 10:21
  Speaker 1: Okay, tsm.
• 10:24
  Speaker 1: Right, that's it TSM.
• 10:26
  Speaker 1: Okay, there we go, all right.
• 10:29
  Speaker 1: So even that's down a little bit on staggeringly wonderful learnings.
• 10:32
  Speaker 1: Does that make much sense?
• 10:33
  Speaker 1: Probably not Now.
• 10:35
  Speaker 1: What about Boeing?
• 10:36
  Speaker 1: Now, the fact that that's down probably makes a lot of sense.
• 10:40
  Speaker 1: That's down another 1.1% Now, trading at the very, very low from October.
• 10:46
  Speaker 1: We dropped below that and well, oops, I did it again.
• 10:51
  Speaker 1: We might drop another $10 or so.
• 10:54
  Speaker 1: That would be my view on that.
• 10:55
  Speaker 1: If you look at some of your favorite tech lobbies Nvidia down 2% pre-market here, and this is just pre-market.
• 11:03
  Speaker 1: This is just the inflation reaction trade, if you will, starting to recover a little bit.
• 11:09
  Speaker 1: Market's going to open in 15 minutes.
• 11:11
  Speaker 1: What about some of our other smaller tech friends?
• 11:14
  Speaker 1: Palantir down 3%, sofi down 3.5%?
• 11:19
  Speaker 1: Might be a good day to set up some bullish trades.
• 11:22
  Speaker 1: I'm a bit of a contrarian here today and Julio there.
• 11:26
  Speaker 1: Thank you very much.
• 11:26
  Speaker 1: Tsm Appreciate that.
• 11:28
  Speaker 1: How does the US government ever pay down or off the US debt?
• 11:33
  Speaker 1: Oh, they don't.
• 11:33
  Speaker 1: They have no intention to.
• 11:34
  Speaker 1: No, you get rid of debt by growing the economy.
• 11:37
  Speaker 1: That's basically or inflation.
• 11:39
  Speaker 1: Inflation also does the trick.
• 11:40
  Speaker 1: Do you trade Forex?
• 11:42
  Speaker 1: No, no, I don't.
• 11:45
  Speaker 1: I just like trading things that have pouts and for me that's kind of earnings.
• 11:52
  Speaker 1: Obviously, if you're Forex trading, you have a different opinion on it.
• 11:54
  Speaker 1: Never really fell in love with Forex trading.
• 11:59
  Speaker 1: I know some people who do it very well, but yeah, I'm not really like.
• 12:02
  Speaker 1: I'm not really gelling with it for some reason.