Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - A once in a lifetime stock market decision + Stock Market News 06 September 2024

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Felix Prehn - A once in a lifetime stock market decision + Stock Market News 06 September 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to the most important day of the year.
• 0:03
  Speaker 1: Yes, we've got the unemployment rate out and non-farm payrolls, and I'm going to give you my 10 reasons why I'm bullish this market.
• 0:12
  Speaker 1: So stick around.
• 0:13
  Speaker 1: There'll be facts, not sort of whims of the heart.
• 0:16
  Speaker 1: So I'm going to share my screen with you, and I see 65 of you have already found your way to the like button.
• 0:22
  Speaker 1: I appreciate that.
• 0:23
  Speaker 1: Well done, and let's explain this.
• 0:28
  Speaker 1: This just out literally 32 minutes ago, and this, of course, is the most important set of data we were waiting for.
• 0:36
  Speaker 1: Jerome Powell is drooling over this right now.
• 0:39
  Speaker 1: And is it good?
• 0:40
  Speaker 1: Is it bad?
• 0:41
  Speaker 1: It's a mixed bag, and that's actually a good thing.
• 0:44
  Speaker 1: So, non-farm payrolls probably the most important piece of data we got out here came in at 142,000.
• 0:55
  Speaker 1: It was expected to be somewhere in that range, so it's sort of like, yeah, okay, maybe a little bit lower than expected in terms of consensus.
• 1:02
  Speaker 1: The unemployment rate actually dropped and I see that as quite a good thing because it sort of keeps the soft landing thing alive.
• 1:14
  Speaker 1: We then have government payrolls.
• 1:18
  Speaker 1: Yes, they're trying to fudge the books by hiring more people, but not massively.
• 1:21
  Speaker 1: Manufacturing declined, which is definitely not good, and if you look at private payrolls, you are at the very bottom end of expectations.
• 1:34
  Speaker 1: And why is that good?
• 1:37
  Speaker 1: And youth unemployment is up.
• 1:38
  Speaker 1: So it's sort of saying it's looking all right on the unemployment but it's a bit soft on the private jobs created.
• 1:49
  Speaker 1: But it's kind of that balance that we want right.
• 1:52
  Speaker 1: We want a gentle softening.
• 1:54
  Speaker 1: We don't want a big shock one way or the other.
• 1:56
  Speaker 1: And it gives, I think, the market enough hope that we're going to get a significant rate cut going into September.
• 2:04
  Speaker 1: So it's kind of perfect.
• 2:05
  Speaker 1: It's almost as if somebody fudged the data.
• 2:09
  Speaker 1: That would never happen, not in this United States.
• 2:13
  Speaker 1: No, no, no.
• 2:14
  Speaker 1: And what does it mean?
• 2:15
  Speaker 1: It means we're going to make some money.
• 2:17
  Speaker 1: Yes, look, nvidia has turned green, big tech's turned green, tesla's still rallying 1.4% up.
• 2:23
  Speaker 1: Our portfolio looking a very healthy $7,300 in the green this very morning, which is lovely, and there's very little in it right now.
• 2:32
  Speaker 1: I have some other portfolios, obviously, but it takes our trading portfolio to well over 100% gain so far on the year.
• 2:42
  Speaker 1: So you want to come and learn how we do that If you're curious.
• 2:46
  Speaker 1: Maybe you just don't care about making money, but if you're curious enough, come and join me on Tuesday felixfriendsorg slash webinar link is down below and let me run you through the 10 most important things that I think are showing us that the path is likely to the upside.
• 3:03
  Speaker 1: Showing us that the path is likely to the upside.
• 3:09
  Speaker 1: So, broadcom this is probably the one bit of bad news.
• 3:12
  Speaker 1: I just wanted to get it in there quickly so we can move on.
• 3:14
  Speaker 1: And it's basically saying bear in mind, broadcom is like AVGO is one of the main chip suppliers to Apple.
• 3:22
  Speaker 1: Disappointing sales forecast, which isn't really what we wanted to hear, because we thought AI and Apple would lift them significantly and it isn't, because they're not doing that well.
• 3:35
  Speaker 1: So, not brilliant Stock's not looking particularly happy this morning.
• 3:39
  Speaker 1: Let me pull it up here for a second AVGO down 6.1%.
• 3:53
  Speaker 1: Hang on Trading down here right now at 142.
• 3:58
  Speaker 1: So the exit signal that we gave on the 3rd of September was probably a good one in hindsight, and we don't do that in hindsight.
• 4:05
  Speaker 1: This is trade vision, right?
• 4:07
  Speaker 1: Did we beat the market with this one?
• 4:09
  Speaker 1: No, we haven't.
• 4:10
  Speaker 1: Actually, so far, we haven't beat the market with Broadcom, which is interesting, but it's been a choppy one to trade, I guess.
• 4:15
  Speaker 1: So I am, yes, still somewhat bearish for the remainder of September and maybe even for October, depends a little bit on how this whole electioneering thing goes in the US.
• 4:28
  Speaker 1: But I believe that there are 10 reasons to stay bullish and optimistic and happy and chirpy like Winston.
• 4:35
  Speaker 1: And let me give you those data points.
• 4:37
  Speaker 1: If you're allergic to data points, this is probably the wrong channel.
• 4:39
  Speaker 1: If you are in love with data points because that's actually what makes the market, then you know what to do.
• 4:44
  Speaker 1: Smash the like button.
• 4:45
  Speaker 1: Free thinker.
• 4:46
  Speaker 1: Thank you very much.
• 4:47
  Speaker 1: It's only 30k when you take profits.
• 4:50
  Speaker 1: Yes, you're quite right, simon.
• 4:51
  Speaker 1: You're quite right.
• 4:52
  Speaker 1: I know I don't count the chickens, although, yes, I have a stop loss on that PayPal trade there.
• 4:58
  Speaker 1: So it's reasonably assured that we're going to do quite well.
• 5:02
  Speaker 1: It's quite a tight one as well.
• 5:04
  Speaker 1: So hedge funds are less leveraged.
• 5:07
  Speaker 1: They're less what?
• 5:08
  Speaker 1: Well, what you see here is that that blue line there shows that leverage is lower than it has been for much of the last couple of years.
• 5:19
  Speaker 1: And what does that mean?
• 5:20
  Speaker 1: Hedge funds borrow money to leverage so they can make more money when things go up.
• 5:25
  Speaker 1: When they're not very leveraged, it means they're not really that heavily invested in the market, which means money sitting on the sidelines, and that's a bit of a theme here that we're going to dive a little bit deeper into.
• 5:35
  Speaker 1: Hedge funds are also bloody short, the market bastards.
• 5:39
  Speaker 1: We are down here and that's where we are right now.
• 5:45
  Speaker 1: So that's now I'm thinking what does that mean?
• 5:47
  Speaker 1: Well, the green line I'm about to draw in is the zero line.
• 5:52
  Speaker 1: Okay, that's zero.
• 5:55
  Speaker 1: So we are significantly short and we're so short.
• 6:02
  Speaker 1: We can't get that much shorter, and that's a good thing, right?
• 6:05
  Speaker 1: So when everybody's bearish, actually it's more likely you're gonna go up.
• 6:10
  Speaker 1: It's like when everybody's bullish is more likely you're gonna go down and it's more likely you're going to go up.
• 6:13
  Speaker 1: Right, it's like when everybody's bullish, it's more likely you're going to go down.
• 6:15
  Speaker 1: And here's another one the long short position, which is basically, what percentage of the portfolio is long?
• 6:22
  Speaker 1: They own stuff?
• 6:23
  Speaker 1: What percentage of the portfolio is shorting stuff?
• 6:25
  Speaker 1: Well, again, they're down here, which, historically this goes back to 2019, is pretty freaking low, right, there were moments where we're a little bit shorter, but 2019 is pretty freaking low, right, there were moments where we're a little bit shorter, but we're pretty short.
• 6:42
  Speaker 1: Again, it means they're more likely to go up than down, as in buy more than sell more.
• 6:43
  Speaker 1: And, my friends, september will pass, september will be over soon and while September is this little misery period here, that is Sept.
• 6:50
  Speaker 1: What happens after September is a glorious little month kicks in and it's called October.
• 6:55
  Speaker 1: And after October if I could spell, october literally can't spell October comes November.
• 7:02
  Speaker 1: And after November comes yeah, you guessed it right, it goes December.
• 7:06
  Speaker 1: So the market traditionally does very, very well the last three months of the year.
• 7:12
  Speaker 1: So the September thing is just sort of an opportunity to freak out, flush some things out, create some new opportunities and make some more money in the third quarter.
• 7:19
  Speaker 1: So I'm going to be sitting fairly tight in September, as we did in August, and, depending on elections, we might come into in October, or maybe we even wait a little bit.
• 7:31
  Speaker 1: Wait into November till we know what Muppet you're going to elect to run your country allegedly.
• 7:38
  Speaker 1: Do you think the president runs the country, or is it just a bit of a waving sort of a job?
• 7:43
  Speaker 1: I don't know, who knows?
• 7:45
  Speaker 1: Are we expecting a 0.5% or a 0.25% rate cut?
• 7:51
  Speaker 1: I think we're going to get a quarter.
• 7:53
  Speaker 1: But I can look up what the market's expecting.
• 7:58
  Speaker 1: It was 48% for the half a percent cut yesterday.
• 8:02
  Speaker 1: Let's see what it is right here right now.
• 8:05
  Speaker 1: Ah, you see it's crept up.
• 8:06
  Speaker 1: 51% of the market now expects full half a percentage point cut.
• 8:12
  Speaker 1: That is a significant move from yesterday actually 11% up from yesterday.
• 8:18
  Speaker 1: It's 20% up from last week.
• 8:20
  Speaker 1: So the recession fears are alive and well.
• 8:25
  Speaker 1: But what else is positive?
• 8:29
  Speaker 1: Do you know that money tends to flow into the market for some reason at the end of the year?
• 8:33
  Speaker 1: Now, I honestly have no idea why, but this green little box there is the fourth quarter of the year and you can see how much money traditionally flows into the market.
• 8:42
  Speaker 1: Now we're here right now, so maybe we've done a little bit of it already, but again, seasonally, you'd expect to see a little bit of something like that.
• 8:51
  Speaker 1: So again, bullish money flowing into the market in the fourth quarter, and this is also bullish Over $6 trillion in money market funds.
• 9:01
  Speaker 1: They're basically making about 5% a year courtesy of the US government, and when those interest rates come down, the 5% become 4.5%, 4%, so it becomes a little bit less sexy and 2.5 trillion of that money is owned by you, the retail investor, and me.
• 9:21
  Speaker 1: Actually, I have money in market funds.
• 9:23
  Speaker 1: And when those 5% drop to less 4%, 3% and so on, what happens?
• 9:31
  Speaker 1: What are we going to do with our 2.5 trillion?
• 9:32
  Speaker 1: Well, we're probably going to go.
• 9:34
  Speaker 1: Wouldn't we be better off buying stocks than getting less than inflation?
• 9:38
  Speaker 1: I think so.
• 9:39
  Speaker 1: And Peaceful Island, you are quite right, the funds up there.
• 9:48
  Speaker 1: Is it October their fiscal year?
• 9:52
  Speaker 1: I think it might be right.
• 9:53
  Speaker 1: That's one of the reasons, allegedly also, that September isn't such a good year.
• 9:57
  Speaker 1: And then we have the JP Morgan indicator, the indicator of all indicators, the biggest indicator around.
• 10:02
  Speaker 1: And what does it say?
• 10:03
  Speaker 1: It's a very baffling chart.
• 10:06
  Speaker 1: It's very pretty, but nobody understands it.
• 10:08
  Speaker 1: Look only at the blue, okay, forget all the other ziggity-zaggity things to make it look more exciting.
• 10:12
  Speaker 1: Look only at the blue, okay.
• 10:12
  Speaker 1: Forget all the other ziggity-zaggity things to make it look more exciting.
• 10:14
  Speaker 1: Look only at the blue.
• 10:16
  Speaker 1: And when the blue is high, like here or there or there, or here or there or there, what happens?
• 10:29
  Speaker 1: The orange line is the S&P.
• 10:32
  Speaker 1: Typically, we peak.
• 10:34
  Speaker 1: You see that.
• 10:35
  Speaker 1: So the blue thing peaks, the market peaks.
• 10:38
  Speaker 1: So where are we right now?
• 10:40
  Speaker 1: We're down here.
• 10:41
  Speaker 1: What does it mean?
• 10:42
  Speaker 1: It means we've got room to go higher, says JP Morgan.
• 10:47
  Speaker 1: They should know they manipulate the market, don't they?
• 10:50
  Speaker 1: They would never do that.
• 10:51
  Speaker 1: Very honest people, lovely people.
• 10:52
  Speaker 1: They would never do that, never, never, no, only the silver market.
• 10:56
  Speaker 1: Was it the silver market they got convicted for?
• 10:58
  Speaker 1: I think so.
• 10:59
  Speaker 1: Now the other thing is that you lot are by the dip people.
• 11:04
  Speaker 1: You were brought up to buy the dip and part of that is that the Fed and politicians got soft in the 90s.
• 11:14
  Speaker 1: They got sort of fluffier and whenever something bad happens, they step in and they bail out whatever bad thing happens.
• 11:22
  Speaker 1: And since about 1990, for some reason, 90, for some reason, every time the S&P drops the next day we go up, or we can have multiple down days and then after that we go up.
• 11:46
  Speaker 1: So it just encourages and incentivizes us to buy the dip thing, which is again one of the reasons I think the market's a little more stable than it has been.
• 11:51
  Speaker 1: So you know, buy the freaking dip.
• 11:53
  Speaker 1: I'm not telling you to, but you get the idea, and I also have real faith that your American elected officials will continue to spend us into a soft landing.
• 12:07
  Speaker 1: And this very intelligent person who made this chart, who had the choice of all the colors in the world, thought green and green would make this a little clearer.
• 12:17
  Speaker 1: So in bright green we have what happens when you get a recession.
• 12:24
  Speaker 1: And in dark green, which I'm going to mark in blue, you have what happens when you get a softish landing.
• 12:33
  Speaker 1: And if we get a soft landing and after the first Fed cut which we're about to get, on the 18th of September, you would expect us about 200, but a year later to be up about what is that?
• 12:49
  Speaker 1: 15% Right Recession, not so good.
• 12:52
  Speaker 1: But do you think the US government's going to allow a recession?
• 12:54
  Speaker 1: I think they're going to keep spending us out of it.