Latest / Felix Nikolas Prehn's Podcast / A once in a lifetime stock market opportunity + Stock Market News 08 May 2024

Transcript

A once in a lifetime stock market opportunity + Stock Market News 08 May 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Wednesday, I want to say Wednesday morning live stream.
• 0:02
  Speaker 1: It's a worrying sign.
• 0:03
  Speaker 1: You don't know what day of the week it is and markets are taking a little bit of an early morning tumble.
• 0:08
  Speaker 1: And I blame Uber.
• 0:10
  Speaker 1: I blame who else do we blame?
• 0:14
  Speaker 1: We blame, basically, earnings results.
• 0:17
  Speaker 1: So we've had some results out here which are Shopify and Uber, both tumbled and that's making the market not feel particularly happy this morning.
• 0:28
  Speaker 1: But I think there is good news in stock, so don't despair, my friend.
• 0:35
  Speaker 1: Uber down 8.7% on bottom line, takes a hit despite revenue uptick.
• 0:44
  Speaker 1: Stock tanks that's probably the best way to describe it.
• 0:47
  Speaker 1: Margins margins are up outlook but yeah, really pretty hefty hit here.
• 0:58
  Speaker 1: So they are missed.
• 1:00
  Speaker 1: Profits very significantly, very, very significantly.
• 1:04
  Speaker 1: Loss of 32 cents a Loss of 32 cents a share.
• 1:06
  Speaker 1: We were expecting 22 cents a share.
• 1:08
  Speaker 1: You sometimes think couldn't you have told us about this earlier?
• 1:12
  Speaker 1: Right, you didn't know.
• 1:14
  Speaker 1: Really, you thought, eh, they're not going to notice.
• 1:17
  Speaker 1: Shop also, and let's face it, these are both pretty good businesses, nothing wrong with them.
• 1:23
  Speaker 1: Really, down 18%.
• 1:25
  Speaker 1: Crikey on earnings results that I haven't got yet.
• 1:29
  Speaker 1: See strength margin and question Shares plunge on Outlook.
• 1:39
  Speaker 1: So, yeah, that's a pretty drastic move down 18.8% and it's somehow taking pre-market with it.
• 1:47
  Speaker 1: Google Meta down, amazon down almost a percent, tesla down 3.5%.
• 1:52
  Speaker 1: What's that?
• 1:54
  Speaker 1: Merck is up, okay.
• 1:56
  Speaker 1: Nvidia down 1.2%.
• 1:58
  Speaker 1: Apple is still green, though.
• 1:59
  Speaker 1: So is it the end of the world?
• 2:01
  Speaker 1: No, it's not, and I want to really actually explain to you what I actually still think.
• 2:05
  Speaker 1: This is a glorious time to be in the market.
• 2:08
  Speaker 1: I think it's an absolutely wonderful time to be in the market.
• 2:10
  Speaker 1: Hit the you-know-what and Bill this year.
• 2:15
  Speaker 1: I love that, absolutely love that.
• 2:18
  Speaker 1: Smash the you-know-what.
• 2:20
  Speaker 1: And Where's Felix?
• 2:33
  Speaker 1: I thought he was German.
• 2:33
  Speaker 1: You can see me, can't you?
• 2:34
  Speaker 1: I think you can see me now.
• 2:35
  Speaker 1: Maybe it came through a little late for some reason.
• 2:37
  Speaker 1: Does that make us howdy chickens?
• 2:42
  Speaker 1: Is this the wrong channel, the chicken channel?
• 2:44
  Speaker 1: But yeah, no, seriously, in all seriousness, let me walk you through a few things I prepared for you, because I think there's some pretty insightful stuff that actually makes me, overall, pretty bullish on the market.
• 2:59
  Speaker 1: Hence the title of today's episode in uh La Land on the stock exchange.
• 3:07
  Speaker 1: And have a look at this.
• 3:10
  Speaker 1: Let's cheer you up here.
• 3:12
  Speaker 1: If you are an Uber or a Shopify investor, you need some cheering up this morning.
• 3:17
  Speaker 1: This is the place to come for that.
• 3:20
  Speaker 1: Buybacks companies buying their own shares, which basically is the equivalent of spreading shares, which means they're less shares, which means each share left is worth more.
• 3:30
  Speaker 1: Goldman Sachs says they're going to be $934 billion worth of corporate executions.
• 3:39
  Speaker 1: Now, that's not taking CEOs and literally executing them.
• 3:44
  Speaker 1: No, so if you thought that was what it was, your mind is a funky one.
• 3:47
  Speaker 1: It's buybacks, and for 2025, we're expecting a trillion dollars in buybacks.
• 3:54
  Speaker 1: I think we might actually hit a trillion this year, but anyway, it's 13% more than last year.
• 3:59
  Speaker 1: And what does that mean?
• 4:02
  Speaker 1: It's just supportive, massively supportive, and right now we are in full swing buyback mode till about mid-June, so it should be very, very, very supportive of the market.
• 4:16
  Speaker 1: And buyback announcements until the 3rd of May again, this is Goldman Sachs are so far $550 billion this year, which is pretty much close to the old time record, almost that.
• 4:32
  Speaker 1: But give or take a few billion, what's a billion between friends?
• 4:36
  Speaker 1: And they're saying the corporate executions, which really sounds like they're just killing people, doesn't it?
• 4:42
  Speaker 1: No, this isn't sort of Khmer Rouge killing fields on trading floors.
• 4:46
  Speaker 1: This is buybacks, and they are executing buybacks at a 40% higher rate than last year.
• 4:53
  Speaker 1: So there are 40% more buybacks this year so far than there have been last year, and that's pretty good.
• 4:58
  Speaker 1: And they think it's going to go up, and up, and up and up and typically, typically, buybacks are heavier towards the second half of the year.
• 5:10
  Speaker 1: So if you look at May, june, it sort of tries to pick up, but it really picks up July, august, october, september, august, september and November to December Slightly odd two-month periods there, but yeah, that's the way typically it plays out.
• 5:24
  Speaker 1: So you'd expect buybacks to accelerate going into the second half of the year and the profit of the seven largest stocks out there the magnificent seven, the wonderful seven, the greatest stocks ever invented again massive growth projected for this year and next year in profit and they won't know what to do with all that profit and therefore they'll be able to buy back even more.
• 5:52
  Speaker 1: And being more profitable also makes them more valuable, right.
• 5:56
  Speaker 1: And then we've got the algo funds.
• 5:57
  Speaker 1: I know there's a lot of charts, there's a lot of data, but it's a data-driven market, my friend.
• 6:01
  Speaker 1: That's how it works.
• 6:03
  Speaker 1: They think last year 9 billion of stocks were bought and we're still pretty low here on the list.
• 6:10
  Speaker 1: So you see, we are there, we're here and we come from up here, so there is a lot of buying potential left from the good old algo crowd and we look forward to seeing that flush into the market.
• 6:28
  Speaker 1: So essentially saying, they think we're going to get about 15 billion in buying across the S&P and the Nasdaq and the Russell coming in because CTA levels are relatively modest and that's a good thing, right.
• 6:48
  Speaker 1: And here is, if you want to take these down, these are useful numbers to write down the 4920, 5106 are your support levels.
• 6:59
  Speaker 1: Basically, you want to stay above those right.
• 7:01
  Speaker 1: Right now we're trading well.
• 7:05
  Speaker 1: Yesterday, spx, we closed at 5180, so we're above all the triggers, which means buy, buy, buy right.
• 7:12
  Speaker 1: That's basically what the algos are saying.
• 7:14
  Speaker 1: So that's pretty good.
• 7:16
  Speaker 1: And in a presidential election year, everything is a bit different.
• 7:21
  Speaker 1: We haven't talked yet about Stormy Daniels.
• 7:25
  Speaker 1: It's quite interesting that that sort of stuff makes the Bloomberg headlines.
• 7:28
  Speaker 1: Anything to get a porn star in the headlines, and although apparently she is a director.
• 7:34
  Speaker 1: So you've been reading up on the lady and that's an interesting story, isn't it?
• 7:38
  Speaker 1: What was going on there?
• 7:40
  Speaker 1: Anybody following that?
• 7:41
  Speaker 1: Any strong opinions on that?
• 7:42
  Speaker 1: On Trump?
• 7:42
  Speaker 1: Usually that gets people a bit, you know, excited.
• 7:46
  Speaker 1: Share buybacks are a nice tax-free raise in value.
• 7:50
  Speaker 1: Absolutely.
• 7:50
  Speaker 1: It's actually better than dividends because it's tax-free.
• 7:55
  Speaker 1: But where are we right now?
• 7:57
  Speaker 1: We are, I'm told, about halfway through May, which is here, right, that's now.
• 8:09
  Speaker 1: And look what happens typically to stock prices in such presidential years, presidential election years.
• 8:18
  Speaker 1: We usually start off at about 99 let's call it 100 and we end the year typically about plus 10 percent higher.
• 8:29
  Speaker 1: Now does that mean it's necessarily going to happen this year?
• 8:32
  Speaker 1: No, of course not.
• 8:33
  Speaker 1: But it's the seasonality.
• 8:35
  Speaker 1: People look at these, these things.
• 8:36
  Speaker 1: When people look at these things, they become more likely true than not, because everyone's looking at them.
• 8:44
  Speaker 1: I'm showing it to you, right?
• 8:45
  Speaker 1: See, I'm trying to influence the market with that chart, just kidding.
• 8:48
  Speaker 1: This isn't financial advice, of course.
• 8:50
  Speaker 1: And typically, as we're in May, may is a decent month.
• 8:56
  Speaker 1: June is a holiday month.
• 8:57
  Speaker 1: July is a great month.
• 8:58
  Speaker 1: August is a holiday month.
• 8:58
  Speaker 1: July is a great month.
• 8:59
  Speaker 1: August is a holiday month.
• 9:00
  Speaker 1: September is a terrible holiday month because everybody realizes how much they spend on crook and champagne and yachts and you know stormy Daniels over the summer holidays.
• 9:11
  Speaker 1: And then October, november, december tend to be very, very good months again.
• 9:14
  Speaker 1: So we we're in a good month, right, and we've got the summer quite summer ahead of us.
• 9:24
  Speaker 1: But if you look at, the presidential stuff should turn out rather well and, generally speaking, from here on to the end of the year, we're pretty much guaranteed to make money right Pretty much guaranteed.
• 9:37
  Speaker 1: Slight disclaimer it's based on old statistics.
• 9:39
  Speaker 1: The past is not an indicator of future performance.
• 9:42
  Speaker 1: They always say right, which I actually don't think it's true.
• 9:45
  Speaker 1: I mean it's not a guarantee, but I think it's an indicator.
• 9:49
  Speaker 1: Now, what about retail?
• 9:51
  Speaker 1: You lot, you and me lot retail traders traded up and then exited at the beginning of the year on a lot of stocks.
• 10:06
  Speaker 1: You can just see the retail get us.
• 10:07
  Speaker 1: So this is Google retail ownership.
• 10:11
  Speaker 1: This is Microsoft retail ownership and a lot of people got spooked.
• 10:15
  Speaker 1: They sold out in 2023.
• 10:17
  Speaker 1: And Amazon, for example?
• 10:21
  Speaker 1: Here the peak was 2023 and the trend's actually down, but it's starting to pick up again a little bit.
• 10:28
  Speaker 1: So we're starting to see a trend change here.
• 10:31
  Speaker 1: That's the fomo buyers.
• 10:32
  Speaker 1: They're like we're late to the party.
• 10:33
  Speaker 1: Brilliant, bye, bye, bye, but it's good.
• 10:37
  Speaker 1: But ultimately, to me, this is actually what's driving it.
• 10:41
  Speaker 1: The, the expectation for earnings per share, profit per share, have rarely been this optimistic and blue sky scenario and if this comes true, stock market should go up.
• 10:55
  Speaker 1: Very, very simple.
• 10:56
  Speaker 1: Should we look at a couple of individual stocks here this morning just to get a bit gloomy.
• 11:00
  Speaker 1: If you are a large Uber investor, avert your eyes.
• 11:03
  Speaker 1: The following chart may cause pain 7.6% down.
• 11:08
  Speaker 1: Seem to be finding some support here at $64.
• 11:12
  Speaker 1: Let me have a look in Options Watch to see if there is some saving grace for Uber shareholders.
• 11:21
  Speaker 1: Some market support maybe somewhere.
• 11:23
  Speaker 1: Oh, this sounds terrible.
• 11:31
  Speaker 1: All right, appreciate that.
• 11:33
  Speaker 1: Thanks guys, here's what we do.
• 11:37
  Speaker 1: Clip this thing on here and move it a bit further away.
• 11:40
  Speaker 1: That might do the trick.
• 11:41
  Speaker 1: Is that better?
• 11:41
  Speaker 1: Clip this thing on here and move it a bit further away.
• 11:42
  Speaker 1: That might do the trick.
• 11:43
  Speaker 1: Is that better?
• 11:47
  Speaker 1: So Uwe's support is a little bit here at 65, 67, but really kicks in at 60.
• 11:56
  Speaker 1: I know there is some at 65, actually Better.
• 11:58
  Speaker 1: Okay, appreciate you for the feedback there.
• 12:01
  Speaker 1: I'm using the actually Better.
• 12:02
  Speaker 1: Okay, appreciate you for the feedback there.
• 12:04
  Speaker 1: I'm using the mosquito mic.
• 12:07
  Speaker 1: Exactly this little thing here.
• 12:09
  Speaker 1: It's actually very, very good.
• 12:11
  Speaker 1: Okay, if it's too close, then it's not good.
• 12:16
  Speaker 1: Where is he?
• 12:16
  Speaker 1: Hong Kong, unless he travels with the paintings.
• 12:18
  Speaker 1: That would be something Darling.
• 12:20
  Speaker 1: Could you pack my painting collection?
• 12:22
  Speaker 1: Don't tease.
• 12:23
  Speaker 1: That would be something Darling.
• 12:23
  Speaker 1: Could you pack my painting collection.
• 12:24
  Speaker 1: Don't tease, it might happen yet.
• 12:25
  Speaker 1: Yeah, so 65 has some fairly decent support here Uber investors, which could provide a little bit of respite here.
• 12:35
  Speaker 1: So 65 is kind of what I would draw in here on the chart and say that that might be a good level of support for the pain that's being inflicted here on Uber.
• 12:48
  Speaker 1: Let's actually have a look on a day chart as well.
• 12:52
  Speaker 1: Volatile ride.
• 12:56
  Speaker 1: Okay, so 65 is slightly below the first of May low, which was 66.
• 13:02
  Speaker 1: Right now we're trading at 65.50.
• 13:04
  Speaker 1: Could be worth a trade.
• 13:06
  Speaker 1: If you think this is an overreaction, can you move your head to the lower left please?
• 13:12
  Speaker 1: So you want to see the?
• 13:15
  Speaker 1: Yes, I'll do that next time we look at the options watch thing.
• 13:28
  Speaker 1: I appreciate that.
• 13:29
  Speaker 1: Change mic for next video.
• 13:30
  Speaker 1: Appreciate that.
• 13:31
  Speaker 1: Thanks very much, guys.
• 13:33
  Speaker 1: All right, can you explain what RSI is and how to analyze it?
• 13:37
  Speaker 1: In options watch?
• 13:38
  Speaker 1: Rsi is a resistance indicator, essentially A momentum indicator rather.
• 13:43
  Speaker 1: So if you go here and screw up all the lines, uber, right, rsi On the left-hand side here is RSI, typically when you're above 70, so up here you would be oversold, overbought rather, and when you're sort of down here in the 30s you get to overbought.
• 14:06
  Speaker 1: That's typically the classic theory with that.
• 14:10
  Speaker 1: So what would that mean?
• 14:13
  Speaker 1: That would mean that, basically, you sell when you get to here and you buy when you get to here.
• 14:25
  Speaker 1: That's the idea.