Latest / Felix Nikolas Prehn's Podcast / Warning: Inflation Data Just Out! 😰 + Stock Market News 31 May 2024

Transcript

Warning: Inflation Data Just Out! 😰 + Stock Market News 31 May 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix, it would appear that we are live on a day where, well, trump gets convicted and inflation comes in lower than expected.
• 0:08
  Speaker 1: Which one do we care about more?
• 0:09
  Speaker 1: For me, it's definitely the inflation number, because it affects my pocket, my income, my wealth, whereas Trump not so much.
• 0:16
  Speaker 1: So very excited about that.
• 0:19
  Speaker 1: But we also need to understand like why did Dell drop yesterday like a rock, you know, drop it like it's hot and CRM and a bunch of other stocks?
• 0:29
  Speaker 1: And is Nvidia topping out?
• 0:32
  Speaker 1: Is it the end of the AI rally?
• 0:34
  Speaker 1: Because suddenly AI expectations are not being met on earnings calls, which is not exactly what we want here, right, christian, there, there, you're tuning in from my old hometown, moin moin to you too.
• 0:47
  Speaker 1: So a happy good morning to you.
• 0:49
  Speaker 1: It is a glorious day, as it is every single day, and um, the reason I'm in it.
• 0:54
  Speaker 1: Later this thing ran out of power.
• 0:56
  Speaker 1: It's glorious, but occasionally I get to plug it in.
• 0:59
  Speaker 1: So there we are.
• 1:00
  Speaker 1: Let me share my screen with you.
• 1:01
  Speaker 1: We get cracking straight away and um, I don't know where they speak like that, but they probably do somewhere.
• 1:08
  Speaker 1: This is the data we just got in, and core PC inflation came in at 0.2%, which is good news or bad news.
• 1:17
  Speaker 1: What would you say?
• 1:18
  Speaker 1: Would you say it's good news when inflation is lower, or is it bad news?
• 1:21
  Speaker 1: Well, it's definitely good news.
• 1:22
  Speaker 1: You were right.
• 1:23
  Speaker 1: A gold star to you, a little lower than expectations, but kind of as expected.
• 1:27
  Speaker 1: Personal income also pretty flat, but lower than last month, which again is good news, why Just shows the economy is slowing down a bit, but still it's still a soft landing.
• 1:38
  Speaker 1: The miracle is still there, apparently the Biden soft landing miracle, and personal spending falling to 0.2% lower than expected.
• 1:47
  Speaker 1: And that is still good news.
• 1:49
  Speaker 1: Maybe not if you're Macy's or Foot Locker, which did very well yesterday, or Nike or someone like that, but generally speaking, for this soft landing mirage that we are all aiming for, this is good news.
• 2:04
  Speaker 1: Here is a picture of what the S&P futures did the three minutes after that happened when they went to the moon, only rising about 10 points there or so.
• 2:14
  Speaker 1: But shall we have a look?
• 2:14
  Speaker 1: Let's have a quick look where they ended up, and I want to talk about this because this is freaking exciting Futures right now at 5267.
• 2:24
  Speaker 1: So it's a nice bounce, but it's only about 15 points or so, so not quite enough to stop the institutional market maker selling, and I'll explain that in a little bit more detail right now.
• 2:37
  Speaker 1: But one of our market makers on our team feeds us that data and he knows what he's talking about.
• 2:42
  Speaker 1: So there is that, so better, or maybe, as expected, a little bit positive.
• 2:48
  Speaker 1: Does that mean the Fed's going to flip?
• 2:50
  Speaker 1: Well, let's get to that in a moment.
• 2:53
  Speaker 1: I want to share this with you because we've just we're about to launch I think tomorrow the indicator that I've literally spent the last 20 years of my life working, seriously, some things you work on for a long time.
• 3:04
  Speaker 1: This is a piece of art and this is a screenshot of Spy.
• 3:08
  Speaker 1: And what do you see?
• 3:09
  Speaker 1: Well, when it goes green, it's guess what.
• 3:11
  Speaker 1: It's a buy signal.
• 3:12
  Speaker 1: So you get that buy signal here, right?
• 3:14
  Speaker 1: Does it go up?
• 3:15
  Speaker 1: Yeah, or you had one here when it went up.
• 3:18
  Speaker 1: And what about red?
• 3:20
  Speaker 1: Well, sort of turned red, let's call it here.
• 3:22
  Speaker 1: And then, did it go down?
• 3:24
  Speaker 1: Yeah, absolutely did.
• 3:26
  Speaker 1: And this is a combination of a large number of indicators and we'll put out an article on that so you can understand.
• 3:32
  Speaker 1: Actually, I've just recorded the full video.
• 3:34
  Speaker 1: I've been just editing it so you really understand it.
• 3:36
  Speaker 1: But if you want to get your paws on that.
• 3:38
  Speaker 1: You want to play with that before everybody else and before we start to charge for it, because right now it's going to get released I think tomorrow and right now, everybody who's on our premium plan just like 16 bucks a month gets it for free, and you get a whole free month of that, by the way.
• 3:53
  Speaker 1: So it's a risk-free trial completely risk-free, because I want you to see whether you actually like it.
• 4:00
  Speaker 1: You will get access to this and it's working pretty freaking well.
• 4:04
  Speaker 1: You can have a look at some other stocks, like PayPal, for example, and just see does it work on other stocks?
• 4:09
  Speaker 1: No, this is staging, so it's a little bit slow.
• 4:12
  Speaker 1: The live version is a little faster, I promise you.
• 4:15
  Speaker 1: But look at that.
• 4:18
  Speaker 1: Look at that, for example, anywhere you want to start, like see the red down, green up, red down and then sort of zigzags a little bit here, red down again.
• 4:27
  Speaker 1: The rally up caught very nicely.
• 4:29
  Speaker 1: The drop down 2023, very nice.
• 4:32
  Speaker 1: Recovery very nice.
• 4:33
  Speaker 1: The drop down very nice.
• 4:34
  Speaker 1: The recovery very nice.
• 4:36
  Speaker 1: Sideways action here.
• 4:37
  Speaker 1: Here's that drop recovery very nice, and right now it would have told you to exit the 7th of here.
• 4:40
  Speaker 1: Here's that drop recovery Very nice, and right now, it would have told you to exit the 7th of May.
• 4:43
  Speaker 1: It's fallen $3 since, so I love this.
• 4:48
  Speaker 1: Now, of course, it's an indicator.
• 4:49
  Speaker 1: We backtest the accuracy of this.
• 4:53
  Speaker 1: So, like for PayPal, for example, we had about 84% for the last two years, which is pretty good.
• 4:58
  Speaker 1: So we've got actual data here that we worked against.
• 5:01
  Speaker 1: But will it make you money if you don't have a trading strategy?
• 5:04
  Speaker 1: No, no, no.
• 5:06
  Speaker 1: Indiecandle will, because people will sell here and then they will get greedy and they wait for it to recover and they'll you know.
• 5:14
  Speaker 1: Okay, that would have actually worked.
• 5:16
  Speaker 1: Sell here, buy there.
• 5:17
  Speaker 1: That would have worked quite well.
• 5:18
  Speaker 1: But you need to have like an exit strategy.
• 5:21
  Speaker 1: You need to have an exit rule, you need to have risk management.
• 5:23
  Speaker 1: Otherwise you're just like a kamikaze driver here.
• 5:26
  Speaker 1: But seriously, go and check it out, play with it.
• 5:28
  Speaker 1: It'll be live, I think, tomorrow.
• 5:29
  Speaker 1: Free trial, so you get access to it for like a whole month for free Optionswatchio, before we actually charge for it.
• 5:36
  Speaker 1: And if you join now, we won't charge you additionally for it, because we want to reward people who joined early on.
• 5:43
  Speaker 1: Generally, that's how we've done it with the whole thing, and the whole point of OptionsWatch is that we give you access to Wall Street data.
• 5:49
  Speaker 1: This is literally the indicator, or the improvement on the indicator I was working on 20 years ago inside an investment bank.
• 5:56
  Speaker 1: That was one of the first things I did there.
• 5:58
  Speaker 1: Now let's talk a little bit about the big drops here yesterday.
• 6:02
  Speaker 1: What's the name of the feature?
• 6:05
  Speaker 1: We call it Trend Alert Imaginative, isn't it?
• 6:08
  Speaker 1: We thought it was very, very imaginative, so it'll show up for you inside Options Watch probably tomorrow and it's just here Trend Trend, one of the indicators here in this little indicator tab.
• 6:18
  Speaker 1: I'll put out an article in a blog post and all that kind of stuff as well over the next few days.
• 6:24
  Speaker 1: But yeah, play with it.
• 6:25
  Speaker 1: I think you're going to like it.
• 6:27
  Speaker 1: Crm yesterday the biggest drop since 2004 in 20 years.
• 6:35
  Speaker 1: Now, typically what happens after a massive, monstrous drop?
• 6:39
  Speaker 1: Well, a lot of the time you tend to recover afterwards and maybe we'll do some trades on CRM today.
• 6:45
  Speaker 1: Dell similarly getting kneecapped.
• 6:49
  Speaker 1: Good old you know Northern Ireland fashion.
• 6:52
  Speaker 1: Now we offended a whole other group of people.
• 6:55
  Speaker 1: Right, and isn't that fun?
• 6:57
  Speaker 1: And basically, why?
• 6:59
  Speaker 1: C-s-g-o-m-s where in line, but they missed 8% versus cons 10%.
• 7:10
  Speaker 1: What the frick does that mean?
• 7:11
  Speaker 1: It basically means AI service missed by 2% the expectations and it just means that the AI adoption is a little bit slower than people would like it to be.
• 7:27
  Speaker 1: But this is like cloud demand, this is company demand.
• 7:31
  Speaker 1: This is not PCs.
• 7:32
  Speaker 1: Actually, otherwise they're pretty good earnings.
• 7:34
  Speaker 1: But yeah, down 18, 18 freaking percent and again, it's the biggest drop down since well, my data only goes back five years, but definitely the biggest drop in five years on Dell there, and I quite like Dell at these prices.
• 7:50
  Speaker 1: But that's just my opinion, obviously not yours.
• 7:53
  Speaker 1: This is what the lovely analysts say.
• 7:58
  Speaker 1: You know the ones who really care about you and me and our well-being and our financial future.
• 8:02
  Speaker 1: You know there's that lot that say an Ave Maria to the retail investors every day.
• 8:07
  Speaker 1: Morgan stanley says while near-term expectations got ahead of themselves, confidently, buy the dip.
• 8:13
  Speaker 1: Smorg stanley, dell's unexpectedly strong april quarter revenue was overshadowed by ai server backlog, missing expectations.
• 8:21
  Speaker 1: Jp morgan, the um loveliest bank in the world, says.
• 8:27
  Speaker 1: The ones with a, with, you know, fluffy heart.
• 8:30
  Speaker 1: They say Delta Margin Shopping is creating a more attractive buying opportunity.
• 8:34
  Speaker 1: And yeah, they like it too.
• 8:38
  Speaker 1: So they're both saying it's a buy because it's cheaper now than it was before, which is kind of interesting.
• 8:45
  Speaker 1: Now, this is the thing we want to get to here, right.
• 8:48
  Speaker 1: Hence the headline today, which is Fed rate cut expectations.
• 8:52
  Speaker 1: When the lines go up, it's a good thing, and they're going up.
• 8:56
  Speaker 1: They went up yesterday.
• 8:57
  Speaker 1: Why?
• 8:57
  Speaker 1: Because, oh my God, ai wasn't delivering on time.
• 9:01
  Speaker 1: So where are they right now?
• 9:02
  Speaker 1: Can we look that up?
• 9:03
  Speaker 1: Yeah, we can look that up.
• 9:04
  Speaker 1: There is something called Fed Fund Futures.
• 9:11
  Speaker 1: This is it, is it?
• 9:16
  Speaker 1: No, hang on, let me find the link.
• 9:21
  Speaker 1: Let me find the link.
• 9:22
  Speaker 1: I've got it saved in here.
• 9:27
  Speaker 1: Fed there it is, that's the one, okay.
• 9:33
  Speaker 1: So what do you want to happen?
• 9:35
  Speaker 1: You want there to be more rate cuts than not, right?
• 9:41
  Speaker 1: So if we now go to I'll zoom out a bit we go to say July Probability of a rate cut any different to yesterday?
• 9:52
  Speaker 1: Not so far.
• 9:53
  Speaker 1: What about September?
• 9:57
  Speaker 1: Not much from last week.
• 10:05
  Speaker 1: We have a slight improvement in the one cut, but a decrease, yeah.
• 10:11
  Speaker 1: So decrease, okay.
• 10:12
  Speaker 1: So that's true.
• 10:13
  Speaker 1: So yesterday, 49% of people thought rates were not going to come down.
• 10:16
  Speaker 1: Today it's 47%.
• 10:17
  Speaker 1: It's pretty marginal, isn't it?
• 10:19
  Speaker 1: It's pretty marginal.
• 10:19
  Speaker 1: So today's inflation data isn't really moving the needle very much.
• 10:25
  Speaker 1: What if we go to the end of the year?
• 10:27
  Speaker 1: Let's look at December.
• 10:28
  Speaker 1: A fraction.
• 10:31
  Speaker 1: Yeah, a little bit less.
• 10:32
  Speaker 1: People think there'll be no rate cut, but it's like half a percent.
• 10:35
  Speaker 1: It doesn't really make the cat fat, does it Not really?
• 10:39
  Speaker 1: It's a modest improvement and we'll take all improvements, but it's modest.
• 10:44
  Speaker 1: By the way, options Watch also gives you an email every day.
• 10:46
  Speaker 1: With the trend indicator flipping All the flips of the day up and down, you get directly into your inbox, which saves you walking through 2,000 stocks, which is what we do.
• 10:58
  Speaker 1: Well, the algorithm does it, thankfully.
• 11:00
  Speaker 1: So check it out at optionswatchio Down below.
• 11:04
  Speaker 1: Get yourself a 30-day free trial and play with it.
• 11:09
  Speaker 1: See if it makes sense to you.
• 11:10
  Speaker 1: Now, this is also what pummeled NVIDIA a little bit at the end of yesterday.
• 11:15
  Speaker 1: The US is apparently taking longer to approve licenses for sort of big exports to the Middle East, and there's security reviews by the US government because they're worried that somehow the chips might find their way to China through some camel or something, will walk through Iran and Afghanistan and over the mountains and then over some more mountains and end up in China, something like that.
• 11:42
  Speaker 1: So that's not great news for Nvidia.
• 11:46
  Speaker 1: S&p is still up, s&p futures.
• 11:50
  Speaker 1: So if we look at Nvidia here on a minute chart, you would have thought that would have been more negative impact.
• 12:02
  Speaker 1: So it did at the end of the day yesterday.
• 12:04
  Speaker 1: Right, we got that drop here from 1100 all the way down to.
• 12:08
  Speaker 1: We lost 100 points on that news and guess what?
• 12:11
  Speaker 1: The freaking dip buyers are back.
• 12:13
  Speaker 1: We're back exactly where we were yesterday.
• 12:16
  Speaker 1: So the news does not deter the market.
• 12:20
  Speaker 1: So far, 2.71% up here, which is good.
• 12:24
  Speaker 1: And the question is is the rest of the market falling or is any NVIDIA going up or not?
• 12:31
  Speaker 1: Let me, are we allowed to see that?
• 12:34
  Speaker 1: There we go?
• 12:35
  Speaker 1: Pre-market looks pretty good.
• 12:37
  Speaker 1: So the inflation data is having some impact here.
• 12:39
  Speaker 1: Microsoft Google up, which is good.
• 12:42
  Speaker 1: It plays nicely into the contrarian trade we set up together yesterday.
• 12:47
  Speaker 1: Like Microsoft's up here, hutz up, apple is up, paypal is up, sofi is up.
• 12:52
  Speaker 1: We're bullish on everything.
• 12:53
  Speaker 1: So these P&Ls will update once the market opens.
• 12:56
  Speaker 1: There's no pre-market on options.
• 12:58
  Speaker 1: So I think we'll have another nice day here today and make some money.
• 13:03
  Speaker 1: Isn't that what we're all here for?
• 13:04
  Speaker 1: I think that's what we're here for.