Latest / The Paul Barron Crypto Show / Rate Hike Sell-Off?📉Market Update🚨
Transcript
- 0:00Speaker 1: Is AI selling off in Could this be the top today?
- 0:02Speaker 1: We'll break it down to you. A lot of indicators
- 0:05Speaker 1: starting to reveal themselves. Before we get started, I want
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- 0:45Speaker 1: Let's go over to a couple of points I want
- 0:46Speaker 1: to showcase and kind of focus on right now, and
- 0:50Speaker 1: this is in reference to what's going to happen tomorrow,
- 0:52Speaker 1: and that is the FEDS FMC meeting is happening, and
- 0:55Speaker 1: you have a lot of split expectations in the market.
- 1:00Speaker 1: You've got interest rate futures imply maybe a thirty percent
- 1:02Speaker 1: chance of a hike, and then you've got a seventy
- 1:05Speaker 1: percent chance of a rate cut. And basically what we're saying,
- 1:08Speaker 1: it's all over the board.
- 1:10Speaker 2: And if you look at.
- 1:11Speaker 1: Not only the uncertainty of where the markets are and
- 1:14Speaker 1: the uncertainty of what we know around Kevin worsh of
- 1:19Speaker 1: how he's going to be able to give us forward guidance,
- 1:21Speaker 1: all of this is still up in the air. And
- 1:23Speaker 1: the last point is what's happening with the Iranian war.
- 1:26Speaker 1: And this of course gets into the energy shock, which
- 1:28Speaker 1: of course has implications for what we're seeing when it
- 1:32Speaker 1: comes to inflation. So lots of issues right now facing
- 1:36Speaker 1: the FED. This will be a very interesting This may
- 1:38Speaker 1: be one of the most important FMC meetings that we
- 1:42Speaker 1: have had in the last year.
- 1:45Speaker 2: You guys, tune in. We'll do a live stream tomorrow.
- 1:47Speaker 1: If you haven't subscribed, do that right now hit the
- 1:50Speaker 1: little bell because that way tomorrow, when we go live,
- 1:53Speaker 1: you'll get a notification and it makes it very easy
- 1:55Speaker 1: for you to join in on the live stream tomorrow.
- 1:58Speaker 1: We'll take a few questions tomorrow as well. If you
- 2:00Speaker 1: guys want to chat, let's get into it. Here's the
- 2:03Speaker 1: nemesis of this whole scenario, and that is Citadel throwing
- 2:07Speaker 1: it in saying we think they might be a surprise
- 2:10Speaker 1: rate hike. This of course sent shockwaves through the market,
- 2:13Speaker 1: but at the same time many others were pointing the
- 2:16Speaker 1: exact opposite direction.
- 2:17Speaker 2: And I think that is.
- 2:18Speaker 1: The question why Citadel put this out. Why were they
- 2:22Speaker 1: so interested in saying that we could see a surprise
- 2:26Speaker 1: rate hike. So do they know something that we don't
- 2:29Speaker 1: necessarily understand?
- 2:30Speaker 2: That's the question.
- 2:32Speaker 1: You look at what else is going on in the market. Well,
- 2:34Speaker 1: I've got crude oil, and when you look at crude overall,
- 2:39Speaker 1: the issue right now has been around hovering at this
- 2:42Speaker 1: kind of this point right here between.
- 2:44Speaker 2: Sixty to seventy seventy.
- 2:46Speaker 1: Five a barrel, which is where we're hovering right now
- 2:49Speaker 1: after last week's spike. And again this has been going
- 2:53Speaker 1: up and down and whipsawing quite a bit because of
- 2:56Speaker 1: the ceasefires non cease fire, all the back and forth
- 3:00Speaker 1: between Trump's administration and of course the Iranian leadership.
- 3:05Speaker 2: And that's where we are right now.
- 3:06Speaker 1: Granted, I feel like, right now, this is kind of
- 3:09Speaker 1: the spot most likely is where we're going to be
- 3:11Speaker 1: until we see what's going to happen long term. And
- 3:15Speaker 1: if you look at that and then compare this to
- 3:18Speaker 1: where the strategy is for the FED, because remember, he's
- 3:21Speaker 1: got to look at energy.
- 3:22Speaker 2: It's one of the key and core components of inflation.
- 3:25Speaker 1: People were asking how Trump thinks this might play out.
- 3:29Speaker 2: Watch this clip.
- 3:30Speaker 3: Are you working to defense going to make greats the country?
- 3:33Speaker 4: Well, they have a board and Kevin's fantastic. But he's
- 3:36Speaker 4: got a board and the board members are very political.
- 3:41Speaker 4: I'm gonna say, so, you know, we fight our way
- 3:44Speaker 4: through the race because we're doing so well. But no,
- 3:47Speaker 4: he's got a board, so he wants to do the
- 3:50Speaker 4: right thing. I know what he wants to do. Well,
- 3:53Speaker 4: you need the consentives of people that have perhaps bad attentions.
- 3:59Speaker 1: All right, So statement there was I know what he
- 4:02Speaker 1: wants to do. Balshun has kind of hit it right
- 4:05Speaker 1: here in his tweet. This quote stuck with me yesterday
- 4:08Speaker 1: from Trump the interview. It's in reference to wash telling
- 4:11Speaker 1: me that I think it goes back to not overthinking
- 4:14Speaker 1: the FED rates because it really isn't complicated.
- 4:17Speaker 2: He put meaning Trump put.
- 4:20Speaker 1: Wsh in here or campaign for worsh being the select
- 4:23Speaker 1: here for the FED.
- 4:25Speaker 2: And he did it because.
- 4:26Speaker 1: He felt like Walsh would be coming in as a
- 4:29Speaker 1: dovish potential chair. And I think this is really what
- 4:33Speaker 1: it boils down to. If he is pushing in that direction,
- 4:36Speaker 1: it really is about politics. Who of that governor's board
- 4:40Speaker 1: is going to be pushing against this. So watch for
- 4:42Speaker 1: the numbers coming out of the ones who abstain and
- 4:45Speaker 1: the ones who are for a rate cut tomorrow. Those
- 4:47Speaker 1: would be very critical as we see that data come through.
- 4:51Speaker 1: If you go in and look at the rate hike
- 4:53Speaker 1: theory under polymarket, you can see, of course the July
- 4:57Speaker 1: is very low, but if you get into September and
- 5:00Speaker 1: October being the highest, October has a potential back here.
- 5:04Speaker 1: In July, this was only a fifty six percent probability
- 5:08Speaker 1: that of course to where we are right now jumping
- 5:11Speaker 1: to just in the last few days to almost six
- 5:16Speaker 1: or over seventy percent, So big jump here. And I
- 5:19Speaker 1: think the point is is that we are continuing to
- 5:22Speaker 1: see inflation numbers coming in. We're also continuing to see
- 5:24Speaker 1: a strategy playing out in this market from energy costs,
- 5:28Speaker 1: which is really kind of boiling down to maybe a
- 5:30Speaker 1: long term threat for economic conditions here in the United States,
- 5:35Speaker 1: all of that taken into consideration, I want to jump
- 5:38Speaker 1: in and take a look at a clip here, because
- 5:40Speaker 1: this is Tom Lee talking about whether or not would
- 5:42Speaker 1: you take that bet on polymarket?
- 5:43Speaker 2: Take a look would you take that prediction market bet?
- 5:47Speaker 2: So to speak?
- 5:48Speaker 1: What do you think any real chance the Fed hikes
- 5:50Speaker 1: rates this year?
- 5:51Speaker 2: This week?
- 5:51Speaker 3: You know, the prediction markets and funds want to hedge
- 5:55Speaker 3: on a binary event. That's why you got the thirty percent,
- 5:58Speaker 3: because someone needs to hedge something. But I'd say the
- 6:01Speaker 3: probability is blow. I mean, I wouldn't expect them to
- 6:04Speaker 3: raise rates and.
- 6:05Speaker 5: Oil it's down right now because there's some talks and
- 6:08Speaker 5: by the way, tomorrow could be up again.
- 6:10Speaker 2: We have no idea what's going to happen. Depends on
- 6:11Speaker 2: the talks. That's got to impact the Fed's thinking.
- 6:14Speaker 3: Yeah, because then they just have to see this little
- 6:16Speaker 3: bubble that they have to kind of manage through. I mean,
- 6:18Speaker 3: I think in some ways they might just shrink the
- 6:20Speaker 3: balance sheet instead of doing a policy.
- 6:23Speaker 5: Rate change, a quantitative tightening.
- 6:25Speaker 3: Correct pressure on growth, but not to deliberately slow the economy.
- 6:31Speaker 5: I think you've heard about that, yes, I have. And
- 6:33Speaker 5: bitcoin they've been coming up. Semiconductor stocks have been going down.
- 6:37Speaker 5: The dispersion between the two is the widest in years,
- 6:40Speaker 5: if not ever. Are those two things related or is
- 6:45Speaker 5: it random but interesting?
- 6:47Speaker 3: The price of crypto is not following what people expect
- 6:50Speaker 3: because they're saying, hey, the FED could be hawkish, so
- 6:54Speaker 3: crypto should be down. I show of ethereum to Bitcoin
- 6:57Speaker 3: has been going up, even though the Clarity Act looks
- 7:00Speaker 3: like it's really being stalled.
- 7:03Speaker 1: All right, So he had a lot of things there.
- 7:06Speaker 1: Let's kind of backtrack on one of them, the Clarity
- 7:08Speaker 1: app be installed. But at the same time we see
- 7:10Speaker 1: kind of this I will say, somewhat flat, maybe slightly
- 7:14Speaker 1: up market in general, and you can kind of also
- 7:17Speaker 1: consider what Tom is getting at around a no rate cut,
- 7:20Speaker 1: how that plays out with the rest of the global
- 7:23Speaker 1: markets in general. And then if you look at the
- 7:25Speaker 1: semiconductor market in comparison to what's happening in crypto, is
- 7:29Speaker 1: this finally maybe a rotation trend that we truly can't
- 7:33Speaker 1: see because that's been the slowdown that many people have
- 7:36Speaker 1: looked at and that is around AI. All of this
- 7:38Speaker 1: could really get into one thing, and that is how
- 7:41Speaker 1: does this market play? And is or is clarity that
- 7:46Speaker 1: important to crypto?
- 7:47Speaker 2: Here was Tom you talking about it?
- 7:49Speaker 3: As you know, the big banks and the asset managers
- 7:51Speaker 3: are tokenizing assets and want to build stable coin rails.
- 7:54Speaker 3: If they have to be subject to state regulations or
- 7:57Speaker 3: local regulators, it is going to have a lot of
- 8:00Speaker 3: people cold.
- 8:01Speaker 2: But are they for it or there against it?
- 8:02Speaker 3: Many of the asset managers are for it.
- 8:04Speaker 5: The SEC was created in nineteen thirty four. I think
- 8:08Speaker 5: ish this is a nineteen thirty four type moment, And
- 8:11Speaker 5: the reason the SEC was created is because state regulators
- 8:16Speaker 5: you might have one rule in Indiana and another rule
- 8:18Speaker 5: in Virginia, and investors like I can't manage both these rules.
- 8:23Speaker 5: All crypto is having that nineteen thirty four type moment
- 8:26Speaker 5: right exactly.
- 8:27Speaker 3: And in addition, crypto is because it's turning money into software.
- 8:31Speaker 3: A lot of things can turn into money, loyalty points, reputation.
- 8:37Speaker 3: Then you want a governing body to oversee all this. Now, Japan, Russia,
- 8:43Speaker 3: Europe are actually passing Clarity Act like bills, So the
- 8:46Speaker 3: US is risking getting behind That's why I think crypto
- 8:49Speaker 3: is recovering because outside the US it's being embraced. Even
- 8:53Speaker 3: though you say, you actually think, look, they had what
- 8:55Speaker 3: a few legislative days.
- 8:56Speaker 2: Left before for the midterms. Could this be a lame
- 8:58Speaker 2: duck kind of move?
- 8:59Speaker 3: Do you think? But it does unlike that a lot
- 9:01Speaker 3: of concessions were given, but that those who oppose the
- 9:05Speaker 3: bill still want to extract something else.
- 9:09Speaker 1: And the key point that Tom's getting there is those
- 9:11Speaker 1: who oppose the bill people.
- 9:13Speaker 2: Want to extract something else.
- 9:14Speaker 1: And that may be what we're seeing right now is
- 9:17Speaker 1: more theater coming out of DC because there's a handful
- 9:21Speaker 1: of senators on the Democratic side that feel this is
- 9:24Speaker 1: such an important piece of legislation that they can extract
- 9:29Speaker 1: something else. So beyond the lookout, guys, are we are
- 9:32Speaker 1: right in the middle of possibly the next innovation era
- 9:36Speaker 1: of our lifetime. The last one we saw was really
- 9:38Speaker 1: on the birth of the Internet in the early two thousands.
- 9:40Speaker 1: A quarter of a century later, here we are in
- 9:42Speaker 1: finance and when you look at what Tom is doing,
- 9:45Speaker 1: and I say, Tom Lee Funstrat, they're taking some very
- 9:49Speaker 1: interesting shots here. And this, of course is Funstrat, who
- 9:52Speaker 1: was on a podcast with Sean Ferrell, and they go
- 9:55Speaker 1: into the whole idea around virtuals. This is talking about agentic,
- 9:59Speaker 1: So think about where agentic could be in just the
- 10:02Speaker 1: near future if Clarity does go through, even if it
- 10:06Speaker 1: doesn't in the United States, where agentic will be globally,
- 10:10Speaker 1: and how virtuals may be playing a big part of this.
- 10:13Speaker 1: So just watch where Tom Lee and because I think
- 10:16Speaker 1: funstrat is one of those that finally understands what's really
- 10:21Speaker 1: happening in this market, and maybe some of these indicators
- 10:25Speaker 1: are signaling where this market is going to be going.
- 10:27Speaker 1: If you look at the performance of virtuals, this has
- 10:29Speaker 1: been one of those, especially as an all coin, but
- 10:32Speaker 1: primarily as an agentic protocol that has been depressed.
- 10:36Speaker 2: Quite a bit. So the move here. Take it for
- 10:38Speaker 2: what it is.
- 10:39Speaker 1: But I always say where there's smoke, there's fire, and
- 10:43Speaker 1: especially on innovation cycles. Now it may not happen soon,
- 10:46Speaker 1: but I start to look at agentic becoming a major
- 10:49Speaker 1: key factor, so we could see something moving there. Just
- 10:52Speaker 1: pay attention when you look at other trends. You have
- 10:55Speaker 1: to look at what's going on in the Korean stock
- 10:56Speaker 1: market right here, and there's a reason that all of
- 10:58Speaker 1: this massacre was intensifying as you saw the Korean Exchange
- 11:03Speaker 1: triggered its ninth circuit breaker of twenty twenty six, which
- 11:07Speaker 1: halted all trading, and the primary thing it was pointing
- 11:10Speaker 1: at was Samsung and sk Heinex.
- 11:13Speaker 2: I don't think so.
- 11:14Speaker 1: The reason that we started to see all of this
- 11:17Speaker 1: liquidity rushing out of that market was something very simple,
- 11:21Speaker 1: and in fact, we have talked about it.
- 11:23Speaker 2: On this show.
- 11:24Speaker 1: We actually had a whole episode that pointed to this
- 11:27Speaker 1: right here, and that is CXMT. We talked about it early,
- 11:31Speaker 1: probably two three weeks ago, saying this most likely could
- 11:34Speaker 1: trigger some liquidity events. There you have it cxmt's four
- 11:38Speaker 1: under sixty six percent market debut, which makes it the
- 11:42Speaker 1: second largest China listed company in history. So there is
- 11:47Speaker 1: some very intriguing things happening in Asia right now around
- 11:52Speaker 1: where liquidity is going to flow.
- 11:54Speaker 2: And I want to kind of kind of cap this
- 11:56Speaker 2: off with a clip that gets.
- 11:58Speaker 1: Into how AI I could be at a very interesting
- 12:02Speaker 1: point right now.
- 12:03Speaker 6: Take a look now, trading on South Korea's benchmark Cosby
- 12:08Speaker 6: was paused temporarily by sliding eight percent. Chairs of sk
- 12:13Speaker 6: Heinex have planned forty five percent from their all time
- 12:17Speaker 6: high in June as concerns about overcrowding, CAPEX and competitions
- 12:21Speaker 6: set in. But here's the thing. What do you see. Yeah,
- 12:24Speaker 6: you see a chart that goes up and then goes down,
- 12:26Speaker 6: and it's still up forty three percent year today. So
- 12:31Speaker 6: if you are an owner and you bought at the
- 12:34Speaker 6: right time, you bought at start of this year, you
- 12:36Speaker 6: have made roughly fifty percent. This is extreme volatility. And
- 12:41Speaker 6: it's not about the war. It's not about tariffs, it's
- 12:43Speaker 6: not about interest rates. It's about a I and it's
- 12:47Speaker 6: about leverage.
- 12:49Speaker 2: All right.
- 12:50Speaker 1: So I love how they always pick if you're an
- 12:53Speaker 1: owner where you have to be an owner at the
- 12:55Speaker 1: very beginning, versus the ones that just got dumped on
- 12:58Speaker 1: two weeks three weeks ago.
- 12:59Speaker 2: So let's just be aware of that.
- 13:01Speaker 1: Timing of going into these markets are just equally volatile.
- 13:05Speaker 1: And when you look at volatility, another point you've got
- 13:08Speaker 1: to look at is where Jensen Swang Wong was in
- 13:11Speaker 1: here meeting with US Commerce Secretary Howard Lutnik. This usually
- 13:15Speaker 1: means one thing, guys, and that is that there's a
- 13:17Speaker 1: deal being made right here. He wanted to discuss five
- 13:20Speaker 1: hundred billion in US in terms of technology production and
- 13:24Speaker 1: the plan around America leadership when.
- 13:27Speaker 2: It comes to AI.
- 13:28Speaker 1: I don't know why Lutnik is necessarily going to be
- 13:30Speaker 1: in charge of that because we of course lost our aisar,
- 13:33Speaker 1: you know, Sacks. But I just wonder to what extent
- 13:36Speaker 1: this could put some pressure on Nvidia in general. Remember,
- 13:40Speaker 1: Jensen just joined Twitter not too long ago, and this
- 13:43Speaker 1: was one of his first posts that went out there
- 13:46Speaker 1: on July twenty fourth. For my first posts, I'm sharing
- 13:50Speaker 1: a letter and this is on why open models matter
- 13:54Speaker 1: and AI will transform every industry.
- 13:56Speaker 2: You can read the post there.
- 13:57Speaker 1: Open model strength and safety and cyber security, accelerated innovation
- 14:02Speaker 1: and diffusion, and enable sovereignty. So it's interesting that you
- 14:06Speaker 1: have this there because this of course enables Nvidia globally,
- 14:11Speaker 1: because if we started to see some pressure here from
- 14:14Speaker 1: the Trump administration or any administration coming out of the
- 14:16Speaker 1: US putting caps or more pressure on some of these
- 14:21Speaker 1: companies that are building in the East, this could of
- 14:26Speaker 1: course affect in Vidia's overall business as well as their stocks.
- 14:30Speaker 1: So that's why I think you are going to see
- 14:32Speaker 1: Jensen Wong very active on X this year.
- 14:35Speaker 2: So be on the lookout.
- 14:37Speaker 1: If you go look at the balance sheet, this gets
- 14:39Speaker 1: a little dicey here because it's showing commitments and liabilities
- 14:42Speaker 1: of some of the biggest companies out there, Alphabet holding
- 14:45Speaker 1: in on commitments which are extensive.
- 14:48Speaker 2: That's still growth in the market.
- 14:50Speaker 1: Then you look at Meta also having an extensive Even
- 14:53Speaker 1: though I have slowed down some AI internally, the point
- 14:56Speaker 1: that they are going into deal with infrastructure to possibly
- 14:59Speaker 1: sell that you know, compute later.
- 15:00Speaker 2: On down the line is still up there.
- 15:02Speaker 1: As you can see right here, this is a good
- 15:05Speaker 1: comparison to where chip makers were in the early two thousands.
- 15:09Speaker 1: This of course was during the era of the dot bomp,
- 15:12Speaker 1: dot com and the birth of the Internet, so there
- 15:14Speaker 1: was a lot of chip manufacturing going on and distribution
- 15:17Speaker 1: going on. What we didn't have back then though, was
- 15:21Speaker 1: of course the developing Asia countries, and of course that
- 15:24Speaker 1: means China, India, Indonesia, Korea. All of these have a
- 15:29Speaker 1: new implementation around building more product and this, of course
- 15:34Speaker 1: we'll play into two strategies. One does it get us
- 15:37Speaker 1: near a top or is this truly just the beginning
- 15:41Speaker 1: of where all of this could begin, Because if you
- 15:43Speaker 1: kind of compare this was like ninety seven ninety six
- 15:47Speaker 1: where that push right there was going on. That was
- 15:50Speaker 1: three or four years now, if you kind of compare,
- 15:53Speaker 1: that has similarities, but it's a much shorter frame time.
- 15:56Speaker 2: It's really been over the last twelve months. Do we
- 15:59Speaker 2: really have.
- 16:00Speaker 1: A point where this could elongate this AI play right
- 16:04Speaker 1: now into many more years? I think that, of course,
- 16:07Speaker 1: is the speculation on how to move forward. I want
- 16:10Speaker 1: to go into that because Steve Eisman talks about that
- 16:14Speaker 1: that this is exactly what he's doing.
- 16:17Speaker 3: Take a look, you wouldn't necessarily short this market at
- 16:20Speaker 3: this point where.
- 16:20Speaker 2: I would not.
- 16:21Speaker 7: I sold my Google a couple of months ago, haven't
- 16:24Speaker 7: bought anything to replace it.
- 16:25Speaker 3: What happens if AI doesn't succeed?
- 16:28Speaker 7: I think we have a big correction.
- 16:29Speaker 6: How big?
- 16:30Speaker 2: I don't know.
- 16:32Speaker 7: It's all one trade. People who think they're diversified because
- 16:36Speaker 7: they own sixty percent stocks and forty percent bonds are
- 16:41Speaker 7: missing the fact that they're actually not diversified because if
- 16:43Speaker 7: their sixty percent more than fifty percent is tech and
- 16:48Speaker 7: AI related, what.
- 16:49Speaker 3: Would it take to get you to deploy that cash?
- 16:52Speaker 7: I don't know yet.
- 16:53Speaker 2: Okay, so think about that, guys.
- 16:54Speaker 1: He doesn't want to deploy it doesn't have an answer
- 16:56Speaker 1: of when he would deploy cash. So that makes me
- 17:01Speaker 1: wonder if many investors are in that position right now
- 17:06Speaker 1: where they literally are just sitting on the sidelines, why
- 17:08Speaker 1: not park it in some stable coins guys and get
- 17:10Speaker 1: some a little bit of yield. Let's jimp over to
- 17:12Speaker 1: clarity real quick, because everybody wants to know what's up.
- 17:15Speaker 1: You get the Senator scheduled to recess on August seventh,
- 17:18Speaker 1: very limited floor time.
- 17:19Speaker 2: And what does that mean.
- 17:20Speaker 1: It means that it's going to get pushed, or maybe
- 17:22Speaker 1: it gets pushed because it's now competing with Save America Act,
- 17:26Speaker 1: the Russian Iranian sanctions, budget bills, et cetera.
- 17:29Speaker 2: Point being behind all.
- 17:30Speaker 1: This, guys, is that we are in a very very
- 17:33Speaker 1: critical time right now. So we're going to cover this more,
- 17:36Speaker 1: including the Fed tomorrow. In terms of the FOMC. This
- 17:39Speaker 1: will have a major impact on the markets as we
- 17:43Speaker 1: play this out, so it's going to be a big week.
- 17:52Speaker 1: If you like this video, like and subscribe, drop a
- 17:54Speaker 1: comment down below, and also join our free private member group.
- 17:58Speaker 2: The link is in the description