Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - BREAKING: FED *Just* Flipped + Stock Market News 08 May 2025

Transcript

Felix Prehn - BREAKING: FED *Just* Flipped + Stock Market News 08 May 2025 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: And welcome to this pre-market live stream.
• 0:02
  Speaker 1: I hope you'll take me back lit.
• 0:03
  Speaker 1: The view is rather nice.
• 0:05
  Speaker 1: It's probably nicer than looking at me and, as we are here, live in the glorious south of France, we just got the biggest, the first, the ultimate of all the trade deals out there, and of course, trump is excited about it.
• 0:19
  Speaker 1: The market is too.
• 0:20
  Speaker 1: So I'm going to walk you through what that trade deal will actually do and then I'll tell you how the Fed is hurting your portfolio and why what they did and announced yesterday makes absolutely bugger all sense, goes against everything the rest of the world is doing, and why they're going to have to change course.
• 0:35
  Speaker 1: And I also want to walk you through and highlight what I believe is the biggest investment opportunity of probably this generation Actually, not just probably, definitely this generation.
• 0:47
  Speaker 1: It's huge, it's bigly, and I'll break it down for you as well.
• 0:50
  Speaker 1: We'll do a review of our popular stocks, our Palantirs, teslas, amds, nvidias and so on, and, of course, we'll round it off with a monstrous Q&A.
• 1:00
  Speaker 1: So first of all, let me share my screen with you here and I just want to make sure you guys can all hear and see me, okay, because I'm on a travel setup.
• 1:07
  Speaker 1: I've just put a, put a, put a smiley or a one in the chat and that way I know that you actually hear and alive and awake.
• 1:13
  Speaker 1: And smash the uh, smash the like button while we at it.
• 1:17
  Speaker 1: Sound is iffy.
• 1:17
  Speaker 1: Someone's saying sharon.
• 1:18
  Speaker 1: Somebody said the sound was great yesterday.
• 1:21
  Speaker 1: Let me know and I'll do my utmost about that.
• 1:24
  Speaker 1: Let me share my screen with you here.
• 1:25
  Speaker 1: This is the Donalds.
• 1:27
  Speaker 1: Okay, I'm loving the monster, brilliant guys.
• 1:29
  Speaker 1: This is his tweet from like 27 minutes ago.
• 1:33
  Speaker 1: Literally, the agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come, because of our long time, history and allegiance together.
• 1:44
  Speaker 1: Well, the Americans got away, but, yes, it's a great honor to have the United Kingdom as our first announcement.
• 1:51
  Speaker 1: Many other deals which are in serious stages of negotiation to follow.
• 1:53
  Speaker 1: Now why are we loving this?
• 1:55
  Speaker 1: Are we just loving this because the Brits were the first to cave?
• 1:58
  Speaker 1: The UK is basically a vassal state of the US.
• 2:01
  Speaker 1: That's sort of been a US government policy, I think, for many years.
• 2:05
  Speaker 1: Walk down a high street in the US and UK, rather, and try to find a business that doesn't funnel its money to the US Pretty hard to find, but that's not really the point here.
• 2:13
  Speaker 1: It's good.
• 2:14
  Speaker 1: It means one of the big G7 economies, one of the largest economies in the world, has agreed to a deal with the US.
• 2:23
  Speaker 1: We have to see what it looks like, but it just means that Trump doesn't just want to keep tariffs high forever because he wants to collect the revenue.
• 2:32
  Speaker 1: He's actually open to freer trade and that's, of course, wondrous for the stock market.
• 2:40
  Speaker 1: Why?
• 2:40
  Speaker 1: Because most companies on the stock market are somewhat making or selling stuff overseas.
• 2:48
  Speaker 1: There's very little that's actually really really, really US-based.
• 2:51
  Speaker 1: It also puts tremendous pressure on the apparatchiks in Brussels and the European Union because, well, if the one who got away the Brits, got the trade deal, the UK is going to want to do something and it'll also give us a nice template that we could then imagine other countries might follow.
• 3:06
  Speaker 1: So the first deal is always the hardest.
• 3:08
  Speaker 1: So kudos for getting that over the line.
• 3:10
  Speaker 1: That's very, very, very big and positive news.
• 3:14
  Speaker 1: We've been wanting a deal with America since Brexit.
• 3:18
  Speaker 1: Yes, yes, and it's funny that it's this present Muppet of a prime minister.
• 3:22
  Speaker 1: I think I can get arrested for that, can't?
• 3:24
  Speaker 1: I in the UK is the one to actually get it over the line.
• 3:27
  Speaker 1: Quite surprising, really.
• 3:32
  Speaker 1: But, yes, definitely good news all around.
• 3:34
  Speaker 1: War started in India.
• 3:35
  Speaker 1: Well, there is a little bit of that skirmish thing going on in India and in Pakistan, but if you zoom out a little bit, that was happening for decades and decades and decades.
• 3:43
  Speaker 1: So this is not as big a deal as mainstream media likes to make it.
• 3:46
  Speaker 1: I'm not a fan of war, but hopefully they're going to do something about that.
• 3:55
  Speaker 1: They're both strong US allies, by the way, so the US has quite a lot of leverage there to tell them guys, keep a lid on it.
• 3:58
  Speaker 1: So that's the first one here.
• 4:01
  Speaker 1: Now are you going to run out and buy stocks blindly?
• 4:02
  Speaker 1: I hope not.
• 4:03
  Speaker 1: I hope instead you come and join me on Saturday and I want to walk you through.
• 4:08
  Speaker 1: There is one sector, there is one bigger than AI seriously Kind of a result of AI, but bigger than AI, and I'm teasing you here.
• 4:17
  Speaker 1: But not only will I say to you okay, these are the stocks, these are the sectors to buy, but I'll actually teach you how I find it.
• 4:24
  Speaker 1: I teach you how to select the stocks so you don't just walk away with, like you know, my three favorite stocks of the week, which I will, of course, give you, but with the actual systems and rules for when do we buy, when do we sell.
• 4:36
  Speaker 1: So that's really my goal for Saturday, and I wasn't going to do one this week because I'm on holiday, but then I kind of realized I'm really always on holiday, so it really doesn't make much difference, and I think the chance and the opportunity is now, not next week, not next month, not next year, but actually now.
• 4:54
  Speaker 1: So I think it's a shame for you guys to miss out on it, just because I feel like sitting in a beach club and I tremendously enjoy teaching.
• 5:03
  Speaker 1: So we'll do one.
• 5:03
  Speaker 1: We've opened a thousand seats for you and all you're going to do is grab felixfrenzorg slash webinar.
• 5:09
  Speaker 1: It's completely free.
• 5:10
  Speaker 1: It's 11 am, new York time.
• 5:11
  Speaker 1: Who's going to come and join me and actually learn what?
• 5:16
  Speaker 1: The biggest opportunity in the world out there and I also put the wrong banner up here, didn't I?
• 5:21
  Speaker 1: Yeah, that's down below the biggest opportunity in my view in, I'd say, probably since 1999.
• 5:30
  Speaker 1: I think that was like the last big one.
• 5:33
  Speaker 1: So one of those comes about every 25 years.
• 5:37
  Speaker 1: So it's okay, you can miss it, I'll see you in 25 years.
• 5:41
  Speaker 1: Links down below phoenixfriendsorg slash webinar.
• 5:44
  Speaker 1: Let me see if I can put that in the chat here as well.
• 5:47
  Speaker 1: Httpsphoenixfriendsorg slash webinar.
• 5:56
  Speaker 1: I know, for some people, typing is a challenge that should not prevent you from actually learning.
• 6:02
  Speaker 1: So I'll pin it to the top of the chat as well that you can get in there, right?
• 6:06
  Speaker 1: So good news all around, right.
• 6:09
  Speaker 1: So what's the market doing with this?
• 6:10
  Speaker 1: Well, the market is saying we're liking it.
• 6:13
  Speaker 1: Google, meta, nvidia are up.
• 6:15
  Speaker 1: Amazon is up, particularly.
• 6:16
  Speaker 1: 1.5% Makes sense, kind of the guys who got hit the hardest.
• 6:19
  Speaker 1: Google, by the way, dumping a lot yesterday.
• 6:23
  Speaker 1: The thought might be that they might lose that Apple deal because it's anti-competitive.
• 6:27
  Speaker 1: I think it's vastly oversold.
• 6:32
  Speaker 1: I think it's a massive over-reaction.
• 6:34
  Speaker 1: If you ask me, it could be an opportunity.
• 6:35
  Speaker 1: I haven't looked into it too much yet, but yeah, I think that's a ridiculous thing.
• 6:41
  Speaker 1: So nice, nice bounce off there for them today.
• 6:43
  Speaker 1: Palantir also 1.6% up.
• 6:45
  Speaker 1: Tesla is up 0.2%, 1.2% even, which seems just wrong, doesn't it?
• 6:48
  Speaker 1: We kind of get used to Tesla going down.
• 6:51
  Speaker 1: The fear is down 3% this morning and it's sitting at 22.87.
• 6:56
  Speaker 1: And the closer we get to 20, the healthier this market rally will be.
• 7:01
  Speaker 1: I'm not saying to you, this rally is a straight line.
• 7:04
  Speaker 1: I'm seriously concerned about the straight lineness of this rally.
• 7:08
  Speaker 1: I think we're going to enjoy a nice bounce here.
• 7:10
  Speaker 1: We're making money right, left and center, which is brilliant, but I'm very prepared for when this rally takes another break, and I believe it will, but we don't really quite know when yet.
• 7:23
  Speaker 1: So let's then have a look at the Fed.
• 7:24
  Speaker 1: Right, the most venerable institution in the United States, which is now described by the president as too late.
• 7:30
  Speaker 1: Jerome Powell is a fool in capitals who doesn't have a clue.
• 7:34
  Speaker 1: Other than that I like him very much.
• 7:35
  Speaker 1: Oil and energy is way down, which is true.
• 7:39
  Speaker 1: Almost all costs groceries and eggs are down.
• 7:41
  Speaker 1: Virtually no inflation.
• 7:42
  Speaker 1: Tariff money is pouring in the exact opposite of too late, enjoy.
• 7:46
  Speaker 1: And the funny thing is, is he's actually right?
• 7:51
  Speaker 1: Why is he right?
• 7:53
  Speaker 1: This is not a political statement, by the way.
• 7:55
  Speaker 1: I'll agree and disagree with presidents as they come and go, but you look at what the world's doing.
• 8:00
  Speaker 1: The Europeans cut interest rates, the Brits have cut interest rates.
• 8:05
  Speaker 1: The Chinese have cut interest rates.
• 8:07
  Speaker 1: Swiss National Bank has cut interest rates.
• 8:10
  Speaker 1: Fed, they're like no, we're going to wait why.
• 8:16
  Speaker 1: I think it's weird and I'll show you why.
• 8:19
  Speaker 1: It's very weird, and it's possibly politics.
• 8:22
  Speaker 1: Now, this is a guy if you want to follow interest rates, the only guy I really read, nick Timiraus, who works for the Wall Street Journal.
• 8:30
  Speaker 1: We shouldn't hold that against him too much, but he says he's known as the Fed whisperer.
• 8:35
  Speaker 1: He seems to have some really good insights into the Fed.
• 8:37
  Speaker 1: He probably has a bug in there or something he said.
• 8:40
  Speaker 1: The Fed chair used some versions of the word wait 22 times at the press conference.
• 8:45
  Speaker 1: Half of those were wait and see.
• 8:47
  Speaker 1: And that's odd.
• 8:49
  Speaker 1: Really, isn't it?
• 8:49
  Speaker 1: When you're a policymaker, you should really come out and say and that's odd, really isn't it?
• 8:51
  Speaker 1: When you're a policymaker, you should really come out and say we're going to cut rates if GDP drops another half point.
• 8:58
  Speaker 1: We're going to cut rates if unemployment goes up significantly.
• 9:01
  Speaker 1: We're just waiting and seeing.
• 9:03
  Speaker 1: We're just like.
• 9:05
  Speaker 1: We had a long meeting.
• 9:06
  Speaker 1: We got a bit tired.
• 9:07
  Speaker 1: We just didn't really agree or discuss anything particularly useful, so we got a few bottles of sherry out and got plastered.
• 9:13
  Speaker 1: That seems to be what the Fed is saying.
• 9:15
  Speaker 1: I'm not sure that's what they actually did, but it would be fun, wouldn't it?
• 9:18
  Speaker 1: It'd be nice if they live streamed those meetings, but they don't.
• 9:21
  Speaker 1: Now this is what Andrew Bailey, who's the British head of the Bank of England, says Inflationary pressures have continued to ease.
• 9:31
  Speaker 1: He says Let me get a highlighter here so we've been able to cut rates again.
• 9:36
  Speaker 1: Maybe we have a green pen?
• 9:38
  Speaker 1: Apparently not.
• 9:38
  Speaker 1: And then he says the past few weeks have shown how unpredictable the global economy can be.
• 9:43
  Speaker 1: That's why we need to stick to a gradual and careful approach.
• 9:46
  Speaker 1: So he's basically saying there's less inflation while oil prices are super low, for example right, that'll do the trick, and there is uncertainty around the economy.
• 9:55
  Speaker 1: So therefore, we're going to be a little proactive and we're going to cut just a bit.
• 9:58
  Speaker 1: Why does that make sense?
• 10:01
  Speaker 1: How long does it take for an interest rate cut to show up in the economy?
• 10:04
  Speaker 1: I'm going to take a poll here.
• 10:06
  Speaker 1: Anybody know how many months from cutting an interest rate does it show up in the real economy?
• 10:12
  Speaker 1: So months from rate cut to impact on real economy.
• 10:19
  Speaker 1: So I'm talking about you know, companies economy to show up in GDP data.
• 10:24
  Speaker 1: Any polls there?
• 10:26
  Speaker 1: We've got 18, 6, 12 to 18.
• 10:28
  Speaker 1: Anybody else?
• 10:30
  Speaker 1: 12 months, 18 months, 6, 18, 18, 6, 6, 18, 18, 18, 12, 12, 12.
• 10:39
  Speaker 1: Okay, I would say that 95% of you have a better grasp of economics than Fed share power.
• 10:46
  Speaker 1: Yeah, so textbooks will generally say I was taught 18 months, but I think 12 to 18 is probably a reasonable range here.
• 10:54
  Speaker 1: So no, it doesn't take three or six months, it takes much, much longer.
• 10:59
  Speaker 1: And one way of really thinking about that is say I'm a company and I borrow money to build something right, or I've got a revolving credit facility.
• 11:06
  Speaker 1: Most of the time I've done that at a fixed interest rate.
• 11:09
  Speaker 1: So for me to get a benefit of lower interest rates, I have to finish that contract, go back to the bank and renegotiate.
• 11:21
  Speaker 1: Mortgages are fixed in the US now a lot of the time for 10, 20, 30 years, which is just abhorrent.
• 11:23
  Speaker 1: To pay interest for 30 years, but that's a whole other story.
• 11:26
  Speaker 1: Same with car loans and so on.
• 11:27
  Speaker 1: So for there to be an actual, significant impact it will take a year, year and a half.
• 11:32
  Speaker 1: Will you be able to do that Now?
• 11:36
  Speaker 1: In the stock market, the reaction is like that.
• 11:38
  Speaker 1: In fact, for the stock market, the expectation is what moves it, so it actually moves before that.
• 11:43
  Speaker 1: So let's move swiftly on here.
• 11:45
  Speaker 1: Rabobank Bank, which is actually a pretty good outfit for research.
• 11:50
  Speaker 1: They call the Fed clueless.
• 11:52
  Speaker 1: I don't think that's a reference to that 90s movie, no, it's actually clueless.
• 11:56
  Speaker 1: They're saying uncertainty by the economic outlook has increased and the risk of higher unemployment and higher inflation have risen, and they basically tell us nothing and dodged questions about Trump.
• 12:08
  Speaker 1: So funny one really.
• 12:10
  Speaker 1: And let me ask you a question here.
• 12:13
  Speaker 1: This is a serious question.
• 12:14
  Speaker 1: I'm going to make this as big as possible on the chart here.
• 12:17
  Speaker 1: I've got two lines on here.
• 12:18
  Speaker 1: I'm going to make this as big as possible on the chart here.
• 12:22
  Speaker 1: I've got two lines on here.
• 12:24
  Speaker 1: I've got one in green, hang on.
• 12:25
  Speaker 1: So in green we have the US interest rate and in that sort of odd shape of shade of purple we have US inflation.
• 12:41
  Speaker 1: Can you see where the last rate cuts were?
• 12:43
  Speaker 1: Can anybody see it?
• 12:44
  Speaker 1: Can you see it?
• 12:45
  Speaker 1: Let me grab a yellow pen.
• 12:46
  Speaker 1: That's a bit more obvious.
• 12:47
  Speaker 1: This is where they last cut interest rates, which was in what is it?
• 12:51
  Speaker 1: July last year, and then again here in September.
• 12:59
  Speaker 1: So if you want to move the Phoenix bubble bottom, right, okay, thanks very much for that, scott.
• 13:05
  Speaker 1: Appreciate the suggestion.
• 13:05
  Speaker 1: If you look at inflation where it was, then it was here, right.
• 13:08
  Speaker 1: What has inflation done since?
• 13:11
  Speaker 1: Has it gone up or has it gone down?
• 13:15
  Speaker 1: Serious question.
• 13:16
  Speaker 1: It's gone down.
• 13:18
  Speaker 1: So why is the Fed now saying that they're not in a position to cut interest rates, when in July and September they were?
• 13:24
  Speaker 1: There's an obvious.
• 13:28
  Speaker 1: Well, the accusation is that it's political, and the funny thing is that Jerome Powell is a card-carrying Republican.
• 13:36
  Speaker 1: He's a member of the Republican Party, so a bit of a weird one.
• 13:40
  Speaker 1: But yes, does it make sense?
• 13:41
  Speaker 1: It makes absolutely no sense.
• 13:43
  Speaker 1: Inflation is lower.
• 13:43
  Speaker 1: Why the heck wouldn't you cut interest rates?
• 13:45
  Speaker 1: It just makes no sense whatsoever.
• 13:46
  Speaker 1: You think it's tariffs?
• 13:52
  Speaker 1: Ok, but the Fed has acknowledged that tariffs do not cause inflation, which is true.
• 13:59
  Speaker 1: They cause a potential one-time spike in prices, but it then disappears 12 months later.
• 14:05
  Speaker 1: It's a one-time effect.
• 14:06
  Speaker 1: It's not a continuous effect, unless you kept doubling tariffs.
• 14:10
  Speaker 1: So they already said that doesn't really have any impact.
• 14:12
  Speaker 1: So it doesn't really make much sense.
• 14:15
  Speaker 1: Bank of England disagrees with it.
• 14:17
  Speaker 1: Bank of Switzerland disagrees with it.
• 14:18
  Speaker 1: Bank of England disagrees with it.
• 14:19
  Speaker 1: Bank of Switzerland disagrees with it.
• 14:19
  Speaker 1: The European Central Bank disagrees with it.
• 14:23
  Speaker 1: They've all cut rates.
• 14:24
  Speaker 1: They're all saying inflation is easing, but the US isn't.
• 14:28
  Speaker 1: So you can only think that this is sort of a bit of a clash of personalities, which is kind of odd really here.
• 14:33
  Speaker 1: What was the take from them?
• 14:35
  Speaker 1: Here they're saying what are they saying?
• 14:38
  Speaker 1: We're penciling in one final cut on June 18,.
• 14:43
  Speaker 1: They think.
• 14:44
  Speaker 1: They think we're going to get one cut in June.