Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - FED Flips in 48 Hours + Stock Market News 19 August 2024

Transcript

Felix Prehn - FED Flips in 48 Hours + Stock Market News 19 August 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: And welcome to this live stream.
• 0:02
  Speaker 1: Isn't it lovely that the weekend's over, we can make money again?
• 0:05
  Speaker 1: And with only 48 hours until the Jackson Hole meeting and the big Fed chair speech on Friday morning and jobs data on Thursday and AMD mergers today and much, much else going on in the economy, I want to give you the data points.
• 0:24
  Speaker 1: I want to give you the things that will help you to make better decisions this week, this coming month and maybe even for a little bit longer.
• 0:32
  Speaker 1: That's our mission and our ambition here today.
• 0:34
  Speaker 1: So smash the you-know-what and ask your questions.
• 0:37
  Speaker 1: And I got to ask David Dove.
• 0:39
  Speaker 1: You said morning from the bluegrass state.
• 0:42
  Speaker 1: What is the bluegrass state?
• 0:43
  Speaker 1: Educate a non-North American here?
• 0:47
  Speaker 1: So I know where that is Okay.
• 0:50
  Speaker 1: So the Fed will confirm its flip today.
• 0:56
  Speaker 1: No, not today, in 48 hours.
• 0:58
  Speaker 1: Today will be nice, but in 48 hours and certainly by the end of the week.
• 1:03
  Speaker 1: And why is that?
• 1:05
  Speaker 1: Because this chart basically explains the problem we've had.
• 1:11
  Speaker 1: So after COVID, we got ourselves into a funky situation by printing well, not we, the Fed did by printing $4 trillion Globally.
• 1:21
  Speaker 1: Central banks printed $6 trillion globally.
• 1:29
  Speaker 1: Central banks printed six trillion dollars insanity.
• 1:30
  Speaker 1: So we basically got the unemployment rate to super, super, super low, super low levels.
• 1:32
  Speaker 1: Just by spending a lot of money, government, the government level and at the same time, the number of people actually working declined.
• 1:41
  Speaker 1: Why people retired after covid got nice little payouts.
• 1:45
  Speaker 1: They discovered they could work a little bit from home, do a bit of freelance and do a bit of this bit of that.
• 1:48
  Speaker 1: You know, maybe mow some grass in the blue state Sorry, the blue grass state, wherever that might be.
• 1:54
  Speaker 1: Kentucky, okay, thank you very much.
• 1:56
  Speaker 1: You know, I've never been in Kentucky.
• 1:57
  Speaker 1: We should do like a Southern US tour.
• 2:01
  Speaker 1: I'd love to do that.
• 2:02
  Speaker 1: I've been East Coast, west Coast, sort of Chicago and places like that in the middle, but never to the South.
• 2:08
  Speaker 1: Miami, of course, yes, florida, yes, but nowhere down there.
• 2:12
  Speaker 1: We should do that.
• 2:12
  Speaker 1: We should do that.
• 2:13
  Speaker 1: Maybe 2025 will be the year we'll do a US tour, but anyway.
• 2:17
  Speaker 1: So what was the problem with that?
• 2:19
  Speaker 1: Well, less people wanted to work and therefore we had two jobs available for one person seeking a job, and that is part of what caused the inflation.
• 2:36
  Speaker 1: Ultimately, it's all the Fed's fault, of course.
• 2:39
  Speaker 1: So what the Fed wanted to do is they wanted to destroy jobs.
• 2:42
  Speaker 1: So we would go back to like, you know, one job for one person and we're heading very, very much in that direction.
• 2:48
  Speaker 1: So, with that in mind, you're probably thinking how do we make money out of that?
• 2:52
  Speaker 1: How do we make money like Felix and Winston Winston takes all the credit here 24K so far in our 30K portfolio.
• 2:58
  Speaker 1: And you might be thinking why does that chart never go up?
• 3:00
  Speaker 1: I'll show you why go up.
• 3:01
  Speaker 1: I'll show you why.
• 3:01
  Speaker 1: I'll show you why.
• 3:02
  Speaker 1: This is why Because we've got very little trades open, actually, but the ones we do have open are printing money, like the PayPal trade, for example $4,000, we're up on this.
• 3:12
  Speaker 1: This is a 30K portfolio, okay, so I'm not minded to close the trade and therefore I'm doing very little with this, because we've got a lot of our money tied up in that well for the portfolio size, a lot of the money tied up.
• 3:22
  Speaker 1: So if we were to close this out today, we'd add another $4,000.
• 3:26
  Speaker 1: We'd be at $28,000, which would be an almost 100% gain so far on the year.
• 3:31
  Speaker 1: So if you want to learn how we do that that's why I'm telling you this Come and join me tomorrow at the workshop, be a two-hour live workshop.
• 3:44
  Speaker 1: I'll put you to think and not just listen, and I think.
• 3:46
  Speaker 1: That way you'll learn more and you'll learn our system and our structure and our rules, and you need to know nothing at all from the outset.
• 3:54
  Speaker 1: So it'll be tomorrow 10am New York time and 3pm London time.
• 3:58
  Speaker 1: So for you Brits out there and you Europeans, you are very welcome to join too.
• 4:04
  Speaker 1: Of course, kentucky Rain was Elvis's best song.
• 4:08
  Speaker 1: Yes, yes, yes, went to Kentucky many years ago.
• 4:11
  Speaker 1: Mammoth Caves.
• 4:12
  Speaker 1: I need to visit Nashville.
• 4:14
  Speaker 1: Okay, interesting, we shall do that.
• 4:17
  Speaker 1: We shall do a tour and behave, you know, like tourists, right?
• 4:25
  Speaker 1: So what's it all about?
• 4:26
  Speaker 1: We need to understand where the economy is, what the data is going to be, but, more importantly, we need to understand the trend, because the market isn't going to really move on the data, and maybe you started to see that in the last few weeks.
• 4:40
  Speaker 1: So retail sales data looked pretty good last week, right, looked actually very good.
• 4:44
  Speaker 1: Well, part of that was because it was manipulated by the number manipulators in Washington and I was going to say something that's polite there, but I saved myself.
• 4:54
  Speaker 1: But yeah, it's true, we're not looking like the consumer isn't dead, right, restaurants are pretty full.
• 5:02
  Speaker 1: Hotels bookings are looking pretty good, airline bookings are pretty good.
• 5:07
  Speaker 1: So a lot of these kind of indicators where you think, okay, we're not really in a full-blown recession here, things are looking pretty steady, so that's good.
• 5:14
  Speaker 1: But I pay attention to these guys.
• 5:17
  Speaker 1: If you watch Billions, then you know that these guys know more than you and me, and we've got two former hedge fund managers on our coaching team, so we have a pretty good idea.
• 5:29
  Speaker 1: These are guys with good data points.
• 5:32
  Speaker 1: And these hedge funds, these cockroaches, are selling consumer stocks, like the recession is going to hit on the door tomorrow and we're literally down here in terms of sales so the biggest sale we've had in like two years.
• 5:49
  Speaker 1: They're just dumping consumer discretionary stocks, which is consumer stocks that you don't need, right, like your Nikes or your Macy's or your fridges or your you know, electronic things, like stuff you don't need.
• 6:01
  Speaker 1: They're selling it.
• 6:01
  Speaker 1: They're running away from it why?
• 6:03
  Speaker 1: Well, first of all, you got to understand the market doesn't look at the data.
• 6:11
  Speaker 1: The smart market doesn't look at the retail sales data and go, well, that's amazing, brilliant.
• 6:17
  Speaker 1: The market tries to look at the trend and while there is some good data out there, we have some data points that are a little bit more.
• 6:27
  Speaker 1: So we've got high credit card delinquencies, which is pretty bad.
• 6:39
  Speaker 1: We've got the consumer saying to Walmart and so on and I'll show you some quotes in a second's saying they're getting more choosy, they're being a bit more careful with their money.
• 6:55
  Speaker 1: So that's what the smart market trades.
• 6:59
  Speaker 1: They don't wait for the news, right?
• 7:01
  Speaker 1: The news is always yesterday's news.
• 7:02
  Speaker 1: You kind of always want to try and predict a little bit of what's actually going on there, and then you might say but hang on, felix, it's glorious.
• 7:10
  Speaker 1: Look at this.
• 7:10
  Speaker 1: Amd just paid, you know however, many billion, four billion or something for ZT systems, which I think makes sense.
• 7:17
  Speaker 1: It'll help them compete with NVIDIA.
• 7:19
  Speaker 1: It's basically bringing it's an AI equipment maker, zt.
• 7:23
  Speaker 1: So I think that'll be quite good and the market's going brilliant.
• 7:27
  Speaker 1: Look at that AMD is oh, it's up 2% earlier, but now it's still up.
• 7:30
  Speaker 1: It's still up somewhat.
• 7:31
  Speaker 1: Nvidia is up, google is rebounding, amazon's up, tesla is up.
• 7:35
  Speaker 1: So life's good, right.
• 7:38
  Speaker 1: So why sell stuff?
• 7:38
  Speaker 1: Well, let me show you the trends.
• 7:42
  Speaker 1: So this is a note from, I want to say, goldman Sachs I think it's Goldman Sachs as I slurp my electrolytes first shot of electrolytes today and um, the buzz is real.
• 8:02
  Speaker 1: They're saying consumer stock look pretty good via walmart, who said july and august were stable.
• 8:06
  Speaker 1: And then adian also saying tpv growth, digital segment is good.
• 8:12
  Speaker 1: And then retail sales data.
• 8:14
  Speaker 1: But what they're not omitting here is that Walmart did say the customer is getting a bit more cautious.
• 8:18
  Speaker 1: We've seen F5, a stock I talk about sometimes doing well.
• 8:23
  Speaker 1: Amd saying things are pretty good.
• 8:27
  Speaker 1: Cisco saying pretty good sales out there.
• 8:31
  Speaker 1: Cisco seeing enterprise orders up 3% a year on year and that looks all good, right.
• 8:38
  Speaker 1: And then the sort of AI spending is looking positive.
• 8:43
  Speaker 1: Cisco is saying they have another billion in AI orders and that all looks pretty good.
• 8:49
  Speaker 1: So why worry, right?
• 8:51
  Speaker 1: I'm not saying the market is overall worrisome, I'm just saying the consumer sector is a little bit problematic.
• 8:58
  Speaker 1: So, so Goldman Sachs are basically saying there won't be a recession.
• 9:04
  Speaker 1: They've cut their recession probabilities and they're going to cut it again to only 15% of likelihood if the August jobs data comes in reasonably good.
• 9:15
  Speaker 1: If nothing breaks, then we're kind of in for this Goldilocks sweet spot.
• 9:27
  Speaker 1: Everything is perfectly wonderful, at least until 6th of September.
• 9:30
  Speaker 1: That's when the buybacks so big companies buying their own stocks end or start to really fizzle out.
• 9:40
  Speaker 1: So watch September, my friend, because this is September.
• 9:45
  Speaker 1: This is the NASDAQ.
• 9:46
  Speaker 1: This is the NASDAQ over the last 10 years, september Not exactly good.
• 9:55
  Speaker 1: Right, september tends to be a bit of a washout month.
• 9:58
  Speaker 1: I don't really know why Everyone's going back to school or something.
• 10:00
  Speaker 1: I honestly don't know why, but for some reason I think what it might be is a little bit.
• 10:06
  Speaker 1: I don't know actually why.
• 10:08
  Speaker 1: I wonder if economic data is worse in September because people spend a lot of money over the summer and then they tighten their belts a little bit in September.
• 10:15
  Speaker 1: It's sort of back to reality.
• 10:16
  Speaker 1: I don't know if that's got something to do with it.
• 10:18
  Speaker 1: That would be a complete random guess.
• 10:20
  Speaker 1: But yeah, generally speaking, september isn't a great month.
• 10:22
  Speaker 1: Now in election years, I don't know if that's any different.
• 10:31
  Speaker 1: What do we have here?
• 10:32
  Speaker 1: 2020 wasn't good.
• 10:33
  Speaker 1: 2016 was actually an outlier, but yeah, so I'm a little bit cautious in September.
• 10:36
  Speaker 1: I think we're going to start trimming some positions going into the September early on and then come back with a vengeance a little bit later.
• 10:44
  Speaker 1: And I think what might also come out of September is that what Bank of America says here.
• 10:55
  Speaker 1: They're saying the market is still pricing in too many Fed cuts.
• 10:56
  Speaker 1: We're going to get rate cuts, but I think we're only going to get these quarter percentage cuts probably three times, and the market's pricing in that we're going to get a half a percentage point cut, and I think we probably won't get that because the Fed has suddenly discovered his cautious, conservative side after printing a fifth of all the dollars in existence within the space of 12 months.
• 11:22
  Speaker 1: Bloody idiot.
• 11:23
  Speaker 1: Elvis's best song In the Ghetto yeah, that is quite a good one.
• 11:27
  Speaker 1: Little SoFi gets a gold star all week says live.
• 11:33
  Speaker 1: And Aruna, you didn't get your trade vision list on Friday.
• 11:38
  Speaker 1: You didn't?
• 11:38
  Speaker 1: Scandalous, who ate Aruna's list.
• 11:41
  Speaker 1: Let me have a look if I got it, if it was some sort of glitch on our side or trade vision Loading, loading, loading.
• 12:00
  Speaker 1: I got it on.
• 12:04
  Speaker 1: Yeah, I did On the 16th.
• 12:05
  Speaker 1: Hang on.
• 12:06
  Speaker 1: No, you're right, I didn't get it either.
• 12:09
  Speaker 1: Okay, I will have a word.
• 12:19
  Speaker 1: I will have a word.
• 12:19
  Speaker 1: I got one.
• 12:20
  Speaker 1: Yeah, I only got the Thursday one, okay, so there's obviously something there.
• 12:22
  Speaker 1: I appreciate you letting us know and we shall fix that.
• 12:24
  Speaker 1: I should take a screenshot If you're wondering what Aruna is all about.
• 12:29
  Speaker 1: We send out an AI trend update list for the stocks that I've basically flipped every day and it looks like this.
• 12:42
  Speaker 1: So it looks like this you get an email and you see, you know what's suddenly on an uptrend, what's on a downtrend, and it's a really nice way to save yourself a huge amount of freaking time to find trade ideas, because you're just looking at the things that actually just moved a lot rather than just looking at the same five tickets every time.
• 12:57
  Speaker 1: Um, okay, you guys talking about all sorts of stuff.
• 13:18
  Speaker 1: Okay, I thought there might be some questions in there, but you're still on Kentucky, right?
• 13:22
  Speaker 1: So the way I look at this is sweet spot.
• 13:25
  Speaker 1: Everything looks good.
• 13:26
  Speaker 1: Powell's going to pivot this week.
• 13:28
  Speaker 1: I think the data we're going to get in will probably be neither here nor there, really, as long as we could, of course, get a massive surprise and something truly horrific happens, but I think it's somewhat unlikely.
• 13:39
  Speaker 1: So FMC minutes on Wednesday, but no one's going to care that much.
• 13:43
  Speaker 1: We're all going to care much more about the Friday speech by Powell.
• 13:47
  Speaker 1: And then we're also getting in here jobs data on Thursday.
• 13:51
  Speaker 1: That's quite a kind of a big one, but all overshadowed by the Jackson Hole Symposium.
• 13:59
  Speaker 1: Now the Jackson Hole thing is a little bit more about like medium term policy, but of course like medium term policy, but of course the focus right now will be on what does Jerome Powell, jp, say about rate cuts?
• 14:09
  Speaker 1: And he's going to basically have to come out and say things are pretty good but it's getting tighter and trend is rate cuts coming.
• 14:16
  Speaker 1: So that's what we'll be looking at.