Latest / Felix Nikolas Prehn's Podcast / Banks Just Warned Big Clients to SELL... + Stock Market News 20 February 2024

Transcript

Banks Just Warned Big Clients to SELL... + Stock Market News 20 February 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to you.
• 0:01
  Speaker 1: Welcome back from the long holiday.
• 0:03
  Speaker 1: Markets are looking distinctly dodgy this morning.
• 0:07
  Speaker 1: Big tech is down.
• 0:08
  Speaker 1: Everyone's waiting for what Nvidia is going to do.
• 0:10
  Speaker 1: Some idiots are talking about rate hikes, which isn't going to happen.
• 0:16
  Speaker 1: I don't think, certainly hope not.
• 0:18
  Speaker 1: He touches his nose worried and I'm going to walk you through what really matters today.
• 0:24
  Speaker 1: What's going to kick off this short week for all of us?
• 0:28
  Speaker 1: I'm going on holiday tomorrow, part of my 2023 plan to be on holiday at least once every week of the year and if you want to join me in that endeavor but being able to go on holiday come and join me in literally one hour, where I'll be live yet again and I will teach you how I make money from my money.
• 0:49
  Speaker 1: Come and join us at FelixFriendsorg slash webinar for about a 90 minute life trading training.
• 0:55
  Speaker 1: We do some actual life trading together.
• 0:57
  Speaker 1: The markets will be opened by then.
• 0:58
  Speaker 1: Just grab yourself a seat.
• 0:59
  Speaker 1: It's completely free of charge and you learn my very simple three step process for Nort, and it'll be fun.
• 1:08
  Speaker 1: You can pummel me with hard questions as well.
• 1:10
  Speaker 1: Appreciate you tuning in and smashing and destroying the.
• 1:12
  Speaker 1: You know what?
• 1:13
  Speaker 1: And here is the NASDAQ.
• 1:15
  Speaker 1: The NASDAQ has dropped below its 21-day moving average, which is generally seen as a little bit of a nose bleed.
• 1:25
  Speaker 1: We have to watch for that.
• 1:27
  Speaker 1: What's going to move that?
• 1:28
  Speaker 1: What's going to decide it?
• 1:29
  Speaker 1: Is it rates?
• 1:30
  Speaker 1: Is it jobs?
• 1:31
  Speaker 1: Is it inflation?
• 1:32
  Speaker 1: No, it's Nvidia, nothing but Nvidia, and I will show you some real Nvidia charts in a second here.
• 1:42
  Speaker 1: But before I do, I want to give you a little bit of perspective for where we are at.
• 1:46
  Speaker 1: Are we super overvalued?
• 1:47
  Speaker 1: What did Goldman Sachs say to their customers today?
• 1:51
  Speaker 1: And what are the traders saying at Goldman Sachs?
• 1:54
  Speaker 1: And they're basically saying look at this, look at this.
• 1:57
  Speaker 1: The amount of call options and you buy a call option when you're bullish right is at pretty staggering levels.
• 2:05
  Speaker 1: We're at a net volume of four and a half million or so contracts, and the last time we saw that was in October 21 and in early 2021.
• 2:21
  Speaker 1: Do you remember early 2021, when everything could only ever go to the moon and the diamond handers were running this stock market?
• 2:27
  Speaker 1: All that nonsense?
• 2:28
  Speaker 1: Yeah, we're close to that.
• 2:30
  Speaker 1: We're not quite there yet, but we're getting close to it.
• 2:32
  Speaker 1: Bear in mind, the market is cyclical and this is probably one of the most confusing stock charts I could have pulled up, but I thought I do, because I respect your desire to really learn.
• 2:44
  Speaker 1: What does it say to you?
• 2:46
  Speaker 1: It basically says when cash yields, so when interest rates are high, stock market doesn't do as well.
• 2:52
  Speaker 1: When interest rates come down, the stock market actually does really, really, really well, and we are at that moment.
• 2:59
  Speaker 1: We are also at the moment where buybacks are back with full force and likely to go up some more, and that is because US large companies are making more money out of a fist than at any point in history and they're using that money to buy their own shares.
• 3:19
  Speaker 1: That's going to be very, very supportive for the next couple of weeks and months.
• 3:25
  Speaker 1: But let's look at Nvidia.
• 3:26
  Speaker 1: This is an Nvidia chart and the earnings.
• 3:29
  Speaker 1: The last couple of earnings sort of resulted in a bit of a dip and then a rally, a bit of a dip and then a rally, and the expectations for earnings are about.
• 3:44
  Speaker 1: I think it's a plus or minus $100, basically plus $100 or minus $100.
• 3:52
  Speaker 1: And what's going to happen?
• 3:54
  Speaker 1: Well, the market is pricing in a massive beat of earnings.
• 3:58
  Speaker 1: So the beat doesn't just have to be good, it has to be extraordinarily glorious and wonderful and the future has to be so green you can only think oh my God, we're just at the beginning.
• 4:11
  Speaker 1: Nvidia $2 trillion is a bargain.
• 4:13
  Speaker 1: That's what they have to deliver.
• 4:14
  Speaker 1: Anything short of that Stock's going to tank, at least short term.
• 4:18
  Speaker 1: So am I going to trade this?
• 4:20
  Speaker 1: No, no, it's the last thing I would trade.
• 4:24
  Speaker 1: It is the most risk on thing this week you could possibly touch.
• 4:28
  Speaker 1: I might actually close a lot of trades today or tomorrow because Nvidia reports after earnings tomorrow to have less risk on, because I don't have a freaking idea which way this is going to go and therefore I don't want to risk my money.
• 4:44
  Speaker 1: Very simple, that's usually the best thing to do is, you know, risk off, risk off.
• 4:53
  Speaker 1: Big news today as well.
• 4:54
  Speaker 1: That's part of the well, the changing banking environment would be a very polite way of putting it.
• 5:02
  Speaker 1: Capital One is proposing to buy Discover and together this little blue bit here is Discover.
• 5:12
  Speaker 1: Discover is about a third or half the size of Capital One.
• 5:15
  Speaker 1: Together they would be the biggest credit card lender out there, dwarfing JP Morgan.
• 5:23
  Speaker 1: So expect some regulatory headwinds, because JP Morgan has already called up the secretary of whatever and said we don't really like the idea that somebody could be bigger than us.
• 5:34
  Speaker 1: Do you know how much money we donate to you lot.
• 5:36
  Speaker 1: Can you do something about that?
• 5:37
  Speaker 1: Look into it, you know, steer around and just cause some trouble.
• 5:40
  Speaker 1: So I think there'll be some trouble if I'm the regulators here, but it may or may not happen, and an interesting one for sure.
• 5:49
  Speaker 1: Should we be following the doom and gloom of Goldman Sachs saying we're near a peak of the market?
• 5:54
  Speaker 1: Be careful.
• 5:55
  Speaker 1: I think you should be careful.
• 5:57
  Speaker 1: There is, however, still a lot of positive activity in the market.
• 6:02
  Speaker 1: It's not all terrible, although 88 likes with 530 viewers is pretty terrible.
• 6:08
  Speaker 1: So maybe this video so far is under delivered for you.
• 6:12
  Speaker 1: And it's because US companies are sitting on close to $5 trillion cash $4 to $5 trillion cash and what do they do with that?
• 6:23
  Speaker 1: Well, they don't really know what to do with that At the moment.
• 6:26
  Speaker 1: The high interest rates are doing what?
• 6:30
  Speaker 1: Well, they're actually making them money because they're sitting on all that cash and they're investing it in treasury bonds or whatever.
• 6:36
  Speaker 1: As the interest rates come down, the incentive to do something about that will be bigger.
• 6:42
  Speaker 1: And what will be the big incentive starts with a B, ends with a B buy back, a back Buy backs are going to get bigger because they've got all that cash and shareholders are going to pressure them to do something about it, because it's a silly amount of money they're sitting on at the moment, so that's going to be good.
• 7:01
  Speaker 1: The same time, retail that's you and me we have $2.4 trillion of money in, basically, money market funds, which is a fancy word for saying bonds.
• 7:16
  Speaker 1: And why do we have that much money in bonds?
• 7:20
  Speaker 1: I'm actually out of treasuries because rates are high and it's tempting.
• 7:24
  Speaker 1: Well, actually, not entirely.
• 7:25
  Speaker 1: I probably have a little bit in treasuries short dated ones and when rates come down which they will, in my view they will then that money is going to get reallocated back to dogecoin exactly crypto or stocks or something, and that'll be beneficial again for the stock market.
• 7:46
  Speaker 1: And what I really want you to memorize is, if you tune into this and you've just been dozed out and just watching the pretty colors behind me and the cat you've seen the pretty colors, you've seen the cat.
• 8:00
  Speaker 1: Where's the cat?
• 8:01
  Speaker 1: Yeah, then remember just one thing and take a screenshot of this.
• 8:10
  Speaker 1: Just take a screenshot.
• 8:11
  Speaker 1: Swipe your little phone, do your little thing, whatever you do, press nine buttons at the same time on an iPhone, or whatever you, you Apple crazy people do.
• 8:19
  Speaker 1: The market is cyclical.
• 8:21
  Speaker 1: When the top five companies buy market cap, a large percentage of the index, we tend to get a recession.
• 8:34
  Speaker 1: So, the gray area in the back well, recession, you basically get a recession.
• 8:41
  Speaker 1: That's what that is and you get a correction.
• 8:43
  Speaker 1: So we had in the 80s AT&T, ibm, exxon, general Motors and General Electric yeah, that's what it was.
• 8:51
  Speaker 1: In the dot-com, it was Microsoft, cisco, general Electric, intel and Exxon.
• 8:55
  Speaker 1: Global Financial Crisis it was Exxon, walmart yeah, they were the big ones P&G, microsoft, ge and so on.
• 9:04
  Speaker 1: You get the idea right Right now it's Microsoft, apple, alphabet, amazon and Nvidia and we're at pretty extraordinary concentration.
• 9:17
  Speaker 1: I personally think that concentration is going to remain higher because the great companies continue to be greater.
• 9:25
  Speaker 1: I mean, look at Microsoft.
• 9:26
  Speaker 1: They've basically been in that list since 1999.
• 9:31
  Speaker 1: 25 years of extraordinary results for Microsoft and I think they like to stay there because they own AI and all the farmland in the US.
• 9:42
  Speaker 1: Well, that's Bill Gates, but you get the idea.
• 9:45
  Speaker 1: So I think we are at a high level.
• 9:50
  Speaker 1: But I think the new, if you look at the dot-com bubble where we were at what?
• 9:56
  Speaker 1: 17%?
• 9:58
  Speaker 1: The new 17% is probably somewhere between 25 and 30%, just because concentration gets that way, big companies the good companies become bigger because they're good.
• 10:11
  Speaker 1: It's just like the rich become richer because they know how to manage their money and the poor people don't, and therefore they become poorer.
• 10:18
  Speaker 1: It's not fair, but it's the way it works and nobody does anything about it.
• 10:22
  Speaker 1: I mean, we don't exactly provide a service for porpoise because we trade and therefore you need some capital to trade, otherwise you can't make any money with it.
• 10:31
  Speaker 1: But we're doing our bit.
• 10:32
  Speaker 1: So come and join me in 50 minutes at philxfrancorg slash webinar.
• 10:38
  Speaker 1: Grab yourself a free seat and learn the easy, simple trading for income strategy, which is what I do, and I do that three, four hours a week.
• 10:46
  Speaker 1: It's very, very time efficient and I'll give you my free three step system.
• 10:51
  Speaker 1: All you got to do is grab yourself a free seat philxfrancorg slash a webinar, righty-ho.
• 11:04
  Speaker 1: Let me show you one or two other things here.
• 11:06
  Speaker 1: Oh, there was the sign-up form for the webinar.
• 11:08
  Speaker 1: You just pop your name in the email address and you hit register and there you are.
• 11:12
  Speaker 1: Futures are looking a little on the dodgy side not terrible, but a little on the dodgy side.
• 11:17
  Speaker 1: Pre-market it's pretty red, but the numbers are not that big.
• 11:21
  Speaker 1: So meta and Nvidia are both down over a percent, tesla also 1.4 percent.
• 11:27
  Speaker 1: Visa mastercard down.
• 11:29
  Speaker 1: Why?
• 11:29
  Speaker 1: Because Visa discover.
• 11:32
  Speaker 1: No, the other way around.
• 11:35
  Speaker 1: Let's get this straight.
• 11:38
  Speaker 1: Capital One is a large customer for Visa and Mastercard.
• 11:43
  Speaker 1: Capital One does not issue its own credit cards.
• 11:47
  Speaker 1: They rely on Visa and Mastercard to do so and therefore Visa and Mastercard are tanking this morning because if they buy discover, they will no longer need to rely on Visa and Mastercard to issue their own cards.
• 11:58
  Speaker 1: That's the idea.
• 11:59
  Speaker 1: Therefore, mastercard, particularly under pressure, could be the bigger supplier.
• 12:05
  Speaker 1: I don't know, but probably, given the market reaction here, netflix down, microsoft down-ish Apple basically flat.
• 12:11
  Speaker 1: Amazon down a little bit, oil stocks are up a touch and we had Walmart earnings out as well, which were pretty average, and they're buying TV maker Vizio, kind of interesting part of their advertising thingy magic program.
• 12:31
  Speaker 1: So we look at Walmart pre-market, up 4.2 percent.
• 12:35
  Speaker 1: So it wasn't as terrible as people thought it was.
• 12:37
  Speaker 1: It's actually a pretty, pretty big jump up for Walmart eight bucks up.
• 12:44
  Speaker 1: That takes them to wow highs.
• 12:48
  Speaker 1: We also had Home Depot, I believe, reporting today and that was not as glorious because people are building less homes and they're down 2.4 percent.
• 12:59
  Speaker 1: But pretty muted responses to earnings, which I do like to see.
• 13:02
  Speaker 1: I like the market be a little bit more calm and collected.
• 13:05
  Speaker 1: Headlines are Capital One to buy Discover for 35 billion in years biggest deal and some muppet out there.
• 13:14
  Speaker 1: Things are going to get a rate hike.
• 13:15
  Speaker 1: There is a 6 percent chance.
• 13:18
  Speaker 1: The market says that there could be one rate hike and the headline for the idiots at Bloomberg is market starts to speculate If the next Fed move is up, not down.
• 13:27
  Speaker 1: 6 percent, 94 percent are looking at rate cut, 6 percent are looking at rate hike and that's the headline you come up with.
• 13:36
  Speaker 1: Someone fell on their head over President's Day.