Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Warning: Inflation Shock Hits Stocks + Stock Market News 12 February 2025

Transcript

Felix Prehn - Warning: Inflation Shock Hits Stocks + Stock Market News 12 February 2025 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to this pre-market live stream from Kuala Lumpur.
• 0:05
  Speaker 1: And we just got out inflation data and it's not what you want it to be.
• 0:10
  Speaker 1: Honestly, I want to walk you through what's the actual data and how it's hitting stocks in your portfolio.
• 0:15
  Speaker 1: How big is the impact going to be, as the data is only half an hour old, and how do we avoid, therefore, stocks that are falling?
• 0:24
  Speaker 1: There will be some stocks that are going to fall quite significantly from this, and then I also want to walk you through what wall street's expecting the stock market to do for the rest of february.
• 0:34
  Speaker 1: Then we're going to do a massive q a.
• 0:36
  Speaker 1: We're going to get all of our favorite stocks the palantirs, the teslas, the nvidia's, the sofas, the paypal's, the quantums, the whatnot.
• 0:42
  Speaker 1: I'll share my screen with you and there we go, see, there we go inflation, how big's the impact?
• 0:48
  Speaker 1: How to avoid falling stocks, market expectations.
• 0:51
  Speaker 1: Who wants to know what we got going on here?
• 0:53
  Speaker 1: Let me know in the chat, say, uh, I am, and I'll know that you're actually a real person, you're alive and and and you know just about recovering from the madness that's about to hit us here.
• 1:05
  Speaker 1: So grand, rising, indeed, big market downturn incoming.
• 1:12
  Speaker 1: There is a silver lining here.
• 1:15
  Speaker 1: There is a positive, optimistic scenario here.
• 1:18
  Speaker 1: I would also want to walk you through that, but let's walk through the real data points here first, and thanks for everyone letting me know that you are alive and a human being.
• 1:26
  Speaker 1: We're going to have to do more of those checks right, as viewers in the future will just be AI bots.
• 1:30
  Speaker 1: Summarizing my videos.
• 1:31
  Speaker 1: I think that's going to count.
• 1:33
  Speaker 1: You have 3,000 viewers and 2,999 of them are AI bots.
• 1:38
  Speaker 1: Looking deeper today, says Terry.
• 1:42
  Speaker 1: Ok, brilliant, I'm not a real person, says the swing trader.
• 1:46
  Speaker 1: I've always suspected that, my friend.
• 1:47
  Speaker 1: So here we go.
• 1:48
  Speaker 1: Core inflation data just out, freshly baked off the press.
• 1:52
  Speaker 1: Why is it bad?
• 1:54
  Speaker 1: What are we seeing here?
• 1:55
  Speaker 1: Well, you're seeing, it came in at 0.4% Expectation.
• 2:01
  Speaker 1: This here was the expectation and that's at 0.3 percent.
• 2:07
  Speaker 1: So that in itself is therefore bad.
• 2:11
  Speaker 1: Why is it bad?
• 2:12
  Speaker 1: Because higher inflation means what?
• 2:15
  Speaker 1: Well, the fed isn't going to cut interest rate, because if inflation is higher, they basically need rates to stay higher to calm the economy down and therefore inflation will dissipate.
• 2:26
  Speaker 1: The fact that inflation was entirely caused by the Fed printing $4 trillion is something that we swept under the rug.
• 2:32
  Speaker 1: That never happened, apparently, but I still remember the headline inflation rate came in at 0.5%, which is rather ugly because we were expecting 0.3 last month of a 0.4.
• 2:45
  Speaker 1: That's a pretty significant spike.
• 2:47
  Speaker 1: We did expect it to be a little higher, but it's coming in well, a little higher than a little higher, if you know what I mean.
• 2:55
  Speaker 1: So not brilliant.
• 2:56
  Speaker 1: And now the inflation rate, the annual inflation rate, is back at 3 percent, no longer at 2 point, something which is psychologically quite a big difference.
• 3:04
  Speaker 1: Here, david, you're real as well.
• 3:13
  Speaker 1: Brilliant.
• 3:13
  Speaker 1: Have you had any dosa or tandoori today?
• 3:14
  Speaker 1: No, today was actually a day with no Indian food, which is a first this week, I think.
• 3:16
  Speaker 1: Let me show you in charts, because that kind of shows you a little bit more like what's actually going on here and how big a deal this is.
• 3:26
  Speaker 1: So during COVID, after the idiotic money printing that took place, inflation went up to sort of 8%, 9%.
• 3:34
  Speaker 1: It's then come down to about 3%, dropped a little bit here into the low 2s, and now we're picking up steam again here, which isn't brilliant, definitely not brilliant, but it's also not massive.
• 3:49
  Speaker 1: It's not a huge, huge, huge, huge increase, but it is something that's a bit of a blip on the radar here.
• 3:55
  Speaker 1: And core.
• 3:57
  Speaker 1: This is core inflation and that's kind of more important.
• 4:00
  Speaker 1: The Fed tends to look more at core inflation than at headline inflation because that sort of fluctuates.
• 4:04
  Speaker 1: And then what do you see?
• 4:05
  Speaker 1: Well, it's picking up, but it's also where we were two months ago, so it's not exactly the end of the world, but it also isn't you know the deliante.
• 4:16
  Speaker 1: So stocks are going to get hit.
• 4:18
  Speaker 1: How much?
• 4:19
  Speaker 1: This was Goldman Sachs' wisdom.
• 4:21
  Speaker 1: They said if inflation comes in at core, that is what did core come in at?
• 4:34
  Speaker 1: What did I just say?
• 4:35
  Speaker 1: Core came in at 0.4.
• 4:36
  Speaker 1: Core comes in at 0.4, the smart investment bankers said after they did a little bit of this.
• 4:41
  Speaker 1: They said that S&P will drop 1%, 1 percentage point.
• 4:42
  Speaker 1: Shall we see how much it's dropped by?
• 4:44
  Speaker 1: Let's have a look.
• 4:45
  Speaker 1: Let's have a look.
• 4:46
  Speaker 1: Where is my clever little window gone here?
• 4:49
  Speaker 1: Let's have a look at SPY here this morning.
• 4:53
  Speaker 1: And yeah, we're down about 0.9%.
• 5:00
  Speaker 1: So so far they're kind of spot on.
• 5:01
  Speaker 1: Is that a huge move?
• 5:04
  Speaker 1: We're below 6,000.
• 5:05
  Speaker 1: That isn't good.
• 5:06
  Speaker 1: The market gets choppier below 6,000.
• 5:09
  Speaker 1: What I would also expect to see is for the VIX, the fear index, which measures sort of how much the market is expected to move by, to jump quite a lot today.
• 5:17
  Speaker 1: So it's up 5 percentage points here back to 17.
• 5:21
  Speaker 1: I'd quite like it to go to 20.
• 5:23
  Speaker 1: A lot of money if it goes to 20.
• 5:24
  Speaker 1: And those of you guys who read my emails where I explained to you that VIX trade two days ago will understand a little bit more about that, and that's definitely a good one here.
• 5:41
  Speaker 1: Okay, so let's have a look at the heat map, and the only thing in green is Tesla.
• 5:46
  Speaker 1: Well, it sold off pretty ugly yesterday.
• 5:49
  Speaker 1: That might explain why.
• 5:50
  Speaker 1: What's the other thing that's up there?
• 5:52
  Speaker 1: What's that Intel?
• 5:55
  Speaker 1: Intel is up 5%.
• 5:56
  Speaker 1: I have no idea why it was.
• 5:57
  Speaker 1: We shall find out in a moment and that's pretty much it.
• 6:00
  Speaker 1: I mean pretty much.
• 6:01
  Speaker 1: Everything else is not looking very, very happy today, which could be an opportunity.
• 6:07
  Speaker 1: It would always be an opportunity.
• 6:09
  Speaker 1: Tesla, the only one holding up Big tech stocks, are down about a percentage point, which isn't sort of crash territory.
• 6:16
  Speaker 1: By the way, right, when they go down 3% in a day or something, that's when we buckle up At 1% early market, there is something that's going to kick in as people now unwind their hedges they set up yesterday, and when they unwind those, it actually tends to push the market up a little bit.
• 6:35
  Speaker 1: So I think it might recover a little bit.
• 6:37
  Speaker 1: That would be my expectation, but we can definitely see what happens there.
• 6:42
  Speaker 1: So what's the real problem here?
• 6:43
  Speaker 1: The real problem is this that the where is it the fund futures?
• 6:53
  Speaker 1: Where are they Fed fund futures?
• 6:57
  Speaker 1: I haven't got that chart open right now.
• 6:58
  Speaker 1: Basically, the market at this point is not expecting a rate cut until December.
• 7:03
  Speaker 1: It was like July till yesterday.
• 7:07
  Speaker 1: So that's kind of where we are at Now.
• 7:09
  Speaker 1: Does the market overreact?
• 7:10
  Speaker 1: Yeah, that's what the market does.
• 7:12
  Speaker 1: If you hadn't noticed, it tends to always overreact.
• 7:20
  Speaker 1: Now Fox is reminding us to watch the masterclass Before we do that, and we should definitely do that because it'll actually help you.
• 7:27
  Speaker 1: A lot of your questions today in your mind are what's going on in your mind right now?
• 7:31
  Speaker 1: Is it like should I exit that position?
• 7:33
  Speaker 1: Should I close it, or should I buy some more of it?
• 7:35
  Speaker 1: What would be the smarter thing to do right now?
• 7:37
  Speaker 1: That's probably what you're thinking.
• 7:38
  Speaker 1: Right, you're feeling a little bit antsy, a little bit antsy, a little bit stressed today, right?
• 7:44
  Speaker 1: If you're honest with yourself, most people are going to feel a little bit stressed today, and that makes you human, by the way, if you want the solution for that, go watch the masterclass.
• 7:52
  Speaker 1: Seriously, leave the stream right now and watch the masterclass because it'll, for 15 minutes, teach you when do professional traders and investors enter a trade?
• 8:00
  Speaker 1: When do they exit?
• 8:01
  Speaker 1: Those are really the two key questions that you need to know, and if you don't, stuff like that happens.
• 8:07
  Speaker 1: These are the biggest S&P underperformers of the last year Nike is down, 34%.
• 8:14
  Speaker 1: Estee Lauder 54%.
• 8:16
  Speaker 1: Walgreens 54%.
• 8:18
  Speaker 1: Moderna down 62%.
• 8:21
  Speaker 1: Albemarle Remember everyone's like that'll make us billionaires 33% down.
• 8:26
  Speaker 1: Adobe is down.
• 8:27
  Speaker 1: 31%.
• 8:28
  Speaker 1: Amd advanced money destroyer 37% down.
• 8:31
  Speaker 1: Intel down 55%, even though it's popping a little bit today.
• 8:35
  Speaker 1: So how do you avoid these?
• 8:37
  Speaker 1: Just by having rules.
• 8:39
  Speaker 1: It's really really, really very simple.
• 8:44
  Speaker 1: We definitely look at SoFi as well.
• 8:45
  Speaker 1: Alpha, you watched the masterclass yesterday.
• 8:48
  Speaker 1: It was 18 minutes long.
• 8:49
  Speaker 1: You mean I'm mis-selling because I'm saying it's 15?
• 8:52
  Speaker 1: Oh, I don't think that was the problem, my friend.
• 8:57
  Speaker 1: I think the problem is a little bit more mindset there, right?
• 8:59
  Speaker 1: So go and do what Alpha did yesterday Go watch the masterclass.
• 9:03
  Speaker 1: My friend and someone's asking should I buy the Tesla dip?
• 9:09
  Speaker 1: This will also answer that, for you didn't receive the mix paper.
• 9:18
  Speaker 1: I'll be check your email, check your spam and if you still haven't received it, drop me an email.
• 9:22
  Speaker 1: We send you the link again.
• 9:23
  Speaker 1: We did send it out to about 65 000 people, so you, a lot of people, people, people got that now, before we look at sofi and palantir and tesla and nvidia and paypal and see the pain over there, this is is the CNN greed and fear index.
• 9:41
  Speaker 1: Right, this is greed and fear.
• 9:45
  Speaker 1: And what do you see?
• 9:46
  Speaker 1: It's at neutral.
• 9:47
  Speaker 1: Does that feel like a market crash when it's at neutral?
• 9:50
  Speaker 1: This is not a market crash.
• 9:53
  Speaker 1: This is a wobble.
• 9:54
  Speaker 1: This is what a wobble looks like.
• 9:55
  Speaker 1: Say wobble for three times in a row, very, very quickly, with a straight face, and I'm not too worried about this, which is usually what people say when they're about to jump off a cliff.
• 10:07
  Speaker 1: In all seriousness, look at this.
• 10:08
  Speaker 1: This is the seasonality, and I showed you this in January.
• 10:11
  Speaker 1: I showed you this in early February.
• 10:12
  Speaker 1: I'm showing it to you again the NASDAQ seasonality, does this?
• 10:16
  Speaker 1: Do you remember if you watched me in early Jan and I said we expect the market to perform very well until mid-Feb, which is there, and after that we tend to see it sell off.
• 10:32
  Speaker 1: Why does it sell off?
• 10:33
  Speaker 1: On January February, we get the biggest inflows from retail, from 529, from your pension accounts and so on.
• 10:43
  Speaker 1: And then mid-February till March, we tend to have this wobble.
• 10:48
  Speaker 1: The seasonal thing happens every year, but not every year, but it happens.
• 10:53
  Speaker 1: Certainly the last 20 years it happened.
• 10:56
  Speaker 1: And then from March onwards, we tend to do very well again.
• 11:00
  Speaker 1: So we're getting into this wobble period.
• 11:02
  Speaker 1: But what's really driving this?
• 11:03
  Speaker 1: What's the concern here?
• 11:05
  Speaker 1: Well, there are quite a lot of concerns right now.
• 11:08
  Speaker 1: I think Trump came into office.
• 11:10
  Speaker 1: Wall Street was very excited about that because he's a very pro-billionaire kind of a president, and they thought well, he's going to fix everything in week one, he's going to give us tax cuts, he's going to do all the deregulation, he's going to solve all the problems in the world in week one and then we'll live happily forever after.
• 11:25
  Speaker 1: Of course, it doesn't work that way.
• 11:27
  Speaker 1: So the sort of honeymoon period is over, and now you're thinking, okay, he's putting in all these tariffs and that could cause inflation, at least for the short term.
• 11:36
  Speaker 1: It's going to cause all this uncertainty about trade flows.
• 11:40
  Speaker 1: And you know, there is the war in Ukraine, in the Middle East, and we don't know what he's going to do there.
• 11:46
  Speaker 1: Is he going to set off a bigger war in the Middle East.
• 11:48
  Speaker 1: Oil prices would go up, which is again inflationary.
• 11:52
  Speaker 1: The Fed yesterday Fed Chair Powell said we have no urgency to cut rates.
• 11:58
  Speaker 1: We're just going to sit here and wait, which is not what the market wanted to hear, but it's, quite frankly, what we all expected him to say.
• 12:04
  Speaker 1: So I'm not sure why that was such a big impact.
• 12:06
  Speaker 1: And then you've got big stocks like Tesla right and you're seeing their car sales actually declining in Europe and potentially in China and then in the US, in Europe and potentially in China and then in the US, and you've got this promise and premise of you know, ai will save us all, but we're not quite there yet Now.
• 12:27
  Speaker 1: Robo-taxis are apparently going to be on the road in Texas in June or July, which is pretty freaking close, so it's an odd time to sell off, but the market is like that.
• 12:36
  Speaker 1: The market wants results now, not in six months.
• 12:38
  Speaker 1: So you're getting a little bit of this kind of sphere going through there and, frankly, a glorious opportunity.