Latest / Felix Nikolas Prehn's Podcast / ⚠️Wall Street Just Warned Big Clients of THIS + Stock Market News 08 April 2024

Transcript

⚠️Wall Street Just Warned Big Clients of THIS + Stock Market News 08 April 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to this Monday live stream, live from Korea, seoul.
• 0:07
  Speaker 1: I hope our IT setup works and that I'll be able to see your chat and so on.
• 0:14
  Speaker 1: The chat so far hasn't appeared yet, but we have hopes.
• 0:18
  Speaker 1: I don't know where that's going to go.
• 0:19
  Speaker 1: I suspect you can hear me If you can smash the like button, and we're going to run through here today the big stuff that actually is going to impact.
• 0:29
  Speaker 1: We need to talk about the jobs numbers.
• 0:31
  Speaker 1: We need to talk about what hedge funds are doing, what the big Wall Street guys are doing, which is sort of a guiding light, I think.
• 0:37
  Speaker 1: I don't know if light's the right approach, but you get the idea and any questions you have put them in the live chat and I hope I can actually find that live chat somewhere.
• 0:49
  Speaker 1: What happens in a live chat?
• 0:52
  Speaker 1: Very peculiar, can't seem to see it.
• 0:57
  Speaker 1: You can tell me that you're here by smashing the you-know-what.
• 1:01
  Speaker 1: That's a chat.
• 1:02
  Speaker 1: All righty, let's get cracking.
• 1:04
  Speaker 1: Bustapool, that's the chat.
• 1:05
  Speaker 1: Yeah, All righty, let's get cracking.
• 1:06
  Speaker 1: First of all, I shall shrink myself so you can maybe see a little less of the glorious view of Korea behind me, but see more what's important, and I'm on a laptop so you'll be able to see the back end as well as the front of my screen.
• 1:19
  Speaker 1: Very, very important.
• 1:22
  Speaker 1: Tomorrow, at 8 pm Eastern time, I'm going to teach about 500 souls precisely how we make money, precisely how we are up 126% in 2022, 105% in 2023.
• 1:40
  Speaker 1: This year, we made something like $5,000 on a 30K portfolio.
• 1:45
  Speaker 1: And just think for a minute like if you had a 30K portfolio and you were up 5K this year, what would that mean to you?
• 1:52
  Speaker 1: What would you do with that?
• 1:53
  Speaker 1: Not promising you the returns, but what I can promise you is that I will teach you precisely the strategy that I use the automations, how I can do this in two or three hours a week, and you'll walk away with that knowledge.
• 2:04
  Speaker 1: So you can see the link down below felixfranzalogcom.
• 2:06
  Speaker 1: It's also in the description so you can click on it.
• 2:09
  Speaker 1: Grab yourself a free seat and show up on time to be able to let in into the room, and I'll see you there tomorrow.
• 2:16
  Speaker 1: But let's just understand for a moment here.
• 2:21
  Speaker 1: Jobs data, and I still can't see your chat, which is very weird.
• 2:29
  Speaker 1: I don't know why.
• 2:31
  Speaker 1: Why is the chat not there?
• 2:32
  Speaker 1: I don't understand, but we'll persevere and push through it, all right.
• 2:35
  Speaker 1: So jobs data.
• 2:36
  Speaker 1: Right, it was allegedly a beat.
• 2:38
  Speaker 1: The headlines were like oh, jobs market is stronger than we thought, but was it?
• 2:42
  Speaker 1: Jobs market is stronger than we thought, but was it?
• 2:47
  Speaker 1: If you look at full-time jobs created, it's this red number down here.
• 2:51
  Speaker 1: We have lost.
• 3:05
  Speaker 1: Since March last year, we've lost minus 1.3 million full-time jobs.
• 3:07
  Speaker 1: While writing in green today, it's a strange color, isn't it?
• 3:09
  Speaker 1: Let's go with a nice blue.
• 3:12
  Speaker 1: And what did we gain?
• 3:14
  Speaker 1: Well, we gained about 1.8 million part-time jobs.
• 3:21
  Speaker 1: Now, why do people work part-time jobs?
• 3:24
  Speaker 1: Especially, why do people work multiple part-time jobs?
• 3:27
  Speaker 1: Because they need to pay rent or some other thing that they have to pay for, not voluntarily.
• 3:34
  Speaker 1: Very few people wake up and go darling.
• 3:35
  Speaker 1: You know what I'm going to do today?
• 3:36
  Speaker 1: I'm going to get a third job because I like working so much.
• 3:39
  Speaker 1: Nobody does that.
• 3:41
  Speaker 1: So, really, this jobs report was another BS report where, yes, about 600,000 part-time jobs were created, but about 6,000 or 8,000 full-time jobs were lost.
• 3:53
  Speaker 1: And this is the official data.
• 3:55
  Speaker 1: It'll be revised, it'll be lower.
• 3:57
  Speaker 1: Give it a month.
• 3:58
  Speaker 1: They're going to revise that down significantly.
• 4:00
  Speaker 1: They always do, and I think that's why the market was just like okay, we don't really care, we don't really believe this data because you look underneath the hood it's kind of nonsense.
• 4:12
  Speaker 1: And we are in this Goldilocks period.
• 4:14
  Speaker 1: I mean the amount of money that is flowing into stock funds, plus the buybacks from the big companies who are just buying their own shares, and therefore propping up the shares and making us wealthier has been absolutely glorious.
• 4:30
  Speaker 1: You go back to 1999, where my chart starts here, 1999, and you draw a line and you can see we're really, really, really, really trending up in terms of money inflow.
• 4:43
  Speaker 1: Now, where did all the money come from post-COVID?
• 4:46
  Speaker 1: The massive peak money printing and the US government.
• 4:49
  Speaker 1: It's debt, it's a debt-funded bubble, the whole thing, which can continue as long as people are willing to create debt and the government can pay for it.
• 4:58
  Speaker 1: The second part of this and this is also important to understand the bigger picture there are less stocks and shares available now in the whole world than there were a year or two or three ago.
• 5:12
  Speaker 1: How is that possible?
• 5:14
  Speaker 1: We have less stocks, literally there is a decline in the number of stocks.
• 5:20
  Speaker 1: How does that work?
• 5:21
  Speaker 1: Well, buybacks, mostly.
• 5:22
  Speaker 1: Some companies have gone private, but it's largely buybacks.
• 5:26
  Speaker 1: So buybacks are essentially reducing the supply of shares, while the government and the Fed has created all this money.
• 5:34
  Speaker 1: They were increasing demand and that's why we're seeing a boom in stocks.
• 5:38
  Speaker 1: It's really not rocket science, but it's important to understand and that's actually going to continue.
• 5:43
  Speaker 1: So that's kind of cool, right.
• 5:45
  Speaker 1: And you look at all the inflows since March 2022.
• 5:48
  Speaker 1: And look at that, look at the massive amount of money that's been running into stock funds, equity funds Really really tremendous amount $350 billion, something like that and that's what's driving the rally.
• 6:03
  Speaker 1: There is just a lot of money.
• 6:04
  Speaker 1: I didn't skip that one, I think Now we would now expect for, traditionally, the rest of the year, inflows into the market to go more flat.
• 6:19
  Speaker 1: Typically, the first three months of the year are big inflow months, and then you get to sort of tax season and everything else and you get some negative months, typically May, june and maybe people also paying their bills and going on holiday or whatnot.
• 6:33
  Speaker 1: Same with August holiday month, and then it improves a little bit towards the end of the year.
• 6:39
  Speaker 1: That's just the traditional flow thing here.
• 6:41
  Speaker 1: So you get a bit of an idea of where we are seasonally.
• 6:45
  Speaker 1: Now what worries me a little bit more hence the title is hedge funds.
• 6:48
  Speaker 1: So hedge funds have been shorting for the last four days, tuesday to Friday, they have also been shorting the market for like what the last eight weeks or something like that Quite significant.
• 7:03
  Speaker 1: Now that's hedge funds.
• 7:05
  Speaker 1: It's not everybody.
• 7:06
  Speaker 1: We can see if we can see in OptionsWatch, we can see the Friday institutional flows, we can see the dark pool trades and what do you see?
• 7:19
  Speaker 1: Well, bullish, bullish, bullish, bullish, bullish, bullish, bullish, and these are monster trades.
• 7:23
  Speaker 1: I mean hundreds of millions of dollars on bullish options positions.
• 7:27
  Speaker 1: So a lot of people looked at Friday's data inside it's not a lot of people, there's a handful of insiders and they were like we understand how the headlines are going to work.
• 7:38
  Speaker 1: Everyone's going to be like, oh, there'll be no rate cuts because the labor market is so strong.
• 7:42
  Speaker 1: But you and I now know that that's nonsense and therefore they actually bought options.
• 7:48
  Speaker 1: But the hedge funds are piling up against the stocks that have performed the best so far this year, and that's something to think about.
• 7:56
  Speaker 1: So if something were to break and I'm not saying that it will, but if there is some bad news then you are going to get a monster sell-off, because the algo funds would sell very significant amounts and that's simply because of their position.
• 8:17
  Speaker 1: They've just been buying and buying, and buying and buying.
• 8:19
  Speaker 1: So if something goes wrong, they will sell pretty hard, maybe $100 billion worth or something like that, which is a significant amount of money.
• 8:27
  Speaker 1: And you have to factor all that in when you make your risk decisions and this is the last piece of the puzzle really blackouts.
• 8:39
  Speaker 1: So when earnings season kicks off, which it is right now, I think on Friday we get JP Morgan and the big banks.
• 8:46
  Speaker 1: They always kick off the earnings season as the chosen ones.
• 8:49
  Speaker 1: It means that companies can't buy their own shares and we are going to have until approximately the 30th of April.
• 9:00
  Speaker 1: We're going to have basically very, very little share buybacks, and that just removes some demand from the market.
• 9:07
  Speaker 1: That's what makes an earning season so volatile.
• 9:12
  Speaker 1: Because you don't get the buybacks, everyone's kind of on the edge of their seat and all you would need is one of the big guys to report slightly disappointing numbers and then boom, the selling kicks in and because there's less demand, you get a lot more of a move than you'd like to see.
• 9:32
  Speaker 1: Now, these are the kind of headlines that Bloomberg's running and pretty much all the other media, and they're basically saying okay, the market's now just in favor of two.
• 9:38
  Speaker 1: Reduction in rates.
• 9:39
  Speaker 1: Lori Logan, fed Reserve Bank president of Dallas, said it's too early to consider cutting rates at all.
• 9:50
  Speaker 1: And again, like that's not actually saying anything different, right, that's just saying I'm not thinking about it today.
• 9:56
  Speaker 1: She's not saying I'm ruling it out.
• 9:58
  Speaker 1: This is just kind of Fed noise to sort of try and keep the exuberance and the pressure cooker from exploding a little bit.
• 10:07
  Speaker 1: So I wouldn't pay that much attention to this, because I think, ultimately, ultimately, there are three factors that work in our favor this year.
• 10:17
  Speaker 1: And it's a funny, funny world.
• 10:19
  Speaker 1: We've got a real estate crisis.
• 10:21
  Speaker 1: It's a funny, funny world.
• 10:22
  Speaker 1: We've got a real estate crisis commercial real estate, not housing.
• 10:26
  Speaker 1: We also have a small banking crisis and I know these are kind of being hushed up, but they're there and we have massive government debt.
• 10:43
  Speaker 1: And all three are made incredibly worse through higher interest rates.
• 10:48
  Speaker 1: So how do we solve these three?
• 10:50
  Speaker 1: Very simple, weak cut rates?
• 10:52
  Speaker 1: That's really the solution to it all.
• 11:00
  Speaker 1: So I would be shocked.
• 11:01
  Speaker 1: I'd be shocked if there weren't interest rate cuts.
• 11:03
  Speaker 1: I must say I think I would be.
• 11:05
  Speaker 1: I'd be very, very surprised.
• 11:07
  Speaker 1: Now I hope you can see yes, you can see Brilliant.
• 11:10
  Speaker 1: This is a little challenging when you're working on just the one screen today.
• 11:14
  Speaker 1: Normally we have three or four, but I appreciate you tuning in and smashing the you-know-what regardless.
• 11:22
  Speaker 1: I think I happened to the chat, the chat guy Bizarre.
• 11:30
  Speaker 1: Normally we have a little site chat thing here.
• 11:34
  Speaker 1: It's just YouTube said no today.
• 11:37
  Speaker 1: Youtube said no today.
• 11:39
  Speaker 1: Well, I'll have to imagine what you're saying.
• 11:41
  Speaker 1: So, chipmaker loans.
• 11:46
  Speaker 1: So the US is giving TSMC $6.6 billion in grants and $5 billion in loans that's $11.6 billion to convince them to build a factory in Arizona.
• 12:03
  Speaker 1: I mean, arizona must be such an unfriendly place to do business in that you've got to give someone $11 billion to build a factory.
• 12:11
  Speaker 1: Very, very, very bizarre.
• 12:13
  Speaker 1: So they're going to construct a third factory in Phoenix and in two facilities that's going to come into production in 2025 and 2028.
• 12:21
  Speaker 1: Apparently he's going to put $65 billion.
• 12:26
  Speaker 1: Okay, $65 billion is a significant amount.
• 12:28
  Speaker 1: Maybe $11 billion isn't that insane and it's just a sort of onshoring thing that we're talking about, right, bringing stuff back.
• 12:40
  Speaker 1: Take a screenshot of this.
• 12:41
  Speaker 1: It's an ALA newsletter that comes up like two or three times a week.
• 12:44
  Speaker 1: Trading Floor Whispers and we put in here the game plan for the week in terms of support.
• 12:51
  Speaker 1: So we are bullish above 5.225.
• 12:55
  Speaker 1: We are neutral between 5.100 and 5.225.
• 13:01
  Speaker 1: And we're freaking the hell out and buying sardines and stocking up on ammo below 5,100.
• 13:06
  Speaker 1: And that basically gives us an idea of how we set up trades.
• 13:09
  Speaker 1: So I'm going to take a screenshot of that.
• 13:11
  Speaker 1: I'll simply go and subscribe to the newsletter.
• 13:14
  Speaker 1: I do want to talk Tesla absolutely, but if you haven't already, do sign up to the live trading training.
• 13:19
  Speaker 1: If you want to know how we made like 5k on a 30k portfolio so far this year and 100 plus return on capital employed in each of the last two years that we started to properly track things, please do.