Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - ⚠️WATCH BEFORE JANUARY 1ST !! #PLTR #SOFI #PYPL #TSLA #NVDA #SOUN #SPY #QQQ + Stock Market News 27 December 2024

Transcript

Felix Prehn - ⚠️WATCH BEFORE JANUARY 1ST !! #PLTR #SOFI #PYPL #TSLA #NVDA #SOUN #SPY #QQQ + Stock Market News 27 December 2024 · Felix Nikolas Prehn's Podcast

• 0:01
  Speaker 1: Felix here and welcome to this pre-market live stream.
• 0:03
  Speaker 1: I want to walk you through the two things that are scaring the market right now and why we might be seeing that beginning of the year dip.
• 0:11
  Speaker 1: And then I want to walk you through the four reasons why, in my humble opinion, that dip won't last and things will be absolutely freaking amazing in 2025 for other investors and traders, but we need to be in the right stocks and in the right sectors.
• 0:26
  Speaker 1: I don't want to walk you through that as well.
• 0:27
  Speaker 1: Then, as a bonus, I'm going to give you some insight into whatever charts and stocks you ask me about here live in the chat.
• 0:34
  Speaker 1: So please do Now.
• 0:36
  Speaker 1: There are two new kittens in this very study, so I'm a little bit concerned that we might go offline at some point because these guys can't be trusted.
• 0:43
  Speaker 1: I don't know if I can get any of them, but hang on, here is one.
• 0:51
  Speaker 1: Here is one.
• 0:51
  Speaker 1: This is the larger of the two.
• 0:53
  Speaker 1: This is albert.
• 0:54
  Speaker 1: You're training him up to be an options trader, aren't we albert?
• 0:57
  Speaker 1: Something like that?
• 0:59
  Speaker 1: So, yes, that's what's going on here.
• 1:01
  Speaker 1: Good morning everybody.
• 1:02
  Speaker 1: Let me share my screen with you and walk you through the key reason.
• 1:06
  Speaker 1: People are feeling a little bit spooked after the holidays and I hope you had lovely Christmas holidays.
• 1:13
  Speaker 1: It's a mad, mad house in here.
• 1:16
  Speaker 1: I shouldn't have let them in and they're now crawling over every wire and absolutely everything.
• 1:20
  Speaker 1: I don't know if you can hear them All right.
• 1:22
  Speaker 1: So this is.
• 1:23
  Speaker 1: This is what people are freaked out about.
• 1:25
  Speaker 1: It's the US 10-year government bond yield, the.
• 1:29
  Speaker 1: What you ask.
• 1:30
  Speaker 1: Indeed, that would make you kind of a normal individual if you thought that that was the.
• 1:33
  Speaker 1: Why do we care?
• 1:34
  Speaker 1: Well, think about it this way the yield is sort of like the interest rate that it pays.
• 1:40
  Speaker 1: And there are two cats crawling on my desk and the easiest way to think about that is if interest on bonds is high, where do people want to put their money?
• 1:55
  Speaker 1: Think about it as like there are bonds over here and then there are stocks over here.
• 2:01
  Speaker 1: Where do you put your money if interest rates of bonds are high?
• 2:06
  Speaker 1: Well, you're going to put more of your money into the bonds, right, and you're going to put a little bit less of your money into stocks, at least if you are.
• 2:13
  Speaker 1: You know, a fund or something.
• 2:16
  Speaker 1: I'm going to get onto funds in a moment here, I don't know, soon be used to the camera?
• 2:21
  Speaker 1: Well, there was.
• 2:22
  Speaker 1: Literally.
• 2:22
  Speaker 1: They were just crawling over the thing as well.
• 2:24
  Speaker 1: So, madhouse, absolute madhouse in here.
• 2:27
  Speaker 1: The easiest way I always like to think of it, it's just like if interest rates are high for bonds, then well, more money flows into bonds.
• 2:36
  Speaker 1: There's a little bit more to that, but that's sort of the way I look at that.
• 2:38
  Speaker 1: So why are they high?
• 2:39
  Speaker 1: Well, it's basically the market saying we don't think rates are going to come down and we think this new government, these Trumponians, are going to do something that's going to cause more inflation.
• 2:52
  Speaker 1: This one's making a racket.
• 2:55
  Speaker 1: Now why are you making such a racket?
• 2:57
  Speaker 1: Come on here, slightly distracted here this morning.
• 3:03
  Speaker 1: So Is that likely?
• 3:07
  Speaker 1: Well, there is an argument that tariffs are inflationary.
• 3:11
  Speaker 1: There is definitely something to that, at least in the short term.
• 3:13
  Speaker 1: So if we get all those tariffs, we might see higher inflation and that might therefore lead to higher what?
• 3:21
  Speaker 1: Interest rates, right?
• 3:23
  Speaker 1: Hence the higher bond rates.
• 3:24
  Speaker 1: Now, it doesn't take into account a bunch of other things, like they're also going to reduce the size of the government, although that might not happen as quickly, and thanks Fox Gaming for keeping things alive and that would, in theory, reduce inflation, because the most inflationary thing in the world is what the government right, the government spending money Slightly concerning that.
• 3:50
  Speaker 1: There are cats crawling all over the router and everything else.
• 3:54
  Speaker 1: So that's the first thing people are freaked out about.
• 3:57
  Speaker 1: The second thing people are slightly freaked out about and there's maybe actually a third thing, but I'll get onto that in just a second the cats add to the life.
• 4:04
  Speaker 1: Yeah, if we'll get on to that in just a second.
• 4:06
  Speaker 1: The cats add to the life.
• 4:06
  Speaker 1: Yeah, if we can get them more into the stream.
• 4:08
  Speaker 1: Where are they?
• 4:09
  Speaker 1: Seriously, where are they?
• 4:10
  Speaker 1: I can only see one Worrying, but I can hear a second one, like she's trying to break out of something.
• 4:20
  Speaker 1: I'm going to close that window at the top here.
• 4:22
  Speaker 1: One second.
• 4:23
  Speaker 1: These guys are unpredictable.
• 4:32
  Speaker 1: So this is Bank of America.
• 4:35
  Speaker 1: They've just come out, bank of America, you know, biggest bank out there, basically bank in the US and they've come out and they've said we expect 17 billion of US equities, as in stocks.
• 4:46
  Speaker 1: I don't know why they can't just use the word stocks to sell into year end.
• 4:52
  Speaker 1: They're saved on the D.
• 4:54
  Speaker 1: Okay, let me show you the culprit number two here.
• 4:59
  Speaker 1: This is culprit number two.
• 5:02
  Speaker 1: We call this one Sabrina, who is very, very sweet and rather small and very, very, very naughty, aren't you Very naughty?
• 5:10
  Speaker 1: So, future chief research analyst material, of course, but at the moment very much in training and chewing everything.
• 5:18
  Speaker 1: So, yeah, we're expecting, basically, a little bit of a sell-off.
• 5:22
  Speaker 1: Why are they selling off it's pension funds?
• 5:24
  Speaker 1: Now, why, you wonder?
• 5:26
  Speaker 1: Are pension funds selling stocks in the most wonderful rally ever?
• 5:31
  Speaker 1: Right, because they want to miss out on the rally?
• 5:37
  Speaker 1: Maybe?
• 5:37
  Speaker 1: Maybe they just had too good of a year?
• 5:39
  Speaker 1: No, it's the quarterly rebalance.
• 5:42
  Speaker 1: And why do they rebalance?
• 5:45
  Speaker 1: Well, they have a rule, say.
• 5:49
  Speaker 1: Their rule might be this is their pie, and maybe they need to be 50% in stocks and they need to be 50% in bonds.
• 5:59
  Speaker 1: That would be sort of a simplified pension fund setup.
• 6:03
  Speaker 1: So what's happened?
• 6:04
  Speaker 1: Well, the stock markets rallied 30-something percent this year, so stocks now make up more than the 50%.
• 6:12
  Speaker 1: So they're going to have to sell some stocks.
• 6:15
  Speaker 1: It's a way you insure underperformance.
• 6:18
  Speaker 1: That way, your pensioners stay poor, which is sort of the goal, it seems, of most pension funds.
• 6:24
  Speaker 1: I'm being a bit cynical here, but that seems to be what most of them achieve.
• 6:27
  Speaker 1: Now, I did tell you there were four pieces of good news here, though, which is which is really.
• 6:37
  Speaker 1: These guys are just climbing over everything, which is good news, and I think I think we have to always separate the media and the news headline and the story.
• 6:47
  Speaker 1: So I'm trying to focus here into short-term FUD, and then medium-term and then longer-term.
• 6:53
  Speaker 1: And as an investor you kind of want to think in those timeframes.
• 6:56
  Speaker 1: So short-term is like a week or two, medium-term is like a month or two or three maybe, and then longer-term is five years, five years, 10 years, 20 years, 30 years, that sort of type of thing.
• 7:10
  Speaker 1: And then there's the very long term and then you're dead.
• 7:11
  Speaker 1: So game's over.
• 7:12
  Speaker 1: They're now chasing each other through this little study.
• 7:14
  Speaker 1: So in the short term, retail that's you and me we're selling less than expected.
• 7:24
  Speaker 1: So typically in December there is a thing called tax loss harvesting, which basically means you close your losing positions, you realize those losses and then you close some winners and then you offset the losses against the winners and that way you pay less capital gains tax.
• 7:43
  Speaker 1: That's a big thing in the US, and so typically in December you see a little bit of that.
• 7:47
  Speaker 1: The kiddies, mind you electrolytes.
• 7:49
  Speaker 1: I fear they've already had some of those, otherwise they wouldn't be bouncing off the oh, they've got one of those cable ties off and are now kicking that around on the floor.
• 7:58
  Speaker 1: Well, I'm glad they're having some fun they should.
• 8:00
  Speaker 1: They are naughty kittens, so this is kind of offsetting, in my view, a little bit here what the pension funds are doing.
• 8:06
  Speaker 1: Now let me show you briefly what's live pre-market.
• 8:09
  Speaker 1: There's a little bit of that headline news here flowing into the market, right, which is all the red.
• 8:14
  Speaker 1: It's all moderate red, but it's all red now nevertheless.
• 8:17
  Speaker 1: So let's understand a bit more what's happening in the medium term, right?
• 8:21
  Speaker 1: So we had data out just before Christmas.
• 8:26
  Speaker 1: What if we trade in a Roth IRA?
• 8:29
  Speaker 1: That makes you a very smart man, paul, and keep doing that, because that's the best place to do it.
• 8:34
  Speaker 1: If you're American and you're not using your Roth IRA to trade, I would argue you're missing the biggest tax gift that government will ever give you.
• 8:42
  Speaker 1: They're going to chew the wires and get shocked like christmas vacation.
• 8:50
  Speaker 1: Well, let's hope they don't do that.
• 8:52
  Speaker 1: So far they seem to be um happy with the clippy things, so two of them running around the floor here can't get to the buggers.
• 9:04
  Speaker 1: What's the good news?
• 9:05
  Speaker 1: There are more people unemployed.
• 9:07
  Speaker 1: Yes, and as a former banker, it's the sort of thing you'd expect me to say right, let's celebrate guys, let's open the shampoos.
• 9:14
  Speaker 1: There are more people unemployed.
• 9:15
  Speaker 1: I didn't mean it in that way, but it might come across like it that way.
• 9:18
  Speaker 1: So, yes, we have more unemployed people now than we've had at any point in the last, in more than three years, which is a sign that it takes longer for out-of-work people to find a job, and it's also a sign that the Biden number crunches are retiring, because they were really, really, really good at manipulating numbers, so we started to see the reality here.
• 9:41
  Speaker 1: Why is that important?
• 9:42
  Speaker 1: Well, the Fed basically said that the jobs market is thriving.
• 9:48
  Speaker 1: Now the data now begs to differ, and that is good news.
• 9:53
  Speaker 1: So if you're unemployed, you're doing a service to the impoverished stock investors.
• 9:58
  Speaker 1: You get the idea right.
• 10:02
  Speaker 1: More unemployed people means lower interest rates, so lower rates mean what?
• 10:08
  Speaker 1: Lower rates mean?
• 10:09
  Speaker 1: Higher stock prices.
• 10:11
  Speaker 1: Very, very simple would be an overstatement, but you get the idea, raj, I love being unemployed.
• 10:21
  Speaker 1: So do I, but these guys are claiming unemployment benefit, which is not something I've ever done.
• 10:27
  Speaker 1: That's a weird thing, actually.
• 10:30
  Speaker 1: I finished law school.
• 10:32
  Speaker 1: There were literally people at law school who said to me oh brilliant, I'm taking the summer off and we're going to Italy or something.
• 10:37
  Speaker 1: I said, okay, nice, and they said yeah, yeah, yeah, I've just got my unemployment check in this morning.
• 10:42
  Speaker 1: I'm like you what?
• 10:43
  Speaker 1: And they're like, yeah, yeah, yeah, getting whatever much.
• 10:46
  Speaker 1: And I thought that was so sad and immoral that somebody who didn't need the money was claiming it Because, yes, technically they were unemployed but they actually had a job lined up like six months down the road with a major corporate law firm, so they weren't exactly unemployed in the classical sense of the word.
• 11:05
  Speaker 1: But that's kind of.
• 11:06
  Speaker 1: People just think that they're entitled to stuff, right, they don't really realize that someone's going to pay for that.
• 11:12
  Speaker 1: But anyway, going back to the third reason here where I think the market is actually going to do much, much better in January than we think and Fox is reminding us here of something as well today which I appreciate you for, fox, and I'll share my screen which is we're running a masterclass today in I don't know how many hours nine hours and about 4,000 of you have signed up so far.
• 11:40
  Speaker 1: Now we had a room limit of 2,000.
• 11:43
  Speaker 1: So I've messaged with a webinar hosting software company and we now have a room limit of 3,000, which seems to be the limit.
• 11:51
  Speaker 1: So I assume maybe another 1,000 of you will sign up today and I encourage you to.
• 11:58
  Speaker 1: I just want to encourage you to show up early, because we might literally be full and there's nothing I can do about it.
• 12:05
  Speaker 1: 3,000 people is the maximum we can fit into that digital room.
• 12:09
  Speaker 1: For future events, we'll fix that and we'll make sure we have sort of unlimited capacity, but for this one here, I'm thrilled that you guys want to learn, very, very excited by that.
• 12:20
  Speaker 1: So really looking forward to that in just a couple of hours, 6 pm, new York time today.
• 12:26
  Speaker 1: But here is another piece of data.
• 12:27
  Speaker 1: This is from GS, which stands for Goldman and Sachs Goldman Sachs, one of the biggest, most important investment banks out there, and they're basically saying that wages are growing at a much, much slower rate than they have been at any time since 2021.
• 12:45
  Speaker 1: What does that say to you?
• 12:47
  Speaker 1: The job market is slowing.
• 12:49
  Speaker 1: What does a slowing job market say?
• 12:51
  Speaker 1: Well, wages are not growing as quickly.
• 12:53
  Speaker 1: What does that mean?
• 12:54
  Speaker 1: That means lower inflation and less economic activity and all of that.
• 12:58
  Speaker 1: And what does that mean?
• 12:59
  Speaker 1: That means, essentially, lower interest rates.
• 13:01
  Speaker 1: Which means what?
• 13:02
  Speaker 1: Yes, indeed, higher stock prices.