Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - BREAKING: FED *Just* Flipped 📈 + Stock Market News 08 October 2024

Transcript

Felix Prehn - BREAKING: FED *Just* Flipped 📈 + Stock Market News 08 October 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: This pre-market live stream.
• 0:02
  Speaker 1: I said the Fed just flipped and it has, and I'm going to show you the data, I'm going to show you the quotes and, of course, also round you up with everything else that's going on in the world, because quite a lot's going on in the world and then we've got something big and juicy to look forward to both tomorrow and the day after.
• 0:19
  Speaker 1: So we're going to do exactly that, in that order.
• 0:22
  Speaker 1: I'm going to share my screen with you, smash the you-know-what, and here we are.
• 0:27
  Speaker 1: Where is Winston and his human?
• 0:30
  Speaker 1: We made it here.
• 0:32
  Speaker 1: Finally, this is important and this is what both stock markets and bond markets are screaming right now.
• 0:40
  Speaker 1: And if I take you back to a sweet, sweet place where, only a short few weeks or months ago, we thought we were going to get about 10 rate cuts, so that would have been minus 2.5% down in the interest rates.
• 0:55
  Speaker 1: Now we're expecting only about five and a bit cuts.
• 1:01
  Speaker 1: So our little cut journey here seems to be cut in half.
• 1:05
  Speaker 1: And what does that mean?
• 1:06
  Speaker 1: Well, it's bad for stocks.
• 1:08
  Speaker 1: Very, very simple, but hair poofy, yes, yes, yes, rather humid here today.
• 1:16
  Speaker 1: That's what happens to my hair.
• 1:18
  Speaker 1: So we also have the Fed talking and then we're going to look at some data here.
• 1:25
  Speaker 1: And that's Musilam warns against easing too quickly, prefers patience.
• 1:29
  Speaker 1: What a luxury this man wishes for Patience.
• 1:34
  Speaker 1: Who's got patience in a day you know age like this?
• 1:37
  Speaker 1: I don't have any patience.
• 1:38
  Speaker 1: You have any patience.
• 1:39
  Speaker 1: Fed's Kugler calls for a balanced approach and he's monitoring the hurricane.
• 1:46
  Speaker 1: I hope you're in Florida.
• 1:47
  Speaker 1: I hope you're sound and safe with all your creatures and everything.
• 1:50
  Speaker 1: How do you move livestock and stuff?
• 1:53
  Speaker 1: That's, I guess, the real problem, isn't it?
• 1:55
  Speaker 1: That must be kind of a bit challenging.
• 1:58
  Speaker 1: Afro hairstyle today.
• 1:59
  Speaker 1: Aruna, you heard us the same.
• 2:01
  Speaker 1: Yeah, yeah, mine is like lots of humidity and it's just.
• 2:02
  Speaker 1: You know, when people say you had us to say yeah, yeah, mine is like lots of humidity and it's just you know, when people say you want more volume, well, get my hair and you don't need more volume.
• 2:11
  Speaker 1: So here's the actual quote from the Fed's Musalem, which is an unusual name, isn't it?
• 2:17
  Speaker 1: What does Musalem look like?
• 2:18
  Speaker 1: We're going to have to look that up in a second, which, of course, is incredibly un-PC.
• 2:22
  Speaker 1: We shouldn't question such things.
• 2:23
  Speaker 1: Where people might hail from.
• 2:25
  Speaker 1: It is a very unusual name.
• 2:26
  Speaker 1: If you ask me, I've never heard it before in my life.
• 2:28
  Speaker 1: Anyway, musalem is saying he won't predict the timing or the size of future Fed eating, but the cost of easing too much outweighs easing too little.
• 2:38
  Speaker 1: So he's basically saying ease off a little bit, ease off the easing.
• 2:45
  Speaker 1: That's what he's saying and the market doesn't like that.
• 2:49
  Speaker 1: Kugler says Only additional rate cuts if inflation continues down.
• 2:53
  Speaker 1: We're getting inflation data.
• 2:54
  Speaker 1: When?
• 2:54
  Speaker 1: When do we get it?
• 2:55
  Speaker 1: Wednesday exactly?
• 2:56
  Speaker 1: And if there's downside risk to employment escalates, cutting rates might be appropriate.
• 3:02
  Speaker 1: If the interim data does not provide confidence inflation is moving to target, slowing may be appropriate.
• 3:08
  Speaker 1: He wants a balanced approach.
• 3:10
  Speaker 1: All that nonsense that we don't want to hear, right, we want him to say big rate cuts coming in.
• 3:19
  Speaker 1: Dr Z is upset about the clickbait.
• 3:21
  Speaker 1: My dear friend, how do you make it past the news agent?
• 3:25
  Speaker 1: It must be terribly upsetting.
• 3:26
  Speaker 1: You've got to realize that YouTube is a tabloid, my friend, if you want to get people to watch the content which is what my intention is, otherwise we have bugger all the impact You've got to give them a headline that might jolt them out of their seat, and then after that I can torture you with Fed quotes and charts from Goldman Sachs and JP Morgan and do the kind of in-depth stuff that I like to do, but if I put that on the tin then nobody will come.
• 3:50
  Speaker 1: So it is just the way it is.
• 3:52
  Speaker 1: So you know, don't get your knickers in a twist on a bit of clickbait.
• 3:55
  Speaker 1: So anyway, it is actually appropriate.
• 3:58
  Speaker 1: It is actually descriptive of what's going on.
• 4:00
  Speaker 1: So before the rate cuts, we just had post Fed 50 basis point rate cuts expectations.
• 4:08
  Speaker 1: We lived in a beautiful la la land where rates would come down significantly.
• 4:14
  Speaker 1: Duffy the video slayer If you get that reference, you're giving away your age.
• 4:19
  Speaker 1: So, hmm, oh dear, freezing, freezing, freezing, oh dear.
• 4:24
  Speaker 1: It still says excellent connection, all righty.
• 4:27
  Speaker 1: So I'll run through this.
• 4:28
  Speaker 1: You'll have to watch the replay.
• 4:29
  Speaker 1: My friends Sacks, we'll figure it out one way or the other, but I'll keep going because on the replay it'll show up properly.
• 4:38
  Speaker 1: So that's important.
• 4:39
  Speaker 1: Equally important is that we make money.
• 4:41
  Speaker 1: We're up 94% so far this year.
• 4:44
  Speaker 1: If you want to learn how we do that, well, there is one very, very simple solution Tomorrow at 9pm Eastern Time, which should be good for pretty much everybody in the US, anybody in Asia, you Europeans it's the middle of your night, nothing I can do about that.
• 5:00
  Speaker 1: Come and join me at felixfriendsorg slash training and I'll teach you.
• 5:03
  Speaker 1: I'll teach you literally how we do this little feat with our trading rules, our and everything else.
• 5:07
  Speaker 1: So stream is back.
• 5:10
  Speaker 1: For some reason.
• 5:11
  Speaker 1: It's weird we get these one-minute cutouts.
• 5:13
  Speaker 1: I is back.
• 5:16
  Speaker 1: For some reason, it's weird, we get these one minute cutouts.
• 5:18
  Speaker 1: I don't know why.
• 5:18
  Speaker 1: I'll get onto it, right.
• 5:19
  Speaker 1: So we have to get moving on Now.
• 5:20
  Speaker 1: I thought twice about showing you this because I wasn't sure if you could handle it.
• 5:23
  Speaker 1: Okay, move is the fear of the bond market, and I do think you can handle it.
• 5:32
  Speaker 1: I think you deserve to understand how the market actually works.
• 5:34
  Speaker 1: The bond traders are the smarter for us, right?
• 5:39
  Speaker 1: I was never a bond trader.
• 5:40
  Speaker 1: You know, I'm an equity guy, options guy, derivatives guy.
• 5:43
  Speaker 1: I'm not a bond trader.
• 5:44
  Speaker 1: They are very, very smart.
• 5:45
  Speaker 1: I had some friends who were bond traders.
• 5:47
  Speaker 1: They were far too clever for me, a little bit dull, but also very clever.
• 5:50
  Speaker 1: And when the fear goes up in the bond markets, it's typically a little bit of a precursor of fear in our world, because we're a little bit more slow-witted than the bond traders.
• 6:03
  Speaker 1: So watch this, because that's a pretty significant move that we've just seen here, from down here all the way out to up there.
• 6:09
  Speaker 1: That's a pretty, pretty big spike.
• 6:10
  Speaker 1: So definitely something to keep an eye on.
• 6:13
  Speaker 1: And you know all that talk about small caps going to the roof.
• 6:26
  Speaker 1: Get what reference?
• 6:31
  Speaker 1: I was frozen.
• 6:32
  Speaker 1: Okay, I'm sorry about that, stacey, you'll have to watch the replay.
• 6:35
  Speaker 1: It's the only thing I can promise, really.
• 6:37
  Speaker 1: So, anyway, small caps, right.
• 6:38
  Speaker 1: So small caps are meant to go to the moon, right, according to Tom and all of that.
• 6:43
  Speaker 1: Well, they only go to the moon with big rate cuts.
• 6:46
  Speaker 1: At the moment, we're expecting less cuts, so that's kind of sour, really.
• 6:53
  Speaker 1: And then look at this US Small Business Sentiment Survey earnings trends and you see that it's just horrible, isn't it?
• 7:03
  Speaker 1: Look at that line there.
• 7:05
  Speaker 1: It's just awful.
• 7:06
  Speaker 1: So kind of hard to see why small caps are going to explode.
• 7:11
  Speaker 1: If you look at this, I mean, we're literally where are we in terms of earnings expectations?
• 7:16
  Speaker 1: We're in this sort of glumness of 2008,.
• 7:20
  Speaker 1: Seriously.
• 7:21
  Speaker 1: So, as I've been saying for the last year and a half, I think, part of the economy are in a recession manufacturing and the real world just not the big tech, stocks and everything else.
• 7:34
  Speaker 1: And then there's all that government spending.
• 7:35
  Speaker 1: So this is the average interest paid on short-term loans by small businesses.
• 7:53
  Speaker 1: They are paying wait for it 9.5%, and that is enough to kill pretty much any small business.
• 8:03
  Speaker 1: And that's literally as bad as 2006, 2000,.
• 8:08
  Speaker 1: Sort of the real like boom years when interest rates were high.
• 8:14
  Speaker 1: So unless they do cut, they will destroy the small business.
• 8:19
  Speaker 1: But then maybe that's the intention.
• 8:21
  Speaker 1: It could be a feature, it might not be a bug.
• 8:24
  Speaker 1: I mean, who influences US policy?
• 8:26
  Speaker 1: It's large corporations.
• 8:28
  Speaker 1: They give all the money, it's not the small ones.
• 8:30
  Speaker 1: So maybe that is literally the intention.
• 8:32
  Speaker 1: Anders, you're not getting trade vision emails, my friend.
• 8:35
  Speaker 1: Have you checked your spam folder?
• 8:36
  Speaker 1: If you haven't, um still gonna get them.
• 8:39
  Speaker 1: Please send us a message because you should be getting them.
• 8:42
  Speaker 1: Um.
• 8:42
  Speaker 1: Also, come and join me tomorrow for our live trading training at 9 pm eastern time for about 90 minutes or so.
• 8:51
  Speaker 1: So I'll be singing you to sleep.
• 8:53
  Speaker 1: That's the intention.
• 8:54
  Speaker 1: No, the intention is to teach you and show you what our rules are that have gotten us up 94 glorious percent so far this year.
• 9:01
  Speaker 1: We are here.
• 9:02
  Speaker 1: We started there, so we added $28,000 on a $30,000 portfolio, being probably the laziest I've ever been as a trader.
• 9:12
  Speaker 1: This year there is more.
• 9:14
  Speaker 1: Also, of course, israel, and this is a little bit what the market's on the edge for.
• 9:17
  Speaker 1: We were talking yesterday about how we're worried that they might strike Iranian oil facilities and Iran might then strike Kuwaiti facilities or even Saudi facilities, and then the oil price would go from 80, wherever it is right now to 120.
• 9:35
  Speaker 1: That's sort of the fear, which would cause inflation, which would mean interest rates will never come down.
• 9:40
  Speaker 1: So all the small businesses close down and the stock market as a tantrum.
• 9:46
  Speaker 1: But the Israeli defense minister is traveling to the US on Wednesday tomorrow which I would say is probably a sign of a more moderate affair, because he is consulting with the US, who's definitely not a fan of destroying the oil installations in Iran, because it'll cause inflation and it'll make it harder to get reelected.
• 10:10
  Speaker 1: That's kind of what I think about, isn't it?
• 10:21
  Speaker 1: Internet connection jokes are appropriate, but it's not the connection.
• 10:24
  Speaker 1: You see, it must be something else.
• 10:25
  Speaker 1: If there are any tech nerds on here, then let me know.
• 10:29
  Speaker 1: I've reset everything, I've done the IP config thing, I've started the router again.
• 10:35
  Speaker 1: We have fibers.
• 10:36
  Speaker 1: It's insanely quick, it works perfectly until the minute I turn on the stream and then about every five minutes we lose a little bit of data and then it's excellent again.
• 10:49
  Speaker 1: So there's something really weird going on there.
• 10:51
  Speaker 1: I'll try to figure out what it is.
• 10:53
  Speaker 1: Defense is the best form of attack.
• 10:55
  Speaker 1: I still have a loading circle above my head.
• 10:58
  Speaker 1: Maybe I am an algorithm and that's really who I am.
• 11:01
  Speaker 1: Felix finally unmasked his AI.
• 11:05
  Speaker 1: Here is the pre-market not looking too bad.
• 11:07
  Speaker 1: Oil coming down a little bit, of course, looking too bad.
• 11:12
  Speaker 1: Oil coming down a little bit, of course.
• 11:13
  Speaker 1: I set up an oil trade yesterday, but we'll see.
• 11:19
  Speaker 1: That's just probably the lack of stimulus coming out of China.
• 11:21
  Speaker 1: I think that's probably what's done that.
• 11:22
  Speaker 1: So we'll see what happens over there.
• 11:23
  Speaker 1: Other than that, most things are doing all right.
• 11:25
  Speaker 1: Qualcomm's down a little bit here 1.5% down.
• 11:29
  Speaker 1: Caterpillar's down a bit down a little bit here 1.5% down.
• 11:33
  Speaker 1: Caterpillars down a bit.
• 11:34
  Speaker 1: I'm not sure why.
• 11:35
  Speaker 1: That is to be honest.
• 11:36
  Speaker 1: But AXP is also down 1.5%.
• 11:37
  Speaker 1: But everything else looks pretty decent.
• 11:39
  Speaker 1: Tesla back in the green after yesterday's misery.
• 11:43
  Speaker 1: Lots of Fed presidents speaking today Bauman, kashkari, bostic, muzalem Kukula it's like you can't stop them from blabbering and blithering on.
• 11:53
  Speaker 1: And tomorrow, same sort of thing.
• 11:55
  Speaker 1: Everyone's talking again.
• 11:56
  Speaker 1: But what really is going to move the week?
• 12:00
  Speaker 1: Thursday?
• 12:01
  Speaker 1: Core inflation data, fomc minutes all at the same time.
• 12:06
  Speaker 1: Hang on, what time zone is that in?
• 12:10
  Speaker 1: Ah, okay, okay, okay, that's what I thought.
• 12:11
  Speaker 1: It's not only York time.
• 12:12
  Speaker 1: Hang on.
• 12:12
  Speaker 1: What time zone is that in?
• 12:12
  Speaker 1: Okay, okay, okay, that's what I thought.
• 12:13
  Speaker 1: It's not a New York time.
• 12:15
  Speaker 1: Fomc is Wednesday.
• 12:17
  Speaker 1: Yes, is that right?
• 12:19
  Speaker 1: 10pm Can't be right.
• 12:21
  Speaker 1: It's UTC minus four, isn't it?
• 12:23
  Speaker 1: That's what New York is.
• 12:25
  Speaker 1: So let's try that again.
• 12:27
  Speaker 1: 2pm on Wednesday.
• 12:28
  Speaker 1: Fomc minutes Indeed.
• 12:30
  Speaker 1: On Thursday, we get inflation data out and jobless claims that inflation data is probably more important than ever now, because we are really back to will they cut, won't they cut.
• 12:41
  Speaker 1: It's like a soap opera, isn't it?
• 12:45
  Speaker 1: We keep running the same theme again and again, but that's what moves the market.