Latest / Felix Nikolas Prehn's Podcast / I WARNED YOU ABOUT THIS + Stock Market News 01 February 2024

Transcript

I WARNED YOU ABOUT THIS + Stock Market News 01 February 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix, say a good morning to you.
• 0:01
  Speaker 1: What a day yesterday was.
• 0:03
  Speaker 1: Yesterday was not a day that many of you enjoyed, I imagine.
• 0:07
  Speaker 1: Massive, massive drop in tech stocks.
• 0:10
  Speaker 1: We're going to talk about that, but really what I want to talk about is something slightly different, not even really that related, but yeah, we'll run through, obviously, what happened to the Fed yesterday, big tech and then the two major stories today that I think you need to really be aware of.
• 0:25
  Speaker 1: If you want to make some money this year we just surely bought this all about and if you want to make some money, maybe not this year, but maybe in a month or two or three then come and join me on Tuesday live.
• 0:36
  Speaker 1: I'll break down for you our one stock three step trading system, how we fully automated, and I will actually do some live trading for you guys in the community already straight after this.
• 0:45
  Speaker 1: So come and check that out.
• 0:48
  Speaker 1: You can sign up.
• 0:49
  Speaker 1: It takes you to a page that looks just like this In fact it is this and you just select the time there is only one time and you pop your email and name in there and then you you'll sign up.
• 0:59
  Speaker 1: It's as simple as it is.
• 1:00
  Speaker 1: It's completely free of charge to make you into better investors.
• 1:04
  Speaker 1: So let's run through some of the cool stuff here today, and that is well.
• 1:10
  Speaker 1: If you look at what the Fed said yesterday and I'll look at, show you the exact wording that matters, just the one bit that actually matters.
• 1:16
  Speaker 1: Then let's go back just just a tiny bit in history here and, of course, ask me questions.
• 1:23
  Speaker 1: I will get to them in a couple of minutes.
• 1:25
  Speaker 1: And since the December Fed meeting, that glorious day in September when Jay Powell came out and said by call options, what happened?
• 1:40
  Speaker 1: Well, the dollar is kind of moved sideways, shares have gone up a great deal and the market sort of been fairly perfect, hasn't it?
• 1:52
  Speaker 1: It's been absolutely glorious.
• 1:54
  Speaker 1: The January rally and all of that is kind of war because of the Fed.
• 1:58
  Speaker 1: And we had in December here a massive expectation that in March we would get a rate cut.
• 2:06
  Speaker 1: We had like an almost 90% expectation of that happening.
• 2:11
  Speaker 1: Now that expectation has come down to more kind of like well, is it going to happen?
• 2:17
  Speaker 1: We're not quite sure sort of levels.
• 2:18
  Speaker 1: So we've definitely moved a little bit away from that exuberance of December and we need to factor that in.
• 2:26
  Speaker 1: We need to understand what that means.
• 2:27
  Speaker 1: We need to understand what they actually said yesterday.
• 2:30
  Speaker 1: This is what he said yesterday, two lines that matter.
• 2:32
  Speaker 1: He said the committee does not expect it will be appropriate to reduce interest rates and it has greater confidence that inflation is moving towards 2%.
• 2:43
  Speaker 1: And he's basically saying give me more data Now.
• 2:46
  Speaker 1: That's much, much, much, much more rate cut positive than anything we heard at any point in 2023.
• 2:54
  Speaker 1: So it's a step in the right direction.
• 2:56
  Speaker 1: Much like smashing the like button would be a step to having a glorious day.
• 2:59
  Speaker 1: I'm just suggesting it.
• 3:01
  Speaker 1: And he also said the risk is achieving employment and inflation goals.
• 3:08
  Speaker 1: Well, it's moving more into balance and we got some employment data out 30 minutes ago.
• 3:14
  Speaker 1: We'll also walk through that.
• 3:16
  Speaker 1: And then they did not mention that financial conditions were tight, and part of that is well, they're not.
• 3:24
  Speaker 1: They are like as loose as can't think of a polite example.
• 3:29
  Speaker 1: The financial conditions have massively, massively eased since over the last year, really, and that's just the market going up, as we've seen, and that's a good thing.
• 3:46
  Speaker 1: Sorry, I'm pointing an arrow here in the wrong direction.
• 3:49
  Speaker 1: It should be going down Trust.
• 3:53
  Speaker 1: The banker with the chart doesn't know whether it's going up or down.
• 3:55
  Speaker 1: Yes, I used to be a banker, in case you were wondering.
• 3:58
  Speaker 1: So that's kind of positive, actually very positive, but look at the shit show that the actual statement is this is a red line.
• 4:05
  Speaker 1: If you've ever worked in I don't know somewhere where you did compare documents I used to be a lawyer for a little while.
• 4:10
  Speaker 1: That's what we were always doing Did somebody insert a comma somewhere because it would matter?
• 4:15
  Speaker 1: And he's really, really, really changed a lot of the statement, which normally doesn't happen, normally changes like a line.
• 4:22
  Speaker 1: He said the economic outlook is uncertain, and we like that because it's sort of saying we might have to cut rates to make the outlook more certain, more positive, and he's also removed any reference to the banking system is solid, which is what he's been saying for the past six months Lying through his teeth, obviously, but him saying it nevertheless is important.
• 4:54
  Speaker 1: I want to get back to the banking story in a moment, but I want to look out here at the risks to inflation, but really the next story is what I want to get to.
• 5:01
  Speaker 1: I think that's really the important one here.
• 5:03
  Speaker 1: Thank you to the 91 of you who've hit that like button, and the other 270 are probably still as drunk or high as a banker would be at this time of the day.
• 5:13
  Speaker 1: True story many true stories not me Never touched the stuff.
• 5:18
  Speaker 1: I never really understood why.
• 5:20
  Speaker 1: I'd want to be out of control, but I have control issues.
• 5:23
  Speaker 1: What have we seen?
• 5:24
  Speaker 1: Okay, let's go to the Middle East.
• 5:26
  Speaker 1: The Red Sea oil flows have dropped 20 percent.
• 5:30
  Speaker 1: Rates have gone up 16, 25 percent a barrel for oil.
• 5:37
  Speaker 1: The amount of shipments through the Red Sea has actually dropped by 50 percent.
• 5:45
  Speaker 1: Look at if you can see this here.
• 5:53
  Speaker 1: The red line is the amount of shipments going around the Cape of Good Hope, around South Africa, which is an extra nine-day journey if you're trying to get to Europe.
• 6:05
  Speaker 1: We have a massive, massive collapse of serious canal shipments and you have a massive increase going around South Africa, which makes sense because he wants to get fired at Now.
• 6:20
  Speaker 1: There are a couple of problems in the Middle East.
• 6:22
  Speaker 1: If you hadn't noticed, this is what Obama got a Nobel Peace Prize for.
• 6:28
  Speaker 1: I mean, can you pay for these?
• 6:30
  Speaker 1: Seriously, let's start riots in Egypt, let's screw up Iraq, syria, libya and I'll get a Nobel Peace Prize.
• 6:38
  Speaker 1: I don't know.
• 6:40
  Speaker 1: I don't know who does.
• 6:40
  Speaker 1: Just those out.
• 6:41
  Speaker 1: That sound, by the way, is not what you think it is.
• 6:43
  Speaker 1: Some people have a dirty mind.
• 6:44
  Speaker 1: It is my chair on the floor moving.
• 6:47
  Speaker 1: See, there we go, not some sort of digestive problem.
• 6:52
  Speaker 1: So we've got the Suez Canal here, which is right next to Israel.
• 6:56
  Speaker 1: We've got this straight down here, which is full of crazy people with things to fire off the back of Toyota trucks.
• 7:04
  Speaker 1: Then you've got the Strait of Hormuz, where you have Iran on one side also doing things that are fairly bonkers.
• 7:11
  Speaker 1: So this is a three, triple choke point for the world's oil and container flows.
• 7:19
  Speaker 1: That has typically in the past had an impact on oil prices and therefore inflation generally, and that's why we care.
• 7:28
  Speaker 1: If you want to see how much does it move through the straight off the Suez Canal, which is really what we care about here, it's quite a lot.
• 7:40
  Speaker 1: It's 15% of all the cereals in the world, 14% to 15% of fertilizers.
• 7:46
  Speaker 1: It's a fair bit.
• 7:48
  Speaker 1: So it has an impact.
• 7:50
  Speaker 1: Strait of Hormuz is also where, obviously, most of the oil flows through.
• 7:56
  Speaker 1: So what does that mean?
• 7:58
  Speaker 1: What does that actually mean?
• 8:00
  Speaker 1: Well, as I said, red Sea traffic has halved and South Africa traffic has gone up.
• 8:10
  Speaker 1: Good news for container shippers.
• 8:12
  Speaker 1: Good news for shipping owners, because they can charge more now for the same journey.
• 8:18
  Speaker 1: Well, a longer journey is good for them.
• 8:20
  Speaker 1: Higher utilization Not so good for everybody else, though and shipping rates.
• 8:26
  Speaker 1: This is from China to Rotterdam, which is the key route, rotterdam being the biggest port in Europe.
• 8:32
  Speaker 1: That's how we used to ship a lot from the other direction.
• 8:36
  Speaker 1: Usually it's gone up from $1,500 to a whopping $5,000.
• 8:43
  Speaker 1: And I don't need to tell you, but that's more than three times.
• 8:47
  Speaker 1: Even I from a banker can do that kind of math.
• 8:51
  Speaker 1: See, without a spreadsheet, have we been higher?
• 8:54
  Speaker 1: Yeah, ok, covid was mad, really mad.
• 8:57
  Speaker 1: I paid container freight during those times too, and I was like I'm sorry, that used to be $1,000.
• 9:03
  Speaker 1: You want 10?
• 9:03
  Speaker 1: And they're like, yes, come and see me on my yacht.
• 9:07
  Speaker 1: That's what they were actually saying.
• 9:09
  Speaker 1: And typically these kind of spikes lead to oil price spikes.
• 9:15
  Speaker 1: So when we had the beginning of the war in Ukraine, we got an oil price spike.
• 9:22
  Speaker 1: Iraq-us War 2003, the Iraq Kuwait invasion, the Iranian Revolution, the oil embargo of 1973, and so on.
• 9:31
  Speaker 1: You typically get these spikes.
• 9:32
  Speaker 1: We haven't had a spike yet, which is kind of weird, partly partially, rather because some people are wondering whether there is going to be a recession in Europe.
• 9:48
  Speaker 1: Germany certainly looks that way.
• 9:50
  Speaker 1: Some of the southern countries are bailing out Germany for once, and therefore there'd be less demand, possibly.
• 9:56
  Speaker 1: And also OPEC has been pumping out a little bit more oil than some people were expecting, so that's kind of been helping, but for how long, I wonder.
• 10:05
  Speaker 1: So yeah, if OPEC was, members were actually to comply with their agreements and that's the wonderful thing with something like OPEC, everybody cheats, right, everybody knows everybody cheats and therefore everybody else cheats as well.
• 10:22
  Speaker 1: So these agreements are never really that agreed to.
• 10:27
  Speaker 1: But since we've had Red Sea Shipments stopped, we've only gone up about $3 per barrel, which is not very much.
• 10:37
  Speaker 1: I would expect that to go much, much higher, but we'll see.
• 10:40
  Speaker 1: That'll be obviously an inflationary story.
• 10:42
  Speaker 1: Now, what's the most important story of the day that no one's going to be talking about?
• 10:46
  Speaker 1: Banks?
• 10:47
  Speaker 1: Sexy, I know.
• 10:49
  Speaker 1: Nycb, the New York Community Bank Corp, dropped 38% yesterday.
• 10:57
  Speaker 1: What really meant to happen to a banking stock right, and why is that?
• 11:01
  Speaker 1: Well, let me show you.
• 11:06
  Speaker 1: Here's a Bloomberg headline 560 billion real estate warning hits banks.
• 11:11
  Speaker 1: I've been telling you this for what a year.
• 11:12
  Speaker 1: Deutsche Bank warns of potential losses on US property.
• 11:16
  Speaker 1: A Japanese bank called Aozora lost 20% of its value today because they realized they had bigger losses in US mortgage lending than they thought.
• 11:29
  Speaker 1: But the New York Community Bank here slashed its dividends and its stockpiling reserves because they know they're not going to get their money back.
• 11:39
  Speaker 1: So they've been lending to finance mostly commercial property commercial buildings and usually at the end of a loan, the person who owned the building is going to pay back the loan.
• 11:50
  Speaker 1: Yeah, that's not happening.
• 11:51
  Speaker 1: That's not happening, and there might be about a trillion dollars there that's missing.
• 11:57
  Speaker 1: And how does that happen?
• 11:58
  Speaker 1: Well, the buildings are not worth that much.
• 12:00
  Speaker 1: So what does the owner do?
• 12:01
  Speaker 1: They'll just go.
• 12:02
  Speaker 1: I'm walking away.
• 12:03
  Speaker 1: You have it.
• 12:04
  Speaker 1: We haven't seen a tenant in here in two years, and good luck finding one.
• 12:09
  Speaker 1: That's basically what's going on in commercial real estate offices.
• 12:13
  Speaker 1: Shops and malls are not doing that much better, because who the hell wants to go to a shop when you can get stuff on Amazon?
• 12:20
  Speaker 1: So this is just the beginning of that story, and I think it's something to be aware of Now.
• 12:26
  Speaker 1: Is it going to make JPMorgan bankrupt?
• 12:28
  Speaker 1: No, regional banks, yeah.
• 12:31
  Speaker 1: So what does it mean Exactly?
• 12:35
  Speaker 1: Bailout coming soon, the 11th of March, the existing bailout runs out and they're going to come up with another bailout and They'll then also start to stop shredding money.
• 12:51
  Speaker 1: It's a complicated sentence, I know, and that will be the beginning of more stimulus down the road.
• 12:58
  Speaker 1: Rate cuts, less money shredding until they stop money shredding and then we're back in hand out land.
• 13:04
  Speaker 1: I think that's what we're going to get back to.
• 13:06
  Speaker 1: So what does it mean for you and me?
• 13:07
  Speaker 1: Buy stocks hand over fist.
• 13:09
  Speaker 1: I think that's already the smart thing to do.
• 13:11
  Speaker 1: Obviously, go for quality, don't just buy any old junk.
• 13:14
  Speaker 1: But yeah, I think the risk has been largely taken away from us.
• 13:18
  Speaker 1: It doesn't mean you don't get days like yesterday, but in the longer term, if you want to learn how we make money out of this properly, come and join me on Tuesday.
• 13:26
  Speaker 1: We love a bit of volatility, us traders.
• 13:28
  Speaker 1: It's a good thing.
• 13:29
  Speaker 1: Actually, I really enjoy it.
• 13:30
  Speaker 1: That's also why I'm doing some trading today.
• 13:31
  Speaker 1: So come and join me on Tuesday.
• 13:33
  Speaker 1: We'll trade one stock, three rules, 75% wind ratio.
• 13:37
  Speaker 1: There's a super simple sign up form here.
• 13:38
  Speaker 1: You just select.
• 13:39
  Speaker 1: There's only one date to select.
• 13:41
  Speaker 1: It shows it in your time zone.
• 13:42
  Speaker 1: I don't know why my contrast is like that.
• 13:44
  Speaker 1: I think it's a Firefox thing.
• 13:45
  Speaker 1: And come and join me and you can see all the trades I make, also inside the community.
• 13:53
  Speaker 1: We did, we've done, all right.
• 13:54
  Speaker 1: Last year we did 105% return on capital.
• 13:58
  Speaker 1: The year before 126% in Jan.
• 14:00
  Speaker 1: So far up 12%.
• 14:01
  Speaker 1: This is a really small portfolio.
• 14:03
  Speaker 1: I run for the community life as a sort of sign of transparency.
• 14:09
  Speaker 1: I think that's really it.
• 14:10
  Speaker 1: Maybe a little bit of learning, but I think it's mostly sort of transparency to show people what we can actually achieve, obviously not promising you the results, that would be illegal.
• 14:18
  Speaker 1: We don't do that.
• 14:19
  Speaker 1: But there is more.
• 14:20
  Speaker 1: There is the Elon, there is the Elon and Elon has got a problem.
• 14:24
  Speaker 1: What's Elon's problem?
• 14:25
  Speaker 1: Well, in a nutshell, some lefty judge said the following deal is unfair.
• 14:32
  Speaker 1: Do you agree with Elon?
• 14:35
  Speaker 1: I think she probably does.
• 14:36
  Speaker 1: Okay, let me explain to you the deal.
• 14:39
  Speaker 1: When Elon, when Tesla was worth $50 billion, elon said to the board if you give me a $50 billion bonus, if, and only if, I 10x this company, that sounds like a fair deal.
• 14:54
  Speaker 1: And the board said so, hang on, you 10x, the company shareholders get 9x of that and you get 1x.
• 15:02
  Speaker 1: Yeah, sounds like a good deal, right?
• 15:05
  Speaker 1: If anybody wants to take my portfolio and 10x it, I will give you one of those 10xs, very, very happily.
• 15:12
  Speaker 1: It sounds like a very fair deal, but apparently not.
• 15:16
  Speaker 1: So she said it wasn't fair and there was.
• 15:20
  Speaker 1: You know the board wasn't truly independent and that kind of thing.
• 15:24
  Speaker 1: So Elon is apparently going to move Tesla to Texas.
• 15:30
  Speaker 1: I'm not sure that helps with this particular problem, but yeah, it's an interesting one.
• 15:34
  Speaker 1: So Delaware used to be where everybody sets up companies seems to judge us not so friendly around there.
• 15:41
  Speaker 1: We've also just had in jobless claims which are just a teeny weeny bit higher than expected.
• 15:47
  Speaker 1: That's good why it means the economy's slowing Well, even after the US government manipulated numbers so significantly and therefore rate cuts are more likely.
• 16:01
  Speaker 1: Job cuts came in at 82,000 people got laid off should be celebrated.
• 16:06
  Speaker 1: It's a bit immoral, isn't it really?
• 16:08
  Speaker 1: But yes, investors like it, because we were only expecting 34,000 or 36,000 layoffs and that's.
• 16:17
  Speaker 1: Oh my God.
• 16:18
  Speaker 1: People are sucking people about.
• 16:19
  Speaker 1: Paypal is everybody is right.
• 16:22
  Speaker 1: They're just laying off people and in continuing jobless claims actually creeping towards the 1.9 million.
• 16:29
  Speaker 1: You believe that number.
• 16:30
  Speaker 1: You believe pretty much anything.
• 16:31
  Speaker 1: Yes, santa is real and he identifies as a reindeer.
• 16:36
  Speaker 1: So that number in reality is probably double or triple that, but that's a whole different story we don't need to get into.
• 16:44
  Speaker 1: They're also getting out today manufacturing data.
• 16:46
  Speaker 1: If that comes in a little bit worse than expected, that would be a nice touch.
• 16:50
  Speaker 1: And then tomorrow we're getting non-farm payroll.
• 16:56
  Speaker 1: Bring on the drumroll.
• 16:57
  Speaker 1: That's really the real excitement for us investors, isn't it?
• 17:00
  Speaker 1: And the unemployment data.
• 17:02
  Speaker 1: So again, we're hoping for a higher number here.
• 17:06
  Speaker 1: Sorry for lower number here, because that's actually jobs created.
• 17:09
  Speaker 1: Now, the US government in its continuous idiocy, has been hiring people right, left and center, but 25% of all jobs created in the last year have been government jobs and the private sector jobs have been mostly at McDonald's.
• 17:25
  Speaker 1: But it looks good on the headline numbers and maybe you can get reelected on that front.
• 17:30
  Speaker 1: So that's something to look out for today.
• 17:31
  Speaker 1: But because of that, because of those job status coming in a little bit better this was yesterday, don't panic.
• 17:38
  Speaker 1: Deep breath, deep breath.
• 17:40
  Speaker 1: And this is pre-market and it looks a little bit better, doesn't it?
• 17:44
  Speaker 1: It's a little bit of a 1% sort of cautious rebound.
• 17:48
  Speaker 1: The dip buyers are nibbling, basically, except for Wells Fargo.
• 17:53
  Speaker 1: Well, quite sure why at Wells Fargo?
• 17:55
  Speaker 1: But yeah, that's what it's all about.
• 17:58
  Speaker 1: I'll be live for you guys in the community in 12 minutes.
• 18:01
  Speaker 1: We're going to do some live trading together, which will be fun at the beginning of the market.
• 18:06
  Speaker 1: So come and join me over there if you are already in the program.
• 18:09
  Speaker 1: If you are not, well, you could do something about it if you really wanted to.
• 18:13
  Speaker 1: Why do you do that?
• 18:14
  Speaker 1: Hang on there we go, felixrenzorg, slash coaching.
• 18:17
  Speaker 1: We offer coaching with me and a bunch of investment bankers who think that you deserve financial education.
• 18:27
  Speaker 1: The government doesn't seem to think so, but we seem to think so.
• 18:31
  Speaker 1: So, felixrenzorg, slash coaching.
• 18:32
  Speaker 1: If you want to check that out, do Now.
• 18:35
  Speaker 1: Should we look at what's happening pre-market in the good old news stock set to rebound before tech earnings?
• 18:41
  Speaker 1: Oh, yes, there is a small thing happening today.
• 18:43
  Speaker 1: Apple, amazon and Meta are reporting at the same day after the market today, so you can rest well during the day or just chew your fingernails all day long and see what's going to happen.
• 18:55
  Speaker 1: That's really the big one.
• 18:57
  Speaker 1: Those three, if they come in better than expected, bring out the fireworks.
• 19:02
  Speaker 1: If they don't, buy a put.