Latest / Felix Nikolas Prehn's Podcast / Hawkish FED Just Spoiled Inflation Rally + Stock Market News 13 June 2024

Transcript

Hawkish FED Just Spoiled Inflation Rally + Stock Market News 13 June 2024 · Felix Nikolas Prehn's Podcast

• 0:01
  Speaker 1: We appear to be live.
• 0:01
  Speaker 1: Thank you for tuning in.
• 0:04
  Speaker 1: The thing to understand today is just exactly how the Fed screwed up the rally yesterday, why we're going up today and, of course, how Tesla wraps up 7%.
• 0:18
  Speaker 1: And once you understand all of that, you're allowed to go away and make money today.
• 0:22
  Speaker 1: It's just really our ambition here, isn't it?
• 0:24
  Speaker 1: So let this old banker walk you through a little bit of the structure, the economics and so on, and then we go and look at some individual stocks.
• 0:30
  Speaker 1: Ask me all your questions in the live chat and I will do my utmost to answer them to the best of my ability.
• 0:36
  Speaker 1: And let's get going, shall we there?
• 0:42
  Speaker 1: We go, if you haven't already gotten yourself a free one-month trial to tradevisionio links down below, and there's also another link which is updated S&P 500 benchmarks full data of the top 500 stocks in the US, and we do that once a quarter after earnings.
• 1:01
  Speaker 1: So get your paws on it and you will be will be better informed than 99% of people out there, which is really where our edge lies.
• 1:09
  Speaker 1: Now, this here is the dot plot, which is particularly it's a weird way of displaying it.
• 1:17
  Speaker 1: I always thought but what have we got here?
• 1:19
  Speaker 1: You've got the March meeting here.
• 1:25
  Speaker 1: I just wanted to make sure that was right.
• 1:27
  Speaker 1: So in March we had 10 people, so this is basically zero cuts, this is one cut, this is two cuts and this is three cuts.
• 1:40
  Speaker 1: You get the idea.
• 1:41
  Speaker 1: So in March we had 10 people who said there'd be three cuts this year.
• 1:47
  Speaker 1: Today we not only have four people who are saying zero cuts, we have basically people hanging here on average at just the one, and markets were looking at that and went that's horrible.
• 2:01
  Speaker 1: Why would you do that after the inflation data we just had here and we thought everything was fantastic to the moon, right.
• 2:07
  Speaker 1: So why have they done that?
• 2:09
  Speaker 1: Well, let's walk through a little bit more data points.
• 2:13
  Speaker 1: This is how the market reacted to it.
• 2:15
  Speaker 1: So the green area here was the inflation coming out yesterday, cpi inflation and the market as we were were live, was just absolutely mooning.
• 2:26
  Speaker 1: And then, well, the Fed happens and it hangs us back down.
• 2:33
  Speaker 1: Now it was still a green day because the morning was so bloody glorious, but if you look at the Dow futures down here, for example, that was a bit of a misery right yesterday, so they actually closed in the red.
• 2:44
  Speaker 1: Today the picture is looking a little bit more mixed, with NVIDIA and Apple leading us and Tesla, but the rest is still red.
• 2:51
  Speaker 1: They're still reeling from the pummeling that the Fed dished out yesterday.
• 2:56
  Speaker 1: But there were a few sentences that Jerome the benevolent Powell said yesterday.
• 3:03
  Speaker 1: The benevolent Powell said yesterday, and that is we are practicing a slight element of conservatism on our inflation outlook.
• 3:10
  Speaker 1: So he's basically saying we think it's better than it looks, but we're not going to admit it because we want to be tough.
• 3:19
  Speaker 1: Right, and that's a positive for us, right.
• 3:22
  Speaker 1: The fact that he's telling us that is kind of undermining his case, but I guess most people don't listen.
• 3:27
  Speaker 1: And then he also says we welcome today's inflation reading.
• 3:31
  Speaker 1: Hoping for more, I mean hope, is not exactly much of a strategy around financial markets, but again he says we welcome the inflation reading.
• 3:40
  Speaker 1: So I think he's actually a little bit more optimistic than he wants to let on.
• 3:44
  Speaker 1: And I don't believe the dot plot.
• 3:47
  Speaker 1: I really don't.
• 3:48
  Speaker 1: I think they're going to cut sooner, but we have some more data out Just literally came out 25 minutes ago.
• 4:02
  Speaker 1: And is it about haircuts, haircuts you think I should get a haircut?
• 4:04
  Speaker 1: I probably should get a haircut right.
• 4:06
  Speaker 1: The more humid it gets and it's about 99% humidity here, the larger.
• 4:10
  Speaker 1: The follicles up there seem to want to be Good old Powell, always lying, yes, and he's very good at that, isn't he?
• 4:17
  Speaker 1: Well, he does come from Wall Street.
• 4:19
  Speaker 1: So the producer price index is it good?
• 4:23
  Speaker 1: Is it bad?
• 4:23
  Speaker 1: Well, it's negative, minus 0.2%.
• 4:30
  Speaker 1: It was 0.5 last month.
• 4:31
  Speaker 1: We were expecting it to be 0.1 to 0.2.
• 4:33
  Speaker 1: So this is a cause for another.
• 4:34
  Speaker 1: You know, drawing with bunny ears.
• 4:37
  Speaker 1: That's how happy we are about that slightly creepy bunny right.
• 4:40
  Speaker 1: But anyway, we're happy about that.
• 4:42
  Speaker 1: Core PPI 0% Again, better than expected.
• 4:46
  Speaker 1: So again, that's wonderful.
• 4:48
  Speaker 1: Initial jobless claims Well, we were hoping 225,000 people would lose their jobs.
• 4:55
  Speaker 1: 242,000 people lost their jobs, and it's weird to draw a smiley for that.
• 4:59
  Speaker 1: I get it and I won't.
• 5:01
  Speaker 1: But the Fed is going to like it right.
• 5:03
  Speaker 1: They love it when people lose their jobs.
• 5:05
  Speaker 1: Even the continuing jobless claims are ticking up ever so slightly, by about 30,000 from last month.
• 5:11
  Speaker 1: That is also good news.
• 5:12
  Speaker 1: Why the Fed has a dual mandate Full employment, full employment, low inflation.
• 5:19
  Speaker 1: How do you achieve low inflation?
• 5:21
  Speaker 1: By creating more unemployment.
• 5:24
  Speaker 1: That's the rule.
• 5:25
  Speaker 1: That's basically what they do.
• 5:26
  Speaker 1: Core PPI is pretty flat.
• 5:29
  Speaker 1: Not really much going on there, so it doesn't really matter.
• 5:32
  Speaker 1: But overall, this is actually good news.
• 5:36
  Speaker 1: This is actually very good news and the market should rejoice and break out in song over it, and the Fed should do too, and I suspect the Fed probably is Now.
• 5:46
  Speaker 1: If you want to know what's actually going up and down every day, we scan about 2,000 stocks every day and look for breakouts, real significant trend changes, and we then email you about those every single day and you can get your pause on that for free for like a whole month.
• 6:01
  Speaker 1: Just go to tradevisionio and sign up for it and you can get your pause on that for free for like a whole month.
• 6:03
  Speaker 1: Just go to tradevisionio and sign up for it and you will get access to these daily.
• 6:07
  Speaker 1: Very shortly.
• 6:08
  Speaker 1: They're going to be coming out twice a day.
• 6:10
  Speaker 1: We're going to do a midday scan as well and they'll be on a screener and everything else and that'll all be eventually a premium feature.
• 6:21
  Speaker 1: That'll be on top of the premium plan we have.
• 6:24
  Speaker 1: But if you sign up for it right now, you're going to keep your low.
• 6:28
  Speaker 1: What is it?
• 6:29
  Speaker 1: $16 a month or something.
• 6:30
  Speaker 1: $19 a month that low subscription fee.
• 6:34
  Speaker 1: Why?
• 6:34
  Speaker 1: Because we don't really raise prices for people who've been with us.
• 6:37
  Speaker 1: We think it's nice that you supported us early on and so on, if you want to get your hands on and up completely for free, risk-free, and maybe stick around, in which case you get the benefit head over to tradevisionio.
• 6:50
  Speaker 1: And what's the other big story of the day?
• 6:52
  Speaker 1: Well, of course it is Elon the glorious, and it looks like that his pay package $56 billion you know sort of average pay package on a Thursday went through, plus, tesla is now a Texas company, so the lefty lot in Delaware can no longer mess with them.
• 7:14
  Speaker 1: And the pay package isn't so much about Elon getting $56 billion although I know very few people who say no to $56 billion but it takes his voting shares from something like 13% up to closer to 20 something I'm not quite sure what the percentage is, but something like that which gets him close to the 25% that he wants to be at, which means he kind of sort of controls the business stuff.
• 7:40
  Speaker 1: Right?
• 7:40
  Speaker 1: Is Trade Vision replacing OptionsWatch?
• 7:44
  Speaker 1: Yes, that's the big rebrand that's happening this week, doesn't it?
• 7:57
  Speaker 1: My feeling is the curly kind of hair that doesn't comb up.
• 8:00
  Speaker 1: The more you comb it, the bigger it gets.
• 8:01
  Speaker 1: It gets annoyed when you comb it.
• 8:03
  Speaker 1: So, yeah, that's where we are.
• 8:06
  Speaker 1: And if you look at what Wall Street was doing.
• 8:09
  Speaker 1: So these are the dark pool trades on Tesla from yesterday.
• 8:13
  Speaker 1: And you can see this again in Options Watch or Trade Vision.
• 8:18
  Speaker 1: Both gets you to the same place.
• 8:19
  Speaker 1: I put the link.
• 8:20
  Speaker 1: It's in the description also the link, but I'll put it in the chat here for you.
• 8:24
  Speaker 1: And what can you see?
• 8:26
  Speaker 1: You see they're all bearish.
• 8:28
  Speaker 1: This is yesterday, right, they're all bearish.
• 8:29
  Speaker 1: Look how many of they are.
• 8:30
  Speaker 1: All bearish, right, and these are pretty significant trades, because these are options trades, like I mean $4 million, right, and they're all selling or buying insurance.
• 8:39
  Speaker 1: They're pretty much all bearish, like literally all of yesterday.
• 8:41
  Speaker 1: 90% are bearish.
• 8:43
  Speaker 1: Do you think they're kicking themselves today?
• 8:45
  Speaker 1: You think they just might.
• 8:47
  Speaker 1: How did they get it so wrong?
• 8:48
  Speaker 1: I don't really understand.
• 8:51
  Speaker 1: 6.7% up today.
• 8:53
  Speaker 1: It's trading up here above that sort of sideways range.
• 8:59
  Speaker 1: And why is that important?
• 9:00
  Speaker 1: Well, how does the market work?
• 9:03
  Speaker 1: If I can pick a color, you get a downtrend, right.
• 9:07
  Speaker 1: What happens after a downtrend?
• 9:08
  Speaker 1: You get consolidation.
• 9:10
  Speaker 1: What happens after consolidation?
• 9:11
  Speaker 1: You get an upward trend.
• 9:13
  Speaker 1: And then what do you get?
• 9:14
  Speaker 1: You get consolidation and you go back down.
• 9:16
  Speaker 1: That's just the four rules of the market.
• 9:19
  Speaker 1: Happens every single freaking time and we've been in consolidation for a little while Seems like we're breaking out.
• 9:31
  Speaker 1: Where is the resistance?
• 9:32
  Speaker 1: Again, ask your friend OptionsWatch or Trade Vision, as I should now be saying.
• 9:34
  Speaker 1: But we'll get there.
• 9:35
  Speaker 1: It'll start redirecting you soon, in the next couple of days.
• 9:39
  Speaker 1: Let me just hide my mug for a moment so you can actually see the chart.
• 9:44
  Speaker 1: Where is it?
• 9:45
  Speaker 1: Where am I?
• 9:46
  Speaker 1: There we go.
• 9:48
  Speaker 1: So if you go to Visualizer type in Tesla, then load, load, load, load, load.
• 9:58
  Speaker 1: Then what do you see?
• 10:02
  Speaker 1: A great, big, beautiful, shining green candle indicating that a load of you have call options at 200 expiring today 43,000 of them and that you will all be very, very happy bunnies today because you don't need to get to 200 to make profit on a call option.
• 10:22
  Speaker 1: So that's good news for you.
• 10:23
  Speaker 1: But it also means that's the resistance to today, right.
• 10:26
  Speaker 1: So now that will go away today because it will expire.
• 10:29
  Speaker 1: So you then look for next week and you look at what happened to my data.
• 10:35
  Speaker 1: There it is loading and what do you see?
• 10:38
  Speaker 1: There's still a lot of 200, 66,000 call options.
• 10:41
  Speaker 1: So what does that mean?
• 10:42
  Speaker 1: It does act as resistance.
• 10:44
  Speaker 1: So 200 is going to be a relatively tough nut to crack, though I personally think it's very likely Tesla will crack that.
• 10:55
  Speaker 1: Maybe not today, but I think next week it's quite likely.
• 10:58
  Speaker 1: Now, the Europeans, the bloody unelected I was going to say Nazis there, but that would have been offensive, right, so I took that back.
• 11:07
  Speaker 1: You see how I saved myself, although, as Germans, surely we're allowed to say Nazis, aren't we?
• 11:11
  Speaker 1: Anyway, the unelected officials in Brussels, the European headquarter, have slapped tariffs on Chinese cars, evs specifically.
• 11:21
  Speaker 1: Now, you might not think that Tesla is a Chinese car company.
• 11:25
  Speaker 1: Well, it sort of is.
• 11:27
  Speaker 1: Everything they sell in Europe is made in China, with the exception of a few vehicles built in Berlin, but mostly it comes from China.
• 11:34
  Speaker 1: So Tesla has asked for a lower special tariff on their vehicles and they might well get that, but still it'll be a margin compression, I fear, on the European sales.
• 11:47
  Speaker 1: So that would not be good Tomorrow.
• 11:50
  Speaker 1: Oh, fonsalber, you're quite right, today is Thursday, thank you very much.
• 11:53
  Speaker 1: So that's the problem when you don't have a job and that kind of thing, you never really know what day of the week it is.
• 11:58
  Speaker 1: But tomorrow is Friday because I'm getting on a plane tomorrow.
• 12:01
  Speaker 1: So an alarm is set.
• 12:06
  Speaker 1: So even I would remember that and that's a big story, and I think it's.
• 12:08
  Speaker 1: I'll put out a whole video on explaining that a little bit later.
• 12:11
  Speaker 1: I think it's worth to really understand what the heck happened there with Musk and so on.
• 12:15
  Speaker 1: We also have a couple of other bits of news.
• 12:16
  Speaker 1: Avgo, 14% up, after the chip supplier, recorded second quarter results that beat expectations and gave a positive forecast.
• 12:24
  Speaker 1: If you look at that, you look at the Oracle earnings and so on, the AI party seems very, very much alive and well in kicking.
• 12:30
  Speaker 1: So I'd say, enjoy it while you can and also download the S&P 500 benchmark down below If you want to really see including the earnings results of all these guys how things have changed, how the numbers changed, how have the margins changed?
• 12:47
  Speaker 1: Let me see if I can open that up here.
• 12:49
  Speaker 1: I think I probably can.
• 12:53
  Speaker 1: Yeah, that's it here.
• 12:54
  Speaker 1: It is updated in all its glory so you can see gross margins.
• 12:57
  Speaker 1: You can also sort by this stuff.
• 12:59
  Speaker 1: Actually, I'll I'll set that up for you so you can more easily do that.
• 13:03
  Speaker 1: Some of you are already in there.
• 13:06
  Speaker 1: I'd love to see it.
• 13:06
  Speaker 1: So now you can talk about it.
• 13:08
  Speaker 1: But yeah, a couple of things that I particularly look at is long-term earnings growth.
• 13:13
  Speaker 1: I think that's really important, I think PE versus forward PE, as in like is it getting cheaper is important, and gross margins are very important, return on invested capital super important.
• 13:29
  Speaker 1: So those are the kind of things I would filter by, sort by, and then you can see exactly what everybody's doing and are they getting better or worse, and check that every quarter, and you'll be far better informed than 99% of people out there.
• 13:39
  Speaker 1: You can get this second link down below in the description felixfrontsorg slash SP500.
• 13:45
  Speaker 1: So go and download that.
• 13:57
  Speaker 1: I should shake my head Really.
• 13:59
  Speaker 1: Bravo.
• 14:00
  Speaker 1: Can you use Trade Vision to purchase stock you want to keep for the long run?
• 14:03
  Speaker 1: No, no, no, we're not a broker.
• 14:05
  Speaker 1: Uh, we're very unlikely to ever become one.
• 14:07
  Speaker 1: We have actually thought about it, but I don't think that's really the pain point.
• 14:10
  Speaker 1: I think we can just connect to all the brokers and eventually allow you to execute trades directly from options watch.
• 14:16
  Speaker 1: That's, that's part of the plan, but give us a little bit of time for that.
• 14:19
  Speaker 1: What do you prefer?
• 14:21
  Speaker 1: Consider bullish, the 50-day EMA golden cross going over the 200 or the 50-day EMA going above the 200 SMA?
• 14:28
  Speaker 1: Honestly, the difference between EMA and SMA is so bloody slight.
• 14:32
  Speaker 1: Don't worry about it.
• 14:34
  Speaker 1: Really, this is not going to make any difference whatsoever to your investing or trading results.
• 14:39
  Speaker 1: Pick one, stick with it, forget the other one.