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It’s been an exciting couple of weeks for the sports world. I start today’s show with a quick recap of the most thrilling moments from the NHL and NBA playoffs.
The market headlines are currently dominated by several risks—including the debt ceiling crisis… the Fed’s plan for interest rates… and stubbornly high inflation. Yet, for some reason, the TV pundits are calling for the next bull market.
I explain the truth about the debt ceiling negotiations… and how to use the resulting market volatility to your advantage.
Next, I break down the massive disconnect between what the Fed is saying about interest rates and what the market is betting on. It’s why I keep pounding the table about the tough spot the Fed is in… and why its only course of action is a problem for the stock market.
Finally, I share some data on why the current market risks aren’t going away anytime soon.
Bottom line: You’d be crazy to anticipate a bull market right now. More declines are coming… Luckily, there’s a simple way to profit from them.
Don’t miss tomorrow’s episode of WSU Premium. Daniel and I will cover the biggest headlines moving the markets… and share our latest Dollar Stock Club pick. Here’s how to join us.
- A recap of the NHL and NBA playoffs [0:30]
- How to play the debt ceiling drama [3:25]
- The Fed’s only course of action to fight inflation [11:00]
- You’d be crazy to bet on a bull market right now [16:40]
- The best way to profit from market declines [26:35]
- How to start your fine art collection [28:10]
- Don’t miss tomorrow’s WSU Premium [32:05]
Wall Street Unplugged | 1040
How to profit from the debt ceiling drama
This transcript was automatically generated.
Announcer:Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.
Frank Curzio: How’s it going out there?
It’s May 24th. I’m Frank Curzio. This is the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets.
There’s a lot going on in the past week or two I should say, including the NBA and NHL playoffs, which were awesome.
Up to the conference championships.
I think I have to look this up cuz maybe the first time in history.
I dunno if you guys have been watching, I’m a big sports fan.
They’re the two conference files in the N B A and N H L, which are supposed to be super competitive, right? These are four best teams.
They play each other to get into the championships, right? All of those series started out three, oh those best seven series.
The Lakers got swept by Denver Mamy Heat was up three.
Oh, but the Celtics actually played really well last night.
One Florida Panthers in hockey, they’re an eight seat.
Great, great stories.
It’s huge here in Florida.
We’re up three oh over the Panthers, uh, uh, over the, the Carolina Hurricanes.
And then you have Vegas Golden Knights Up three oh over the Dallas Stars.
What’s going on? Did it ever happen before? Ever? Pretty crazy, but oh yeah, this is a financial podcast.
There’s a lot going on and that world as well.
So there’s several big stories going on.
The first one is the debt sailing debate.
When the markets fell sharply, sharply, sharply.
Yesterday, I think Nasdaq felt like 1.
I was saying sharply.
That’s its biggest decline in over a month.
Isn’t that crazy when you think about it? I mean, NASDAQ 100 is up incredibly in doing it very, very well.
I think it’s accounting for about 75% of all gains in s and p 500.
But hey, now market’s selling off course of the debt ceiling debate.
Are we gonna come to terms or not? That’s the first point.
The next one is the Fed come out with minutes in a little while I’m taping this, but you had the presidents come out and a lot of these presidents, Fed presidents are, I don’t know why they do this for, because they’re all allowed to speak at certain events and some of ’em just, you know, contradict each other.
Like you’re all in a room.
If you really, if the Fed ‘s about providing transparency, then shut these guys up.
I mean, they’re all over the place and they’re like, no, we don’t need to raise rates, we gotta raise rates.
It’s just, they’re just all over the place.
But I have to tell you, they’ve been pretty consistent in their speeches here and there at different events and they all believe that we’re not done raising rates and saying, you know, we may pause, but doesn’t mean this is the end of the cycle, which the market’s not anticipating that.
The last thing is, and this happened the past few days, early in the week, Monday, Tuesday, we had the markets break through key technical levels and then we had some pundits on the major financial media networks declaring that this is a new bull market.
That’s one of the, is this a new bull market? A lot of the bulls coming out.
This is a new bull market.
So let’s break these down one by one.
First one’s a debt ceiling.
Don’t worry about it’s a non-issue.
We’ll get the deal done.
Okay, so if we don’t get a deal done by June 1st, again, if you wanna trade the opportunity, if we don’t get a deal done and right now, again, they’re saying that a deal’s likely to get done.
They met on Monday.
You saw both of ’em together with with Biden McCarthy.
But as of right now, they haven’t seen each other since then.
Okay, we’re, we’re coming close to the date, right At 5 24, if they don’t get a deal done, the market’s gonna start to crash.
And then our wonderful politicians are gonna immediately get together and say, okay, we need to sign a deal just like they do with tarp when they play tough.
Uh, the drama of this event makes sense since we’re no longer in earning season, there’s not a lot going on in terms of stories in the financial media and these financial media channels.
Remember they have to have stories for, you know, So you’re watching the TV so they could pay for advertising.
Not saying that dead ceiling’s not a big story, but it’s gonna get done.
Okay? It’s, it’s gonna get done.
You’re not gonna be like three years from now, s**t.
We shouldn’t have sold that.
The whole, it’s something you gotta see, you know, blood in the streets, the US completely fail and everything’s horrible and you know, just the fear of the government shutdown kinda makes me laugh.
Since social security’s gonna get paid, Medicare, Medicaid gets paid it, it’s gonna continue to get funded.
Uh, it’s not a toll shutdown.
You know, it again, it’s not like everybody’s gonna lose their job in the Fed eral government and rights in the street and they all quit and, and the United States is over as we know it, right? As a country.
No, that’s not, again, that’s what they want you to believe, but it’s not right.
You’re gonna see some of these employees not getting paid and then if the deal takes another two weeks or a week to deal, then they all, you know, give ’em back pay and stuff like that.
No one’s gonna get fired or nothing like that.
Again, it’s, you wanna get it done.
It’s so big and, and it’s crazy.
You don’t want to, we’re getting to levels where we’ve always been through this numerous times over the past 10 years and a couple times we did shut down, but now it’s getting more serious cuz when you have the level of debt that we have at 31, 30 2 trillion when we’re paying a trillion just in interest, cuz we didn’t anticipate two years ago, even a year ago that interest rates were gonna rise by 1900%.
Okay? Now if you’re looking at the interest and it’s dead, it’s over a trillion dollars, which is bigger than social security, which is bigger than defense spending, right? Stuff that I covered.
This is serious.
Now you gotta stop f*****g spending these politicians.
It’s getting big, stupid.
I mean seriously, come on.
You gotta curve spending.
You can’t just hand 5 trillion to these guys to Congress and expect them to, to do good.
There’s no consequences.
They’re all gonna pair their own pockets.
That’s what they do.
They’re gonna do everything in their best interest even though they’re supposed to represent us.
They don’t do that.
We all know that.
They don’t care about that.
Okay? They can’t run a business.
There’s no accountability.
No one’s gonna get fired.
I mean, again, I always say post office is a good example of something that’s failing and loses what, five, 6 billion a year.
Yet companies like UPS and and FedEx could, you know, printing money could not as much money now with the economy a little bit weaker because there is accountability.
You gotta lay off employees, you gotta make numbers.
You don’t have to make numbers when you’re the government.
You can just keep spending and spending and spending.
That’s why we spent 5 trillion over the past 20 years on ways to find alternative energy and solar and whatever.
And what did it do? What is it? I think it’s 85% as fossil fuels and over those 20 years and 5 trillion, what has it done? It’s now at 83% in terms of, of how much oil that we’re using.
Pay it to those alternative energies.
Okay? If you’re a business, that would never ever happen.
But the government, they can continue to spend, they’re gonna spend another 5 trillion on climate change.
Don’t wanna go too much down that rabbit hole.
I’m gonna p**s off a lot of people, but there will be a deal just like what we saw, remember in with tariffs in 2018 toward the end of 2018.
And I looked in Google and uh, you know, we wrote a really good paper about this saying you have to throw off the words it was a free thing that that I gave out.
I said, stop worrying about this is all b******t and there’s so many 150 million stories when you look at Google.
So many stories are written about it, about China.
Us no longer being trade partners gonna threaten trade.
And China was talking this big game in the US I mean China has to talk a big game.
They can’t say, okay, us whatever you want, but basically, you know, we had them by the bulls and we had the largest economy in the world, you know, we’re the largest trading partner.
Their economy would be absolutely destroyed, absolutely destroyed.
I mean they can’t go out and, and, and sell all their treasuries or anything that they can’t, right? So, so yeah, we can buy goods from any country cost more, right? I mean rare earth Metals, yeah that’s something, right? So whatever, but you know, when, when you look at the pieces, China has no choice and we’re the largest consumer in the world.
You wanna be the largest consumer in the world, right? Because you could buy those products anyway and we will pay more money outside of China and that’s fine and labor and stuff like that.
But it was really a non-issue.
But not to the markets cuz the stock stocks felt 20% in a four month period.
And we used that as a huge buying opportunity.
He said, guys, buy, buy, buy.
This is gonna not be a non, is that an issue today? Was that an issue in 2020? Not really.
I mean COVID was a big issue.
We used it as a buying opportunity in our newsletter.
Recommended new stock did well.
But again, when, when you were listening to that and it’s constantly pushed down your throat and everything that you see and every major p paper, everything, all, you know, the normal shows that you watch in the morning to have fun and, and and today’s show and all this.
Good morning am America again, that’s who they were focusing on.
Scaring the s**t outta you and that’s okay, but try to use things like this to your advantage.
Cause right now, debt ceiling, it could be a great trading idea.
Maybe we default on our debt for a week or two, maybe get a debt downgrade maybe, but that’s gonna result in the market’s really, really, really selling off.
And immediately they’re gonna come to the table and go, okay, here’s the deal.
Yeah, when it happens to market, probably go right back to those trading levels it was.
And I think we’re gonna sell off even if they have a deal more like a sell on news type of thing.
And that’s what we’re seeing.
We’re not just seeing here.
I don’t know if you saw, saw the markets, uh, over the past 24 hours overseas as well.
Really, really came down and now we’re seeing pressure on the markets as well cuz we don’t know if there’s gonna be a Fed deal.
So this is a short term event but not really a big deal.
It’s just, it’s gonna be a fun talking point but it’s gonna get done.
The next point is the Fed.
So there’s a lot of worry out there with the Fed where most of the Fed presidents are out there and they’re saying that we may need to raise rates and inflation persists, which is different from what’s price to the market right now, right? To me, this is no surprise.
Apparently economists believe in pricing that we’re gonna cut rates a small percentage.
Now I think it’s like 35% by year end year end is only what, six months away? I mean that’s, it’s not like this is January or February by year end.
I mean we’ve seen inflation.
Is it moderating slightly? I mean you could say moderating, that’s fine.
You could say okay it was 9% but it’s 5.
5% of the core.
And yes, that’s the definition of moderating.
But if, if we didn’t go to 8% and we went to 5.
5%, there would be chaos like we saw with, with the Fed raising rates aggressively with the market that we had last year.
We would see the same thing cuz five point, we haven’t been over 4% since 1990 on annual inflation.
We’re at 5.
5% right now.
That’s not enough to high five each other and think the Fed ‘s gonna lower rates.
You’re outta your mind.
And that’s important cuz you’re looking at mortgage rates and you say, well it, you know, your raising rates is supposed to impact so many industries.
Look at real estate.
She told brothers numbers, holy s**t.
Blew out the numbers and raise guidance and said this is just a shortage of homes.
We’re doing great.
They gonna raise price.
Cause now mortgages rates are back over 7%.
I’ve seen a two year surging with it.
the 30 year surge.
So rates are going higher.
And again, rates going higher is bad since we’re filled with a lot of debt.
Most consumers, uh, uh, are living paycheck to paycheck.
What is it? CNBC did a survey, I forgot what it was.
It was like close to 70% people live in paycheck to paycheck meaning that they probably have a lot of debt and those rates are going higher, which means they’re gonna be spending less going forward.
But with core inflation over 5%, well, well, well above the Fed 2% target.
They’re not cutting rates anytime soon.
But inflation is by far the biggest threat.
People are talking about systemic risk with the banks.
We’re not gonna see that the large cap banks are fine.
They have more capital on the balance sheets than they ever had in history in history.
105 billion plus in profits last quarter.
Last quarter from the four major banks.
And did you see JPMorgan came out and raised like their, their guidance because they were given those assets for free from First Republic and these guys are in great shape.
So now we’ve proven that okay, it it’s, it’s a few of these commercial banks, it’s not really a big deal or regional banks but a large cap banks are fine.
I mean if we see systemic risk, yes and the, it’s different.
If Fed had to worry a little bit about the bank crisis but it’s contained, then you say, well Frank, what about commercial real estate? And look, from my experience in 30 years when everybody is highlighting a risk and every bank is well aware of this, we in Goldman Sachs talk about, we hear JPMorgan, Jimmy Diamond just spoke about a conference.
They all know about it, they’re expecting it, they’re, they’re increasing their loan loss reserves.
I mean it’s gonna hit, we know it, we see it, we see major moves at at at the major cities.
We see it, right? Funds trying to pull money from, from clients trying to pull money from, from some of the private funds at Starwood and BlackRock.
And they didn’t allow those redemptions at least for a little while.
And we see it but we see the risk coming.
It’s not a surprise.
Like the banking crisis was a little bit of surprise.
These guys own treasuries.
Well you’re forced to sell treasuries one year treasuries and you have to take massive losses cuz you’re not holding to maturity and you weren’t insured uh, enough and you know again it hit at the same time that was that really surprised the markets.
But they’re factoring commercial real estate risk.
Again, this isn’t something that’s gonna be systemic since they have great balance sheets, they’re factoring in not blindly lending to whoever but the banks are preparing for this.
So when you look at the Fed, what’s the biggest threat? If they see something that has systemic threat that going to focus on it, but right now we don’t.
So inflation by far is our biggest threat because the Fed has little power.
When we have high inflation it can’t lower rates to stimulate the, it can’t buy bonds like it did for 10, 12 years after the credit crisis.
So to get no help from the Fed like we did in 2009 during credit crisis, they bailed out everybody and they made a fortune off of it.
Which I always argued since then was the worst thing in the world that the Fed made so much money and the Fed lost money be dipped.
The fact that they made so much is the reason why they spent trillions this time around during COVID, during the lockdowns.
But the Fed was there in 2009.
They were there in, you know, at the end of 2018 when the markets started coming down tariffs.
And then we had 2019 the middle of it.
But in 2019 if you look at earnings, they peaked earnings peaked in 2019.
I think we would’ve been in a recession in 2020 without COVID earnings peaked.
They were not expected to grow year over year valuations were at 1919 times forward earnings seeing slowdowns everywhere we p we could have hit a recession going forward.
But what did the Fed do? They lowered rates again.
They lowered rates again.
And then what happened? We all know mid 2020 providing trillions of liquidity when we’re forced to lockdown due to COVID.
So you always had the Fed there, the Fed there, the Fed, the Fed, the Fed that made, they put a bid under this market forever no matter what.
Just any growth name.
If it goes down, just buy it.
You’re gonna be fine.
It’s gonna go higher, it’s gonna come back.
Don’t worry, you have free money.
Those days are over, those days are over.
They need to get inflation under control and it’s not, it’s not under control right now again, you can point to different things that you’re gonna show inflation’s moderating, but I can point to so many different things that are not.
And the main thing is consumers.
And if you take all the bills that you pay right now, you can’t tell me your bills are much, much lower than they were last month.
Maybe you’re getting help from energy cuz that’s coming down a little bit.
But electricity prices are going up again.
Healthcare prices are going up again, food prices in some areas eggs went up so much that they’re coming down.
But still you see in some areas where food prices are are, are staying at insane prices.
But if the Fed is serious and there’s no indication that they’re not serious about this, it’s Palest said a million times, nobody wants to take his word for it.
If they’re serious about getting inflation back to that 2% target, that’s not gonna happen until at least mid 2024.
I mean Goldman Sachs doesn’t think it’s gonna happen through 2024.
The rest of it’s for 2.
7 I believe.
7%, uh uh inflation and the CPI at the end of 2024.
So you know, someone asked Powell a question, if we get the 3%, are you gonna be good? He said no, absolutely.
It’s not even on a table.
It’s gotta go back down 2%.
But the only way that we would see this is if we have a huge collapse in the markets that maybe people are really gonna curb spending, pricing’s gonna come down.
But the only way to curb this type of inflation that happened one time in a, in a generation right when it happened in the early eighties and they made the mistake cuz they’re like hey we gotta contain now we can lower rates and they made a mistake and hadn’t raise rates again, right? We all know there’s the biggest mistake, one of the biggest mistakes the Fed made in the history of its existence.
In order to curb this type inflation, you have to force the recession.
You have to force to slow down, you have to keep rates high.
And that puts us to the last point here where puns declaring this, the start of a new bull market.
Look, it’s a nice run caught me by surprise.
Cause a lot of people by surprise, given the numbers and everything that you look at, whether it’s the economy, the macro, the spending higher rates all effect, you check ’em all off.
You can’t say wow, I think you know the NASDAQ or the NASDAQ 100 is gonna go up 25%, which it, it’s up like over 20% this year.
You don’t see that.
But to declare a new bull market, I mean that’s pretty insane to me.
And yes this happened, we broke key levels on S P 500 which when now I think testing on the downside, cause the market went down yesterday and now it’s down a little bit as I’m taping this, who knows, it could be up a lot, they could have a deal, it could be up 2% by any of this.
I dunno, I think that’s gonna be used that if the market does go up but they have a debt ceiling compromise and they figured that out, I think you’ll see a temporary move higher and then you’re gonna see the markets probably sell off.
And we’ve moved so much higher into this.
I gotta figure it’s factored in that this isn’t a problem that people think it’s going to get solved and I think it’s gonna get solved.
So there’s probably gonna be a sell on news event.
But when you look at at, just cuz we test key levels and we’re gonna bull guys, you gotta do your homework a little bit.
And I’m not saying we can’t go up higher from here.
We went up all in 1999, the market was expensive and then NASDAQ doubled in 1999, went from 2,500 to 5,000.
We eventually went to below a thousand and it got crushed of the guys in 19 early or late 1998, early 1999 turned out to be right.
But look how much it went up before that.
But when you look at what’s associated with, with a bull market, there’s, they’re just, we’re not there first.
We’re extreme valuations.
We’re at 18.
3 times forward earnings that’s slightly above the 10 year average.
But remember the 10 year average guys, if we look back 10 years, what did it include? Super low interest rates, huge earnings growth, many of those years double dig your earnings growth and nonstop qe, right? Fed buying bonds like crazy, constantly providing liquidity into the system.
Those are all gone.
Earnings are declining year over year and they’re gonna do that the next couple of quarters.
Interest rates are much, much, much, much, much, much higher highest level in decades.
The Fed s no longer buying bonds, this is qt, they’re tightening, quantitative tightening.
Also, when I look a lot of these punts, even economists making this prediction like, hey, you know a lot of this behind us, most of them have never seen a market like this.
You know, if you’ve been in a market since 2000 and and say 6, 7, 8, 9 to, you know, all right, you lived through the credit crisis but you know for the last 10 years, funding from the Fed .
Constant buying bonds, liquidity everywhere, free money everywhere.
That’s not normal.
That’s not normal.
Going back even it’s not normal for the Fed.
There was surprise that inflation was so low and they were able to see such growth in the economy over that 10 years by keeping rates low.
They wanted to raise ’em in 2011, 2012.
They were just like, hey, we’re okay.
And every hint of of recession, which is a normal course of business after every five years, what happened? We can’t have recession, right? We got a low rates, we got a low rates like in 2019.
Can’t have recession.
Recessions are a normal cost of business.
They’re not bad.
You need that.
You need the ups and downs in all businesses.
It happens in every sector and every business.
But it didn’t happen for 12 freaking years.
It’s like building this bubble, building this bubble, building this bubble.
Eventually it’s going to pop.
That’s what we saw in 1999, 2000 it popped.
I mean it, it over inflates much more than what anyone thought.
But looking at the economist that they haven’t been this part in a market like this, it’s crazy.
But a bull market, I mean when, when we have higher rates, which are 1900%, right, that’s 1900% rise in rates past 18 months point 25% to 5% or 5%.
You have to realize when rates are higher, there’s a constant drag, there’s constant drag on consumer and business spending.
It’s not like it peaks and everything’s okay.
It continues to get slower and slower and slower and slower.
That’s not a bull market.
It’s not like we have these lower interest rates, which we had through 2010.
We saw rebound by 2010, 2011, 2012.
Then you see the market chugging along, it takes a while, boom, then the market exploded.
But with rates this high, it’s constant.
It’s a tax on consumers that’s constantly taking money outta their pockets.
And we’re gonna continue to see this slow down cause it’s necessary spending, I mean it’s continuing to tail off.
Look at the recent comments from Footlocker, Lowe’s, home Depot, Walmart who beat estimates.
Even the companies that beat estimate.
Did any of companies come out and say the consumers stronger than they’ve ever been? It is awesome this quarter was different, even Walmart great quarter.
But they was like, we’re seeing, you know, they have pricing power cuz they’re the cheapest on the street and they have the ability to raise prices more.
Same with McDonald’s.
When you’re the cheapest price, it’s a lot easier for you to raise prices compared to more expensive.
Now what are we seeing for the first time luxury retailers got nailed past couple days.
You see that they’re immune, those guys gotta spend, those rich people spend.
It’s, when you look at this, the consumer’s not spending that much.
You’re seeing more defaults, more loan loss provisions, they’re raising loan loss provisions at all the banks.
You’re seeing this, I mean Harley Davidson as well said, they don’t have enough people to just, you know, not paying their bills and, and and trying to get all those motorcycles back and repossess they don’t have enough people.
For the past couple of years, everybody seemed like a millionaire.
You could spend as much as you can.
Now they’re sitting on major, major debt and if you look at that debt, they’re paying much, much higher on that debt.
And that’s a continued drag.
This isn’t like, oh this bull market and you have this constant like bid underneath the market and, and and it’s tailwind.
This is a headwind that’s here.
That’s not going away anytime soon.
We’re not gonna see rates go lower and much lower from here because we still have inflation at oh 5% again, higher credit card rates, higher inflation, more layoffs, wages peaking, it’s gonna get slower and slower and slower.
And Morgan Stanley put out a great report in this from yesterday and we’re just highlighting a few things and, and you know, just looking at, at certain things where, you know, the forward multiples at the, the 89 90% uh, percentile, uh, and this is going back to 1985.
So that’s how expensive they have is stocks.
And you see whenever we’re at that expensive, you know, going back when, when it was 2001, right? When you look at another peak in 2007 right before the market crash, I mean they have some great charts here, margin compression.
And you see margins come down a ton.
I mean they have a great chart here.
I’m gonna put this on YouTube so I’ll show this and this chart’s awesome.
So it’s margin compression if you’re not seeing this and just listening material drag on earnings per share growth.
Uh, and it says our negative operating leverage thesis they say is playing out cuz they bearish on the market.
If you look at this chart, it goes back to to 1998 and it’s in blue and yellow and the yellow highlights the margin compression.
And there’s three periods where you saw the biggest margin compression, which we’re starting to see now is the fourth period.
The first period they go back to, which is the biggest margin compression was 2001, right? That’s when the market crashed.
Then the other one was 2008, again, market crashed.
Then they have in 2000 during COVID the market crashed.
Now we’re seeing the same thing in 2023 margin compression coming down these it’s not like, um, ch picking and choosing and, and I mean these are the, if you look at this chart, it’s pretty amazing And these are just four areas that you’ll look at and you’ll see it and you know that area at the end is highlighting how we’re seeing the same pattern play out.
These are not associated with a bull market.
Again, maybe we go apart, but you can’t tell me this is the start of a bull market.
They show how high end consumer spending is starting to fade.
Tire lending standards tell us a contraction is likely coming based on their charts and they have a lot of good stuff here through their report.
Again, these things are not associated with a new bull market with much higher rates.
It’s gonna continue to be a drag on consumer spending.
So be careful here guys.
You know I’ve been saying that the market has been, it, it’s concentrated in just a certain area.
If you look at the rest of the market, even x financials at S&P 500 , they’re also trading at like 18 and a half times forward earnings.
They’re expensive too.
So I’m not saying we can’t go a little bit higher from here, but the start of a bull market meaning go all in, we’re fine.
Hey we’re not like 2011.
We don’t have low interest rates.
What are the tailwinds behind us? Because we broke a technical level.
Be careful cuz technical levels work until they don’t work anymore.
It’s not like you broke it, it’s gone.
It it, those are trading patterns when you look at the next year and where interest rates are going to be and how high they’re gonna be.
Tighter lending standards, okay? The only way this works is if we see a collapse, a total slowdown in the market with the Fed is doing everything in its power to push this agenda and it hasn’t really been working too much, it’s only working slightly because there’s just trillions and trillions still in that system, which is something we never experienced ever in history trillions.
And we even started spending another 5 trillion or four and a half trillion after we reopened.
And this is in 2021 when all prices, you look at a home price, you look at stock market, you look collectibles, look at assets across the board.
We’re at all time highs and the government’s still spending trillions into the market and they’re wondering why inflation is remaining stubbornly high.
Really? How are you gonna remove that much money from the market? What out there being cracks like we saw with the banking system? So be careful here.
Continue to protect yourself.
You can buy puts, we have money flow trader that does that.
And again, that the performance of that hasn’t been that good, been amazing during COVID amazing last year, but it it it’s coming.
There’s just not a lot of catalyst here.
But for you to, you could say hey, I think the market still has like 5% upside here, maybe 10% upsides to declare, to declare a new bull market.
Come on man.
You can’t go on TV and say it to to to regular folks.
I mean that’s, if you’re saying it’s a new bull market, you’re saying everyone go all in, we’re fine.
There’s just too much risk out there and you have to protect yourself.
There’s great ideas out there, a lot of names, especially small caps, small caps of underperformed NASDAQ stocks by and even if you’re looking at at the NASDAQ 100, I think it was 25% to 3% year to date, I’ve never seen that big of a discrepancy ever, ever.
And some of the small caps is down 70, 80%.
I’m finding lots of ideas.
One of them was Kohl’s who just reported great earnings.
I know Kohl’s s****y garbage.
But when you look at the valuation and the fact that they own real estate and hedge funds, were looking to pay a hundred percent higher for this name, trying to buy it when it was a hundred percent higher from here six months ago.
That’s a good buy to me.
Especially now that they showed us a prize profit outta nowhere.
Again, some names that we’re seeing here offer lots of opportunities but you have to be careful, you have to be careful.
Valuations are really stretched here and it’s a very dangerous, dangerous market considering the Fed can no longer help us.
They have to focus on inflation and they’re gonna continue to focus on inflation, which means rates probably like go higher and see a couple more rate hikes before we see the final pause.
Let’s see what happens.
We’ll monitor the data.
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So again guys, just be careful here and we’re in a market that people will say, well it’s a new bull market.
I just highlighted a bunch of reasons why it’s not a bull market.
But how about another reason? How about no earnings growth? How about margin deterioration for most companies? How about banks are gonna have much tighter lending standards after this recent crisis? That’s why the estimates are being lowered significantly.
How about China? Huge growth engine.
Everyone’s like it’s back.
Clearly not growing as fast as everyone thought based on their data.
And you might see certain areas like casinos where people are gonna spend money no matter what and they will close and now they’re open up.
But overall China has been a pretty big disappointment.
It’s supposed to the reopening now you’re going through another wave of COVID stuff there.
I mean holy s**t, again, it’s a massive growth engine we’re expecting.
But all of these risks, all these headwinds you, you just can’t go on TV and say I’m declaring this is a bull market.
Declare that hey, you know it’s a trading opportunity.
I think we’re gonna go a lot higher cuz you know a lot of people are negative on the market, that’s fine.
But declaring a new bull market with all these headwinds it it’s very dangerous to do that.
We’ve never seen a bull market with these types of conditions.
Just with two or three of these risks, let alone no earnings growth, massive increase in rates, mortgage rates now over 7%.
These rates are going higher.
The Fed not looking, they’re gonna slow down anytime soon.
No help from the Fed QT quantitative tightening instead of buying bonds to flood the market with liquidity, again, just things not associated with a bull market.
This guys tomorrow can be back Wall Street Unplugged.
That’s our premium podcast, right? Wall Street Unplugged Premium.
Dan and I gonna break down these points even further.
Provide a great great trading idea We found also have special interview set up with Luke Norman’s, a chairman of small mining company called US Gold that’s in our curio venture opportunity portfolio named that I really like gold starting to move higher again.
We got more exposure to some gold and if you subscribed to some of our products, uh, I think Gold is going a lot higher, a lot higher from here.
And I mean just several factors you could say, you know, debt sailing fore, but just the amount of debt that we have.
Uh, you look at other countries starting their own digital currencies, looking to back buy goal.
If you’ve seen the buying from central banks for gold, it’s insane.
It’s at a 50 year high and it continues.
That was 50 year high last year and now you’re seeing even more buying this year.
Why are they buying so much gold? And I think a goal’s gonna go exceptionally higher and you wanna have exposure to this, especially some of the bigger mines, which we do.
But also this is one name that I think is a project that I visited personally I really like and I wanna hear from him cuz the stock moved up a lot and this was probably like a month ago, moved up probably about 50%, right? And then it pulled back sharply and now’s at these levels where I think it’s a good buy.
So I wanna hear more.
We’re just gonna talk about the catalyst again, that’s gonna be available that interview.
Luke Norman’s gonna be available to Curzio Venture Opportunities subscribers and also Wall Street Unplugged Premium subscribers.
Okay? So, uh, definitely give that a listen that’s gonna come out on Friday.
I’m doing that interview I think, uh, a little bit earlier than that.
So you’ll get it on Friday and we’ll release that to our subscribers.
But Wall Street Unplugged Premium guys, for you guys that don’t know, listen to first time it’s our premium products, $10.
We really break down things.
We provide trading ideas for a Dollar Stock Club newsletter.
Uh, it’s been a huge success for us.
A lot of people subscribing, but it’s, you could see the personal touch in that and, and just the data and information that we’re giving away and the stuff we share with the search engines is really, really cool.
A lot of educational stuff and getting very, very positive reviews.
Again, that is a $10 month subscription only.
Uh, if you’re interested to go to WSUoffer.com to subscribe this. WSUoffer.com. guys, looking forward to tomorrow’s show.
And that’s it for me.
Thanks so much for listening and see you guys tomorrow.
Announcer:Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.