Wall Street Unplugged
Episode: 912June 28, 2022

Peak inflation is here… and I’ll tell you how to play it

raising rates

With all the negative headlines right now, it seems like some of the positive headlines are being overlooked… 

I start today’s show with the positive results from the Fed’s recent bank stress test… the major signs inflation is finally peaking… and why I expect the Fed to end its rate-hiking path.

I share why the worst of the selloff is behind us—and which sector I’m looking to buy right now. 

What’s causing the massive volatility in the oil market? I break down the battle between buyers and sellers… and why I expect it to continue.

Turning to earnings season, I explain why you need to pay close attention to the major retailers’ reports… and red flags to watch out for across the board as companies’ results start pouring in. 

Finally, I’ll be a keynote speaker at TCG World’s Metaverse Expo, held July 8–10 in Las Vegas. Here’s how to get tickets… I’d love to see you there (booth B02).

Inside this episode:
  • The bank stress test is a huge positive for the market [1:20]
  • Inflation is finally slowing down [8:28]
  • The battle in the energy market [9:12]
  • Why you need to watch big retailers this earnings season [12:20]
  • It’s time to buy equities [16:17]
  • Red flags to watch for in quarterly results [19:40]
  • Assets I’m looking to buy [24:00]
  • Come meet me at TCG World’s Metaverse Expo [35:22]
Transcript

Wall Street Unplugged | 912

Peak inflation is here… and I’ll tell you how to play it

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: What’s going on out there? It’s Tuesday, June 28th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets. A lot has been happening over the past 10 days, in terms of the financial markets and the data being reported. And I feel like it’s being underreported, not really being mentioned in the media, because we have Roe v. Wade, which is going on. And I won’t go there. Again, you’re not going to change anyone’s mind. It’s 50/50 split, maybe a little more or less, depending on what side you’re at.

Frank Curzio: But that’s been dominating the media emotions and all craziness, which I’ve been telling you and Dan tells you. Listen, if you want to hold up a sign, you want to be emotional about it, that’s fine. But for us, it’s how do you make money on things. But when I’m looking at the markets and data that’s reported, I’m surprised. I’m surprised it’s not getting more coverage. I’m just talking about the last 10 days or so. So, I want to start with, just recently, the stress test for the banks.

Frank Curzio: So, these stress tests were put in place after the credit crisis, to make sure banks had enough capital on their balance sheets to withstand these three things, which have to happen at the same time, a 10% unemployment rate, it’s going to rise above 10%, general 50% drop in stocks, and a 30% plunge in home prices. Again, that has to happen at the same time. So, they have to have that kind of capital in that type of environment, which hasn’t happened. Didn’t happen during the credit crisis. I don’t know if we saw that 30% plunge at home price, I think it was a little lesser than that. But unemployment didn’t get to 10%. We did see that 50% drop in stock prices.

Frank Curzio: But that hasn’t happened since depression, but yet, banks are forced to keep this capital on their books. And you’re looking today, where stocks… Okay, we’re down more than 15%. Unemployment rate is very, very strong. We have full employment, below 4%. Home prices are holding steady. It’s increasing dramatically post COVID, when it’s not seeing huge declines. People are coming down in terms of the sellers and selling their homes. I’ll talk about that in a minute.

Frank Curzio: But when we have these types of requirements, it’s no surprise all 33 banks pass with flying colors. And again, we are pretty much in a recession right now. You could argue, you could debate. It’s not the definition of recession, but we’re basically in a recession right now. Well, maybe we’ll officially be in a recession early next year. But to see a decline in stocks and a lot of positives with balance sheets are flush with cash, the banks are perfectly fine. People have more capital in savings, that they could put into the market right now, because they’re nervous.

Frank Curzio: But there are positives considering the inflationary picture and all this nonsense. So, when you’re looking at the banks, again, it’s no surprise that they passed, but they’re forced to keep a massive amount of… Forced, being forced to keep this capital on their balance sheet. So after the stress test, they all come out, the large US banks said that they’re going to increase their paths to shareholders starting right now. Some banks started right now.

Frank Curzio: You have Goldman Sachs increasing their dividend by 25% from $2.00 to $2.50. Morgan Stanley increases its dividend by over 10%. These are banks, and look where the markets are, and compare this to other recessions, where banks are increasing their dividends. Bank of America increases its dividend by a small amount. Wells increases its dividend by 20%. Northern Trust, Truist, BNY Mellon all increase their dividend. It’s a little surprise JP Morgan did not raise its dividend, but they’ve been raising it. Citigroup didn’t either. Their test results every stress test are kind of on the lower end, where they pass, but you could see the capital coming back in the market.

Frank Curzio: And you think about that for a minute. Hey, wait a minute. We’re on the brink of recession. Markets are down incredibly, 20% across the board, 30% for the Russell and NASDAQ, yet the banks are perfectly fine. What a positive data point. And again, we know the stress test. Those requirements are complete joke. Those conditions did not exist together since the depression, but yet, those are the rules, those are the laws.

Frank Curzio: And for me, I’d rather banks lend the money out. I had trouble getting loans on my construction loan. I had trouble getting on a second house. I had to pay for cash for my mom. And you look at to the balance sheet, you look at the income coming in, you go to own a business, and stuff like that, and they still made it really difficult, really, really difficult to lend this money out.

Frank Curzio: But anyway, expect more buyback announcements. And I was early to this a few months ago, so I’ll take my lumps, saying, “Listen, you should own a bank.” We’ve owned Goldman Sachs, and Goldman Sachs has went up a lot, and then it came down. I said it’s a good buy. But when you see massive deleveraging at the same time, it doesn’t matter what stock you own. Didn’t matter what stocks in your portfolio, how good the earnings were. Nothing. Doesn’t matter. It doesn’t matter if margins are higher. If you look at the banks, they’re pretty solid. You’re either getting hit because you’ve seen a slowdown, but bank balance sheets are healthier than ever.

Frank Curzio: And recessionary conditions may reduce demand for loans. You’ve seen a little bit, but banks are going to make a fortune in this rising and strained environment, absolute fortune. This isn’t guesswork. Look at the numbers. I covered this a while ago. I mean, banks are looking at chops right now. Most of their profits came from fees and BS fees since the credit crisis. I’m not talking about investment banking fees, which are great, which you’re going to see is slow down there.

Frank Curzio: But you’re looking at the Fed. They push short-term rates to zero and kept them there for the majority of the past 12 years. So, banks had to find ways to generate capital. That’s why you’re getting fees all over the place. Money in the bank? They’re charging you left and right, wire fees, everything. Doesn’t matter how much money you have in the bank. Wire fees, everything. They just charge, charge, charge, charge for fees. It’s not fees anymore. I mean, that spread, that difference, that net interest margin is going to increase dramatically.

Frank Curzio: So, you see profits and margins take off for these companies. And you’re going to see that in the coming quarters and going on well into the future, as long as The Fed continues to raise rates and rates are this high. But why is that? Why the buybacks? Why dividend increases? It’s the only thing they can do with their cash. And current laws are restricting the banks from growing. Granted, you could say they deserve it because they got stupid pre-credit crisis with mortgage backed securities, hiding it from the authorities, and creating synthetic, synthetic. They had a good idea, and then they just turn it upside down on its head and went nuts. So, you could say they deserve it.

Frank Curzio: These laws are in place to make sure the banks are not too big to fail. And they’re 3X to 5X larger than they were during a credit crisis, which means they’re really, really too big to fail in this environment. But banks are really good investments in a rising interest rate environment. It’s just a deleveraging process, just like you’re seeing in crypto. Every name in crypto have got nailed, even though there’s a huge separation between the top 50-75 cryptocurrencies and the other 5,000, a massive difference. But a lot of them all got nailed. That’s what happens when you see deleveraging, because people are forced to pay their debt off and get margin calls. And in order to do that, they have to sell the good stuff to pay off the bad shit. And that’s what happens. That’s why you’re seeing your favorite stocks down.

Frank Curzio: Well, let’s look at some of the other data that we’ve been seeing over the past couple weeks. And you’re going to notice it’s a sharp change to what we’re used to seeing, which is inflation surging across the board. Our goal, 100%, right now, is to control inflation. I sound like a broken record. Talking about that for 18 months. Inflation is going to surge. It’s going to surge. It’s going to surge. They’re handing checks directly to people. Fed said it’s transitory. We make jokes about it. We had headlines of jokes, and look where it is right now. We all get it. Everybody knows it. We’re not talking about the past, not patting myself on the back, because I did have some losers in this environment. I didn’t expect the market to absolutely crash the way it did, and some names are down tremendously.

Frank Curzio: However, we need to stop inflation. We need to curb it. That is 100% the goal. And you know what? We’re starting to see it. And no one’s really talking about it. Everyone’s talking about, it’s going to get worse, it’s going to get worse, it’s going to get worse. I mean, shipping data, so exports out of China, is down. We’re seeing a major slowdown in demand for furniture, appliances, and home decorating, again, all related to housing.

Frank Curzio: I don’t know if you’ve been following commodity prices. Lumber, copper, have you seen them? Copper broke below $4. It’s down 20% over the past month. Lumber prices were $1,300 in March. They’re below $600, down 55% in three months. These are deflationary signals. This is good. This means the Fed is doing the right job. They’re starting to accomplish it. You’re seeing it. And it’s going to happen. Energy price are down, $125, and now they’re at $110, although this may be temporary.

Frank Curzio: And there’s a massive, massive, massive battle going on in energy markets between shorts and longs, the algos and the fundamentals. And I’ve just be reading lots of reports on this. And if you suggest we should be trading at $150, you’re seeing not a lot of supply in the market, huge demand, but then the short sellers and those algos, they trigger and they run to the exits right away. It’s all automated. So I mean, on both sides, you’re seeing both these guys come out and make arguments like, “Hey, we’re going into recession. EV demand is not going to be as strong.” And the other side, you’re seeing that oil prices and, again, no supply. So, it’s just the back and forth argument.

Frank Curzio: And we’re talking about tens of billions of dollars in flows, just going back and forth. So for me, when it comes to energy, all the bulls are leaning to one side, and I could see. That’s why you saw a huge drop in a lot of these stocks, 25% across the board, basically, on average, of these stocks. They were up tremendously. You could say, “Well, they were up so much. That’s why they came down.” Well, they were down more than anything or any sector in the market for many, many years. It’s down 13, 14, 15, around 14-15. I mean, it’s just been a nightmare for these companies, especially through COVID.

Frank Curzio: So oil, just be careful. You’re going to have to weather the storm if you’re long or you’re short. But I can see oil price fluctuating between $140 and hitting $140, and below $100 over the next two, three months. That’s a very, very wide range. Make money, strats, whatever you want to do, because someone’s just going to get squeezed. It’s rush in and rush out, especially with the algos. One second in, one second out, they don’t even care about fundamentals. But there’s a lot of buyers on that side. And if this thing goes lower, you’re really going to see it collapse, maybe go well below $100. They’re already $110 right now. But either way, oil prices are down.

Frank Curzio: And what are we seeing? Deflationary trends for the first time post COVID. Post COVID. And I’m surprised they’re not talking about it more. They’re not really talking about it at all on the financial media channels. But yet, it shouldn’t surprise anyone. Why? Because the Fed is in demand destruction mode. That’s their job, to destroy demand. And it’s not hard to do that. And that’s how you fight inflation, by reducing demand, which is going to lower prices. So, it’s shrinking its balance sheet, which is just starting shrink its balance sheet. And they’re raising rates, which you all know.

Frank Curzio: But look at where rates are right now. The 10 years at 3.2%, it’s up from 1.7% in March. That’s a 90% move. That’s an incredible move in the 10-year. You don’t see that, ever. That’s massive. That has huge implications. Mortgage rates, 30-year is at 3% in January, just went above 6%. I think it might have dipped a little bit below 6%. It’s 6%. That’s massive. You’re seeing higher rates cause demand destruction. It’s happening a lot quicker than anyone is predicting. And you want proof in terms of speed, how fast consumers can change their mind and close their wallets, we just saw it with Walmart and Target.

Frank Curzio: So, from someone who has been doing this for a very long time, and I love earnings season, because you could tell when we cover it. And I love listening to conference calls, which I read the transcripts, which is quicker, and it gives you a good indication on geography, what areas are strong, what different industries they cover. A lot of these companies are in 10, 15 different industries. It helps me find ideas for smaller names. It just filters down. I love it. I love to hear what they’re saying.

Frank Curzio: And usually, when a major company, industry leaders, are coming into the quarter and they’re going to miss by a mile, they warn, they tell everyone a couple weeks before and say, “Here’s our guidance. It’s going to be freaking terrible.” And then when they report, they usually beat that weak guidance. It’s like kitchen sink type thing, usually. Walmart and Target didn’t get the chance to even do that. And you want proof that they do that. What happened after Target warned and Walmart warned, and those stocks got crushed? Target two, three weeks later warned that next quarter, their March is going to be a lot lower. They didn’t even get the chance. That’s how quick this can happen.

Frank Curzio: But reporting that terrible quarters two months ago, they cited inventory concerns as demand suddenly fell off a cliff and surprised them, so they’re sitting on massive amount of inventory. I think it’s 35% on average across the board. 35% inventory? What are you going to do with inventory if nobody wants it? You got to sell it at cheaper price to get rid of it. Dump it. You have to. You’re going to give it away to TJ Maxx’s and stuff, and those companies. But you got to dump it.

Frank Curzio: But both companies didn’t have a chance to warn investors. And what happened? Walmart and Target, their stocks absolutely crashed when they reported earnings. They had the largest, both of them, the largest one day drop in their stocks since 1987. That’s how quick this changes. I know people laid on inflation, and say, “It’s going to go up. It’s going to go up. It’s going to go up,” something we’ve been saying for a very, very long time, that it’s going to surge, absolutely surge.

Frank Curzio: And I didn’t even think it’d be at these levels. That’s why we still have a lot of stocks on our portfolios. And we’re doing good in our portfolios, but we could have reduced the damage if I had really thought it was going to go that high. And it’s still not being controlled, it’s still going higher. Hasn’t just stopped or topped out yet.

Frank Curzio: But getting back to deflationary trends. Global growth is slowing. Commodity prices, like I just said, are falling. Home prices, sales are slowing, obviously. There’s less people that could take out a loan at these rates. And price started to come back, where sellers are lowering their offer prices, which data confirmed that. Again, all this data in the past 10 days. Started with Walmart and Target, which was about six weeks, two months ago. But one is seeing a plunge in money growth, consumer sentiment is at a record low, record low. Say that. A record low, in this market.

Frank Curzio: Consumer sentiment is worse now than it was in ’87, than during the tech bubble, during a credit crisis, during COVID. Sentiment is worse now. Why? Because we can all identify with inflation, and we all see prices going up, and that’s all everyone wants to talk about. But we’re definitely seeing signs of deflation, and I don’t know why it’s not being mentioned. If that’s the case, that means inflation is starting to come down. We’ll see food and energy likely take longer. I covered those sectors. It’s going to take longer to come down, especially food.

Frank Curzio: But this is great news if you’re looking to purchase equities. And why? Because the one problem. There’s one problem. That’s it. There’s one problem. It’s not the war. It’s not another strand of COVID coming. These are temporary events. The war with Russia, I know, Ukraine has been going on a lot longer than expected. It’s not going to go on forever. Russia can’t afford it. Russia is in the driver’s seat right now, where they can get anything they want from Europe and the US. Just stop the war because it’s going to help our economies tremendously and curb inflation even more, and everybody wins.

Frank Curzio: I mean, no one is going to say Russia won, but they can do whatever they want under the table in terms of politics, and it’s going to be great for everyone, and great for the world if they end that war, especially on the food front, on the energy front, on everything. But the one problem we have is inflation. It’s the one thing the Fed cannot help you. They have to do the opposite. They have to force a recession, something we’ve been saying for a long time, force a recession.

Frank Curzio: And I think it’s funny when people say, “Oh, we’re probably going to avoid a recession.” We feel like we’re in a recession. I mean, stocks are down. You’re going to see home prices probably come down a little bit. A lot of asset prices are coming down, a lot of leverage coming out of the market. It feels like it. You see prices through the roof. Everyone is seeing at restaurants, everywhere you go, we’re seeing it.

Frank Curzio: But inflation is starting to come down, and this is good news. We need to see this. Because when it starts coming down, what’s going to happen? The Fed is going to be able to say, communicate. This is important for you to understand. We know inflation paying $5 for… Well, probably a little bit less than that. Oil prices will come down. But if you’re paying $5 at the pump on average, and it goes to $4.50, look, it was $3 a year ago. So you’re saying, “Frank, we’re still paying these higher prices.” That’s not the point. That’s not what’s going to drive equities higher. What’s going to drive equities higher is the communication from the Fed.

Frank Curzio: Because right now, the communication out of the Fed is what? We’re doing whatever it takes, we’re raising rates aggressively, shrinking our balance sheet, because we need to control inflation right now, which is out of control. That’s the message, finally, which should have been the message nine months ago. I don’t want to look backwards, because everybody can play Monday morning quarterback. I want to look forward. And the Fed is doing its job now.

Frank Curzio: That’s the message now. But if that message changes to, “Okay, we’re going to slow the pace of rate hikes.” And that could happen based on everything that I just told you. That’s a lot of factors that you have not seen on financial news media channels, and you haven’t really been reading about it too much. Wall Street Journal covered a little bit here and there. Again, we read all this stuff. I read all this stuff. Daniel reads all this stuff. And we’re watching the gauge sentiment on CNBC all the time. That’s my job, to help you guys out, to listen to all this and tell you what’s bullshit and what’s not. That’s why you listen to this podcast.

Frank Curzio: But when you look at inflation, if the Fed comes out and says, “Hey, you know what? We’re going to slow the pace of rate hikes.” And that could happen September, October, because we’re going to be at what? 2.5, 2.75, close to 3% then? But based on the data that I’m seeing, that could happen. If that does, that’s going to send equities screaming higher. Because most equities are down 25%-plus. I’d say most of them are down 35%-plus. Some large caps have held up a little bit better, down 20, 25%.

Frank Curzio: So, now what? Now, we’re heading into earning season pretty soon, and I think we’re going to see lots of companies warn where profit margins are going to decline. You’re going to see that. And you have to realize, from a company standpoint, the worst environment is COVID or the credit crisis, because you can’t see what’s coming. You can’t see what’s coming. Every single company knows the inflationary environment. They know their supply chain sucks and they have trouble getting shit to their stores to sell. They find any way they can to get more and more supply, that now demand’s falling off.

Frank Curzio: But these companies see the problems. They understand inflation, they understand inventory concerns, which makes it easy for them to adjust. That’s why you’re seeing companies lay off employees, the easiest way to save money, unfortunately, not for the employees. It’s unfortunate for the employees, but for companies, that’s the largest expense. So, you’re seeing companies here, companies there, 10% layoff, 20% layoff, Netflix, the crypto companies, Robinhood, and Coinbase, and things like that. But they could see. They understand the environment.

Frank Curzio: So, they’re going to be cautious, and they’re going to warn and say, “Listen, okay. We want to be cautious.” And now is the time to be cautious, because we just saw that in Nike. Nike’s results weren’t that good. China is a huge uncertainty. And they just reported the stock was down 3%, then it was up a little bit. I think it’s down 2-3%, but people are a little worried. But under normal market conditions, where the marketing crash, Nike would be down 15-20% today, because they reported good earnings, but they warned.

Frank Curzio: And they said, “We don’t really know what’s going on with China. There’s too much uncertainty,” and people hate uncertainty, but they said, “Uncertainty around further COVID disruptions.” Because Nike is a China story. That’s where their growth comes from. They have a little bit of inventory concerns and they lowered their margin guidance, but the stock is holding up pretty well. It’s not too bad.

Frank Curzio: So you say, “Well, how come it’s not down more?” Because it’s already down 40% from its highs, which is just six months ago. It was trading at $179. It’s trading $108 today. But we’re seeing a lot of potential earning warnings. That’s what I’m saying, a few. We’re going to see potential earning warnings, weaker guidance, but it’s going to be factored into stocks. That even happened with Target when it reported the second time. The stock crashed 35-40%, and then I think it was a week later, two weeks later, said, “All right. Our margin guidance and lower the margin guidance. Going to be terrible.” And the stock took a little bit of a hit, went down 8%, then finished down 2-3%.

Frank Curzio: But that’s what you’re seeing. And Target may be down from those levels because their whole market has sold off over the past five, six weeks. It’s really been 12 weeks before last week. 11 out of 12, I think it’s come down. But you’re getting my point. These stocks already factor in, it’s being factored in, they’re going to lower their guidance. And now’s the time to do it because you can get away with it. And you got to put out all those strings.

Frank Curzio: And Nike’s the best when it comes to earnings manipulation. I’m not talking about doing anything illegal, but it’s very easy to manipulate your earnings. Talk about currency X, this, and that, and all this bullshit. Look at me. I’ve followed Nike for a long time. They’re the best at doing it. The best at doing it. Buybacks, massive buybacks. I mean, there was a time where they would’ve missed three quarters in a row, but they beat quarterly estimate and stock went up, only because they bought back the stock, which they’re great at doing.

Frank Curzio: But now is the time if you going to warn… It’s expected. Your stock is down. And that tells me why. It tells me we’re close to a bottom in equities. We’re close. I know that sounds crazy, because you watch TV, so you’re seeing consumer sentiment, I just said, at record lows. But when I see 99% of the so-called gurus on CNBC… And these guys are bullish all the time, they are bullish all the time, all the time, all the time, bullish, bullish, bullish, bullish, bullish, all the time. When I see 99% of them, I mean, I can’t even name someone that’s been incredibly bullish here telling you to buy, or just buy it a little bit. Not even incredibly bullish, but saying, “Hey, we’re close to…” Nobody.

Frank Curzio: But when I see that, and all these guys are saying, “It’s going to get a lot worse.” They’re more bearish than ever. That’s what you need to see to form a bottom. Zero optimism, no hope, everyone throwing in the towel. We’re pretty close to being in there right now. With consumer sentiment at all-time record low. So, that’s why I’ve been aggressive picking away at some great names. I’m going to tell you something else you haven’t heard. There’s a lot of names that are screaming off their lows.

Frank Curzio: You’re going to talk about sectors, NFTs. The good NFTs are surging, have surged over the past month. The good NFTs. Bottom market is shitty. People don’t know that. Go look at statistics of how much is being sold in the NFT market right now and how much money is flooding in. Hundreds of millions of capital raises just in the past few weeks to these platforms. Let’s take it back to equities. I mean, looking at Nike and how bad it was, but we’re seeing so many names on 30% from their high, solid growth profiles, have solid balance sheets. And what does Nike do with their balance sheet? They authorize a new $18 million share of buyback over four years.

Frank Curzio: But I’m looking for those companies that are down, solid growth profiles, where they expect revenue to grow 7-8%. Nike, year over year. That’s not bad. And we’re not seeing this massive decline that everyone’s expecting, but yet stocks are pricing that in. We’re seeing record insider buys. And you could see, there’s a lot of names, someone that screens for lot of stocks, there’s lots of names that fit this profile. Insiders are buying, they have strong balance sheets, solid growth profiles, down 30%-plus from their highs. There’s a lot of names, especially in small caps.

Frank Curzio: And one area you should start looking at right away is biotech. I mean, you talk about annihilation. I mean, worse than crypto. Holy shit. And you look at all these companies across the board. It’s not just, “Hey, this one’s worse than this one.” All these companies, whether you have a company that’s generating a ton of revenue and a real biotech that has numerous drugs in the marketplace, compared to a name that has one drug, one promising drug that passed phase one. I mean, these things are down across the board, 70, 80, 90%, some of these names. They’re trading close to cash. But you’re starting to see a lot of those names pop. The cream is rising to the top, where not every biotech company is shit.

Frank Curzio: But I know it’s tough to buy equities right now. It’s really tough. You got smoked the past six, eight months, you’re looking at your 401k, you’re watching TV. It makes you want to jump off a building. That’s the time to invest. That’s when great investors go into the market. I’m not saying that we’re at bottom. We could go down further. I’m saying the worst is behind us, especially where equities are pricing this in. And the Fed is accomplishing its goal. I know that’s bad. No one is going to tell you that, because everybody wants to destroy the Fed.

Frank Curzio: Everyone loves to go on TV or say, “The Fed sucks and they don’t know what the hell they’re doing.” They’re doing a good job right now. They’re doing what they’re supposed to do. Demand destruction is resulting, and a lot of prices coming down. You’re seeing deflationary signs for the first time, and lots of them. I’m not picking out… You heard me talk about Walmart and Target over the last month, saying that was the first deflationary signal I’ve seen probably in five years. Now you’re seeing a lot more. I just named them.

Frank Curzio: And again, it’s tough to buy equities, but let me tell you something. Did you know Boeing? Shittiest company in the world. It’s terrible. It’s horrible. It’s up 30% in two weeks. Boeing, one of two companies in the world that produces airplanes, where demand for travel is absolutely soaring despite inflation, because people are not buying those furniture items and crazy discretionary things, and saying, “I want to go on vacation.” Every airline, demand is surging. Every hotel, demand is surging. Cruise lines, demand, surging.

Frank Curzio: I could tell you something about Boeing. The company had 5,500 orders of its MAX plane before they had to recall them just before COVID hit. And we all know about the crashes, and China took them offline and grounded these planes. But there’s only two companies that make airplanes. It’s Boeing and Airbus. And demand is going to absolutely soar over the next five years. And it’s been a pain in the ass for Boeing, because every time he tries to get on its feet… I get it. The MAX. Okay. Figure out the problem, made it better, then you had COVID, then you have another strand of COVID.

Frank Curzio: You have international travels at a standstill, even though things got better in the US. Less people flying internationally. That’s all lifted. Most of that stuff is lifted. But demand for airplanes was surging pre-COVID. Demand is stronger now. These companies need these airplanes. They need them, especially for Boeing, since it’s MAX plane, it’s back on the market. China’s about to reverse decision to ground these planes, which is huge. And I know that plane very, very well. I talk to executives when I visit Boeing’s manufacturing facility in Everett, Washington.

Frank Curzio: Guys, do that before you die. Take your kids there. It’s a massive assembly line of jumbo jets. It’s the biggest manufacturing facility in the world. I can’t even explain it. All I know is the assembly line included about eight planes. Think about these eight massive planes in one building. It’s huge. Go do your research. It’s bigger than Singapore. And they put over… It’s amazing. They have pictures showing how big the facility is. It’s unbelievable. They have their own runway of massive, massive, those huge, huge planes that bring in the parts and everything. But it’s unbelievable to see it.

Frank Curzio: I got to know the MAX very well. I mean, it’s the lightest plane, lowers fuel costs tremendously, 20% increase in fuel efficiency compared to its closest competitor, which is the Airbus A320neo. This is the plane. This is the plane that everybody wants, but they had problems with it. Don’t look at the past, look at the future. But Boeing here, they’re not going away. They’re not going bankrupt. They can’t. I mean they could go bankrupt and come out of bankruptcy, but someone’s got to make planes. Can’t just be Airbus. But these are names that you’re not hearing about.

Frank Curzio: And we have two biotechs in Curzio Venture Opportunities. I’m going to give them away because they’re a lot higher. Impel was one of them. Went from $34.75 to $5. This is a great name, and we picked it up at a cost base of $7.75. It went below that. But in the past month, the stock is up 40%. It’s close to 10 bucks. AbCellera Biologics, a great, great company, generating close to $500 million in sales, partnerships with some of the large pharmaceutical companies in the world. This isn’t a BS name with one hopeful drug that passed phase one, and you’re saying, “Okay. Hopefully, it goes past phase two. If not, we’re crash 80%, we’re go into cash value on the balance sheet.” It’s not one of those companies. This is a great, great company. We recommended it last month at $7.25 cents, and it’s over $10, 40% gain.

Frank Curzio: Again, you could say $10, and I missed a move. I mean, it was 22. Look at Impel. Was $34, and it’s at $10. That’s how far these things got hit, but nobody’s really talking about this. Nobody’s mentioning, “Hey, a lot of these stocks are bouncing off the bottoms.” Because what you have in a deleveraged market is oversold conditions. You have forced selling, which provides one of the greatest environments for buyers. That’s why it’s important to follow your stocks when it comes to stocks. You can be a little aggressive at crypto and limit your position size and different… You got to take on a certain amount of risks in different places. But in stocks, you should have stops. This is why. Because you limit your losses. And now, a lot of these things are down much, much, much, much more. You have cash in a bank, and you could buy a lot of these names.

Frank Curzio: Again, I’m not calling for a bottom in these. Maybe they go down further. I just know, in 18 months from now, almost any stock that you buy right now is going to be incredibly higher, almost any stock. And it may hit a new low. It may go down 15% from here. That’s why you want to just scale in some of these positions. But this is some of the stuff that we are doing. Just, you’re not hearing enough of this shit on TV. It’s all the negative, and it’s all Roe v. Wade, and it’s all the companies that are crashing, and look at…

Frank Curzio: Now, they’re talking about energy. They weren’t talking about energy as much when it was going higher and higher. They’re talking about it now because it crashed 25%, and they have energy bulls, and bears, and what’s going on, blah, blah, blah. Now, you’re not talking about the rest of the market. And you got to look under the hood. So, I know when you’re conditioned a certain way, and you’re… It pays for these channels to be negative. Negativity sells. That’s when you have the biggest audience. Everyone’s worried about their money. Nobody wants to do anything. That’s the time you want to be buying.

Frank Curzio: I know it’s difficult, but try to shut off the TV. It’s my job to listen to them, the gauge sentiment, but watching financial news channels today, it’s crazy. It’s crazy. Since even the so-called gurus to get on TV, you can’t get on TV these days and say, “Wow, I think we’re close to a bottom. I think we could see stocks go up 5% for the rest of the year.” They’ll never put you on TV, unless you’re a superstar, and just because you have a big name, people are going to watch. It’s very Dalio, or Icahn, or Ackman, or something like that.

Frank Curzio: But most of the people, unless you come up with this bulk prediction, like stocks are going to fall another 30% from here, or we’re going to see a 50% rally in stocks, that’s how you get on TV. That’s interesting. That’s a headline. They throw it on their website, they get lots of clicks, they get paid advertising dollars. That’s their job. Profits, that’s their job. That’s what they need to do. They want to say that I’m biased. But the bottom line is, if they don’t sell ads, everybody gets fired.

Frank Curzio: So when you’re watching TV, you got to think about that. You got to do your own research. Even if you listen to me, do the homework of everything I’m saying. You’re looking at TV, I mean, it’s guys like Peter Schiff, Tom Lee, that’s their marketing strategy. Bearish forever, bullish forever, doesn’t matter the data points. This is where I’m at. This is where I’m going to be forever. I’m going to talk about different data, and this could happen, but I’m always going to lean one way, no matter what. And that’s very, very dangerous, if you’re not changing your mind due to the data.

Frank Curzio: Because AOL thought that way, Blackberry thought that way, and look what happened. We’re okay. Don’t worry about the data. We’re okay. Streaming is really, really big, for Blockbuster. Streaming is big. Blockbuster is like, “We’re not going to change.” Look what happened to Blockbuster. That’s what happens when you don’t change, when you don’t look at data. They’re very dangerous people. It’s great marketing strategies, because it’s like a cult and you follow them regardless.

Frank Curzio: But you have to… For you, it’s your money. No matter who you listen to, me, Schiff, Tom Lee, no matter, it’s your money, and you want to make the most money possible for your family, for your generation. And to do that, you got to educate yourself and you got to be willing to change when the market changes. That’s why I’m so into the metaverse. It’s going to change the world. Absolutely change the world. Which by the way, I’ll end with that. One is start picking away at stocks, follow our newsletters religiously. We’re starting to pick away a lot of stocks and recommend new names.

Frank Curzio: But also, we’re going to be attending the Metaverse Expo in Vegas from July 8th to the 10th, that’s Friday through Sunday. I’m a keynote speaker. I’m going to be speaking on Saturday at 2:45. It’s going to be at the major conference center in Vegas. So, if you’re interested in attending, we have a special discount offer on our site, where I think it’s a 50% discount, so it’s $99 for the ticket. And if you’re a Curzio One member and you’re attending this event, please reach out. Because I may hold, depending on how many Curzio One members are going to be there, I may hold a special Curzio One event, where it’s cocktails, food, depending on how many of you attend again.

Frank Curzio: But I’ll meet up with you, which is part of the Curzio One membership. It’s just, when COVID hit, no one is really traveling as much. A lot of these conferences are virtual. Most of the conferences are going back to in person. And when I am, I see a lot of people there, and also Curzio One members and members all. But be sure, even if you’re subscriber, whatever, to say, hello. I’m going to be there. Let me know. Drop me a line at frank@curzioresearch.com. Again, it’s a 50% discount for those tickets, which is the best I could do.

Frank Curzio: And it should be pretty crazy. It should be pretty crazy. It’s going to be all over the place. This is their first conference, but it’s going to be cool. You’re going to learn about the metaverse. You’re going to learn… You’re going to see great companies. And guys, listen, this is what we’re going to have access to going forward. I mean, in terms of the metaverse, some of the biggest players in the field. These are the people that we’re going to meet. I’m going to interview them on our podcast going forward. I mean, you’re going to see new technologies, where to invest.

Frank Curzio: Hopefully, you guys enjoyed the Adam Russell interview last week. And the contacts that he has alone are amazing. And we have the credibility in this space now that we made the largest virtual land real estate purchase in history, which was $5 million for Curzio Research. But that was blown away. A couple weeks later, someone bought $102 million, a gaming company in same TCG metaverse. And TCG is hosting this Metaverse Expo, but there are going to be other metaverse companies there.

Frank Curzio: But it’s a great education. It’s going to provide ways for you to make money in the metaverse. And you’re going to see it a lot clearer, where I think a lot of people don’t see it clearly. But there’s a reason why billions and billions and billions of dollars of flowing into this industry over the past eight months, in one of the worst market conditions that you’ve ever seen, because this is the future, this is going to happen. Even Facebook who, one of the companies that own the internet, is going all in, changing their name to Meta.

Frank Curzio: So, it’s here. I didn’t think it would happened that fast. It’s amazing how many companies developed. But there’s a big difference between the winners and losers in the space, open, closed metaverse. I’m going to educate you as much as I can, because this is a place, it’s going to be investing in 1994, 1995, 1996. I think it was 1995, went on Today Show, and it was great. And they were like, “What is www dot? And what is this hashtag?” Whatever they said, it was so funny. And sure enough, that was the time to invest.

Frank Curzio: And I feel like that’s where it is in a metaverse, where you can go anywhere, and you’ll be able to create anything and have your own ownership of your digital material, where it’s not owned by all these companies, whether it’s Google, and Facebook, and Apple. No, it’s different. You got to know the difference between an open metaverse or closed metaverse, who’s going to be the winners, losers, and there’s a chance for you to make an absolute fortune, especially for the younger generation.

Frank Curzio: And the younger generation complains, and I know you’re conditioned to think America sucks and you have no opportunities, filled with all this student loan debt. This is the greatest environment for you to live in. For me, I had to know somebody in order to get into the industries, in order to break in. You have to know somebody. You don’t have to. Now, it’s all about innovation, creativity. You can get your word out to anywhere in the world as quick as possible. I mean, this is your time. And people want to beat you down, and they’re not going to tell you that.

Frank Curzio: But if you’re part of the younger generation, now is your time. Focus on the metaverses, focus on NFTs. That’s the future. That’s where we are going. And it’s going to get bigger and bigger over the next two years, five years, 10 years, and 30 years. And when you do the research and you dig in, you’re going to understand why. But anyway, you can find a lot of that if you want. Come see me in Vegas, drop me a line at frank@curzioresearch.com. I’ll be more than happy to meet up with you.

Frank Curzio: Hey guys, this is it for me. Question, comments, again, frank@curzioresearch.com. Daniel will be on tomorrow. And of course, with Frankly Speaking, which I do Fridays for paid subscribers, I always take your questions. But keep sending them in. I want to get as many questions as possible. Let’s try to answer them, even during Tuesday, Wednesday, Thursday’s podcast. Continue to get lots of questions of people being worried, but that’s where I am with the markets. Hopefully, I came across that way, at least being a little bit positive, because everything you see is negative. That’s when I want to be positive, and that’s what I’m buying with my own money right now. So again, questions, comments. I’m here for you, and I’ll see you guys tomorrow. Take care.

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.

Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 11 million times.

P.S. Curzio One members, be sure to shoot me an email if you’re coming to the expo and we’ll plan a special event.

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