Wall Street Unplugged
Episode: 1055July 12, 2023

The cold, hard truth about what the Fed must do

I recently installed a Ring doorbell camera at my new house—and my favorite part is getting access to the online Ring community. I start today’s show with some hilarious stuff that people post.

For some reason, the proposed merger between the PGA and LIV Golf has been elevated to the Senate. I rant about political interference in sports… and how pro leagues should just admit that all they care about is money.

By the time you get this podcast, the latest Consumer Price Index (CPI) data will already be out. I share why this month’s report should be positive for markets… but next month’s numbers will show that inflation remains a big problem.

And I share the cold, hard truth about what the Fed will need to do to defeat inflation.

Earnings season kicks off in a couple of days. I highlight some analyst expectations—including important upgrades/downgrades on a couple of household names. I also share what to expect from this earnings season… and the main piece of data you should focus on.

Next, I break down one of the biggest risks in this market. I continue to pound the table on one sector that presents a ton of opportunity right now—and share an example from one of our premium newsletters.

Speaking of which, don’t miss your chance to lock in our best deal ever on our three premium products—and the opportunity to speak with me one-on-one.

  • Hilarious stories from the Ring community [0:30]
  • Why the PGA/LIV merger has gone to the Senate [5:40]
  • This month’s CPI data will boost the markets [10:30]
  • The cold, hard truth about the Fed’s course of action [15:10]
  • What to watch this earnings season [18:45]
  • The biggest risk in this market [30:10]
  • The sector with the best opportunities right now [33:25]
  • Lock in this special offer before time runs out [39:20]
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 12 million times.
Transcript

Wall Street Unplugged | 1055

The cold, hard truth about what the Fed must do

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? Today is July 11th.

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.

You guys know, just recently moved into my new home and for the first time I got a ring bell installed and the ring allows you to see who’s coming to the door, videotapes it and it sends alerts to your phone as someone’s actually walking up to your door, which is pretty cool.

And even if you don’t have a ring doorbell, most of you know how it works.

Well probably heard about it.

A shark tank where I was originally pitched and turned down by all the sharks, which include Mark Cuban and Kevin O’Leary.

And you know, to their credit, the guy, I think he wants something like 700,000 for 10% of the company, right? So the valuation was really insane at the time and I don’t think it was growing as fast.

But little did he know a few years later Amazon buy the company for a billion dollars and it’s probably worth at least 10, 15 times that right now.

Uh, you also probably saw commercials about it.

If you’re on social media, people post when someone trips on the steps or slides on the ice or different things and you know, on reels and TikTok and things like that.

So I know a lot of you’re familiar with it, but what you may not be familiar with is Ring has something called Ring Community where your neighbors post things that they think are relevant and you’re gonna get alerted to.

This includes all videos and everything and posts and stuff like that.

And it sounds cool when you think about it.

Cause as community, we’re all together.

We’re helping each other out.

You know, if a car gets stolen in your neighborhood, you wanna be alerted or a stranger trying to open doors in the neighborhood, you wanna get alerted.

However, the default setting on this thing is like a five mile radius.

I’m not sure if you really know how big that is, but ticket may just say like Baltimore, five mile radius will include an area where, there’s 10 20 million mansions and an area where there’s a 6% chance that you’ll get kidnapped in that way.

Hear from you again.

So imagine the feedback that you’re getting.

So anyone with a ring doorbell, anyone, doesn’t matter, doesn’t look at the background, who you are, whatever can post within that radius.

So I have alerts set up and you have to see what people post on this thing.

I mean it’s, hey is my dog is missing and anyone see it and 10 minutes later they’re like, forget it, he’s in my yard.

And you know, you see the camera and the yard’s fenced in.

So I guess you forgot you’ll let your dog out or someone posted this strange person is walking through the neighborhood.

Watch out.

Older man walking slowly looks very shady.

And this person actually lives in a neighborhood and he’s 80, of course he’s walking slow.

I had to get hip surgery in about three weeks.

I walk slow, I’m 51 and they’re posted.

Watch out.

This guy looks shady.

Poor guy’s trying to get an exercise.

Everyone in the neighborhood now thinks he’s a stalker.

But the other morning things got real cause one person reported hearing gunshots.

He’s like, I hear gunshots.

Three rounds.

Did anyone see anything? Another person’s like, yeah, I heard two gunshots.

Another person’s like, did anyone see the cops? Anyone hear sirens? Anyone coming? It was July 3rd.

The day before the 4th of July, kids were lighting on fireworks.

Okay, in Florida, fireworks are illegal.

Not in New York, they’re not legal in Florida, they have them everywhere.

They have ’em at every grocery store, every Home Depot, every Walmart they have on every place.

People sit on the side of roads like Christmas trees, they’re everywhere.

They’re like gunshots.

Watch out gunshots.

And people are glued to this camera outside their house analyzing every single person that passes by.

And I think they’re shady.

They’re gonna send alert, which goes out to hundreds and hundreds of people depending on how big that radius is.

So again, you get alerts to your phone and, and for me, I don’t wanna shut it off cuz it’s entertaining as hell.

I actually expanded my range to 15 miles.

I mean you have to see the s**t that gets posted.

Bear just ate someone’s cat.

You see the missing grandma missing for three days.

Anyone see her? I’m like, it’s your grandma.

It’s the first time they reported.

I mean she’s probably a little hungry three days like you notice three days before she’s missing.

But you have to see it.

And people just look at this ring thing all day.

It’s like a social media channel.

It’s actually awesome, awesome.

Holy cow.

I don’t think that was intended.

Kind of like Viagra, right? When you saw it was intended for something else and all of a sudden thousands of mens are like, we need more, we need more.

You’re like, wait, wait, what’s going on? You know, like you figure it out.

I mean that, that’s a big part of this ecosystem.

It’s not just the Ring doorbell.

It’s cool to see and you get the alerts, but that community, people love it.

Holy cats entertaining hell so hell see everything.

Anyone who owns Airbnb knows exactly what I’m talking about cuz they’re gonna wanna see that person that goes into their house.

Cause I’m going to Saratoga opening day an Airbnb with four of my friends.

I was gonna taking my shirt off and walking in my underwear.

So imagine seeing that because they all have the ring set up and they’re all looking at that per, oh, I gotta see these people coming into my house.

I just wanna go in there and probably just hire like 50 people to come in with me.

Imagine that they’d be, you gotta get outta the house.

Everybody does that but ring what an awesome business.

And, and those unintended consequences sometimes when you’re like, wow, this is actually pretty good, this ring neighborhood thing and it sounds cool and they pitch it cool.

But until you have it and you realize how crazy people are posting on, it’s entertaining as hell.

Anyway, I’ll tell you that story.

I’m probably gonna get a ton of ring stories now cuz again it is, it’s it’s awesome.

Uh, but today I’d like to report there’s absolutely nothing going on in the markets today.

Nothing.

That’s why CBC keeps reporting about the executives from p g and L I V tours at testifying in a special senate hearing.

Okay? This isn’t a hearing being conducted by the DOJ or the FTC about the combined tour being 100% of monopoly.

Which it is.

It’s not about that.

It’s just a special hearing.

There’s no f*****g reason for anyone to be at this thing or to hold this.

I have no idea why they hold at all.

It’s two private companies looking to merge.

But our senators want the opportunity to grandstand, get the PGA ship for doing a deal with the Saudis after, you know, basically getting the woke media after these guys of how terrible.

So everyone all sudden you have the cell phone, everybody’s a terrorist, everyone, this is terrible.

How could you do this? Even though the Saudis is the number one funder of the woman’s tour, nobody wants to talk about it.

Even though we buy 7% of our oil from the Saudis, we could do business, right? It’s so funny how we talk, uh out both sides of our mouth hypocrisy is, is unbelievable.

How could you do this deal in the meantime? You know, it’s yeah, with China, right? And the NBA in China, the NBA has to do, they have, it’s one of the biggest markets, it’s massive.

And we hate their government.

I sure they hate our government, but the people there are pretty cool.

They love the N nba.

But just say that, just say, Hey, we’re doing this deal because the Saudis have a s**t load of money.

We can’t stop them.

They’re paying these people a hundred million dollar best players, a hundred million dollars over five years even though nobody shows up to these things.

And they’re gonna pay this for another seven years or lose as much money, unlimited amount.

We can’t compete with that.

And the PJ’s awesome cuz you, did you see the purses, what they raised them to? They raised ’em tremendously ever since l i v tour was established.

Then you got these guys at L I V just forget it.

I mean, what a joke and competition is good for everyone.

And a lot of this happened because PGA didn’t wanna pay their tour players enough money compared to the percentage that players get paid in every sport.

It was significantly, significantly lower.

So what, who starred this Phil Mickelson? What did he do with Phil Mickelson? They threw him under the bus and the bus ran him over back and forth five times.

That’s how what they did to to, to that poor guy you’re dealing with.

The Saudis did interviews, the, I mean, man they tried to destroy that guy and they kind of did right for going to l i v tour yet he was just like, he knows the business better than everyone and he makes a lot of money.

And you can say, well that’s, you know, he’s got a lot of endorsements and stuff.

But he was p****d off and saying, this isn’t right though.

These person should be hired.

Now they’re hired and now what is the PGA wanna do? They wanna merge with l I V.

Just say, Hey, it’s for the freaking money.

We’re all gonna be filthy rich when we do this.

They have a lot of money.

They can do whatever we want.

It’s awesome.

Just say it.

Don’t go there and say, oh well we made a mistake.

Uh, not everyone’s a terrorist or whatever.

You know, it’s all this grandstanding.

It’s all part of a whole package where, you know, these centers all wanna get lobbying dollars and money and be a part of.

I mean this isn’t the ftc, this isn’t a D O J, this isn’t like, is this deal fair? Again, it’s not even gonna matter.

It’s private companies and they’re gonna let it go through.

But yet we’re not talking about Microsoft and Activision.

Is that a joke that that deal’s not going through? Holy cow.

That’s one of the things I love about Cramer.

Everybody criticize Cramer, they hate him.

But I tell you, when comes on at nine o’clock slot, he always says something that is exciting or challenges again, people have problems with his picks and back and forth.

And then COVID again, I don’t agree with everything he says, but right away he’s like, is this about the ftc? And they’re like, no.

He’s like, oh, cuz the girl’s running the ftc, I mean she, she won’t approve two people in a room.

She’s not gonna approve it.

And he’s right.

You know, right away that spark’s like, you know, Faber telling him that, oh well, you know, well I wouldn’t say that and, and you know, whatever.

But it, it’s cool like the controversy.

But he says what’s on his mind.

And sometimes that’s what you wanna hear.

But how’s that deal not going through? It’s crazy that it’s not going through.

And, and and, and the lobbying behind and, and, and just the secret backdoor meetings of not pushing that deal through, whether it’s Europe, whether it’s here.

It’s amazing that deal has to go through.

It has to go through.

They’re worried about them controlling a lot of the cloud market.

Anyone get into cloud in terms of gaming? Are you kidding me? You know, how about gaming platforms? There are tons of ’em.

You know, just talking about the Sony PlayStation and, and and the gaming companies and Nintendo and, and take two interactive and EA sports and you know, all the online games and apps and stuff like hey come here.

Come on, gimme a break.

World of Warcraft.

Got a metaverse.

We’re all like gaming platforms as well.

You’re really not gonna prove this deal.

This deal should go through.

No problem, no problem.

That’s concessions and they’ve met them and they’re still not approving it.

But come on instead.

Yet you have this on TV and talking about it.

That’s how you know there’s nothing really going on cuz this is meaningless.

It shouldn’t even be a meeting, it’s a Saturday hearing surprise.

Even took time to do that.

They couldn’t take time to really, you know, come back from vacation and get the debt ceiling done.

But this is important.

We gotta get out there.

We gotta, you know, have this special senate meeting.

Now the rest of the week pay costs attention to got the CPI tomorrow.

The CPI and also the core, which excludes food energy expect to rise 0.

3% with core inflation.

Expect to be up year over year.

You know how much 5%.

That’s insane.

You know how high that is in inflation.

I explain this before, we’ve never on an annual basis before last year, we’ve never been above 4% in annual inflation dating back to 1991.

So we’re at 5%, we’re cheering, it’s below 9% and everyone’s looking for a much better number.

Expectations.

Tom Lee went on, gotta give him credit.

He’s been right about this rally.

Gladio spent, a lot of people spend a lower number.

So inflation is moderating.

That’s a better number, right? I think we get that used.

Car sales have gone down.

Energy pulled back last month.

Although gasoline prices, I don’t know if you’ve seen them lately and I’d like to know and hear from you guys.

Uh, I know a lot about gasoline prices.

One, I drive an hour to work for my office.

I haven’t moved it by the house that I moved in yet.

So I probably drive by 10 different gas stations and sometimes I see some of ’em like you gotta be a joke.

And the one buyer house happens to be the cheapest all the time.

It was $3 5 cents a week ago for a gallon of gas.

It’s 3 45 now a week ago.

I’ve never seen prices move up or down that fast.

I mean it, I mean it didn’t really go straight down, right? It went from 3 50, 30 to 20 over like probably a month and a half in one week.

3 0 5, 3 45.

I’m like is it just this? You know, I was wondering if it was just this place and it wasn’t the gas stations that I pass and as I get close to my office, a lot of gas stations around as I’m driving 3 45.

That’s a big difference.

So the engine component last month and June is gonna show any prices came down.

And so yes I see a positive CPI number tomorrow.

You got some favorable dynamics going on.

But that will not be the case next month when we report July data.

So that’s the data going on this week, which is set of energy prices.

That’s not being reported in the number you’re gonna see tomorrow.

This is the June number again, all prices have went up significantly.

Hotel prices are still surging.

I know cause I follow this industry and recommend another company within this area.

We’ve done very, very well being early to party food prices, not much moderation but home prices are now back at all time highs going up every month since January.

We talked about this a lot.

Housing real estate including rents a big component of CPI.

Why? Because the government manipulated that over the past 27 years to make sure that we’ll never see inflation ever.

So we didn’t see inflation.

Well based on the CPI, there was no inflation from 2010 to 2020, right? There’s no inflation.

It was below 2% on average, right? There’s no inflation.

We all saw massive inflation during that time.

But according to what they report there wasn’t on inflation.

Why? Because they made rental income account for a massive part.

And even rentals, if you look back the past 50 years, they don’t go up fast year over year.

They didn’t even go up that fast or that crazy during Rental incomes were not going up that much.

Check the data.

So like, okay, let’s construct this.

Where how do we keep and why would they do that? Because it’s in their favor as a politician to have the economy do well and the economy does well when you have low interest rates and you had a period of 10, It allows constant spending.

It allows you to spend over that 10 year period, go from what? 85% to 83%, 5 trillion.

Think about what you could do with that money in terms of border safety, in terms of kids at school and putting 3, 4, 5 security cops at schools with shootings and stuff.

Like think about what you could do.

$5 trillion.

You’re allowed to do that when you have zero interest rates pedal to the Metal, everything going great.

But now with rental income and people saying, well it’s coming down.

You think rental income’s gonna come down at home, prices going higher.

And nobody predicted this.

Nobody predicted that rates would go from three to 7% and you’d see home prices go higher.

Nobody.

So now you’ve seen this and yes, say it’s a supply shock or whatever, but you know you really think rentals are gonna come down.

There’s a supply shock in houses.

I mean rentals, they’re not gonna come down and now that’s gonna come back to bite them in the ass.

It’s why the Fed is like look we have this hawkish pause and we’re gonna raise two more times going forward, but not right now.

Well July in a couple weeks go say that meeting they’re raising, I don’t care what the number is tomorrow they’re raising cuz inflation’s gonna go a lot higher going forward and they need to control it.

They’re not gonna raise twice.

They’re gonna raise three times.

It’s either gonna be a 50%, it’s gonna be a 25% raise in in July and then they got three other meetings to do this to the end of the year.

And you’re either gonna see a 50 basis, maybe they skip and do 50 or they do 25 and 25 cause you’re gonna see inflation go a lot higher.

We saw it in the uk, we’re gonna see it in other places.

We’re seeing it around.

I went to the outlets to get some clothes to my trip and I have to tell you, I’ve been going to the outlets probably, you know, since I’ve been here now I’m a lot closer.

I live in Jacksonville, right? And go go to outlets in in St.

Augustine.

I’ve never seen it that crowded before.

I’ve never ever seen it that crowded before since I’ve been going 12 years.

If you’re looking at restaurants, restaurants are are not emptying out.

It’s not.

You’re still seeing people spend money, they still have money, they’re still trillions in the system.

We’re seeing LA liquidity finally coming out of the market.

It’s gonna happen with the debt ceiling.

We need to raise 1.

2 trillion.

That’s money from the banks, banks reserve that’s gonna come outta the market.

We’re seeing money come outta the market from student loan three year pause.

Now it’s a lot of money.

43 million people, $400 a month discretionary spending.

It’s a lot of money.

But three years that was paused.

Now you’ve seen liquidity coming to the market but there’s still a lot of liquidity in the market.

You think inflation’s going away.

It’s not.

So I’m hoping we get a really good number.

Everybody’s anticipating, everyone’s saying.

No one said hey this number’s gonna be behind the expected.

Cuz you see the data kind of coming out ahead of it.

And healthcare’s kind of been driving this too a little bit.

I mean the healthcare prices and whatever happened within healthcare have come down tremendously.

I dunno whose healthcare prices came down.

Mine certainly didn’t.

I dunno if yours did, but I think it was like a 20% decline in healthcare whatever premiums or whatever it was that was in last month’s CPI year over year.

Uh, but, and you’re looking at the jobs number, still strong A D P number.

I mean holy cow.

That was scary.

Then we got a jobs number, kind of said, okay, we’re okay.

And you know what happens after jobs number, right? Every jobs number we revise the previous month lower every last five months, right? So the data that we’re getting for jobs really is s**t cuz it’s gonna get revised lower, right? Because it’s lagging data.

But it’s interesting because we have what, 3.

7% the Fed ‘s doing everything in their power to force a a, a recession because we have inflation that’s incredibly high at 5%.

Even if we get a good number, it’s still gonna show the core is that 4.

6, If they are serious, the power Sears is about 2%.

We’re not hitting at 2025.

We’re gonna have tightened conditions until then or until we have no inflation.

And the only way we have no inflation is the market crashes.

If we have a deep recession general way to cure it.

Look at the eighties, that’s the playbook.

Can’t cure it by oh we want a soft landing.

You’re not gonna have a soft landing.

It’s the reason why you’re seeing stocks go through the fricking roof where interest rates are surging, which usually never happens.

Not to mention earnings are down this quarter coming in Q2 starts next week, they’re gonna be down 7% year over year.

It’s to third straight quarter.

They’re gonna be down year over year.

Earnings recession yet stocks are rising.

You have the the yield curve.

I mean the two year hit its highest level I think I wanna say in decades you have the inverted yield curve more inverted than it’s been since the eighties, right? I mean s**t like this doesn’t happen.

These disconnects don’t happen unless there’s something broken within the system and it’s gonna come to a head.

So be careful because what do we have? We have earning season where you could say, well Thursday kicks off with Delta and Pepsi.

But really next week gets crazy.

You have JPMorgan City, BlackRock, United Health, Wells Fargo report on Monday, banking stocks in there.

So by the way, JPMorgan got an upgrade today, with what with a couple of days left, which is interesting a couple days before they’re gonna report.

So when I look at that and I see JPMorgan getting an upgrade, they got upgraded by Jefferies.

By the way.

They got four trading days before the report.

You should expect some good news outta JPMorgan.

I mean it’s rare to see upgrades on the stock just ahead of the earnings call.

Let’s the analysts talk to management.

We still don’t talk to management, it’s just they’re not supposed to talk a few weeks before the quarter.

But it’s very rare to see upgrades on a stock just ahead of that earnings call because if they’re wrong and the stock crashes, you’re really, really gonna look like an idiot cuz it’s a coin flip.

You gotta have a bad quarter and say hey, next quarter’s gonna be bad.

We raise our loan loss reserves, whatever.

Maybe you don’t meet estimates and the stock falls five 7%.

You’re gonna look like an idiot upgrading a couple days ahead when you could wait.

You’re better off waiting and the stock reports good numbers and goes up 10% and then you upgrade.

That’s fine.

You’re not gonna lose your job for that.

You can lose your job by upgrading just ahead and the stock crashes.

And granted JPMorgan’s not that volatile and you’re not gonna see a 10, But using the playbook that usually happens as me being from Wall Street and understand sell side research and stuff like that.

Uh, what they do, these sell side analysts, if if they like the company ahead of earnings, they usually don’t upgrade.

But they reiterate.

They reiterate their by rating, they reiterate it.

I like this stock.

I really, really like this stock.

I really, really, really, really, really like this stock.

That’s what they say.

So Cowan reiterated Netflix as an outperform.

Bad reiterate Tesla as an outperform.

This is just from today.

Morgan Stanley reiterate Microsoft as overweight reiterate as Microsoft does.

What? They just cut 10,000 more jobs.

Doesn’t sound like a company that’s rocketing fine and all selling this trade’s highest valuation.

Get earnings declining year over year.

Get ai, I get it.

Huge trend these guys going all in these technology companies spending billions.

I understand that.

But you do.

You really see, and I’ll challenge you on this, when’s the last market cycle that you saw when stocks were at all time highs and the companies at all time highs were laying off this many employees? I challenge you find the time for me cuz I bet you’ll find it.

Companies don’t lay off when their stocks are at all time highs.

They don’t.

They may cut costs and say okay, we’re at the top here and let’s play a little conservative way.

They don’t lay off employees as their stock is up 30%, I don’t know if NVIDIA’s laying off employees.

I know Microsoft is, I know Google did I know Netflix did.

I mean looking at the top 10 of those companies that represent what, Now you’re getting back to those overall key bank again today reiterates Nvidia as an overweight, but they raised their target at least to five 50 to five 50.

NVIDIA’s trade at 4 25 today.

Like if you wanna put that in perspective, if they’re right and it goes to five 50 and that’s usually a six to 12 month target, NVIDIA’s market cap is gonna increase by 300 billion.

It’s a trillion dollar company right now.

3 billion.

I know we throw out billions and trillions.

Not a big deal.

I’m put in perspective for you.

There’s only companies INS&P 500, a market cap above 300 billion and KeyBank believes that NVIDIA’s gonna add that much market cap over the next six or 12 months.

You wanna go even further here.

These are the companies that have just 150 billion market cap and they’re saying that NVIDIA’s gonna grow by 300 billion.

So twice these market caps, Disney, Wells Fargo, right? One of the largest banks, Schwab, Raytheon, biggest defense companies, Comcast biggest cable companies, ups, biggest delivery companies, they all have around 150 billion market cap, total market cap for those companies.

And KeyBank is like that stock’s gonna go up one 300 billion in market cap over the next six to 12 months.

That’s how insane things are getting, ok, put things in perspective sometimes and only 20 companies look it up, have a market cap of more than 300 billion.

They’re expecting them to add that in a year in market cap.

And they could, let’s see what ai, let’s see if the spending continues, but to me I’d be a little worried.

You have 70% margins.

You do have the best product.

Everybody’s coming after you.

Chip companies, amd, Taiwan, semi, a lot of companies coming after you.

Now they, the biggest companies, when you have 70% margin like Apple and Google, they’re gonna start making their own chips cuz it’s a lot, lot cheaper.

Doesn’t make sense when this is a commoditized business.

Well let’s keep it to Taiwan.

Semi, everybody uses them.

Samsung Intel, again, they have their own fab fab places and and and stuff like that.

And I get it, but it makes no sense to jump into an industry where the margins are tight.

When the margins are that big and you’re sitting there with hundreds of billions of excess cash and cash free cash flow and tens of billions of dollars on your balance sheet right now when you’re these big tech companies, it makes sense to say, okay, hey let’s allocate 25 billion to this over the next four years.

Cuz at the end of the day, cap like apple is not a big deal.

You can get that s**t up and running 10 times faster if you get the right people in there.

And you can, because money talks also worth noting.

One more note from today is Evercore and sell side shop I I I like a lot, they’re good.

They added Netflix as a tactical underperform ahead of the quarter.

So expecting a sell off after earnings because expectations are high.

I got my ass kicked saying that about Nvidia going up over a hundred percent into the quarter where expectations were high.

So I’m not telling you to act on that, but let’s see how that plays out and I’ll give Ed Acor a credit because it’s one of the only companies that’s saying, be careful right now.

Be careful with these large cap tech companies.

Which is interesting because another tell, and I’ve been bringing up these tells in my newsletters where you had the technicals, you had the record in your favor, but now technicals are breaking down, come down Wall Street Unplugged Premium also in my newsletters it’s gonna come out Wednesday and and and that’s Curzio Research Advisory.

So that’s gonna come out Wednesday’s today.

That’s how crazy it’s cause I’m going away.

I’m excited.

It’s been so busy.

But that’s gonna be later today gonna be a great, great, great pick.

Awesome pick that I love a lot.

That’s huge Upside potential.

I love it.

And, and people forgot about this name.

It hasn’t participated, been reported, great numbers last time.

It’s in the right sector in the hotel sector’s.

Fantastic, great, great name.

And also I talked about these technical indicators rolling over last week, in Curzio Venture Opportunities.

So as this is happening, we rid, we rid all these buys on these technology companies.

What do you think is happening? Billionaires have sold 9 billion so far this year of their stock.

This includes insiders at Walmart, Salesforce.

Ton of insiders at Nvidia just look at the sales.

They’re coming out like crazy.

And these guys, key bank think it’s going to five 50.

These people who are selling Nvidia obviously don’t think that Airbnb, Oracle, Moderna, Apollo dumping, dumping, dumping.

The billionaires in these companies are dumping.

And when you look at insider buying, it’s running at half at last year’s level.

Which means what? Which means when you see inside of buying, it means it’s a, it’s more of a big deal, okay? When everyone’s buying and insiders buying and you see the market come down, okay fine, people are like, all right, we’re cheap right now.

When you see only a few companies, that’s usually good.

Where I’m seeing inside of buying small caps still 25% off the November 21 highs.

Nobody cares about them.

But anyway, these billionaires selling their stock should tell you something about where they believe the smartest guys in the biggest companies where they believe the market’s heading over the next six months for the rest of the year.

But look, Q2 earnings season starts next week, then the next three weeks you’re probably gonna see 85% of the companies this P Daniel and I love this part of the market.

We like going through these reports, digging through, seeing how they relate to other companies, the competition.

I’m saying pay close attention cause numbers again, just like the last two quarters, three quarters earnings been down, there’s gonna be a third quarter in a row where earnings are down year over year.

But numbers again have been revised lower into this earnings season.

Not as bad as last earnings season, but about two 3% going in you can check facts set and that report’s a free fact set earnings, PDF pull up on Google, it’s awesome report.

So I’m expecting companies to come out and beat like normal 70, you know you’re supposed to earn a dollar.

Now even with Disney, you know Disney’s estimates have come down by like 30, it’s cost, they’ve been revised 30% lower.

It’s still a number.

If you’re reporting 70 cents, it’s still reflects in your pe, it’s still reflects in, you know, how fast your company’s growing.

You beat the estimate.

Again, it’s just an estimate that the average only sell site analysts.

I’m expecting beats like the past few quarters.

However, however, however, many companies are not just gonna give Q3 guidance, which by the way, Q3 is expected to be roughly flat year over year.

Just very, very small gains.

Less than 1%.

But this is a quarter where they’re gonna report full year earnings likely for the rest of the year.

And this is significant because if you’re looking at this quarter, earnings are expected to to fall 7%.

So it’s a trough right now, right? It’s supposed to be at a low point.

So 7% for q2, however, analysts are expecting earnings to surge by 8% in q4.

If we don’t see a lot of these companies talk positive about the rest of the year, some of ’em are gonna have to raise their estimates.

We could see the market sell off, which we haven’t seen over the three pass earnings season.

Even though we saw earnings fall year over year in a earnings recession, which you normally don’t see.

We saw that as good news, it’s not as bad as expected because again it’s been manipulated.

But we’re seeing earnings growth slow.

It’s down year over year for the last three quarters.

It’s probably gonna be fourth quarter too.

Like it’s probably gonna be, you know, four quarters in a row cause next quarter is q3.

But for Q4, analysts are expecting an absolute surge in earnings.

Do you see that? Because I think we’re gonna be more in the heart of recession with liquidity coming outta this market.

And I think it’s crazy for a company to report earnings and issue super positive guidance for the rest of this year.

Cuz they are seeing trends with Walmart, Macy’s, they said they expected the consumer to be weak.

Not this week night Swift just said that just lowered their estimates.

This is much worse than expected.

This is one of the largest truck companies in the world.

Deliver everything, all the goods.

If you’re looking at Taiwan exports, why is that a big deal? Well they’re down about 23% year over year.

What comes from Taiwan? Taiwan sent me all the electronics, the parts come from there, they’re down 23%, that should be up 23% based on where these stocks are trading.

And this boom that we’re supposedly seeing, it’s not being generated by the numbers, it’s a multiple expansion.

Meaning that PEs are rising even though earnings are not.

It’s very rare to happen or something like that to happen when you have a rising interest rate environment, inverted yield curve and a Fed doing everything, its power to pull trillions in liquidity out of this market through QT quantitative tightening.

So this is a monster outlook for Q4 with the majority of companies.

Again, the majority of the companies already padded their numbers by cutting costs over the past two, three quarters.

They fired tons of employees, which includes the top 10 tech names.

Again, they’re responsible for 32% of the market in terms of waiting.

The last time we hit this high was back in at 32.

I don’t even think we hit 32, but I think it was November And then this is November before the crash came down, right we, we saw a crash in November, right? But it’s funny cuz if even if you look at the last two instances and the last one was only a couple years ago, but if we look even back then the waiting was almost the same.

So it was a 30% waiting.

I think it was more like 25, 20 7% weighting, right? Where these top companies represent of the S&P 500, but their profits were almost even.

So if it’s a 28, 20 7% weighting, it also counted for 27% of the profits, of the total profits for the S&P 500.

Now it’s a 32% weighting.

But yet these big 10 companies, these top 10 companies only count for 21% of the total earnings.

Very big disconnect.

But the markets are up sharply now.

They’re up sharply Now, which changes a perception mean that companies aren’t gonna get away with s****y or conservative forecasts this time around.

They gotta be strong.

They, that’s what the market is expecting.

Not so much this quarter they’re gonna beat and maybe some of ’em will say, well Q3 looks good but a lot of companies, the majority of ’em are going to give you an outlook for the rest of the year.

That’s what everyone wants to hear.

And that outlook better be very, very, very good because if it’s not, and if they’re like, well if any of these companies that are expecting a positive outlook, warn, trust me on this, you’re gonna see 20% declines in one day for many of these names because they’re expected to generate eight PERC earnings supposed to grow 8% in one quarter.

Okay? That’s the average.

They usually grow for the past 10 years.

We have 0% interest rates.

It’s 78% 9% earnings growth year over year, over year over year.

Almost like clockwork.

Sometimes it went up 12%, sometimes it went down to 6%.

But overall it’s like 8%.

You’re expecting that in one quarter.

That’s very, very, very huge expectations in a market that you’re seeing liquidity being drained now, money coming outta the market, consumers struggling more than ever, pay close attention to this earning season.

It’s gonna be a big deal.

Cause I’m seeing tons of disconnects in companies and their share price, it’s for large caps.

Disconnect is mostly companies trading on much higher valuations than they should be trading compared to their earnings growth.

But for small caps, I’m seeing the opposite.

Tons of names trading significant discounts to their stock price.

And we picked up and can’t tell you how many names we picked away at where they’re up tremendously.

And I’m very, very, very, very happy for subscribers.

Our average position is up over 90% of that portfolio last few months.

I mean we’ve seen a hundred percent winners.

We just saw a big winner in in Rivian.

We bought at 14 in May.

And and you know, again it was, writing was on the wall.

The quarter was great, the quarter was fantastic.

Nobody cared.

Nobody cared about small caps, even watching tv.

It’s all about Microsoft and their layoffs and Google and AI and special reports in 60 minutes.

And you know, it’s all it is.

It’s avidia.

AI is going crazy.

You know, Amazon Prime Day coming, everything is large cap.

That’s what you wanna see.

Cuz guys like me who’s paying attention to small caps like I’ve done all my life, you don’t really see opportunities like this.

Yes, it’s gonna be a tough economy, but these companies down 25%, they cut their costs, the big guys benefited.

So their stocks go up 30, 40, 50, a Rivian is left for debt at 14 inmates, it’s over 24 less than two months.

And I got news for you if you think that company’s done going higher, if you’re looking at valuation compared to Tesla.

Ok? And I’ll do some quick math.

And you may say this isn’t apples to apples, but I, I think it’s pretty close because if you look at Tesla and the amount of vehicles that they produced the first six months, I’ve forgot the number, it’s like three 50 or something.

Billy man done the math on it.

Three 50,000.

And if you look at Rivian, it’s around 45,000, which they were supposed to produce 50,000 by the end of this year.

They’re already at at companies that are in massive production mode, scale mode, Tesla’s market cap is eight 80 billion.

If you look at Vivian’s market cap, it’s about 23 billion.

Yet if you look at the vehicle production, it represents about 14% Vivian’s 45,000, about 13, So if you said it should be traded maybe 14% of the market cap of Tesla, you’re looking at a company where Rivian should be trading about a2 $5 billion market cap that’s trading at a3 billion market cap.

If you value it based on what Tesla’s trading.

And you can say, wait a minute, Frank Tesla’s got bigger Gigafactories and things are great to, you’re right.

Not apples to apples but not too far off.

Cause I dunno if you realize this, Rivian sells trucks and SUVs.

SUVs are now 53% of the market.

Pickup trucks are like 12% of the market.

That’s what they’re selling and that’s what they could scale right now.

So you’re looking at a company that man, no more liquidity concerns, They could raise money right now, people would die to get in to that company at a discounted price.

But you’re finally seeing that growth protection.

When I look at a guy like Ron Barron and it’s incredible because here’s a guy that saw Tesla where everyone questioned it.

It was crazy.

Yet you’re looking at Rivian who’s at this point a lot quicker than Tesla got to, which took them five years.

It took about half the time to get there in terms of ability to scale ’em having a technology in place.

Not to mention if you look at Ford gm, they basically, I don’t wanna say throwing in a towel, but you could see it EV sales quarter over a quarter for both of those companies declined quarter over a quarter.

Remember we saw EVs, I’m going all in.

Everything they’re realizing when you look at Rivian and you look at Tesla, they live breathe, they wake up.

100% of the company is about EVs.

That’s it.

Jim and Ford.

No, they gotta run this business that generates a s**t load of money and cashflow for them.

But they’re trying to push themselves into this market where they don’t have the technology and they can’t scale.

Well, you’d see a ton more cars, right? We’ve heard three years are gonna be able to scale.

They can’t.

Same with Disney.

If you look at Netflix lives breeds, they’re entire life is streaming.

You look at Disney, they’re trying to get into a business that’s not their core business that they can’t compete.

And companies are starting to realize that Ford, good job and gm good job realizing that, hey, you know what? I know the ESG people are gonna go crazy, beat the s**t out of us.

But let’s just dial it down a little bit because Ford’s selling a ton of pickup trucks and GM sales like blew out, right? Blew out the numbers in terms of vehicle sales.

Most of ’em are guests.

Vehicles know what you’re good at, try to satisfy the politics, what you need to do.

And that’s when you’ll see Disney turn around when they say, all right, enough is streaming.

We’re not putting that much money into it.

700 billion, Who’s been around 15 years loses money.

I think he’s still losing a billion dollar who constantly losing money, lose money, lose money again under, under the Disney umbrella.

They own a percentage of that.

Let’s see, Comcast owns a percentage as well, but let’s see what happens there.

But these are some of the names, again, not Cherry Pick and Rivian here.

We have several names in in Small Cap Venture, Curzio Venture Opportunities that that are up and, and Seven buys real really good names in this portfolio, but just names I’m seeing that have tremendous potential.

They knew Recessions coming since.

Everyone’s saying it for over a year now.

Well over a year they cut their costs, they positioned themselves.

The only thing that didn’t happen is their stock surge like everybody else.

And that is seeing business and getting their business right with a leaner business.

The same demand come back in their core markets.

And that’s where you see e earnings explode cuz you’re leaner than ever.

Your costs are lower than ever.

And now your business you’re generating is huge.

It’s easy to manage costs, it’s easy to add, it’s always hard to cut.

That’s why they say you should cut quick.

So that’s the com that’s the position they’re in.

These are the companies I’m seeing in, in in Small cap world.

So quick note, so I talk about this a lot with a special offers subscribed, our premium products 80 cent discount.

Uh, it’s gonna close this week below the price of our three premium service.

That’s, Moneyflow Trader, Crypto Intelligence, and yes, Curzio Venture Opportunities for 5,000 annually to a thousand dollars annually for the year.

Again, only time I’ve ever done this.

I also said the first hundred people I subscribe get a 10 minute phone call with me.

I only have a few slots left for that.

Uh, that 10 minute phone call is the highlight of my day.

I have several and you know, certain days that I take them that stretched out.

The people that I talk to have been amazing.

Just the information I get, the feedback I get and person, the police officer and the entrepreneurs, several in the military business owners and one, one young investor, sent me several AI programs to help that helped him build, his social media presence increased by 2000% and he’s totally into AI and all these, and the three engines he sent me, I’d never heard of, spoke to another person who said, Hey Frank, thank you so much for Rivian.

He’s like, I’m already in it.

He goes, I I have two, two EVs.

He’s like, I thought you hated EVs.

I said, I don’t hate EVs.

I I hate the model that Fording GM have with EVs.

I said, no problem with them.

You wanna buy ’em, buy ’em.

It’s just the, the, the numbers that he estimates that they’re projecting on this is insane.

It’s not gonna happen.

So he owns a Mach, which I think is like, someone’s like the Mustang in Ford it.

And he, and he bought the Rivian a few months ago.

He goes, Frank, the Rivian is the greatest thing ever.

He goes, as soon as I, as soon as I took riding it and, and he’s like, I bought the stock, bought the stock months ago.

He’s like, you’re dead, right? Everyone that I hear that owns a Rivian loves it.

You see the Wall Street Journal, someone report unbelievable the experience.

The truck is exactly what they want and they love the product and now they can scale it.

But that’s really good information.

I wanna know, and I’m gonna report back to you.

There might be people that say, Hey Frank, the Rivian sucks.

This why I’ll report back to you again.

It’s about getting the right information.

So speaking to you personally, that 10 minutes is really cool.

Again, it’s a highlight of my day.

I love it.

but the deal for those products ends this week.

Thank you so much.

A lot of people subscribed.

I’m glad you subscribed.

Cause I think in almost every one of those newsletters, if you subscribe three weeks ago, it probably paid itself back already.

Cause the three areas I said that I’m very, very high on, again, I don’t get paid by companies if I’m not right, you’re not gonna subscribe again.

But it’s just an opportunity where I don’t see all three products.

It’s very rare you market three products.

It’s not the best marketing strategy.

It’s better to mark one idea, focus on that idea.

But these three products offer a lot of value for you right now because again, Moneyflow Trader , I see a lot of companies missing earning estimates.

Genia’s all over this.

And you could easily buy buying long data.

Puts make a lot of money.

Crypto Intelligence, the institutions will get in that see outlined framework, which is great.

You’re going after certain amount of companies and you the institutions are pouring in, right? We went to 60,000 plus in Bitcoin without institutional support.

Now BlackRock, 10 trillion Invesco just filed for the ETF Arc.

Who’s gonna be the first mark my words, to get the approval for Bitcoin etf, fidelity Wisdom Tree.

And that’s just the beginning.

It’s not just the ETF.

For, for Bitcoin, it’s now an ETF for Ethereum.

Then it’s an ETF to manage, you know, 10 different cryptos, right? That are mostly proof of work and not proof of stake, which ICOs, which again the SEC finally has outlined which ones they’re targeting as securities.

So we have an outline.

That’s why you’re seeing all of a sudden all these institutions getting in.

And then you have small cap Venture Opportunities.

Again, I just talked to you about the value I’m seeing there and I’m very excited.

Put my money in all three of these areas of the market.

So guys, that’s it for me.

I’m gonna be out the next few days going open day Saratoga Raceway.

My close friends have a lot of history there used to go when I was younger, we talked about that last year.

My dad used to take me every single year cause we had an upstate house for 15 years, still had the same house.

My sister took it over Stanford, New York, and it’s awesome.

We hang out and, and you know, just got a lot of property up there and then it’s about an hour and a half hour, So now I think it’s eight weeks.

Uh, I think it rotates with, you know, aqueduct and Belmont for the New York tracks opened up and just beautiful guys, beautiful, beautiful outdoor track.

It’s so beautiful.

It’s, it’s really, really nice.

And it’s known as, the graveyard for favorites, which means you can win a lot of money, which I did last year.

I won $4,500, which means this year I’m gonna lose several thousand dollars.

But I’m gonna enjoy myself cause I don’t give myself time off.

And these are friends that I know for decades and decades.

I’m gonna have a really good time if you happen to be there.

Don’t be shy.

You may have a few beers in me.

Feel free to make fun of me, but I’m very happy drunk.

Uh, but I’m gonna have a lot of fun.

And again, if you’re around, you see me, please say hi.

I love talking to you guys, subscribers, it’s awesome.

And that also means Wall Street Unplugged Premium.

Tomorrow Daniel taking the reins and he’s gonna have a new recommendation of Dollar Stock Hub members.

So definitely tune in, tune in.

Alright guys, that’s it for me.

Have a wonderful week, wonderful weekend.

I’ll see you on the inside.

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.

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