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Folks if you are buyer stocks uh you should be very happy with what the fed just did here the the fed just tanked stocks essentially and i want to share exactly my perspective on this what this means for the market what this means for the market over the coming year and things like that and kind of my viewpoints on this now if you’ve been tracking things here today
First off cpi was the main thing that was supposed to be the news today okay and cpi came in worse than expected 7.7.2 cpi uh was expected that’s in regards to inflation right the consumer price index 7.5 percent ended up being the number and so what ended up happening essentially is a market open super low on the back of that cpi data well then the market showed a
Lot of resilience throughout the day and it went up and went up and went up okay until a point when there’s some big news kind of out of the fed here that we got into and so yeah i’m gonna share my perspective on that in this video hope you guys enjoyed it always make sure to subscribe the channel also massive valentine’s day sale going for the private stock group
So if you ever want to join us in there it’s a great time to do so it’s gonna be a lot of money to be made in this market over the next couple years so uh i put this out last night in regards to the cpi i put this in the breadcrumbs tab i said the market always cracks me up imagine making a decision in a few hours to buy or sell amazon stock based upon if cpi comes
In at six point nine percent seven point two percent seven point five percent et cetera right uh there will be funds and investors doing just that in a few hours when you’ve been doing this as long as i have you just find the humor in these things have a great day and uh you know it’s just it almost begins to you know become comical at this point in time that you
Know folks make buying and selling decisions for great companies based upon if cpi is going to beat a little bit or come a little underexpected and things like that and here we are where cpi came in worse than expected and i think a lot of folks would have expected the market to tank on the back of that and uh you know things to get really ugly really fast and
What ends up happening is the market shows great resilience and ends up going up and going up and going up and meanwhile people are like what the heck man cpi given worse than expected solution 7.2 it came in 7.5 market should be tanking and market just showed resilience there was up until oh the fed had to come out okay and uh b-man sent me this and this is the
Huge news here and this is this is a big deal okay fed’s bollard favors 100 basis point so basically what this means is one percent think of it as one percent right fed funds rate right now is that like i don’t know zero point or 0.25 or something like that like it’s it’s insanely low uh favors 100 basis point interest rate increase by july first bullard favors
First half point u.s rate increase since 2000 bullard favors balance sheet reduction starts in the second quarter and so when this broke um you know then i’ll show you guys basically everything just started to tank because this is seen as the fed’s going to be more aggressive than what a lot of folks had it basically anticipate anticipated many people thought the
Fed was essentially going to raise rates four to seven four to seven times in the course of of 2022 here but when people say i’m expecting four to seven rate hikes how most of them are thinking is 0.25 each time well if all of a sudden you talk about a half a percent each time you raise rates and let’s say you do that four times then we’re at two percent plus by
The end of uh 2022 essentially right never mind if you start talking about maybe they raise rates five times six times i think that’s unrealistic uh to be talking about them raising rates that many times but it’s not out of the question to say they could raise rates four times i think everybody’s had two rate hikes for sure like that’s the automatic like there’s
No question the fed’s going to raise twice this year right that’s what everybody expects the big question is does the fed raise a third time in a fourth time this year that’s really going to depend upon what happens with inflation where those numbers end up shaking out right and if there’s any real fears around a recession or not a recession or things like that
Right and so that’s going to end up being what’s really really important as far as the short-term you know fluctuations in the market and those sorts of things there right now as soon as that news broke almost every single stock just started tank this is uh looking at my watch list here on the hungry bull app purple as soon as that news broke uber started falling
A little before maybe the uber shareholders had the news before everybody else did stitch fix as soon as that news broke with the fed tattooed chef even ttcf imagine selling ttcf or buying tdcf based upon what the fed’s gonna do that’s just that’s just comical okay as soon as that news broke down lemonade stock same exact thing just down as soon as the news broke
You can see this correlation throughout almost every stock right the planet as soon as that news broke voyager same thing by the way voyager bitcoins looking really good suddenly if uh bitcoin keeps trending the way it’s trending voyager is going to put together a pretty sick uh 1q2q uh in into this year if bitcoin continues on this trajectory that’s all i got
To say about that and wall street this was one of those stocks that kind of is forgotten because it’s a smaller cap company it’s a crypto brokerage at the end of the day right and so this is a company that’s kind of forgotten about and uh it’s not on really like a major major exchange yet although they’re working their way toward that and so voyagers kind of just
Gets forgotten about and um don’t forget about voyager if we go ahead and take a look at tesla as soon as that news broke tesla just paypal as soon as that news broke okay almost every single stock out there just even even stocks uh you know i have that are greens they are on my watch list that are green like you know revolve uh there’s a stock i own you know as
Soon as that news broke came down didn’t come down as much as a lot of the other stocks but it still came down fubo i don’t own this one uh but that one did definitely come down smile direct club i do own this one that one came down corsair i do own that one that one came down square i do not own but that one came down so almost everything as soon as that news broke
Essentially um it came down now i have some really really good news to kind of share in this whole situation and kind of my viewpoints on thus okay so here’s the thing um we just got cpi worse than expected right which is seen as a negative for the stock market we just got a fed that looks like they’re much more aggressive than what the majority of experts folks
On wall street expect it right and so with that dramatic of bad news right the the expected cpi numbers that everybody expected to come out but they came out worse and then the unexpected you know uh kind of fed extra aggressiveness that a lot of folks weren’t anticipating today so we got caught off guard with one and then one came in worse and then was expected
And we were expecting a certain kind of number right well if you hear that you you would think the market would be down three four maybe five percent today and i’m talking about the nasdaq specifically right on the back of two bad news but here we are we’re having a down day but it’s not as dramatic as you might think with that bad of news in this situation right
And so what are things transpiring here right in front of our eyes essentially and the russell i’ve been watching the russell throughout the day the russell’s been outperforming the other indexes and doing better than them what i think is essentially transpiring here in this market is i think there’s been a lot of money that is uh what i would call scared money has
Already gone to the sideline right they’ve gone to the sideline they live in it position sizing or they’ve gone short the market through put options or just shorting the market straight up okay and or or just sorting you know stocks individual stocks right and so when you’re in this sort of scenario essentially when you have bad news come out it gets hard to see
A major major sell-off like a three four five percent type sell-off even when you get two what i’ve seen is really bad news in the same day and the folks that are really in this market now don’t really care that much if cpi comes in a little better than expected a little less or a little worse than expected or if uh the fed’s a little more aggressive or a little
Less aggressive for us me a lot of you guys and a lot of the folks that are in this market at this point in time right a lot of us don’t care about that so much we’re not out there selling all our stocks because cpi came in at 7.5 instead of 7.2 we’re not out there selling all our stocks here today because a fed might be a little more aggressive than what folks
Had anticipated at the end of the day we look at this and we’re like is this stock a deal for the next five years and if it’s a deal for the next five years we buy that stock and if it goes down we buy more of that stock and if the fed wants to send the stocks down or whatever people want to sell off stocks in the short term we say thank you thank you thank you
It’s just more money for us to make in the end right we’re looking for companies that have tremendous revenue growth opportunities over the coming years net income opportunities over the coming years expanding margins over the coming years you know balance sheets that are going to get in a better and better place over the coming years we’re looking for those sorts
Of opportunities in this market and if we’re going to get those opportunities for even cheaper we gladly take it but the issue you kind of have is you start to run out of sellers essentially in a market in which you’re looking at these things and it’s like um you know you can’t even get the the market to move down three four percent today on the back of two bad
News and that’s what that’s the sort of market we’re kind of getting into right now and this is just one of many many reasons why i continue to be very very bullish on stocks over the coming years because i’m looking at a market that’s that’s you know everybody’s very very positioned for downside risk for stocks to go down and those sorts of things and then here
I am and many others are you know we’re just continuing to take advantage of deals we get in the market and if they want to send this stock down this stock down we just we just stay there and say okay we’re buying uh we’ll continue to acquire shares we’ll continue to build out our ownership positions bigger and bigger and companies and hold through for the coming
Years and when you start having so much bad news priced into the market essentially this is this is very very important when you start to have so much bad news already priced in the market when bad news comes it doesn’t even affect the market much right and here’s the sort of market we’re really starting to get into now where there’s so much bad news baked into this
Market on so many different fronts that it’s going to start to get very very hard to push that the the market down in general and if you just start getting little bits of decent news it doesn’t have to be great news just decent news you see big moves up in the stock and the markets in general and this happens with stocks individually right where stocks if a stock
Has so much great news always like like it’s like you know peak fomo in this talk and you know everything’s just seen as it is the expectations are through the roof right the company has to report ridiculous numbers everything has to be ridiculously great all the time to continue that stock to continue to go up right however if you got another stock where it’s
It’s beating down it’s at 52 week lows all-time lows the expectations are are you know on the floor for that stock if they just come in with anything that’s halfway decent you see the stock move up huge and that’s because so much bad news has already been priced into that stock and you get the same exact effect happen just on a much larger scale with the markets
In general the dow the s p the nasdaq the russell where and by the way the russell i was watching the russell throughout the day the russell outperformed the other indexes almost basically throughout the entire day which i think is another kind of tell you know once again that i don’t want to say we’ve already hit the bottom or something like that but that’s kind
Of a tell that the russell’s starting to outperform like it’s starting to go up more in green days than the other indexes are and it’s starting to go down less on red days than the other indexes that’s you know i watched it almost all day today and that’s what i’ve consistently kind of seen play out and so these are sorts of things that you start to look at in
The market and if you’re thinking about trying to get this market down in a meaningful way if a day like today can’t even send and i’m recording this video while the market’s still up and you know i want to check here see what the the nasdaq’s down right now right um as we’re kind of you know recording this video here so nasdaq as of right now is down 1.8 percent
1.8 with what the market would see as two very very bad news you know where’s that three four or five percent move on a day like today right and it’s just kind of a lot of folks that are in this market are like yeah whatever you know whatever the inflation is in the short term is whatever inflation is we already priced in a lot of bad news whatever the fed does
Is whatever the fed does we know in fed rate height cycles what does the market usually do it goes up and it goes up quite a bit that’s what we do know about what happens in the fed rate hike cycle so um you know if the fed’s going to rate height is going to raise rates right um i i think that means uh pretty good things for overall economy and if there was any
True weakness in the overall economy believe me the fed’s not going to raise rates they’ll lower rates in a scenario like that and think about this for a moment right let’s say hypothetically let’s say hypothetically we get into any sort of scenario where there’s true recession fears and i don’t mean like the ones we’ve had recently where it’s kind of like you
Know we’re just like talking out loud type recession fears i mean like unemployment starts to go up massive job losses companies stop hiring uh banks started having a lot of fears and those sorts of things and everything gets much worse right well if you’ve got interest rates at let’s say a two percent number three percent number right then you can easily lower
Rates down to a half a half a percent or down a zero and start up the money printer as they say again right if you’re already at zero or 0.25 or whatever well shoot if you also get into a recession what do you do in that scenario i guess you go negative for rates you would have to go negative for rates in that scenario right that’s an uncomfortable feeling so i
Think if anything it’s going to give the market more of a sigh of relief if we start to raise rates and we get to a more normalized number we don’t have to go to 10 percent interest rates for the fed funds rate if we could just get to a 2 percent number a 2.5 percent number i think the market in general is going to feel much more healthy about that because they’re
Going to say okay if we are going to get in any type of weak economy or any type of scenario where there’s a true recessionary fears well we could always bring down rates and that’s uh that’s something that’s you know nice to have at your disposal if you’re the fed that ability to say oh we’re at two point five percent right now let’s bring rates down two percent
Oh things are getting worse let’s bring it down to one percent oh things are getting even worse let’s bring it down to zero and let’s do everything in our power essentially to uh you know flood the market with money make sure liquidity stays high and we can get ourselves out of this situation right if you’re already at zero or right around zero um you know it makes
The fed’s job a lot tougher in that scenario and so i think it’s a i think it’s like a breath of fresh air i guess you can say for the markets if we get into a more healthy state so yeah it looks like the fed’s going to be a little more aggressive and now think about this right imagine if the fed’s not quite as aggressive as they’re talking because now everybody’s
Going to start pricing in you know that we’re going to be at 2 2.5 by this time next year what if we’re not is that is that a bullish indicator for the markets then right is that also seen as a positive and so there’s some kind of food for thought there guys and that’s why i just try to keep my head down buy stocks that i think are great deals over the next three
Five years and uh you know call it a day i watch all this stuff and it’s interesting and it’s entertaining but at the end of the day you know i’m buying companies that i think are going to prosper their revenue is going to go up a ton over the coming years their net income is going to go up a ton over the coming years and if i’m right about that the stock prices
Always end up following in the end in the short term anything can happen with the stock price but in the long term the stock price is always going to go wherever the company’s fundamentals are going over time hope you guys enjoyed this video as always also uh there’s gonna be a lot of money to be made in the next few years in the market make sure you take advantage
Of that massive deal we got on the private stock group in the financial fortress program right now and much love have a great day
Transcribed from video
THE FED JUST TANKED STOCKS – DO THIS NOW By Financial Education