THERE IS NO RECESSION – WHY THE STOCK MARKET WAS UP ON NEWS OF NEGATIVE Q2 GDP – Friday, July 29, 22

The United States is officially in a recession after getting our 2nd quarter in a row of negative GDP. But Joe Biden, Janet Yellen, and Jerome Powell want you to believe that there is no recession. So join me as we ignore the numbers, manipulate the facts, and pretend like everything is fine with the US economy. This explains why the stock market was up on Thursday, despite news of a negative Q2 GDP print of -1.6%. This is the stock market where the stock market news doesn’t matter, the bear market is ignored, PE ratios are insane, and stocks rally on bad earnings. Welcome to the irrational stock market of 2022.

Hi guys it’s stock curry and we just got our second quarter in a row of negative gdp which means we are officially in a recession but if we’re in a recession then why is the stock market rallying well i’ve got the answers for you so let’s get into it in order to understand why the market went up today even though we are officially in a recession you have to take

A look at the five minute chart because we can see four clear times that the stock market went up today now the stock market initially went down after the gdp report came out and we found out that we are officially in a recession and at one point the nasdaq was down over one percent but then right before 11 o’clock right around 10 30 we see the stock market rally

And the reason for that is because the senate passed the inflation reduction act which is a silly funny name to help people feel good in reality it was more of a clean energy bill and that was the initial thing that brought the stock market up now after that we see the stock market go flat for a little while and then right at 1 pm we see the stock market go up

Again and that is when president biden started speaking we then see the stock market go flat again and then right about 2 30 p.m we see the stock market rise again that is when janet yellen started speaking we then see the stock market go flat again and then right at close we see the stock market skyrocket and that is when we got amazon earnings you could also see a

Smaller green candle about 30 minutes after that and that was the apple earnings so let’s talk about these five points one by one and that will give us a better idea of whether the stock market is going to continue to rally or if we’re going to hit a top and we’re just going to keep going back down about an hour before the market opened the u.s q2 gdp came in and

It fell at 0.9 percent now keep in mind that the consensus was for us to have a growth of 0.4 percent so this was significantly lower and now that we’ve had two straight quarters of negative gdp by some definitions that officially puts us into a recession and that of course set the stock market down over 1 percent in the first couple of hours of trading then we

Got passage of the clean energy bill which was brilliantly titled the inflation reduction act even though it had absolutely nothing to do with inflation or reducing it but what it does do is it does reduce the federal deficit by 300 billion dollars over the next 10 years or about 30 billion dollars per year it also significantly raises taxes which is gonna be bad

For corporate earnings but it will help out some of the clean energy stocks so we saw quite a few clean energy stocks rise when that news came out and a lot of those clean energy stocks are in the nasdaq which is one of the main reasons why the nasdaq rose more than some of the other indices when that news initially came out now after that we got further increases

From biden and janet yellen janet yellen is our treasury secretary here in the united states and essentially what they both said is that we are not in a recession so this begs the question what is a recession and are we in one now since the economy contracted at an annual rate for two consecutive quarters in a row that meets one of the most common definitions of a

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Recession but the united states is not officially in a recession until a recession is declared and the task of identifying recessions is left to a little-known panel at the national bureau of economic research or nber which is a non-profit academic group recession dates are determined by nber’s business cycle dating committee which is a group of eight economists at

Universities around the us now here’s the kicker they typically make the determination months or even years after a recession ends so there’s a really good chance that we will not have an official declaration of a recession here in the united states until the recession is already over most likely sometime in 2023 just like in 2008 they did not declare recession

Until it was pretty much over and then they said well we’ve actually been in a recession since 2007. and again even in 2008 all of the politicians and everybody were saying we’re not in a recession don’t worry not a recession vote for us in november and then december came and they finally officially declared a recession so i don’t think we’re gonna get any official

Declaration of a recession until december at the earliest but probably not until 2023 once the recession is over now you saw on the five minute chart how when joe biden started speaking and said we are not in a recession we saw the stock market rise and we also saw the stock market rise again when janet yellen spoke now joe biden and janet yellen both said the

Exact same thing they both said that we are not in a recession because the job market is strong now this is really sketchy because the job market is part of the gdp the job market the labor force goes into the amount of production that occurs in our gross domestic production or gdp without enough people working there’s not enough gdp which normally is why when

You get massive layoffs you have negative gdp but we have negative gdp with what is to be honest one of the lowest unemployment rates we’ve i’ve had in this country so why are we still getting negative gdp well the reason is gdp is an encompassing collection of a lot of different data points and essentially what joe biden and janet yellen are doing here is they’re

Looking at all the data points and there’s like eight data points that are negative and one or two that are positive and they’re saying ignore the overall gdp which by the way includes jobs and let’s just focus on this one little positive piece see that see that we don’t have 100 of the economy negative we still have good jobs so therefore there’s no recession

Just ignore the gdp numbers ignore the fact that it includes jobs and let’s just focus on the fact that we have one small piece of the economy that’s still positive and because of that there’s no recession i’m declaring it that’s it it’s over no recession come vote for us in november that’s literally what’s happening now i will say that janet yellen went a little

Bit further in trying to explain why there was not a recession and i really want to focus on the one additional point that she made janet yellen said that the inventory swing was the key culprit behind the q2 gdp being negative to be specific slower inventory accumulation subtracted two percentage points from the output in the second quarter meaning gdp would have

Grown had businesses not been trimming their stockpiles now that sounds really good it sounds like okay well there’s just this one rogue thing that caused negative gdp had we not had that one rogue number we actually would have been good and honestly it’s just huge misdirection because the reality here is you really have to ask yourself why did inventory growth

Slow why was there a two percent contraction in the amount of businesses buying inventory and the answer is because consumers are buying a lot less goods and services and as i explained in a prior video warehouses are full we’ve already had walmart and target come out and say that they’ve had to significantly cut prices in order to get rid of excess inventory

And like i said yesterday because warehouses are already full that means that businesses are not buying as many goods which ultimately hurts producers of those goods which ultimately hurts gross domestic production so it sounds good to say there was this rogue data point the reality is the data point was not rogue the data point is a huge red flag that the economy

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Is not only bad but it’s about to get worse this will mean that revenues should continue to decline significantly and profits should continue to decline as well and that is exactly what we have been seeing in the earnings report so far and you’re also going to see that in a minute when i show you the apple and amazon earnings but before we get to this earnings i

Want to dig a little bit deeper into the us economy and understand the fact that whether you want to call this a recession or not the recovery has ended and a slowdown is here key indicators of economic activity have ground to a halt total spending by households and businesses did not grow in the second quarter even after averaging six percent annualized growth

In the prior six quarters and again this slowdown in spending is causing our inventory issues monthly data suggest consumer spending is flat or falling especially on goods and not just big ticket durables again this is part of the inventory issue there’s nobody to sell the inventory too so there’s no reason for retailers to buy inventory thus we are getting our

Negative gdp it’s also interesting to note that spending on groceries is actually down over the last six months this really points to the fact that not only do consumers not have any money to buy goods they also are running out of money to buy groceries meaning they’ve had a cut back on the amount of groceries that they’re buying due to the high inflation from

Energy rents and other things and the fact that wages are not going up fast enough to keep up with inflation consumer spending is down because they are running out of money and this inflection point is worrisome it is not a short-term blip it was deliberately engineered by the federal reserve to reduce inflation on wednesday chairman jerome powell said we think

We need this slowdown we need a period of growth below potential in order to create some slack so that the supply side can catch up jerome powell has been very clear that the fed is going to deliberately cause a recession in order to slow down demand due to the fact that we have significant supply chain constraints in the economy to this day and since our supply

Chain constraints are not getting fixed and supply side is not increasing rather than fix the supply side we’re just going to cause a recession to get the demand side down lower demand and that way prices will come in line and inflation will go down and jerome powell is absolutely correct you absolutely can get inflation down by significantly lowering demand but

Doing so causes a recession now all of these recession worries are a major problem for joe biden and democrats especially with elections coming up in november and that is why we are seeing politicians including joe biden and janet yellen coming out and saying we are not in a recession no way no how ignore the negative gdp ignore the official definition of a recession

And just trust us bro and clearly with the stock market up today both the white house’s and the treasury department’s manipulation of the definition of a recession is working because the stock market is rallying and we also saw the stock market rally after hours which i’m about to get to in one second but first with all of this bullishness and what appears to be

A non-stop bull run i want to go look at the chart and try to determine how much higher the stock market could go now it’s clear that we are still in a bear market and with earnings continuing to drop and revenue continuing to drop there is no possible way we are getting back to all-time highs that said we will certainly have these short-term bull runs or relief

Rallies as we’re getting right now in fact back in march we had one and it was pretty significant so how high might this current relief rally go well just based upon the technicals here on the qqq which is the nasdaq 100 etf qq could very well hit about 325 dollars before topping out and if you do the math on that it’s about 4.8 percent up from where the market

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Closed on thursday so there’s definitely still some room for the market to run up but it is going to hit some very strong resistance once it rises another 4.8 percent from where it closed on thursday now let’s get into apple and amazon earnings so that we can understand why the stock market rallied after hours apple reported an 11 percent decline in profit and the

Stock was up 3 percent after hours now the reason apple stock rose after hours is because expectations were for a more significant decline than what apple actually reported and based upon the expectations apple beat on both earnings per share and revenue so overall the expectations were quite low and apple beat those expectations thus why the stock was up three

Percent after hours amazon on the other hand posted a net loss for the second straight quarter in a row and amazon stock was up 13 after hours on that news yeah that’s right a 13 rise after reporting a second quarter in a row of loss now i went back and looked at the last four quarters including the one they just reported on and their total earnings per share

For the last four quarters combined was one dollar and 11 cents now based upon where amazon closed after earnings at 139 dollars if you take that 139 and you divide it by the earnings per share of 1.11 that gives you a p e ratio of 125. i don’t know about you but i thought we were done with these insane p e ratios i did not expect any stocks to be at a 125 p e

Ratio in the middle of a recession that said i think it’s clear that markets can be quite irrational and the fact is that a stock price is almost never equal to the company valuation stock prices are almost always either extremely overvalued or extremely undervalued compared to the actual valuation of the company and certainly with a p e ratio of 125 going into a

Recession with continued decline in earnings there is zero doubt in my mind that amazon’s stock is severely overvalued it is for that reason that i plan on opening some bearish positions on am z in now if you want to know everything i’m buying and selling you can come join us in the vip discord where i post all of my trade alerts before they are actually filled

And i give you my full reasons on why i am buying or selling certain stocks now i don’t get every trade right nobody does my only goal is to get about 60 of my trades right because i know from experience that if i can just get 60 right i will make money in the stock market and you can too the goal isn’t to be perfect it’s to beat the market so if you want to know

Everything about buying and selling come join us in the vip discord we only have about 200 slots left at the 25 a month after that the price goes up i also have a full training program in there so if you want to learn how to trade options especially multi-leg options if you want to learn how to do technical analysis or fundamental analysis i have training for all

Of it in the vip discord at just 25 a month come join us over there you can sign up at stock curry.vip get vip that’s stock curry.vip slash get vip sign up before the last 200 slots are filled all right i hope you enjoyed this video got a lot out of it don’t forget to hit the like button and subscribe and if you’re on youtube click the bell icon to click all i

Wanted to let you know that i am celebrating my anniversary this weekend so i will not have a video for you on monday i will be back with you all on tuesday i hope you have a lot of success trading and i will see you on tuesday you

Transcribed from video
THERE IS NO RECESSION – WHY THE STOCK MARKET WAS UP ON NEWS OF NEGATIVE Q2 GDP – Friday, July 29, 22 By Stock Curry – We Profit Day and Night

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