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June 20, 2024 - Lionel Nation
27:51
The Stock Market: It's Now or Never! (Financial News That'll Blow Your Mind)
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Well, good news, sports fans.
It's time to talk with my good friend and yours, Bob Kudlow from Trade Genius.
And don't forget to take advantage of what we are talking about.
Go to that, which is displayed on the ticker, TradeWithLionel.com.
I'll call 800-949-1408.
I don't say O. O is a letter.
Zero is a number.
Bob Kudlow, let's talk about the story of stories, the stock market.
I think Elvis says it's now or never.
What sayeth you, sir?
Yeah, I agree.
So we're coming into what they call the summer trading period ahead of a very consequential election.
And so you have a number of things that line up.
What they call seasonally, right?
So summertime, there's less trading.
So there's more of an opportunity to what they call create calmness in the market.
They suppress the volatility.
When you suppress volatility, risk assets can move higher.
And that's typically what happens in the summer.
In the year of an election that's coming up, especially an election of a first-term president, July and August tends to move the markets up to 7%.
And since we're trading the indexes at all-time highs, we keep hitting them.
I think we hit them high yesterday and a high Monday.
You have a chance for what they call a blow-off top.
I say that 5% to 7% is not out of the ordinary coming into this move.
And then come fall, There's going to be a lot of people pulling back risk because this election will have consequences.
And people will take their chips off the table to kind of assess, you know, what the 2025 looks like.
And also we're going to probably be going into a recession.
So big money is going to be looking for positioning to get out of the market.
And they usually try to move their stock from them to you.
And so that's kind of the setup.
The other thing, too, is energy has seasonality of July through September as a move higher.
It started to move this week, or actually last week even, so it's probably a week or two early.
Moved from $73 to $81 this morning.
Oil is still trading, even though the stock market's closed.
And we can see a pump in energy names as well.
And then we know Bitcoin's been banging on the ceiling here from its recent high of $74K.
There's a lot of buying under the surface, but there's a lot of selling.
There's a lot of shorting in the futures markets.
Those tend to get absorbed.
And so you can look at basically the crypto markets, primarily Bitcoin.
Some Ethereum could then move.
Bitcoin could get over $100K.
So that whole complex that's around Bitcoin, the Bitcoin miners, the Bitcoin ETFs, the Bitcoin high-yield ETFs, all could make a big summer move as well.
So it's setting up for a big move here.
And yesterday, we even had a little bit of movement in the gold and silver miners.
So you have to watch the dollar.
And then what's the fuel behind this other than seasonality is Janet Yellen's probably going to be selling bonds at what they call the lower duration, which allows banks to continue to speculate with that money.
They don't have to take that bond on as a liability against their portfolio.
They can use that money and still leverage it for other activities.
That's our view on this.
I think the earnings that are coming out in July for the second quarter are probably going to be good enough.
I'm on the record of saying that we will hit a market high between August 15th and Jackson Hole, if they have Jackson Hole usually at the end of the month.
I think we're going to hit a high in the market by then, and that'll probably be the high for the economic cycle, because we are rolling into a recession.
So that's kind of my opening monologue on that.
I like the way you said that at the end, good news, big, big, big.
Oh, and by the way, we're rolling into a recession.
But, you know, now, what does that mean to the novice by that little appended statement there?
Well, so, you know, typically in a recession...
You have a situation where companies can't generate enough revenue or revenue growth like they have been during an economic expansion, and then that causes all the analysts to reassess the value of these companies and the price of stocks go down.
The other thing that happens is that you have people losing their jobs, and instead of saving money, they may have to start tapping into it.
And the third thing is, obviously, everybody gets scared, so they stop.
They stop making longer-term or higher-value purchases.
And all that affects the stock market.
And then so you see a shift from the stock market into the bond market for protection.
And so that's kind of what it means.
And we're already seeing that happening in terms of the bond market started to pick up here.
Powell was hawkish at the June meeting.
The market didn't believe him.
People are starting to buy an ETF called TLT, which reflects the 20-year bond value.
And when that goes up in price, that means you're expecting the yields to fall on the longer end of the bond curve.
People are starting to position themselves now for recession.
We're also seeing a collapse in demand for what's called durable goods.
We've already seen auto sales falling, obviously housing sales falling.
Now we're seeing durable goods falling.
That's the refrigerators, the freezers, the washer, the dryers, things of that nature.
That's starting to now weaken as well.
And that's how it works.
There's no mystery to this stuff.
You know, the stuff that costs the most, that you're in debt the longest, that gets affected first.
And now we're driving ourselves down.
The next thing you're going to see is you'll start seeing restaurant sales start to fall.
And you'll start seeing what I call the non...
Non-necessities, you know, your services will start to fall as well, i.e.
taking trips, i.e.
massages, i.e.
you know, hair care products, hair care services, stuff like that.
So that's how it rolls off, and then everybody gets base, right?
When it's full-fledged inflation, I mean, full-fledged recession, people are just going to be buying absolutely what they have to survive.
And again, the time frame, do you think of that, roughly?
Yeah, I mean, my argument is that we're probably already in a recession, if you do it mathematically.
They tend to be six months behind in their pick.
So I would say they'll announce an official recession sometime in Q4, 2024, and we'll be in a recession for a minimum of two years, 100 weeks.
You know, Bob, whenever we speak, you always talk about goings-on of the world, politics and the like, not from a partisan point of view, but how it affects the market and markets.
When we hear, with all this going on regarding Russia and Ukraine and the Middle East and Saudi Arabia and getting off of the dollar, what can we take from that, if anything?
You can take nothing from it, actually.
So unless Russia decides to expand its scope of operations or they decide to directly attack the United States in some sort of terrorist fashion that's meaningful to the health of the country, then it just gets pushed aside.
The thing with Saudi Arabia and the dollar, that's just much ado about nothing.
The people that just constantly are saying that the dollar is going to collapse really don't know what they're talking about.
You know, the way a currency works is that there's physical dollars, right?
You know, what's in your wallet?
And then there's dollars that are conjured up through lending, right?
You know, fractional reserve lending.
So the loans get conjured into thin air.
So when you go into recession, loans get paid off or defaulted on.
That means there's less dollars out there in the world.
And the rest of the world gets nervous, right?
you start seeing flows of people purchasing dollar assets, right?
You know, Fortress America, if you will.
You know, two oceans separate us.
You know, the world's largest navy, the world's best air force, blah, blah, blah, blah, blah, blah.
And so people are like saying, hey, We have a reasonable rule of law.
I used to say it was a great rule of law, but I think the last couple of years have proven that.
Taking basically the cover off that ball.
So people move assets, and you're starting to see that.
You're starting to see flows now coming into the United States from overseas.
Canada and Europe have already lowered interest rates.
So that drives people out of those assets.
They'll drive them into assets in the United States.
That strengthens the dollar.
So you have defaults, you have loans being paid off, and then you have flows coming into the United States, dollar strengthening.
So Saudi Arabia can do whatever Saudi Arabia wants to do.
It's mox next to us.
And the whole thing on the bricks is a joke.
I always ask people that tell me that.
I said, okay, you have a million dollars.
You can only invest it in what country?
What country are you going to put your money into?
You're going to put it in Brazil?
I don't think so.
You're going to put it in India?
I don't think so.
You're going to put it in China?
I don't think so.
You're going to put it in Russia?
I don't think so.
So where it's going to go?
It's going to go to the United States, maybe United Kingdom, maybe Australia, maybe some Western Europe countries, but mostly United States, right?
Because Europe is a monolith, right?
It's one currency.
So I just look at that and I said, you're a joke.
And then if push comes to shove in the world, where do you want to live?
Even though all the problems we have here in this country, there's no way I'm leaving this country to go somewhere else.
I'm so glad you're talking about this.
And Bob Cutler, there is a bifurcation, if you will, a compartmentalization between what we say politically, what we say in chat rooms, what we say online, what we say in terms of the bumper sticker playbook.
Cookie-cutter, echo-chamber kind of political rhetoric.
You know, James Cameron is moving to New Zealand!
Why are the world billionaires planning on...
Okay, that's fine.
That's interesting.
But then the financial world, the investment world, has a completely different look at it.
Very sober.
Very specific.
It doesn't get caught up in all of this kind of stuff.
And you bring it down to brass tacks.
Yes, you might be upset about some kind of, let's say, some draconian free speech problem here, but when it comes to Wall Street and investment and the rest of the world, they don't think like that.
They're not talking about that.
I've got to ask this one question.
The other day, I wish I could have just had you, because do you know how many times people tell me who think themselves financially sound, you know, this crypto stuff?
Nothing backs it up.
Bitcoin, Schmittcoin, one of these days, you don't watch.
They're going to get it.
The Fed's going to get it.
The government's going to get it.
There's nothing there.
Nothing backs it up.
And I'm thinking they're still saying this.
Bottom line, what's your take on that kind of rhetoric?
Is there anything to that?
Absolutely not.
In fact, I'll make the case that...
The United States intelligence agencies developed Bitcoin primarily to support the dollar going forward.
Remember, the NSA is the one that wrote the initial white papers on On a blockchain cryptocurrency.
Okay, so I don't know who Satoshi is.
He's a construct, right?
Nobody knows who this person is.
He's a crypto human.
He's almost like this.
He's an NFT of human, whatever.
Listen to me, I'm throwing these terms around.
He's just an enigma.
As far as we know, he could have been six guys in the CIA deciding to...
Push the first block, you know, blockchain out, right?
The first block of crypto.
But here's the interesting thing about Bitcoin.
Now, we have these things called stablecoins, right?
And so, you know, this is an easy way for you to transact without coming in and out of the crypto ecosystem, if you will.
Well, those stablecoins are backed by U.S. government bonds.
So the bigger the stablecoin environment grows, it becomes a sponge to soak up all the debt that the United States is creating.
So it's in the best interest of the United States to expand the activities and the asset class of...
Bitcoin, or even Ethereum, if you will, to create this huge stablecoin environment, which is basically dollar-backed because they're back in the debt of the United States.
And, you know, if you're Coinbase and you're sitting around these, you're earning a 5% yield now, right, on these bonds that you're in that are totally liquid.
If, you know, if I had a billion dollars in a stable coin held by Coinbase, I needed my billion dollars back for whatever reason.
All they simply do is they sell the short term bond that they own for the government one day.
So, this is really huge.
And remember, you know, Bitcoin is an off-ramp for, you know, a collapse of the banking system, which is quite possible worldwide.
So, if you're really, really rich and you're really, really connected, And you don't want to lose all your assets because of a bank run that the FDIC and the governments can't protect, which is very, very possible if you look at the leverage.
You move your money into Bitcoin, and you let the flood go by, and you know you're sitting on high ground.
And now you have an asset then now to pick up the pieces.
So I think it's just people are ignorant.
You know, when people tell me Bitcoin is not backed by anything, I'm like, what's the dollar back?
Exactly, exactly.
I don't want to bring up the tulip analogy from years ago, but you're absolutely right.
And when they use this word, fiat currency, and we got off the gold standard.
I got news for you.
What's gold backed by?
Anything that you put value in.
Again, I'm not a...
No, I think people don't understand that things have value because things have value, right?
I mean, look, you know, to talk about gold, the reason why gold was and is a currency you could trust is because it's difficult to mine, okay?
And it's relatively indestructible, right?
You know, it's a stable element.
And so it's easy to say, you know, if I have 20 coins, I know Michael's not going to go out there and make 20 more coins next week.
Because you simply can't.
There is a slight inflation to gold, obviously, because you keep mining it, right?
But you use some gold, too, and you get slippage in people losing their coins or it gets used in industrial environments that get thrown away.
But gold is stable that way.
Well, Bitcoin is stable that way, too, because you just can't conjure up new Bitcoin.
It's a mathematical process that has to be...
Coerced into an award.
And that's slowly going away.
So I think it was a genius move on their part.
And so Bitcoin is good.
Look, I tell people, too, look, I'm not a Bitcoin maximalist because you shouldn't be a maximalist on anything.
So, you know, to me, you get exposure to Bitcoin.
And I like getting my exposure through the people that actually monetize it, right?
So you're talking about Bitcoin miners or Bitcoin proxies like Coinbase and MicroStrategies because you need to monetize it.
And, you know, you look at gold.
I like the gold and silver miners because they're monetizing gold.
They have leverage to gold.
Those proxies have leverage to Bitcoin.
So if Bitcoin doubles, My investment in those products are going to more than double.
And so I don't hold wealth for wealth's sake because I still need to operate in this world.
So I need actually to convert it into dollar fiat to operate.
So, you know, I tell people all the time is that, you know, I own a $2 million home right here.
It's $2 million.
You know what it's worth to me?
Nothing.
Because I'd have to sell it.
We're to be worth anything.
Right now, this house is actually a liability to me because I have to constantly be fixing it, paying taxes on it, paying insurance on it, right?
And so, you know, you have depreciation and taxation and insurance on your home.
So my point is that you want to own things that you can convert into fiat and still maintain the asset.
You know, that's why people like rental properties and stuff like that.
So that's the thing with the stock market, too.
So, you know, I like to buy things.
I like to own asset classes that I know are going to be stable or strong, regardless of the environment, and then buy the asset inside of that that's going to generate income to me for me to live or to reinvest it back and build wealth over time.
Well, you see, this is why, you know, a friend of mine recently, True Story, was watching us and he said, Who is that guy?
I said, what do you mean?
He said, wow.
I said, precisely.
Precisely.
So that's your thing, Bob.
Who is that guy?
Because nobody talks like you do.
Nobody.
You're not.
I always tell people, I said, if you watch, I remember, I don't want to mention names, but if you watch anything on cable news, if you think that's financial, you're out of your mind.
You are the real deal.
Now, now that we've enticed, now that we've tantalized, somebody says, okay, I love this guy.
What do I do?
We're flashing this TradeWithLionel.com.
What happens if they go to TradeWithLionel.com or if they call 800-949-1408 and say Lionel sent you?
What happens?
Yeah, so that'll take us to the landing page of our service.
And so what we do is we've created a couple of very effective algorithms.
To help people navigate the stock market effectively.
So, you know, our system, you know, there are rules in the stock market.
There's things that you can trust over time.
If certain things happen, you know, it's a high probability.
It's kind of like a civil case instead of a criminal case.
You don't have to get 12 jurors.
You just have to have seven jurors, right?
And that's how it is with trading.
You know, our track record is 65% win rate.
Our profit factor is positive, which means that over time, you will make more money than you lose, and you'll be building wealth over time.
And so our algorithms are designed and optimized for that, so we have a good, strong win record, and we have a positive profit factor.
Now, just to be clear, we don't trade your money.
We give you these tools so that you can do the trades that we do, or you can trade what you want to trade.
And then we'll teach you how to use that.
The program that we set up with you is that there's a basic and there's an advanced room that you can join.
And we discounted those very heavily for you and your listeners to be able to take advantage of it.
So we don't charge much for the service.
We've been doing this a long time.
I'm going on my 11th year doing this.
And our performance is very consistent.
We don't care what the market is doing.
We're market agnostic.
If the stock market collapses, there's stocks and ETFs you can buy that take advantage of a falling market.
And then when the market is mooning, take advantage of that.
If you want to trade crypto, there's ways in which you could trade crypto, either through the cryptocurrency brokers, or you could trade the proxies in the stock market.
So we really don't care.
And here's the other thing that's coming up.
Let's say you don't really want to trade.
You want to buy things and hold things for a while.
80% of my portfolio, I don't touch for months at a time, okay?
So there are products coming out now, Michael, that are just incredible, super high dividend yields on these products because what they've done is they've taken and created a synthetic product that allows you to sell calls against it.
And be able to draw huge yields.
Like, you know, last year, if you stayed in this one ETF that followed MicroStrategy or followed NVIDIA, you would have received dividends in excess of 100% of the investment that you made.
And your investment is still intact.
So, you know, those kind of products are coming out.
Well, they're coming out with ones that will protect you on the downside, too.
And so we're knee-deep in those in terms of expressing those opportunities to our listeners.
So, you know, you could sit there.
You know, I have a friend that wants to retire as a bit of a shortfall on the monthly.
I showed him how to take advantage of these products.
You know, fairly modest, and you're getting 25% to 30% yield on the product.
Okay?
With brand name stocks that you would know.
And then you can protect it on the downside because they trade it to the long side and they trade it to the short side or the bear side.
And then you're market neutral and you're picking up an advanced above average yield.
Incredible stuff.
And this is stuff that now is becoming available to retail investors.
And available here through you.
Well, not just for me.
We just share people when they're good to buy and not.
That's what I'm saying.
Yeah, they're just out there.
Yeah, and they've been out there for a while.
And this is how the rich always have traded.
These products are now just being constructed for the retail because more people are getting interested in the options market.
But these guys have a twist on it.
You make more money selling options than buying options.
Buying options is typically a sucker's bet.
This is the opposite.
They're taking advantage of people's greed and being able then to draw off dividends off of these moves on a monthly basis, Michael.
This is not quarterly.
In fact, there's one out there that pays you every week that has an 18% yield and it just follows the broad market.
You know, if you have a million dollars in the bank and I told you you can get 18% fairly consistently over the years and you're drawing $180,000 out, you know, you'd be like, you're crazy.
They've been doing this stuff for years like this.
And when the market rolls over, there's a way to do it on the short side, a way to do it on the long side.
You'd be market neutral.
Maybe you make less money.
Maybe you make 12% or 10%.
If the market goes down 50% and I can make it 10% or 12% on the market, not me, but I mean the ETF, you'd be like, no-brainer.
Those things are available now to people.
And so we just show people how to do that, how to trade that, and how to invest in that.
And then you don't care.
Then you're relaxed.
Then you don't have to agonize every day.
And you can protect a portfolio that you can't sell because you're worried about taxation.
You can hedge with these products, too.
So fun times.
We don't have to fear the bear that's coming later this year and next year.
Indeed.
Well, Bob Kudla...
TradeWithLionel.com, TradeWithLionel.com, or call 800-949-1408, and when you call them, tell them that Lionel sent you, and you will take them through the process, find out what product or products are best for them, and it's so exciting always to talk to.
I learn so much, and so do our viewers and listeners.
Bob Kudla, any final words, sir?
No, just watch for, after this coming weekend, watch for the markets to start what I would call broadly growing.
So right now it's just the S&P 500, the top stocks that are starting to run.
But start looking for a broadening of the stock market into July and August.
And take advantage of it and just prepare yourself for the market to have a sharp turn down here going into the fall.
Well, Bob Kudlow from TradeWithLionel.com and also Trade Genius, as always, my friend, thank you so much, and we will talk again.
Thank you, sir.
Have a good one.
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