folks is this the beginning of the end or is it Moon time that's what we're going to talk about in this video we've got quite a few charts and we've got an interviewer from Credit Suisse an interview with Bloomberg we're going to do some reacting to because it's actually quite optimistic but the question is am I getting optimistic about this is this or is this the moment that we're supposed to get really excited or is this more cause for concern let's go ahead and get started with exactly that thesis right here folks and yes the price goes up tonight we did extend the coupon code until Thursday at 8pm California time so you've got until tonight and then the price is going up for the programs on building your wealth again lifetime access and course member live streams with me every day the Market's open here we go give me your year-round forecast I know it's constructive and walk me through why you think it's achievable given all the risks on the table right now yeah I mean let's I I think that we're going to have a double-digit um return between now and and the end of the year and I'll tell you what what I think drives it and if you look at the B if what we've seen so far this year profits are up seven and a half percent year-to-date and they'll probably be up another five to six percent between now and the end of the year so we don't have a profit problem as much as people say what we have is the value hold on a sec before we get to what we have let's think about this for a moment let's analyze this with with a few charts and updated pieces of info that we've got so really what he's saying here is that hey look we've had such a painful beginning of the half but that doesn't correspond to the fact that we actually had earnings increase in the first half and we're still expecting earnings to increase in the second half so I did a little bit of digging and I found this which was interesting the s p lost 21 in the first half of 1970. during a period of high inflation now I I think this is a very important and understated element right here because we keep hearing talk about this soft Landing right Jerome Powell says well we've been able to achieve a soft Landing three times before sure but look at well not this chart look at this chart right here these right here are the prior periods in which we had a soft Landing the Blue Line represents inflation minus the target which is two percent so basically inflation at the time was actually two percent higher but they're just trying to show on the chart how far away we are from the target so that way when you're right here you're about five percent away from the target where we are right now is also about five to five and a half percent away from the Target right well the problem with this idea of oh we're gonna have this soft Landing is that wait a minute the soft Landings dronepal talks about here here and here all occurred during times where inflation was at or below Target now the Federal Reserve didn't actually start creating a precedent of bailing out the market until right here so sure we've had one post-fed bail everything out print money to save the day a kind of bailout we've only had one situation where we've had a soft Landing after that now when we look back to 1970 though again a period of high inflation which I think it's so important to compare to take a look at this first half of the year what happened S P 500 loses 21 in the first half of just that one year the next six months the s p literally Roars 27 which is obviously similar to what we had in 2020 where we dropped four percent in the first half and went up 21 in the second half well not similar in the second half not similar in the first but then again 2020 was the total federal reserve bailout 1970 is a little different because we've got massive inflation we leave the gold standard we've got the failure of price curbs which the interesting thing is the failure of price curbs and the lifting of price caps going into the early 70s and the late 60s actually led to more earnings and more revenues at companies because they were finally able to raise prices appropriately so that way prices would be at a level where prices would end up matching demand but when Supply would then supply and demand would light up right we'd have an equilibrium of course this ended up leading to insane runaway inflation and insane expectations of inflation continuing Forever by the end of the 1970s which led to us getting Paul volckert in the 1980s which is not what we want to see happen right now but it's really interesting to think that okay so here we go we've got an individual from Credit Suisse saying hey well earnings are still doing great here we could have a boomer of a rally and and potentially rally as much as 26 by the end of the year okay that's interesting let's see what else he has to say let's pop back on over here and uh and eventually I will fix the HDMI so don't mind the flicker anyways is a PE multiple is down over 30 percent I think 31 on the market and that's an enormous adjustment which makes stocks much much cheaper okay some on the Fly fact checking as we go along he's not wrong here multiples measured by the red little mountains here my son jack calls them the red mountains okay multiples have gone down substantially they've collapsed we haven't actually really seen red the news collapse yet or therefore earnings per share expectations really collapse yet although earnings per share expectations have started to inflect down after well what happened Target and Walmart reported see the white line represents the Blended forward 12 month EPS estimates but the average annulus analyst price target has actually started getting moved down so we still see high EPS targets but on the right side here this blue line we see yeah analysts are starting to lower their price targets now the weird thing though about analysts and I'll tell you I hate this is analysts just seem to move their prices based on what the stock market is doing so if a stock soars oh wow we're increasing our price Target if a price falls out we're lowering our price Target so I pay a little bit more attention to that white line that EPS line we haven't really seen a compression there yet on EPS which actually reiterates what he says about hey if earnings hold up we might have a rally towards the end of the year now I want to tell you what I'm doing in reaction to this and there are a few more charts that we can look at that are extremely important but first we got to get in a message from our sponsor now we gotta talk about our sponsored folks it's summer the sun is out again and people are finally going outside again but before you start working on that summer bot of yours you might want to take a step back and make sure your family is protected first and thankfully today's sponsor fabric makes applying for life insurance coverage easier than ever before fabric was built for parents to 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come back here we go to the part two I think that the earnings continue to move forward and we think that you get a bounce in valuation probably a couple of multiple points between now and the end of the year stocks will still end the year cheaper than they started and they'll be up double digits between now and December so I can ask you this do you think the FED will be happy I just want to clarify that he said hey up double digits by the end of the year still negative but double digits by the end of the year that's pretty bullish see that yeah I don't I really and I and I I talk to people at the FED I don't think that they are focused on what the stock market is doing they what do they care about they care about inflation and jobs I I think you know if I yeah so I really think that they're focused on the mission and I think Powell may be behind the curve but he's doing a pretty good job of being clear what his his focus is right now inflation is too high they have to address that and that's where they're going to spend time let's just quickly reflect on that do we actually think the FED doesn't care about the stock market no of course the FED does care about the stock market we know that here's a chart of U.S CEO confidence we're at some of the lowest levels that we've seen since uh not only the uh the pandemic but obviously going back to the Great Recession so you know this is a problem a recession obviously right here the Great Recession uh and we're trending towards low levels right so when you get this CEO confidence decline at the same time as you're getting expectations for Price targets going down and we're seeing credit cards spend decline does make you wonder maybe the FED does actually care about the stock market because all of this has aligned with the stock market going down creating a wealth effect when people feel like they have less money what happens they spend less now I read this crazy report the other day about how Bitcoin yeah folks Bitcoin disproportionately affects younger men younger men who are disproportionately likely to spend money on stuff whether that's for their friends their family their girlfriends watches cars boats you name it they're more likely to take the money and spend it and so if you crush crypto you crush the wealth effect amongst a cohort that's very likely to spend it maybe crypto could be the reason we actually start seeing disinflation because valuations have come down so much an interesting little mind trip there but we've also and this is an important one to break down right here when we look at this particular chart right here what do we get we get spending growth of consumers in both the high and low end products according to Barclays drifting lower right we see these charts going down both the higher end and the lower end but something that's really important about this chart and this is where it's kind of like ah we get kind of data on both sides but do we I don't know this says growth in spent right it doesn't say spending it says growth in spending and as long as we remain above this line right here the green bottom line we're actually growing so even over here we are still growing spending by 10 to 15 percent per year and so that's actually very interesting if this can lead EPS to hold up and you pick companies that are going to grow earnings per share this year you could if this person's Right End the year in pretty solid position now I still think we've got headwinds coming for semiconductors I'm very excited to go deep on semiconductors and get a lot more exposure to the semis but we are seeing chip prices Trend down especially if you track eBay chip prices uh and you track supplies for chips supplies for chips right now are blowing up in fact right here our inventories total Tech inventories up eight days on the usual five year median Upstream Downstream inventory this has to do with subsidiaries this is all up memory storage semiconductor inventory OEM inventory uh everything with the exception of distribution inventory every kind of chip in the semiconductor sector is up in terms of how much inventory we have so we're thinking that maybe in Q3 we're still going to have like a semiconductor potential bottoming out but maybe if we get a bottoming out now between now and Q3 which Q three folks starts tomorrow we start new prices on the courses on building your wealth as well tomorrow but Q3 starts tomorrow so we could see a potential bottoming here which is hopeful but then again I don't really like to play hopium I like to play reality and I like to make the dalahalas okay all right let's now hop back on over um you know index for bankruptcies is at record lows that's not what happens when you're going into recession that's not what happens when the economy is melting down the fewer and fewer people are going bankrupt you would need to see that Spike if you're going into recession if you look at people who are defaulting or businesses defaulting on loans or not making loan payments we're not seeing that at all you know um Anastasia was talking about a soft Landing but in many ways this environment just it there's this if you look at the stock market you feel like it's a recession and then you look at these metrics on the health of of you know the the credit market and it just doesn't feel stationary so um yeah I don't I don't think the FED has been obsessed on the stock market and blink on that they will blink if the consumer falls apart that's a whole different issue they care about the consumer they care about jobs they care about spend okay first of all I'm sorry I gotta buy a new HDMI cable I don't know what the heck is wrong with that one but clearly it's got a problem okay but folks let's talk about the consumer then what happened this morning folks we got the personal consumption expenditures ratio which showed us our first decline in real spending since folks December so people are spending less the consumer is spending less again we saw that in the credit card data it's not just Barclays who's seeing that in their credit card data but JP Morgan is reporting that they too are starting to see declines and this is why they're actually writing down a substantial amount of of equity valuations in fact and I'm still working through the report but JPMorgan did this substantial Deep dive uh into downgrades uh downgrades for a lot of their companies uh I'm on the Trivago section let me jump to the front here look at this uh here you can see the overall macro environment has deteriorated since q1 earnings with inflation reaching a 40-year high in May fuel costs up 45 since February and Chase credit card data indicating slowing consumer spending and lower consumer confidence they project a 66 chance of recession in the next two years and an 83 chance of recession over the next three years they believe that the internet sector continues to be more mature and therefore has less ability to offset broader market trends now that's actually a lesson right there if a company is less mature you can kind of really still blow up your growth even in a recessionary time because there's so much demand potentially for your product what does that make us think of Tesla it's still not a mature automaker it's still young right but once you become mature well then you are subject to the whims of the macroeconomic cycle this is why when we were looking at the earnings call for not just the earnings call but the actual earnings report for Nike which every day in our course member live streams we go through fundamental analysis whether it's earnings calls press releases uh 10ks 10qs whatever what do we see we see a five percent decline in net income year over year at Nike and not only do we see a decline of net income but we also see a decline of revenues of one percent year over year you know this is this is a company that's subject to the whims of the macro cycle because it's more mature and so I think this becomes very important when you're picking investments in this kind of Market sure could we have uh you know a great Q3 in Q4 as maybe finally we see inflation P look I want to be the cheerleader for that idea absolutely and I'm going to tell you a little bit about what I'm doing right after I say where is our inflation chart uh we got to get inflation ah yes here I wanted to show these right after we start actually seeing inflation go down right which here's a chart on the average price of gasoline 16 days of drops in a row this is good we've seen oil move down there's still people shouting that oil is going to go to 150. I don't know if it's just fear-mongering we've seen the a 10-year treasury yield plummet the 10-year treasury yield is right here look at that plummet that we got on the 10-year treasury yield it's under three percent right now people are uh you know picking up bonds again they might drink the bottoms in for the bond market why because maybe the bottoms or the top is in for inflation because look at the break-even expectations for inflation this is the five year and the ten year the white line is the five-year and look at it the expectations are plummeting here I'll remove myself for a second there we go look at this this is like straight down folks if I draw a line from the bottom we are now at least on the white line which is the five year Break Even we're at the lowest point in inflation expectations for the market that we've been in since October of a 2021 which is incredible and the uh and the lowest level since January of 2022 for the 10-year curve this is very interesting the market seems optimistic at least about this idea that yeah inflation might be peaking here and uh we are starting to see Commodities rotate down whether it's gas or oil or or other Commodities that have peaked such as a big one obviously in the past here has been a nickel or copper right and we've seen some peaks in some of these commodity prices and so this is again leading to at least some hopium that hey maybe just maybe we could be starting to see a peak of inflation now what do I personally think I don't actually think we're going to see a real peak on inflation until probably somewhere around uh July to early September and so that's I should clarify that I don't think we're going to see a peak of inflation until either the July or August CPI report which we'll we'll get those between August and September right because they come out the month later uh it but from there I do think the way Commodities are looking now the way Fuel and energy costs are looking and the year-over-year comps that we start having to lap when we get to the Delta variant level of inflation which really started picking up in September we should start seeing drops when we get our CPI reads for September October November I'm hopeful but hopium doesn't work so well right opium isn't an investment strategy so what is my strategy right now well my personal strategy is no debt take whatever real estate I can buy the dip on painful red days in the stock market keep some cash on the sidelines whether that's 10 20 something like that but otherwise I'm in I'm buying this stuff I'm not going to pass up on in my opinion the opportunity of a lifetime to build quantity of shares and if that means Tesla goes to 400 or goes to 900 doesn't matter just give me give me the quantity for example on Tesla if that means Nvidia goes to a hundred bucks I'm buying you know trade desk back under 35 please give me some more and phase 130 I'm ready to go so I'll use that cash for some other opportunities but otherwise I'm it and I'm excited if you want to see every move I make remember stocks and psychology money folks you get lifetime access thank you so much for watching the video and we'll see in the next one thanks good luck.