Hey everyone meet kevin here this morning. We've got a lot to talk about, including tesla kathy wood. What's going on with tech versus a value we got to talk about the hunger issue, we're also going to talk a little bit about what apple's talking about right. Now it's going to be quite interesting, harley's going to give us a little bit of insights as well as kohl's.

So let's get into some of the news updates for today you probably already know, what's going on with the tiggers, it's straight up and straight down, which is pretty much exactly what happens in bear markets and it's quite exhausting, because yesterday we had a crazy down day In markets and today, we're not really sure where things are going to end up, but anyway, let's get into this. So first, if you don't follow me on twitter, yet you should do that at real meet kevin. Why? Because kathy wood follows me on twitter and if she follows me on twitter, then you should too, actually i'm really honored that kathy does, but she does - and she also quoted my quote of elon musk on twitter, which was super cool. I was scrolling through the bloomberg terminal on the plane this morning, just as we were coming in to land and i'm getting the news and i'm looking.

Oh kathy woods says something about inventories and i'm reading it. It's like what. Why am i all of a sudden, reading a tweet from real meat kevin? I'm like oh yeah, that was really cool, but anyway, kathy was talking about how inventory levels are starting to substantially increase and she's right target and walmart inventory levels are substantially increasing. She gave some statistics about how inventory uh at walmart is 33 higher and that they're having trouble.

So what i did is i went back through the earnings reports just to try to get a little bit more color on what kathy wood was seeing. Regarding these inventory arguments - and it was fascinating, first of all, walmart executives spoke of quote aggressive rollbacks, which only really started in late q1, which means they're really only just now getting started right, because if you have aggressive rollbacks that started in say the end of march, Then your earnings report that you're just now talking about, is only going to reflect those aggressive, rollbacks or price cuts slightly right, you're, not even going to have a full quarter of those price drops. Yet it's gotten so bad, though that walmart has so much inventory that they think it's going to take them two to three months to work through some of this inventory, with up to 10 000 price cuts, it's quite wild. They expect massive markdowns in discretionary categories, especially in the mid to lower end, due to specifically over improvement as a result of improvement of the quote entire shipping network now, they're also expecting to mark things down because they see food inflation substantially persisting and because food inflation Is persisting they're needing to convince customers to buy other things, and so the theory goes that if customers are in a store spending money on food and they finally start paying attention to prices again, even though they have more pricing power than they did in 2019.

They're being a little bit more choosy right now, because of inflation because of food prices, walmart believes that if people see price cuts on things like apparel and tvs, people will finally go back to buying those, because so far they haven't been. They see a dramatic shift away from those discretionaries, which kind of follows a little bit of the news that we talked about yesterday already, but it gives you a little bit more clarity and it's really awesome to see kathy wood quote tweet me, i'm honored all right! Next, this morning, we had initial claims, come in higher than expected for unemployment at 218 000 over the forecast of 200 000. That's the highest level since january and stocks now many believe at this level, roughly about seven to eight percent below the 318 level. On the qqq, why do i say that? Because i believe that 318 is the zero percent fibonacci line? We seem to be about seven to eight percent below that we kind of keep rubber banding back to this.

So maybe this is actually the zero percent line right, but anyway, stocks are now finally, which they have not been appear to at least be pricing in an fomc terminal rate of between 2.75 and 3.25. Remember terminal rate is an end rate for the last five months. We have not been pricing in 2.75 to 3.25. We finally have we finally are, and you know, like i've, constantly heard other youtubers.

Oh, don't worry it's priced in everything's priced in like no. We i've been saying for months. No there's we have not priced in all of the originally. What i expected was going to be 20 uh, no 17, 25 basis.

Point hikes was what i'd been saying months ago and i'm like that hasn't been priced in yet so we can't say it's been priced in, but now we're actually finally seeing that potential terminal rate of the fed funds rate priced in unless, of course, things just continue To get worse and then the terminal rate of the fed fund rates has to go up, and then the market will have to price in more pain, but that could actually be a potentially good sign for maybe getting nearer to a bottom. Although it's very difficult to call a bottom in this market because, like we've, seen we've stretched below that zero percent level, now we're bouncing around that seven to eight percent level below it on the qqq. It is, though, worth noting that, just as i mentioned in my fox business interview yesterday, the valuation of most tech companies right now compared to value companies is actually equal relative to the s p. 500.

Let that sink in for a moment. That means, if, if you're, considering essentially investing in the s, p, 500 or value or tech, you're kind of getting the same deal in either value or tech right now, relative to the s p 500. That is wild, that that should be like alarm bells going off. Like okay, i'm gon na go, buy tech or fintech or whatever right institutions by the way are favoring right now, according to flows sofi open door.

Oh, why would you buy open door going into this kind of real estate market, but whatever arrival svexi, which is the volatility short with some wayfare retail buyers, are buying walmart on the dip? I don't know, i don't know why you would buy walmart on the dip. The only reason you would buy walmart on the dip is, if you didn't read the earnings, call, because that ernie's phone was not great okay, but whatever warner brothers, costco, amazon and tesla. Those are the retail dip buys right. Now a firm also had a substantial move up in terms of price, but both retail and institutions are equally shunning a firm i'm not really buying it.

Webbush reduced their tesla price target from 1400 to 1000, calling the quarter two delivery forecast and a quote epic disaster. That is, in my opinion, a sign that tesla's stock price is already pricing in what is going to be a terrible earnings report from q2. Thanks to the chinese lockdowns, the shanghai lockdowns, now, how do we know that the stock price might go down in anticipation of uh? You know low delivery numbers. All you have to do is look at what happened to harley-davidson harley-davidson.

Just today said they halted almost all assembly and shipment lines of their motorcycles for two weeks because of a quote regulatory compliance matter from one of its suppliers. As a result, the stock was down 11 just because of a halt. Kohl's reported this morning. They also reported some weakening uh in april, substantial weakening in consumer spending in april, but some improvement in may, but definite inflation issues, comp sales down 5.2 percent year over year and two executives, just bailed, which remember another company that i said is gon na, have a Little rough time coming up ahead of time, i believe well, i believe, that'll be under armour and their ceo just bailed.

Nobody exactly knows why yet target in their earnings call says we don't expect to see any meaningful reduction in global supply chain pressures until 2023. At the earliest yikes, this is not so great for consumer discretionary stocks, although i do have to say i'm personally starting to get tempted again by stocks like etsy, because i'm like dude 70 bucks, that's what i was paying back in like march of 2020, it's nuts Uh, you know at some point these things just do get all so oversold where it's like gosh, even if they miss growth, they've, just gotten so cheap, but you have multiple compression across the board. Apple has shown has now officially shown its headset, its vr headset to its board of directors, and this could potentially be apple's first new product unveiling since the apple watch in 2015.. Now uh, apparently the targeted release date or or sort of worldwide debut of this product would be wwdc in june, the worldwide developer conference, but apparently there's some overheating issues and so there's a potential that there's going to be a delay for apple's headset release, we're also Having the worst day for the dollar since november of 2020, that's likely as the 10-year bond yield is dropping to 2.84.

Multiple suits like jpm and goldman, are now suggesting that it's possible. The 10-year might be capping out at around 3 percent. Some wall street suits do estimate that that 10-year treasury could go up to 3.25, but anywhere between 3 and 3.25. They see as an opportunity essentially to buy and when the price rises of bonds the yield falls 10-year treasury yield right now has fallen to 2.84.

The more the 10-year treasury falls the less attractive the dollar becomes. The dollar has gotten very attractive recently because you are essentially getting a 2.84 risk-free yield on 10-year notes. Obviously, that's not inflation considered uh, however, that does attract a lot of buying power to the dollar. So people wonder like oh, why is the dollar strengthening? Well, it's because our bond yields are going up.

People like that 10 2 has flattened a little bit about 24 basis points five year break even sitting at 2.94. It's nice to see that under three percent. For our expectations for inflation, that's really important. Now we've got a bunch of other things to talk about as well, but i do want to quickly give a shout out to our sponsor for the video ftx shout out to ftx go to medkevin.com ftx fdx is starting to release stock trading to some of their Users as part of a beta, so they're bringing stocks already uh much sooner than i suspected personally but uh.

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This is what happens when you have algorithmic stable coins. You have to print more of one to sort of support the other and boy. Oh boy, algorithmic stable coins have just not been lasting right now, uh. In the meantime, we also have some smaller updates, like joe biden offered support for the entrance of finland and sweden into nato.

He's also invoked the defense production act to help with the shortage of baby formula uh. In addition to this, we have melvin capital. Melvin capital was one of those that had a large good old short against gamestop back during the january 2021 uh gamestop and robin hood at debacle. Melvin capital was bailed out by citadel, and now melvin capital has decided that their hedge fund rework has still failed and they are officially closing down their hedge fund.

So if you were waiting for the death of melvin capital, it has arrived good. Riddance uh now do keep in mind. We've got some massive food crises coming up. The economist reported this morning that the entire global food system has been weakened by covid climate change and an energy shock altogether, because remember, even though we have wheat fields in in russia and ukraine that are getting destroyed, uh it's much more difficult to get whatever wheat Is remaining out of the region because not only are energy costs more expensive, but then there's also a danger cost right, and so, as a result, wheat prices are up 53.

Since january 1., a lot of folks speculating on wheat through the wheat etf, which is w-e-a-t, ukraine and russia, are responsible for 12 of the world's traded calories and wheat jumped another six percent on may 16. Just a couple days ago after india said it would suspend exports because of an alarming heat wave that is potentially threatening their own crop supply. Now this has given a substantial rise to fears that we're going to see global famine uh, most specifically in countries like africa, uh countries within africa. Obviously uh this would be uh.

Even egypt. You've got countries in the middle east like egypt, you've got other countries that are all potentially at risk of substantial suffering. Due to the short food shortages. The high cost of staple foods has already risen the number of individuals who can't get enough to eat to 1.6 billion people worldwide.

China has also said china, by the way, the largest wheat producer that uh the after rain's delayed planting of crops last year. This year's crop harvests might be the worst yet so you've kind of got this convergence of all these issues from problems in ukraine and russia. You've got problems in china. You've got problems with transportation and you're going to see substantial issues for for quite a long time.

Going forward for uh global food shortages and it's it's going to be quite devastating. I think the best thing we could hope for is that this war ends uh in in ukraine, hopefully by the end of the month, but so far i don't know that we really have a path to that. What we do know, though, is that china is considering purchasing cheap oil from russia to rebuild the chinese oil strategic reserves. This is unfortunate because it gives russia, a buyer, of course, uh china's trying to stay as relatively neutral as possible, though obviously we know they're friends with russia, quite quite close friends with russia anyway, uh in other news, real estate.

Continuing to show cracks might do another real estate. Video later, i think i've gotten back to most everybody. Who's asked for details on the bundle, coupons, uh described linked down below and if you have not gotten a a question answered yet on the bundle coupons feel free to email me at kevinmeken.com. Remember we'll have that largest price increase at the end of the month.

Finally, and hopefully, that'll coincide with the launch of our series a so that way. We can make sure that uh the world knows about the wonderful things that we've got coming up so fingers crossed. We continue a green market here. Hopefully you learned something in this video and folks, we'll see the next one bye.