Hey everyone Me: Kevin Here this is really interesting. Uh, take a look at this. it's one of the posts I just made on Eack. If you haven't heard about it yet, go to Eac.org But here's what's really interesting list.

Listen to this: Goldman Sachs is estimating that $95 billion have flown into US stocks in 2023. and so a comparison that I wrote over here is that Elon Musk sold around 24 billion dollars of Tesla in 2022. The stock market only saw barely four times that in 2023. so the entire US Stock Market in 2023 has only seen seen four times what Elon sold in 2022.

Now, obviously that either means Elon sold a lot or the stock market's getting very few inflows. And the reality is, while it's probably a mix of both, Elon did sell L The reality is, it's been really tough for people to allocate new money to the stock market, because why would you when there's so many uncertainties Russia Ukraine Israel Inflation Is it coming down? Is it going to go back up? Is this 1974 all over again and we just walking into getting Paul Vulker? Of course my thesis is no, because back then we left the Gold Standard, we came off price caps. We had a horrible uh, uh, how should I say management of monetary policy following the leaving of the Gold Standard? I'm not saying monetary and fiscal policies any better today. Okay, there's a lot that leaves to be desired over there.

It's just that conditions today are virtually the opposite of what we faced back then. Conditions back then were that inflation expectations were skyrocketing through the roof because people didn't have any faith at all in the government or our monetary policy today. At least there's some Faith Again, I'm not saying it's high and I'm not here to shill for the government of the Fed. I'm just saying inflation expectations are so low.

Both the Bond Market's allocation of expectations, but also sentiment surve. Inflation expectations briefly spiked after Israel, but have plummeted since. In fact, if we look at the 5-year break even for example, which is the Bond, Market's expectations for inflation, forget about consumers or individuals sitting about 2.2% Yeah, they've come up a slight bit because of a tension off of the coast of Yemen, but we're still near Year's lows. Why? Because yes, even though oil prices have started ticking up a little bit, and there are trade fears that we are going to see some temporary inflationary pops on Headline reads because of tension in the Middle East again, driving oil prices up.

the big picture is that there's a lot of rationale that says nobody wanted to invest in stocks in 2023 because there were so many uncertainties and there still are uncertainties. And 2024 is an election year, so you also have those uncertainties. But consider this for a moment. We put all of that aside for a moment.

Consider this: these money market rates as interest rates come down Or going to come down as well at the same time as those rates come down, we are going to see individuals look and say, well, what did the stock market do in 2023 for people who aren't regularly attuned to the stock market in 2023 and what they're going to see is oh my gosh, how did the NASDAQ 100 go up 53% in 2023? how did Tesla year to date go up 137% coinbase stock year today 341 year to dat Microsoft 54% Apple year to date 55% point is sitting out the stock Market in 2023 was actually very punishing. and if there's a record amount of cash on the sidelines, there is a strong thesis that as long as inflation continues to Trend down, that money will circulate into stocks in 2024 And that is leading Goldman Sachs to say Well, as long as we don't then and I Well let me say that I'll tell you what Goldman Sachs said in a moment I Just want to say this is all predicated on not having a shock that leads to larger unemployment because if we have an unemployment shock, we're probably leaning more towards the recession and there are the risks that right now employment is heavily skewed towards government, health care and education which there's a lot of government and Healthcare as well. So you're kind of at late cycle employment gains which isn't great because we wonder how long that's sustainable and if those gains go away, do we potentially go to negative job gains which is bad? it's a recessionary indicator and potentially self- fulfills more unemployment? a doom. Loop Cycle One Layoff cycle leads to more layoff lay offs and more layoffs and more layoffs.

Fortunately, we've kind of had a lot of layoffs behind us, so hopefully we're not going into that direction. Hopefully most of the pain is behind us, but that's a risk. But what Goldman here says is: look at: Global Inflation Trends Global Inflation Trends On a month over month, annualized on a core basis, mind you, and a three-month annualized basis have plummeted. But not only have they plummeted, if you actually zoom into these, uh, you'll find that Global Inflation is sitting at just 2.2 % for the last 3 months annualized.

That's basically at 2% Target and just 1.3% for November Now In Fairness: If you go a little bit deeper and you look at what JP Morgan said this morning for reli, he suggested hey, hey, we got to be careful though, because Super Core is still running a little hot last 3month average Super Core which is taking out housing and the housing disinflation we're getting, which is also a very volatile metric. Super Core is running hotter closer to maybe four to 5% youo. And while it is true that's something we want to pay attention to, the broader trend is down. This is why also in the Catalyst section if you jump down on eack to Catalyst I Talk about multivariant core inflation.

And this is where you can actually remove housing and just see Services X housing. When you look at the United States and you actually look at this trend, you could see that Yes, even though it's volatile, that red line trend is clearly down. So of course, if you haven't been watching Eack yet, make sure to go to Ec.com You can see some other Tesla up, Ates and some other news here as well. But these are some very interesting charts from Goldman's Goldman Sachs and it explains why Goldman is so optimistic about actually risk assets going up that they've raised their S&P 500 price Target 9% in just the past four weeks.

Now keep in mind they're only looking at three rate Cuts. They think we're going to get three rate Cuts in March May and June of 25 basis Points each basically three back-to-back Cuts. But they think the F is going to stop and pause there. And the reason they think the Fed's going to stop and pause there is because the growth trajectory that Goldman has uh is actually a lot higher than the Bloomberg consensus that most banks and economists think growth will only be around 7% whereas Goldman suggests no, we think growth in 2024 will actually be 2% which is actually really important for earnings of US Stocks is that you have growth.

Now another thing that we could potentially or should look at here is the odds of getting five rate cuts that would be bringing rates all the way down to 4 to 4 and A4 per. The odds of getting to that level by December of 20124 based on what the market is pricing in right now: Five rate Cuts Ready for this? 87.3% Yeah, so the market is. pricing is almost fully pricing in a full five rate. Cuts Goldman is suggesting three, but only because they think earnings will be higher in the economy will be stronger now.

Unfortunately, you know I like to be balanced here, and unfortunately, there there isn't a lot of bearishness to cover right now. The biggest bearishness to cover is what's going on with the Houth. So to balance this video out, I'd just like to point you also to E-hawk Hack.com where uh, you actually I think I had a whole piece on this yesterday. Here it is: Houthi attacks are intensifying.

This is a big deal. You could read all about this again. Ec.com It's totally free. like I Don't make any money from it.

It's just it's a great tool. I Love it. It's actually a great tool for us as well because we have all our thoughts in one place. so we use it as a team tool.

But we're like we may as well share with the community. But anyway, why does this matter? Well, why do the Houthi attacks over here matter in this straight right here that is 18 Mi wide at the thinnest Point easy to launch attacks. We have US destroyers in the region shooting down drones and involved in the defense of shipping lanes, but that still hasn't stopped. BP from saying for example, you know what, we'll just go all the way around the coast of Africa which lengthens shipping time frames, increases costs.

It's why the shipping companies are seeing their stocks go up like Zim or MK or whatever because they're like, ah, well, they're just going to pass the cost on to the consumer which is inflationary or or you know their customer. But anyway, if you look over here, about 12% of seedborn traded oil and 8% of liquid uh, liquified natural gas passes through this area. Uh, this is a lot of an energy Market that goes through here. While it may not necessarily be a supply concern for everything like the straight of Heros it, it is a concern for Energy prices.

And so that's why at least recently, through trades we're seeing this: Robble Bank Had a thesis that if the United States stops defending in this area, this could get a lot worse. They're right, they could get worse if the United States stopped defending here. but the US knows that and I wouldn't be surprised if you actually get a step up of defenses in this area. In fact, there's talk about the United States authorizing Australia to go to this region with warships to help defend this shipping route.

So we'll see. but this will be something everybody's paying attention to in the near term anyway. Thanks so much for watching I Got a jet to uh a big inspection and we'll see you soon. Bye why not advertise these things that you told us here? I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes.

Congratulations man, you have done so much. People love you people. look up to you Kevin PA there financial analyst and YouTuber meet Kevin Always great to get your take even though I'm a licensed financial adviser, real estate broker and becoming a stock broker. This video is neither personalized Financial advice nor real estate advice for you.

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