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Ladies and gentlemen, once again the markets are showing us their ugliest side. Initially, they opened higher, but as we're observing right now, this volatile situation is alternating between losses and gains. The triple is exactly the same, with 0.33 and 0.34. The big question that comes to mind, and which we'll be looking at in our charts, is: should we start buying stocks?
Should we start loading them in bulk on eBay, in stock halls like Envy, perhaps Apple, or perhaps we should wait a little longer? Well, not only will I give you my opinion in this video, but Bill Ackman has just said practically the same thing: that we should wait at least a little longer. Personally, I think we could have a better opportunity towards the end of this month.
Bill Ackman goes a bit further and isn't entirely wrong, but let's start from the beginning. What happened on Friday? Because on Friday we had a beautiful market, the truth is, the market was super happy, we were getting carried away, and suddenly, on Friday, and suddenly... We were falling apart, what was happening?
Well, the first thing we have to realize is that nothing was happening here, and suddenly we started hearing news that Europe might put a price ceiling on Russian oil. Obviously, Russia didn't like this at all, and shortly after the announcement, Russia ended up confirming that Europe had run out of gas.
"I'm not giving you any more gas," they said. With that, the markets ended up falling and falling and falling. They dropped below 400 points, 1,400/1, which was on the SAMP, falling to 390, no more, no less. Something else very interesting that happened on Friday, and if you look at the pre-market, we had a very good upward movement.
We had the " I'm freaking out" market, meaning, what number of jobs were created in August, what the unemployment rate was, what the growth was, etc., etc. And the figures weren't extraordinarily positive, but they were enough to cheer up the market. There were about 315,000 new jobs, which is still high, but much smaller, 500.
The thousand who arrived last month, the growth of payrolls remained stagnant at 5.2%, below the 56% we had in March or April, and finally we have an unemployment rate that was already above 3%, with two historic lows, and was launched at 37%. But it wasn't because people were being laid off; as we know, we analyze this every Thursday in Los Robles.
Claims are getting a little lower each time, which means that people aren't having much trouble finding work, if you'll pardon the redundancy. What was happening was that there was greater market participation, something that also obviously fueled the faith that was being sought because we're not going to be able to bring inflation down, otherwise we'll start to see some destruction, so to speak, in the Eibar market.
So, as we were saying, the markets initially turned green, they launched upwards, and then came the geopolitical news and we took a tremendous tumble over the long weekend, because Monday was a holiday. We also had news that China was still having problems. In fact, if we take Taking a look at Chinese stocks right now, we have Alibaba at $88.
It seems like a really good opportunity for a swing trade, maybe a bit risky. We also have all these stocks looking a bit down, right? Well, the main reason is because we have a more serious situation, for example, in Sichuan province right now, than we had in April and May when Shanghai, among other cities, was locked down.
Do you remember? It was closed for two months straight. Well, the situation now is a bit worse, but let's say the Chinese government is a bit more flexible. They're still in lockdown, but not completely. But the situation continues to worsen. With all this geopolitical situation, we're seeing that China is super weak, that Europe is going to be in trouble this winter, that Russia is going all out.
I think we're facing a huge crisis globally, a huge recession. But beyond this being negative news, it's extraordinarily positive news for two reasons. In my opinion, it will obviously help bring inflation down, making the Fed's job easier. And on the other hand, obviously, given the current state of China...
It's accurate to predict how Russia and Europe are doing and who will continue to govern the world during the next cycle, at least for the next few cycles, because it's quite clear that it will be the US. Far removed from all these apocalyptic pronouncements that big-name fund managers, whose names I don't want to remember, were making about how this is the end of the dollar, China is going to take over the world, etc., etc., etc.
Well, then, returning to the US market, what interests us is that we have to realize that the main reason why the markets are falling is not the global crisis, although obviously the markets don't like the uncertainty of what will happen this winter in Europe and what will happen here. I hate it too, obviously.
What's happening with China? When will it recover? And what will happen with this mess of problems? The positive thing, as we were saying, is inflation. The big problem is that the Fed keeps raising interest rates. Okay, I don't know if you remember those four by the kilo, the notes we had last week.
We had cell phone, we had Cascar, and they were all saying practically the same thing: that the Fed is going to have to raise rates. Interest rates at approximately 4% for next year, and they're going to have to keep them up there. In fact, as we're observing, we're still going to have a bit of a run to go.
These are the effects of the effective Fed, the Fed, the Wright, saying where the rates are. They're the same, if you look at them. Right now, we're at these 2018-2019 levels, where Powell himself said, "Up to here, the economy is suffering too much," and it ended up going down. Well, right now, let me pull out this email that does n't seem relevant at all.
We're back here. The Fed wants to come here. And we're going to be able to do something now that we're all here together. We've put a horizontal line here. Well, better than a horizontal line, let's put a horizontal line, but one that's like this: goodbye, we're gone. So, when the effective rates are at approximately this 4%, which we still have a good way to go, the Fed will probably stop raising rates.
It will be exactly when the famous Fed pivot can start to become a rumor in the market again, and the head fund managers, the big pockets, start positioning themselves again. Also, remember that We have to pay close attention to bond yields, and right now they're not at their best. Not too long ago, as you know, in mid-June of this year, we had some of the worst market movements.
We hit rock bottom, and suddenly the yield on ten- year bonds fell again, back to 25 percent. The markets were rising, and then suddenly we have this turning point. We weren't saying, "Watch out for bond yields." Bonds are telling us what the market wants, and indeed, the markets fell silent. The big question is, right now, are we thinking that in a year's time, the Fed will decide—in 2023, okay?—that in February, the Fed will have an interest rate between 44% and 25%, right?
Very likely, looking at the next 12 to 24 months, we'll be talking about inflation having already fallen, unless the Fed doesn't do its job and raises rates, but obviously causing this recession. In the next two years, inflation could have fallen to around 4%. The bond market isn't saying yes yet, well, 3.5%.
Perhaps a little more, but notice how the two-year yield is already struggling to break through this support or resistance. This resistance becomes support, and so on. So it's very possible—I'm not saying I'm paying attention, obviously, to all this withholding, many things—but I'm very focused on the two-year yield because I think it will be the two-year bond yield that starts to fall, and when the 10-year yield is divested, that will give us the green light.
You also realize that the one-year yield right now is at 3.5%. That is, the market is trying to figure out where inflation will be next year, but notice how the one-year yield isn't encountering as much resistance. And obviously, the three-month yield... well, there's no resistance here. We started the year at 0.10% and we're at 3%, no more, no less.
So the two-year bond yield isn't asking you to go down either. The 10-year yield will also start to fall, but I think the drop in the two-year yield will be much sharper. When that will happen, the truth is, it's quite difficult. To say this now without knowing the August inflation figures, which the market is eagerly awaiting, and obviously also without knowing the various macroeconomic data on which the Fed will ultimately base its decision—whether we raise rates in September by 0, 50, or 75 percent, what we do in November, what we do in December, what we do in February—is also true.
As I was saying, Bill Ackman was saying—it's not exactly the same thing, but it's essentially saying—that now is not the time to buy stocks, to buy our stocks, because nobody is buying. The world is selling; everyone is shorting. The market is waiting for interest rate hikes to stop to find its buy signal.
And the billionaire, the headshot manager Bill Ackman, said today, Tuesday, that investors are waiting for the Fed to stop raising rates. When we expect this to happen, in February, the market is pointing to February 2023. February 3, 2023, the Fed is expected to raise rates for the last time and stop.
Okay, well, let's continue. I think once people... Realize that the Fed doesn't have to keep raising rates and that very soon it will start lowering them. That will be the buy signal that the markets are looking for. I was saying this, and I started to discuss how investors would probably anticipate this when they see a continued trend of moderating inflation.
Imagine now that August's inflation is here, compared to July's inflation. Notice that July's inflation is at 8.5 percent. Okay, because that's something. Last year in June, we had inflation of 0.5 percent, and this year we didn't have it month after month. Okay, imagine that now August's inflation comes in at no less than 0.2 percent.
This would be extremely positive news because 0.2 percent is less than 0.3 percent, so we would have 8.5 percent minus 0.1 percent, which equals 0.8 percent. We would see another big drop. But what could happen? What could happen with this August inflation? Could it reach 0.8 percent or not? I do n't really think we know how, but it reached 0.3 percent or 0.4 percent, which means that we will be seeing during the In June, during July, inflation was blamed for the rise in May and June.
We would see a drop during July and then another rise in August. The big question is how big this rise will be, if it is a rise at all. This already happened to us during March, April, and May. We had this rise, it went down, it went up, where the market said the peak of inflation. When then, I was discussing Vila One, when then the market starts because inflation starts to fall, that faith is doing its job and the market is going to get ahead and start buying, as I was saying.
So I don't think we have to wait until February 2023 to buy our favorite stocks for the long term. I think things, depending on how the macroeconomic data comes out, could happen as soon as the end of October or even November of this year. You will also realize that this year is an election year, and if the Republicans win, let's say this Goldilocks would be created, this blockage would remain, and The markets love the deadlock because right now, well, let's say the Democrats have an overriding advantage and the balance is heavily tipped, which the markets aren't quite convinced about.
So, we're ending up saying here what Bill Ackman is saying is that they're going to be the ones to stop the coin. What they said is what they have to do, which is to keep raising rates until they reach 4 percent, or maybe a little more, and leave them there for a while, maybe a year, he said, and then they'll start to come down.
Looking beyond a year, Ackman said that inflation would be at 3.5-4% with a negative trend. This is what I was telling you. Indeed, if next year we go from inflation of 8.5% to 4%, this would obviously be extraordinary. The problem would be over. We would see, let's say, a change of cycle. We would see the market recover, etc., etc.
We don't have to wait a year, but as I was saying, to see the Fed stop raising rates, even if they leave them up there, the market will recover. So, we won't be at all- time highs, but perhaps the markets are trying to get ahead again, and we might return to the August highs. Maybe we can even surpass the August highs once the Fed— the market anticipates that the Fed will stop raising rates in February.
I'm practically convinced, but of course, as we were saying, we're still missing some information, and the market is also practically convinced, but we're still missing the inflation figures for August. Will they be higher or lower? We're kind of moving forward right now, trying to buy into a market where we don't know.
The extraordinarily good news, as I was saying, is coming here, and we'll leave it at that. Look at this: we have a 5 in July, which already had a 0; we have a 3 in August, and we don't know what's coming next. Okay, we have a 4 in September, and we won't know what's coming until October. But look what happens from October onwards: it'll be like 9, 7, 6, 6, 8, 0, 12.
All of this, unless there's a new disaster that positively affects inflation, will be extraordinarily high figures, and if we add them up, we have 12 here, we have 2 here, we have Here, 3.23 with 24, like 14 with 1, gives us 4.8. In these months from October to March, we have a total of 4.8. If we take it out, trying to avoid being at 0% for three months, but perhaps we will have some months of falling inflation, we know that energy is falling, it has already fallen from its highs, let's see what happens right now with Russian crude, etc., etc., but we do understand that we are not going to have such high inflation, or it is very unlikely that we will have such high inflation as this.
So, from the 4.8 percent inflation we have between October and March, let's say we can take half, 2.4, 1. 2.4 would leave us with 8.5. Minus 2.4 would leave us with 6.1, which is still very high. It is still an inflation that the Fed will have to continue attacking, but as I was saying, it is an inflation that can continue to be controlled, and personally, I think 09 07 06 06 08 02 I think we're going to be able to come much further below what it has done.
I would be surprised if we had and couldn't subtract beyond March. A 3.5 would effectively leave us with an inflation of 5 for March, on the way to this 43 percent against the second half of 2023, and then to the market, and obviously I would already be jumping in. So, personally, and sorry for going around in circles sometimes, I try to explain everything and I get carried away, and I get carried away, I skip over it.
In September, September's inflation is going to be almost as important as August's, depending on how August arrives, obviously, but October's inflation is going to mean a before and after. And when October's inflation arrives, indeed in November, if not at the end of October, as we were saying, I think it's going to be a tremendous opportunity to buy these markets.
Perhaps if we get very nice inflation in August, we can get ahead of the curve, against mid-to-late September. Discounting that September isn't very positive, October has to be a little more so. It also depends on what the Fed says; they probably will say 075 The Fed prefers to overshoot rather than undershoot, but ladies and gentlemen, as always, I hope you enjoyed this video.
I hope you now have a little more clarity. You should take advantage of these dips to buy stocks. Now you should wait a little longer; you never know where. It's true that we might be able to start nibbling at some positions, but as I almost always say when you ask me this, I would dip my toe in a little and not jump in headfirst or dive headfirst into buying positions that you can probably buy cheaper in a short period of time.
Ladies and gentlemen, I hope you enjoyed this video as always. Don't forget to hit the 'subscribe' button, the bell icon, and the ' like' button. Also, don't forget to to learn more, because I've been doing quite a bit of intraday swing trading, hedging, and taking advantage of all this market volatility.
You can also ask me anything; I spend a lot of time in the group, both about strategies and stock opinions. What should I do with this position, Bernardo? Nothing. like that exclusive content and a long etcetera and with the same gentlemen don't forget to smile service says that is to say your loved ones who love you the next video more yes
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