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Hey guys, Mike here. So, oh boy, what a whipssaw roller coaster the last 24 hours. I mean, big news coming out all over the place. Whips on the market. Obviously, you saw the market go down last night uh when Donald Trump did something. And I know the Nvidia CEO is going to be shaking his head like going, "Come on, brother.
I just like said I spend $500 billion building supercomputers in the US. Like, why you going to do me like this?" So, we'll get into that. something else came out of China which gives you a preview if we ever work out a trade deal between the two countries. What's going to happen to the market? Okay, so you got that preview and then it kind of go back to when they did that false 90-day pause and then we got the real 90-day pause like you got the preview before and then you see what really happened, right?
And of course we had drawn pal speaking and again it's plain and simple. So far since December, when the man speaks now, the market just goes down and it usually goes down pretty big because he is basically telling everybody there is no Fed put. Okay? And he's also basically reinforcing what we've been talking about with the uncertainty things of that nature.
And so, you know, and we did have the data come out today, which I'll show you, which kind of backs up what he's saying anyway. And we already said that data doesn't come out better than expected because why? People are frontloading. You guys have said in the comments, some of you are doing it. And yes, it was thrown off by what?
For some reason, people went went out and bought cars. I guess they really wanted a car before the tariff hit. So, there you go. And so, that's kind of surprising. Uh, and then we'll get into the charts and everything. But, let's start off with Jerome Pal and listen to what he's got to say. And he's he's you know what's it all about?
It's about this trade war. That's what it's all about. The new administration is in the process of implementing a sub substantial policy changes in four distinct areas. trade, immigration, fiscal policy and regulation. These policies are still evolving and their effects on the economy remain highly uncertain.
As we learn more, we will continue to update our assessment. The level of tariff increases announced so far is significantly larger than anticipated and the same is likely to be true of the economic effects which will include higher inflation and slower growth. Both survey and market-based measures of near-term inflation expectations have moved up significantly with survey participants pointing to tariffs.
Survey measures of longerterm inflation expectations for the most part appear to remain well anchored as well. Market-based break evens continue to run close to 2%. So, as we gain a better understanding of the policy changes, we'll have a better sense of the implications for the economy and hence for monetary policy.
Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent. Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices and ultimately on keeping longerterm inflation expectations well anchored.
Our obligation is to keep longerterm inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem. As we act to meet that obligation, we will balance our maximum employment and price stability mandates, keeping in mind that without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans.
So I I would just say the same thing. I I I think it's very hard to know in real time. I've had a lot of experience with with significant moves, for example, in the bond market where there's a narrative that people land on and then two months later you look back and go that was completely wrong. So I I think it's very premature to say exactly what's going on.
Clearly there's some delevering going on uh among hedge funds on in lever trades and things like that. It's also again it's the markets processing historically unique uh developments and with with great uncertainty and I think you'll see you'll probably see continued volatility. But I I I wouldn't I don't I wouldn't um try to be definitive about exactly what's causing that.
I will just say markets are orderly and and they're functioning kind of as you would expect them to in this time of high uncertainty. And then he's asking about what happened in the bond market, which we you should know by now because we already cover it in detail. But again, that that word he uses at the very end is what the market is paying attention to.
And kind of back up a little bit what he's saying. I mean, everybody's worried about growth, things of that nature. But we talked about the sales, right? The sales are going to come in higher than expected. You see, that's the biggest bar we've had in quite a while, right? When you go over this one, you can see plane and Jane, it was automobile sales.
A bunch of category in the bottom. You can see the biggest part of that bar, what color it is. That's automobile sales. So it kind of threw everything off. And then so when you adjust automobile sales out, you get 0.5%. And then prior was 7. So you know the retail is still holding up. We're still buying.
Obviously people can go out and buy cars, right? So it must not be hurting that bad cuz remember it's the top 50%. They're the ones holding up this whole economy, right? And then of course this is what drone pal was talking about with prices. This is the US Empire State Manufacturing Survey. And boy, I mean, six months now, whatever, you know, prices paid have been going up.
And so, and you got to think once because remember, a lot of these tariffs aren't even really in they're just kind of hitting now. But we got to like go over a 30, 60, 90day period. See which ones stay in place and and what is it going to do? Now, when you come over this one, six-month outlook for new orders and Empire manufacturing index dropus 6.6, the lowest on record.
I mean, this thing goes back to the.com bubble. Look at that drop though over the last few months. Holy moly. And so that's going to be interesting. Something to watch for sure. I mean again and again manufact and plus I mean and again manufacturing has been in the recession camp or the contraction camp whichever way you want to look at.
Okay. Now of course prices increasing also has to do with what Taiwan sector reportedly set to raise prices on chips made in the US by 30%. That definitely doesn't help but again you make in America it's going to be more expensive. That's just the way it is. So, you know, then we got the Atlanta GDP tracker coming out today and you can see there's two different ones right now.
It's like negative -2 point something, but without the gold, it is almost positive. And gold is just absolutely just going skyrocketing and we're still importing a lot. And if you want to know who's driving up gold, it is China is driving up gold prices. I mean, when China opens, their market opens, gold goes up immediately.
I mean, can you This is Chinese gold tracking activity explodes. You can see their activity. buying and buying supposedly they're replacing like they're selling our dollars and replacing it with gold. That's kind of the word on the street. So, kind of keep that in mind. But we did get some news out of China last night and that's what made the market which was going down but down about 2 and a half% in the middle of the night and then at 4:00 a.m.
boom. These are news candles, right? So, we shoot up about 1.4% in 15 minutes. And that's kind of weird at at 4:00 a.m. So, you know, when you see a candle like that, it's a news candle. And of course, all China said was, "We're willing to talk, but you know, they laid out some parameters that one, we got to be more respectful." And then they said a few other things.
And then people were like, "Oh my god." They said they're willing to come talk. That's great. Now again, they picked up no phone, but they did assign like a leader to start trying to lead negotiations if they get what they want as far as like trying to set this up and all that good stuff. But you kind of got to see you get that at 4:00 a.m.
Imagine if if that was like at 9:45 this morning, that news came out, what would have happened? And that kind of gives you that prelim that if it ever does happen, obviously you're going to see a very, very big news candle. There's no doubt about that. Now, of course, you know, President Trump's team kind of pulled the rug on the on the chips, right?
Because they came out last night and what happens is Washington curve exports of an AI chip Nvidia tailored specifically for China, further cutting off the crucial growth market for semi- voters in a move that will cost the AI pioneer 5.5 billion in charges. Nvidia said the charges will incur as a result of the US restrictions of their H20 AI chip along with AMD's M1308.
So that is why of course China accounts for 13% of Nvidia sales. And when you look at semis that's why you see AMD and Nvidia I think was almost down almost 10% today. I mean it was it was a mess. And so the last like rally into the close which they always do but you know yeah these were just getting hammered down.
Remember 10% of the S&P and it's not like they ever got off the rug to begin with. And when you look at the S&P, we were we actually broke that trend line where I was told kind just kind of just wedging and we broke this triangle. What they do, they sucked it up at the end with a big rally at the very end.
Get right above it. Got a gap as you can see above as well. Remember tomorrow is the last day. Friday we're closed and stuff. But so let's see if we can get up there and start trying to maybe fill this gap right now. They come down to a lot of liquidity today. So let's see if we get above the JPM collar tomorrow or is it actually going to serve as resistance?
You can see I mean the last three days have been what lower highs. I mean that's just kind of the way it is. Last out the last six days right? Uh we're down but again big move up. Look at that big candle. I mean that is a daily candle over there. And what we did was we come down got in a discount broke down by the golden pocket and then they started buying it back up in the last 30 minutes of the day.
Okay. And I suppose there's a whole bunch of puts expiring tomorrow. I know some whale basically made a boatload of money. He bought like thousands upon thousands of QQQ contracts expiring tomorrow at around 3. I think it was 42 or something like that. So he may like abandoned if he's sold them. But you know should we we surp but should we be surprised?
I mean look at the VIX. You know we we charted this out. I usually don't chart the VIX but I want to look at this and we marked that line out. I think it was Monday and said well see if we get a bounce from here with that trend line. There's a gap right above us. You know let's see what happens. Got this daily fair value gap above and that's where we bounced.
And so again, like drone pal said, it's most likely going to remain volatile. That's the way it is. You know, I didn't think we'd come down here and try to work this right shoulder out on video if that's what it turns out to be so soon. But we'll see. We'll see if we get the turnout because it was a very important spot right there, that $100.69 where it bounced.
Okay, so it did bounce off support right there. So let's see if we end up getting a move up tomorrow. Again, big gap, a lot of liquidity taken. And in this market, good luck because that's why I keep telling you every night, I can't predict headlines. I can't predict new restrictions, new tariffs. And you see the market is so sensitive because we're we're in negative gamble.
We've been there forever, right? We're symbol all those moving averages. And anytime the word tariff is mentioned with negative positive, it's moving. It's like causing like 1% moves. Anytime new restrictions are put on this and that scares growth. Bam. You know, Tesla, well, we thought maybe, hey, maybe they're trying to hold hang on for a while.
Nope. That thing just sold off big time. Nice rally at the very end. We can move that now. Take that out of there. So, we still got that gap down at the bottom right there. Uh, I'm assuming maybe we don't fill up it before earnings. I guess we'll have to find out. Uh, and then, of course, we got that big gap up above.
Again, I can't imagine. I mean, it would be insane to see them report earnings and fill that gap above to be honest. But again, here we are uh with Tesla going ahead and breaking out of that triangle already, but still in what? Just still in the same range. I mean, it's it's that's just the way it is.
Still in the same range. So, we'll see if it can hold 220 tomorrow and then of course like 260. I think it's been the high for a while. Uh Celsius is one I was looking at because it was actually green all day today and it got above this important level as you can see right here. Even with the volume profile right there, even though it shows stress like everything else a little bit, but getting up in that gap right there is the big thing.
Like this one's getting and it's amazing to see how well it's handled uh this sell offer held up, you know, because this guy had a big rally. It's up like 50% or something since the bottom hit. And so if it can stay above this level, stay in that gap, you know, Celsius is one of those stocks, it can actually move pretty fast.
I've even heard people talk about how like it's more of a defensive play cuz people are going to, you know, drink their energy drinks no matter what and all this good stuff. I heard all kinds of narratives, you know, pointing on this thing, but I'm just saying when I look at it, you know, I'm looking at what's green, what's moving well.
You know, a nice pullback would be in the cars for sure before it moves higher. But it's like some other stocks I showed you where they're just holding up way better than others. And if the market can finally get some kind of footing of some kind for, you know, and I show you footing if we had this gigantic move up, but still at least if the S&P can try to challenge back up to the 300 moving average at this point in time.
I wouldn't even say the 200. Let's see if we can get to the 300 and that trend line, then obviously Celsius is going to uh move up for sure. No doubt about it. And so, you know, we draw this trend line. Here we are. We'll see if I mean you look at that the 50 fib up there. I mean, it's like a 60 bucks.
So that's pretty far up there. I've heard a lot of people talking about this one. So I at least wanted to point it out. Again, a nice pullback would definitely be in the cars after this huge move first. Uh when it comes to earnings tomorrow, right in the morning, Taiwan Semiconductors, American Express, we're going to be listening to what they talk about.
People are slowing down, which I doubt it. Uh Dr. Horton, the home builders, home builders been under extreme stress. And then Netflix after the bail, but then we're closed on Friday for a three-day weekend. So that's going to be interesting. Let me know how you play in that one. And then data unemployment claim in the morning.
Philly Fed Manufacturing Index, housing starts, housing permits, is everybody's talking about the housing market crashing and burning, especially here in Florida, South Florida that is with the prices going down a lot. So, let me know what you're seeing in your area when it comes to the housing market.
Like, is prices dropping? Are houses stay in there for longer? And I would think they are because, you know, obviously tenure went back up, 30-year mortgage rate went back up. And of course, you know what what happens when that takes place? Same thing I saw in the report today about refinance and fell off a cliff.
Well, no duh. I mean, of course, I I definitely see that South Florida is one of those areas where, you know, me and my neighbors talking about it. They way overbuilt, okay? And houses are way more expensive down there to begin with than like North Florida. And so, of course, houses are sitting on the market longer.
Prices are going down. But the difference is I read the data on this is like over half of existing mortgages are like below 4% 32% below 3% you know and so some people are calling for 08 and I keep trying to go oh 08 I I don't even I mean if you go into like a crazy crazy recession but it's like in '08 I went back and read the stats it was like in 2005 like over half mortgages that were originated in 2005 were the ARM mortgages the adjustable rate mortgages.
So when people got in trouble, it would spike. All a sudden they go from a 4% rate to like an 8 10 12% rate or something. So of course they were screwed here. It's like there's not even nowhere close to anything like that. And if you're sitting in equity, you know, and then again, this equity spike we went on is highly unusual.
Normally, what do you get? You know, four, five, 6% maybe equity in your house a year if you're lucky. And some people's houses almost doubled in like a year and a half. So you're starting off up here. Yeah. starts coming down, but look, you're still here. Here's your here's where your buying price is and you're like, "Okay, cool.
Coming down. Coming down." So, it's a little bit different to say the least. Uh, but let me know your thoughts on that. Especially if you're in the real estate, I'm expecting price to come down for sure. They have to come down at some point in time, right? Um because you got a whole generation that can't buy houses.
They're just renters. And rents expensive, let me tell you. And bad thing about recessions is I was in this business. When recessions hit and people start getting kicked out of houses, guess what rents are going to do? They ain't coming down. They going up. That's what happened when I I was in that business.
I wait. We raised our rents dramatically. Not me. Corporate did it. All right. So, I was not happy about that, but it is what it is. Okay? Cuz somebody's got to live somewhere. So, that's the bad thing about it. So, we'll see. See what happens. Anyway, just going to put that out there to you. I'll do a video tomorrow.
See where we wrap up. See if we're going up. Let me know in the comments if you think we're going to be green or red tomorrow for sure. I think no matter what happens, I think we agree. It's probably going to be pretty dang volatile. We'll see if people hold on to the end because a lot of people don't like to hold through a 3-day weekend, especially in this kind of market.
So anyway guys, please hit that like and subscribe button on your way out. Think about signing up for the membership lesson the McDonald's combo and I will see you guys tomorrow.
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