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so bloomberg is now reporting that the surge in stocks that followed the fed decision proved quite short-lived not only was it short-lived but it was like a joke i mean it was like an hour at the end of the day yesterday boom rug pull right after that this is very different from what we saw in march in march we saw a two-week rally after the federal reserve meeting and it seems like that hopium did not last people have lost confidence in jpow now bloomberg is going in here saying that just after a day after notching the biggest rally in two years the s p 500 had headed towards its worst session since june of 2020 remember june of 2020 was actually when we had sort of a summer crash because we ended up getting a resurgence of covet we were just getting ready to reopen after may and things were looking really good in markets but we got this new surge and was like oh no second wave fears you know this was well before delta right 95 of companies in the s p 500 are down uh when we look at the heat maps they're just all red the nasdaq 100 is on track for one of its sharpest u-turns ever and that's kind of interesting to look at because when you get these sorts of volatile movements you know you're in a bear market that these are the definitions of bear markets in fact let me give you the times that we've had these sorts of swings before and you know we've seen charts like this before and we keep getting more and more of them it's just more and more evidence that we're in a bear market and all of the times that you've had swings like this before they've been bear market swings uh again that's a bad thing right so keep that in mind like this is what a bear market feels like and it doesn't mean it has to end uh personally i still think it's you know it's a little good time to focus on that quantity rather than that price but take a look at this got it lost it nasdaq showing wild swings in 24 hours this year take a look at the highlights at the bottom there so you get a positive three and a half and a positive three point four percent day the very next day you end up down four point five and four point three percent uh you know resp respective to that that prior day there and look at when these sorts of dates actually happen here's the scary thing this is how you know you're in a bear market that should be obvious by now though look at the dates march 13th 2020 bear market the 2000.com bubble bear market and then the only other time the 2008 recession october and november of 08.
like if you're looking for an opportunity where it's like tell me when can i go by pain you got your pain you got your wish and i ain't talking about charles pain either i'm talking about real pain the kind of pain where people are like i gotta sell just because i'm exhausted i'm exhausted that things are going up and down i'm tired of the pain of worrying about my portfolio so what do they do rather than hold or huddle i sell and retail capitulation probably be picking up after we break the psychological support levels which unfortunately means potentially more pain ahead or it's an opportunity it's one of those that's for sure doubts now exist that policymakers will be able to actually deal with uh inflation and now we have the real prospect and concern that the market is beginning in beginning to price in stagflationary fears see some folks are saying oh no it's j pal's fault because he said we're going to do 350 bp hikes one now and then two thereafter but that's already been priced in by the market as of monday as of monday the market had already been pricing in 350 bp hikes so the market now turning worse even after the pricing into those three bp hikes is really a way of saying we just think that no matter what the fed does it's not going to be enough shares of companies like etsy and shopify tumbled on weaker than expected quarterly earnings and forecasts deepening the concern that the pace of online shopping has slowed and creating the concern that this could be the beginning stage of recessionary changes in spending now fine but we've also known about the e-comm shift away for quite a while so there's some real questions there as are we going to see that you know plummet now in ecom spend end up causing pain in service spend or you know if people see their wealth disappear or they going to spend less money going out to movies and restaurants or on travel tbd on that either way it's pretty painful so oil though interestingly and this is actually kind of fascinating oil is actually falling uh or it has been this morning let's see uh oh never mind it you turn back okay never mind uh oil's no longer falling it was and now it's actually up about a percent nice now one of the reasons and this was more more expected usually when the stock market sells up you get a little bit of this flight to safety and oftentimes those are commodities which that was expected i was kind of surprised that oil was actually selling off with those earlier you get a flight to safety in either bonds or commodities so it's not a surprise to see now brent at 111 dollars but this is quite high we've been hoping oil would head down unfortunately the acceleration of russia towards victory day in their attacks in eastern ukraine aren't going to help especially with threats of that german russian oil embargo 10-year treasury now sitting at 3.05 this is the highest level we've seen all year we knew we were going to get to three percent but now the question is how high are we going to go are we going to go to 3.5 are we going to settle at 3 percent 3 percent ironically is starting to look very attractive for a lot of people and this is why you're getting a lot of sort of by the dipping uh in in the bond market uh but the the the flip side is you get by the dipping in the in the bond market uh you know you have that real potential of getting burned because if you buy the tip in the bond market uh and then yields rise you get burned on the value of your bond so really it wouldn't be surprising to see more people just say look i'm either commodities or i'm cash you see everybody every time i say cash i always think it's funny people are like oh cash that's bad in inflationary times well wait a minute is it though because if you're not using the cash to buy stuff like goods and services or energy like oil and gas then you can preserve cash for buying stocks and if they're losing value then you're actually gaining because of inflation it's kind of a weird twisted way to look at it but it's an interesting uh thing to consider so uh let's see what else we have here we have uh nasdaq almost hitting that six percent i want to zoom in on that six percent there for a moment oh yeah yep we're getting to that uh look at that 309 65 was the low we got to 309 80.
yeah you know what's really interesting is exxon mobil right now is up 41 year to date that's wild and i mean think about warren buffett's moves even though he's buying the dip on things like apple charlie munger have been buying the dip on things like alibaba they did substantially increase their allocations to stocks in oil with big moves into exxon mobil and occidental petroleum and both of those quite stellar performances occidental petroleum up 97 year-to-date while at the same time the nasdaq year to date is down 22.7 percent so hats off to warren buffett again with the amazing positioning now another piece of scary news just came in u.s retail traffic on a week-over-week basis is down 10.9 percent u.s retail foot traffic fell 10.9 last week from a year earlier so year over year right which is really surprising because if you look at these weak periods as in like seven day periods and we're comparing to last year we should really be thinking of seeing increases substantially fewer covet restrictions more enthusiasm to go out and spend is this potentially a beginning of the cracking of the consumer that wait a minute we could only take so much pain in the stock market before we finally start spending less what do we got home improvement centers and furnishing stores had a 24.8 percent decline in retail traffic and off price uh had a decrease of 18 i think these are usually like your tj maxx kind of uh of stores uh beauty was the only one that actually had a gain with 5.6 5.4 any kind of malls and department stores were down 15.1 percent uh you have us retail traffic overall again down 10.9 grocery stores down 5.9 and when you look at that's that's the change year over year which is odd and when you look at the change week over week what do you get also declines in all categories double digits and a double digit declines in all categories with the exception of home improvement centers and furnishings which were down nine 6.9 week over week grocery store is down nine point one percent week over week so on some of this initial data not such great uh changes here and just retail in general now take a listen to this victoria secret traffic down 47 year-over-year bed bath and beyond i'm sorry 47 yeah 47 year-over-year week over week 23 bed bath and beyond year over year down 40 best buy down 36 year-over-year home depot 26.6 year-over-year nordstrom 18.4 year-over-year decline target 17.4 year-over-year decline i don't know if like obviously people aren't spending more money online and if now all of a sudden we're seeing retail spend go down folks this is the recession this is what it feels like to be in a recession because now this is going to solidify probably a bad q2 result unless for some reason spending doesn't plummet here in may in june it's kind of a problem because remember q2 is april may june well if you had good consumer spending going into april but may and june are terrible and we're going to lap last year's summer forget about it you got yourself a recession and quite frankly we might end up being in a recession all year long now so far the suits tell us oh but don't worry if we have a recession a it'll be transitory and b it won't be that deep yeah well recessions still hurt two things we know about recessions number one you can see layoffs within a recession usually they don't lead a recession right that's odd it usually happens within a recession we're still not seeing that in fact we're seeing a lot of attempts to hire like crazy now but you have these really mismatched skill sets that that we're dealing with this is something jay pal talked about yesterday as well that one of the reasons we have 1.9 open job slots uh for every unemployed person is because you have this skill mismatch between what companies want to hire and and the people who are available to work so you've got you know no cracks necessarily yet in terms of like layoffs but that usually comes right after you see retail spending go down and folks we just got our first news that retail spending went to crap here and i can't justify that one away and it's not like i'm trying to justify stuff away i just want to give you my opinion of the straight scoop i think those productivity numbers are kind of garbage this morning we talked about those i don't think those really matter i think they're important because they're going to give us a beautiful upside next quarter unless of course retail stops spending then it's then you know who knows maybe that's just a leading indicator which usually it's not it's quite a lagging indicator but the point is there's a retail traffic move that's scary and again if we're in a recession now what do you want to do well as always you want to a make sure you minimize your debt clear out margin or have the capacity for clearing out margin if you need to like the last thing you want to do is look at your brokerage account and go there is no way no way i can empty that kind of margin that's bad like for me uh i am we just did this math with course members yesterday as we went through my portfolio we were doing peg weightings and that uh we are right now thanks to good old tax day i'm 2.6 in margin but closings that i have for some real estate transactions are essentially going to wipe my margin so i'm going to be at zero so that means i'm all in and then that means i'm at zero then i've got a few closings coming up after that in about the next 30 days and i'll have that money available to buy the dip which is cool because if we're in a recession in q2 we're gonna keep seeing this sort of pain for a while now hopefully the best thing that we can hope for is that the federal reserve actually sees inflation starting to decline which i have to say this is where maybe kathy woods could end up being right look and read that etsy and wayfair earnings report a huge difference from q1 in q1 every single earnings report i read said we have pricing power we're increasing prices we have multiple price increases scheduled we are like and the consumer's paying it now what are you hearing from wayfair and etsy oh there big guy yeah we're not gonna raise prices just to drop them you know what we're gonna do is we're gonna keep our prices stable and these executives are trying to sell it as that as if that's a good thing like oh well you know we're one of the few who hasn't been raising our prices this makes us more competitive no it means you have no pricing power and you suck that's bad that's very bad the only thing we have left right now the only thing this economy has left is the consumer spending money and the fact that retail traffic just had its biggest drop since november of 2020 is very bad and is is something where again get out of margin get out of debt if you can't take it then don't be in the market if you are looking for a way to kind of like separate your self and your emotions from your stock portfolio you have to look at the quantity and not the price this is a very important concept of the q versus the p how many shares of tesla do i have today how many shares did i have yesterday well i have more shares of tesla today than i did yesterday so for me psychologically that means my portfolio is actually up because i have more quantity obviously it's down but guess what i ain't looking at it like i am not looking at it actually it's been kind of a wonderful thing when i go to place an order with jpm because i still haven't gotten off the platform uh you know and i really like the people over at jpm you know i uh i call in the order which is like super antiquated but it's actually like this really cool thing because then i don't have to open up my brokerage account and see how bad uh it feels to be down 10 on tesla in a day oh i'm sorry it's only down nine percent but anyway this retail move very very bad uh not good i don't know if this is going to lead us to like that's it is this like the worst of the bad news like is this it if we keep getting bad news obviously not we keep going down but who knows maybe this is just the news that we needed to get the additional capitulation we rubber band down below that zero percent fib maybe we can come back up we'll see but i'll tell you i can't sugarcoat that retail data that retail data is bad and you know there was there was this thought that maybe it's just e-commerce no retail data is not e-commerce it's literally consumer spending i'm just going to read the list really quick victoria's secret bed bath best buy ulta lowe's home depot kohl's tj maxx nordstrom old navy target publix supermarkets ross stores walmart macy's dollar general sephora gap aldi kroger all of them down literally every single one of them so it's not just ecom now it's also retail now that's really bad so what's left travel planes but who wants to be in those indebted companies and then you know who knows maybe people have their travel plans booked but then they stop booking new ones 2022 is the year of the recession folks i think i think the bond market and i hate to say it but i think the bond market was right when we inverted when the yield curve inverted on april 1st and just like dude we we will have a recession this year we'll get through it we won't have a recession then in 2023 because you know we'll be lapping horrible comps and uh and then we'll have the pandemic behind us and if you could sit there and diamond hand through on quality stocks generally and i'm not trying to say that profit losing companies are not quality but you know according to institutions they don't want to own any company right now that has a negative eps and so those are the ones that are getting sold off the most keep that in mind but uh yeah big concerns these retail numbers again like i want to be able to say something positive i mean beyond uh buying the opportunity there's nothing positive about it's it's bad news so anyway there's the news on retail numbers for you oh but if you want to 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