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Tom Lee tomly everybody's favorite permeable Tommy is out with some new comments here today that we're gonna react to from seven hours ago as inflationary data softens yield and bond volatility will fall we'll hear what Tom Lee has to say about this I'll react to this kind of give my perspective on that one second video to react to it's a buy one get one free here today three stock dinner we'll hear Shelby speak about Costco Ai and metal stock and what her opinion is on those stocks and I'll kind of give my perspective as well first off thank you everybody we are now officially over 24 000 flip and Flapjacks and subscribers on this channel I appreciate each and every one of you thanks for always being here guys I appreciate y'all and I'm glad you enjoy the channel the reaction Channel always looking for some interesting content out there to react to also thank you everybody that supports the channel on patreon if you would like to support the channel on patreon that will be the pinned comment down there and just so you know uh as of 10 hours ago I just posted the new stocks I bought in there as well so you get to basically see all the moves I'm making to be part of that it's like 2.50 sends a week and it's a no-brainer to be part of that to see exactly what I'm up to in the market and how I'm exactly I'm building out a portfolio there and also since you're a patron member you also get to enter in to win a free membership to the private stock group and private wealth group we do a drawing every single month and once we hit 1 000 Plus patreon members in there we're going to start drawing two names each month so a pretty exciting stuff and I just put the link in there so everybody that's part of the patreon you can go ahead and join the giveaway there let's go ahead and get into this guys appreciate you co-founder of funstrac global advisors he's with us now welcome back thanks Scott eight week rally uh gets us there uh well first of all I think this is a it was an important week because the market was testing key levels and we had some hot data but the we held the 200 day but now we're entering what I think is a very strong seasonal period the next eight weeks the s p could rally as much as seven percent it has a lot to do with the strength shown in January I think it's going to coincide with the Fed sort of dampening those hawkish did you say seven percent s p did I hear that correctly six to eight weeks that s p could rally as much as seven percent it has a lot to do that's insane okay you know S P 500 to move I mean even the NASDAQ to move seven percent in a matter of eight weeks is a pretty extreme number there S P 500 wow that's a prediction the strength shown in January I think it's going to coincide with the FED sort of dampening those hawkish tones and I think people may start to hear the FED say 25 even though the data's been hot and we get some if you want to know why the stock market started to come back yesterday and obviously ran great today there's one reason in my opinion over everything else and it's not even really close okay and that reason is Bostic okay Bostic Atlanta fed President right comes out and says 25 basis points I'm still on the 25 basis point train here talking about pausing in the summertime like that was all the mark he needed uh and basically as soon as he made those comments like almost down to the Minute Market took off on Thursday and then obviously climbed much much higher here on Friday I his commentary in my opinion was everything for the market to say okay oh things are still on trajectory they're not freaking out over this one month of uh bad data here starting next week that I think will sort of take people off the edge that inflation and the growth is accelerating and I think that combination plus the market at 14.8 times x Fang means you got good risk reward and iFix Falls uh yeah I think it's going to be you know maybe s p 4200 or something why wow sap 4200 within eight weeks holy smokes and yeah he's kind of banking on vix no you know what's interesting about this is uh from what I've seen a lot of people are playing uh like basically kind of like call options on the vix and expecting this massive kind of spike in uh volatility in the market coming somewhat soon here now you know it'd be interesting to see if we get that or not we could certainly get that of some sort of Black Swan event happens that no one really saw coming right that's always a possibility there but you know what else I kind of think when let me hear Let me hear the rest of his point but I'll I'll come back to that kind of vix point there because there's something else I think is going on there that I want to kind of explain at the end of April wow uh are you unnerved at all by the move that we've seen in rates no I mean you know over the last I'll explain it now before they get into that next subject what I think is going on as far as you know you see a lot of those call option plays on basically the vix what I think is likely transpiring there is I believe there's a lot of people hedging maybe you're you're long in the market and I also do believe there's a certain amount of folks that are kind of gambling on something happening and you know something crazy happening right um you know maybe kind of winter ending obviously in in maybe Russia Ukraine gets going in a major way again right and obviously since it's been winter time things are kind of cooled down there a little bit no pun intended in regards to that whole situation um and so we'll see what happens but it seems like there's some people gambling but there's also some people kind of hedging hedging their portfolios by thinking okay maybe I'm long but just in case some craziness happens over the next month or so hey I'm kind of hedged because I'm playing volatility here hey they've taken a breather but we're above four percent on the 10 year yesterday and the two-year was marching towards five uh yeah I mean rates is a big deal because uh you know the rates Market affects how we want to Value equities so seeing the tenure at four percent is pretty alarming and of course the bond market is quite smart it does seem like it's been overly reactive to inflationary data so I think next week it'll be interesting to see how it reacts to Powell's testimony on the 8th into the jobs report and then to the inflation print starting to come but I I you know we're expecting a lot of this sort of hard data and Soft Data soften and I think yields and bond volatility is going to fall so if you need you need um I know you need volatility probably to fall but you need bond yields to fall to get to your 42.50 by the end of April don't you correct I think if inflationary data is stronger in February and the jobs data let's say it's over 250 000 jobs um then it makes it harder to to argue for equities to Rally because it puts more pressure on the FED to do more so all the marbles come down just like Professor Siegel was saying everything comes about down to next Friday's jobs report yeah you know we I think we do have to be mindful we had you know over 500 000 for January so something even in the 250 which is above consensus would be considered a significant Improvement in the pace of jobs growth not that I want the economy to lose jobs but you know growing faster than the employment force is growing is bad news what do I do with the fact and I know you think about where earnings are you know expectations estimates are coming down so as long as estimates are coming down how can we have really any kind of sustained move higher in stocks uh well I think the two groups to really watch are Industrials and Technology because are very sensitive to financial conditions all right I wish they would have let that play out there more you know in regards to that it's also a possibility the market could be going too far one way in regards to earnings right and then earnings come in stronger than Wall Street expects and next thing you know market ends up rallying over the next few quarters uh because earnings aren't that bad and I mean imagine especially if there's a scenario where next quarter right which is shoot you know it's there will be earnings starting to come out for that next quarter in a month and a half two months from now imagine that quarter that some of these big dog companies are actually reporting better visibility better earnings better expectations for the year right it's a possibility I don't think Wall Street is even as you know even thinking about that right now and if something like that happens oh my gosh like you really you really want to talk about Off to the Races at that point in time because there's not many people kind of expecting that but what I've heard you know consistently recently over the past few quarters is CEOs and Executives have been as confused about the future and the economy and things like that as you can possibly be if there starts to be any sort of certainty and in confidence building among CEOs in these Executives I'm telling you it's going to matter a significant way for the market because these folks have been you know scared to say anything to be quite Frank to give guidance to sound confident out there and um you know I don't want to say it can get much worse as far as that whole confidence game goes but there's a long way to go there let's hear what Shelby has to say in regards to Costco Ai and obviously a super important stock for me meta which meta is the biggest stock in the public account right now that we do on Powerline is called three stock lunch well we have very cleverly come up with a new segment for tonight it's called three stock dinner we're tracking three of the day's biggest movers and digging deeper into how to play them let's bring in Shelby McFadden investment Analyst at Motley Fool Asset Management Shelby thanks for being here really Motley Fool had an asset management division what what what that's the thing I've never heard of that okay appreciate your time and expertise first up let's hit Costco down after posting a mixed quarter what's your approach here Shelby you know the way I look at Costco is I see it as a great example of a company that can deliver on their value proposition um and has the advantage of excellent management so they're not able to control the macroeconomic environment right they can't control their competitors but what they can do and what they do consistently is evaluate and reevaluate their competitive position on their core items they offer value so that they can drive sales and drive membership Drive traffic and then drive average ticket and part of the reason they're able to do that is because of their amazing position when it comes to cost compared to their peers so you know inflation is rough you're going to see some uh you know unfavorable environments especially so exposed to Consumer but I do think that Costco has a superior management team that's prepared to get them through a tough time and potentially come out of the other side with increased market share so you like Costco next up c3ai it's surging over 30 percent after an earnings beat what's your take on that one you know I think that c3ai is a company that demonstrates the value in a fundamental bottom-up approach uh to looking did that say the stock was up 33 today what by the way her Costco analysis there uh I can't say I disagree with it but it was just kind of a very generic uh analysis in regards to what you just talked about there at Costco what a 33 move c3ai what is going on there free AI is a company that demonstrates the value in a fundamental bottom-up approach to looking for high quality companies right you know in this environment that's been really tough on Tech valuations and has even sort of doubted the viability of ongoing AI Solutions demand they've gone ahead and shown us that if they deliver on value proposition and if they can continue to maintain demand for their product throughout the business cycle that that's what it's going to come down to in the end right you know Management's really optimistic about the business they've still got a healthy balance sheet and to me that's a demonstration of their capacity to differentiate and to sort of prove themselves in a tough environment so I think the c3ai has shown that you can still differentiate yourself even in a group that's got a little bit of a doubtful Cloud hanging over it all right so that's true we didn't get into the details at all there about c3ai what makes their product or service special or any of that that was just like a lot of generic kind of talk there was a little disappointing I would love to talk more in depth points but I mean this is obviously just kind of AI hype cycle we're in right now right I mean you know you could say this management or this the the product you know and once again we got no details there so you know sometimes I do worry about some of these these folks like if they really understand what these companies do I'll just be honest when I hear them speak the way they do on such a simplified basis I'm kind of like do they really like understand it um it kind of you know you remember the I think it was a year or two ago the guy that got asked about a stock what was it what stock was that and he's like and the guy's like what what do they do like what is their business what do they do exactly and the guy was like didn't know even what they were doing sometimes I worry about that with folks but um you know this is just a life cycle that's all it is like you can get dude that stock going from 12 bucks to 28 dollars it's hype hype hype hype hype meet yourself even in a group that's got a little bit of a doubtful Cloud hanging over it all right so that's two out of three that you like finally that mystery chart that we showed you earlier the clue was reeling them in it's meta announcing a huge price drop for its Quest headset and Rising on that news as well as some bullish notes from Barclays and Morgan Stanley Shelby would you recommend this one and go for three for three tonight you know I do think that meta is beginning to deliver on that show me proposition that a lot of investors put in front of them a few quarters ago um you know we're seeing that among their achievements they have successfully gone ahead and scaled those reels right they can now focus on monetization efficiency in that product line pulling those profitability levers and I think in seeing the uh the slash on the headsets price is also a demonstration of the fact that they are pivoting to being more diligent on their capital and operational expenditure and those two things combine reinsure investors that one Management's not asleep at the wheel and they do care about what's going to be accretive to the business and two they are really starting to focus on what's going to drive cash flow uh so I do think that Matt is really starting to deliver on the fact that they are paying attention uh that they understand what's going to be the most valuable to shareholders so I do think there's a bit of a turnaround there Shelby McFadden three for three thanks so much yeah in her points on meta that was good that I thought her meta-analysis was was pretty good for what you can try to do in you know 30 seconds or a minute whatever they give you here to kind of talk right I liked how she talked about Instagram reels there uh you know obviously that product's been taking off like crazy over this past six to nine months and uh obviously this is a tick tock competition right and you know I I go on Instagram and it just seems like it's they're getting better and better at it and their AI is getting better and better at recommending new content that you're actually going to click on or watch and be engaged with right which was what what Tick Tock mastered let's be quite honest Tick Tock mastered that the the that's how Tick Tock became such an addictive platform and how it got so many users to use it so much religiously right is the the AI program just at Tick Tock like they did a phenomenal job with that and it just you know for people that use tick tock like they just always like they love the experience and like oh it's a new video and it's like you know interesting to them and the system just kind of keeps training itself and meta how to play catch-up in that whole game but as I spoke about how many times we met up this is nothing new to them they're always playing catch-up and they always find a way to get to the lead okay Facebook came after Myspace right they caught up and then they way surpassed it right think about uh when they had to switch from website to app based right when obviously iPhone started to take off and the App Store started to take off in the Google Play Store and think about how well they did in that transition right think about Snapchat and how much of a competitive threat Snapchat was that was a serious competitive threat at one time I know nowadays it's like seems like it's a joke right but at one moment Snapchat was a serious competitive threat for Instagram in in Facebook platform as well people are very concerned even the messaging services like WhatsApp and Facebook Messenger people were very concerned about you know Snapchat causing real damage in Snapchat stories were just so incredibly popular and then Instagram basically just copy them with Instagram stories and you know Snapchat it was I was like I hurt them substantially there growth rates very shortly after that started you know it was not that sort of growth anymore and meanwhile Instagram and obviously now you think about this most recent competitive threat with tick tock like Zuckerberg in that team like they're it's not for them it's not about being the first of the market they'll let somebody else do this next big thing see it successful and then say Oh that's big enough for us to go after and we'll go ahead and copy that and then what basically how they they run their business model is they'll get it perfected they'll do whatever they're doing okay whether it was Instagram stories whether it's uh you know Instagram reels whatever it is right and they'll perfect the product they'll get everybody to use it and then shortly after they start throwing in monetization and so they they like to really focus on the product first make sure it's good and a lot of times it'll hurt their business in the short term because maybe people are using that new thing but they're not really getting fed ads let's say for instance Instagram stories just have no ads on it when it was kind of first taking off in that first six to 12 months and then now you like watching Instagram stories let's say for instance or stories in General on Facebook and obviously you start getting ads put in there right and so Instagram reels no ads pretty much almost across the board but guess what's going to start falling in ads adds ads and so they really focus on getting the product right then they focus on the monetization and so you see the monetization start to come down the road and it uh it can be pretty substantial for the company obviously and you know that that's a multi-billion dollar opportunity just in kind of Instagram reels and what they can do there over time and obviously it just makes their products stickier in general whether we're talking about what they can integrate on Facebook or uh obviously Instagram as well and WhatsApp you know she didn't really touch on obviously what's that but WhatsApp it's just it's a behemoth what's up Behemoth and they're really just starting to crank up monetization on WhatsApp and the the possibilities when it comes to businesses using WhatsApp for messaging and being like their main choice to go to so that that's a crazy monetization opportunity that's hardly tapped at this moment in time but I can tell you over this next few years you're going to see a pretty insane ramp up in terms of uh you know the monetization of WhatsApp for for meta and it's going to matter significantly for Top Line and bottom line for that company so and she she also spoke on efficiency which is obviously something they're they're focused on I've never heard Zuckerberg so focused on efficiency keeping the team small and lean now at this point in time profitability moving fast right with a smaller team rather than so bureaucratic I mean that man seemed very hungry I just put it that way it seems like he uh he wants to really turn this ship around and and you know I've always felt like Meadow was always positioned to become the biggest company in the world and you know it's it's been they had to go through a lot they had to go through with government stuff obviously uh obviously Rona they had a huge ramp up in their business then a huge slowdown they had to deal with Apple privacy changes what hurt them substantially they had to deal with like so much in a matter of like a three year three or four year span but now they're getting through all that and uh it's brighter days ahead so I appreciate everybody joining me as always thanks for being subscribed folks much love and have a great day join us on patreon there'll be pin comment
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