00:00so I just woke up about 10 minutes ago
00:02and talking about inflation 10 minutes
00:04after you wake up it's not fun but I got
00:06to do this Papa Tom is here to relax
00:09everybody everybody's running around
00:10like headless chickens I got 10,000 DMS
00:13everybody's wondering what the hell
00:14happened yesterday what's going to keep
00:16happening so I'm here Papa Tom is here
00:19relax we don't have time to make the
00:20full produced video with the camera is
00:22in the gear but you're here for the
00:24information so the quality of production
00:26who cares now look yesterday was a c C
00:30date I have some notes Here iwm For the
00:34First Time In eons have outperformed the
00:37NASDAQ iwm which basically means the
00:39Russell 2000s the small caps has beat
00:43the NASDAQ and by the way I know I said
00:44the Russell 2000s in plural I just woke
00:48up so iwm beats the NASDAQ for the first
00:52time in God knows how long all big Tech
00:57stone and the big question on
00:59everybody's mind is why why is this
01:02happening what this means for the rest
01:04of the year and how to act as an
01:07investor as a Trader in this market and
01:10I got you covered in this video A to Z
01:12do not worry about a thing so so far we
01:16have the mag 7 completely dominating
01:19over the past year 18 months and the
01:22reason that that happened is because the
01:24Mac 7 the nvidias of the world the
01:27Microsoft of the world the metas of the
01:29world World well they were some sort of
01:32a safe haven for a lot of investors
01:34because when interest rates were above
01:365% which is a very aggressive
01:38environment you want to flee to the
01:40companies that you know are the least
01:42sensitive to interest rate hikes which
01:44is the meta the Google the Microsoft the
01:46big companies that are not that
01:48sensitive so a lot of money piled in
01:51into money market accounts but also a
01:53lot of money piled in into the big tick
01:56as kind of A Safe Harbor away from the
01:58nasty interest rates
02:00now at the same time and this is
02:03something we talked about on the channel
02:05multiple times these small caps the
02:08Russell 2000 has literally done nothing
02:11if you go back before yesterday A year
02:15of no performance nothing flat it was
02:18actually even red a little bit now that
02:21happened for the same reason that the
02:23big tick ran up interest rates are too
02:26high the small caps are extremely
02:29sensitive the to interest rate hikes
02:31because they don't have as much cash
02:33reserves they need to borrow money so
02:35they're Ultra sensitive to high interest
02:37rates and at a 5% interest environment
02:40they suffered and they suffered hard
02:43yesterday was a huge rotation where this
02:45was pretty much the first step of the
02:48rules of this game changing a little bit
02:51now just before yesterday we had the
02:54first indication and a lot of people
02:56perhaps play this correctly I don't know
02:58I don't trade so I don't play this game
03:00the day before the CPI came out
03:02yesterday Jerome Powell was on TV
03:04literally giving you the hints and he
03:06said look we will drop rates even if we
03:09don't hit 2% CPI even if inflation does
03:12not drop to 2% the economy is starting
03:16to get bad we have to drop rates now he
03:19said that 24 hours later CPI data comes
03:22out it's cooler than expected and on top
03:25of it it actually went down on a
03:28month-to-month basis for the first first
03:30time since 2020 so inflation was
03:32actually negative month to month for the
03:34first time in four years four and a half
03:36years now that brought back on the table
03:40the three cut year that everybody was
03:42talking about about 6 months ago but now
03:44it's actually real now we know we're
03:46getting three Cuts in 2024 September
03:48November December now if you go to the
03:51FED watch CME watch tool whatever it's
03:54called you can see right now that these
03:56three rate cuts are priced in at 90% and
04:00above likelihood September November
04:02December now the result of this
04:04happening the result of the Federal
04:07Reserve pivoting away from restrictive
04:10monetary policy to an accommodating
04:12monetary policy has caused a lot of
04:14money to flow back into the damaged
04:17goods of yester year which is the real
04:19estate stocks which is the small caps
04:21real estate has really suffered because
04:23of high interest rates obviously I've
04:25explained this multiple times High
04:26mortgages means that people can't buy
04:29sellers don't don't want to sell it to
04:30reduce price so real estate suffered
04:32small cap suffered and yesterday when we
04:35had confirmation that the FED will start
04:37pivoting that immediately got priced in
04:39and people started jumping on these
04:41beaten down real estate small caps just
04:44like Tom Lee said would happen multiple
04:48times on CNBC for the past 6 months now
04:52it's only one day so I don't want
04:54anybody here getting crazy ideas that
04:57this is the beginning of an avalanche oh
04:58my God this is melt up I don't know
05:00what's going to happen nobody does
05:02nobody does nobody understands nobody
05:05knows it's just one freaking day relax
05:09this isn't the beginning of the new melt
05:11up it's also not the beginning of a
05:13crash of tech stocks it's just one day
05:14it's too early to tell what's going on
05:17now I don't think Tech talks have
05:20anything to worry about there's no issue
05:21with tech talks I'm going to relax you a
05:23little bit it's just cash literally
05:26moving away from the big de
05:30where the money was parted right now
05:32into the stocks that were absolutely
05:35ignored until now so this cash moving
05:37means people sell S&P 500 people sell
05:40NASDAQ and they buy the iwm iwm sorry I
05:43just woke up it's normal in fact it's
05:47actually very good for the tech stocks
05:49and this is the point where a lot of
05:51people are going to miss what just
05:52happened it being a good thing now the
05:55one thing that people need to understand
05:57is that a very narrow
06:00High bull market which we had I'm de now
06:03in which seven stocks lead the way and
06:05the rest are basically it's either fast
06:07or Fe feem femine femine femine femine
06:11sorry femine fast or femine just woke up
06:14it just woke up and it's not my first
06:16language so basically you either are
06:19extremely rich if you're in the max 7 or
06:21you get nothing if you're outside the
06:22Mac 7 that kind of narrow bull market is
06:25not healthy it's not sustainable so a
06:27broadening of the bull market is very
06:29healthy if we want the bull market to
06:31continue so the development that we saw
06:33yesterday in which the small caps got
06:35some love for the first time in two
06:37years it's healthy and it's also good if
06:40you want to see a sustainable bull
06:41market across the board now there's
06:44still a lot of money that hasn't flown
06:47back into the iwm into the wrestle 2000
06:50and it's not necessarily all going to
06:51come from tech stocks and the S&P 500
06:53and the NASDAQ some will but the
06:55majority of money that's going to start
06:57coming right now back into the small
06:58caps is the money market accounts that
07:02$6 trillion do that Tomley told you
07:04about $6 trillion currently sitting at
07:065% interest as that interest drops to 4%
07:093% because the rate cuts are coming
07:12what's going to happen is the stock
07:14market the equities are going to look a
07:16lot more attractive especially if you
07:17missed out on the past 18 months R so a
07:21lot of the small caps are also going to
07:23get a lot of love from money market
07:24accounts there going to be $ 1.5 to $2
07:26trillion is going to flow from money
07:28from money market accounts into equities
07:31and that's not going to hurt tech stocks
07:32at all and I don't think anybody here
07:37can expect how this is going to play out
07:41condone trying to time this Market it's
07:44impossible if you want to DCA into your
07:47favorite stocks do it but trying to time
07:50this and go all in on iwm and Russell
07:522000 right now maybe it works maybe it
07:54doesn't nobody knows that's not the
07:56right way to do it now 40% of my
07:58portfolio is is in S&P 500 40% is in
08:02paler 20% is in Tesla that hasn't
08:04changed in years my portfolio has done
08:07very well because I literally left it
08:09alone for the past few years I haven't
08:11touched it and it's been very beneficial
08:13to me now I'm going to explain here one
08:17time and one time only this small
08:19correction we just got yesterday is
08:24500 it may continue it's not over yet
08:29Perhaps it continues a little bit more I
08:31don't know it may stop who knows the
08:35idea here is that you need to understand
08:37that number one we have more inflation
08:39data coming up which will derail the
08:41whole thing so if we have bad inflation
08:43data over a sudden then this might
08:45change completely and rotate back on top
08:47of it don't forget that the S&P 500
08:50needs Corrections the S&P 500 corrects
08:53five times sorry 5% three times a year
08:56so every year the S&P 500 literally
09:005% unless this correction happen on time
09:03they happen very violently it's the
09:05rubber band effect so because we went up
09:07so violently up for the past 30 days 6
09:10months we needed a correction now that's
09:12not really a correction what happened
09:14yesterday it pulled back by 1% but if we
09:16get a 5% correction on the S&P 500 it
09:19may feel very painful and
09:21violent but it's healthy for the S&P 500
09:24in the bull market in the bull year the
09:26S&P needs to pull back every once in a
09:30correct now nothing really happened
09:32yesterday people are freaking out and
09:34I'll talk about Tesla in a second it's a
09:35very specific case Nvidia pull back oh
09:38my God I checked nvidia's price it's
09:40literally the price it was four days ago
09:43so the Nvidia pull back brought it back
09:46days so what are we really talking about
09:49here nothing broke relax now what
09:52happened with Tesla is the very specific
09:53case Tesla pushed back the robot tax and
09:56they reportedly I don't know if it's
09:57been confirmed yet or not just woke up
10:00they pushed back the robot taxi event
10:02from August to October oh my god oh no
10:079% look you guys waited for a correction
10:09you asked for a correction my whole
10:11Discord is filled with people saying oh
10:13my God I wish Tesla dips I wish Tesla
10:15dips here you go you got it on silver
10:17platter nothing has changed
10:19fundamentally now by the way this
10:21Recreation might continue it might drop
10:22another 9% who knows so I don't say go
10:25all in right now I just say DCA dollar
10:28cost average unless you're a Trader you
10:30have to understand you have to make a
10:32decision every time understanding what
10:34kind of role you're operating under you
10:36either way your cap of a Trader or the
10:38cap of the investor as an investor hey
10:41DCA as a Trader might be an opportunity
10:44here now a lot of crybabies talk to me
10:48about oh my God oh my God Tesla I wish
10:51it would dip but it ran away it's never
10:53going to dip again the same people right
10:55now are looking at this 9% drop saying
10:57oh my God I'm too scared to buy this
10:58right now don't listen to these idiots
11:00do the smart thing if you like the stock
11:02if you like the fundamentals DCA and see
11:04this for what it is which is an
11:06opportunity now the other two reasons
11:08that the market have rotated yesterday
11:10are that basically a lot of what we saw
11:13yesterday with the CPI data being so
11:14good has already been priced in over the
11:16past 30 days in the market so nothing
11:19really changed because people predicted
11:21this expected this and the other thing
11:23is because we have 4.1% unemployment and
11:26you know a lot of people are scared that
11:28this is not going to lead to a rate cut
11:31that creates an explosion in the stock
11:32market and they referred to 81 2001 and
11:352008 as the years where the FED cut
11:37rates but the economy crashed anyways
11:40now these rate Cuts in 81 2001 and 2008
11:43didn't create the crash it was the docon
11:46bubble and the subprime real estate
11:50crisis the mortgage back Securities the
11:52rate Cuts were a means to try to prevent
11:55the crash didn't work the rate Cuts
11:57don't crash the economy I can give you
11:59six different examples from the 80s
12:02until now that the r Cuts pushed the
12:04market up so if the economy is normal if
12:07unemployment rate is out of control if
12:09we have good microeconomic data these
12:11three rate Cuts will do good for the
12:13economy if it's not too far gone yet and
12:16it's not and I do think that the FED
12:18dropping rates in 2024 will do it on
12:20their terms which means we should have a
12:23very positive reaction from the economy
12:25and from the stock market and that's all
12:27I got to say about this relax get some
12:29coffee this Skai hasn't fallen Papa Tom
12:32is here to save you I'll see you the
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