Yikes: This is Bad. Watch Before Tomorrow [Stock Market].

there are three critical things that we

need to talk about regarding the market

and economy right now number one the

Federal Reserve number two the worst

earnings call I have ever read in my

career now you're going to laugh when

you hear it because you're like oh Kevin

do we really care about this company

it's going to be an example of how

quickly things can turn and you're going

to learn what to look for to identify

that kind of u-turning then we'll

obviously get into talking about

earnings Catalyst now many of you know

that going into this earnings week I

have started loading up on shorts Friday

Saturday uh oh it's not Saturday Friday

Monday and Tuesday and I have closed

some of those as of this morning profit

up $775,000 thank you very much if you

want all of those alerts on buy and sell

alerts for trends that I see I can't

guarantee that you're going to make

money can't promise you anything but I

will tell you exactly what's on my mind

what I'm doing and you'll actually see

my trades my entries and my exits so I

want you to know about those when I send

those trade alerts in the stocks and

site group we do have a coupon expiring

tomorrow uh that's fed day it's usually

when we have an expiration anyway let's

now talk about the Federal Reserve the

market broadly today anticipates and

expects that tomorrow the Federal

Reserve is going to lay the groundwork

for obviously rate Cuts in September yes

my friends the markets have priced in

rate cuts for September we already know

that that's really really obvious but

what happened this morning that probably

throws cold water on the idea that jpow

needs to go up there and say we're

cutting quickly markets right now are

pricing in the highest chance of a

September rate cut that I've ever seen

here on the world interest rate

probability sheet we're at 1.15% right

now on on the probability of getting

rate Cuts in September and quite frankly

it's it's almost certain we are going to

get rate cuts in September we're not

going to get a rate cut tomorrow there's

a 4% chance of that we pricing in uh 1.8

rate cuts for December 1 point Sorry 1.8

cuts for November 2.75 rate cuts for

December and 3.4 rate cuts for January

so you're really pricing in the cuts

here but why may the Federal Reserve not

tee up rate Cuts tomorrow folks it's

simple the joltz report came in hot and

was revised up so more job openings and

a revision up of job openings this is

warm data this does not suggest an

imminent collapse in jobs data and

without an imminent collapse in jobs

data the Federal Reserve does not need

to rush to signal that they are going to

cut and so I don't think they're going

to be in a rush to say yes we are

committed to cutting in September

instead I think the Market's frankly

going to be pretty disappointed tomorrow

when Jerome Powell gets his butt up

there and they're like so uh have yall

talked about cutting he'll probably say

something like

some of us have began beginning the

discussion of easing but we have not

committed to anything we remain data

dependent and we'll make decisions

meeting by meeting so to be clear this

is not an announcement that we are going

to cut rates at any point in the future

however we will make that determination

at the next meeting and I think markets

are going to be pissed by that but it's

all going to come down to what happens

with earnings earnings will amplify what

happens tomorrow that's the way to look

at it whatever the FED does is just

going to add fuel to the fire so if the

market goes bearish tomorrow whatever

the FED says is just going to make the

market more bearish if earnings are good

like AMD and Microsoft today if earnings

are good it's just going to add bullish

fuel to the Federal Reserve fire so I

don't think the FED is the Catalyst I

think the FED is the the the uh

amplifier or the accelerant okay now

though let's talk about I realize this

one's ridiculous I'm sorry I'm under the

weather I'm like hiding in this office

all day today cuz I mean nobody wants to

be sick but I also don't want to get

anybody else sick so I'm just like stay

away stay away stay away so this is by

far probably the worst report I've read

in my career and it's it's not that like

this is an industry that I really pay

attention to it's What I want you to

know about what happens to almost all

companies as you go into a recession

I want you to think about this for a

moment as you go into a recession what

usually happens is you're like oh okay

there's there's some slowing okay that

was odd and then you're like oh this

slowing is going on longer than we

suspected huh we've never had slowing

like this before and then you start

looking you're maybe we should start

cutting some expenses and then you go

yeah yeah yeah yeah let's start cutting

expenses for next like 2026 and then you

start cutting 2026 expenses and then

it's like hey but but maybe maybe uh

maybe we need to drop the price of our

product because we can't sell our

product anymore this is crazy okay let's

drop the price of our

product it's still going

bad and that's when things start getting

sweaty and when things start getting

sweaty guess what happens people get

fired and the problem is it happens very

very slowly and then it happens all at

once now I suggested on Twitter it's a

toxic Wasteland but I still use it I

suggested on Twitter at real meet Kevin

today that quote just read one of the

worst earnings calls in my career and I

read earnings calls every day if this

consumer call is a sign of what's to

come I'm selling everything and a

recession is near to which of course

some loser said if you keep calling

calling for a recession at some point

you will eventually be correct to which

I replied with the following cute attack

I haven't called for recession but since

July 10th if you actually pay attention

you'd see I've been long mostly bullish

and excited about the volatile Nike

Swoosh recovery I've called since

November of 2022 evidenced by my public

fund as well totally transparent trades

right but I suppose it's easier to write

this than what did I say this nonsense

actually consider uh

reality so

anyway you know people like to like lash

out when they're long and you're short

and then you're winning they're like

well well you always confir like no I

really don't like if you actually listen

to my videos I really don't always call

for recession I'm generally train

America and I hope that this is not a

recession what I'm about to show you I

hope is not recessionary

because if it is it hurts me I am more

long exposed than I short way more long

exposed that I'm short I have a public

fund that I want to keep going up I also

have two startups that I don't want to

suffer through a

recession I don't think they will suffer

we'll be totally fine but it's just

going to slow down growth so I don't

want a recession

look at

this that said the operating environment

has changed rapidly during fiscal 2024

that would be the last 12 months for

them their 24 just ended AS Global

Restaurant traffic and frozen potato

demand has softened uh don't make fun of

me okay yes to potato demand it's a

french fry freaking company okay yes we

know the recession has hit restaurants

but I want you to see how important this

is watch this in fact the downward Trend

accelerated during the back half of the

year and into early 25 that would be

July which means it's actually getting

worse right now their 2025 starts in

July which means it's getting worse

they're also trying to rightsize their

pricing to fit their consumer needs in

other words they're dropping prices

their sales growth will be driven by

volume because what they'll do is

they'll try to sell more at lower prices

and when that doesn't work they're going

to take it in the margin and when that

doesn't work they'll start firing people

they also talk about how they're

encouraged that restaurants like

McDonald's or whatever Quick Service

restaurants are going to start uh more

promotional activity which they mention

here and they say hey so far that

increased promotional activity has not

made a difference but it should because

historically it does in other words

historically we should see promotions

help us but so far we're not seeing any

signs of that that's very bad it

basically says we're hopeful but we're

not going to guide up we're going to

guide down instead that's very very very

very bad okay now I want you to keep

seeing this because this gets ridiculous

here we expect the operating environment

this year will be challenging consumers

will be more intentional with dollars

they spend in a pressured economic

landscape there's more we don't expect

meaningful contribution from Price duh

pricing is over inflation is plummeting

and a recession is going to drive us

into straight deflation they're going to

turn that money printer back on so fast

you've never even seen a money printer

turn on as fast as they're going to turn

that damn money printer back on again

but that only after everything goes to

crap uh anyway so uh let me get to my

next Arrow over here because it it gets

it gets worse okay you ready for this oh

yeah yeah we are in unchartered

territory to see a decline for this long

look at this we've seen traffic Trends

negative before but we've never seen

traffic Trends in restaurant

collectively this

prolonged okay this is like what I was

saying earlier they're like oh it's bad

oh it's worsening oh wow we've never

seen it this bad what does this mean for

your ability to price

uh what do you think they're going to

drop prices like crazy like a freaking

Rock because they're getting reamed

absolutely getting

destroyed uh what else do we have here

market share losses blah blah blah blah

blah the rest doesn't matter so much the

point is this is a bad start now I

understand it's it's like wow that's the

worst earnings call you've ever read

yeah usually earnings calls are like

here's some bad news here's some good

news there was no good news in this

there was also no reading between the

lines necessary it was straight up it's

bad it's never been this bad we are

hopeful because historically we should

be hopeful but we could be wrong because

we're not seeing any signs that sales

promotions are even helping right now

the consumer is probably going to

continue to be more choosy our American

consumer makes up over 70% of the market

and yes dang it when Jim Kramer starts

pitching me tequila which he did this

morning on the market open live stream

and he started reading off how certain

brands of tequila were on sale the very

first thing I did was go to buy that

tequila I mean short the

market so look not good again I

understand maybe it's just restaurants

and that's possible we go through cycles

first it's the chips recession then it's

the freight recession then it's the

restaurant recession then it's the

apparel recession What freaking ever I

get it I totally get it we go through

Cycles but my point is this my friends

is exactly what could happen in

artificial

intelligence because first what happens

is you have massive pricing power huge

pee your PP gets so large because

there's a demand for a product then you

explode manufacturing capacity but then

all of a sudden the demand for that

product starts shrinking cuz people are

like oh how useful really is this AI

stuff then more competitors enter the

space with also more comp competitive

capacity now all of a sudden you have

way more capacity in Supply you could

possibly imagine you would have ever

needed and then what ends up happening

prices go down and then when freaking

prices go down what ends up happening

Kevin ends up saying please please look

at Bloomberg for second while Kevin gets

up and closes the door because there's a

child screaming and not both of my doors

are closed and I'm going to close both

of them because honestly it's probably

bothering me more than it's bothering

you but that sounds like violent going

ape somebody some child not happy over

there and I'm like oh

boy okay okay okay okay no problem so

anyway uh the last thing that we have to

hit on exactly though is earnings so we

talked oh just got stopped out hold on

hold on your boy meet Kevin just got

stopped out send the trade alert oh oh

oh he's out oh oh oh uh so uh what

usually happens is uh I'll make a trade

and I'll send an alert and then I set a

stop loss uh which is actually in this

case it's a takeprofit I got into this

trade at uh 207 on an option contract

and I just left it with a stop loss at

243 36 let's go let's go times obviously

the amount of contracts and all kind of

stuff that's good let's go let's

freaking go more tendies baby daily

pnl up oh over 880,000 now let's

freaking go let's go anyway remember if

you want all those uh Buy sell alerts

make sure you are part of the stocks and

psychology of money group uh that was

actually a uh call very very short-term

call there on uh Tesla and so uh picked

up uh I don't know that was like 7K or

something like that I picked up on Tesla

so sweet while I was filming this let's

freaking go okay so uh now uh let's get

into well folks we are going to get into

earnings expectations look we don't need

to spend long talking about this we have

massive earnings Catalyst this week we

already know that Microsoft and AMD

today I'm going to be covering those

very closely Starbucks Pinterest

lemonade for solar Caesars tomorrow

we'll get the ADP jobs report uh and the

employment cost index I don't think

those are going to matter near as much

as the Friday jobs report but we'll also

have fed day tomorrow followed by a Wing

Stop MasterCard craft meta arm Qualcomm

carvana lamb research Etsy Western

Digital cheesecake Thursday Wayfair Mna

ISM Manufacturing Roblox Crocs Thursday

afternoon Amazon Apple Intel coinbase

Roku DraftKings block snap Cloud flare

door- rocket mortgage and then of course

Friday we get the jobs report so this is

a very very very very very big week and

I want to put this very very clearly

because sometimes people like to misc

contextualize myself uh or me like to

misc contextualize me want to be very

clear I think that after the election we

go as long as there's no

recession it's straight up Moon maybe go

margin but we're not post recession or

uh post election and I'm not sure we're

past recession yet right okay good now

with that said I still believe in the

volatile Nike Swoosh absent recession

but I do believe that if earnings go bad

this week we will be at the beginning of

a recession I don't want to be at the

beginning of a recession I would rather

earnings go really really well this week

and then I could close all of my hedges

I could close all of my shorts and it

could go back to being bullish today

after reading the potato report uh the

potato report by the way was um lamb

Weston Holdings after reading lamb

Weston Holdings I'm probably at about a

three and a half on the bare scale so

I'm nervous I'm very nervous going into

these earnings I pray they do well

because I don't want the market to go

into a

recession because that will hurt

everyone I'm just trying to be as

transparent as possible of course some

people they just like to look at titles

and then and then you know say stupid

things or misc contextualize things but

you know whatever that's their fault I'm

just going to keep putting one foot in

front of the other trying my absolute

best every single day and if I see a

trade I'll send you an alert on it join

the course you pay once you get lifetime

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member live streams as well we did we

did a lot of research this morning on

the course member Liv stream we also

went into monster beverage Jet Blue uh

we have some stuff going in there as

well so some really good quality stuff

hope to see you there folks I love you

all we'll see you in the next one

goodbye and good luck these things that

you told us here I feel like nobody else

knows about this we'll we'll try a

little advertising and see how it goes

congratulations man you have done so

much people love you people look up to

you Kevin paffrath there financial

analyst and YouTuber meet Kevin always

great to get your

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