12 Reasons WHY The Market is Crashing | *Track These*

hey everyone me kevin here in this video

we're going to review 12 reasons why the

market is falling we're gonna go through

each one independently and share some

facts and opinions let's get right into

it right after i mentioned that this

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links down below okay number one scary

bubble market indicator folks 36 of

nasdaq stocks are down 50

from their highs in november the nasdaq

is down 8 from its highs in november

usually when the nasdaq goes down by 10

only about 12.5 percent of stocks are

down 50

so the fact that three times as many

stocks are down 50 percent is

potentially a bad sign this means that

really mega caps are the ones keeping

the index up and that faster growing

smaller companies are getting wrecked

under higher interest rate fees and

unfortunately this could usher in a

quote cyclical bear market where we see

indice declines of at least 20 percent

from the records set in the last few

months since 1972 there have only been

39 days though where the nasdaq was

within 10 of highs and 35 percent of its

members were down 50

that is out of the last

50 years there have only been 39 days

in the past where the nasdaq has been

down roughly 10

and

35 or a third of the members are down 50

which is what we're experiencing now

and folks all of those days

happened in 1998 and 1999

right before the bubble pop of 2000.

now there's a lot of pain a lot of pain

in the micro cab sector so who knows

maybe this is just isolated to micro

caps and shorting but

it's not a very positive sign

all right that's market reason for pain

number one

number two bank earnings first a city

reports that corporate client balance

sheets are very strong that there is a

lot of liquidity on both consumer and

corporate sides and that a lot of

business investment is being conducted a

lot of capex spending especially to

streamline supply chains the issue

however is that we are in an era of

unprecedented and unanticipated demand

and as a result shortages this comes at

the same time as consumers have low

delinquencies and high payment rates on

debts and citi is seeing positive

deposit growth despite a reduction in

stimulus this all was actually

relatively positive from city that we

did see trading and loan revenues

decline this is similar to what we saw

at wells fargo and jp morgan in fact

wells fargo reported that there is a

huge amount of corporate liquidity in

the system and available they also say

that there is 30 to 35 percent more

money in individuals accounts for all

wealth levels than prior to qua than

prior to coven

but and this is the downside and this is

the part that's really weighing on the

market

wells fargo says that inflation is very

real prices are up for most that

businesses have the most pricing power

that they've ever seen and that really

labor and wage shortages are just

contributing to the issue jp morgan

reiterated this sort of inflation as

well going as far as saying they will

pay whatever it takes to attract the

best talent goldman sachs just paid out

massive bonuses to their top one percent

of workers to retain their best talent

jp morgan goes on to say that wage

inflation is real and that we should

expect higher inflation for 2022 in fact

we're regularly seeing revisions up on

inflation estimates the big issues here

folks more inventories are not actually

at the moment helping reduce inflation

they're helping increase inflation this

is quite wild because the kathy woodyan

argument is that as we have more

inventories businesses will have to cut

prices to get rid of those inventories

and actually move product

but the flip side is that as businesses

continue to build up their inventories

what happens

you end up putting more pressure on

manufacturers leading to more inflation

and supply chain constraints

now trying to prevent getting quote

burned by businesses is what's inducing

this sort of spending on more

inventories because businesses do not

want to be caught flat-footed without

the appropriate levels of inventory

j.p morgan is expecting less deposit

growth but the theme of these three

banks is very simple

defaults on loans very low

and people have money but because

defaults are low and people have money

and people are able to get more credit

if they want to which means they have

more money to spend

we are seeing people willing to pay

higher prices and this is leading to the

cycle of inflation continuing

so we're in this sort of weird place

where we have higher profits lower

delinquencies but all at the expense of

prices going up

now goldman sachs recommends that now is

the time for investors to check out

financial stocks energy stocks and

material companies as these might be the

best suited for hedges against inflation

now let's talk about these business

inventories and this is the third

problem but first a message from our

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kevin for xero fees business inventories

were announced today to have jumped 1.2

percent in november now business

inventories are usually a sign of an

expanding economy adding to gdp however

the fear now is inflation

as businesses continue to stock up on

these inventories now two months in a

row of inventories increasing

we are seeing

more pressure on supply chains which is

then getting compounded by omicron

pressuring supply chains so ironically

as business inventories go up and that

should be good for gdp and should be

good for potentially prices going down

right now prices are going up before

they come down this is also true in the

energy sector and this is the number

four reason for why the market is having

such issues blackrock says that the

number one investment opportunity going

forward is investing in new technologies

especially around the green economy now

this came from the blackrock earnings

report and they mentioned that new

technologies are going to help

accelerate the transition to green but

the problem is

as

until we actually have the innovations

that we need in the green space we can

actually see the prices of green energy

go up rather than down and it comes at

the same time that so far year to date

in the last just two weeks since the

year is only two weeks new oil is up ten

percent this year natural gas is up

seven to twenty percent depending on

which type aluminum nickel and iron ore

are all up over five percent just in the

last two weeks and while some of this

could be due to trading these moves are

perpetuating fears that prices will keep

going up that energy costs will keep

going up and that green the green energy

revolution can't keep up because of

price ceilings and the time it takes for

new technology to actually help bring

green energy costs down so in other

words we might be dealing with high

fossil fuel costs but also high green

energy costs and this is a potential

negative catalyst because as you look

around and you see that all

opportunities for energy prices are

going up your opportunity to to

lower inflationary pressures actually

goes down so in other words more energy

costs both in the green and hydrocarbon

space more inflation

now one potential diversifier here is

investing into something like the crane

shares global carbon strategy etf they

bet on carbon futures which is

similar to having like call options on

the price of carbon as the price of

carbon goes up so should this fund no

guarantees of course but anyway this

fund was created in august of 2020 and

it's up over 100

over the last 12 months it really is uh

it really has been acting as a

diversifier especially to uh sectors

like big tech and uh and other aspects

uh or higher growth sectors of the stock

market which have been getting

substantially punished uh so another

issue to keep in mind higher energy

prices hurting the market number five

consumer spending so the headline here

is really fud it's it's a sign of pain

1.9 decline in retail sales we were

expecting a 0.1 percent decline so we

had a big miss here 10 out of 13

categories declined that the only

categories that were positive were home

improvement health and personal care at

miscellaneous stores all the others like

clothing sporting goods food and

services cars retail online retail

electronics were all down online fell to

most 8.7

not good for etsy etsy got burned a

little bit in the stock market today

etsy is now down over 20 year-to-date

and we've only been on the market for

two weeks here kind of crazy but anyway

october november results were so strong

uh though that uh if we look at q4

broadly q4 retail sales are still up

17.1 percent year over year problem is

none of the headlines in the mainstream

media are talking about how q4 retail

sales are up 17.1 percent all they care

about is that december is down 1.9

so uh unfortunately here uh er you know

we we have fun uh now it's unlikely

unlikely that inflation is actually what

held back spending because people have

more cash it's actually presently

appearing that it's more likely that

demand was just pulled forward to

october and november rather than

december as people wanted christmas

gifts to actually arrive timely or

holiday gifts to arrive timely either

way this headline report is affecting

the market quite negatively

number six

the russia and ukraine drama russia

currently has 100 000 troops lined up

next to ukraine with tanks and artillery

ready npr interviewed a retired colonel

who thinks that

uh the odds of a russia invasion are 8

out of 10 with 10 being the most likely

now look it either appears that russia

here is saber-rattling or they're

getting serious you do have the white

house and democrats arguing that there

are maybe uh false flag operations that

could actually perpetuate the odds of an

invasion in the ukraine uh the biden

administration has gone as far as saying

that russia is literally considering

saboteurs to attack their own forces

hence a false flag operation so that way

russia can use this as evidence or a

reason to end up attacking the ukraine

now the white house didn't release

details of this evidence but it seemed

to be related to intercepting

communications as well as drone or

satellite observations to corroborate

that information some are calling this

foul this claim of a false flag

misinformation itself especially some

individuals on the right who are saying

that of course the biden administration

is saying that now the ukraine and

russia are or well russia is setting up

false flagging for uh you know

operations because

see the the 4d chess kind of level here

argument would be okay well if uh the

biden administration wants to downplay

russia invading ukraine then maybe the

biden administration could say something

like oh well

that catalyst for the war was just a

false flag so that's not actually a

legitimate invasion and so we're not

gonna uh you know we're not gonna get

involved on either side or something

like that right uh it so really it's

like who's right nobody knows military

is a disaster but this uncertainty is

certainly uh leading to more pain in the

market as well especially since there

was a cyber attack that just downed

multiple government websites today uh

the government of ukraine does say that

there isn't there was no data leak just

a crash probably a ddos attack here the

us is advising that they're helping the

ukraine deal with this remember folks

this issue has been going on for quite a

while uh not only with uh the ukraine

going as far back as 2008 2009 but in

2014 you had the malaysian airlines a

flight that killed 298 individuals

because of a russian

missile that was shot uh somewhere from

the eastern border of the ukraine which

is right next to russia

uh and uh so there it's suspected that a

russian warhead destroyed this passenger

plane killing 298 aboard flying above

the ukraine uh the same year by the way

russia invaded crimea uh biden right now

saying he will not send troops to defend

the ukraine instead he's going to help

reinforce military presence with uh nato

this is a hotly debated uh mostly

because ukraine is not part of nato but

many say that the ukraine should be part

of nato where an attack on one is deemed

an attack on all

anyway ukraine has been in civil war for

a while so it's quite possible that's

why they haven't gotten into nato okay

reason number seven that we're seeing

pain in the market right now is

obviously bond yields rising bond yields

rising on anticipation of the federal

reserve uh actions of not only

increasing interest rates but also uh

limiting the stimulus that they are

injecting into the economy reducing

their bond purchases and then eventually

they'll actually be vacuuming money out

of the economy by removing money from

the economy

ultimately by selling bonds and then

receiving cash in exchange for that

removing this from the market it could

actually and bloomberg expects this it

could actually take until the end of

2023 though for tightening to actually

begin because there's so much excess

liquidity that banks have and you can

see this by looking at the reverse repo

market as

explosion and access liquidity which

makes sense because in the bank earnings

reports we also had them talk about how

they there's so much money around they

might be pointing the finger at

themselves

uh reason number eight the market is

falling consumer sentiment has fallen to

68.6 this is down from 70.6 and this is

the lowest read in a decade worries

about inflation and omicron or weighing

on consumers

now sometimes the consumer sentiment

reading can actually be lagging that uh

maybe

maybe we're we're overdoing the fear but

at least at the moment in terms of the

release that that came out today uh

consumer sentiment has fallen and you do

have uh companies like fox news

reporting that 70 of individuals in

america are unhappy with the state of

the economy in america today

number nine omicron mobility

uh we've obviously seen a massive

decline in mobility data

related to the omicron surge in fact if

we take a look at mobility data we'll

see that mobility has fallen so much

substantially more than we had during

the delta variance attack so delta was

really a fall that we kind of saw around

here

there we go so around those green lines

there those are about the changes that

you saw during the delta variant

actually not much not substantial

changes in mobility whereas take a look

at this tomtom congestion google

mobility and apple mobility all moving

down substantially more for omicron

probably because so many more

individuals are getting sick compared to

what we saw with the delta variant this

is really uh quite unprecedented

now uh fortunately and we've been

reporting this in the covet update

videos we have been seeing an omicron

flattening in cases in new york city so

we're seeing some form of an affliction

to the downside

but still a lot of

lingering fear and pain over omicron and

what it might do for inflation

consider the fact that a surging omicron

could shut down supply chains in china

or in america simply by people calling

it sick not even necessarily with

lockdowns and that is expected to of

course slow supply progress number 10

reason the market is falling u.s home

sales had their largest plunge falling

11 from a year earlier this is the

biggest decline that we've seen since

june uh availability of homes on the

market fell by 19 leading to a 15

increase in the median home price year

over year this is now the largest median

home price that we've seen in quite a

while 382

900.

number 11 shorts and hedges folks of

people are so fearful in this market

that the level of shorts puts and hedges

against stocks throughout the stock

market and selling to sitting cash on

the sidelines has substantially

increased it's not a surprise when

prices go down folks tend to be

motivated to want to hedge their

portfolios generally the best time to

hedge your portfolio is when prices are

rising not when prices are declining but

the most common time not the best time

the most common time to hedge your

portfolio is when the port when markets

are going down because this is when fear

comes out and this is when people

continue to exacerbate the amount of

short positions they have or put

positions they have via options

and this can in the short term

accelerate declines on stocks especially

if individuals believe that all of these

catalysts are going to lead to a

recession and potentially more pain for

longer than hedging a portfolio is a

potentially a wise decision number 12

germany's economy grew at just 2.7

percent last year but folks quarter four

was a problem we saw negative gdp growth

and a fall of between 0.5 to 0.1 percent

i'm sorry 0.5 to 1

these are just the initial estimates for

q4 that's why we don't have an exact yet

but it looks like germany will be having

a decline in gdp and q4 of somewhere

between half percent and one percent and

this could be because of lockdowns that

came from delta or covid lockdowns for

omicron but honestly what the market

feels like right now is just a

continuation of march 2020 over and over

and over again as eventually maybe we

get through this pandemic and we can try

to go back to some semblance of normalcy

but otherwise in the meantime we've got

a pretty

sad market right now a lot of fear and

all of this fear is just reiterated by

uh rising bond yields again a lot having

to do with the federal reserve but you

can see there are quite a few catalysts

here for why the market is falling also

the next time the federal reserve speaks

will be january 25th to 26th that's

their next meeting we'll expect a

conversation from jerome powell on the

26th so we can get more insight from

jerome powell directly anyway folks this

is what's going on on in the market

thank you so very much for being here

make sure to check out titan via the

link down below and folks we'll see in

the next one thanks again goodbye