the one scary thing the bears have.

so the one thing the Bears have over the

market and it's almost the only thing

other than potentially sticky inflation

or maybe this reanimation of inflation

or war with China and Taiwan like

somebody just donated five dollars to

say how would you navigate the market if

you know it's certainty hypothetically

of course that we were going to have a

conflict between China and Taiwan it's

like there's no way you could position

for something that far out and that

uncertain right but it's very common for

the bear thesis to look

for bearish reasons and reasons to sell

and reasons to short reasons to get out

and reasons to not believe in America

there's one that stands above all

and it is right

here

this

is the inverted yield curve this is the

difference between the two-year and the

10-year Treasury and what you'll find is

it's actually slipping more into

inversion as of late

is remarkable and it part of that is

because the two-year treasury just so

you can visualize how this works because

I know sometimes when we hear inverted

yield curve it's a little confusing uh

and and maybe a little bit overwhelming

so what I like to do is I like to try to

simplify things I do the same things uh

to get you from basically zero

understanding to a lot of understanding

in the programs on building your wealth

link down below remember next price

increase is June 1st at 11 59 PM so

a simple way to look about this is like

this let's say the two-year treasury is

at four point five percent which is

approximately where it is now

the 10-year treasury sitting at about

3.75 percent

now ordinarily when you lock up money

for a longer period of time you would

expect that you would have to demand a

higher interest rate

but that's the opposite of what's

Happening Now

if you lock up your money for more time

you are actually earning a lower yield

than if you lock up your money for less

time

the reason for that is because we do

still have lingering inflation

and that is creating this inverted yield

curve

generally the stock market suffers

during what's known as the re-stepening

of the yield curve right now the yield

curve has actually been falling

which that is further inverting which

potentially somewhat reiterates why the

stock market is actually doing well

because it's the steepening the going up

of this line see over here how it shows

negative 0.79 that's just the difference

of these two numbers here now I rounded

so my difference is about negative 0.75

the actual number is about negative

0.799

whatever

the point is It's usually the rest

deepening that hurts the market and a

lot of folks believe that when we go

back to zero and an actual normal yield

curve is when we will be in a technical

recession

now remember we looked at the tax which

was the German uh basically Dao it's the

top 40 companies uh top 40 Blue Chip

companies in Germany and they're

technically in a recession right now and

their stock market is actually

outperformed you're at one year highs in

their stock market despite the fact that

Germany just technically entered into a

recession

now what you could do is you could look

at okay well when did we have some of

this steepening of the yield curve and

what did the stock market do around that

time

well last time we had a steepening of

the yield curve was actually during the

banking crisis which is interesting

because some people actually call it a

faux deepening they say it wasn't

actually a steepening yet in fact we're

just going to go right back to Trend so

look right here for example let's draw a

line

let's grab a tool here grab the line

tool and what some folks are saying

is that we're probably just returning to

the trend if this right here was the

banking crisis

then none of this hump should really

exist if the banking crisis is gone

and we're actually probably still

somewhere around these levels in where

the inverted yield curve should be

and that when the real reseapening comes

that's when we're really going to see a

world of hurt because frankly if you

look at what the stock market did here

which this steepening was around March

10th to March 14th

the stock market laughed it off

absolutely laughed it off go to the s p

500.

zoom in on March 10th where we got it

March 10th so over here you had a what a

1.8 day to the downside one percent day

to the downside and then you kind of

continued

if you zoom out and you look at just the

year here I'll set the the scope to just

this year

which this year began right about where

are we where we were right about here so

let's set it to right there this is

really what the Market's done this year

you can see it's been slow and steady

March right up on the S P 500. the

NASDAQ gets even more extreme than this

and the banking crisis was right here

this little bump right here also your

steepening of the yield curve so there's

this idea that yeah even though we

laughed that off looking back as the

banking crisis sort of faded away you

did have a temporary kind of a little

bit of a few days there where you had

some red as the yield curve was

re-steepening so maybe if we get the

real re-steepening uh towards Q3 Q4 and

some form of recession then maybe that's

where you have some real pain for the

stock market

and to some extent there might be some

reasonableness in this idea given that

what's propping up like the S P 500

right now

isn't much in fact and this is crazy out

of the S P 500

the average return of the bottom

495 stocks

zero the average return of the S P 500

is zero if you take out the top five

stocks

I will show that to you visually

right here isn't that crazy

the top five stocks Apple Microsoft

Amazon and video and Google have driven

the s p 500.

the bottom

495 stocks have an average return of

zero

so this reiterates this sort of bearish

thesis that well wait a minute wait a

second

if we haven't gone through the real

re-steepening of the yield curve of

course we haven't seen any kind of real

pain in the stock market yet

and consumer confidence is still

extremely low which you can see depicted

in this picture here the Blue Line shows

you uh leading indicator of consumer

confidence

and the white line is your S P 500

year-over-year return generally they

roughly Trend in the same direction but

now we're diverging the S P 500 is

skyrocketing as confidence is so low

and that's because it's being driven by

those five stocks

so you have this this narrative that

bears can form right now which says just

wait the real pain is still coming

confidence is too low revenues are going

to fall we're going to go in an earnings

recession and when we get the

re-steepening of the yield curve that's

when we're going to get the real pain in

the stock market and just wait because

that's coming in Q3 Q4

here's the problem with this

the problem with this bear narrative

is we don't know how high the stock

market is going to go between now

and that

let's look at the NASDAQ for a moment so

we look at the NASDAQ the nasdaq's

trading for 348. uh let's zoom out to

the week chart so we can make this a

little easier we can see our Nike Swoosh

recovery over here

so we know that in 2020 the stock market

was extremely volatile right we got all

this crazy up and down mess of 2020 and

we had this massive downtrend down

but think about that for a moment as we

had the downtrend down in 2022 what you

didn't want if I said 2020 I meant 2020.

uh what you didn't want was to be in the

stock market basically the best move

during 2022 was don't be in the stock

market

because it didn't matter when you had

Downs it just ended up going down more

the opposite seems to be true now in

2023.

where it doesn't matter if we have downs

we just get another leg up

and so this is leading the Bulls to

counter the Bears and say look

yeah maybe when the yield curve steep

you know steepens again we're gonna have

a 10 decline in the NASDAQ

but what if

that means we end up going all the way

up to 404 and then we ring the bell ding

and then we dropped 10 and we're at 393

then guess what we're still up about 10

from where we are now

and that's the probably that's probably

the most frustrating thing to say to a

bear is

yeah maybe the market will go down

but how much is it going to go up first

and so obviously nobody knows obviously

the charts right now in the week look

relatively extended over here obviously

we know that this whole like AI

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price goes up June 1st 11 59 PM so with

that said though

look the Bears have a point yes usually

when you enter a recession the stock

market Falls and it's only as you come

out of a recession that the stock market

actually starts Rising again

and usually when the yield curve rate

steepens the stock market Falls

but the question is how high do we go

before that that's the big question and

again I would I would really encourage

you pay attention to Germany pay

attention to Germany which just entered

into a

technical recession

and what I want you to do is I want you

to search Google for Dax stock market

and zoom out to the max

zoom out to the maximum zoom out for the

Dax this is the furthest you could look

out

and what do you have you are nearly wait

I'm sorry

no you are you are at ah you were 30

points away from all-time highs all-time

highs November 5 2021 16 054 we are at

16 024.

so your 30 points on sixty thousand

that's less than one percent that's like

a third of one percent less probably

third quarter whatever a fraction of a

percent away from all-time highs and

Germany's a recession

I don't know

it's it's whatever's going on it's weird

it just does seem to be very difficult

though these days to be bearish uh

because we don't seem to have the

Catalyst that corroborate why uh we need

to continue to be embarrassed

embarrassed and I think that's why you

see uh so much talk like this you know

anytime you turn on the news on it's

debt ceiling debt ceiling

and a lot of it is oh is it actually

still going to go through is it is it

actually still gonna uh you know happen

just exhaust

that's that's all it's exhausting uh and

there's nothing new about it

I'm tired

anyway now I want you to know this when

it comes to AI it's time is what's going

to make you money and if you can prove

that value to an employer you'll always

be able to be employed so this is

another way of making sure that you

don't get replaced