2023 Stock Market Hell JUST Beginning | 90% Drop.

oof is it possible that 2023 could be

even worse than 2022 well Goldman Sachs

says so Citibank has three scenarios for

us which we'll be going through here

we'll talk a little bit about what CFOs

are thinking what are consumers doing

and oh man what are some of the charts

tell us we might be facing

well let's get into this because uh in

one of the scenarios we see a negative

90 percent number and it's just not that

good okay anyway let's get right into it

so first Goldman Sachs believes that the

bear Market is not over in fact they

expect that the stock market the S P 500

will essentially be flat all the way

through to 2000 and 2023's end uh that's

because they believe that the S P 500

will end at 4 000 in 2023. if you see

here we are presently within one percent

of that level and that's not very

optimistic of an outlook for 2023 they

cite the rapid deterioration of economic

conditions they suggest that this

process is just now beginning

and that potentially the bottoming of

earnings per shares for companies isn't

even in sight that we might not actually

see the bottom of earnings per share for

companies until potentially late in 2023

or early 2024. now do keep in mind that

in other research Goldman Sachs analysts

have suggested that the stock market

tends to bottom about six months before

the bottom of an earnings recession as

the bottom of earnings per share but the

question is where is that bottom if the

bottoms of earnings per share for

companies doesn't actually come around

until let's say Easter 2024 then we

might not actually bottom out until

November of 2023 so that's leading to a

lot of Doom and Gloom so much so that

when you look at what CFOs is surveyed

by Deloitte say 39 that's almost 4 out

of ten actually expect stagflation in

2023 that means no growth and high

inflation yikes 46 of those Chief

Financial officers expect a recession in

2023 which gosh at this point seems like

it's already kind of baked in the cake

but uh then again you looked at the

stock market on The Daily it's like nope

nothing's baked in the cake it just

seems to get worse and worse and then

when you try to compare January of 2020

to what we're seeing now you're actually

seeing some serious changes in consumer

Behavior as well just consider this if

we look at consumers personal savings

rates and compare it to Consumers uh

credit card spending or I should say

credit card debt rates look at the

inversion of these curves it's not

usually what we think of when we think

of an inversion but look at this you've

got the green line representing the

personal savings rates uh personal

savings rate falling to 3.1 percent

that's the lowest level on this entire

chart and this chart goes all the way

back to 2000 16. 3.1 percent personal

savings rate that is the lowest level

and then when we look at a total

revolving debt based on data just

released from the Federal Reserve what

do we have we have oh dear much more

than where we were at pre-pandemic

levels now if you adjust this for

inflation

we're basically at

the same trend line for pre-pandemic

levels so if you look at real credit

spending you see oh yep we're right back

at 2019 levels of credit outstanding not

so great for the consumers and so that's

leading some to say okay well are we

actually starting to see any stress in

the consumer yet because it seems like

you know earnings for last quarter were

still pretty good right I mean 63

percent of companies in the S P 500 beat

so how bad could it be for consumers

well if you look at something that is

held up really really well we start

seeing a little bit of an inflection

point take a look at this a little scary

look at this this is a chart showing you

how many people are going through TSA

checkpoints and all of the airlines have

been telling us oh demand has been so

resilient you know Airbnb is like oh

demand is so great everything's going

great but look at what we actually have

here which we have not yet seen

look at that a downtrend if we actually

try to get the angle here without the

iPad correcting it there we go look at

that downtrend that we have on TSA

travel now in case you're wondering

about this dip over here that dips about

a 60 drop just like what you could get

with the courses on building your wealth

including the new Elite Hustlers course

which Launches on Friday that's this

Black Friday when the largest coupon

code we've ever had expires so get into

lifetime access to the programs on

building your wealth that means if we

add new lectures in the future you're

locked in forever no monthly fees one

time you're in and if you join before

Friday even in that Elite Hustlers

course you'll get access for the elite

Hustler scores to both live streams the

course member live stream and the elite

Hustler one but that'll go away after

Black Friday unless you buy beforehand

where you can lock it in now in case

you're wondering about this dip over

here this is really your Delta variant

right here so you kind of want to take

that out and if you take that out out

what you see is actually a really nice

uptrend recovering out of that pandemic

right and we were kind of trending back

to what we saw in those sort of

pre-covered levels and keep in mind one

of the reasons airports sucks so much is

because right now the airline industry

is basically running at like 95 of what

it used to be except there's a lot more

demand today or at least we were

trending in that direction until just

recently here where we've kind of

started seeing a little bit of a

Slowdown now this slowdown is a Slowdown

that we've seen throughout 2022 but it

does make you wonder hey is it possible

though we've hit Peak earnings for the

Airlines and potentially even Airbnb now

vacasa will tell you oh yeah Airbnb has

hit Peak we are seeing short-term

rentals dry up but Airbnb will tell you

don't worry in recessions people want to

rent out other rooms in their homes or

maybe even their own home while they go

on vacation I don't know about that but

we think we'll see more growth for

people renting out rooms on Airbnb then

uh than in a normal environment I don't

personally agree with that I think

there's a potential here we could be

hitting Peak Travel and I think that's

an important warning to watch for

because if we align Peak Travel

potentially with a peak housing market

and Peak residential Investments we're

going to see that consumer spend really

plummet on residential Investments solar

Travel consumer discretionary spend and

where are we starting to see real cracks

of consumer discretionary spend well how

about Target

consider what we heard from companies at

the beginning of 2022 we heard oh we

have pricing power we have the most PP

in the world we have pricing power all

day long we can raise prices and people

keep spending spending spending what are

companies like Target telling us now

well it's not good this is something we

went through with course members this

morning in more detail than we will here

but what you're seeing is consumers are

showing increasing signs of stress

they're pulling back on discretionary

purchases later in this document they

even say that people are not only

pulling back on discretionary purchases

but they're running so low on money that

they're even starting to have to pull

back on household essentials

sure Beauty and food are still doing

well but sales Trends are softening

people are spending more money on like

via debt and on their credit cards

another thing Target talked about in

their earnings call we're seeing more

theft and we're seeing more weakness in

the last few weeks of October and the

beginning of November what is that

telling you well it's actually telling

you wait a minute

we just had Q3 earnings but Target is

warning about an inflection in Q4

October right October November December

that's Q4 so is it possible that we're

actually about to get the really bad

earnings in q1 and Q2 for companies

related to Consumer spend be it travel

discretionary spending like toys or

apparel or bathing suits like what

Target's talking about or are we also

going to see pullback on things like

buying Teslas maybe and that seems to be

what the market is trying to try to you

know parse out right now uh oh maybe

everything is going to go in the toilet

in the first half of 2023 and maybe

Goldman Sachs will be right

kind of scary and so this is where when

we look at the Federal Reserve we're

like hey well the fed's gonna relax on

their hiking Pace right and then then

maybe maybe like the stock market can

stabilize right

the problem with that is there's little

indication of the market actually

pricing in any kind of lid here on the

Federal Reserves terminal fed funds rate

in fact we're knocking on doors of

all-time high expectations for how high

the FED is going to hike so you've got a

fed that's hiking extremely aggressively

to levels that we have not seen in any

other prior hiking cycle because folks

we are hiking at the fastest rate that

we have seen since the

1980s it's insane now sure we're seeing

commodity prices fall we're seeing the

prices of freight start to plummet and

inflect it down this is great these are

disinflationary forces that could lead

to a nice amount of uh and falling

inflation in 2023 and maybe we'll have a

floor put under the stock market and

we'll all be right back to the Moon

maybe this is where we have to look at

citibank's three projections and

potential targets but let's just start

by saying it very simply

there's a lot of uncertainty ahead and

when we inflect from what we saw at the

beginning of 2020 two which was

everybody's got pricing power to where

we are now nobody's got pricing power

and all of a sudden prices are falling

and all of a sudden consumers aren't

spending anymore you get a lot of fear

that earnings are all going to get

revised down in Q4 including at a

company like Tesla now I believe or

maybe hope I'm not quite sure that Tesla

will be just fine but what a Citibank

thing all right well let's take a look

at that city gives us three scenarios in

one scenario they actually think that we

have so much bearish sentiment right now

that everybody is expecting everything

to be so freaking bad that they're not

actually considering that consumers are

overall in a better place than where

they used to be even though debt is

rising even though savings rates are low

we might be in a situation where

inflation Falls very quickly and this

coming recession ends up being a soft

and shallow recession and we end up

getting a short squeeze to the upside

and we rebound nicely

it's one idea for the S P 500 in markets

of course then there's a counter

argument that Citibank released which is

well

or we have to actually get through the

real recession that the real recession

hasn't happened yet that quantitative

tightening has barely just started to

affect our markets and that potentially

some stocks being down over 90 percent

it's just the beginning carvana being

down over 97 percent and really it's not

the inverting of the yield curve that

hurts we've got some of the deepest

levels of inversion today than we've had

in the last 20 years but it's the

subsequent steepening that actually

leads to real pain for stocks as

earnings bottom

problem is all recession indicators are

looked at in hindsight and the fact of

the matter is in the last 100 years

stocks have never bottomed before a

recession has begun so this kind of

makes you hope that if you're a bull

that we're already in a recession but if

we're not in a recession that maybe that

means we have another leg down as

Goldman suggests in their bearish

scenario they do though also have a

balanced scenario this is sort of the

middle of the road scenario and this is

where they see earnings Falling by at

least 10 percent in 2023 and the share

price declines that we've already seen

might actually be looked at as a down

payment so to speak towards earnings per

share declines so it's kind of like if

share prices are going down don't worry

they're going down but

we're kind of already pricing in the

earnings per share paying that we're

going to see so you may as well use that

60 off coupon code down below because

why not the worst is over and what

generally rallies first well generally

stocks do generally an economy rallies

its way out of a recession with stocks

leading the way

and there have only been two bear

markets in the last 100 years that have

taken more than two years to find a

bottom giving a lot of hope that maybe

will get some green in 2023 worst case

it's two years of pain but then we're up

from there

who knows a lot of potential pain

and this is where some folks say hey if

we do get that sort of scenario where

all of a sudden consumers you know

really do pull back we see those EPS

declines

the fed's potentially going to have to

u-turn on either how high their hiking

rates or they'll have to soften on their

inflation Target and move their two

percent Target maybe to something like a

three percent Target

either way Goldman Sachs and City give

us plenty of warnings that earnings per

share are coming down we know this has

been coming for probably the last six

months the question now is which

companies and this is the hard part

which companies are going to have the

best opportunity to prove that their

earnings per share already took the hit

or are no longer going to take as bad of

a hit as markets expect things won't be

as bad as expected and could rebound out

are those going to be companies like the

chips Nvidia AMD tsmc are they going to

be Autos companies like Tesla pole Star

Ford

not really good estimates looking out

there for four right now especially in

that EV sector or is the best thing to

do to just stick with oil even though

oil prices are starting to decline on

the other hand if we look at our sectors

Consumer Staples the S P 500 they're

only down three percent year-to-date

could that be the place to continue to

hide or are those Consumer Staples going

to start getting sold off like Walmart

once we rotate back into maybe a tech

rally which has fallen somewhere around

26 percent year to date

I don't know but what I do know is

there's a lot of pain out there and I

hope to talk to you in our course member

live streams check out the links down

below and folks we'll see in the next

one good luck