Another Big Drop Coming | The Fed's Stock Market Reset is Worsening

oh man nobody thought we were gonna

revisit all-time lows with inflation

going down but that's exactly what's

happening and in this video we're gonna

talk about why why are we reaching all

new time lows again maybe it's because

countries like the United Kingdom are

threatening threatening how dare I say

to slash tax rates by the most since the

1970s at a time when the country is

about to enter a recession

no it's actually probably more likely a

Goldman Sachs report that we're about to

go through that is a little bit scary

sure look a couple days ago we had the

Federal Reserve come out and tell us

stuff that we already knew including a

75 basis point hike coming but really

what happened is the Fed told us they

are impatient in getting inflation down

I went through my notes again and I was

absolutely flabbergasted when I looked

at my notes again and I realized oh my

gosh here we go the FED is

re-defining what they defined in the

past yet again in another way now we've

talked about the FED redefining their

goal from inflation to getting job

openings down and quits down but another

thing that they redefined is the lag of

monetary policy so let's start there

number one the FED has historically been

known to tighten monetary policy see and

that's supposed to tighten conditions in

markets and spending and you know

essentially at businesses and with

consumers about 18 months later so

you've got about that 18-month lag well

a few months ago in June Jerome Powell

told us that this lag is probably more

realistically just a six-month flag well

two days ago in the last fed meeting

Jerome Powell redefined this and said

well you know actually we think

Financial conditions are actually

affected immediately and sure maybe

there's some lag but we actually think

Financial conditions move before we even

act so maybe that lag is closer to zero

than we ever thought

so for the first piece if you're

wondering for the first reason today why

is the market falling more it's because

we finally realize that oh my gosh well

first of all the fed put on their big

boy pants and they told us the truth

that we need to get interest rates way

higher than the market thought that is

4.6 or higher as a terminal rate for the

FED funds rate we got to stop paying

attention to just the inflation number

but we got to make sure that the job

openings numbers fall and I'm going to

provide some catalysts in this video as

well and we've got to make sure that the

quit ratio Falls we'll talk more about

that in a little bit but we also got

from the FED it's just another U-turn to

the dark side that yeah you know uh we

kind of think our stuff uh you know

affects everyone right away so screw

this lag talk we're just gonna go

aggressive until rates go down uh or

inflation rates go down and that kind of

aggressiveness is exactly what's leading

to the number two concern today so not

only more digestion of what's going on

with the fed and dare I say indigestion

uh but also this Goldman Sachs report so

I actually have the actual Goldman Sachs

report and Goldman Sachs is coming out

suggesting that because interest rates

and the interest rate path is now

expected to be higher for longer Equity

valuations have to come down potentially

to a 6 and 12 month forecast for the S P

500 of

3600 3600 folks but it could go even

lower in the short term and I'm going to

show you what that low number is in just

a moment but look at what 3 600 is this

is the S P 500 you can find this on

Weeble by typing in s p x in case you're

wondering you don't have to use spy or

the other ones you just type in SPX by

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stocks but take a look at this we had a

Fibonacci floor here right around June

17th June 17 18th is approximately when

we last hit a Bitcoin floor as well and

it's when real yields on the 10-year

tips peaked now we'll talk about the

10-year tips next but we are dangerously

close to approaching that floor again

right now the S P 500 is sitting around

3 700 and the last floor that we saw in

June was 36.36 but you've got to be

cautious because we're not really good

about respecting floors back when the

chart of the S P 500 looked like this or

should I say the NASDAQ because that was

a little closer we'll go ahead and use

QQQ we'll go to the day chart and this

is just a caution about floors see this

yellow line right here well we thought

this was a floor that's because we

bounced off of this floor Feb 24th March

8th March 14th and then again around the

end of April yeah well floors don't do

you much good when they do the following

okay

so quite quite painful in the market and

the S P 500 by according to Goldman

Sachs is expected not only be at 3 600 6

and 12 months from now which basically

means zero zero growth for the next 12

months

folks are thinking to themselves as they

should thanks to rules like opportunity

cost which of course and of course the

psychology of money which of course we

talk a lot about in my stocks and Sykes

course linked down below but if you get

any of the programs whether it's on

stocks and psych or in real estate you

join me in the private live streams

today we'll be talking about catl in the

private live stream and actually going

through the fundamentals and financial

analysis and the statements of companies

so that way you don't have to do it I do

it for you just use the coupon code link

down below that expires at the end of

the month but take a look at the rest of

this pain that we potentially have from

Goldman Sachs they suggest that in the

near term investors are going to focus

on earnings and margins this is

particularly why I'm personally so

exposed to Tesla because I feel that as

investors focus on profit margins

they're going to see a giant highlighter

in Tesla as Tesla profit margins exceed

expectations wildly which is just my

belief right now and Wall Street

realizes oh my gosh Tesla's actually

doing quite darn well but in that near

term we're expecting more inflation even

though we're seeing temporary signs of

some easing we're still seeing those

wage sensitive sectors like shelter and

food away from home really killing it

and that is going to lead to a potential

trough of an S P 500 of

31.50 that's right if we actually have a

classical recession we could potentially

see the S P 500 go down as low as

3150 according to Goldman Sachs 3150

just for comparison to today's 3700

level represents an approximately an

additional 15 decline of the S P 500

from today's levels that's scary so not

only in case you're asking yourself why

is the market down today not only do we

continue to parse what the Federal

Reserve is saying and realizing that oh

man now we're going from talking about

inflation to actually trying to get job

openings down getting quits down but the

fed's basically under this impression

that their poop makes everybody else

stink immediately even though most

institutions believe that's not true

that there is indeed a lag and this is

leading the FED to be overly aggressive

with the market until of course they'll

be forced to U-turn now that U-turn

might be a long way away in fact the

market is really not pricing in that the

FED is going to U-turn until likely

August to December of

2023. it's actually quite scary but

beyond that we've got to talk some

catalysts because we do potentially have

some Hope on these dates or it'll just

be bad news for more and boy oh boy talk

about bad news for more when we look at

Treasure yields and then we'll look at

some of those catalysts but treasury

yields right now an absolute complete

disaster and terms of being a bond

investor but if you want to buy bonds

today they look pretty darn juicy take a

look at some of the bonds as listed by

CNBC right now we're looking at a

10-year treasury at

3.7 if we just go two-year treasury CNBC

and we give this a quick little Google

here what do we end up with

4.14 that's right folks right now you

for a very limited time only can get

yourself 4.14 on a two-year treasury

bond you could even go down as low as a

six-month Treasury and get yourself some

gorgeous yields and since Goldman Sachs

says in the near term it seems like

there's more pain why bother why bother

at all being in the trailer in the stock

market when you could get yourself a

beautiful yield of 3.9 on a six-month

treasury why bother being in the stock

market when there's just likely more pay

pain ahead it makes sense now what I

wanted to show you what real yields are

looking like you can measure real yields

through something called the 10-year

tips don't so much worry about what the

heck that is this isn't a video to go

deep on that but look at this chart

right here on the left you see this

little red dot which is right here sort

of in the middle that shows you that we

last peaked on June 16th which is

roughly the top the bottom of the market

but it was roughly the top of the tips

yields well we have now far exceeded

that and we're expecting a potential new

low now because of this and if you take

the previous peaks of the 2000 cycle to

2007 cycle in the 2018 cycle we have now

exceeded the tips level of all of those

prior Cycles that's pretty scary that

shows some real pain in our markets now

what about catalysts well Catalyst folks

that you want to write these down

because we have three more CPI reports

coming that could finally show us that

inflation is no longer exploding on the

levels of shelter inflation on the

levels of inflation that are wage

sensitive as sectors like food away from

home where really every single other

category that exists that's blowing up

right now we really need to see the

numbers come down so mark your calendar

because the following dates are going to

be extremely important number 1 October

13th for December September 22 report

the October 22 report will be released

on November 10th so you've got October

13th November 10th and December 13th

that's when we'll get the November

report in addition to this we're going

to be expecting two jobs reports for the

next of the uh for the rest of the year

we're going to be expecting a joltz job

openings report this is going to be an

unusually critical report since the

Federal Reserve just redefined their

priorities as demanding that the jobs

report goes down Jerome Powell literally

said we need the jolts report to go down

his word was a need not mine that's

October 4th very critical on October 7th

we'll get a jobs report we'll get quits

as well keep in mind that quits are

different from separations I saw some

comments yesterday where some folks were

saying well maybe people are just

retiring retirements are deemed other

separations they're counted separately

from quits now maybe we still think the

numbers from the government are rigged

and if anything right now they seem to

be rigged in our favor that means

reality is worse than what the reports

are actually showing us because the FED

continues to ream us

and I'm a little sore

another big Catalyst will be a GDP

update on September 29th and a gorgeous

Catalyst in November folks the elections

maybe just maybe just like the 2020

cycle we will see our bottom before the

elections and some peace and quiet for

once please in markets and politics

during a lame duck session of Congress

between the end of the elections and the

beginning of the new year thanks so much

for watching check out the programs on

building your wealth link down below if

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coming housing crash with me make sure

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