The Major Stock & Housing Market Reset | Prepare for THIS.

hey everyone me kevin here in this video

i want to go through something that

could end up making you a lot of a money

and no it's not trying to pitch or sell

you something though yeah there are

links down below where if you wanted to

buy something you could this is to show

you something in a not so granular way

not so overwhelmingly detailed way i

just want to talk to you as a human and

talk to you about the big x that i see

happening or the great crossing between

real estate and stocks now while we've

talked about this a little bit on the

channel before maybe you're new here or

you haven't seen the dates that i've put

on this yet so i think this is a really

critical video for you to watch because

it could make you a lot of money let's

pay attention to this i think it's going

to give us a lot of information now just

this morning which kind of relates to

what we're going to talk about here we

got numbers that would affect the stock

market and we got numbers that affect

the real estate market and it's really

interesting to just use these two data

points from this morning because it is

not only fresh information but it also

reiterates what i think is going to

happen and the timing for what i think

is going to happen

so first of all we're coming off the end

here of earnings q2 earnings season has

been phenomenal i mean even apple that

told us hey expect a big miss came in

with a beat over that miss and we've

seen that across the board for many many

freaking companies which is awesome and

really exciting if you're exposed to

stocks i'm 98 percent invested in the

stock market and real estate i've got

like two percent of my portfolio in cash

and so i'm excited about this i'm

excited that it looks like the stock

market may have bottomed in june though

only about half of you believe that i

ran a poll on twitter and about 55

percent of you think this is just a bear

market rally 45 of you think no no we

bottomed in june and this is it we're

going back to the moon

okay interesting so we've definitely got

some you know arguments on both sides

here but this video isn't to try to

argue the bottom of the market it's to

argue the intersection of stocks and

real estate and let's talk about those

two data points and then let me talk

about that intersection so two data

points came out this morning and i want

you to think about which one is good and

which one is bad so first remember we're

in a technical recession right two

quarters of negative gdp and what came

out industrial production came in and

beat expectations substantially last

month

so what is industrial production well

industrial production could be machinery

it could be

building ships and components that go

into things that we use like the apple

iphone there are a lot of components

within this that are produced by

industries

or manufacturers i should say within

industries and then apple buys them and

puts them together and sells us a good

generally when we see industrial

production rise it's a really good

leading indicator think about it if

we're in a technical recession it means

things have kind of gone down they've

gone negative here where you're right

now we're seeing industrial production

rise we're actually seeing earnings

coming stronger than expected consumers

are holding up they have more savings

than they did in 2019 they're still

spending more than they did in 2021 20

and 2019 and if anything even though

spending slowed in march and april when

we kind of hit like peak fear in in

inflation worlds uh we've actually seen

consumer spending tick back up again in

every single income demographic so

consumers are spending and in my opinion

industrial production rising is a sign

that companies like apple just for an

example are picking up the phone and

going

hey uh yeah we're gonna have to order

twice as many wafers as we thought we

needed oh yeah hey

glass screens yeah three times as many

glass screens make sure you put the uh

you know the crystals in it this time we

need them for the advertising you know

basically now they produce more and we

see industrial production rise before

more product comes to store shelves and

consumers can buy more it's a leading

indicator that's good it's actually a

green flag so to speak for the market

instead of a red flag right so we're

seeing these more and more that is

consumers still spending green flag for

stocks uh earnings coming in way better

than expecting q2 green flag for stock

industrial production green flags uh

green flight for stocks the in inflation

re readings while still ridiculously

high 8.5 is still ridiculously high

right it's it's we're seeing kind of

what could be a potential peak but even

if we just stabilize for a little bit if

our underlying

companies and industrial production keep

booming some folks are rightfully

concerned that wait a minute kevin like

if if we're seeing those green flags

consumers still spending and industrial

production still going isn't there then

a risk that we actually continue to add

more inflationary pressures and that's

just going to make the fed have to come

out and punish us more and the truth is

yes that is absolutely possible

fortunately though we have the benefit

of commodities across the board

plummeting

nickel

copper lithium

wood

wheat oil gas you name it like the big

things that caused a lot of inflation

are plummeting and something that folks

really forget a lot when it comes to

inflation and we're going to talk about

the crossing is the following look when

inflation goes up and i hear this

argument over and over again it's like

hey if you pay people more

it's not like you can undo their wage

increase to get inflation to go away you

don't have to and i think this is what a

lot of folks miss is you don't have to

see look if you pay somebody a hundred

dollars in

2021 and then in 2022 you pay them 110

dollars that right there represents a 10

increase if now in

2023 you pay them a hundred and ten

dollars the same level inflation is

actually

zero

percent right that's what's so important

that's what's so incredible so critical

is not the fact that wages and prices

went up

it's that they then stabilize even if

they go up a buck or two you know less

than three percent that would be okay

now if we continue to see now all of a

sudden this is 121 another 10 increase

that's a problem right now we get into

spiral world and then we get paul

volcker basically the image of the most

severe federal reserve chairman to come

out and just spank markets and put us

into a deep dirty recession to prove

that inflation will be going down even

if it means burning the economy to the

ground well that's a bad day but we

don't have to talk about that because

that's not what we're seeing it's not

what we're seeing commodities it's not

what the bond market is yelling at us

so where does that that leave us well

that leaves us with a lot of indications

that inflation should continue to trend

down

companies and industrial production and

consumer spending actually holding up

really well for a recession much better

than expected so that's like good news

on inflation good news on industrial

production and consumers and companies

right that's really really important for

stocks but what about housing well

housing we already know this i'm not

going to rehash this because i've made

so many videos but just to catch you up

more price drops in every city across

the country we're actually starting to

see closing prices finally start ticking

down when closing prices start ticking

down you get more fear in markets more

or i should say fewer homes are built

and more deals are cancelled leading to

more inventory on the market more

discretionary sellers people who

wouldn't have to sell but can sell

deciding they're going to sell and move

into another home that they have or with

family or move to a cheaper area right

all of these things can happen to lead

to more inventory hitting the market of

course we all know all real estate is

local but what numbers came out this

morning well this morning we had a

really bad reading

we had and okay so housing starts are

basically when builders start building

new homes this is different from

building permits let me quickly explain

that because this number is going to

blow you away okay building permits are

when architects go into the city and

they say hey we've got all these

beautiful plans that we've been working

on for the last year here you go and

then the city's like

my goodness these are some beautiful

plans but we don't like that one thing

and they send it back to you for six

months and then it goes back and forth

and it takes like three years for you to

get a permit building permits are kind

of a weird number because they're not

quick people look at building permit

numbers which actually slightly beat

this morning but folks look at building

permit numbers and and i think that's

somewhat of a leading indicator it's a

terrible indicator for the housing

market because building permits are a

way of suggesting that hey finally

through the pipeline the cities have

caught up and issued permits on plans

you could have submitted two years ago

it tells us nothing about what actual

home builders are doing but you know

what does tell us something about what

home builders are doing it's called

building starts

building starts is hey all right we're

breaking ground and we're starting to

pour the foundation that's actual

construction start it and that matters

because now people are putting money

into that project and we were expecting

a decline on this number we were

expecting a decline of 2.5 percent but

we actually got a decline reading of 9.6

nearly four times as bad of a decline in

the housing market for building starts

as what we were expecting

reconcile this for a moment it's really

difficult but then we're going to talk

about the cross

we're in a technical recession

inflation is still crazy high 55 percent

of you based on my twitter survey think

that we're just in a stock market bear

market rally and 45 percent of you say

no the bottom is in we're going back to

the moon but the point is there's a lot

of confusion out there how can inflation

still be so high but consumers still

spending and industrial production's

still going but science that inflation

will come down being so good every all

of this kind of relates to

it's actually good news

and on the housing side we get this

terrible news

but year over year home prices are still

up

how do we put the pieces of this puzzle

together because this is by far one of

the most confusing times that we are

living in and you cannot be blamed for

feeling confused in this environment you

just absolutely can't be it's crazy and

it's so hard for people to time the

market if you could even remotely time

the market successfully in this insanity

that we're going through

you basically deserve a course on stocks

and psychology of money because oh my

gosh it is crazy there is by the way a

coupon code for that that expires on

august 26th link down below along with a

real estate investing course now let's

talk about the cross this is the

important part and we're going to put

some dates on this we haven't done this

before with uh with actual dates so

here's my belief okay we're gonna go now

from the data and explaining things that

are happening

to now my opinion okay this is me taking

all of this data and trying to put it

together in a simple

not overwhelming manner so that we can

kind of picture what the h e double

hockey sticks is actually going on out

there and the fact of the matter is it's

not all doom and gloom it's not all fud

it's just the reality of what's going on

so

the red is going to be the stock market

here's what i believe that we had

first let's go ahead and draw some dates

here this over here is going to

represent november of 2021.

this over here is going to represent

june of uh come on hdmi cable partner

with me

2022.

and then we're going to draw a little

curve here right this makes sense we've

all

basically experienced this insanity

right this is roughly what we've seen so

far in the stock market

this to here represents about a 38

retracement doesn't actually mean that

the nasdaq for example moved 38 percent

uh it just it from like a technical

analysis point of view it's an important

number and an important level that we've

crossed we've actually crossed that

level it's about 318 on the ticker

symbol qqq which is an etf that follows

the nasdaq don't worry about that okay

so we've gone from this crazy high in

november of 2021 to this crazy low of

june of 2022 and we've retraced now it's

possible that we could have a double dip

right we could see a double dip and then

we should see some kind of continuation

right uh i believe that this is this is

quite likely that we'll face some kind

of uh you know shorter term dip i don't

know if that dip will be as low as what

we saw in june of 2022 but we will

almost always have some form of other

dip like this i believe that i also

believe and you could have a different

opinion of this that this will probably

be higher than june of 2022 just because

earnings are coming in stronger and

production is coming in stronger yes

that creates a little bit more fear that

whoa then the fed has to be more evil to

us right not while inflation is trending

down if cpi numbers in september

inflation numbers in september come in

bad yeah then maybe we hit a new low i

agree with you so i i don't want to feel

like i'm alienating any of you thinking

i have a different opinion of you it's

going to depend on cpi and i think we

can all agree on that

okay so this

when do we break when do we basically

moon again right

uh in other words when do we break

november of 2021 levels well personally

i believe that is going to occur

between q1

and q2

of 2023

which means i don't really care

to be perfect about timing the stock

market here or here or here or here or

here or here i don't need to do that

okay i've already played it and i'll

tell you it's very very stressful i sold

about here and i rebought about here

okay right and and then also more here

uh these are these are roughly the

places i bought right around when we get

to that support level uh which i guess

we haven't really gotten to that dotted

line yet so i should really put it like

more like there there we go right so so

i went from here to here and here okay i

feel comfortable about that but that's

just me personally that doesn't matter

so much what matters instead is the

forward-looking information and that's

that i believe we have this real

potential of hitting these levels again

in q1 and q2 of 2023. now why would i

say that well i say that because

i think we're going to in that quarter

in those two quarters

going to be comparing back to a whole of

omicron 2022

and q2 oh crap we could be going in a

recession the bottom of consumer

spending

so comparing year over year should be

beautiful for 2023 coming looking back

to 2022 and that's why i believe the

stock market could hit all-time new

highs in q1 q2 of 2023 now what does

that have to do with the great cross

right

all right well this is where it gets fun

let's talk about the real estate market

so the real estate market is very very

interesting because the real estate

market took a little bit longer to peak

the real estate market actually peaked

tentatively and we don't know maybe

it'll keep going up but so far it's not

the real estate market actually peaked

in about march of 2022 that's

interesting so let's kind of draw that

so we draw the real estate market here

okay

now we're right now uh in august of 2022

and so far we've seen real estate prices

come down

about 3.5

in closings though we already have

indications that that is going to be

even more severe probably going to be 10

to 25 off of peak and that might be

disputed but that's my opinion

so

this brings us off peak to august of

2022. now there are a few things that

could happen here right

10-year treasuries could fall which

they're not right now they're pretty

much stabilizing around 2.8 which means

mortgage rates should stay high and we

could go right back up right but that's

not actually what i believe

i believe

and i apologize for this phenomenal hdmi

cable

or it's the apple dongle in which case

short apple but anyway here's what

actually what i believe i believe that

the real estate market is much more

likely because it moves so slowly to

take a lot longer to bottom i actually

think the real estate market is more

likely to bottom

somewhere in when we get the after we

get the year-over-year comps so remember

q1 q2 we're going to be looking back

into a hole for the stock market but

we're going to be looking back at a peak

for the real estate market that means in

q1 q3 of 2023 we're actually going to

see the biggest year-over-year decline

in the real estate market but that could

lead to some additional fear that

there's more pain to be had

and this means that we could actually

see real estate prices realistically

bottom and closer to q3 to q4 of 2023

and i think peak fear so this right here

i feel like would be representative of

roughly a bottom but then peak fear

which generally precedes the bottom

would be more like q2 maybe q1 of 2023

and so this means i believe the real

estate market is likely to do this

and then for us to see sort of that that

dotted line up which if you now look at

this chart you'll see this incredible

crossing where the place you probably

want to hang out for the next year no

guarantees this isn't financial advice

i'm not your financial advisor right i'm

not even a financial advisor i'm a dude

on youtube the place for you to hang out

in my opinion is probably

this slope right here which yellow is

probably a bad color to use since that's

the background but this is probably the

place for you to hang out

while

that happens

let that intersection occur let that

crossing occur

and then

when stocks hit highs again or start

beating highs of 2021

now start taking profits from here and

dumping them into

real estate

that's my belief now i could be wrong

but

i'm one of the few folks i believe

who is all in on both stocks

and real estate and this is what i'm

seeing and that's why yeah i have

programs on building your wealth whether

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for example when i opened my m1 finance

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those anyway check those out the

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for watching and we'll see the next one

bye