Blackrock **JUST** Ignored a Critical Warning | HUGE FLIP

you won't believe what Black Rock just said about the stock market it is a warning about the stock market despite their bullish positioning which is really interesting because it's basically the opposite position that I've taken with a similar conclusion now if you're not familiar with my position or their position let's watch the video and find out what's going on first we're going to look at a chart that gives us a really good indicator of usually what happens when we're at this sort of point in the stock market do want to give a quick shout out first of all congrats if you also made some tendies this morning on that Tesla trade we made in the stocks and site group and if you're not yet part of the group we have the next price increase and expiring coupon code coming up at the end of the month so it'll be very simple end of the month this month and if you've got questions email us at staff mein.com let's get into it this folks is a chart of the snps price to earnings ratio now we're going to look at this before we look at what Black Rock says because refer to it now something that's really important to remember about the PE Ratio is it does really weird things during recessions see in normal times the PE Ratio is useful because let's say we have $20 of earnings and we have $200 for a price of something so something for $200 makes $20 that's obviously a 10p okay that's really simple to e and easy to understand but what most people Miss is that during recessions this number goes up when the economy is faltering because not necessarily the change in price but a substantially faster collapse in earnings and so when earnings collapse this PE ratio can actually Skyrocket and make markets look very expensive watch this let's say earnings go just to be extreme from $20 all the way down to $1 and the stock market corrects by 30 30% so we go down to 140 well instead of having a 10 PE we would have A40 PE ratio so the point is if earnings are collapsing faster than price this ratio can Skyrocket and so there's a really unique conclusion that comes from this chart first let's go to the right over here and let's evaluate where we sit today so I'm going to draw a line all the way across here this little blue line and this will show you that pretty pretty much historically we are at one of the highest levels we've ever been on the S&P 500's price to earnings ratio as you can see we are only beat by the crash of the do bubble which is the peaking that we have over here and then of course we have the crash of 2008 which is the peaking we have over here and then we have the crash of covid which is the peaking we have here now remember those are not the signal we have to separate as they say the signal from the noise the top of these charts is not the signal what's actually the signal is what comes before those spikes because you've got to look at how rich are prices getting before earnings collapse because once earnings collapse it's already too late you're in a recession and so this is what's very interesting clearly earnings are actually growing right now earnings that most companies are doing quite well and the early reports that we got this morning were actually pretty good Spotify beats GM beats F serve which processes a lot of credit cards like when you go to Macy's and stuff UPS Pepsi all of them beat Sherwin Williams and Jet Blue gave a little bit light guidance but honestly these were really good earnings so we're not seeing our chart go up because earnings are collapsing we're actually just seeing this chart go up because valuations are expanding in other words the market is getting rich so what you really ought to do is you should look at times this has peaked before without necessarily a massive crash to get that subsequent like recessionary disaster and instead you want to look at what happened in places like this oh over here you had that's not good the stock market crash of Black Monday over here in the early 90s clearly didn't have a recession but you had a valuation reset valuations went from basically where we are now way back down to a normal historically normal level of around 15 times earnings so 15 times earnings is right here pretty strong support level we saw that after CO as well so uh this elevated level where we sit now absent an actual recession is not very good but Black Rock takes a different approach than I do on this and I think it's really interesting because well it's Black Rock they manage a whole lot of money now I'll be clear my strategy in what I think is happening in this environment is I think this Market's gotten Toppy and this is just a very simple recap of the market being toppy it's essentially you've got Bitcoin topping out the S&P 500 and q's topping out and that creates resistance that we really have to blow through and I don't think we're going to and so in the last few weeks you know maybe the last three four weeks we've kind of started seeing a little bit of an edge down my concern is that worsens and so I went to cash pre preemptively Black Rock says you know what we're going to wait and then we'll flip-flop and I'm going to talk about that flip-flop here but some of you might be wondering what was this Tesla trade I was talking about what we did this morning is we actually set a day Traders line at 14578 on Tesla and what we noticed was we were constantly getting bounces here 148 uh 145 145 145 and so that led us to go for a short and play this down to the vwap which worked perfectly in fact you could have literally done the trend the same trade again when we uh got rejected went for a double top boom right back to vwap and look at this then we even broke out above the line and what happened boom snap back to reality right there between vwap and that day trade line again those are the sort of signals I send in the stocks and sight group and while I can't guarantee you're going to make money on them because it comes down to how you trade my goal is just to send hey here's what I'm seeing what you do with it is up to you and that's my goal that's my job all right folks let's now get into black rock and make sure to join before the price goes up again and email us at staff atme kevin.com if you need a bundle okay right here higher bar for us earnings okay so let's let's read some of this right here US Stocks have slid from their highs have as inflation has proved sticky and geopolitical tensions rise Wei whether corporate earnings can keep buoying C think of a buoy in the ocean it's full of air and if the waves are too strong or you know you attach a buoy to a boat that's filling with water and it's sinking it's going to pull that buoy underwater with it even in the case of a wave just temporarily because well hopefully there's nothing anchoring it down we don't know if we're going to have an anchor or just a giant wave but the point is when somebody says things are buoying it's usually not very optimistic so the S&P slid on 3% uh on Jitters from Key Tech earnings and Rising bond yields as well as geopolitical flare ups yep we already know that first when we got into 2024 we thought of two stories cooling inflation and solid corporate earnings unfortunately though resurgent inflation might end up disrupting sentiment and unfortunately that's exactly what's happened is we've gotten resurgent inflation just this morning Jamie Diamond suggested we might end up seeing stagflation and you should prepare for a case of stagflation where the economy growth falters we go to 0% growth and on top of that we end up having higher than normal inflation mean which means the Federal Reserve can't bail us out by lowering interest rates instead they end up saying sorry we stay high forever it's not actually going to be forever but until the economy actually really falters and crashes so they say we stay overweight US Stocks yet are ready to Pivot now see that's really interesting and that's where I say it's a different strategy from m they are still long stocks but they're ready to GTFO and this is why they say the second leg may now be playing out reinforcing our expectations for persistently higher inflation that raises the stakes for q1 corporate earnings to buoy sentiment just as higher bond yields pressure equity valuations and then here you go the fedus calling has gone from blessing the market hopes of inflation to 2% without a growth hit to implying policy may have to stay tight and the S&P 500's price to earnings ratio a popular valuation metric shows stocks feeling the heat from higher rates in other words we're starting as we've moved up we've started to see that PE ratio come down uh now you'll notice that their PE ratio is sat sitting at a slightly different level uh than the PE Ratio that we used which uh is right here I want to show you where this data is so you could see and compare for yourself why these charts might look different this is the Y chart S&P 500 PE ratio and when we pull that up right here you could simply jump into it over here uh you could see the fiveyear on y chart so the fiveyear on y chart puts us at that 2479 so which is the same I have on my chart although it's a slightly different chart that I was using I think I may have been using macro Trends yeah that looks right see macro Trends sitting over here at 2740 though I think it's come down to about 24 as we saw that little Edge down in the last few days so I think black rock it just has a little bit of a scale issue here but I just wanted to clarify that because I did think it was a little weird that you know macro Trends and uh the uh y charts both have us at over a 24 and there's you know is is suggesting S&P valuations or somewhere in that neighborhood of just under 21 so it's worth noting that their chart might be a little oopsy doopsie so again pay attention to that uh but the point is the same no matter we're sitting right under 21 or right under 25 it is historically well above the long run average of 15 to 16 and so those Corrections can happen no matter from where again I don't know why they have this uh I think it's oh I know the difference ah look at this forward looking esates okay we just discovered that live together this chart show shows the forward PE ratio so the charts I showed you are the trailing 12 months and the black rock is the forward so they're already trying to price in how much earnings might grow and say even with the future earnings growth we are already high so worth noting glad we saw that together uh yeah good for us to learn together okay good so what do we have over here we question whether the slide in stocks is a Flip or a bigger shift towards pricing in inflation I think it's that I think people have gotten a little complacent they're like oh we don't mind if rates are at 5% okay buddy you'll start minding when you lose your job you know somebody else is like Kevin a recession can't happen in an election year they would never allow that to happen I'm like bro bro where were you in 2008 where were you in 2000 where were you during Co so crisis can happen okay they can happen all right let's go in over here so we have broadened out our stock view to include segments all right so that's actually a red flag when people say hey I'm going to diversify more into more stocks rather than concentrate it means they're a little nervous the market might be getting toppy so as a market goes up you're supposed to diversify and as a market goes down you can concentrate on specific positions okay got it so earnings face a crucial test this week with some Mega cap tech companies reporting yeah 40% of the S&P 500 by market cap that's a little more than some but anyway they do say that they do prefer artificial intelligence and staying exposed to AI I think that's why they're still in especially down the road AI applications like those that might be able to be found in healthcare financials and Cal services so they're a big fan of that however this argument that they are ready to Pivot is something they reiterate multiple times us benchmarks we are ready to Pivot once the market narrative shifts now that I thought was kind of like classic suit rather than looking at underlying data and then deciding to Pivot which is what I do they're saying hey we'll pivot once everybody pivots like bro you're Black Rock unless of course they're referring to the FED sentiment but then again those might be one and the same with the market since the market seems to copy the FED but anyway that's black Rock's warning and when you combine that with what Jamie Diamond said this morning which I'll go through again in just a moment uh look if if you're in uh let's watch earnings let's pray they're good I know people that are like C how could you say you pray the earnings are good when you're cash because if the earnings are poopy doopy like truly poopy doopy it's going to go into recession man it's going to set off a recessionary spiral and that's bad uh so that's what I want to avoid uh we don't want a recession oh sure I'll pick up a stock correction uh but uh you know recession is is just bad for everyone okay so uh Jamie Diamond uh just spoke this morning and he says that uh here it is uh when it comes to the soft Landing put me on the cautious side of that he's commenting at the New York economic Club even if we go into recession the US is in consumer is in good shape yeah I don't know about that they should have asked him why his charge offs are up 70% in the consumer division year-over-year obviously they didn't do that uh and then of course there's the risk of stag FL sh okay all right whatever let's see what happens I'll be live for Tesla earning so I hope you join me join me in that stocks and site group linked down below at meetkevin.com I'll also be in sack and San Jose later today and then tomorrow I think we've got Seattle Spokane I don't know there's a whole list just go to house act.com 2024 if you want to meet me in person because you're curious about investing in house Haack read the solicitation this video is not a solicitation thank you so much for watching we'll see you in the next one goodbye and good luck advertise these things that you told us here I feel like nobody else knows about this we'll we'll try a little advertising and see how it goes congratulations man you have done so much people love you people look up to you Kevin P there financial analyst and YouTuber meet Kevin always great to get your take even though I'm a licensed financial adviser licensed real estate broker and becoming a stock broker this video is not personalized advice for you it is not tax legal or otherwise personalized advice tailored to you this video provides generalized perspective information and commentary any thirdparty content I show shall not be deemed endorsed by me this video is not and shall never be deemed reasonably sufficient information for the purposes of evaluating a security or investment decision any links or promoted products are either paid affiliations or products or Services we may benefit from I also personally operate an actively managed ETF I may personally hold or otherwise hold long or short positions in various Securities potentially including those mentioned in this video however I have no relationship to any issuer other than house act nor am I presently acting as a market maker make sure if you're considering investing in house Haack to always read the PPM at house.com

Channel: Meet Kevin

Views: 73,487

Keywords: investing, stocks, stock market, real estate, money, making money, passive income, wealth, starting to invest, meet kevin, house hack, househack, j bravo, graham stephan, reventure consulting, bottom line report, blr, bottom line, caleb hammer, calebhammer, caleb hamer

Id: M6jMKcrc4hc

Length: 16min 4sec (964 seconds)

Published: Tue Apr 23 2024