[0:00] Donald Trump is playing a great game of
[0:02] 4D chess with markets. And with the
[0:04] Federal Reserve meeting tomorrow and
[0:06] Kevin Worsh's first Federal Reserve
[0:09] meeting, oh, it is so weird to say that.
[0:12] No JP, pal. Dang, we have to prepare for
[0:16] what we should expect for tomorrow. Now,
[0:18] let me start by saying this. I think
[0:19] there is absolutely zero shocker that
[0:23] Donald Trump is doing everything in his
[0:24] power to get a deal signed with Iran,
[0:27] including begging BB to stop attacking
[0:30] or striking Hezbollah inside of Lebanon
[0:32] for obviously retaliating against
[0:34] Hezbollah, who's retaliating for Israel,
[0:36] attacking Iran, who'sal, this keeps
[0:38] going, okay, we don't need to go down
[0:39] this rabbit hole. Point is, Donald Trump
[0:41] is like, "Yo, we need this deal done
[0:43] this week and we need to do everything
[0:45] in our power to get oil prices to go
[0:47] down because we need Kevin Walsh to be a
[0:50] good little puppy and start talking
[0:52] about rate cuts because that's what the
[0:54] market is not doing right now." And so
[0:57] far, Donald Trump's call it
[0:59] announcements or convenient timing or
[1:02] manipulation is working out quite well
[1:04] for oil. Now, that is creating some
[1:07] nervousness in the stock market, but
[1:08] I'll explain exactly why in just a
[1:10] moment. But first, regarding oil, take a
[1:11] look at this. International Brent crude
[1:14] down under 80. Let's freaking go. That's
[1:17] actually huge. My goal was to get to
[1:20] about $65 to $70 by the first quarter of
[1:24] 2027.
[1:25] We're already at $79 in June. That's
[1:30] fantastic. WTI sits at 76 bucks. So, we
[1:33] still have a little bit of room to go.
[1:35] But one of the big reasons we're
[1:36] dropping today is because of this Wall
[1:38] Street Journal exclusive, which
[1:40] indicates that the Trump Iran deal is
[1:42] immediately allowing Iran to sell oil.
[1:45] In other words, if you've been paying
[1:47] attention to what Donald Trump has been
[1:48] saying, he's been consistently saying
[1:50] that oil is going to drop like a rock as
[1:52] soon as a deal is signed. And so, it's
[1:54] no surprise to me that the deal is
[1:56] actually going to immediately, there's
[1:59] no like, hey, we'll give you half of the
[2:01] $24 billion now. Hey, if things go well,
[2:04] we'll give you $300 billion in
[2:05] investment money over time and Jared
[2:07] Kushner is going to help you rebuild.
[2:09] There's none of this like, hey, we'll
[2:10] talk about it later crap. It's quite
[2:13] literally the provisions for waiverss of
[2:15] sanctions on oil take effect immediately
[2:18] upon signing the agreement this week and
[2:21] also enable whatever is necessary to
[2:24] make sure that banking infrastructure,
[2:26] transportation, insurance policies,
[2:28] whatever it is, even if the United
[2:30] States has to do an insurance like
[2:32] guarantee fund or whatever is done to
[2:35] make sure that oil keeps flowing. I kid
[2:37] you not. This is all part of the plan to
[2:40] make sure that Kevin Worsh can show up
[2:42] tomorrow and talk to us about recuts
[2:45] because that's how you keep this boom
[2:48] going. It's not just going to be SpaceX,
[2:50] which obviously is doing a fantastic
[2:53] movement. I'm very happy about because
[2:55] we got a lot of money in SpaceX, but
[2:56] hey, you know, let's be clear here. It's
[2:59] going through its meme movement. This is
[3:00] what we thought. We're like, "Okay, it's
[3:02] going to get a little bit of a meme bump
[3:04] for the first 15 to 30 days cuz nobody
[3:06] can sell." Uh, even people who bought on
[3:09] IPO day, a lot of brokers require them
[3:13] to hold for at least two weeks. So, this
[3:14] is totally reasonable. We made a little
[3:16] SpaceX and Tesla video this morning. You
[3:18] should check out if you haven't seen it
[3:19] yet. But most importantly right now is
[3:23] what do we expect for Kevin Worsh
[3:25] tomorrow? Well, I've said it before and
[3:26] I'll say it again. And I think Kevin
[3:28] Worsh is going to be an anchor for
[3:30] interest rates. He has no appetite to
[3:34] actually increase interest rates. But
[3:37] when there's a big inflationary regime,
[3:39] obviously there's going to be a lot of
[3:41] pressure to potentially raise rates. So
[3:44] what is the market doing right now?
[3:46] Well, the market is screaming at the
[3:47] Fed, you should raise rates. In fact,
[3:49] with about a 58.6% 6% likelihood. The
[3:53] market says the Federal Reserve should
[3:55] raise rates once by the end of the year.
[3:58] And with about a 16% likelihood, the
[4:01] market should or the Fed should raise
[4:03] rates twice by the end of the year. And
[4:06] if we go to the uh let's see, July 28th
[4:08] of 2027, we would only have about a
[4:11] combined 31% chance of staying where we
[4:14] are with rates or going down. Only about
[4:17] a 2.3% chance of getting a rate cut. So,
[4:19] the market's not pricing in any cuts.
[4:21] The market's pricing in two rate cuts
[4:24] certainly by next summer, but maybe even
[4:26] by the end of the year. And in order to
[4:28] U-turn that, you suddenly need
[4:31] inflationary pressures to tank. Pun
[4:34] intended, because now we're going to
[4:35] have tankers tanking oil by literally
[4:38] tanking oil. Get it? Anyway, uh oil
[4:42] prices are tanking because oil is
[4:44] finally going to get tanked out of the
[4:45] straight of four moves again. And this,
[4:47] in my opinion, is all happening
[4:49] purposefully right before the Kevin
[4:52] Worsh meeting tomorrow. Think about it.
[4:54] The Federal Reserve, they start their
[4:55] meeting today. Wow. Hey, big news on the
[4:59] Wall Street Journal conveniently, right
[5:01] as the meeting starting, you know, maybe
[5:04] a couple hours into the Fed meeting.
[5:05] We're going to give insurance
[5:07] guarantees. That's been rumored that
[5:09] part, but we're going to enable
[5:11] insurance a colloquialism for insurance
[5:13] guarantees, I think. uh and we're going
[5:15] to make sure that they can transport oil
[5:17] immediately without any kind of delay or
[5:20] issues and we'll let the Iranians sell
[5:22] their oil to the global market.
[5:24] Conveniently, as the Fed meeting starts
[5:26] today, the Fed meeting ends tomorrow
[5:28] morning and it culminates with a rate
[5:30] decision. We'll probably get a hold and
[5:33] then of course we'll get Kevin Walsh's
[5:36] yapping. Now, I'm personally really
[5:38] excited to see the Kevin Wars yapping
[5:40] because I think today uh you have a lot
[5:44] of market participants that are kind of
[5:46] nervous. They're like, "Oh my gosh, what
[5:47] are we going to get? The Fed's going to
[5:49] be forced to talk about a rate hike.
[5:52] This is bearish. Let's take some money
[5:54] off the table." We also get a summary of
[5:57] economic projections tomorrow. Unless
[5:59] Kevin Worsh for some reason removes the
[6:01] summary of economic projections, it is
[6:03] an SEP meeting. But what's more
[6:06] interesting to me is that right now
[6:09] you've got a lot of people with a lot of
[6:12] money in markets and I think people
[6:15] hearing, "Oh no, the Fed meeting is
[6:16] tomorrow." Has people going, "All right,
[6:18] all right. Well, let's be a little
[6:19] cautious. We had a big run yesterday.
[6:22] Maybe we don't want to be so aggressive
[6:24] going into a Fed meeting." Today in the
[6:26] course member liveream, I actually said,
[6:28] "Hey, to don't do not expect it to
[6:31] rocket like it did yesterday." Yesterday
[6:32] in our course member live stream in our
[6:34] alpha report I'm like hey I bet up today
[6:36] like calls baby and today what we said
[6:39] in the alpha report was be careful a lot
[6:42] of the juice has already been thrown
[6:44] into the market on Monday we had a great
[6:46] extension yesterday expect that to slow
[6:49] down today as people get nervous about
[6:50] the Fed in fact we specifically pointed
[6:52] out the 735 line which we've been rubber
[6:56] banding aroundish here I really hope we
[6:59] close at 735 really don't want to lose
[7:01] that 730 35 line although it is a pretty
[7:03] loose line. Anyway, uh one thing to note
[7:07] is financials are actually doing pretty
[7:09] decently right now. Visa, JP Morgan,
[7:12] Veru, SoFi, all doing really well. And
[7:15] even though Robin Hood is red today, it
[7:18] has shot up over the past few days from
[7:21] about the mid to low 70s. That support
[7:23] somewhere around 69 to 80 in that range
[7:26] is where we kind of keep bouncing up on
[7:28] Robin Hood. So financials are starting
[7:30] to kind of be like, "Hey, Kevin, you
[7:33] looking for another sector here.
[7:37] Look at that." I mean, look at my my my
[7:40] shares.
[7:42] Uh yeah. So anyway, where were we? Oh,
[7:45] yeah. Uh over here, Bank of America.
[7:49] Look at this. This I thought was
[7:50] actually kind of incredible and imply
[7:52] like reiterates to me why there's some
[7:54] red today. Bank of America private
[7:56] client cash holdings as a percentage of
[7:59] assets under management. Keep in mind
[8:01] Bank of America doesn't manage real
[8:02] estate. So when you know like for
[8:04] example, House hack has a bunch of
[8:06] assets. But if you just look at you know
[8:09] stocks to cash that's going to be very
[8:12] different than if you look at the stocks
[8:13] we own versus the real estate that we
[8:15] own because we own so much more real
[8:17] estate. The reason I say that is because
[8:18] Bank of America private cash holdings
[8:20] are not going to show you percentage of
[8:22] cash cash compared to real estate. And
[8:24] so if people had real estate and stocks,
[8:26] their actual cash allocation would be
[8:28] even lower. And right now we're at
[8:31] basically the lowest level of cash
[8:33] allocation we've seen going back well
[8:35] forever in this chart which is about
[8:37] 2006. We briefly bottomed out around
[8:40] that bond crisis at the end of 2018 and
[8:43] early 19. It looks like over here
[8:45] actually this I think this is all bond
[8:46] crisis at the end of 18 over here. So
[8:49] basically no cash fear right now which
[8:52] is surprising that during the bond
[8:53] crisis people were plowing money in and
[8:55] not really raising cash. Maybe the bond
[8:56] crisis is actually that little peak
[8:58] right here because people freaked out in
[9:00] like December. So it's a little hard to
[9:01] see where that line is right here. So
[9:03] maybe right before that bond crisis
[9:05] right here, right? Anyway, it's been a
[9:08] while and so people don't actually have
[9:11] that terribly much cash right now. And
[9:13] of course, we're seeing outflows in
[9:15] crypto. We're seeing outflows in gold.
[9:18] Not a surprise that we're seeing
[9:19] outflows here. Both of these heavily
[9:20] driven by momentum. Kevin Worsh is very
[9:23] bearish for gold. I call the top on gold
[9:25] when Worsh was chosen and we topped
[9:27] within 2 days of my call on that.
[9:30] Honestly, I think Kevin Worsh could
[9:32] usher in 8 years of a bare market for
[9:33] gold. That should sound really bearish
[9:36] for gold bugs and I apologize. It's my
[9:40] opinion. I'm just going to give it to
[9:41] you straight. Uh this unfortunately this
[9:43] is where the tech is the the momentum is
[9:45] rather. So I always like to be cautious
[9:47] about just like chasing momentum. Tech
[9:50] flows are obviously quite high but
[9:52] that's also where like earnings happen
[9:54] to be. And right now Bank of America
[9:56] private clients hold 65.5% of their
[9:58] assets uh at Bank of America in stocks
[10:02] with 17.4% 4% in bonds. And I wrote, you
[10:05] better hope the market doesn't crash cuz
[10:07] that's a lot. It's pretty big. Uh, also,
[10:10] Bank of America is under the impression
[10:11] that Kevin Walsh is going to turn
[10:13] hawkish at the July 29th FOMC. And to
[10:17] me, I wrote that the market doesn't
[10:20] actually peak until the market prices in
[10:23] rate cuts again.
[10:25] And so, if Bank of America's like, "Oh,
[10:27] he's going to turn hawkish." That's
[10:28] probably why you're seeing red in
[10:30] markets right now because some of the
[10:32] institutions are like, "Oh, yeah, no,
[10:33] you know, things are going to go uh uh
[10:36] they're going to hawk to us. They're
[10:37] going to hawk to us real bad." I'm like,
[10:39] "I don't think so, but whatever." So, uh
[10:43] again, I think there's no surprise that
[10:45] Donald Trump is timing this, you know,
[10:47] these oil announcements right before the
[10:50] Fed meeting because it's going to give
[10:51] Kevin Walsh the license to say, "Hey,
[10:54] boys and girls, look, we know there have
[10:55] been some inflationary pressures. We
[10:57] think they're one-time inflationary
[10:59] pressures along with all the other
[11:00] onetime inflationary pressures we've
[11:01] seen. And ultimately, we think the
[11:03] artificial intelligence deflation is
[11:05] going to show up. And when it shows up,
[11:07] then, you know, we'll um uh we'll be
[11:10] able to go back to rate cuts. And to
[11:12] some extent, you will see it come up. I
[11:14] mean, something that I thought was very
[11:15] interesting is that sonnet uh the AI
[11:18] model costs about 120th of what Opus
[11:22] over at Claude costs. and a Kimmy from
[11:25] Moon Moon Moonshot AI, the Chinese
[11:27] startup, cost about 120th of what Sonnet
[11:30] costs. So, it's like you've got all
[11:31] these like cheaper choices of LLMs. And
[11:34] I think that's going to keep happening.
[11:36] So, I actually agree with Kevin Worsh.
[11:37] That's his sort of that's the reason why
[11:39] he's at the Fed. He's a deflation bug.
[11:42] Uh I really hope we don't have a
[11:44] recession under WSH. We probably will,
[11:46] but I really hope we don't because I
[11:48] don't think he's going to run the money
[11:49] money printer like JPAL would, which is
[11:52] a risk factor because well, while it's
[11:55] probably healthier and more free market
[11:57] is a risk factor in that you will go
[11:59] through pain for longer, which isn't
[12:01] great. Now, obviously going back to
[12:04] looking at the market for right now,
[12:06] it's not just I mean, obviously SpaceX
[12:08] is getting everybody's attention right
[12:09] now. This is part of the meme cycle. But
[12:11] I do want to also point out that Google
[12:12] talking about these LLM models. Look at
[12:14] this. Google again rejecting 374. Uh and
[12:17] so it it's really not been able to get
[12:20] through that 400 level even though there
[12:23] was a period of time it was really
[12:25] pushing for it. Uh and uh now we're kind
[12:27] of getting stuck in the mud. Look at
[12:28] that. We briefly broke out to 404 and
[12:31] now we're getting rejected by some of
[12:33] these upper lines here. So a little
[12:35] shortterm bearish there on Google.
[12:38] Anyway, that's uh that's what we got. I
[12:40] will see you live for the Fed meeting
[12:42] tomorrow. Thank you so much for being
[12:43] here. Consider following me on Instagram
[12:45] and X and we'll see you in the next
[12:47] video. Goodbye and good luck.
[12:49] >> Why not advertise these things that you
[12:50] told us here? I feel like nobody else
[12:52] knows about this. We'll we'll try a
[12:53] little advertising and see how it goes.
[12:55] >> Congratulations, man. You have done so
[12:56] much. People love you. People look up to
[12:58] you.
[12:58] >> Kevin Praath there, financial analyst
[13:00] and YouTuber. Meet Kevin. Always great
[13:02] to get your take.