---
title: 'Why the Stock Market is Tanking: AGAIN'
source: 'https://youtube.com/watch?v=0ySGZvFLARI'
video_id: '0ySGZvFLARI'
date: 2026-06-28
duration_sec: 1169
---

# Why the Stock Market is Tanking: AGAIN

> Source: [Why the Stock Market is Tanking: AGAIN](https://youtube.com/watch?v=0ySGZvFLARI)

## Summary

This video analyzes the June 2026 stock market volatility, attributing it to a combination of the Japanese carry trade, massive corporate debt issuance (including Google and SpaceX), and a communications vacuum from the Federal Reserve. The speaker examines economic data like FedEx earnings and jobs numbers, concluding that the volatility is largely technical and not signaling a recession, while promoting his paid services.

### Key Points

- **Market Volatility Overview** [0:00] — The market is nervous due to Google being added to the Dow Jones, SpaceX's record debt issuance, and renewed concerns over the Japanese carry trade.
- **Google's Dow Inclusion and Issuance** [0:50] — Google's stock has fallen 14% in five weeks, with a $70 billion issuance hitting the market. Inclusion in the Dow may help Google offload shares to retail investors.
- **SpaceX Bond Issuance Success** [1:45] — SpaceX refinanced $20 billion in debt with a $90 billion demand, accepting $25 billion at a 1.4 percentage point spread over 10-year Treasuries (5.9% yield), indicating ample market liquidity despite uncertainty.
- **Japanese Carry Trade Mechanics** [5:11] — Hedge funds borrow yen in Japan at lower rates (e.g., 2.5-2.6%) to invest in higher-yielding US assets. When the yen weakens, funds sell assets like Micron (down 13%) to cover losses, amplifying volatility.
- **Fed Communications Vacuum** [7:17] — Fed Chair Kevin Warsh's lack of forward guidance ('communications vacuum') increases investor uncertainty and volatility, relying on the 2-year Treasury as a rate guide.
- **Economic Data Shows No Recession** [10:30] — FedEx earnings show margin decline due to higher fuel costs (up 66% YoY) but no economic weakness. Weekly ADP jobs data (30,750 jobs) extrapolates to ~123k per month, a bullish sign.
- **UBS Agrees Fed Will Hold Rates** [13:17] — UBS states market pricing for rate hikes is 'aggressive,' expecting the Fed to keep rates on hold, with a pivot to cuts in 2027 due to slower growth and disinflation.
- **Broadcom Selloff Overblown** [17:52] — The speaker argues Broadcom's recent selloff is due to liquidity needs for the SpaceX IPO, not an AI slowdown, as his notes indicate 'no signs of an AI slowdown'.

### Conclusion

The current market volatility is driven by technical factors (issuance, carry trade, Fed silence) rather than a deteriorating economy, with solid data (jobs, earnings) suggesting this is a temporary dip that could present buying opportunities.

## Transcript

Well, holy smokes. The market is nervous
yet again. Not sure if that's because
Kevin extended his vacation or if it is
because of SpaceX record issuance.
What's going on with Google, the Fed, or
worse, the Japanese carry trade. Yes,
back to the Japanese carry trade talk.
Boy, we've been talking that about the
Japanese carry trade for almost 2 years
now when we had that first real shock in
August of 2024. And here we are in June
of 2026 still talking about it. Well,
I've got some updates on all of this for
you, including the fact that Google just
got included into the Dow Jones
Industrial Index, replacing Verizon,
which is a really convenient time for
Google because Google stock has been
falling as of late given their record
$70 billion of issuance that is starting
to hit the market here in late June and
is likely going to hit the market for
the rest of the year. Getting included
in an index like the Dow Jones
Industrial might be a nice opportunity
for Google to get that liquidity they
need to dump those shares on retail as
usual. The suits have it out for us, it
seems. But while Google is down 14% over
the last uh five weeks, it is up about
1% in after hours. Doesn't make anyone
feel better though given that the NASDAQ
100 rejected down 3.29% 29% today.
Bounced off of 7:15 uh twice actually
which we had in our alpha report as a
critical threshold level and uh now
closing at 713. Not great. Why is this
happening? Part of the reason this is
happening could be just again not just
Google issuance but also SpaceX issuance
which was oversubscribed. So it does
somewhat suggest maybe issuance isn't
actually that big of a deal. Here's
basically what happened. And SpaceX
said, "Yo, we want to refinance $20
billion of debt we have by issuing
bonds. Anybody want it?" So many people
wanted it to the tune of nearly $90
billion, which is a great sign that
there's still ample liquidity out there
that you actually ended up seeing SpaceX
accept $25 billion
with a spread of 1.4 point percentage
points over equal duration treasuries.
That sounds complicated. Let's just
simplify that into English, which is
exactly what we like to do in our
courses as well on building your wealth
with real estate, stocks, property
management entities insurance
liability, social media, sales, you name
it. You can always join those over at
meetke.com. We've got a coupon expiring
on June 30th. It's coupon code pope. Uh
but let's focus on explaining this
simply really quickly. When you say
equal duration treasury, what we're
really trying to say is, hey, if SpaceX
is issuing a 10-year bond, how much are
markets demanding for a yield? In this
case, it landed around 5.9% for a
10-year, that is about 1.4 percentage
points over the equivalent 10ear, which
is sitting at 4.5. So 4.5 for the US
government, risk-free debt, risk-free
SpaceX at 5.9. That spread is the extra
that SpaceX investors are being paid for
those SpaceX bonds. Uh that is one of
the highest spreads we've seen in a
while, which does suggest some
uncertainty around SpaceX. Obviously,
they're losing money. They just got a
triple B rating, which is actually
surprising that they got that even
though they're uh losing money. One of
the first ratings, I think it was Morgan
Stanley rated them. Was actually
surprised to see such a quick rating. Uh
but anyway, not a surprise given also
the fact that Morgan Stanley tends to
underwrite a lot of debt for SpaceX and
Elon Musk. So they're kind of all in
cahoots together. Imagine that. The
suits and cahoots. It almost rhymes.
That's perfect. Don't. Anyway, um so
basically SpaceX paying even more than
what Intel was raising at, which is
somewhat surprising, but uh it does
indicate that even though investors are
demanding a higher yield for SpaceX,
there's still plenty of liquidity out
there. I the fact that you had $90
billion of demand pretty impressive. So
there is still money out there. But why
then are we seeing all this volatility
in markets? Because yes, we expect more
issuance and likely more volatility. In
fact, UBS argues we could see as much as
200 to $350 billion this year of IPO
issuance with secondary offerings at
$400 billion or more. Just a quick
clarification on what that means. An IPO
issuance would be like SpaceX. Hey, we
did $85 billion. Cool. That's a majority
of that. But then you're going to add
Open AAI, Anthropic, and other IPOs like
Aloe wants to go public now, right?
Everybody's trying to get money. Well,
it's easy to raise money like it is for
SpaceX. Everybody wants to join, right?
Anyway, then secondaries are like Google
going, "Hey, uh, we're going to do the
largest secondary ever and try to get
our hands on an extra $80 billion and
Warren Buffett's company, Bergkshire
Hathway, is going to anchor the first
10." Cool. Clearly there's appetite for
that. Clearly there's appetite for
SpaceX. Will there be appetite for all
this money? Who knows? My take is as
long as the economy holds up. We can
absorb all this. The problem is we're
now getting additional volatility
because of the Japanese carry trade. The
Japanese carry trade. The way you have
to understand this is basically American
hedge funds go to Japan and they borrow
money in Japan uh at cheaper rates.
Okay. Why? Well, if you could go borrow
in Japan at 2.5% or 2.6% on the 10-year,
why would you borrow here at 4.5%.
Right? Most regular investors don't do
that. But companies like bigger hedge
funds who have offices in Japan, they
borrow money for 2 and a half% or 2.6%
in in Japan. They're borrowing that in
yen. That's a problem though when the
yen weakens because when the yen weakens
or you type in USD to JPY into Google
and when that number goes up it means
the yen is weakening. Problem with that
is if you have debt in Japan you have to
spend more dollars to pay that off and
that pisses you off. It means as a hedge
fund you're losing money, right? You're
getting hurt on that trade. Okay, great.
What's the problem here? Well, hedge
funds don't like getting hurt. So what
do they do? They sell. And what do they
sell? They sell things that have run
like freaking crazy. Micron is down 13%
today. MU stock, the memory chip stock,
13%. I made a warning video on Friday
and even yesterday. Yesterday before
this 13% selloff, I said there's no way
in heck I would touch Micron right now
before earnings. I would not buy call
options on this at all because the risk
of it plummeting is massive. I said that
in my video yesterday. go fact check on
it and we did our full update on it. It
was either Friday or Saturday, it might
have been Saturday. We did a full
breakdown on what to look for in
earnings and why the company has the
valuation it does. It's valuation if
growth holds up is actually not
expensive. So, I don't want to sound
like I'm bagging on Micron, just saying
right now in the moment that we're in,
not ideal because you've got the
Japanese carry trade plus issuance plus
now the quote unquote communications
vacuum from Kevin Worsh. not ideal. Now,
when I talk about communications vacuum,
it's actually kind of worth noting that
we have this um uh alpha wire, we call
it, that you could use totally for free
right now. We just did a massive update
on it, so there are even more news
sources uh that should show up now and
even more news sources that'll probably
show up even later today. But if you
look at that, which you could see it on
desktop or the Meet Kevin app if you
want it, you just download the Meet
Kevin app. Uh it's totally for free. uh
you can use it for free. That is go in
the Android app store, just type in Meet
Cavan app or the Apple App Store. And I
pinned a couple of wire notes. So the
couple wire notes that I pinned uh were
right here. Communications vacuum
increases that investor volatility.
We're seeing green span echo as WASH Fed
goes quiet. And then there's a whole
article around it. I put my little notes
next to it. I did the same with the uh
ghouls speed comment and I'll read you
those and explain those really quick but
basically a communications vacuum is
we're going from the era of Jerome Pal
telling us hey like we're going to be
patient we're good for now we're going
to wait and be data dependent which is
what we expected WH to do instead we got
Kevin Worsh going yeah we're going to
utilize tasks task forces to determine
if we're going to make any changes and
as far as forward guidance we're not
going to give you any Great. So,
basically, we are relying on the 2-year
Treasury, which is high as a guide for
what the Federal Reserve is going to do
since they usually follow the 2-year
Treasury. And this leaves us with a
communications vacuum, which increases
volatility along with the Fed, the
Japanese carry trade. But here's the
other problem. The Japanese carry trade
gets worse when our Fed is hawkish. When
our Fed is hawkish and it implies rates
are going to go up in the United States,
as our rates go up in the United States,
the US dollar strengthens because more
people want those higher yields. That in
turn makes the Japanese yen look even
weaker. It didn't help that the Bank of
Japan governor is in the hospital who's
a hawk and who replaced him at the last
meeting was a dove. And so, of course,
they sounded more doubbish and gave even
less guidance about hikes coming to
Japan, which again accelerates the
Japanese carry trade because the yen
weakens even more. So, basically, two
things are making the carry trade worse.
One,
Bank of Japan isn't being as hawkish as
they should, and they had a fill in
who's doubbish. Okay. It's kind of like
getting a you know if if you had like a
you know a a real dove like a waller
who's like or like my imagine if my got
up there instead of Kevin Wars or Jerome
Powell. All right boys we need to cut
rates one percentage point right like
that would be so doubbish. It's kind of
to a lesser extent what happened to
Japan.
All of that increases volatility is what
I'm just trying to say. So issuance more
volatility. Fed wash communications
vacuum increases volatility which
increases rates in the United States or
rate expectations which increases the
Japanese carry trade which again
reiterates more volatility. None of this
has any economic impact. In fact, we
sent a trade alert that we bought the
dip this morning. Now if you're not part
of that, you could join us and you can
see exactly what we bought the dip in by
going to meet mekevin.com and you can
join join the courses. you get lifetime
access uh to the trade alerts, the alpha
report, all the courses we mentioned
earlier. Uh and you can see that over at
meetke.com. Now, what's also very
important to remember is that we just
had FedEx earnings and I always like to
look at earnings to see if there are any
hints of, you know, problems in the
economy. The answer is no. Their
guidance is pretty much okay. They've
got some extra cost because of obviously
the uh tariff issues, but the biggest
thing that happened in their actual
earnings that I saw was fuel. Their fuel
costs were up 66%
year-over-year in the first quarter,
which makes sense because fuel prices
were up about that. So, it's really not
a surprise. If I adjust out and take out
$500 million of that increase of the
fuel cost, which is almost all of the
increase, I left about a hundred million
in there because they went from like864
to 1434
million, right? It's 1.4 billion.
Anyway, if I adjust that out, I get
roughly a stable margin at FedEx with
the higher fuel cost. Their margin fell
and that's probably why FedEx is down in
the after hours because their margin did
go down. They're down like 6% in the
after hours. But economically
it's not really a signal. What was a
signal this morning actually was we got
the ADP weekly data. The first time we
got weekly data for June uh since the uh
June BLS data that we got was based on
May's data. Right? So uh we just got the
first week of June all the way through
June 6th came in at 30,750.
If I multiply that by four, which is a
rough approximation since there are 30
days on average in a month, right? Uh
that puts us at a bullish 123k jobs per
month. Keep in mind I also pinned that
in the newswire service. So like you
could use that and what a lot of people
are actually doing is they're
downloading the app. They're signing up
for the app and they're using the
newswire service to check the news
instead of relying on something
distracting like Twitter. So they're
checking the news on there. Uh and then
I can pin things that I could add my
comments to. In addition, after you sign
up on the app, you could use that same
login if you want and you could go to
app.mekevin.com
and you could have the desktop version
of it, which I think is honestly pretty
cool. Uh, and then you can get the
desktop updates on it. So, stay tuned.
We're going to have more uh new source
updates coming in. So, it's going to
keep growing and getting better. It's in
pretty early beta. We're excited about
that. Now another economic thing that uh
happened well data point we got is we
got the US global flash PMIs they h they
were okay we got US business activity
growth improved for a third month in
June growth rate remained weaker than at
the start of the year things you know
because of this volatility we're seeing
we're seeing some uncertainty
elevated uncertainty always ends up
leading to lower growth forecasts but
still doing okay at least on these flash
surveys for Junet companies. Still
seeing inventory building at
manufacturers. Not sure how long that's
going to last. And this is always a good
one. The service sector continues to
grow, but it is growing at a subdued
pace, reflecting push back from
consumers over higher prices amid lower
levels of consumer confidence. Now, some
of that we expect a U-turn because gas
prices are coming down. In a weird way,
the longer end of the Treasury curve is
also coming down, so weakening some of
those mortgage rates, which small note
on real estate. I thought this was
interesting. I might make a more
detailed video on this, but UBS actually
noted, quote, "We expect overall real
estate values to continue to
appreciate." I agree with that. Maybe
it's confirmation bias, uh, with further
rental growth anticipated over the
medium-term. medium-term is usually one
to two years unless interest rate costs
rise significantly amid heightened
volatility. They actually find US real
estate, Singapore real estate and
Australia real estate attractive right
now. They do not find Japanese, Hong
Kong or continental Europe real estate
attractive. And they also do not find
the United Kingdom uh region attractive
for real estate. I don't know if that
has to do with Carrie Charmer or you
know bailing out. Who knows? Maybe that
is by the way probably all still a
symptom of Brexit. A lot of people very
frustrated by Brexit because Brexit
promised lower immigration and they
actually ended up getting more
immigration except instead of getting
more immigration from other European
countries, they actually ended up
getting a lot of immigration from like
Africa and the Middle East uh refugees
and otherwise. And so a lot of people
have been really frustrated about the
impact of Brexit. The estimates are that
their GDP probably shrunk by around two
to two and a half percent after Brexit,
you know, over the years afterwards. Uh
but it is what it is. And the economists
actually had a really good and blunt
message. They're like, "Hey, listen.
Y'all got to get over the fact that
Brexit happened. We were against Brexit.
It happened. Oh well, it's over now. The
best thing you could do right now is the
United Kingdom needs to get people off
of benefits. get him back to work, grow
the country, stop overregulating AI, and
focus on capitalism. I'm like, "Wow,
that was pretty blood from the
economist." Well, they're pretty
capitalist. Uh and uh they, you know,
which is interesting because it kind of,
you know, some people say this doesn't
align, but they're also very anti-Trump.
Uh they bag on them every day. It's
hilarious. If you want a publication
that just bags on Trump, The Economist
is for you. Go sign up. I don't have a
link below. They're not sponsored. I I
do think they're a great publication
though. Uh and you know, you could read
a publication even if you disagree with
someone's politics. Okay, then this is
interesting. UBS is the first in uh
investment bank that I've seen come out
to actually agree with me Kevin on the
Federal Reserve. They basically have an
entire institutional piece which you can
see in the data tab for free of the uh
Meet Kevin app. They have an entire
institutional piece that says, "Hey,
meet me. Kevin is right. We agree with
him." Okay, maybe this is confirmation
bias. It doesn't actually say that, but
it does say the following. We believe
market pricing for rate hikes is
somewhat aggressive.
They say that we believe the Fed is more
likely to keep rates on hold rather than
hike them. I agree with that.
Reiterating what I've said before, I
think WASH is an anchor. Uh, I think
when you put all of this together, oh,
and the fact that they argue slower
growth trends and disinflation in the
second half should help us pivot towards
lower policy rates in 27. Okay, 2027.
When I put all of this together, here's
my read on all this. SpaceX, big
liquidity suck, lots of volatility. It's
a big suck. Then you've got Japanese
carry trade and the lack of
communication from WASH that extra
volatility economically flash PMIs
weekly jobs data earnings so far so
good. Even the bad bad Broadcom earnings
like a week and a half ago, they weren't
really that bad. You know, I broke those
down to detail. I have a video on the
channel somewhere on like they're not
that bad. You can actually see my full
Broadcom breakdown. I'll I'll do you
I'll give you a quick solid here and
give you a quick little summary on uh I
go back to my Broadcom uh summary and in
my opinion I write down no signs of an
AI slowdown. This is an overblown
selloff likely as people pick up
liquidity for the SpaceX IPO next week.
See I wrote I'm not a fan of the
Broadcom balance sheet. It's not my
favorite choice of a company, but I give
credit where credit is due. And it's
overall quite exciting for AI hardware.
And I see little evidence of anything
other than some loony Wall Street
expectations being modestly missed on
the timing of ASIC chip deliveries,
application specific integrated
circuits, right? Specific chips made for
specific customers. But anyway, if you
want to see my full ThrodCom note, uh if
you are a course member, you join over
at me.com, you can not only see my stock
notes like that, much more detail on
there and my fundamental analysis, but
you can also use this new tool that we
released for course members, but really
haven't pitched it at all. It's our
stock AI tool. Uh, and it's designed to
utilize sort of the Kevin mindset of
stocks, our PEG ratios and how we look
at stocks and apply AI for red flag
analysis and our algo for where the best
deals are in the market and you can now
use that inside of the me Kevin app.
Thank you so very very much for
watching. I love you all. Consider
subscribing. We'll see you in the next
video. Goodbye and good luck.