Buy.

[00:04] and Ooh, I've got some bad news I got to talk about in this video. But first, we got to talk about what's happening in the market and how we expect and the market and how we expect and anticipate a potential U-turn coming and

[00:16] why. Let's break this down. So, first things first, the market has had to deal with a lot over the past about 6 weeks, frankly. This is what we've called the great suckening. Think about this. Google raises $80 billion. SpaceX raises

[00:31] $85 billion. SK Hynix in the $25 billion ADR raise. You've got corporate financing raises. A lot a lot of money that includes Meta, right? A lot of markets because companies are like, "Hey, this is a great and frothy time to

[00:46] And then that way we can keep reinvesting, so to speak, in whatever now. The problem with this is yields were also higher during that time by about two Fed rate cuts. Now, across the curve, we saw yields higher,

[01:02] because of the resumption of the Iran Ah, which has also resumed as of the last 24 hours, which we'll talk about. But, all of this has sort of led to an implosion of leveraged ETFs, and you've

[01:17] seen this sort of massive leverage unwind. At the same time, you're going into a lot of uncertainty regarding, you know, what's Kevin Warsh going to say today. I'll give a little bit of a prediction on that, as well as what it

[01:29] course, you've got Meta earnings, Microsoft earnings, Amazon and Apple all within the next 2 days, plus the resumption of the Iran drama. Lot going on. For a small note, how many of you think this is a green screen?

[01:42] >> Like, this is so cool. Look at this. This is actually a bar on the Disney Treasure. And this is my first time in here. This is actually really cool. I mean, the ship is just gorgeous. The The only like 2 years old. And so everything

[01:58] is like you can still smell the leather the newness. It's so cool. They do, you know, like them or not, you got to give them credit for some of the best design. you ever want to get design ideas >> [laughter]

[02:12] incredible the attention to detail. But anyway, uh so when we put all this together, we've got a lot that sort of goes into the great suckening. You know, JP Morgan is now saying, "Oh, hedge funds are now 50% levered and uh

[02:27] leveraged ETFs have delevered by about 75%." But it's more than just the US side. You also have to remember what's going on in South Korea. South Korea, I wrote this down, the KOSPI index, which is KOSPI index, it's a PI at the end,

[02:40] basically like their version of the S&P basically like their version of the S&P 500, that index literally turned into 500, that index literally turned into about 50% memory stocks, mostly because

[02:52] of Samsung and SK Hynix. So, imagine memory literally being 50% of the S&P memory literally being 50% of the S&P 500. That'd be crazy. Now, uh while we look around here, I I know a lot of you might be thinking, "Okay, but Kevin, uh

[03:07] might be thinking, "Okay, but Kevin, uh what is the S&P 500 or, you know, in terms of memory?" Check this out. Isn't that cool, too? Uh it's actually about 2 >> [laughter] >> you know, when you have a massive unwind

[03:20] in this basically what became this meme stock sector, like it's not even like the GME moment in one stock, it's anything memory. Just

[03:32] meme. Now, rightfully so, the earnings have been fan-fricking-tastic. But the amount of leverage that then gets created during an unwind is pretty painful. As that leverage unwind ends, I actually think we we might be getting

[03:45] close to a recovery in a weird way in alignment around August 3rd when >> [laughter] >> Uh And mostly because we seem to be respecting, at least so far, some of the support levels we've been talking about

[04:00] an expiring coupon code on Friday for that. And that does mean the price net net goes up over the long term. So, if you want to secure that best price, join us over at mekevin.com. You can use that coupon code cruise red. But, think about

[04:13] this for a moment. You know, when when we get through the leverage the deleveraging, all right? We've seen, and we get through Apple, Meta, Facebook, and Microsoft earnings. That's today and tomorrow. Two

[04:26] big earnings days. And we get through Kevin Warsh hawking to us, which I I'm going to talk about my Fed predictions in just a moment. And we just unfortunately get complacent again with ideas and concepts like, "Oh,

[04:41] China's selling 60-80 million dollars worth of MANPADS." You know, the portable air defense rocket launchers, basically. To to Iran to help Iran with their sovereignty, you know, maintain their sovereignty, which

[04:55] is basically a way of saying China and Russia are kind of siding with Iran, least we got Ukraine helping us out in the Caspian Sea. Oh, wait. They're actually saying, "No, it was a mistake. We didn't actually mean to sink an

[05:07] >> [laughter] >> All right. We'll chalk that up to a mistake. In my opinion, that was a soft little test to see how Iran would react. [laughter]

[05:19] jaded here. So, let's talk about the Fed I should honestly sit down. Maybe we'll sit down one of these beautiful velvety chairs. You know what the sound these

[05:31] chairs make when you sit down on them? Coupon expires Friday. Coupon expires Friday. Dang. I'll sit on a different chair. Okay. So, my prediction for the Federal Reserve this week is that we're going to

[05:46] get a hawkish hold, mostly because uh I think Kevin Warsh does not want to hike. But, I do think that he can convince the committee, which is on the "Give me two more data sets." The September 16th Federal Reserve meeting

[06:02] will give him two more data sets. He'll get the July employment numbers, and he'll also get the August employment numbers, which are really important. Even though ADP yesterday came in at 15K, which is still stable roughly with

[06:14] last week for the weekly data, there is a clear decay going on in the week-over-week data, and that is bad for the economy long term. Some people in the comments are, "But, Kevin, you just said you're bullish."

[06:30] these comments, I just have to be a little bit more clear, okay? So, let's be crystal clear. The great suckening might come to an an end the beginning of September or sorry, the beginning of August here,

[06:43] August 3rd. That is short-term bullish. Bullish for a bounce, bullish for a recovery, bullish for some of the pain ending mostly in hardware. Because if just hit new all-time highs. Like, there's no problem there,

[06:57] S&P 500 equal weight, it's like all-time high, all-time high, all-time high, all-time high. Does not care. Uh but, the in the longer term, so I'm talking about the next two to five years,

[07:11] the labor market decaying is not something the stock market is going to something you price in in a matter of, you know, 1 or 2 months or even 6 think in the back of your mind, okay, I'm going to watch this because it's

[07:25] going to prevent me from being reckless with leverage, and then I risk getting wiped out in the event there's some kind of actual recession because when the labor market rolls, it rolls fast. We already know that this year we have more

[07:40] already know that this year we have more layoffs in total than we have had last year in technology jobs, which is really interesting because you know, you've got a lot of the venture capitalist going well, technology actually creates jobs.

[07:52] Yeah, that's going to be true in the long term like over you know, 50 to 100 In the near term, it usually destroys jobs and the very studies some of these ramp study that I wrote down where these

[08:06] venture capitalists are like, "AH, SEE AI CREATES JOBS." I'M LIKE, "BRO, >> [laughter] >> YOU'RE ACTUALLY NOT doing what you're saying it. But, I mean that's that's usual. Nuance gets missed. This is why I

[08:20] always get frustrated when people only rely on AI summaries as well. Personally, I think it's a competitive advantage for me because I don't rely on the whole point of reading or even listening to something, you're listening

[08:33] to me, is for you to think like that mental machine in your head going, "Nah, Kevin. I disagree with you there. You're a freaking idiot." Or you're going, "Ah, you're still a freaking idiot. "Oh, that's actually a good point." But, that

[08:46] is how you learn and every single day your mind expands and and that that there is a small audience of people on YouTube, thank you, who appreciate that kind of stuff. Uh you know, compared to like a Mr. Beast audience, right? Uh

[09:00] it's totally different segment and that's okay. So, I enjoy doing this. I could I would die if I had to make YouTube content for children. My kids "Daddy, >> [laughter]

[09:13] I'm like, "I really enjoy them." uh okay. So, back on the Fed. I think we're going to get the hawkish hold. Uh guidance talk. We kind of already saw an end to that. But, keep in mind in the

[09:28] last few meetings Kevin Warsh is like, "Ah, you know, I feel comfort in the fact that things that affect inflation are coming down and affecting down." because of Iran. What do we have regarding Iran? CENTCOM yesterday told

[09:43] that we had a surprise attack against an airbase in Jordan. All of the missiles or rockets were intercepted. Uh you know, rockets are only fueled for like are fueled through the entire phase of flight, but they're similar. All right.

[09:58] Anyway. Um these stupid little facts. Uh anyway, um the administration also So, the White House is threatening to take away soldiers' phones after images uh have been appearing online like on X of of

[10:11] bad for targeting because you're kind of letting Iran fine-tune their targeting. And Trump is now really pissed about the uh he's just he's just starting to lash out. He says, "We're going to beat the

[10:25] effing out of them. We'll be hitting them hard. They're going to get a beating." We already resumed some strikes against them, and so here we are something that we did call for in the Alpha report. I said on Monday morning,

[10:38] I said, "We have a lack of durability going into this week." And this is why I report every week, but not just short-term. It's also long-term. You bought like, you know, $200,000 worth of stocks, and you can kind of see where

[10:51] it, join the Alpha report. Sent one notification yesterday as well. But what at this uh okay, Trump has we're going to be at I just lost my train of thought.

[11:04] yeah, at the beginning of the week, I said, "Look, we have a lack of durability going into this week. You've got Fed concerns, you've got earnings concerns, and you don't actually have a memorandum of misunderstanding. You

[11:16] literally have nothing. So, you don't even have a concept of a plan to go on. So, the odds something goes wrong are very, very high." And sure enough, here well, now counterattacks and all the other nonsenses. Not good. So, then we

[11:31] have uh that uh we talked about the man pads. Oh, yeah. CTAs Let me say Commodity Trading Association traders uh trading in uh trading in as sellers. So, selling stocks every single scenario next week.

[11:45] >> [laughter] >> You should probably, too. Consider that. personalized financial advice, of course, but I think when the CTAs are selling in every scenario next week. It's going to be the most green stock

[12:00] >> It's It's like they've I think the suits put this out uh as just pure believe >> [laughter] >> Uh but anyway, finishing my thought on Kevin Warsh, okay. So, here, let's look

[12:13] at some decor while I finish my thoughts on Kevin Warsh. Uh on Kevin Warsh uh I really think that he is uh he's going to hawkish hold us. Uh this is so beautiful. Uh not only is he going to hawkish hold, but he's going to make it

[12:26] very clear that he has no idea, you know, he's not making any projections about the future. We're going to look at the data over the next few months to get a trend, and then we will make a decision. Today, we decided not to make

[12:39] a decision uh or we made a decision to hold, basically, right? That's my impression. I think he actually might keep the meeting shorter the first meetings This is the bad news. This is going to be one of the first

[12:51] for, but I will do a summary video thing scheduled with the kids today, which I think will be really cool. I'll probably share a photo of what happened after uh the Fed meeting. That'll be

[13:05] really sick. Has to do with the cruise. And no, it doesn't have to do with the coupon code I made Kevin Derico. Uh but um missing the live, but I'll do a summary video afterwards. But basically, there's

[13:18] no reason for Kevin Warsh to make any prognostications. We shouldn't expect killing forward guidance. I I he's going to say, "Look, things are going in the wrong direction on inflation and uh the labor market so far is still holding up

[13:32] that we want to pay attention to as long-term investors. Uh and bottom line, we're not raising rates today, but there are compelling reasons to consider that for the next meeting, which is September 16th, which right now markets are

[13:47] pricing in an 80% chance of a hike for only about a 35-ish percent chance of a hike today. So, I think no hike today, but get ready September Iran war. Any reason to hold is starting to

[14:01] evaporate, which isn't good. So, let's do a couple or a few uh NOOB VERSUS PRO BREAKDOWNS. I'm putting them at the end of the video. I also turned was like, "Kevin, stop filming in HDR. It makes the

[14:16] highlights so gross." All right. >> [laughter] >> So, we'll we'll we'll see what other can >> So, we'll we'll we'll see what other can I said, "Kevin, your color looks so bad

[14:28] >> [laughter] >> Can't win. Uh anyway, uh so quick little uh noob versus pro summaries here. Uh people have been wondering why the stock market has been selling off and the noob says, "Well, you know, it's just sell in

[14:41] May and go away a little bit delayed." The pro looks at the data and says, "No, dude. Google raised $80 billion at the beginning of June. Kevin Warsh hawked it to us in the beginning or mid of June. You got Space X raising $85 billion in

[14:56] the beginning of June. SK Hynix listed their $25 billion ADR and Meta went to the markets to raise money. When you add up all of that money that got sucked out of the market in just the last 8 weeks, there should be no freaking surprise the

[15:11] stock market is having trouble going to all-time new highs on hardware. But, if you actually look at the RSP index or the S&P 500 equal weight, it's up. All-time highs. Uh I think that was a good little noob

[15:24] >> Uh let's do another one. Uh okay, how about uh oh yeah, okay. The noob says, "Hey, how come memory The noob says, "Hey, how come memory prices are so all time high, 4X, and yet

[15:39] all of a sudden memory stocks are selling off?" SK Hynix says earnings right, SK Hynix's earnings weren't that bad. They were actually really good. Even though technically they missed, they did a phenomenal job with over 83%

[15:52] margins and signed 10 long-term contracts for high bandwidth memories uh memory deals, which could smooth out earnings fluctuations for them, kind of like a defense contractor, which is good cuz memory is usually up and down, boom

[16:07] and bust, boom and bust. But, what actually happened was the South Korean stock market got to the point where 50% of the entire stock market was memory, and it was propped up by a bunch of debt, margin, and leverage traders, and

[16:22] guess what? Once leverage starts going then you get a little oopsy-doopsy correction. Totally normal. Uh what else we got? By the way, yeah, the SK Hynix numbers were fantastic. I

[16:37] Hynix numbers. Uh they did miss on revenue technically by 5.4%. Some analysts are indicating that's because of a higher share of high bandwidth memory, uh which uh tends not to sell at spot pricing. Uh DRAM and

[16:53] NAND, which are up like 4X year over year in price, they tend to sell at spot price. High bandwidth memory sells on a long-term contract over years, so it kind of gets buttered out. Uh as a

[17:06] result, there can also be a little bit of a discount to current pricing because people think pricing will normalize. Totally normal to expect. And SK Hynix does a higher percentage of bandwidth memory compared to the other

[17:19] manufacturers like Micron. Worth paying attention to as well, but again, that's the deeper analysis that that we should be watching. Uh let's do let's do one more here. Okay,

[17:31] so the noob comes in and says the war with Iran is just the United States of versus Iran with Israel pegging the United States into the deeper portion so the depths of the war. The pro says this is

[17:47] way more expansive. We just had Ukraine attack an Iranian ship in the Caspian Sea. We have Russia enabling the manufacturing of drones of four Iran and we have China selling weapons including now $60 to $80 million of Manpad

[18:03] portable defense rocket launchers to Iran. So when you kind of start you go, "Wow, this is really interesting." On one axis, you've got the US, Israel, and Ukraine, and on the other axis, you have Russia, China, and

[18:20] Iran. That's starting to sound like things are going more in the direction of World War III, not not in the direction of World War III. Yikes. good little snippets there.

[18:35] What else did we have? Anything else for me to add context to? Let me just double-check the SK Hynix numbers. Uh 83% margin is so freaking good. It is such good margin. Oh yeah, CoStar sinks 12% after hours. You know, CoStar

[18:52] frankly platform companies for real estate where they're not actually buying real estate, but they're just trying to make money off of transactions, hard to cuz transaction volumes are down because rates are high. Doesn't actually mean

[19:06] have fallen in certain areas and markets. Fortunately, knock on wood, not yet in the markets that we're in. Anyway, thank Remember to join us over at meetkevin.com.

[19:19] fossils in the countertop. That's really think is really cool. Look at that. That is awesome. That's very, very cool how they do that. Wow. Yeah, I've not seen that before. Inside the slab of granite

[19:33] yeah, good luck out there. The vacation's almost over, so just buckle up. See you soon. Bye.