(oh sh*t) BREAKING NEWS FOR THE STOCK MARKET

Oh snap. Ladies and gentlemen, we have big news on this war with Iran and a new initiative that could bring this to an end. So they say, of course, I know that it doesn't feel like that. And I thought this war would have ended a long time ago, but I will give you the latest details moving the markets today. On top of that, we did have economic data that we will discuss. You are seeing a bit of a bounce back in some of your hyperscalers and software stocks and the markets are well areas are being led lower today by semiconductors following Intel's earnings. Intel is down about 3% today coming down quite a bit from its all-time high. We will discuss all of this and more in today's episode. The only thing that I ask you to do for the YouTube algorithm is to hit that like button number one right now. Take a quick second, hit that like button. It helps push this information out to more retail investors that need to hear it. And number two, subscribe to the channel if you guys find value and or perspective, hopefully both, out of today's episode. So, in the news today, Pakistan is considering resuming stalled US Iran talks to end their nearly five-monthlong war. According to three Pakistani sources, following a push by China, exploratory discussions took place during Iran's interior minister's visit to Islamabad this week, his second in the last 10 days. Donald Trump then on Truth Social said China and Putin said that he wouldn't sell arms to Iran. Donald Trump says if China and Russia are supplying weapons to Iran, it would be very bad for them. So, as I've said before on this channel, there's a risk of that, right? From a financial perspective, who cares about Russia? They don't really matter. We're not going to start lobbing missiles at Russia. That's not something we have to worry about. Economically speaking, we don't really have to worry about anything there either. China would be the bigger problem. If if somehow weapons were getting to Iran from China, which I don't think is happening, it would be more likely that Russia is doing that topic for a longer discussion, a different day. But the tariff threat would come back on China and that would be the last thing we need to deal with in the markets. And the fact that all of this news came out at the same time, I think it is suggestive that potentially Trump and the US have agreed to come back to talks with Iran. Obviously, that is my speculation just based on how the news came out today. We will see what happens over this weekend. But this did lift your indexes, specifically areas that are sensitive to oil markets, sensitive to the Fed, which are kind of going hand inand right now. Russell 2000 up 0.14% today. S&P up 0.53% and the Dow is up 0.71%. NAS NASDAQ roughly flat today. NASDAQ 100 down 0.41%. If we take a look at oil today, oil's down about 4.24% sitting at $88.28 per barrel. This is still up quite a bit from where we were, you know, 20 days ago or so in the high $60 a barrel range. So, you've definitely still went up a lot recently, but this is down from the 92 plus dollar barrel highs that we had just yesterday. So, definitely an improvement, but still, we need to see something come out of this. And that does mean 10-year Treasury yields today are down about five basis points. Again, they've went up a lot recently in the last month or so. They've went up 30 odd basis points. That's adding a lot of restriction to the economy. That's pressuring company margins. That makes lending more expensive and overall not great. So, you're still at 4.65%. I think a lot of Wall Street is nervous about that 5% number. And just yesterday, we were at 4.70%. So you're down about five basis points today. That's good. But if things don't continue to progress in a positive way, if nothing comes out of this, seeing a a rise to 5% would be a problem. Now if we take a look at the heat map today, you will see a lot of green. Now there's a lot of green in healthcare, in cyclicals industrials financials some of the areas that do better when oil comes down, right? Recently you've seen more of a pressure on the rotation trade and some of the areas that have been working recently have kind of stopped working in the last you know two weeks or so. Well today it's coming back a little bit because of this good news on the Iran conflict. Even software today look at software pretty deep in the green. AI stocks not as much today. There's two reasons for this. number one Intel earnings and lately around AI stocks reporting earnings whether it's Micron or SKH Highix or Samsung or you know any of the companies that have reported so far and now including Intel you're getting this sell the news event why well I' I've talked about this on the the channel for a while now it's really all down to the capex trade and yes capex did go up from Google but not enough to ignite AI stocks to rally further because in the last 5 months, let's call it a lot of these AI stocks have priced in a lot of good news and you are now in a consolidation phase. You're letting fundamentals catch up to how well these stocks have done. So, it's not uncommon when stocks do really well to sell the news even on better than expected earnings because there's really three three ways to look at it, right? When you're thinking about a stock and the three things that that that really matter. What are your expectations? What are analyst expectations? And what is the stock actually pricing in? And these are three totally different things. And really, if you wanted to break it down, it's really only two that that matter on like an earnings report. What are analysts expecting and what is the stock expecting? Well, we know that like Nvidia analyst, let's say, will project 42 billion in revenue. If Nvidia comes out with 45 billion, the stock was already pricing that in. So, you need a number like 50 billion to drive upside. And that's part of the problem that you're also coming in with. And we do know as semiconductors have led the markets higher over the past handful of months, software stocks have well been beaten up from that. Now you're getting a little bit of a flip-flop today. Also in the news today, Intel, they had good earnings. Revenue jumped 25%. This is the most robust growth for any period since the third quarter of 2011. But the stock is up a lot. So initially Intel went up on these results. Earnings per share came in at double what they were expected to. We were expecting 21 cents. They came in at 42 cents. Revenue really impressive. We were expecting 14.42 billion. Revenue came in at 16.1 billion. So the the numbers were actually quite good. They said quote AI is driving unprecedented demand for compute. They say, quote, "As we continue to execute, Intel is well positioned to capture sustainable growth across our CPU franchise." They had nothing really but good things to say. Quote, "Customers continue to signal a strong and sustainable spending environment." I I would argue about the word sustainable considering it's fueled by private credit, which is really tied to stock prices. And if hyperscalers are going to be punished for spending, I don't know if that's what you'd call sustainable. I think it's quite the opposite. They're going to be raising over $300 billion worth of debt next year. I don't know how sustain like negative free cash flow over $300 billion. I don't know how sustainable that is truly if if we're being honest. But Intel had nothing but good things to say today. So, Intel initially went up on their earnings and then obviously came down again. And Intel has fallen from that $142 high down to 96 97 down like 20 30% 34%. So, this is why you never want to chase stocks when there's a lot of hype behind them. We did also have some economic data today. Let me refresh this so we have the most up-to-date numbers. You had the S&P global composite PMI that came in at 53.6. The estimate was 52.3. So that's good. Manufacturing PMI at 53.8. The forecast was 54.2. So that also beat. And then uh global services PMIs came in at 53.6. The expectation was 51.3. So beat across the board. not not such a beat where the markets uh you know think the Fed's going to have to be hawkish or anything like that but enough to show that maybe things are okay out there in the economy which there are some questions about that I have at this point at least with you know the ADP employment change those numbers have really started to come in pretty damn weak in the last couple couple of weeks you've went from 40,000 jobs per week in the private payroll numbers to less than 20,000 in just the last 3 months or so. The last jobs report missed expectations by a mile. You were expecting like 110,000. You came in at 50,000. I I you know, Wall Street, they're so focused on oil and what's going on here. Don't be surprised if we get another bad jobs report and Wall Street starts to go, "Oh, wow. Well, we just completely forgot about the other side of the Fed's mandate." And that could repric how the markets are, you know, expecting the Fed to react this this year really um with rate hikes because you're pricing in two rate hikes by December. December 9th, there is a 37.5% chance of two rate hikes. That is down from 39% yesterday, but you're still pricing in two rate hikes, okay, firmly by December 9th. Now, next week, we are going to have the Fed meeting. That is in 5 days, 2 hours, and 14 minutes from now. To be super specific, there's a 67% chance of a pause and a 33% chance of a rate hike. Now, for September, you're pricing in a rate hike, 56.1% probability, 22% probability of two rate hikes. For October, you're still pricing in at least one rate hike, and then December, you're pricing in another rate hike. So, merry Christmas. Let's give you a rate hike. I also think the markets are not really considering the political aspect of this. Typically, when you're, you know, close to a midterm election or close to a presidential election, the Fed doesn't like to do a whole lot. Now, that's not what happened the the last election, right? The the election of uh 2025, you know, right before the election, the Fed actually cut rates. So that was a little unprecedented just considering you know that doesn't tend to happen. So we we'll see what the Fed says next week about this. But I am not expecting the Fed to do anything this year. And considering the markets are pricing in two rate hikes, I think there is quite a lot of room to surprise in a positive way and not get rate hikes this year. So next week all eyes are on the Fed but also earnings because yes we heard from Google they're going to be raising capex a little bit. They're going to be spending a lot next year but what about the other hyperscalers? So next week you're going to have earnings from a lot of software, a lot of cyclicals, a lot of you know even financials are in here, healthc care software, some software will also be reporting industrials, right? But Wednesday and after hours, you have Microsoft and Meta. And then Thursday in after hours, you have Apple and Amazon. And that's going to tie the story together for hyperscaler spending and capex and ultimately drive the markets either higher or lower here. The Fed will also be important, but I, you know, I kind of look at that as a positive at this point. I don't think we're going to get any action from the Fed. I don't think responding to oil inflation is the right move. And I don't think the Fed really wants to do much until they get the task forces um completed and get some resolution from that towards the end of this year. Now, if you take a look at the technicals on the triple Q's continues to look pretty bad, you are below your 695 level. That was your previous level of support. Um you're down about a third of 1% today. It looks like you're probably going to come down and test that 100 day moving average around 370 which would be still downside from here of about 2 and a.5% or so. That would be a roundtrip decline on the NASDAQ of about 10%. And it it is possible ju just depending on what happens next week with hyperscaler earnings and the the weird negative seasonality that that we're in before the midterm election that you could fall to that 200 day moving average. That would be down about 14% from all-time highs. So that's that's also in the cards as well. As far as the S&P, you are no longer in this bull flag pattern. You are below your 50-day moving average at 744 and you're below your 20-day moving average here as well. But unlike the NASDAQ where you're down like 7% already, the S&P is only down 2% from highs. So the S&P looks a lot better and I again I think this is a a signal of how you want to be positioned here over the next 6 12 months. I don't think it makes a lot of sense to be investing in hyperscalers or AI stocks at this point. I think it makes a lot more sense and I think the riskreward is a lot better in you know smaller caps, industrials, financials, health care, software, some of these areas that benefit from the rotation trade if the Iran war ever ends. Those are the areas that would benefit from that. If the Fed is not going to be hiking rates this year, you know, those would be areas that would also benefit from that. But if we did come down, if we do fall to that 100 day moving average, that would be downside of about 6% from highs. So give or take another, you know, 3 4% from here would uh would be in the cards. It wouldn't be unusual. Again, seasonally, we have the midterm election. You do tend to sell off before the midterms. You tend to get this volatility, this selloff towards late July, August, September. you tend to bottom around early October, rally into the midterms, and then really rally after the midterms. And I think this is what we need to be positioning for at this moment. And again, I do think the areas that are going to be the biggest winners over the next 9 months or so, which could be a pretty aggressive rally are the small caps, the industrials, the financials, the software names, right? Some of the robotics plays could be very interesting. And I also think solar could be an interesting play um heading into the midterms because we know Trump doesn't like wind turbines. Uh he doesn't like solar either, but I think that's something Trump could get behind if we do need more power, right? It's pretty fast to deploy solar. I know nuclear longer term is going to be great, but near-term to get more energy because that's something very important to voters, right? They're sick of seeing data centers go up around their cities and then their their electricity bills going higher. I think solar could be a solution to that. So, I'm I'm I'm doing a lot of work on solar right now, but I think there could be an interesting play there. So, with all of that said, ladies and gentlemen, hit that like button, subscribe to the channel if you guys have not done so already for the YouTube algorithm. If you guys want to come trade and invest alongside of us, that link is down below in the description of today's episode as well. Have a fantastic rest of your day and I will see you in the next