If Louie Had $10,000 Right Now, Here’s Exactly Where He’d Put It

Today I'm asking Louis a big question. If he had $10,000 to put in the stock market today, where would he put it? We're going to take everything that happened in the market this week and also figure out exactly where that money would go. But let's start out a little further back. A few months ago, everyone was talking rate cuts. Now the minutes show officials talking about hiking. What has changed? >> Nothing has changed. The FOMC minutes are released, I believe, 3 weeks after the actual meeting, and they revealed that several of the FOMC members were open to raising interest rates, and of course, three voted to raise, but only if inflation materialized. So, if we look at the data, we see that inflation is fizzing fast. It's coming in lower than economists expected. So, we should not worry about a Fed rate hike because the inflation hasn't shown up. Furthermore, San Francisco Fed President Mary Daly was recently on Bloomberg and she saw no need to raise rates if inflation doesn't rematerialize. So the Fed has an inflation mandate. They have an unemployment mandate. We did have a dramatic drop in payroll jobs recently. So they're not going to raise rates. Okay. Now, we'll know all about this in more detail at Jackson Hole. And we're hoping that Kevin Walsh gives a speech about how the productivity gains from AI are not inflationary. Most economists are trained in something called demand pushed inflation, which means as we go out and spend more money, it puts upward pressure on things. That's not how AI works, okay? And that's not how a growing efficient economy works. So we don't worry about a rate hike. We're not getting it. And if we do get inflation from energy, the Fed can't do anything about that. So the the core rates inflation look fine now. They're cooling off and we should not worry about any rate hike. >> So rates are one thing hanging over this week, but there's another story. Why did Treasury Secretary Scott Bet intervene and drive bond yields lower? Is he having an argument with the bond vigilantes? >> Absolutely he is. What happened is is Scott Bessett, our Treasury Secretary, announced that the Treasury Department starting September is going to be buying back more Treasury bonds. That's 10 to 30 years out. That caused yields to fall. And before that, Treasury bond yields were going higher because the bond vigilantes have been pushing yields higher around the globe. This is just not a US thing. It's Japan, it's Britain, it's France, and even Germany. Okay? So, what's going on is there's this concern over debt. And of course, our debt crossed over $40 trillion. But unlike those other countries, the US doesn't have demographic problems. The US is still pro- family. The US assimilates its immigrants. Obviously, Trump wants them to be legal and all that. And our velocity of money is up and it's very high right now. So, there is a narrative out there that the world won't be able to handle all its debt. And what some of these countries might have to do, not America, but China, Japan, eventually they might have to devalue their currencies. Now, the Treasury Secretary of Best had already intervened to shore up Japan after the yen hit a 40-year low. and he did that to to help with the the trade that we do with US and Japan. So, it's very interesting what's going on. Now, Scott Bessett's a very powerful person. He did make George Soros a billion dollars one day when he bet that the Bank of England would have to undo their currency peg. So, this guy knows what he's doing and our yield curve is not inverted like it was under Janet Yellen. And so, in Scott Besset, we trust. Okay. I I would be happy to put that on the on the US currency. Okay. So, we're lucky to have him as our Treasury Secretary. But, yeah, there's a narrative out there that all these countries are not going to be able to pay their debt and so yields must go higher due to higher default risk. And if it ever gets bad, the some of these countries are going to have to devalue their currencies. >> Now, this story is already moving money. Gold jumped over 3% on this, and that seems like a huge reaction. Why is that? >> Yeah. Well, gold's backing and filling, but basically the central banks have a choice. They can buy US treasuries as reserves or they can buy gold. And the truth is they do both. And they own last I looked almost $10 trillion of US treasuries, but their gold reserves are even bigger. But as bond yields tilt higher, any bond loses money. So if you bought Japanese, British, French, German, or US bonds, you are losing money. And if you could show that uh chart of TLT year to date, that's the isshares 20 plus year ETF, you can see it's been going lower. And if you bought in March of 2020, you would be down over 50%. So basically as yields tilt up the bond people get very grumpy because their principles eroding and it creates insecurity and gold is one way to offset that because there's just a fear that the global financial system will not be able to service its debt. >> So is this a buy gold now moment or has that trade already happened? >> I think the trade already happened and I think gold it's important to have gold but I only want to own the big gold stocks at this time. I have sold a lot of my smaller Canadian related ones. I got into gold because of central bank buying pressure and I got into them because of the forecast of sales and earnings. So the bigger ones, you know, have better earning surprises, but not all of them, but they're more likely to have better earning surprises than the smaller ones. >> So, are we carving out a piece of that 10,000 for gold? >> I wouldn't do that. Well, if I have money to deploy right now, I would be deploying in something that hasn't announced earnings yet. So, because all the good news is out, we already said in another video that the best time to invest will be the last week of September. We're in what we call seasonal shenanigans now. Everybody's on vacation. Volume's light. You know, the markets move on all kinds of rumors into windows. I need earnings to drive stocks higher. So, I would be looking to add invest $10,000 in the stocks that have not yet announced. >> And we'll get into exactly where you would put your money, but let's talk about an actual stock. Now, Walmart reported this week and it was a weird one. They beat on revenue, beat on earnings, and the stock still dropped. So, what was going on there? >> Well, their same store sales are only up 2.6%. And uh that's a concern. They used their same store sales used to be stronger and their guidance was lower than analysts expected, so that's why the stock got hit. Now, there are supermarket wars underway right now. You know, Kroger is trying to capture market share back from Walmart. The source of Walmart's growth has been largely led by supermarkets and cheaper food prices. You know, when we had Tammy Marshall on, she was talking about how Walmart has just the lowest prices. But, you know, as the Kroger's and other companies gear up to compete with them, apparently their sales are starting to moderate here a bit. So, I found that report interesting. Okay, I'm happy Walmart beat on sales and earnings. you know, maybe their guidance was too conservative because they're trying to manufacture surprises, but yeah, it was disconcerting and it just another reason the Fed shouldn't raise rates because, you know, retail is dominated in America by Walmart and Amazon. And, you know, we just had online sales drop in July 2.2% because Prime Day was in June. Walmart does a lot of online sales, but their same store sales growth is just very, very poor. Even the Targets of the world are announcing better results. So, this is going to cause me to rethink my position in Walmart and I got to better evaluate it and I might sell the stock on on what we call a dead cap bounce recovery. >> Tariff refunds were also a part of the story. Is that a real tailwind or a one-time thing? >> That's a one-time thing, but it comes in in different stages. So, I don't think we should worry about that at this moment. You know, I look at what is called core retail sales and same store sales, and that that had nothing to do with the tariffs. So, there is something going on at Walmart and it looks like they're finally getting competition to be candid with you whether it's Kroger, Target or whoever and that is a concern and obviously consumers are thrifting. You think that would help Walmart but it it although it showed up last quarter, it may not be showing up in the future and that's why the stock sold off. >> Well, speaking of stocks doing unexpected things this week, we have the complete opposite with Madna. What was that? almost 180% up in a day. >> That was short covering. Okay. And you're showing a chart from BSpoke that that MADNA rally actually sucked a bunch of money out of the tech stocks that day. And it's like Wall Street concluded, well, we got to own Madna now and where are we going to get the money? So, they sold some of the AI stocks which had been doing well the day before. So, this just shows you how money doesn't leave Wall Street. It just it's just slloshing around. But just to back up, before Madna's announcement, their sales were declining, their earnings were negative, and the the announcement was their mRNA drug is going to be able to cure cancer, especially skin cancer, which is very common. So, that was a a huge surprise and I don't know when they'll be able to monetize this, but that is what happened. And I think it was just a big short covering rally. I think the stock will settle back down. Now they have to give us guidance when the earnings come out. It's still going to be poorly ranked under stock greater because it just doesn't have the fundamentals. So when the analysts start to forecast positive sales and earnings, I might pick it up. But right now, it's a one-trick pony and this is a promising drug, but I will not buy it until it's monetized. >> For someone watching this who doesn't own Madna, should this news change anything about how they're invested? >> No, because it was short covering. And anytime you see a stock spike, it has to back and fill. So wait for any selling pressure to be exhausted. But right now, I would wait for the ounce community to say, "Okay, great. You got this great drug. When are you going to make money? Is it 2027? Is it 2028? When can we monetize this?" And what I don't want to do is buy it well before the earnings materialize. This company does not have the best reputation. And they were kind of a onetrick pony back in the co era. And apparently with this new mRNA treatment, they're going to be a onetrick pony on cancer treatment. So that's very encouraging, but it has to be monetized first. And so again, I won't buy it until the ounce razor estimates. And I know when it's going to be profitable and while they're losing money, I don't want to be anywhere near this. And the stock sales have been horrific. They've been declining steadily. You know, all the the news over Dr. Fouchy wasn't helping them. Now, before we get into where you would put that 10,000, let's answer some subscriber questions. What's your take on CLS? >> Fine. I'm not worried about it at all. This is a stock that has very good forecast sales and earnings. Celestica's sales are supposed to be up 70.4%. Their earnings supposed to be up 89.8. The analyst communities revised the earnings estimates higher. As an example, a month ago, they were estimating 269 a share. Now, they're estimating $3 and has a very good earning surprise history. So this stock is checking a lot of boxes on that eight factor fundamental model. So I'm very happy with the stock and I want everybody to hold it and they can buy it on any pullback. >> Now what about Novo Nordisk? >> Nova Nordisk doesn't fit my criteria. I did own it a couple years ago and that's when the GLP1 craze was taking off and to to Nova Nordisk credit they invented GLP1s. It came out of the diabetes medication, but they were not able to properly monetize it. They had a big executive change and they even admitted they went on Bloomberg and admitted that they're not going to be earning the money that they they should cuz they're gearing up to to sell their GLP1s. Their sales are supposed to be up 2.1%. Their earnings is supposed to be down.9%. Now, we do have positive balance revisions. So, in the last 90 days, they've gone from $2.13 to $223. And it did have a surprise in the second quarter of 12.1, but it missed in the first quarter. And uh it doesn't have the best earning surprise history. So, you know, even though this stock is is about to improve, it doesn't have the sales and earnings I demand. So, I will not be buying Novaorisk. I prefer Lily Li. All right, let's put this all together and also answering a few of our subscriber questions. With Nvidia's earnings coming out soon, where would you end up putting that 10,000? >> Well, let's just say you have one of those kids accounts. You know, Trump has the money for the kids that they're giving out. I would put all of it in the video. All of it. It's a monopoly. It's going to be very dominant for several years and it's acting very well. Okay. Now, if you're not a newborn baby and with a Trump savings account, okay, what I would do is I would put at least 2/3 in Nvidia and I would put the other third in Micron. Now, the reason I picked those two stocks is they haven't announced yet. Nvidia announces on the 26th of August and then Micron will be shortly thereafter. Now, Nvidia is definitely a long-term hold. Okay, it's a monopoly. It's the highest operating margins of any company I recommend. Micron's also doing great. They have all windfall profits, but it does have competition and it trades at a low multiple because memory prices have been historically volatile. The question is how long will that memory bottleneck last? It looks like it's going to last anywhere to five to eight quarters. So 15 months to two years. So the Micron trade we have to watch, but it's safe bet for the next year plus. The Nvidia bet is safe for the next several years. I'm very pleased with Nvidia and uh it it hasn't gone up as much as it's earning. So, its P ratio is getting lower and lower, but Micron right now has the lowest forecast to P ratio. >> Well, there you have it. If you enjoyed today's video and enjoyed hearing about where Louis would put his money, please give this video a like and subscribe to our channel. If you had $10,000 right now, where would your first dollar go? Drop it in the comments below. But we read every single one of them and we will get to more of your subscriber questions in our midweek update.