UNEXPECTED NEWS could Crash the Stock Market... (Crap)

We do have big news to cover in this video. And let me just tell you, it's probably the last thing we needed as investors right now in the stock market. It looks like we are back in a trade war with Canada. And what could this cause to the markets? How are the markets going to take this coming Monday? Because nobody was expecting this. Literally nobody. It looked like we were going to get a deal done and and then it all fell apart at the last second. On top of that, we do have a crazy upcoming week in the markets and I want to give my opinion on what to expect from different catalyst like Nvidia earnings, PCE data, Jackson Hole, and other events. Ladies and gentlemen, do me a quick favor and hit that like button for the YouTube algorithm to help push this video out to more people that need to see it. And if you guys want to come join the trading community, that link is down below in the description of today's episode. We are up 95 a.5% year to date. And the only thing that we do is look for opportunity before Wall Street figures it out. When Wall Street is emotional, we are executing. The only advantage you have as a retail investor is you don't have a monthly or quarterly profit statement that you're chasing for your clients to literally keep them and to keep your job. You can buy a stock and hold it for 2 months, for 3 months, for 6 months and wait out the emotional turbulence. And I do think the best days are ahead of us. So if you guys would like to come join us, that link is down below in the description of today's episode. I'm not a financial adviser. I'm not a financial planner. returns are not guaranteed, but I point out opportunities. That's what we do. So, let's get into your big news of the day today, which is we are now in a trade war again with Canada, which if there was nothing else really going on, I don't think this would be a big deal. But you're right before the midterms. Markets are still fearful about what the Fed's going to do. We have Jackson Hole this week. You have Treasury yields blowing out. The Iran war seems to just be in a stalemate at this point. So, nothing's happening there. Oil still gradually climbing. We have Jackson Hole this week. I mean, it's just one more knife in your back, if you will, as an investor. And what's very interesting about this is it sounded like a trade deal was done with Canada. It sounded like we just had to like sign the deal. Well, not exactly. It is being reported, quote, "Canada has declined to complete the trade agreement." Greer says Canada continues retaliation against the US. A senior Trump administration official says a deal would have cut tariffs substantially and apparently there are no negotiation talks planned with Canada at this point. Canada's Prime Minister Mark Carney says trade talks with the US are suspended. A senior Trump administration official says quote, "If this pact had been reached, we would have had Canada USMCA talks." Carney says, "As the US imposes 50% tariffs, Canada will match tariffs dollar for dollar to protect workers and businesses." And really the reason why this could crash the markets and I'm I'm I'm just going to be honest with you is because look, we've had two months of inflation really coming in good. We two months ago the markets were pricing in three rate hikes this year. We've made a lot of progress in pricing out those rate hikes. Well, with the Iran war still going on and all of the other issues in the market, these tariffs on Canada will raise inflation expectations, it will raise the Treasury yield curve, right? 10, 20, 30-year bonds. They're going to go up on this. The short end of the curve as well, the monthlong bonds, the two-year bonds, the, you know, three-year bonds, they're they're all going to go up on this as well. So on top of all the other issues, now you're going to have another problem for inflation and perceived problem for the Fed. It's just not a good scenario to be in, especially when you think about what's happened recently with bonds. Like this is just going to be another tailwind to push bond yields higher. So, I don't think the economic impact is like something to be concerned with. Like, this is not going to cause a recession or or anything crazy like that, but it will cause bond yields to move higher, which will pressure stocks. It with everything else going on, it's the last thing you needed. Oh, and not to mention, uh, Trump and Besson announced economic D-Day on Iran. And if that follows through, China's going to be a big target of that because China buys 90% of Iran's oil. So what kind of headlines could we get out of that? If we can't make a deal with Canada, the markets, they're not going to think that China is going to be spared the rod. And China would be the much bigger economic problem, inflationary problem for the US. Honestly, at this point, I think the government just is winging Like, they have no idea what their actions could cause from a market perspective. I don't even think they care because with everything going on right now, I mean, it's like there's a category 5 hurricane that is brewing just right off the coast and nobody's putting out sandbags. Nobody's trying to protect their home or put up plywood. like it's it's there's a lot that is building on this market. And yes, I will say while I am still bullish on the broadening trade, while I'm still bullish on markets in general, things can change quickly. We could wake up Monday morning and have a trade deal with Canada. If some of these catalysts this week do not go well, you're going to have a problem, a a a big one, and quickly. Now, we did have some good news that I want to get into before we talk about your catalyst for this week. Iran allows several Iraqi oil tankers to transit the straight of Hermoose after Iraq's request. And that's another weird story, right, that we've been following on this channel. Weeks ago, Trump said he'd be willing to walk away from the Iran war and just leave the Middle East if the straight of her moose opened without tolls. Well, in the last couple of days, we got news that Iran had reached out to the US and there were positive developments, but Trump said, "Yeah, don't talk with them until they're ready to make a deal." Iran and Oman are apparently still negotiating transiting routes through the straight of Hermoose. So that's like step number one before you know you could even have the possibility of opening the straight of moose from Iran's perspective and the US walking away from the conflict. Well about a week ago it was reported that after the Iran war the US is going to pull some of its forces out of the Middle East. You know that sounds good for deescalation. So, putting all of this together, you know, it seems like we should get positive news on Iran sometime, but we're just not getting anything. And as I've said on this channel before, like 80% of the broader markets issues like the broadening trade and cyclicals and you know small caps, most of that problem comes from the Iran war and the impact on oil and the impact that that is having on people's expectations for the Fed. Now add the Canada tariff stuff on top of that and until the Iran war ends or you know the US walks away or the straight of her moose opens it just makes that worse from an inflation perspective from a Fed perspective but these things can change quickly. Okay now let me just tell you for this upcoming week I'm just going to be honest Monday and Tuesday they're going to be your slow days. So, there's not going to be a whole lot happening Monday and Tuesday. For Monday, you have the Chicago Fed National Activity Index. For Tuesday, you have the ADP employment change, Fed bargain, new home sales. Um, that's that's pretty much it. Wednesday is when things get kind of crazy. So, Wednesday, pre-market, you have core PCE price index month overmonth, you're expecting around 0.2 2 to 0.3%. Last month was 0.1%. It's probably going to come in low. CPI came in really low. PPI came in low. PPI feeds heavily into PCE. So, I think PC is probably going to come in on the low side. Durable goods orders come out as well Wednesday morning. GDP growth rate quarter- quarter. Second estimate for Q2 as well comes out on Wednesday. personal income month over month and personal spending month overmonth come out Wednesday as well. Now when you shift towards Wednesday in after hours you have Nvidia earnings, Salesforce earnings, Crowdstrike Octa Synopsis Viva and some others. So between PCE and Nvidia earnings, Wednesday's going to be insane. I mean, Wednesday is the big day. If I were to say, you know, one day is going to determine what happens this week. It is definitely going to be Wednesday. Now, on Monday, you have some earnings, Xpang, pre-market. Tuesday, you have Intuitit, SEC, Zoom, Box, you know, Dick Sporting Goods, but things really start to pick up starting on Wednesday. Now, on Thursday for economic data, you're going to have initial jobless claims, wholesale inventories, things like that. But it's the Jackson Hole Economic Symposium that's really going to move the markets. Now, look, I don't think we're going to have a dramatic flip-flop of what Kevin W says. I think it's going to be a lot of the same he said at the the last two press conferences, right? there's not going to be a whole lot of a change there. And I think right now Wall Street is kind of nervous around any signaling of a change that could come. And this really stems from 2022 when Jerome Powell went to Jackson Hole and basically said, "We're probably going to have a recession. We're about to go on a crazy hiking spree." And that started a lot of the markets problems, right? or that was maybe that was 2021. Um I either way, you know, it it's it's I don't think we're going to have a change from Kevin Walsh. I think Kevin Walsh is a pretty damn big dove, but he has to be a little hawkish right now. He has to signal credibility and getting inflation lower. You don't want inflation expectations to become unanchored. And this is this is most likely going to be a positive catalyst. We're most likely gonna have some fear heading into this and we'll see what happens Wednesday. Uh, you know, with Nvidia earnings and PCE, but I think we're going to get a lot of the same stuff that we've heard from Kevin Walsh. Now, on Friday, you're going to have the Jackson Hole, you know, economic symposium again, but if we're going to get anything different, it's going to happen on Thursday. On Friday, you have non-farm payrolls, the annual revision. So last year it was negative911,000. We'll see what happens for this year. It could move the markets, but again, you're going to have Jackson Hole, you know, the speech from Kevin War out the way. You're going to have PCE. You're going to have Nvidia earnings by Friday. I think the non-farm payrolls annual revision could be kind of a sidehow compared to some of these other catalyst Chicago PMIs as well. Now, if we look at earnings for Thursday, that's also going to be a big day. Best Buy, Billy Buy, Dollar General, RBC, TD Bank, Dollar Tree, and Burlington report in the morning. In after hours, you have Marll, I you know, major AI themes. And then a ton of software, Autodesk, Affirm, Alta, Beauty, Workday, Centennial 1, Rubric, Elastic, and Gap. So this week's going to be really big for AI hardware, software, the broader markets, the, you know, expectations around the Fed, what happens with this Iranian conflict. Like this is going to be one of the craziest weeks of 2026. Again, I continue to be um kind of bearish on the AI hardware trade. I think if we look back at the last couple of years, you know, there were moments and opportunities where I was buying, you know, hardware stocks on the dip like deepseek when DeepSeek when when that happened and Nvidia fell like 30% in two days, I was buying the out of that because that was sentiment. That wasn't that wasn't logical. That was emotional. That was leverage pulling back, you know? But today, I mean, we just had Enthropic come out with 65 billion in ARR. You guys have to understand like on on on the All-In podcast, like like David Sachs and and some of those guys that they were expecting 300 to 400 billion in ARR by the end of next year. 65 billion in ARR this year. You know, it it doesn't look likely that ARR is going to go from 65 billion this year to fast forward a year from now, it's three400 billion. And that's kind of what a lot of people thought, right? Enthropic is going to take over everything. Well, that's not going to be the case. Open AAI, their losses are accelerating. Open AI posted 18% quarter-over-quarter revenue growth. These are companies that are promising hundreds of billions of dollars in commitments to some of these data center contracts. The revenue is just not going to support that. So, if you can't pay for something via revenue and income and free cash flow, how do you pay for contracts? You raise a lot of debt, right? And either way you want to put it, if they can raise the debt, if OpenAI can raise hundreds of billions of dollars of debt to fund their Oracle contracts and their Microsoft contracts, great for Microsoft and Oracle, but nobody's going to want to stand behind that much delusion. So the math is not mathing on the AI trade at this point for the sheer amount of money that is being spent. you know, $3 trillion dollars um here in the even the next year or two. It just the math doesn't math. So, we now have like a fundamental problem with the AI trade and the amount of money that is being spent on it. Now, Nvidia earnings, this is going to be a this is going to be a little weird because expectations are a little lower, but they're always going to be high for Nvidia. Expectations are always going to be high for the AI hardware trade until sentiment really goes south. I think Nvidia is going to probably be in raise, but any weakness at all is going to be very bad news for the entire AI complex. In that case, the S&P and the NASDAQ, they're they're waitings in the NASDAQ and S&P are huge, right, for the whole AI trade. If Nvidia, you know, mostly beats, but there are some weak spots on top of the general worries I just explained around the AI trade, the markets are going to come crashing down on Wednesday. The headline indexes, but you could see quite a violent rotation after Wednesday, okay? in your cyclicals, in software and small caps, communication services, nonAI financials, nonAI industrials, even consumer defensives and healthcare, right? You could see kind of what we've seen recently. Take a screenshot of Friday's heat map. You could see this kind of play out in a bigger way after Wednesday. Now, we'll see what happens with the Canada trade war, what happens with Iran, you know, by Wednesday. If if I were to imagine Monday and Tuesday could be pretty red days after Wednesday, I think the broadening trade kicks up a little bit heading into Thursday morning after we hear from Kevin Walsh and he doesn't surprise us. You could actually see a very strong Thursday. So I think Monday and Tuesday are going to be on the weak side as people kind of price in these risks coming Wednesday and Thursday assuming PCE comes in low. You know, you could start a broader market move Wednesday, especially after Nvidia earnings heading into Thursday. But again, let me just tell you, Monday and Tuesday could be on the rough side. And again, this all feeds into kind of the event risk hedging that is happening right now. you know, Wall Street on Monday and Tuesday. They're going to see all of these catalysts coming with PCE and your economic data Wednesday with Nvidia earnings Wednesday and after hours, the fear around AI, the leverage blow up that you just seen in AI hardware stocks. They're going to see the Jackson Hole speech from Kevin Walsh Thursday morning, the Canada tariffs over this weekend, the the stalemate in the Iran war, and they're going to hedge for these events again after Nvidia earnings, after the economic data, after the speech from Kevin W. Some of those hedges are going to come off and you're going to see the markets rebound a bit. The broadening trade, I don't know what's going to happen with the hardware trade. That's going to be determined on Nvidia earnings. But I am more optimistic in the second half of this week once we actually get to these catalyst that it could be a positive for the markets. Now again, we are in a seasonally weak period of the year right before the midterms. So you can see that on screen. You do tend to sell off during this period of the year. you will likely if seasonals repeat bottom out early to midocctober and then begin a 9 to 10 month rally. So I think any weakness before the midterms is an opportunity. So let me know your thoughts on this down below in the comment section. I know it's difficult to try to figure out preemptively what the markets are going to do, but I I think we have a pretty good grasp on uh where things currently stand at this point. Let me know your thoughts on this down below in the comments section. Are you bullish? Are you bearish? How are you feeling right now? Hit that subscribe button if you guys made it to the end of this video. And if you guys want to come trade and invest alongside of us, that link is down below in the description of today's episode. Have a fantastic rest of your day and I will see you in the next