Top Three Videos – August 2, 2023

Soloway- “Gold will reach an all-time high in 2023, Bitcoin will drop to $15k, and a particular commodity will soar…”

Quick Summary Bullets:

• The Chinese economy is experiencing a major crash, and the impact is expected to reach the United States.
• China’s risk of prolonged falling prices could have a detrimental effect on global economies, impacting corporate profits, consumer spending, and employment.
• Deflation can have serious repercussions for the rest of the world, particularly on corporate profits.
• The combination of job loss, increased prices, and higher debt levels leads to less money available for discretionary spending, impacting both the economy and inflation.
• The model used in the CTA reports identified a quadruple bottom pattern and triggered a trade with over a two percent upside potential, proving its worth as a trading tool.
• China’s increasing mortgage easing measures in big cities suggest a growing panic and attempt to stimulate the economy amidst signs of deflation.
• The negative year-on-year rate change in new loans signifies a potential all-out panic, as it indicates a decrease in the creation of new money and a higher rate of loan repayment.
• “What’s happening in China is coming to the U.S in not too distant future.”

Transcript Summary:

• 00:00 Gold will reach an all-time high in 2023, Bitcoin will drop to 15k, and a particular commodity will soar, while the US economy’s strong job market, stock market, and GDP growth are misleading due to lower imports artificially raising GDP and creating a false narrative of rapid expansion, and there are mixed signals from analysts about the probability of a US recession.
  • The US economy has defied predictions of a recession with a strong job market, stock market, GDP, and lower inflation, but Gareth Solway predicts a lack of a soft landing, with gold reaching an all-time high in 2023, Bitcoin dropping to 15k, and a particular commodity soaring.
  • GDP growth may appear positive, but it is misleading due to the fact that lower imports artificially raise GDP, creating a false narrative of rapid expansion.
  • A drop in imports suggests that more goods are being produced in the US, but other economic indicators such as consumer confidence show that higher-income individuals, who have more exposure to the stock market, have higher confidence levels compared to lower-income individuals.
  • The strong employment front is keeping the stock market up, but there may be a deluge of layoffs coming once the recession hits, and the AI boom will also lead to some layoffs.
  • Inflation can be reduced without significant job losses, as indicated by the strong employment picture, but there are mixed signals from analysts with Goldman Sachs economists lowering the probability of a US recession to 20% while Fannie Mae analysts predict a modest recession in the near future, and the data shows a depletion of household savings, making a soft landing unlikely.
  • Housing costs and consumer debt are increasing, with the average car payment and cost of housing significantly higher than in 2008, indicating a strapped consumer, while food and energy prices are also rising, and there is speculation in the market with high forward PEG ratios.
• 08:10 Bonds are less attractive as yields rise, leading to speculation in stocks; the correlation between bond yields and the S&P 500 suggests potential market trends, but a soft landing is unlikely as the Federal Reserve tends to overreact to lagging data.
  • Bonds are becoming less attractive to average investors as they now pay higher yields, leading to increased speculation in stocks.
  • The correlation between the average corporate bond yield minus fed funds rate and the S&P 500 suggests that major corrective moves in the stock market coincide with specific ranges, indicating potential future market trends.
  • The Federal Reserve has never achieved a soft landing in the past, and with the current economic situation, it is unlikely to happen this time; they tend to react to lagging data and overcompensate.
• 10:44 The Federal Reserve’s ability to cut interest rates and print money may be hindered by increasing oil and gasoline prices, leading to concerns about inflation and potential recession, while gold is predicted to reach an all-time high in 2023 and Bitcoin to reach $15k.
  • Jerome Powell’s statement that there won’t be a recession is a red flag, as the Fed’s comments should be taken with caution, and the government’s data on cooling inflation is not sustainable, which will hinder the Fed’s ability to cut interest rates.
  • Looking at the data, oil and gasoline prices have increased, causing concern about inflation and the Federal Reserve’s ability to lower interest rates and print money.
  • Gold is predicted to reach an all-time high in 2023, Bitcoin to reach $15k, and the Invesco DB agriculture fund shows a significant increase, making it difficult for the FED to avoid raising rates.
  • Soloway predicts that there will be minimal rate hikes and the market will rely on the FED to save them, but there is concern that increasing rates may lead to higher oil prices and a potential recession, which has not yet occurred as expected.
  • Excess savings from COVID and the lag effect of interest rate policy have contributed to the prolonged positive economic period.
  • Analysts predicted a bad first half, causing a catch-up in the stock market as fund managers and retail investors adjusted their portfolios, leading to a sense of FOMO and a surge in stock prices.
• 17:49 A significant pullback in the S&P 500 is predicted by the end of the year, with a potential decline in earnings growth and high valuations leading to a 25% drop in 2024; sentiment and psychology are driving the market, resembling the dot com bubble, and Microsoft may have already reached its peak for this bull cycle.
  • Soloway predicts a significant pullback in the S&P 500 by the end of the year, with a target range of around 3,900, and expects a 25% drop from recent highs in 2024 due to high valuations and a potential decline in earnings growth.
  • 82 percent of companies have beaten earnings expectations, but their price action after earnings suggests a bigger picture related to sentiment and psychology driving the market.
  • Microsoft’s stock experienced a sell-off despite beating earnings and metrics, and the speaker suggests that the current market trend may resemble the dot com bubble, raising the possibility that Microsoft has already reached its peak for this bull cycle.
  • Microsoft, part of the Magnificent Seven stocks, has driven the latest bull market, but only those stocks that have not reached their all-time highs, like Google and Netflix, have seen significant rallies.
  • Apple’s stock may experience a sell-off before earnings due to a slowdown in chip production, despite investors ignoring this information.
• 23:01 Investors should consider going long on AMD and short on Nvidia, as Nvidia’s high valuation may be a warning sign, while the Magnificent Seven stocks have likely peaked and investors should be cautious of FOMO and greed in the market; the speaker is more bullish on stocks than on bonds and suggests exposure to foreign markets, particularly Brazil, due to potential breakouts; concerns are expressed about the banking sector, Bitcoin’s future value, and the impact of defaults on real estate.
  • Nvidia’s strong performance may be a warning sign as it is trading at a high multiple, and the speaker suggests a potential trading opportunity of going long on AMD and short on Nvidia.
  • Majority of the Magnificent Seven stocks, including Microsoft, Nvidia, and Tesla, have likely peaked according to the charts, and while the macro data should be closely monitored, the speaker is more bullish on stocks than on bonds due to the higher exposure to the stock market.
  • Investors are driven by FOMO and greed, choosing higher-risk investments despite the opportunity for safe investments with decent yields, which is a warning sign in the market.
  • Investors should consider having exposure to foreign markets, particularly Brazil, due to the potential breakout in the Brazilian stock market and the trend of emerging markets trading in their own currencies.
  • Soloway expresses concern about the banking sector, particularly regarding the commercial real estate and corporate debt, as well as the potential impact on residential real estate if defaults occur.
  • Bitcoin has seen a significant rise in value due to concerns about traditional finance, but the speaker predicts a potential significant drop in the future despite passing regulatory hurdles.
• 30:55 Bitcoin’s price may drop due to liquidity issues and stock market decline, but it could rebound; Gold is predicted to reach all-time highs in 2023 due to increasing US debt and a weakening dollar.
  • Bitcoin’s price may drop to 15,700 or lower if there is a liquidity issue and the stock market declines by 20 or 30 percent, with the potential for further decline if it breaks the trend line at 27,000.
  • Bitcoin’s price could potentially drop to as low as $9,000-$10,000 before rebounding, as its correlation with the NASDAQ has reduced due to decreased interest in Bitcoin and increased interest in stocks.
  • Bitcoin is not yet considered digital gold due to the emotional nature of the crypto industry, but the launch of the BlackRock spot ETF and potential downside in the stock market could lead to a big correction in the equity market and Bitcoin, creating the bottom for the next bull run.
  • Gold is predicted to reach an all-time high in 2023, with a potential value of at least $150,000, as the speaker believes that the Federal Reserve will be compelled to print more money due to the increasing US debt.
  • Printing more money is the golden ticket for Bitcoin, while gold is not the top performing asset but has a breakout short term trend.
  • Gold is expected to reach all-time highs by the end of the year due to a weakening US dollar, potential recession, and elevated inflation, while Bitcoin and the S&P’s performance will also play a role in determining gold’s success.
• 37:37 Uranium is expected to soar in price due to a long wedge pattern on the chart, increasing demand for alternative energy sources, political strife in Niger, and the global push for sustainable energy, potentially resulting in a 50% upside in the next 12 months.
  • Soloway is bullish on uranium due to a long wedge pattern on the chart and the increasing demand for alternative energy sources, as solar panels are not feasible or cost-effective enough to meet the growing energy needs.
  • There is a potential for a new trade in uranium and nuclear power plants due to elevated inflation and the recent opening of a nuclear power plant in Georgia.
  • The political strife in Niger and the global push for sustainable energy will likely drive the price of uranium to revisit its 2021 high, potentially resulting in a 50% upside in the next 12 months, making it somewhat immune to recession concerns and a slowing economy.
  • BlackRock’s potential shift in the ESG narrative, as indicated by their appointment of aramco Co to the board, could have a significant impact on the economy and should be closely monitored.
  • Investment in energy companies may increase as there is a shift away from solely focusing on ESG, with uranium being highlighted as a potential trade opportunity.
• 42:55 Gold to all-time-high in 2023, BTC to 15k, and a certain commodity will soar, as predicted by Gareth Soloway.
  • Gareth Soloway provides daily trade ideas for the commodity, crypto, and stock markets, with a focus on short-term trades, and viewers can find his videos on verifiedinvesting.com, YouTube, and Twitter.
  • Gold is predicted to reach an all-time high in 2023, Bitcoin is expected to reach $15k, and a certain commodity is projected to soar, according to Soloway.