JPMorgan market outlook: tech rally and ceasefire trades

0:00Phoenixer, and I wasn't going to make this video because I'm on a flight as you can obviously tell, but I was doing some light reading as you do. JP Morgan's market intelligence report. And it pisses me off again and again that this stuff is not reported the way that it should be because you, a retail investor like what I am now, we don't get the same data, right?

0:28JP Morgan writes this note, sends to the institutional clients with lots and lots of money and literally tells them what to do now that there is a ceasefire in the Middle East and also what to do if the ceasefire doesn't hold. It literally includes the exact sectors, even stocks. And I think you deserve to understand it too. And if you agree with me on that, you'll put up with the terrible audio, the crappy video footage, and you're here for the information and the education.

1:02And let me know if you agree with that, that you deserve it. Put a "deserve" in the comments down below. And I'll do one better for you. Actually, I'll put the actual full report into our free community because let's just spread this bloody stuff, right? Just don't tell anybody that we do that. But yeah, it's down there, there's a link down below in the description for you to see out.

1:21So I've made a couple of notes, I'm just going to run you through them so you really understand what the heck's going on here, including, as I say, literally what JP Morgan is telling the big money to buy and not to buy in both scenarios, when the ceasefire holds or the ceasefire falls apart. We're seeing a bit of both right now.

1:41So let me hit you with some data. First of all, they're targeting and they're predicting an S&P 500 that hits 7,200, which would be glorious, right? So they're saying rally is back, baby. But the key sector that they're liking here, and I think this is so important to understand because so many of you, I'm sure, are tech investors, right? If you're a tech investor, put "tech" in the comments. Love to see how many people of you are.

2:06And they're saying tech is likely to have a huge rally for 2 simple reasons. Reason number 1 is that we are going into earning season and we expect the earnings to be pretty good. And reason number 2 is that tech's been getting clobbered to death. Like I was going to say baby seals, but that would be very un-PC, but you get the image during this war, right?

2:29And people had questions about AI, is it going to work, all that kind of stuff, right? And therefore their share prices dropped pretty significantly. I set up a fairly contrarian Google position during that time, which seems to be coming out of the woods right now. So we're basically having a combination of everybody hates the sector, but it's tech, it's AI, like use it. I mean seriously, if you're not using AI right now, you're missing out. It's just like you're not understanding how powerful this is going to be.

2:59So it's literally a love letter to the Mag 7, right? So the Magnificent 7 stocks, we can look at some specific stocks in just a second. We'll do that together. But they're basically saying they expect fantastic earnings, better than they expected. And at the same time, all the institutions are very bearish on these big tech stocks because that's what we've been told for the last couple of weeks and months. And therefore there is a catch up for those guys to do.

3:23And that brings me to point number 2 here, which is hedge fund leverage. And I know that sounds about as boring as watching paint dry, but the way a hedge fund operates is that they will borrow money to trade with. They have some of their own money, borrow some money on top, like a leverage trader basically.

3:51Thank you. That was obviously an important interruption. You can't say no to garlic bread. Actually, I'll give you a secret on airplane food as well and why everybody should be carrying a little sachet with some white powder in it when they fly. Explanation on that coming up too.

4:08So yeah, but seriously, a hedge fund will say have a billion dollars. They have more, but let's say there's a billion dollars and then they'll borrow. Now sometimes they borrow $100 million like maybe you and me might. I mean as a percentage of funds, not saying we're borrowing $100 million. But actually a lot of the time they borrow $25 billion if they have $1 billion, or $40 billion if they have $1 billion. Like they really go to town on the leverage. So it's a huge, huge part of what they do. And therefore it has a big impact on the market.

4:36And those guys dropped their leverage down very significantly from the last 12 months high. And that means if the market picks up the way we're now expecting, if this ceasefire thing holds and the Strait of Hormuz is named the Strait of Trump the Almighty, which I think is one of the key requirements in the treaty, these hedge funds will buy a ton of stocks, specifically tech stocks.

5:05Right now there's an "if" in there, right? So you got to take that into account. I'm not a financial adviser, I'm just a guy in a plane who used to be a banker and also shares this with you. But if you actually really want to understand and you're here for like literally what do I buy, don't just follow even the stuff JP Morgan's putting out because it's again going to date.

5:22I will do one better for you. I will teach you literally this Saturday at 9 a.m. Eastern time, that's 9 a.m. New York time, 2 p.m. London. I will teach you Wall Street's very own rules. They have a 3-step process. Simple rules, have been around for 50 years. Every Wall Street trader gets taught them, but you obviously don't. So I'm going to teach them to you. It's free. Go to felix/training. Grab yourself a free seat down below and let me know you got a seat just by writing "seats" in the comment as well and everybody else can see it too.

5:55Now the 3rd part, I think we're on number 3. This is what happens when you haven't got structure to a video and you're doing it on a plane. Retail, that's you. You apparently have been feeling a little bit, retail sentiment has been terrible. You lot have been selling stocks like 7 out of 8 days this month. So you've really been going to town on the whole panic thing, near the end of a panic thing.

6:22And what does that mean? It means there is again a chance that the retail crowd will start chasing the dip and therefore you're going to get more money pouring into the market. They also use a lot of leveraged ETFs and so on which again push up the market quite significantly.

6:36But putting all that aside, probably the most important statistic here, and again it's just a statistic before I give you the bullish and the bearish list and everything else, is when the market is positioned like this, very very bearish, historically the S&P 500 has delivered an 8.2% return over the next 3 months. So in this kind of positioning the following 3 months were historically an 8.2% up over the next 3 months. It's JP Morgan data. It's not a promise or that's definitely going to happen, but it's an interesting one.

7:08Right now for you, if you lot are living in the good luck of the European Soviet Union, similar for you guys. European stocks, current positioning pretty extreme. You're looking at about 7.7% up over the next 3 months on average historically. Again, historic performance wasn't guaranteed future performance and all that kind of stuff. But maybe that's useful for you lot who are tuning in from the European Union. Although this video might be prohibited because there are opinions on here which people may not like.

7:37All right then. So that was a bit too serious for a joke, wasn't that a bit serious? Yeah, it's true though, isn't it? A lot of the stuff I say probably is very non-PC. Let's look at the bullish list. JP Morgan's bullish list here and then we look at some individual sectors and stocks here.

7:51Right, so they're basically saying we're looking back at the trades that worked very very early in the year. The US dollar will sell off. Now what does that mean? What happens when the dollar sells off? Gold goes up, silver goes up typically, right? So how can we play those? Well, we could actually play those with miners. And I'll come back to that in a second.

8:12But first of all, you're looking at the stock order. The Russell, the small caps go up first. The NASDAQ goes up second. The S&P goes up third. That's the way JP Morgan sees it. And then we're looking at upside in the discretionary guys, like home builders, and we've been in home builders for some months now, but also retailers because you lot will feel more euphoric and you'll go and swipe the plastic or ping a phone, which doesn't have quite the same feeling about it.

8:39And also financials, they're excited about financials. Banks always report first and if their earnings are good, and we expect them to be, and we think that the environment is that the macro mind is going to get better, like lower interest rates, low oil prices, all that kind of stuff, then we could get a very nice bounce there. Because again everyone's been selling financials, everyone has been hating the banks, and there's a fairly good reason to hate them, but not in the scenario of I want to make money out of it.

9:06So precious metals, they're saying here, would likely see a strong rebound as the US dollar pulls back, miners more.

9:14Generally may see a bid on the recent changes to the metals tariffs. That's another big story there. So how do you then find those kind of stocks? Well, let me show you. One second.

9:37Okay, so the Wi-Fi just failed. I'll make a little recording of it. I'll put it on the screen here. Essentially, you can go to Trade Vision, which is the app that I'm a co-founder of and we've been building the last couple of years. There's a cool AI feature that's just about to come out and being rolled out to you guys. And you could literally just type in, "Hey, make me a watchlist of the top 10 largest gold miners" or something and it'll just ping them up for you. And it's a very, very cool, very, very fast way of doing that. You can then click through to all the charts, see what's going on there.

10:05And if you can't read a chart yet, and you don't know, does that mean it's a good stock, is it a bad stock, then again join me on Saturday. I'll teach you that. If you're complete beginner or if you're more advanced, we teach this to investment bankers, but also people who've never had a brokerage account in their life. Anybody can learn this in a couple of hours.

10:23Now, before you run off, very importantly, write down the bearish list because this ceasefire could flip tomorrow, right? There are already missiles flying around and this is not really like peace yet. So let's write down what we need on the bearish list. And they're saying if the attacks continue, Israel's bombing Beirut and so on, it would likely mean Saudi production will go offline because the Houthis, which is Iran's last card they haven't played yet, the lunatics in Yemen, apparently not meant to call them lunatics, they don't like it, but let's call them the lunatics in Yemen.

11:01They close the Red Sea. Now the Red Sea is a little bit of water on the left side of the Arabian Peninsula that leads up into Europe, Israel, Egypt, huge, huge, huge strait again where all the stuff flows through. So if that happens, oil will go back up. Look at the $125, that's kind of what we're looking at. And then the $150. This is JP Morgan saying it'll go up because Saudi is the key thing. And there was an attack on the Saudi oil pipeline for example as well.

11:30And that means the dollar gets stronger, which means stocks sell off, gold and silver sell off. And if you want to buy stocks in that scenario, you just buy energy stocks. That's really the only place I would go. Maybe oil services companies, storage, pipeline companies, those kind of guys. But everything else is going to get clobbered like a, as I say, baby seal. That phrase comes from, it's a Wall Street phrase. You see it literally in banking reports. Also said this morning oil stocks got clobbered like a baby. It's an incredibly offensive phrase but I keep reading it in these banking reports. So I blame the lunatics on Wall Street and the Houthis, the same type of mindset apparently.

12:12And then of course defence companies and fertilisers. So those are the ones, and again if you want to find out what defence companies, what fertiliser stocks, just type it in Trade Vision. It'll give you a list and you'll know what you're looking at here. But you would very likely get that $1.5 trillion defence budget through. You'd probably get that $200 billion request for defence companies through.

12:35So basically in that scenario, everything else goes down. Some things get particularly clobbered. There it is again. Airlines, because some of them will potentially go out of business, especially the smaller ones, if you want to go aggressive on that kind of stuff. But I hope you're starting to see, and that's always my intention here, that no matter what the market does, no matter how bad it is and how bad it looks, there is always an opportunity.

13:01And literally join me on Saturday and I'll walk you through literally this week's opportunities and how we find them. And last week we had one sector that looked good and I think it was waste disposal or something really abstract and it was having a good run.

13:20So when people say markets can have long periods that suck, but not if you know what you're looking for, because the way to look at it is that the market is separated into sectors, right, 12 sectors, and money will move from one to the other. So now money looks to be flowing back into tech and into higher risk things and then maybe into gold and gold miners. But if it goes the other way, then the money is going to flow into oil stocks or service companies, it's going to flow out of airlines.

13:47So it's the money moving around. And once you really understand that, it changes the way you can take advantage of opportunities because it's not black and white. It's not like what the mainstream media headlines tell you, oh it's all terrible. No, there is always a freaking opportunity, especially when we get these big swings. So in a strange sense, I quite like these strange swings because for me it's an opportunity, but I appreciate for a lot of people it doesn't feel so good and that's what we're looking to change here.

14:12So do the following. Download the actual report, Jamie Wong's reports. It's a little bit more convoluted in terms of language. I try to simplify it for you, but might just be interesting to see. And sign up for Saturday. Join us there, felix.training. And if you want to dive into some of these stocks and use our cool AI features there in Trade Vision, there is a free trial to that too.

14:36There's also, if you sign up now you will get all the AI features as they're getting rolled out in the next week or so, you get those for free basically as part of your subscription, whereas if you join us later there will be a higher charge for those. So maybe take advantage of that. Just lock in the free trial. That's literally the one risk-free thing you can do right now.

14:53And I apologise for the terrible audio and everything else. And yes, I was going to tell you what this is, right, and why you must travel with this. Not what you think. No, no, no. Don't do drugs, children. Airplane food. That here is always terrible. It is always terrible. It's typically made in some facility that hates people and wants to kill people. So don't eat it. Bring yourself some boiled, lovely, fresh, organic eggs. So I get these from Italy. And an egg doesn't taste any good unless you got some salt with it. Right, that's all that is. It also gives you some interesting questions to answer if anybody ever opens your bag.

15:34So I hope you got some value out of this. I hope to see you Saturday and use the links down below. Get better informed. All the best. France just pulled every last ounce of its gold out of America. 129 tons, gone like that. And the excuse they gave you is one of the most insulting things a central