The Stock Market Goes Insane After Trump Saves Powell | TSLA Earnings

Summary

In this video, the speaker discusses a range of key financial topics, including President Trump's stance on Jerome Powell's position, the unsustainable path with China, and market reactions to interest rates and tariffs. They delve into market analysis, particularly focusing on gold and Tesla's earnings, while offering insights into trading strategies. The speaker emphasizes the importance of technical analysis and suggests buying stocks during 'red headline' days. The outlook includes the potential for further market volatility and the need to monitor defensive stocks amid economic uncertainty.

Takeaways

• 😀 Trump states he has no intention of firing Jerome Powell, despite past comments suggesting otherwise.
• 😀 Trump can influence the stock market at any time, but when he pulls back, bond yields often rise due to market panic.
• 😀 The U.S. government is focused on reducing the 10-year bond yield, even if it means facing a recession.
• 😀 Scott Bessant advocates for de-escalating the trade situation with China, suggesting that the current path is unsustainable.
• 😀 Gold hit an all-time high, and a trade strategy based on technicals and data was successful in profiting from it.
• 😀 Tesla missed on both earnings and revenue, but the market is increasingly valuing Tesla for its robotics and AI potential rather than its car business.
• 😀 Investors are eager for updates on Tesla's robotics and AI advancements, with the focus on the upcoming autonomous driving release in Austin.
• 😀 Market sentiment is influenced by Trump's softer approach on China tariffs and his decision not to fire Jerome Powell.
• 😀 Despite a potential market rally, the speaker believes that the fight against high yields isn't over, and the market might still face challenges ahead.
• 😀 The VIX (volatility index) remains in backwardation, signaling heightened volatility in the near-term future, which suggests that a market bottom is not yet in place.

Q & A

What did President Trump say about Jerome Powell's firing?

President Trump stated that he has no intention of firing Jerome Powell, despite earlier comments where he had suggested he could do so. Trump also acknowledged that there is no immediate need for Powell to be removed from his position.

Why does Trump not want to fire Jerome Powell, according to the transcript?

Trump's decision not to fire Jerome Powell stems from the context of financial market concerns. The focus is on addressing bond yields and economic stability, rather than firing Powell, even though Trump has previously mentioned this as a possibility.

What is Scott Bessant's role in the tariff negotiations with China?

Scott Bessant is seen as a more reasonable figure in the Trump administration, advocating for de-escalation in tariff negotiations with China. His position contrasts with others like Peter Navarro, who is perceived as more aggressive in the negotiations.

What impact did Bessant's comments about China have on the bond market?

Bessant's comments about de-escalating tensions with China provided some relief to the bond market, which had been panicking due to ongoing trade tensions. This helped stabilize bond yields, which had been rising due to market uncertainty.

What does the speaker think about the timing of interest rate changes?

The speaker believes that lowering interest rates would be a timely decision, especially in the current economic climate. However, they also suggest that if interest rates aren't lowered soon, the situation may worsen, potentially leading to a recession.

Why did the speaker trade options on gold (GLD)?

The speaker traded options on gold (GLD) because the data indicated that gold was significantly overbought, almost 30% above its 200-day moving average. Historically, when this happens, gold tends to correct, making it an ideal opportunity for a short trade.

What was the market's reaction to Tesla's earnings report?

Despite Tesla missing both earnings and revenue expectations, the stock price still increased after hours. This is because the market seems to be valuing Tesla more as a robotics and AI company, rather than focusing on its car business.

What is Tesla's future focus according to the earnings call?

During the earnings call, Tesla's focus was on its AI and robotics developments, especially with the Optimus project. Elon Musk mentioned plans to produce a million units of Optimus within five years, though only about a thousand would be produced this year.

How does the speaker view the stock market's future performance?

The speaker believes that while there may be short-term rallies, the long-term outlook remains uncertain. The market could see temporary gains due to comments like those from Trump, but structural issues like high bond yields and economic uncertainty suggest that a more significant downturn is still possible.

What strategy does the speaker recommend for buying stocks in this environment?

The speaker advises buying stocks during 'red headline' days, when market sentiment is overly negative, as opposed to when markets are euphoric. Additionally, they recommend focusing on defensive stocks, such as those with strong cash flows and minimal tariff exposure, like Google, Meta, or Amazon.