Trump Just Threatened Iran's Bridges (Markets Are Selling Off)

[00:00:00]Everybody welcome to today's market overview, July 22nd is the day that we've got some clear movement. First things first, we've started with a uh uh a genuine broad market sell-off today, specifically related to chips.

[00:00:17]Um you're you're seeing a higher chance of rate rate hikes coming. You're seeing a massive escalation in Iran. In fact, Trump has now announced any attack on any sort of ship going through the Strait of Hormuz will be met with a uh attack on bridges in Iran, which is a definite escalation. We have not seen bridges attacked. This is now more and more civilians becoming involved. You have to think about this as in your homeland. Think about what that could feel like to you on a bridge in your city.

[00:00:51]Um and so now this is a definite escalation of this. Now obviously nothing's happened into that regard just yet, but we shall see if Iran decides to poke and shoot at any sort of ship in the Strait of Hormuz, that'll happen even further. So you're seeing a a a sell-off from there. Keep in mind, tonight Google will report earnings, which I think will be the only catalyst to potentially hold the price at um you know, current levels. And that's only if Google has decent earnings. If they have poor earnings, we already spoke about in yesterday's market overview the exact price levels that we think that Google may have um you know, genuine opportunities on as well. So we'll continue to watch that. Number two, uh Brent crude hit 95 overnight. We see WTI hitting 87 or so.

[00:01:43]Um this is now blistering through the level that we had spoken about. Um and and now really it's the the question of where can this thing turn around? AKA when can the conflict calm down? This is the price point that we spoke about and you know these are the levels now that it to which we want to be buying the dips on. We have broad market dips now in the markets and if you have the buying power to do it and you have stocks that you want to own right now, these are the times to set buy limits, sell puts, buy at the market, whatever the case is in order to take advantage of such opportunities. Market's trading at 87.

[00:02:24]Remember 85 is the most potent reversal layer. We were able to break that so that's definite upside. Why is that?

[00:02:30]Well, just again what I just talked about, more escalation related to Iran, more definitive escalation related to attacking bridges, that sort of stuff. So really important stuff right now going across the markets and again just keep keep an eye on this over the next 24 hours because what Google could do. Secondly, will they announce the tariffs? I think they'll announce it by tomorrow. And the tariffs should be another damper on the market.

[00:02:59]I I don't think the outlook in the stock market for the next at least week looks very good. Lots of volatility, lots of fear, lots of selling off. Do not let it shake you. Continue to say which stocks do I want to own and which stocks do I believe in and then we'll go from there and we'll continue to you know to to buy those dips cuz there's a lot of opportunities presenting themselves as we speak right now. SMCI Supermicro is up now since this slide deck 17%. It's up now 24%.

[00:03:36]The company said it plans to build AI data centers alongside SpaceX and 60 billion dollars in new orders are coming in the fourth quarter.

[00:03:48]All good things for SMCI right now. This is actually funny enough a stock that uh obviously we have in the live room as well. And um it's a stock that I've called the stalker cuz it just won't go away. And um it uh it now spikes 25% in a day. We have covered calls right now currently in the live room at $36.

[00:04:12]Um we're actually trying to get out of SMCI if we can. So this is obviously a very exciting day for those of us that would like to get rid of SMCI. We're still several dollars away uh from that happening and it's definitely not easy to go from 31 to 36. But um definite definite important levels that are being hit as we speak and we will continue to monitor this and continue to watch this uh in the coming weeks on SMCI. Furthermore, um Google and Tesla, those are the big two.

[00:04:47]Uh those are going to report after Wednesday close. Google and Tesla, ServiceNow, Text uh Texas Instruments, uh Alphabet is expected to post revenue growth north of 20%.

[00:05:00]And um really the question is is the CapEx worth it? Is the capital expenditures worth it? All of the money that Google, Tesla, that's all of the money that they are spending, is it worth it? That is ultimately the question that you have to ask yourself and that's what we're going to find out this afternoon. If the answer is yes, we can see this as a very bullish sign in the future of the markets. If the answer is no, as spoken about just yesterday, I think that there's uh if the stock can get uh any sort of upgrade, I think that there's opportunity related to Google down towards $300 a share currently trading at three 47.

[00:05:41]So again, we'll continue to monitor all of this, but uh really today's the day that we have to be watching this and tomorrow of course and tomorrow's our market overview we can talk about the outcomes. But 300 billion dollars of total AI capital expenditures if you spend 300 billion dollars, shareholders are going to want to know if they can recoup that money.

[00:06:01]We will see what happens. This is the bleak one.

[00:06:05]The 10-year Treasury has now hit 4.64%.

[00:06:10]Um actually 4.65%. This is now about to be the highest level that we have seen since May.

[00:06:20]Um oil going higher tells the market that inflation is should and will go higher.

[00:06:26]Energy prices higher.

[00:06:29]So the 10-year yield goes higher.

[00:06:31]Uh this is very impactful because this impacts the housing market in particular. Mortgage rates going higher, the 10-year yield pushes mortgage rates higher.

[00:06:40]And uh again this is the highest point since late late May.

[00:06:44]And so the question is will there be a de-escalation causing a sell-off in oil soon?

[00:06:53]Which will drive down the expectation of inflation and drive this down.

[00:06:58]This is the most nerve-racking part really of the market because this impacts not just the stock market but the housing market as well. And the higher this goes, the more dangerous this becomes. But at the same time, what's interesting is even though this is you know, this is heading higher, this is the market pricing in rate hikes.

[00:07:16]So it does the job of rate hikes for the Fed without the Fed actually having to hike raise rates.

[00:07:23]Remember the market always just tries to price in everything.

[00:07:26]Um and so that's what's so important about this. And we'll we'll of course continue to watch this and and um you know, this is this is an example of the market pricing in that there should be future rate hikes.

[00:07:38]In fact, if you go to the FedWatch tool, you can see here, interestingly enough, just a week ago, we had a 10% chance of a rate hike happening next week. Now, we have a 30% chance of a rate hike happening next week.

[00:07:52]This is the highest chance that we've had near-term of a rate hike that I can remember in a very long time. Now, the chances of a rate hike in September are up to 95% and the chances of October, of course, are 100% with a 25% chance of a 50 basis point hike.

[00:08:08]So, the odds of a rate hike are really on the table now, and the market's trying to price those in. How is the market pricing them in?

[00:08:16]Oil up, 10-year yield up, stocks down.

[00:08:19]That is the market pricing in these moments and these rate hikes. So, we'll continue to watch that. Again, that wraps up and that concludes today's market overview, and we will see all of you guys on tomorrow's market overview.