This is a HUGE SHIFT

The market obviously has started going red today, giving back some of the enthusiasm of yesterday. Should we care and what does it mean? >> [clears throat] >> My opinion, the answer is no. We really shouldn't care right now. Why? Because a lot of this is driven by the return of the suckening that we knew was coming. The suckening strikes back. The suckening returns. Elon Musk issuing now the largest ever or seeking to issue the largest ever debt financing for the AI buildout. $40 billion to buy Nvidia chips, $10 billion from the banks, $30 billion from bond investors. And frankly, the more expensive we see or the higher yield we see from bonds at corporations, the more people are starting to scratch their heads saying, "Hey, do I want to invest in the S&P 500 and kind [clears throat] of, you know, to take the YOLO, so to speak, on the overall market where it sits now, although its valuation is relatively lower? Or do I just want some kind of bond or preferred bond with yields as high as they are right now? Look, for example, at the Google preferred that they did. They did a mandatory convertible preferred bond, which is a mouthful of uh words. But, they were offering a temporary 6.25% yield that just cliffs in May of 2029. And so, you get this preferred, this tax-preferred dividend yield at 6.25% from Google uh and and then it converts into stock at a bit of a premium, which I think it should have converted at where the actual price is now. But, my point is, like, equity investors are starting to get so many more options to invest in other things that actually provide some yield while you wait. And so, that's what Google pulled off this summer is this get paid while you wait. And so, the more of the suckening we see, the less money, obviously, there's available for the stock market in the shorter term. So, it's not a surprise that yesterday we get this news that Elon's looking to lead the largest debt round, which is different from the big equity round that they did where they raised 80 in equity plus the green shoe plus the 25 billion dollars of debt for refinancing some of the other debt that they had. Put all this together though, coming out now with 40 bill of debt, it gives people other opportunities. And I mean, I get it, especially if you can come out with a preferred dude, a preferred >> [laughter] >> you know, tax preferred this could effectively be if I divide that by 60, this could effectively be closer to an 8 to 9% interest rate for some people based on their tax structure where they are. It's kind of crazy. So, like that does kind of weigh on the stock market's ability to just keep going up every single day. The good news is so far, things are relatively stable. We actually didn't get anywhere close to our line at 748 here on the queues. We've held stable. Now, part of that is because in my opinion, we are actually getting somewhat closer again to a deal with Iran. I know it might not sound like that, but I think a lot of what's happening right now is posturing and negotiating. Look at this. Iranian media is reporting a 60% decrease in oil passing through the Strait of Hormuz. We have full control of the Strait of Hormuz. So, you got the Iranians going Guys, we got control. We're shutting this down. And at the same exact time, you have US Secretary State of State Marco Rubio says Iran has lost complete control. >> [laughter] >> All that stuff, just know noise. It's noise, noise, noise. What matters a lot more is that the Iranians are getting really frustrated. And Donald Trump knows this. Look at this. Iran has already made more than enough concessions in Washington. Every time we negotiate with the Americans, the negotiations end in war. Usually wars begin and then you end with negotiations, but what America does is the opposite. A 12-day war somehow was preceded with negotiations and then we ended up in war. Then we had a 20-day war that was also preceded by negotiations and we ended up in war. Then we had a 13-day war after we signed a memorandum of understanding. So in other words, the Iranians are like, "What's going on here?" And this is frankly Donny T pulling his Art of the Deal chaos theory strategy for making deals and frankly he's got the luxury of time right now. The market's looking at the suckening right now. I mean, you could see it's literally on Bloomberg right now. SPACEX TARGETS MASSIVE CHIP FIRE. I WAS LIKE, "OH MY GOSH." EVERYONE WHO'S BEEN PAYING ATTENTION TO SpaceX knows that they need to raise money. Okay, any any what? Like financial statements 101 could look at the balance sheet and go they don't have the 400 billion dollars they need. They're going to have to raise money. It's just a matter of when they announce it and the stock just ran from 145 to 176. Of course, they're going to take the opportunity to raise money. And so, you know, then it's like, "Darn, the suckening is back." The fact that the Qs are only down .6 off of this is actually a good thing. And I think there's a treasury reason why. I'm going to pitch that treasury reason in just a moment. I want you to see it on what's happening on treasuries because it's really important, but I also want to explain Donald Trump's chaos theory in terms of why he has the I hate to say it, but the luxury of time right now. I do also just want to mention that thank you to all of those of you who are believing in what we're doing at our startup Reinvest and the products that we're launching because yesterday we actually had Stripe Startups. So, Stripe, the company Stripe, flagged our account because we just moved to Stripe as our payment processor. We were at a different payment processor. And so, when people check out, that it it all goes through Stripe now. And they're like, "Sorry, man. We you know, we fixed it. Uh but uh this was likely due to larger than normal first translation size that our risk systems flagged." In other words, like so many people were you were buying the Reinvest 1 product. We kind of broke Stripe for a moment. So, if if you want to be one of those, then join us. >> [laughter] >> Come join us. Go to meetkevin.com. Join us. Uh we do have a price increase on Thursday. You've got the uh Alpha membership, the trade alerts, the stock terminal coming at the end of the year. We've got a complete rebuild for everything with our research terminal that we're building coming between now and the end of the year, which is really really exciting. Uh the Homes product, all nine courses, the course number livestreams, uh Aagent AI for consumers and Aagent AI for businesses coming at the beginning of next year. We're really excited. We've got a really sick product coming for everybody. So, you want lifetime access to that, go ahead and lock that in there. But, let's talk about Trump, and then let's talk about the Treasuries. So, Trump's impression is that right now time gets him a better deal. As Iran is suffering and getting frustrated, Donald Trump gets the benefit of them calling him going, "All right, you know, what if we loosen What if we loosen this a little bit? What if we ask for a little bit less? What about this? What about this? What about this?" And you literally have the Iranians going, "Hey guy Hey, peace is not out of reach." They're on a phone call with Vladimir Putin going, "Hey, we're fully prepared to reach a balanced and fair agreement. Like, we're ready. Please sign our deal, Donald Trump." Because right now the Iranians are waiting for Donald Trump's response. The Iranians are like, "Please sign. We're We're ready. Please. Like, stop the economic pressure, the naval blockade, the flight blockade." Some of those have already been loosened a little bit as a sign of good faith, part of the negotiation process, but they're having trouble. They are getting squeezed from all sides, and Donald Trump realizes this, and this is why Donald Trump recognizes that time gets them a better deal. There are 27 days left before the election, but the market broadly is up, broadly, okay? If you look at individual companies, a lot of individual companies are in fairness suffering. We're going to talk about that in just a moment. Actually, you can see it right here. This was more than 40% of the Russell 3000 members have fallen more than 20% since June, and just a week later, that number was 51% of Russell 3000 members are down more than 20% since June. So, not every stock is crushing it right now, but Donald Trump's looking at the index level. The market is up. Oil is relatively stable around 100, and the 10-year's rise is stabilizing. Now, that's going to make me sound like I've just lost the plot, but let me explain that in just a moment. >> [laughter] >> Okay? So, stay tuned for number four right here. Well, the point is, if this is Donald Trump's impression, then he doesn't have to rush into a deal now. He could rush into the deal between October 20th and Halloween. That would be my guess. The final two weeks of the election, that's Donald Trump wants the biggest magnitude of gas prices coming down. That's the target window for striking a deal. It's after CPI comes out on October 13th. We'll have a Fed meeting at the end of the month, so I wouldn't be surprised if you actually get a deal before the Fed meeting. I think the Fed meeting is on the 28th or the 29th. It's the 28th. The 28th is at the presser. So, on the 20th. So, that really means we're looking at a deal time frame deal announcement IMO will be somewhere between Oct 20 to Oct probably 27. Fed meeting on the 28th. Ideal time frame for gas prices to fall before the election and Fed to hold. That would be my guess. Like that's when Donald Trump's clock runs up. If he doesn't do a deal here, I don't know. There's another problem. But, I suspect that's what's going on. Now, why do I say this about Treasuries and what does this mean for like the you know, breath issue that we've been talking about? Let's talk about that. But, first, there's good news about bonds. So, this is the 6-month chart right here on 10-year Treasury yield. It's basically gone vertical on a on the slope of the line, right? This is a very big problem. The slope matters. But, something has recently changed just over the last few days. And I want you to see it. But, first, I want you to be able to compare the slope of the line uh a little bit earlier. So, if I widen this Dude, I hate being on preview in full screen. >> [laughter] >> This is so dumb. There we go. Just like fights me. You can see how the slope if I kind of draw little slope lines here, if I do a slope here, or if I even go from here, you can see the slope was relatively stable whether I measure here or I measure here. This is the insane part. The September to October period. This is very, very bad. But, I want you to see something good that started happening. It's over the last week, the slope has changed. Look at what the slope has done since about September 27th. That green line is a pretty dang flat slope. And this morning in our course member live streams, I mentioned, "Hey, today the 10-year Treasury is opening up 7 and 1/2 basis points." This market stabilizes or recovers if that 10-year Treasury comes down. 7 and 1/2 bips is crazy for a market open. And so, guess what happened? The 10-year Treasury is only up four bips right now. We recovered. It stabilized again. That does two things. One, it means we were right to point that out that the market would stabilize. That's exactly what happened on the Qs. But, that's just a you know, a shout-out to what we do in our Alpha reports in the course member live streams. But, what matters more and broadly is this. This is an inflection. This is a change, folks. This is really good. This means we have been going from everybody freaking out about the 10-year Treasury going parabolic to all of a sudden it's flatlining. That change in direction is huge. Because think about this as like a derivative. Uh the easiest way to think about this is like let's say we're driving a car, okay? You're driving a car, you're going 30 mph. All of a sudden somebody steps on the gas pedal and you're going 70 mph. And you're like, "Bro, this is uncomfortable." Not that 70 is necessarily uncomfortable, but, you know, it's a small road, let's just say, okay? So, it's uncomfortable. So, you're like, "I don't know, man. This is a little fast, man. This is This is not good. I don't know. I don't like what's going on with the 10-year here. This is crazy." Most people are still of this mindset that, "Oh my gosh, the 10-year is so high. It's skyrocketing." But, if you actually pay close attention, these people have have stopped accelerating. They've taken their foot off the gas, and now all of a sudden we're not getting thrown back into our seat anymore going, "Whoa, this is going fast." It's almost like they've lifted their foot off the gas just enough to go, "Okay, we're no longer accelerating. We're now just cruising." We're still high, you know, but we're not going through that wow, he just stepped on the gas and we went from 30 mph to 70. That acceleration that pushed us back going, "Oh, this is not I don't feel good." We're just cruising at roughly the same speed right now. I wrote here K peak just because in transparency, I will gladly be wrong if I'm wrong, but I still maintain that around this level I I called 527 peak Treasury yields. Obviously, we're slightly above that right now. But what you'll notice is, I mean, I made that call what? A week ago or something like that? At the beginning of this? What's happening is the the slope of the line is actually flattening to that peak call. That's crazy. Now, I'm not trying to say, "Oh, well, you know, that makes me right." I I don't really care about being right. What I care about is how can we all make money? And my takeaway from this is if most people aren't realizing that the foot's now off the accelerator pedal on the 10-year, and we're setting up from a for an Iran deal within the next 20 days, this little suckening bull crap from SpaceX, who gives a flying poopy doopy, man? This is a nothingburger. And this is a really bullish setup, especially if that 10 comes down. And guess what? That's exactly what they talk about in the Zero Hedge piece. In the Zero Hedge piece, what they do is they analyze uh Mike Wilson argument from uh I don't know, where is he now? Yeah, but he's still at Morgan Stanley. Okay. So, uh Morgan Stanley's Mike Wilson they make this analysis on how many stocks are down about the rotation, blah blah blah blah blah. This is not an oil shock. What this bad breadth is is Jackson Hole, the hawkishness coming from the Fed. But, hawkishness coming from the Fed fades when you get pressure off from the Iran Treasury yield side of this market. And that's what we're starting to see happen now. Yesterday, I was talking to somebody who deals with companies that list on Nasdaq, and they were talking about how challenging it is right now for companies who rely on, you know, going public and getting liquidity on public markets to actually list right now because a lot of the exchanges are more interested in doing bigger fund raise deals, bigger deals like SpaceX size deals, which makes sense. If you could do an $80 billion IPO with SpaceX, uh and somebody else wants to do an $8 million IPO, like a super tiny IPO. I mean, you'd have to if my math is right, you'd have to do a thousand of those little deals to just equal one SpaceX deal, right? So, the big financing deals we're getting with either big mega IPOs or big financing deals are giving a lot of the suckening to the big companies, but they're hurting a lot of the smaller companies who need that financing. It's been harder for smaller companies. That is an extreme way of saying as smaller companies get hurt, so do those little and mid-size companies, and that could be one of the reasons why we see market breadth at the lowest level since the dot-com bubble. But, I suspect that'll will reverse, and Mike Wilson argues that as well. Wilson thinks the bond market may be getting ahead of itself. August CPI was firm, but the upside was concentrated in a handful of categories. And they're probably talking about like the cell phone numbers we saw. Uh but anyway, in our view, the bond market has potentially moved to an overly hawkish posture in the near term. They also, in another part of the article, suggest there could be a move where both yields come down and the stock market moves up together and simultaneously. I still think, even where we sit now, a lot of that is ahead of us, not behind us. So, maybe I'm delusional or too excited about it, but I think that's what's happening here. And I think that a lot of the noise that we're hearing out of Iran, about Iran, "Oh, we're going to We're going to shut down Hormuz again. We fully control it." You know, that's literally what you have right here. Look, advisor to IRGC, "Illegal routes for moves are going to be blocked soon." These things come out on purpose, as Donald Trump has the Iranian counter response on his desk. So, it's sort of like "Did you fax the offer to the Americans?" "Yes, sir, we did." "Good. Now tweet that we're going to close Hormuz." And then Pete, "Donald! They're They're threatening to close Hormuz." What's the stock market doing? I I need I need more of a Trump Trump impression here. Uh "Little Pete, the stock market is doing just fine. I don't care what the IRGC says. >> [laughter] >> I'll sign it in 20 days. >> [laughter] >> It's honestly just a clown show. It's all a clown show. Uh but I The bottom line of all of this clown show is the market going to go up. >> [laughter] >> That's my take. That's my take. And I'm sticking to it. And in the meantime, >> Oh, man, your boy Kevin just lost lots of money. Oh, but that's okay. I am with you with you. >> You like that video? Check this one out. I think you're going to love it. >> Why not advertise these things that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. >> Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Paffrath there, financial analyst and YouTuber Meet Kevin. Always great to get your take.