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How’s it going everybody this is beat the bush today i’m gonna talk about the looming stock market reckoning why do i call it a reckoning because the current stock market valuations is completely unhinged from the fundamentals before i begin this video is sponsored by we bull we bull is a free trading app with over 1 million downloads get yourself a free sock
If you just sign up and then if you deposit another hundred dollars in your account you’ll get another free share of stock unemployment rate right now sits at fourteen point seven percent now if you just kind of think about this you kind of need a reference on how bad this really is at the peak of the great depression in august 1932 it had an unemployment rate of
Twenty five point five percent so it’s like two thirds way there at the height of the 2008 financial crisis the unemployment rate was around ten percent given that the unemployment rate is higher some people might argue that this is very temporary people got laid off temporarily because of the lockdown and they think that if we come out of lockdown all of sudden
People are gonna get their jobs back or very very quickly recover from this but the truth here is the longer that we lock down the more permanent these jobs loss is gonna be and these days it’s trickling into tech is trickling into other jobs other than the service industry check out this article over here bank of america sees about a trillion dollars in cash to
Go into stocks now whenever i look at the news there’s always some bull case and then there’s always some bear cases so who do you actually believe what i think of is kind of like myself because i have a lot of cash sitting on the sidelines right now but there’s gonna be a reason that i’m gonna actually start spending this money and buying some equities because
I’m looking for a bottom here i’m looking for the equities to be somewhat safe and that i’m not gonna see a dramatic loss in the near future so in order for this one trillion dollars to start going back into the market something needs to happen maybe there’s a vaccine maybe the reopening of the economy sequence is safe enough that it’s gone on for a little while
And then we do not see a second way of coming and this is gonna be kind of iffy because there’s no guarantee that it won’t come no matter how long you wait maybe like a month or two later then when people get complacent that is when the second wave comes again in order for people to put their money in people are really looking for their wee infection to be under
Control although this article is kind of upbeat it’s saying oh there’s a lot of money it’s suddenly gonna go all into equities that’s why this is a bull case when i look at this article i don’t see it as a bull case because there’s a criteria here people need to see something change in order for that money to start going in check out this other pessimistic article
Over here mortgage delinquencies surged by 1.6 million in april one point six million doesn’t really mean that much to me because i have no reference to how much it was before so typically the delinquency rate back in march 2020 it’s around 3% so in april the fact that it doubled to six point four five percent this is a really really bad thing doubling is a huge
Number here so the prior record is delinquency going up by one percent this is three times as bad you wonder why are there so much delinquencies and yet the stock market keeps roaring upwards this is indeed very puzzling to me but i feel like eventually the stock market is gonna realize what’s going on here aside from all the federal money printing and stuff just
Take a look at the john hopkins dashboard i’m coming back to this because i showed this at the very beginning over in march timeframe this is when i showed it and i showed it around five hundred thousand seven hundred thousand cases worldwide and i said oh my gosh you know at this rate it’s gonna hit to 1 million infections worldwide in roughly seven days ten
Days or so that’s when it actually happened and look at it now it’s at five million so if i said back then when it was 700,000 that it’s gonna head towards him five million no one’s gonna believe me but what i’m looking at right now is five million it looks like it’s gonna easily double to ten million and this is gonna be a far off case but we see like a hundred
Thousand new cases every single day if this accelerates but right now it’s not because it’s kind of staying flat in order to get another five million cases we only need me six or seven weeks of whatever that is happening right now the current rate is just 100k every single day if you check out the world daily cases here it hasn’t been improving some countries are
Going down yes i wish i was in those countries some countries are actually going up and some are sort of staying flat some more going down a little bit at a time but if you round everything out it’s kind of staying flat across the world so why should you be concerned about if it stays flat across the world it’s because if some country has an infection that’s out
Of control this is gonna be very hard to not really cases back into your own country as long as there is some country that has an explosive case of infection said country is gonna have to brace itself with very very strict quarantine measures with anyone that goes in and if you have these measures going on the travel industry is gonna be decimated people are not
Going to travel to a country that has a two-week quarantine requirement and so if you have these measures in place you can kind of see like the entire world is not doing very well right now if you have the tourism industry not doing very well people are not making money people are hurting and so this in turn affects the entire world economy the united states is not
Immune to this so there’s gonna be a trickling effect it’s going to leak into gdp everything else now if you zoom in on us cases only we can see that the daily new infections is going down but then it’s going down way too slowly compared to some other countries and if you just simply extrapolate this it looks like if we keep on doing whatever we’re doing right
Now it’s gonna hit zero around september which is a really really long time and it’s only doing this because we have so much lockdown measures in place this is only going down because we have these shelter in place and requirements going on because we’re relaxing these requirements a little bit what i see happening is that it’s not going to keep on going down
Like the initial trajectory all the way to september what’s gonna happen is it’s gonna flatten now and after i think two weeks or so it might actually come back up a little bit at which rate is gonna come back up really depends on how stringent the social distancing measures are gonna be how fast we will relax things the fact is most americans including myself
We’re just sick and tired of sheltering in place this is very detrimental to you know your mental well-being you just want to go out and do something you want things to return back to normal meet your family meet your friends and stuff and i personally really really want to do this but i think it is indeed too detrimental to do a full lockdown if we do this for
A month in months it’s just gonna i don’t know that that’s when it’s really gonna tank the stock market and i think probably the realistic thing to do is make sure all the old people home they’re very very well protected people have to sanitize their hands or something or maybe there’s gonna be a strict requirement of visitors and i still see at my local grocery
Store there are one-way aisles and people just try to pass by each other people sort of try to social distance but then it’s not strictly enforced even though people have their masks on and stuff so just me going to a supermarket i panic a little bit just seeing what’s happening in the bay area so here is what i think it’s gonna happen we’re gonna start relaxing
All these criterias pretty soon over in california and across the entire united states probably sometime the first week of june june 3rd or so we’re gonna level off in terms of the number of new infections and i think it might take another week or two before the infection rate per day goes up again and this is gonna be very hard to see and i think if this happens
And i think it’s there’s a high likelihood of this happening 65 75 percent in in my mental record of probably ability here and when this happens for a consecutive few days or so i think this is when the stock market is gonna freak out it’s gonna go oh my gosh things are gonna get out of control cases per day is increasing then that is when we’re gonna see a drastic
Drop in the stock market and then maybe the policies is gonna react to this so this is why i have to monitor the market very very closely i don’t know what’s gonna happen a few weeks from now because this all depends on the policies are enacted in place how are people reacting are people taking this seriously because if reinfection happens and actual people die
That they know in front of them they actually believed this is true instead of saying this is a hoax or whatever then when people start believing all this and follow the social distancing rules follow you know strictly having a mask on and not like the cashier where they just kind of pull it below their nose this is the cashier i had they had the mask right here
And that’s not predicting them at all and this is how you can get it actually so this is my near-term prediction if the policies and if the way that people react changes based on what happens then of course i need to change my prediction as well thanks for watching this video i hope you guys enjoyed it this is my current standing i am still 100 percent cash over
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Transcribed from video
Looming Stock Market Reckoning By BeatTheBush
