April 25 Financial News: Housing Market Who hurt by Rates the Most? Bear Market is not Fun, Corvette

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morning good afternoon good evening

folks michael zuber one rental at a time

it is monday april 25th

and this is your

daily financial news this is a new show

that you can count on

seven days a week

usually starts at 7 30

sometimes on thursdays we actually go a

little bit early

because we talk to one of our experts at

7 30 instead a couple of quick uh notes

about today one i am feeling under the

weather i am not my normal

i just feel off last night was uh was

rough but uh we are here

uh and hopefully we’ll be interviewing

uh greg and um

gosh just not happy just just just off

this morning so i think taylor taylor is

at 9 30. so again uh

sorry i’m just off i feel terrible

i feel terrible

uh but first let’s congratulate marissa

marissa found the easter egg on my

website one rental at a time

marissa your shirt will go out

probably tomorrow cause

after this i’m going home and taking a

nap probably

when we look at the daily financial news

we really do need to start with the

stock market

and the stock market the nasdaq

specifically

has entered fair market territory it is

down 20 percent from the peak

uh looks like more selling is coming

you’ve been watching my channel for any

length of time

you know that i had called this

weeks ago

right uh

i often call it smart money and dumb

money

the smart money was saying the fed is

serious the dumb money was like

they’re not going to do anything and it

looks like the dumb money is waking up

and we are in earnings season

and while the first

week of earning season was generally

good 75 percent of companies

hit or exceeded expectations

i do not expect once we get into the

throes of computer or consumer and

discretionary uh that the story will be

the same and more importantly multiples

must come in

the fact that we’re still trading as of

this weekend at 22 times

into

potentially stagflation or heaven forbid

recession

that’s got to come in even if earnings

stay flat stocks will fall because of

that um

compression so again be careful out

there as always

what do i talk about

do the work

and recessions bear markets are great

opportunities to make money as greg

dickerson always says

good times never last bedtime bad times

never last

get your shopping list ready get some

dry powder we’ve been talking about all

of this

for quite a while so hopefully you are

doing what we are talking about

i did see an interesting article talking

about mortgage rates and who is hurt by

the sudden jump in mortgage rates

kind of a side note i did check the

10-year treasury it’s actually down this

morning it’s down quite significantly

for a single day

a lot of this i believe is because china

beijing might be going on a similar

lockdown like shanghai

folks this uh

this is this is not good not good so um

yeah there’s there’s stagflation really

is

again as i’ve called it we are in the

midst of stagflation and uh

it’s not it doesn’t feel good to say

uh but when you look at mortgage rates

who is impacted the most i think

obviously for me

first-time homebuyers

the folks that were stretching

uh to get in to that

um

it is um

it’s got to be very very tough for first

time home buyers i suspect

builders will have some cancellations

and have to kind of sell the house twice

builders as greg dickerson talks about

could feel a lot of pain

the banking industry is already feeling

pain just like i said and wells fargo is

again laying off folks validated over

the weekend so again lots of stuff but

what about sellers

that is a great question because most

sellers most sellers

become buyers right there are very few

folks that will sell and just cash out

absolutely some probably a great time to

do it

if you happen to have a second home or

you want to go somewhere and rent i get

it but most people sell and buy

something else either they are the move

up buyer or they are the buyer changing

locations right moving from la to miami

or la to austin or phoenix or whatever

so rates uh really

impact you on both sides so again it’s

very interesting to see what is going on

with rates because buyers and sellers

are definitely being hit by what is

going on right now

i do want to talk about wall street

we’ve talked about wall street buying

residential properties for probably a

year maybe even a year and a half

they are not big operators right they’re

about one percent

they are certainly dominant in certain

markets like phoenix for example

i wonder

i wonder if you’re in phoenix or in one

of these locations i want to hear from

you

i believe wall street is

surprisingly simple to understand

wall street is in the business of making

money

we talked about the tina trade there is

no alternative

the fed broke housing the fed broke the

stock market

i believe the last two years

wall street came to single-family homes

billed for rent

because of the t-nut trade

when i look at the purchases they’ve

done it appears

it appears

that they are aiming for a six percent

what i call yield

risk-adjusted return

well

the 10-year note and all the five-year

note is almost at three percent so my

feeling about wall street

is at some point they will go elsewhere

we shall see

that said i do not believe wall street

will sell

i believe wall street is a good investor

i believe they’ve structured their debt

of the assets they already own at rock

bottom prices

but i do see wall street

not buying as actively as rates go up

they will keep what they have i know a

lot of you are hoping they sell i don’t

think that’s how wall street operates

they buy them fix them up

generate cash flow and they flip them

into a bond so they get all their money

back and keep the asset but i do think

they’re going to stop buying let me know

what you think of that below

uh coca-cola reported it’s the first

earnings of the week they beat top and

bottom top means they sold that’s

revenue right how many piece coke cans

they sold and bottom line is earnings

after all expenses

revenue jumped 16 percent

i called this over the weekend i

suspected that coke would have good

numbers because events

are kicking back off

coca-cola is very event-driven compared

to pepsi pepsi years ago

uh de-risked their portfolio because

they bought frito-lay

so

they’re really

yes they both sell sugar water but pepsi

is far more diversified coke is

definitely events driven so uh they did

hit

twitter

looks like more and more reports are

coming out that uh elon musk will

successfully buy twitter this is

something i’ve talked about being very

likely

the question is

will elon musk be the ceo of three

companies

tesla

spacex twitter

i’ve seen some tweets some mentions from

uh elon musk

that he sees his twitter acquisition as

perhaps the most important thing he has

done free speech

if that is the case

what does he give up

does he give up being the ceo of tesla

does he give up as being the ceo of

spacex

what does he do i think that is a i

think that’s a real question

i don’t know does he nominate someone

for twitter i don’t know

he has the same 24 hours in the day that

you and i have he clearly processes

information at amazing levels

but really ceo of three companies i

don’t know if that’s been done before i

need to look that up

maybe one of you could look that up

maybe google for me has there ever been

somebody who’s been the ceo of three

companies at one time i’m not talking

chairman of the board

or like

you know like celebratory roles i mean

like active ceos so kind of interesting

oil stocks are falling this morning

again based on china right they are

potentially shutting beijing down

it is a

very odd

behavior right i just saw some pictures

this morning where they’re installing

gates and stuff in shanghai to keep

people inside

that is

very it’s very odd behavior

i don’t i don’t that certainly wouldn’t

work here i would hope

more and more talk about central banks

do central banks have the balls to do

what’s necessary

what does that mean

well

as we have learned as we have talked

about for quite a while

the way you break inflation is you get

the fed funds rate one

or two or more points above inflation

so let’s just say we’ve hit peak

inflation we kind of roll over but we

settle at five percent

does any one of you think that powell

has the guts to take the fed funds rate

up to five six or seven percent

i certainly do not at least not right

now

again if you go back and look at my

whiteboard discussion about 2022 and

2023 i think he gets to three percent

this year

maybe four percent next year but i just

can’t see five six or seven so does this

mean inflation just stays with us longer

probably

it does mean that the fed has to

engineer a recession in my opinion

uh we’ve been talking about the fed

breaking housing recently i now think

with what i’m seeing going on in the

stock market my conversation with dan

bird yesterday i think the fed broke the

stock market

think about it two years ago we were

sending money to everyone

lots of those folks were still working

so you took that money and you put it in

robin hood or weeble or whatever

then those companies started to give you

loans or debt on your shares

there’s an amazing amount of leverage

in the stock market at some point that

will capitulate at some point there will

be liquidations

and we could be well on our way to that

i think the fed broke assets

movie theaters i want to hear from you

audience participation time

movie theaters last year did 1.85

billion dollars that’s an increase of

365

i want to know what summer blockbusters

are you looking forward to

uh i just saw a

i don’t know what you call a preview

of top gun or top gun 2 or whatever

they’re calling it that looks like fun

but let me know which movies you are

looking forward to seeing this summer uh

very interesting

general motors

is going to make an electric corvette

wow can you imagine a corvette

fiberglass body

electric kind of dual quad motors that

thing is going to be a spaceship

that thing’s going to fly right my god

i’m gonna have to check one of those out

someday just to maybe rent one and see

how fast they are

and then let’s let’s just kind of round

it out with this

bear markets are not fun

bear markets are not fun they hurt they

hurt the unprepared for sure

hopefully if you’re watching this

channel you’ve been taking action

hopefully you’ve been watching this

channel you have some dry powder

recessions bear markets are amazing

opportunities for those that do the work

it is the best time to make game

changing or life changing money

it is how you can buy assets on the

cheap

so that’s what i look forward to doing

hopefully you are as well yes again

recessions bear markets suck

they are part of the cycle

they are to be appreciated and respected

that’s kind of what i think and again

that we we are in one now according to i

think it was the nasdaq this morning is

down 20 so again

don’t be afraid understand appreciate do

the work

if you’re going to buy some assets in

stocks or crypto great do the work

if you’re looking at real estate great

do the work it’s the same deal

all right everybody take care of

yourself i’m glad i got through this i

really don’t feel that good

so take care of yourself bye

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