#1036 - Meme Stocks Roar Back… Will It Last? With Tony Greer

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0:59Meme stocks roar back. Will it last? Hi, everyone. Welcome to the Real Vision Daily Briefing. I'm Maggie Lake. With me today is Tony Greer, editor of the Morning Navigator Newsletter, which is, of course, part of the RV Marketplace. So if you'd like to subscribe to Tony's work, you can head to the Marketplace. There's a super easy link there. And if you're a Real Vision member, you get a special offer. Hey there, Tony. It's great to see you. Hello, Maggie. How are you today? I'm doing okay. I'm doing okay. We had kind of an interesting day. The action was a little bit muted for most of the day.

1:30I should say stocks did rally. a little bit more in the afternoon. The S &P 500 up about a half a percent as we close here than Nasdaq, about three quarters of 1%. But it was sort of felt like the market was kind of marking time a little bit, even though we had a headline reading on producer price index that came in a little hotter. Fed Chair Powell talking again, kind of preaching patience that they're kind of sounding a little worried about inflation. And we had meme stocks going crazy again. so there's a lot to unpack. What's top of mind for you as you look across the market action? Man, you nailed it.

2:08Those two things, PPI and meme stocks. Mostly because coming into today, Maggie, I'm looking for confirmation that the S &P breakout is intact, meaning looking back on that sort of technical hold of the 100-day moving average back last month. I sent you guys over a chart with showing those bottoms there and then a recovery of the moving averages. So I'm looking for, I'm head on a swivel looking for reasons for that to continue and or reasons that that idea is going to get bombarded. So I'm like eyes peeled for PPI this morning. And yes, while they came in a little bit hot for April, if you notice the revisions were mashed across the board.

2:55So March PPI revised to down 0.1%. from up 0.2%. Year over year, only 1.8 % versus 2.1%. The Biden administration just told you, remember that inflation you thought you felt last month? Didn't happen, right? So what's key for me there is that that last month was sort of PPI and CPI came in a little hot, and that's what sent two-year yields to the top of the range and caused that pullback in stocks, right? Mm-hmm. If we're kind of refuting one of the ideas that had rates pounding the highs of the move and treasuries pounding the lows of the move, and we're going to kind of throw that out the window and rates are going to have another mean reversion like they did today back down to 480%, that's the most bullish thing I can think of.

3:49Mean reversion trades in the rates markets are extremely bullish equities. So if we're going to get another one of those, like I tweeted this morning, I don't know if CPI or if the S &P is going to wait around for CPI to come out and confirm that it's not a situation that's going to derail the bond market, right? That's the number one fear. You know, even if it comes in a little hot, I mean, bonds aren't going to tank after what we just saw with the downward revision in PPI. I mean, that takes a lot of the sting out of it ahead of time. So I feel like we're getting confirmation today. You know, we've got widespread participation in the market.

4:24In the equity market, retail's rallying at the top. We've got breakouts in miners and copper, high-grade copper right on the highs with a really great story there. Sprott Physical Trust is being launched in copper as the market is tightening on the COMEX. There's a lot of reason to be bullish there. The market looks good to me. I think that you'll see on Friday, barring a world-ending CPI number tomorrow, stocks are in a bull market and they're going to show you what they're all about on Friday's close. Yeah. I mean, and Tony, you did tweet that out. And Brian and I were talking about that. We're like, oh, Tony sounds kind of bullish in anticipation of this conversation.

5:02So once again, you nailed it because markets were doing nothing when you tweeted that out. But again, I know you're sort of always looking for that. And interesting to see that rally. It is notable going into CPI. And by the way, economists, even though people always joke about them being really boring, they always talk about looking at the trend, not just one number, right? Because we do get these revisions. And so they always like to string together at least three reports, looking at some of those past revisions before they lock on to anything. So, you know, if that's the setup for tomorrow and Jonas was asking about copper, we'll go back and circle back to that.

5:37But Jonas, I think that gives you a little indication of what was happening. So, so Tony, and by the way, it looks like NASDAQ is at a record close. is what is what's the sentiment been like? Because it felt like it just has been feeling like at least some of the noise that people keep looking for a pullback. They're getting worried. But it seems like one given opportunity, the market rallies. What do you you know, it does the sentiment line up with what we're seeing in the market action. Is it just that the people that are bearish have a bigger megaphone sometimes? Yeah, yeah. And they sound very smart, too, because it sounds like they see something that the market isn't seeing.

6:15you know and so it sounds like that you know you're missing something if you're paying attention to all this bull market stuff that's going on where the S &P is sorting out winners and losers and ending up with advance and advance you know at the end of the day and at the end of the week I think with the most important thing beyond sentiment which I think is a little bit negative with the meme stock story that's back with the return of the roaring kitty I think it is on Twitter. But I kind of have a noise cancellation policy on that. And I like automatically had to turn it back on when you guys said that we might discuss it on the show today.

6:48And I was like, OK, let me let me take off my headphones that block out everything about meme stocks and sort of get a handle on what I think is going on. But before we get to that, the most important thing for me is that the bond market we just said is barely moving on this PPI data because the PPI data is not threatening. The curve has been like, why are you waking me up for this? Not moving. The curve is dead stable, minus 33, minus 35 basis points and twos, tens. You can check it every day. And if the curve isn't going to mind the data that's coming out, I'm certainly not going to mind the data that's coming out because a kink in the curve will mean that that's changing Fed expectations now.

7:32Whoa, whoa, we got an uncertainty coming in here and we are not seeing that. You know, we're seeing more reversion to the mean trades and rates. We're seeing a stable curve. And that's why that's why I can wake up bullish equity still. And so to get to whenever you want to get to the meme thing. Hey, everyone, we're going to take a quick break right now to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet.

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8:58Yeah, let's talk about that. And we did, we did, and I know, I know sometimes, you know, you do like sort of really try to stay focused on what's important, but we wanted to bring it up because we know everyone's thinking about, first of all, it's all over the headlines, right? But before we even started the show, we had Peter asking, you know, what do I make of this? Because it felt like it kind of came out of nowhere. It took some people by surprise. I want to run, it came up with a conversation that Roger Hurst and Raul had today. And I want to run a clip of Raul's take on what he was thinking about as we watch these stocks take off again.

9:31Let's run that and then we'll talk on the other side. Good. On the other side is ask the question, really interesting what happened yesterday. Roaring Kitty, whether it's him or somebody who's taken his account, puts a bunch of videos with not even naming GameStop. and GameStop did, I don't know what it did yesterday. About 100, I think it's 155 from lows to highs today, pre-market. I haven't seen it since the market opened. What is that about? What is going on with the obsession with meme coins, which everybody knows are worthless, apart from how long can they capture attention and culture for?

10:10Some of them, like Doge, have lasted quite a while, and others last a day. So what the fuck is that all about? And this is all about the fact that rates are high and property prices are too high and wages are too low. It's because young people don't have a chance. So what they've become is highly speculative. And guess what? The odds are better than going to Vegas, where the house always wins. The house doesn't always win. There's probabilities. And Americans spend, I think it's$100 billion a year on lottery tickets,$100 billion a year, of which the payout rate for the big one is one in 300 million.

10:57A payout rate of a million dollars plus is, let's say, one in 20 million. Is the odds in the meme coin casino better than one in 20 million? Yes. So it's actually rational. And it's actually rational because if you ask most of these millennials what they do, is they put their allotted amount to their 401k, as they're told to do, and they punt the rest. Some interesting thoughts there from Raoul. I don't know, Tony, when you look at this, what jumps to mind for you? Is it an indication of anything? Yeah, it is. Absolutely, it is. It's an indication of a lot of excess liquidity in the market. And I would love to hear what Michael Howell has to say about this as the expert on market liquidity.

11:49But I would bet that he would agree that it is a function of there being lots of liquidity in the markets. Lots of liquidity can slosh around in the markets for a really long time. And betting on that liquidity to all of a sudden be sucked out is not the kind of trade that I'm into at all. Yeah. So, you know, when I look at what happened last time, their main stocks were, you know, last time AMC traded 450 back in 2021 was another period that there was enormous liquidity in the markets. Bitcoin was pounding 70K at the highs for the first time that year. Right. People thought that that might have been a bull, you know, an equity sentiment that the equity market was going to take a big dump from there.

12:35Well, that's a thousand points ago in the S &P. The S &P was a 4 ,100 point item in 2021 when AMC was going berserk. So if you're going to sell the S &P at 5 ,200 now with the same idea, I'm the bid. I'll buy those from you. And we'll see how this turns out because I'm be willing to bet that this liquidity is sloshing around and it's going to stay sloshing around. I feel like it's just shown up today. If AMC starts exploding, today, maybe we have two or three months of crazy GameStop and AMC headlines. I have no idea. But I know that I'm going to keep that on the noise cancellation policy. I'm going to keep staring at rates and the curve, at the mean reversion trades in the rates market and the stable curve.

13:20And I'm going to be choosing my fighters, my breakouts, because they're happening all over the screens today. There's a blue sky breakout in cloud storage today, SKYY, one of the sectors we've been following closely in the Navigator, you know, just cleared all the moving averages after a great consolidation today. I mean, those are bull market events. And now we've got all this is a market that is still being bridled by CPI, which isn't out tomorrow. So that's an unknown that's still got to come off of the board. I'm telling you, if that unknown comes off the board and it's not a disaster, the S &P is going to show you what this bull market is all about by Friday's close.

13:58That's what I think. Wow. Wow, great stuff. Yeah, really interesting point. So I think that there are some people, it was interesting, Rao wasn't saying it wasn't risky or casino, but that it's just, that's the choice they're making. It's like sort of throw the risky bet, the chip down, knowing it could all go. When you look at a high momentum stock like that though, as an experienced trader, if there are folks sitting out there who are seeing that, who decide, yeah, Instead of playing the lottery, I'm going to have a go at it. You just, what are some things to keep in mind in that kind of environment?

14:35What it means is the casino is full and it's rocking and everyone has a drink and the music is playing, right? I understand that you may want to be one of the first ones to leave that party, but what it's telling you is that the party is going on. It is telling you that everything from the slots to the$5 blackjack table to the Baccarat room are full. The high rollers are playing. The grandmas are pounding dollars into the slot machine. Everybody has a seat at the casino right now. Does that mean it's closed? No. Does that mean it's about to get shut down? I mean, no, I don't think so. Maybe it peters out that kind of thing, just like, you know, the liquidity will finally, you know, kind of subside and that wave, the tide of that wave will kind of come rolling back in.

15:23But man, that's not something that you can bet on, you know, you can't bet on the machine stop blinking and you can't bet on the roulette wheel stop and spinning, you know, so that's, you know, this to me, it just says that the casino is full and every player that wants a seat has got one. And there's probably five deep at the blackjack table. That's all it tells me. Yeah. Yeah. I just want to underscore that, you know, we try to do it. Tony's doing it. You know, this is a no judgment zone when it comes to this stuff. It's just, you know, but but you do have to sort of, you know, go in eyes wide open.

15:56Right. We talk about this all the time. You know, make sure it's money you can lose and watch out for leverage. If you're going to if you're going to play that kind of hot game in the casino, make sure you have your head on your shoulders. Right. But but it is sort of wild to see it all happen again. And I'm sure a lot of people have vested interest in being on the sidelines of this and talking about it, too, because it's got social media alight. So just just be careful. But, you know, interesting, Tony. that we're talking about liquidity because we didn't see crypto go up. You know, if this is a full-on risk-on environment, we're not seeing that in crypto.

16:30Maybe it'll happen, but that's just kind of sitting just about where it's been down a little on the day. So that's not moving in tandem with the NASDAQ or with meme stocks. No, but you can make a case that it fits the narrative of what went on in the crypto market where, you know, everybody sort of chased, you know, the post-ETF, institutional chase in Bitcoin was all over the screens. It was quite obvious, very real, very large in size. And so when there's that much money coming into that market, you got to think that there's plenty of smarties that are like, hold on a second, I'm not going to chase it up here.

17:10And so now what's happening is that the bids are getting filled in on the way down, but the bids are there. That's what it tells me. And I think that that kind of has a, you know, a crossover to the liquidity in the markets for meme stocks, for the S &P to get rolling again. But the same thing looks to me in Bitcoin where, you know, you could make a case where Bitcoin should have failed the highs and backed off hard. I mean, to like 50K and nothing doing, man, it's coming barking back in my mind. I'm kind of looking at it the other way, Maggie, where, wow, Bitcoin is really impressing me. You know what I mean?

17:42I don't have it on at all. And, you know, I kind of called when it was going to be around the highs because sentiment got frost. I mean, smoking hot again. And so the pullback came. But man, the bids are lined up. The thing is forming a pennant flag. It looks like you could break out to the upside again. Then you're going to see a liquidity storm happening on the upside. And it's going to be everybody. They got bearish years stopping out. But we'll get to that trade eventually. Yeah. Great, great point. And again, this is like it's so great because this is really Tony using all of his years of experience from that trading perspective and watching that action that just sends signals.

18:19Tony, it's so great to hear you dissect that. Christopher has the greatest comment. You got to get a t-shirt made of this. Tony is the reverend in the church of what's happening now. I love that. I love that. We like when you preach Tony. That's a great one, Christopher. That's amazing. Thank you, Christopher. Christopher is one of the kings of our chat. That's awesome. So, all right, let's talk about, we've got all this liquidity. What does that mean for bonds? Are you expecting a bond rally as well? Are we going to see bonds and stocks move in correlation? Are we just not looking at a run-up in yields?

18:58Is there more opportunity, you feel like, in equities right now because of the scenario you just painted? Yes, there are, because the bond yields not breaking the top of the range are, you know, that's a bullish scenario for me. You know, we saw some hot inflation data, the bond market sold off, that made perfect sense. What did the equity market do? We experienced some turbulence. We had a little, I guess it was like a five to 8 % pullback into the moving averages, hardly a pullback that you could sink your teeth into. Another market that feels like there were bids waiting on the way down. And I'm sure a lot of them got filled in and I'm sure there's a lot more that say, oh man, give me another look at that level down there and I'm really going to back up the truck.

19:39So when the conditions are, you know, the alternatives are, you know, there's a number of sectors that you can play right now. And I think that that's kind of what's supporting the S &P. And when I look at the technicals, when I look at what sectors are breaking out, what sectors are recovering, I mean, this whole cocktail has tremendous upside to me. So that's how I'm looking at it, Maggie. I hope I didn't get away from the question too far. No, not at all. Not at all. So I just want to circle back to copper a little bit because we have a couple of questions. So we went through it quickly, but just break down.

20:15Jonas was asking what happened in copper today and in particular, the front July, September spread. So is this around the Sprott movement? Was that the main cat or is that just the one of the pieces of the puzzle? That would certainly be a piece of the puzzle, Maggie. That's correct. It's got to be some piece of the puzzle. I mean, Sprott may have gone out and borrowed a whole bunch of copper that tightened up this market and sent the front spread in high-grade copper, which is the local exchange-traded copper. That June-July spread went from a dollar contango to two and a quarter dollars backward dated in a month's time.

20:54Right. And then we just get the launch, the news release of the Sprott copper physical ETF. Could they have bought and borrowed copper ahead of that, anticipating demand? Absolutely. You know, could it be the sanctions that we're putting on Russia in the metals markets and on China and things like that, tightening the markets up could be another contributing factor. But what's going on is that, you know, we're breaking historic levels with copper back above 10K, great demand story, great fundamental picture. And now the exchanges are tightening up. So that's when everybody thinks that they can sort of put those plays on the pad.

21:30And that's kind of feeds into one of the reasons that keeps me bullish stocks while we're on the topic is because when natural resources starts participating with the tech rally, that's when the S &P really starts legging into a few hundred point rallies. So we'll see if that transpires. But copper looks great. Yeah. It sounds like you're bullish because Ralph is asking, Is there more room for copper to run given the price action? Seems like you think there is. If they're going to reflate China, right, with stimulus there, you know, and then maybe that's another piece of the puzzle, Maggie. And I've only been expressing length in base metals via length in metals, industrial metals and miners, XME, which we have on the pad, on the Navigator, that we've had for sort of weeks and we're making money on it, knock on wood.

22:16But that's the expression of that trade, is saying that there could be a China reflation trade. There could be a real push toward electric battery power. The exchanges are finally tight again. Maybe this is the time that copper breaks out and rallies for a year. We're going to take another quick break to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

22:43mark asking your thoughts on oil and the commodity complex so do you think it's bullish across the border they're kind of winners and losers or more opportunity than not in for some of these are you separating it out are you bullish the whole class yeah i think you need to look at copper as the copper trade you know you can look at it as an offshoot of hey this is you know part of the metal strength that we're seeing. And it's definitely a version of that. But I don't compare it to the oil markets at all right now or anything in energy, not natural gas. Natural gas, you really can't compare to crude oil right now.

23:18You can't compare what's going on in oil to copper. I think to me, I have me right now. I'm at the mercy of what oil does because I don't have a view and I don't have a position. And if it went up$10 tomorrow morning or down$10, I would just be forced to deal with it because I have nothing on and I have no reaction whatsoever to that. And so I feel like the oil trade is in and of itself right now. There's probably downside risk with an election ahead of us. There's maybe upside risk because the Middle East is batshit crazy and the Red Sea is full of traffic. Where the next 10 bucks is, your guess is as good as mine, Maggie.

23:54So I'm kind of at mercy of the oil price myself, but it's not doing anything that's going to kill my equity view or anything like that right now. So that's what's important to me. I guess when we're talking about risk on, I should ask you about technology. We've been getting a lot of AI headlines in the last few days. We talked a lot about it yesterday with our guests. How are you feeling about tech here? If rates are going to back off the highs and tech has been consolidating, then I can make a case that if rates continue to consolidate around here, that tech is going to get into its bull market rally mode and get going.

24:29You know, NVIDIA still looks amazing. The chart looks great. It kind of looks like Bitcoin where you'd be like, wow, that's a top. It should really back off now. How about now? How about now? This looks like it should back up. No, it's not backing off. It's not backing off. You know what I mean? So it's like you have to pay attention to that. And, you know, it's still I expect to see those tailwinds come and go. You know, you expect to see the tech tailwinds to be really strong when you get that crappy GDP number or that crappy employment print and bonds rally and rates are on the lows. And it's like, well, there goes semiconductors, you know, or there goes cloud storage, as in today's case, or there goes, you know, whichever sector, internet stocks, because Google just beat like, you know, beat the pants off earnings or whatever it is.