Bull Trap or the Real Thing? Plus, Dana Mattioli on Amazon, Coinbase Joins the S&P 500, China Tariffs LOL

28:17So it could really offer low prices. And then the whole retail landscape is this graveyard of former retailers that it used to compete against. Yes. It has benefited from this perception that it has the lowest prices for years after that's actually been true. Being pro-consumer. Correct. That was the vibe. That it was low prices, lower than everyone else. Now, what's really fascinating is now that they have this retail graveyard, what they've done is they've been able to extract tons of fees from all those third-party sellers on the website. So a few years ago, they used to take 19 cents on the dollar from someone selling something on Amazon.

28:54Today, that's 45 cents on the dollar. So those sellers have had to raise their prices on Amazon. So we all pay more to buy those prices so that they have some sort of margin. And that gets concealed when you think about Amazon. And that's what the FTC calls out. Okay. This type of behavior is raising prices and creating this like inflationary. So the third party sellers thing, you've got a section of book we talk about. At first, they try to launch an eBay clone. The problem is nobody shows up for it. Turns out people just like going to eBay and eBay is doing it better. And they had already reached this nucleus of buyers and sellers where it was really hard to justify a reason for there to be a second one.

29:38but they pivot that effort into marketplace which is for the first time not only can you buy from amazon but you can buy from a third party who may even be competing with amazon itself on amazon consumers love it it opens up this whole um it opens up this whole new world of more sellers selling more things and i think it's good for amazon because they don't have to hold the inventory but they can satisfy the transaction. Okay, so that becomes really important to Amazon. It's like the happiest mistake because it opens the doors to all these sellers, right? It's like the best mistake you can make.

30:19Right, but the sellers are like frogs hopping into a pot of water that's not yet boiling because they give up their own e-commerce ambitions of building their own sites, their own marketplaces. They just say, you know what? I could just sell tons of stuff right there. All the customers are there. That's sort of what happens on one side. The other side is, you know, Amazon without having to hold an inventory, but having every SKU you could possibly buy, you have those monoline retailers like your linens and things you talk about in the book. It's like, how could we possibly justify being a standalone operator?

30:58All right. All right. So that's kind of how that all plays out. But again, most of it is to the benefit of the consumer. So this suit, the current suit is really more about competing businesses. And now these competing businesses are like, we can't even make money on this site. Like it was one thing when we could make money, we can't make money at all. Yeah, it's actually not even about competing businesses. It's about them kind of extorting their third party sellers. And it actually is a standard consumer welfare lawsuit about prices being raised for customers, which is interesting because the FTC had moved away from that under Lena Khan, but this is sort of her white whale.

31:35And I think this is more of a carefully constructed lawsuit. Okay. Amazon would say, we tried it the other way. We let third party sellers handle their own shipping and logistics. And it was a customer service nightmare. And so these are Amazon customers. And the only way to do this business and preserve our reputation as the best place to buy things online, is to force these third-party sellers or not force, persuade these third-party sellers to use us for shipping and fulfillment. There is some merit to that argument to anyone that's ever attempted an e-commerce transaction with somebody other than Amazon.

32:20Amazon's just better at getting the thing to your door. Sure. I mean, it's the biggest logistic network in the US, bigger than UPS and FedEx, right? They're very good at shipping. Yeah. But, you know, I think a lot of those sellers would say like they are being forced to use Amazon logistics because then if you're not, you can't be on Amazon Prime. And that's where 200 million members are, right? So it's this pay to play atmosphere, they would say. Right. So I guess the court is going to have to look at what's in the best interest. So it's tricky because I could see both arguments. if Amazon's logistics are literally the best version for the consumer, you can sort of understand why they would charge the third-party sellers more to be able to have access to it.

33:08Yeah, it'd be interesting to see what they come up with on Remedy is. You can almost see them making a world where Amazon logistics has to be its own company. They spin it out and then it's a separate competitor and that can be something that's explored. I don't think it would be like an AWS spinoff because it doesn't really have any bearing on the argument they made. But I think that logistics would be a big part of it. I wonder how Shopify factors into this because effectively the pitch on Shopify is we can give any seller Amazon-like payment and shipping and fulfillment capabilities. And would Amazon be able to point to them and say, what do you mean Monopoly?

33:53Spotify is right there based in Canada, but millions of merchants all over the place utilizing their services. We compete with them. I guess the flip side of that would be, well, why can't a merchant on Amazon using it to get customers use their Shopify shipping to fulfill the two-day promise and stay in prime, right? If they're so good. The case about Alphabet paying Apple billions of dollars for Google to be the default search engine on the iOS ecosystem's browsers, it actually went against the tech giants. And there is going to be a remedy. And we don't know exactly what it's going to be. Wall Street has weighed in by selling off shares of Alphabet because it looks like they're not going to be able to maintain their hold or at least pay to maintain it the way that they were.

34:51So this case against Amazon and its outcome absolutely is going to have a big impact, especially in a worst case scenario. I know it's early, but how do you think this thing ultimately plays out. Well, it's interesting. The book makes a lot of comparisons between Jeff Bezos and John Rockefeller of Standard Oil. In the first chapter, you start down that road. Yeah. And what happened with Standard Oil, and there's just so many similarities, it's kind of crazy. What happened with Standard Oil is John Rockefeller fought a breakup of Standard Oil tooth and nail. He did not want his company to be broken up.

35:30In 1911, the Supreme Court breaks it up into 34 different companies. 20 years after the antitrust suit started. Exactly. Exactly. Okay. And it winds up being the best thing to ever happen to John Rockefeller or Standard Oil because all those companies separated from each other become behemoths in their own right. And some of them quadruple in stock market value. Okay. And he's wealthier beyond compare. And I think that there could be like an analog here with Amazon that they're resisting a breakup. This conglomerate model serves them very well. They're like one of the last conglomerates that actually works because they're able to leverage their power with their vendors and their competitors and the people they compete against.

36:12It's a great effect. But I think if it were to be broken up, it might even be a standard oil sort of scenario where it unleashes more value. So I love that idea. I think a lot of people are starting to talk about, you know, they think about the problems at Alphabet. Well, what if YouTube were a standalone business or, okay. So the baby bells, which were spun out of AT &T, when that was broken up, that was done along regional lines. They basically created like the Northeast and the Southeast and the Southwest, and each of those became standalone companies. And then they all re-merged with other companies anyway, to the point where they basically don't exist anymore.

36:54I don't know exactly how Standard Oil, along which lines those pieces were broken up. I feel like it was like Texaco and - Exxon is one of them. Exxon. Mobil is one of them, right? Was that regional too or was that - I think some of it was regional, but not all of it. Like there was Standard Oil of New Jersey, for instance, that became its own thing. And then some of them wound up merging again later. Chevron was originally a Standard Oil company, right? I guess the question is like if Amazon were to contemplate – well, I guess if a breakup were forced on them as the ultimate remedy and then maybe they fought that for five or ten years.

37:31But like what – let's say they acceded to it and they said, you know what? You're right. We'll break up. We don't want to deal with this anymore. Along what lines? You separating the third-party marketplace business from the first-party business? Or we're taking the Lord of the Rings show and spinning that out into its own – I can't even imagine what the different permutations could be. But I feel like there could be so many of them. I mean this is like 12 different publicly traded companies in one company. Their advertising arm, the retail arm, cloud computing, logistics, movie studio, you name it, right?

38:07Yeah, it could be anything. everywhere. Kuiper's coming online now, right? That's another business that's going to compete with SpaceX. So there's just so many different ways you could hypothetically chop it up. But if you read the FTC lawsuit, that's really focused on one area. So I'd imagine logistics could be a big part of that. Okay. You mentioned Kuiper. So let's end with that and then we'll tell people where they can get the book to read more. This is going to be the head-to-head that, I think they launched 127 satellites last week or two weeks ago. They want to have their own version of Starlink.

38:47I think it's great for the world and for the consumer for it not just to be Starlink. Like I think having at least two players there offering internet service. and so it's going to be somebody versus Tesla or somebody versus Elon Musk, Amazon versus Elon Musk. Sounds like it even has a shot. Do you think that this is going to be a really interesting battle? Do you think that this is going to be kind of like a mono a mono Musk versus Bezos, even though Bezos isn't the CEO per se of Amazon right now? He's executive chair still, so he's still very much involved. This is something very much like that was part of Jeff's vision here, you know, deals with space, which is one of his like big areas.

39:35I think it's really fascinating. For a very long time, Starlink has been the player in this space, no pun intended. And to see Amazon come online, I mean, later than they wanted to, I think it could, you know, we could see some big ramifications here. So it's kind of exciting to watch. Yeah. Prime users having a discount for internet service. as like an introductory way to build market share sounds like it's really going to make the SpaceX folks not very happy with having that as a competitor. So if they can get the capacity online and get more of, I think they said they want to have like 1 ,200 satellites in the sky in the next two years or something like that.

40:16It sounds like it's going to be the next battleground. Timing is interesting too, because it comes right as Jeff Bezos and Elon Musk sort of settled their years long pissing match, you know, or Elon would really criticize him online a lot about Blue Origin, his space rocket company. So settled it at least settled it at least for now. For now. All right. So I want, I want to send people to where they can get the book because I've been an Amazon shareholder forever, but I learned so much just going back through some of the old stories and your reporting is really, I mentioned to you before we started recording.

40:53It seems like you've had a thousand conversations with people about this company in order to write this book. It's just so well done. And there's so much in here that I think most people haven't heard before or didn't fully understand. Um, so I wanted to congratulate you on the everything war. Um, and, uh, I asked you before, like, what was the most exciting feedback that you got? You mentioned the company was like, not as combative about what you wrote and what you published. Well, I was very methodical on that. I spoke to 600 people and I had hundreds of pages of internal documents to bulletproof it.

41:29Yeah. Yeah. Okay. Well, I think it's incredible. And I want people who are looking for their next great business book to strongly consider the everything war. Dana, thank you so much for coming by and chatting with me. I really appreciated it. And hope we talk again. Thanks for having me.

42:05Ladies and gentlemen, welcome to What Are Your Thoughts? An all new edition. It's Tuesday night, five o 'clock on the East Coast. That means Michael and I are live interacting with the chat. Chad, say hello to Michael. He's going to pay attention. He wants to see. No, I'm not. You have my full attention. That's how I do it here. All right. Joe Altamoro is here. Akbar Muhammad. What up? Ben is here. Jay Luther. John Carlo. Magnus is back. Chris is back. Georgie, we see you. The doctor is here. Guys, Nicole is in the chat tonight. Say hello to Nicole, everybody. All right. We got the whole gang is here.

42:48This is an incredible moment in market history I have almost never seen anything like this in my entire life And we have so much to talk about But before we do, Michael, we have a sponsor tonight Who's the sponsor of the show? Guys, it's Public And I want you to do something Leave the old, boring, legacy, outdated platforms That make it hard for you to invest Public makes it really easy What do you want? Crypto, stocks good old-fashioned bonds, they got it. Cash account. Cash. Like a high interest cash account if you don't know what to invest in or you want to sit out. You want to say, you know what?

43:32This is not for me. I'm going to earn a little bit of interest while I figure out what I think is going to happen or how much risk I want to take. That's always an option too. I'll tell you another thing. you also can get up to$10 ,000 if you transfer an existing brokerage account over to Public. So let's tell people where to go. Public.com slash W-A-Y-T to learn more. Paid for by Public Investing. Full disclosures in podcast description. All right. Here's where I want to start. And I know you wanted to start here too. Josh was right. So we had like, you weren't debating me really. You just, you weren't understanding what I was trying to say.

44:19We had this conversation so much. No, no, no, no, no. I don't think you were on the other side of this for me. You just were like, you're like, wait, I don't understand. That's all. But we had like a little, a flare up on the show a couple of weeks ago. His Cali was on last week. It was like, why? Like, what is the market responding to? Why is the market rallying? Right. And I don't know. All I know is the market looks like they're now laughing at the tariff headlines. So my best guess at the time, and now it seems like it was the right guess, my best guess is the market no longer believes circa early May what it believed in early April, which was that tariffs were going to be here to stay.

45:03They're going to get worse. People just basically said, you know what? He's capitulating already. carve out for semiconductors, carve out for phones. Now he's talking to the auto industry. Now he's telling the retailers, don't worry, and winking. So it was just like kind of like the stock market each day was like, yeah, this tariff thing's not real. And that's where it like ended up landing. And nobody could really predict that in advance. But I feel like day by day, stocks started to just decide this is all going to be a big joke in the end. And that's what ended up happening um you had a capitulation over the weekend so i just wanted to get your take on like you know was that the right was that the right instinct like why stocks are rallying they definitely weren't rallying because we're going to get all this tariff revenue that's going to offset income tax yeah um all right well if you were wound during the throws of the sell-off I was pretty vocal saying that I don't believe him.

46:08And I was saying at the time that I could end up being wrong, but I don't believe that he doesn't care about the stock market. I don't believe that he doesn't care about the scoreboard. He's a narcissist. And that was the right call. Yeah. So, okay. However, I am still surprised at the stock market's reaction. So for example, I am surprised that over the last 24 sessions, according to Mike Sicardi, the S &P 500 is up 18.5%. That has only happened, a 24-session, 18.5 % rally has only happened in 1982 at the bottom, in 2009 at the bottom, and in 2020 at the bottom. This V-shaped recovery has me surprised.

46:55Bespoke tweeted, the last time the S &P 500 erased a 15 % decline in under six weeks was 1982. This is rare. This is highly unusual. So I cannot believe that we've had a V-shaped recovery that took back all of the declines because if you ask me and if you ask the average investor, are things better today? What's going on in the chat? Uh, nothing. I think that, I think the whole stream is in unison, uh, basically confirming what you're saying. If you, if, if, if you, if you go back and listen to what you were saying, you were actually saying in real time, no way. Yeah, I was now, but I'm still, I'm still absolutely flabbergasted that the market hasn't said, you know what?

47:48All right. We, this is a confidence game. And we are not as confident in the multiple that we should be applying to our stocks given all of this. And given that earnings are probably going to slow down, there's probably going to be some negative impact to the market. But the market is looking all the way past that because they are temporary setbacks is what the market is saying, I think. I was super bearish in late March and right through the bottom of the market. And probably, look, I bought stocks anyway, just because that's what I do. But I absolutely did not think that we would retrace the entirety of the sell-off and then be looking at a situation where you're now 5 % or 4 % from back to the highs.

48:37We're up on the year. Like what? Yeah. A hundred percent. In a million years, I never would have guessed it, which look, I think speaks to why it's so hard to try to guess which direction the next 10 % is going to be. I don't know anyone that can reliably do it. And I don't, I don't even know that even if you can do it, like, even if, even if you can say the next 10 % is going to be this and then it happens, well, then what do you do? Right. Then you have to make another guess. And then that leads to another guest. So I was super bearish throughout the month of April, still sort of bearish, not super bearish anymore because prices went up.

49:18And I think that's how it lands on regular people. When things on the screen get better, you start thinking about, well, maybe it wasn't as bad as I thought. And then when it happens every single day for three weeks, it's impossible to not consider the fact that stocks sniffed out the truth, which is The whole thing's a joke. And of course, Trump was going to capitulate. It was only a matter of whether or not he had somebody else do it for him. In this case, he sent Scott to Geneva. And he said, do me a favor. Don't come back here without something good. I can't, you know, I don't want to hear it anymore.

49:53Or whatever he said. And that's what he got. By the way, Peter Navarro was not sent to Switzerland. That was probably good for 7 % of the S &P's rally. Lutnik was sent to a TV studio. Besant was sent to Geneva to meet the Chinese and Peter Navarro was sent to his bedroom without supper. No, basically, right? Have you seen him? No, thank God. They basically said, hey, do yourself a favor. Shut the f*** up. We're trying to get this thing back on track. And he's gone like that. You think that wasn't the conversation? Stop. You're off TV until we tell you. You ghoul. Nobody wants to hear your bullshit anymore.

50:34So, look, I think where we are now is like super insane. And I don't know. If you threw money at all these stocks during the course of the market bottoming in April, what do you do now? You keep them all? I'm not selling anything. It keeps going up. I haven't sold that. You bought a bunch of shit too. I bought NVIDIA, Uber, CrowdStrike. Oh, yeah. So I bought CrowdStrike in the 300s? Yeah. So I'm up like 30 % on a lot of these names. I'm probably going to lighten up a little bit. Not because I have an opinion on the future of these stocks, but it's 30 % in three weeks. So I doubled my Amazon position.

51:16I added to Uber. What else did I do? I didn't buy Starbucks. That was the one I should have bought. Oh, I bought more Toast. We're going to talk about Uber and Toast later. I think there's a silver lining just purely from Netflix I bought Netflix we did it on the air during the show that I might I might sell some of that that's up a lot dude you have to remind yourself how you were feeling four weeks ago we were all nervous and let this be a lesson let this be a lesson for the next time something like this happens I still am nervous I understand that now the trade uncertainty is gone we're not gone but significantly diminished What are you nervous about?

52:02Well, 145 % is not 30%. But 30 % is still not great for the economy unless everything is an exception. But everything is going to be exempt. Everything that matters. Yeah. Great. Here's what I'm a little bit nervous about. You would think that at some point yields are going to matter and be somewhat of a headwind for stocks. The 10-year hit 4.5 % today. in recent history that has kept a lid on stocks. You know what's funny? Compared to the shit that we were worried about like three weeks ago, that almost seems quaint. No, I'm making up reasons to be worried. The VIX is under 20. The market's not worried.

52:39Why would you be worried? Let's do some stuff here. Anyway, for those who aren't paying as close attention to this, basically Trump went from 145 % tariff on China circa the first week of April, and that is now down to down to 30 % and probably going even lower. It's like, and by the way, that's not like the new tariff level. That's the baseline level while they negotiate. And I think they gave themselves another 90 days. So this is the New York time. Let's do the next chart. So this shows that chart and then below it is the tariffs imposed by China, which went from 10 % on certain things like nat gas, coal, and farm machinery to 34 % on April 4th, 84 % on April 9th, 125 % on April 11th, now 10 % on May 12th.

53:37So China took almost all the tariffs off. So did Wei. Nobody made any concessions. This is the New York Times. President Trump made big promises with his China tariffs. China needs us more than we need it. America can outlast China in a trade war. Those advantages will let the administration get big concessions and rebalance global commerce. Trump's actions, however, suggest that talk was bluster. China made no concessions. By now, most of us are familiar with this pattern. Trump makes big claims about what his tariffs can get only for him to later back down without the other country giving up anything meaningful.

54:14It happened with Mexico, Canada, and most of the Liberation Day levies. Despite his claims, America seems to need other countries trade as much as they need ours. All right. So that's the New York Times weighing in on that. I wanted to ask you, because stocks rallied as furiously as they did, does that mean that the whole theory where, hey, we're going to get all this tax money from overseas and that's going to be what pays for the extension of the tax cuts in the TCJ. So does, is this like proof that the market never believed in that story and never will? I think so. Yeah. Can you expound on that?

54:56Or what do you think? No, I don't, I'm, I don't know about the, I don't know enough about the tax code. So I don't want to pin you on everything. Okay. I don't know about the shit. So I punt. One of the things that, one of the things, the responses from Howard Lutnick over the last six weeks is of course we We have to do the tariffs because we're going to extend the tax cuts and China is going to pay for our tax cuts. And the stock market rallying to this extent tells you that literally there's not a soul on earth who believe that story. Like not one, literally not one person believes that. All right.

55:28So here's a question. Is this a bull trap? No. So now we're 4 % from the all time high. like is is this is this the rally that sucks everybody back in right before we resume the downward uh trend what do you think well i i almost reject that premise because i don't think the people that sold bought back it happened too quickly but but if they did and i don't think they did because it was just a blistering speed uh no i don't think it's a bull trap i do believe that those were the lows. But I don't believe it with everything I got. If you told me that the economy weakens and we go into a recession later in the year and we take out the lows, I would not be surprised.

56:11You don't think people who sold stocks in February, March, April bought anything at all? I didn't say that. You said that. So the hedge funds did not buy back in, or maybe that's what the last five days have been about. I'm just saying, if you panicked in early April, I don't believe the market gave you a chance to buy back in. It usually doesn't. So if you panic sold, you never really got the all clear until Saturday. That's the thing that made you panic is not going to be a thing anymore. The lows were on April 8th. At that level, we were down 19 and change from the highs. And then you had the up 10 % day where we were going to do the pause.

56:55And then I think we gave a little bit back and then we haven't looked back. So if you look at every single day, every single candlestick from somebody that might have sold in April, when was a great time to get back in? Because the fears were still there. That's my point. I agree. You probably didn't believe the rally because why would you? When all the headlines are saying we're going to retest the lows, why would you believe the rally? So I think that had you panicked, you're probably still on the sidelines waiting for a better opportunity. And what do you do now? I have no idea. I agree because if you were panicked, the reason you were panicked was because you thought the tariffs would cause a recession, especially the tariff.

57:34People didn't care about the Canada thing or Mexico thing. It's the China thing is the thing, right? Let's just put that out there. So the announcement of the deal with Britain, which was last week, might have been the thing that got you to unpanic a little. Come on, I don't bother that. But you really didn't get what you needed until this Saturday, meaning yesterday would have been your first chance to say, all right, I was worried about the China thing. Now we're going to make a big, beautiful deal. Yeah. I'll put that back on. So listen, the day after we had that up 10 % day, we got lower by like 3 % the next morning.

58:13And for the next one, two, three – for the next seven days, we gave back half of that gain. Do you remember that? that 10 % candle, we gave back half of it over the next seven trading sessions. So you probably thought, well, we're rolling over. We're going to test lows. You didn't buy then. And then we bounced. We haven't looked back since. So I think that like, yeah, I'm sure traders got back in, but for like the average person that panic sold, they're not back in. No way. All right. Let's define. So this is what I'm going to tell you. If this is a bull trap and my operating assumption is that it's not, I reserve the right to change my mind, of course, but I can't see how it would be.

58:48If it is, it's the most elaborate bull trap I have literally ever seen. And the reason I don't think it is now is because of what we heard during earnings season. But we'll get to the reason in a second. I want to start by defining the term. A bull trap is a lower volume rally that occurs in the midst of a bear market that ends up being a head fake and sucks people back in. And there have been some really convincing examples where it looked like, oh, the bull market is resuming, but it was just a bull trap. And we talked about this, Michael, you and I, a couple of shows ago, the 2000 to 2002 bear market, which I probably still have PTSD from, but the S &P rallied 5 % or more on 10 separate occasions.

59:36This chart comes from ChartKidMAT. So those blue squiggles higher amidst this grueling 51 % bear market, those are instances of the S &P rallying 5 % or more. And then as you can tell, falling apart and seeing lower lows later on. And every time that happened, less and less people wanted to play along, which is why you get lower highs on the way down. So that's what an example looks like of multiple bull traps inside of a bear market. Centerpoint Securities has this really great thing on bull traps. And I just want to show you a couple of their charts. I mean, these are illustrations. They're not charts.

1:00:24So like that's – if you were to take a crayon and illustrate for somebody what does a bull trap look like, that's a really – to me, that's a really great example because it actually breaks the downtrend and you think you're out of the woods. But this one has gone way further than this illustration, which is why it's really hard for me to believe that this is a setup that's going to trick everybody. Dude, we made it hot. We got back all the losses. Like it's over. Not saying that we can't fall, but we got back all the losses. Okay. Usually in a real bull trap, you get back, you rally back to a resistance level, usually the downtrend, and you challenge it and fail.

1:01:06And that didn't happen here. Usually there are big momentum divergences or volume divergences, and that's not the case here. Like the volume, even anecdotally, the things that Robinhood is saying with trading volumes, the ETF flows, like all of that stuff is confirmation, not divergence. But let me show you what it would look like if it were a bull trap. So like very simply put, like a market rally that's accompanied by low volume, meaning like, yeah, people are buying, but not to the same extent they were on the way up. that's a classic tell. And so when you have really high volume like what we've had, that's how you go all the way.

1:01:53That's a potential bull reversal. Last month, we learned that retailers, retailers, that retail traders, retail investors had the highest amount of buying ever. I think they bought like$50 billion worth of stock in a week. It was off the charts. So this is the opposite of a low volume bounce. Let's put this chart up. So we talk about a negative divergence. You don't have it here. No, it's confirming. You see the confirmation from RSI relative strength is 67. MACD, which is moving average convergence divergence up into the right. So you're not getting that kind of classic divergence with this rally.

1:02:42So we've come all the way back and you're getting the momentum. And let me show you, I made this this morning. Here's an example of a negative divergence. February. So as you can see, we come out of the election, the stock market, which is in purple, just rips higher and 14 day relative strength or 14 day RSI is ripping with it. And then as you head into January, you see where I have that red line. That's momentum falling apart as the purple line continues to rally. That's a classic. And a lot of our technician friends pointed out at the time. That's a classic divergence in momentum versus price.

1:03:24And look what ends up eventually happening. The market literally has the stool kicked out from under it and confirms that lower momentum, not vice versa. Now look at the way back up. The purple and the orange line are almost perfectly synced together. So you had the negative divergence already. It wasn't this month. It was four months ago. Am I explaining that well, Mike? Yeah. Yeah. Okay. Last thing on this, and then we can move on on the bull trap thing. Put this last chart up. The difference between a bull trap and a bullish move, you see that volume spike with the buying in the bullish move.

1:04:05That's what's happening now. So like, I don't, I don't know what's going to happen. But if you say to me, like, is this, is this the, the bull trap that gets everybody sucks everybody back in? Not according to the classic definition of how I learned what a bull trap is. Yeah. I'm with you. Ryan Dietrich tweeted over 55 % and now it's over 60, but this was earlier today. Over 55 % of components in the S &P 500 made a new 20-day high today. Okay? New 20-day high. This is yet another clue the lows are likely in and better times are coming. It's been higher a year later, 29 out of 30 times. So I - And a 16 % average return?

1:04:45Yeah. I take this sort of stuff seriously. When you have this overwhelming amount of buying, and we had the bread thrusts earlier in the year. And when the psychology, the collective of psychology of the market goes from everybody out to everybody in. Historically, that is the bottom. And it's hard to imagine given all the headline noise, but yet again, look at this rollercoaster. Put this up. This is the S &P 500 performance year to date. I asked Sean and Matt to put this together. So this is the downturn starting from February. This is S &P, not NASDAQ. Close enough. 18.9%, I guess, on a closing basis.

1:05:26Mental. And then almost perfectly symmetrical. I would say in about two-thirds of the time it took to fall, you come back 17.3%. So you're not quite back to where you are in early February at the top. You were 58.44 going into today. The high was 61.44. Back at 61.44, all the strategists had price targets of 7 ,000. 6 ,800, blah, blah, blah. That's like almost a perfectly symmetrical comeback. We're not quite all the way back, but like, my God. And all of them, and it's not their fault. I would have done the same. That's the job. All of them lowered their price targets. We're going to do that in a second.

1:06:10Put a pin in that. What's this next chart?

1:06:16Oh, percentage of S &P 500 stocks above their 20-day. that's the left pane 50 day 200 day moving averages this is interesting so the s &p is back above the 200 as of today uh it's got to be right i mean it's right there uh okay but but only half the stocks are i think the mag 7 x alphabet did a lot of the heavy lifting here just eyeball test look at chart look at um nvidia went nuts today uh microsoft went crazy last week Meta had a decent run. Apple even. So just like Tesla had a big bounce. So I think the MAG7 is still doing a lot of the heavy lifting. Even though you now have a lot of stocks above their 20-day, you still only have about half the market above its 200.

1:07:07Do you find that somewhat meaningful? Is that the next thing that has to catch up? I mean, RSP looks great too. I don't know. I don't know that I find it super meaningful at only half or above. All right. Here are the sector returns off the market lows. What jumps out to you here? From the market lows. So April 8th. Yeah, dude, this is every sector and how much they're up off the low. I'll tell you what jumps out at me. But what jumps out to me is this is literally exactly how you would draw it up. From the top to the bottom. Like if you said, all right, there's going to be a huge market recovery.

1:07:43Rank the sectors in order of what you think will happen. More or less. How about this? The top five versus the bottom five, you would draw it up like that. So the bottom five is healthcare, staples, youth, energy, and real estate. The top five is technology, industrials, discretionary materials, and financials. That's exactly how you would draw it up. That's funny. I got somebody here. Bill Grebel is saying MAG7 is not doing the heavy lifting. It's underperformed the S &P QQQ year to date. Handsome, we're saying from the April 8th low, the technology sector spider is up 26.7%. Listen, Mr. McLeary.

1:08:17And the market is not, sir. Josh is very sensitive to people disagreeing with him, so I would tread lightly. All right. Here's the New York Stock Exchange advanced decline line. What else could you ask for? Yeah. It's all the things you want to say. Pretty good. So again, this is important. If this is a bull trap, it wouldn't look like this. Maybe you'd be like somewhere in the middle of that channel. Because we already got above where the previous highs were, not the all-time highs. but before we're, we're higher than the liberation date dump. All right. So the, the, the, the question is, is this a bull trap?

1:08:51It's already been answered. No. Well, can I, let me say one thing, this new, I'll put that back up. This New York stock exchange advanced decline line includes a lot of bullshit. All the, um, closed end funds that trade there and bonds. So this is better. Here's the S and P 500 advanced decline line. And by the way, the next time somebody shows you an NYSE advanced decline line say, no, thank you. Show me the S &P. Here it is. Look, look, it's an all time high. Yeah. So it's tough for this to be a bull as it's tough for this to be a bull trap. It, you know, market has had a lot of bullshit thrown at it.

1:09:30We were talking with Neil last week or two weeks ago and we said, this is a bull market. You had, you had the biggest intraday declines erased in three years off bad news. That's what happens in the bull market. It shrugs off bad news. You might not like it. Here's GLD. Hanging in there. Yeah. Up 23.3 % year to date, 5.4 % off all-time highs, which is nothing. That's one bad day. So even with the stock market melt up over the last five weeks, GLD is not backing off. I find that interesting, don't you? Yeah, I do. You would have thought money would fly out of there once we got the re-certainty that we've been joking around about, but it didn't.

1:10:16So that's, I don't know if that's people or essential banks. We had a couple of charts from a friend of the show, Todd Sohn, Strategas. These are ETF flows off the lows. So this is in price, guys. This is the amount of dollars coming into and out of. The number one - This is very interesting. Wow. So interesting, right? I think Todd sent us this today or yesterday. So the number one asset gathering ETF from the low on April 8th is Treasury bill ETFs. That part, not surprising. So short duration bonds is number two. No, this is surprising to me. To me, as Todd writes, he says, category flows have suggested equity rally skepticism since the low.

1:11:03So to me, this is exactly what I suggested at the top of the show. people are not buying back in the people that sold went to bills and bonds and they still got to get back in what's surprised what's not surprising about what's not surprising about it to me is when you sell stocks and you're not buying more stocks that's where you go yeah so that that's the part that's not surprised that's the part that's not surprising you're saying it's surprising or it's not surprising? I would have thought that given the rally, money would have had to flow into these ETFs, the market ETFs. And it did. It did.

1:11:43It certainly did. It's just not the leaders. All right. Here are the surprises. Put that back up. Spot crypto was the number three category of ETF asset gathering. That's wild. $5.3 billion came racing into the safety of spot crypto ETFs. Okay. That's crazy. Growth. So growth factor equity, five billion. So there's the money. Yeah. So there's the money that came in. Precious metals at 4 billion. Okay. Less surprising. More bonds. European equity was actually net positive. That's actually interesting. They bought Japanese equities on a net basis too. That's interesting. Not crazy amounts, but enough that it made the chart.

1:12:25All right, these were the big losers. Here's what they sold. Small cap stocks couldn't get arrested. They sold 5.5 billion worth of small cap equity ETFs since the lows on April 8th. Cyclical sector ETFs, which I don't even know. Would that just be like S &P materials? Materials, industrials. Okay. They sold Chinese stocks, negative 3.7 billion. They sold the long bond,$3.3 billion. I guess that's probably mostly TLT. And then they sold the defensive sector ETF token negative money, which I suppose is somewhat surprising. But maybe that's the nature of tariffs was that the defensive sectors are hit just as hard in a worst-case scenario.

1:13:11They held up really well on the sell-off, so maybe that's just profit-taking. I don't know. Okay. Next chart. We got one more from Todd. this is interesting this is the same dollar went to equity and to fixed income since the april low so the people who were buying something in equal amount and i don't know if cash uh t bills are in here as fixed income because maybe that's misleading what do you think about this they are they are so that's that's the source of that okay um if anyone's gonna get caught in this bull trap or look stupid as a result of this bull trap not being a bull trap. It's the chief strategists.

1:13:53So chart off. Sam Rowe wrote this morning, Goldman Sachs and Yardini Research led Wall Street in slashing their year-end S &P 500 targets as the stock market tumbled. In the following weeks, RBC, SockGen, Oppenheimer, B of A, JPMorgan, BMO, BMO, sorry, Citi, CFRA, and Deutsche Bank, all revised their targets lower. On Monday, yesterday, Goldman and Yardini revised their targets again, this time up after the US and China agreed to temporarily lower tariffs. Goldman sees the year ending in 6 ,100, up from 5 ,900. Yardini sees 6 ,500, up from 6 ,000. Sam writes, we're not gonna pretend like the swing in the S &P 500 itself isn't influencing these revisions.

1:14:44right this is just marking to market right that's all they're doing what are they supposed to do they were they marked it down for a reason the reason changed and then they got to mark it up well that's not my criticism i have no criticism i don't think i would be any better at this but you're in january full speed ahead with a 7 000 target and then liberation with the lead up to Liberation Day, the stock market crashes, then you cut your target to lower than where the market is, right as it bottoms. Then it rallies for five weeks and you raise your target. You should take your target and shove it up someone's ass because nobody needs to actually read it.

1:15:27If we're just like, oh, my year-end target is 6 ,500 unless there's a market crash, in which case it'll be 5 ,500. Oh, that's amazing. And then if there's a recovery, it'll be back to 6 ,500. So what does the target do literally? What is it about? I don't think anybody cares what the target. The financial media cares. Right. Yeah. Every time they raise the target, lower the target. Yeah, that's it. I think it's the hardest job on Wall Street to come up with a price target for anything, especially the whole stock market. But don't make it even worse by changing, by marking your target to market every time there's a correction.

1:16:15If you're a bull, be a bull and eat it, live through it, or don't be so bullish. If there's that much uncertainty that, if there's that much uncertainty that the minute something negative happens, you have to chop your target down, it shouldn't be as high as it was in the first place. Is that like a reasonable takeaway? That's harsh. So what do you do? Stop publishing targets? Can't do that. I don't know. It's a stupid thing. We know. We know it's complete clownery. All right. Let's talk about Google. So you were on the air last week when there was a report. Where did the report come from? Was it Apple made this report?

1:16:56It was Eddie Q testifying in court about the antitrust suit and pointing out, hey, it's not like anyone's searching Google anymore anyway. And Eddie Q is who? The number three person at Apple. So the market, Google fell 8 % on the day. and I don't know when I bought the stock but I sold the stock for a 4 % loss and I was pretty proud of myself because I think it would have been very easy to be like yeah it's so cheap and this is a great buying opportunity maybe just add but I'm like you know what I'm down 4 % why am I who gives a shit just get rid of it right like I don't need to be dying to sell you're lucky you're only down 4 % what do you mean I'm saying like Like you could have been down 20 % really easily.

1:17:48You were only down 40, a four.

1:17:53So let's look at this chart from where Google's revenue comes from. And really it's search. I mean, we know that, right? Like there's, yes, the cloud is growing really nicely and YouTube is a huge engine, of course, but - 50 % of revenue is search. It's search, that's it. So in my opinion, it's possible that we look back and we say, oh, wow. Remember when we thought that people were going to stop using search and chat, chat off, please. But this is going to be an overhang probably forever. And even though we learned last quarter, I don't know, when did they report? Three, four weeks ago? We learned that search grew 11 % last quarter.

1:18:35And to me, when I saw that report, I was like, okay. Like, yeah, we might be afraid of Chattachy, but it's still growing really, really, really healthily. The problem is it doesn't necessarily matter that the stock is cheap. It doesn't necessarily matter that it's growing. What matters is the threat of its crown jewel is going to be under assault for God knows how long. So I want to, hold on, two charts, and then I'll give them the mic back to you. So Charkin made these, chart on please. This is Google since ChatGBT was launched. And it's actually up 60%, which is not that much less than the Qs.

1:19:16The Qs are up almost 80 % over the same time. So underperformance, but not dramatically. But here's the thing. The forward PE is as low as it's been basically ever. And what changes this? I don't know. Next chart. So what I had Matt do here was compare over the last one, three, and five years, all of the MAG7 names. And yeah, over the last year, it's the only one that is down. It's down 6 % over the last year. Every other Mac 7 name is up. Over the last three years, it's the second worst performer behind Tesla. And over the last five years, it's the second worst performer only in front of Amazon.

1:19:56So yes, it's cheap. Yes, if you're a value investor and you have a long-term time horizon, you might very well be rewarded. But for me, that's not my objective with Google. I don't want the headache. and I think the headache is not going away. Okay. So I want to tackle that 11 % stat that you just threw out. You said the growth of search was 11%. Here's the thing. That's not the growth of search. That's the growth of revenues from search. True. That's it. Like Meta used to do that. They would just throw another ad in. Like increasing the ad load makes the product worse and makes the revenue higher today.

1:20:34But it costs you customers in the future as people grow fatigued. You ever try to read something at thestreet.com? No. Holy shit. I dare you to accidentally click a link from, I don't even know how you would get there. Like maybe Yahoo Finance or there's a story at thestreet.com. People that are regular users of Yahoo Finance over the last 25 years, like that's their go-to, how they just quickly find out what's going on. When they see thestreet.com, they will not click it because they know what's about to happen. video ad close it another video ad try to close it it pops something else tickers scrolling across the bottom tickers scrolling across the top a pop-up a form to fill out by the time you get to the second paragraph you have seen 19 ads do you know why they're doing that because the traffic is doing this for the most part and no disrespect to anybody who's doing a column there i know they have like talented people but they have turned that site into a torture chamber for the reader.

1:21:38And now I'm sure, and I think like private equity owns it or somebody took it off the market. Now I'm sure whoever they were doing it to impress internally, Hey, look, our revenue was up. Okay. But how, like, were the views up where the reads up or the subscriptions up or is the usage up? No, but the revenues up. So Google can continue to add more buttons and bells and forms and add units and blocks of things tracking you. They could do that for the next 10 years and somehow grow revenue. But the street has already decided that that revenue growth, A, has decelerated to the point where it's a point of no return and B, is not being accompanied by increased usage of the product.

1:22:26And that's why it's a 15 multiple. Now, I just said all that, but what I want to say next is if you are a value investor, you should be buying Google hand over fist. Agreed. Because that's what value investing is. Yeah. It's accepting all of the things that people have decided are negative about the stock and saying, yeah, but I'm going to invest anyway because I think either the negatives are overstated or a company can fix it. I believe the negatives are overstated. I think that the threat from chat GBT is overstated, but I also don't think it's going, the threat is going away and the market doesn't think the threat is going away.

1:23:05So if Google rolls over and it falls another 15, 20%, I will buy it back and hold it. It's just not there yet for me. I called it PayPal on TV and that might've been harsh. Like PayPal still grows. PayPal still has hundreds of millions of people that use it. The problem is there's enough competition there that it's never going to be able to grow the way it used to. It's not going to get its old multiple back. And the stock sells at 11 times earnings. That's like I think Google search is going to be a hugely profitable business. For a long time. For a long 20 years. I don't know. You know what's funny, Tasha?

1:23:44I almost forgot to mention this. We've done this segment multiple times. Five years ago, a couple – I don't remember one. which Mac seven stock is like the least disruptable. And I think I'm pretty sure I said Apple was the most disruptable. I would have said Alphabet is the least disruptable. But I think we both said, at least I think I said it was Google because it was impossible to envision chat GBT. And the market share that Google had seemed fully impenetrable. So it shook me a little bit in a good way. I would have said, I would have, I would say, of course you can't envision chat GBT, even if it comes along.

1:24:20You can't envision it as a private company being able to raise$100 billion. You can't envision the speed with which that app reached a critical mass of users faster than TikTok, faster than literally anything that's ever happened before. There were so many things that you could not have seen coming. And at that time, you're talking about a company that's 95 % market share. Right. It's unheard of. That doesn't exist anywhere in the world. Um, but they had that. So that's why they look the least disruptable. Um, then the next, the next phase of that conversation is okay. Maybe somebody could come along with a better version of search, but Google's got a lot of resources.

1:25:03They'll reinvent themselves. They'll cannibalize their own thing and they'll, they'll do it too. And that still might be how this turns out. Maybe it doesn't look well. Market doesn't like it. I'm out. The market doesn't like it, but they are not giving up. They're working on their own bots and their own AI assistants and products that they will weave into their core products and they'll get usage of. And I think it's not like unsurvivable. I just think it's a tougher stock than it's ever been before. Will Google outperform the Qs over the next three years? i'd say no i'd say i'd say you would have to have a bear market for google to outperform the rest of what's in that index be my guess because that index has gigantic companies that we almost never talk about like service now um and and these companies are probably going to be 20 growers with 40 margins and i don't think people are going to race them with alphabet it.

1:26:07So I'd say probably not unless you get a bear market. All right, let's touch on inflation. We got a CPI report, April CPI rose 0.2 % month over month on both headline and core, which was below expectations. The year over year was plus 2.3%. On headline, core was plus 2.8%. Those were below expectations. Nothing really jumps out at me, like lower egg prices, stupid shit like that. Services prices, X energy were up slightly. I don't even know how important that is to the calculation. Rent wasn't crazy. Airline prices were way down. Airline fares are in the services component fell by 2.8 % month over month.

1:26:59That's a third consecutive negative month for airline prices and negative 8 % year over year. So that's good. Sticky part is auto insurance, but like there's nothing in there that would spook you. And I, I, I don't know. I guess the question is, is that the last team inflation report we're going to get? And now we get the tariff era inflation reports. So, yeah, I don't know. I don't know what the future inflation reports are going to hold, but this did surprise me. I'm looking at CME FedWatch tool. And a week ago, there was a 30 % implied probability of a rate cut in June. And that's basically gone now.

1:27:44It went 30 % down to 8%. So the market seems to think - A 20 % chance of two rate cuts this year and like a 20 % chance of a third, like for the rest of the year. Where do you think inflation will show up in the coming reports? I don't think inflation is the problem. I think goods inflation is the problem, not overall inflation. And I think services deflation will be disinflationary if goods inflation is high because high prices will kill demand and will hurt companies. companies will lay people off. And I actually don't view the tariffs as permanently inflationary. I think you wish that would be the case.

1:28:28Is this the last tame inflation report? Is that what you asked me? Yeah, because none of this stuff was in effect for April. Some of it though, we effectively had an embargo with China. I don't know how much time you spent reading or looking at this, I haven't spent much time at all. Okay. But from what I surmise, what spooked Trump was the retailer saying, expect empty shelves. If we're going to have Christmas, we need to start getting shit in now. I totally not getting it. Okay. What we had was not a trade war. It, it, the, the level of tariff was so high, it effectively became an embargo. Like ships stopped coming here.

1:29:11Or China stopped exporting here and started sending things elsewhere. And then maybe it would end up coming here. But hang on, wait. But if the tariffs are on pause again for another 90 days, why would you think that this is going to be the last tame inflation report? They're not on pause. They're at 30 % now. We thought they would be at 145%. You see? So they bought - I thought on Sunday they announced that they paused them again, no? No, it's 30. The level's 30. But then again, half the shit is exempt. Right? So, dude, my point is when I say we had an embargo, I mean like ships not moving. Yeah, yeah, yeah.

1:29:51I understand. So when I say the last of the tame inflation reports, I don't mean next month is 9 % inflation again. I mean weird shit that took place during the course of May because of the gap between when the tariffs were paused and when they were fully on. Like ships stopped moving. So I'll turn this around on you. I'm asking. I don't know the answer. I have no idea. What do you think? I think – here's the best case scenario. There are some weird readings in certain categories and the market ignores it because the reality has changed. I think that's likely. So like you could get a really bizarre reading in one segment of the economy.

1:30:35Some sort of industrial material was tough to come by or whatever, shipping rates. And then the market yawns because they're like, oh, yeah, yeah, yeah, we know. That's because of the 145 % tariffs that are no longer happening. So that's like the best case. Sometimes the market is really hard to figure out. Sometimes it's easy. Sometimes it's hard. Yesterday, we had Trump tweeting 80 % declines in medicine prices or whatever the number was, whatever he said. And XLV was up like 4 % of the day. And you're like, wait, what? And yesterday, you would have said, well, the market clearly doesn't believe him.

1:31:09It's looking past it. OK, that would have made sense. And then today, XLV was down 3%. Like dumped a really bad day. The worst performer sector by far. Sometimes the market is confusing. So one of the reasons why we keep the best stocks in the market list is to kind of check our priors. And it's like a bias elimination machine where you might not believe in something, but like price is price. And the buyers and sellers in the market, they could agree with you or disagree with you, and you should at least know. and one of the things that happened last week, Sean came to me and said, yo, Carvana's the best stock in the market and I said, no way.

1:31:52I didn't say it to him, but I said to myself, he probably has the ticker wrong. No, it's like literally a best stock in the market and the reason why I put this chart up, one of the reasons why, not the only reason why, this is the Mannheim used vehicle value index. You probably heard a lot about this in 2021. This just turned upward. The Cox Automotive Mannheim Used Vehicle Value Index, which tracks prices of used vehicles sold at wholesale auctions, increased, you ready, Mike? 4.9 % year over year. It's important to note this was a 2.7 % month over month increase, which would be a 32 % annualized increase.

1:32:33Sean writes, automotive prices are going higher and demand for a value-oriented service offering is in the midst of heating up. so we wrote this up for uh for cnbc pro yesterday um here's a chart of carvana unbelievable you know what a break you know what a breakout looks like but let me ask you this so if the tariffs are reversed or don't go through can't all of that demand that like holy shit about it i better buy a car now can't that reverse in two seconds i don't think it's holy shit i better buy a car now i think it's the used car being a better value than the car that can't be made or sold new because it's stuck in Mexico or the parts aren't coming in or whatever.

1:33:16I think that's what this is about. The other thing it's about is on May 7th, they put up an insane earnings report, 40 % revenue growth. Net income was up 6x from the year prior. Carvana is one of the craziest stocks. Dude, they did 49 million in net income in Q1 last year. That's 373 million this year. I mean, it's like just an insane story. Operating margin 9.3 % versus 4 % last year, double their operating margin. So there's a stock at an RSI of 71, made a 52-week high yesterday, made another 52-week high today. I would never be bullish Carvana in the midst of a trade war. What the hell do I know?

1:34:02The market is saying this stock is working. This company is positioned better than I would have guessed. And it forces you to understand the story. Yeah. No, I love it. I don't know that I've ever seen a stock go down 99%, which it did. Me either. It went from 370. Let me give you the number. It hit$3.55 in December of 2022. It hit$375 in August of 2022. 99 % fall to 355. And now it's at a record high. No, it's not. A 52-week high, excuse me. But I don't think I've ever seen a stock like this. Now, even if you're not bullish on the used car market, Sean writes, this is one of the most fragmented markets in the country, any industry.

1:34:59Automotive News says 2.3 % of market share is owned by the top dealership brand. 11.1 % of total market share is the top 100 dealerships. That means 90 % of this market has yet to have consolidated. And Carvana probably has the financial wherewithal to consolidate as much of it as they want at this stage in the game. So look, I'm not like buying the stock or going crazy, but - Do you own it? We wrote it up. It's on the list.

1:35:36it's a 39 billion dollar market cap yeah i don't know how big is what's the tam on used cars it's gonna be enormous and what if and what if they decide we're not just going to sell cars we're going to do something else they could like like robin hood is doing with every other vertical and financial services what if they say we're going to take football bets all right what if What if they get into crypto? You want to do this recession chart really quickly? Or layoff chart, rather? All right, real quick. Real quick. So I thought this was notable. We're looking at, for those of you who are listening, this is from Goldman.

1:36:14The share of companies mentioning recession increased during Q1 earnings calls by 23%. All right, that's not a surprise. But here's what makes this very different than the two prior spikes when you had recession mentioned spike. It was not accompanied by layoffs. So layoffs, the mention of layoffs only rose 2%. So it's hard to have a recession when there's no layoffs. And then not LOL, in fact, the opposite of LOL. But ironically, there was a big announcement today from Microsoft that they're going to trim its worldwide workforce by 3%, which would mean almost 7 ,000 people are affected by the job cuts.

1:36:52It's nothing. it's a better headline than it is a story at 6 000 people um goldman lays off three percent of its workforce every year so no layoffs no layoffs no recessions we can move we can move on what's next um coin is the last one we're going to do and then we'll do a mystery chart and make the case uh coinbase joining the s &p 500 let's pull up a chart the stock's up 20 something percent today holy shit right um this is the first crypto component in the s &p 500 and uh this i'm showing you guys a chart of inception back to the ipo which of course was in 2021 or the end of 2020 um it's not quite back to where it was initially when it came public but it's come most of the way back.

1:37:44It's one of the most volatile stocks I've ever seen at its current market cap. But it's now replacing Discover Financial Services, which is going to be acquired by Capital One. Yeah. Is it poetic to you that it's replacing a - TradFi? TradFi giant? I mean, the TradFi giant's not going out of business. It's getting acquired, but still, it's a little bit poetic, right? Yeah, no, it is. I think they were like, yeah, it was cute. It was cute. Here's why that matters. This is the assets index to the S &P 500. Put this chart up, John. $1.6 trillion in ETFs,$5.3 trillion in mutual funds and insurance products, another$3 trillion in ETF exchange-traded derivatives.

1:38:34So it's what Bitwise has the slide saying, they equate that to about$15 billion worth of demand to buy shares of Coinbase. Hence the 22 % rally in the stock today. Pretty big moment. It is a big moment. It's wild, dude. the sentiment, if you think people were worried about the stock market a couple of weeks ago, and they were, crypto Twitter was in full-on panic mode. Absolute panic. When? Oh, in April? In early April. And for good reason. And for good reason. So when the stock hit 73, there were calls for, I saw a call for 10th. People were freaking out. And it is just unbelievable. Wait, why were the crypto people panicked about tariffs?

1:39:26You would think that that crypto was a solution to tariffs. Just price action. When your asset's getting killed, you get bearish. But the fact that ETH is up 50 % over the last week, 63 % over the past month, and Bitcoin is up, it's a wild move, really without any explanation. Big catalyst coming up. Schwab said they're going to do digital assets sometime in the second half of the year for retail. Morgan Stanley as well. So that's a lot. That's two huge pools of capital, trillions of dollars. But 53 % in a f***ing week. Are you kidding me? Yeah. Dude, this is the market that we're in. All right.

1:40:08Make the case. I don't have a new stock I want to talk about. We'll talk about some stocks that we've profiled here before because they both just reported earnings last week. And I wasn't on the show Tuesday night. And I know people want to hear from us on this stuff. So Uber is the first one. This is a new all-time high. I'm showing you, I guess, what is this? A one-year chart. I'm showing you a one-year chart here, but you take my word for it. Never before has it traded at 90. You can see it's been consolidating for a year and then it broke out. I mean, the stock is on my best stocks in the market list.

1:40:46Obviously, it's been for a week now. 72 RSI, not too overbought. Is this your biggest holding? Yeah. I think it was neck and neck with NVIDIA until just now. Good for you. But NVIDIA went up a lot too, so I'm not 100 % sure. But my top three are NVIDIA, Uber, and Apple. Wait, Apple? I had no idea. Yeah, I never sold it. I just never sold it. So it's not – I didn't buy a lot of it. I just never sold it, and it's 1 ,000x. So it just doesn't stop going up. Let's put up this second chart of Uber. like very simply put, this is the story. And I, so I bought the stock after the IPO was my first purchase.

1:41:29And then I bought in the twenties and I bought it in the sixties. So I I've been buying and selling the stock, but in the last four years, I started to build a position and I stopped trading it. And, um, this is the earnings versus the stock price. So what I'm showing you guys is trailing 12 months earnings of$5.71 a share versus a share price of$90. I love charts like this. It's not an expensive stock. It matches up. It's not a mystery. Yeah, it's not a mystery. Like, shut, like, it's not. Shut. Yeah, they're on a daily basis. Josh, who are you about to flame? You had to say shut the, who are you talking to?

1:42:08Like, people, people equated this to a bubble when it came public because they weren't earning money. People were like, oh, Uber, it's not profitable. They'll never get the profitability. Really, never? That's what you want to say, never? Just watch the price of oil go to negative$30 a barrel. You say never in the financial market? That tells me how unsophisticated you are. So this company came out of the gates losing a ton of money. They were under the cloud of a CEO scandal, the likes of which was so extreme. Brian Koppelman had to make a movie about it. It was like a book about the scandals at Uber.

1:42:49They were tracking people on the app in God mode, and they were flouting the rules in every municipality. They were operating around the world. They would operate first and ask permission later. It was just this whole thing. Then no sooner do they emerge from that, they find Dara to be the new CEO. He has to now sell all these assets all over the world. They sell the Chinese assets because China will never let them compete with their homegrown companies. They have to take losses on all this autonomous stuff they were doing because they're burning money. So they do that. Then it's COVID. No one will ever get into an Uber again.

1:43:28LOL. Uber Eats ends up saving the company. True story. Then after that, it's the inflation. Oh, the inflation is too high. People aren't going to take rides. or the drivers aren't going to want to drive for Uber because they're not getting paid enough or whatever it is, the reopening. All right, they do that. Now it's work from home. Nobody's going to take an Uber to work anymore. Okay, they get through that. Then this Elon Musk shit starts with CyberCab. Stock gets hammered. It's like every year, another crisis for Uber and new record high today. And look at the earning. When in doubt, if you have nothing else to guide you, If the earnings line is going up and to the right, and you have a reasonable basis to think that that can continue, the stock should work.

1:44:13So that's what I wanted to show people there. Let's do toast really quickly. I think this is Uber for restaurants, dude. And I made the case for the stock, and I'm long, and I just bought more before the earnings. You see the post-earnings pop here was tremendous. They added 6 ,000 more restaurants in the last quarter. um they added any competitors there's gotta be uh clover which is owned by fiserv and um like just like regular square but that's there they own it they own this business they have 120 000 uh customers and um they have the marriott they have they just added the hilton chain they just added applebee's they're now doing enterprise deals with these companies that have hundreds of restaurants.

1:45:04It's like, just standardize on toast. Our take rate is 50 basis points. You're going to love us. And I think it's a wrap. Put that chart back up. I'm not saying they're not going to struggle with competition, but what this looks like to me is they are now acknowledged to be the Uber of their space. Every restaurant, every bar, souvenir shops, you name it. They're just going to be like standardizing on toast. And this is going to be the platform that every employee of every hospitality business and every owner learns how to use. And they're going to become super entrenched. And they're going to be able to sell a lot of other stuff to these places.

1:45:48And they become – I know in a – to chart off. I know in a recession, people worry about overall gross value of restaurant spending. I think the Uber restaurants, excuse me, the toast-powered restaurants will do better in recessions because those are the types of restaurants that are on their game and tracking their costs and are running professional business. And I think they'll become indispensable in a tough economic environment. I don't think people turn toast off and say, let's go back to a pen and paper to track all the checks and everything that's happening. So that's the thesis there. Not selling it.

1:46:27I know it's up a lot. I'm going to let it develop. What do you think? I like it. I like it. All right. I got nothing else. Let's do a mystery chart and we'll bounce out of here. All right, John, if you'd please. All right, Josh. Well, this is a stock. It trades on the stock market. It's a newly issued stock. And it went out today at an all-time high. newly issued did it come public or was it spun off public it had an ipo

1:47:01it's robin hood no okay uh and an ipo recently this is look at the date oh you're showing me since inception yeah oh it came public this year the chat is saying core weave the chat is right wow let's put it up round of applause for the chat that is a big win it's a big deal uh biff got this one who else r sterling got this one jerry car uh jerry carcia said reddit incorrect sir um wow what's going on with core weave so this just trades with nvidia right is that basically how that thing acts um i don't know but but this is a very this is a stock that came public under There are a lot of scrutiny from yourself included, as well as a lot of other commentators.

1:47:50And you love to say it. This is important. It's good. It's good stuff. Yeah. I still don't want to own it. I like, I respect new all time highs. I think if I want AI, I want Nvidia, not CoreWeave. Okay. Well, both can go up. Yeah. No disrespect. All right. Guys, thank you so much for hanging with us this evening. We appreciate you. Those of you who came for the live on YouTube, you know you're the best already. people listening out in podcast land shout to the apple listeners spotify listeners we love you too make sure to check out an all new animal spirits tomorrow morning with michael and ben we'll do ask the compound later this week and an all new edition of the compound and friends on friday thanks so much guys we'll see you soon

1:48:40whether you're just getting started as an investor or you're managing a multi-million dollar portfolio Ritholtz Wealth Management has the solution for you it all starts with building the right financial plan to speak with a certified financial planner today visit RitholtzWealth.com don't forget to check us out at youtube.com slash the compound RWM Make sure to leave a rating and review on your favorite podcasting app. If you love investing podcasts, check out Michael and Ben every Wednesday morning on Animal Spirits. Thanks for listening.