Meme Stocks, CPI Watch and Bitcoin | Weekly Market Recap

Speaker 1 0:00
Hi and welcome to Wealthion’s Weekly Market Recap. I’m your host, Tanya Solati. Before we get started, I wanted to tell you about our upcoming conference in conjunction with SALT , Wealthion is hosting our next virtual conference on June 1. You can find all the details on our website well beyond that calm. Now onto the recap. This week we spoke to Joe Dillion, who had his thoughts on Roaring Kitty in meme stocks, and also talk tech and how Google has became complacent.

Andrew Brill 0:40
So let’s talk a little bit about roaring kitty. And I know that you you wrote about some of this this morning, and he’s been absent a little bit, probably about three years since the last time Gamestop went crazy, but one strange posts, and everybody jumps back on board. I don’t get it. And I don’t think I’m smart enough to understand what a guy leaning forward in a chair means. But these meme stops. Jared, what? What do we make of these?

Jared Dillian 1:09
Well, first of all, I think the most interesting part of this doesn’t have anything to do with the markets. What’s this guy’s name? Gil, what’s something new Shawn gills something? I can’t remember. He’s Gil Keith Gill, he’s pretty clever. Like, obviously, he’s pumping the stock. Right? And but the SEC, I mean, like nobody, the SEC can go after him in court and say that a guy leaning forward, and the chair is a pump. You know what I mean? He’s not, he’s not saying anything. He’s posting memes. He’s posting gifts. Like, I mean, obviously, it’s a pump, but like, it would never it would never hold up in court. You know, so, I mean, I don’t know how much Gamestop he bought before he started doing this. You know, what was what was interesting the last time around? I don’t think he needs I don’t think he’s sold any, you know, and I think he sold none. So I kind of wonder if he’s selling into this, like, I have no idea. So wow,

Andrew Brill 2:16
I because I know, I look, I watched the movie, and I lived through it just like you did. And I watched a lot of people make some money. And then there were some that obviously were shorting it, that lost their shirts and needed to be helped out. And those are the professionals. So I guess it works out. But is can the SEC do anything about this? You know, obviously he had to testify in front of Congress before. And but you know, posting something like that, look, if if I posted something, nobody’s gonna give a darn. But this guy goes and post something like if you posted something strange people like, Oh, I wonder what Jared means by that. Maybe I should go out and buy, you know, a rocking chair stock. Yeah, I don’t know. Yeah. So it’s a it’s one of those things, but there’s other stocks that you write about. And I know, Google has been on your radar for a little while. And now they’re going through layoffs. And there’s another stock you know, it’s it’s funny, because Google has become like the brand bandaid. It’s like, oh, well, you know, somebody wants to know about oh, go Google it. And it’s become that. That brand name. Yeah, I mean, knock that off its pedestal.

Jared Dillian 3:30
You know, it’s funny. There’s been a lot of high profile people, including Stan Druckenmiller, who’ve said they don’t even use Google anymore. They use perplexity, which is a new AI search engine. And I’ve used perplexity. So it’s, it is superior to Google. Google has 184,000 employees, perplexity has 55 employees, right. And what they have done is with 55 employees, they built a better mousetrap. It is a better search engine. But you know, like in my browser, like if I go in the search bar, like that’s where Google is, like, if I want to go to perplexity, I have to navigate to the website, like Google is embedded in everything you do. So it’s going to be interesting to see how, you know, somebody like perplexity or, you know, any of these other competitors can dislodge, you know, Google’s dominance and search and my, my position all along, is that Google will lose market share in search over time, you know, because as a company, culturally, they got complacent. They hired a bunch of people that don’t really do anything. The culture is a mess. And ultimately, it’s really the same company that it was 10 years ago, they haven’t innovated. You know, I remember writing about Google in 2013 2014 when they were in the process of building out Google Maps and Google Drive and all these other services. And they really haven’t done anything in the last 10 years.

Andrew Brill 5:06
Because it’s in their search engines already. You know, Apple has it whenever you open your browser, it’s Google, you think that there’s a possibility that perplexity could make a deal with some of these computer manufacturers and you’d open your computer and it would be perplexity or, or purple or whatever they call their their search engine? Yeah,

Jared Dillian 5:28
I think that is possible. I mean, that’s kind of what I’m betting on, you know, I have put on Google, which are not doing so well at the moment. But, you know, there to your putts. And I’m happy to keep rolling them. So I mean, you know, Google has developed their own AI search engine, as everybody knows, which is Gemini. And Gemini has all sorts of problems. So yeah, I mean, I think this whole I think this will work long term. And

Andrew Brill 5:58
I think that Google, not only Gemini, I think they came up with a second version of Gemini, trying to fix the problems that they had. So perhaps that you know, people listening, just go over to perplexity and check it out and see if that’s something that they would want to use. And I want to ask you about Apple for a moment, because this is another company that’s losing market share. Obviously, in China, they’re struggling quite a bit. And AI, could AI boost them back up to where they need to be.

Jared Dillian 6:29
I don’t know. I mean, you know, Apple, I suppose it’s possible. Apple is a hardware manufacturer, and you know, it’s a great company, they’ve been able to maintain these absurd margins for a long period of time, they still have these absurd margins. I think Buffett was right to buy the stock seven or eight years ago whenever he bought it. But yeah, I mean, I don’t Apple Apple is a tough one. Apple is a tough one. So

Andrew Brill 7:03
Jared, I want to talk for a few minutes about the debt and the amount of treasuries that we’re pumping into the economy. And at some point, there’s got to be a breaking point, right? The the debt is scheduled to be about, I don’t know, 116% of, you know, the economy by 2034. And is this st sustainable. Um,

Jared Dillian 7:28
so just let me tell you a story. When I was first getting into the business in like 1999. I had a subscription of Barron’s and is remember Alan Abelson used to write up and down Wall Street is like the opening column and Barron’s. And he would go on about the debt all the time. So, you know, he would talk about not just government debt, but household debt and corporate debt. And he had this chart of total debt to GDP, and it was going from the lower left to the upper right. And he said, look like we’re at 200% total debt to GDP, this is unsustainable, like the market is going to crash. Right? That was Alan Abelson, he was like this perma bear. And, you know, here, we are now worth 360% total debt to GDP, and nothing has crashed. And households and corporates have actually de leveraged a lot like what’s actually where this is coming from is government debt. So look like when interest rates were spiking last year intens got up around 5%, you could see that there was a lot of pressure on the bond market because of issuance, right? We had these huge auctions in issuance was weighing on the market, and it was causing interest rates to go higher. And I said at the time, you know, I was like, look like, you know, people thought that we would get failed auctions and issuance can go higher. But I said, you know, demand can rise to meet supply, right. And, you know, for a lot of people 5% on 10s Looks pretty attractive, you know, especially after a period of time where we had, you know, really low interest rates. So I was of the opinion that demand would rise to meet supply and we wouldn’t have this problem of interest rates going to seven or eight or 9%. So I still believe that and, you know, even if 10s got to five and a half or six, it brings out a whole new class of buyers, right? So there’s there’s a lot of bond bears out there who think we’re going to have you know, eight nine 10% on 10s. Like we might get there eventually but it’s going to take a very very long time.

Speaker 1 9:46
On speak up Peter McCormick, an avid Bitcoin investor talks about the geopolitical situation inflation and how it all affects Bitcoin.

Peter McCormack 9:58
I started see coat and premium When the prices start to drop, and that was a lag I saw after previously seen planes fall to now see in planes and artful. And so I just think there’s there’s a real issue is that one of the disposable eras, people with their disposable income is on holidays, but I think they happen to be a little bit smarter about where they go on holidays. But in terms of every one of my businesses, there is no part of anybody, any business where I’m planning for prices to be falling, I’m not seeing any indication that’s going to happen. Actually, what I’m seeing is belts tightening, less customers. And because of that, people are having to increase their prices, because if they don’t increase their prices, they themselves are going to risk going bust. And so what I’m actually planning for is more active marketing, more active work in ensuring that when people do have money to spend, they’re coming into my businesses to spend them. That’s what I’m planning for. I I think we’ve sadly, we’re in this really strange place whereby the the politics has divided people so hard. There is such a desperation, whether it’s here in the UK, or in the US, for each political party to win an election. Nobody’s going to posterity on the table as a as a as a campaign promise, even though they couldn’t win. It’s like, if you rented a car, if you buy a car or buy a house and have a mortgage, you have to make payments. And if you take out a loan, you have to make payments. And if you don’t make payments, they’re gonna repossess your home or your car. So you work to a budget. No, you can’t step out of that. But the politics politicians have a you know, they have different rules. There’s no budget they have to keep to their you have a permanent money printer, they have an infinite debt they can get on every time they use that infinite debt machine is squeezes us because it leads to inflation. And if you just look at US debt alone, what are we approaching $35 trillion.

Anthony Scaramucci 11:51
You know, what are they talking about? 35 Shawn? Yeah,

Peter McCormack 11:54
4 billion 4 trillion this year, they’re talking about with Biden. I mean, this is a Ponzi scheme. We’ve seen we know what happens. Before we seen it all around the world. We are in a debt bubble, which is going to blow up at some point. And a lot of people

Anthony Scaramucci 12:10
it’s weirder. Don’t mind me interrupting per se, it’s like weirder than a Ponzi scheme. Okay, because it has all the elements of a Ponzi scheme. But it’s like if Ponzi could create money himself. Yeah, I don’t think so. In other words of if Ponzi are made off quick, make the money himself like in the backyard, like people make crystal meth. And they get delivered, you know, they can last longer. You said I mean, so we’re borrowing the money, money that we can make ourselves. So what’s happening now is we’re printing the money, and then we’re putting it on the Fed’s balance sheet as debt, right. So we’re actually even less concerned about people buying it because we just print it and put it on our, our balance sheet. And what it’s doing is it’s killing the people that go into your bar, Peter, it’s killing the lower and middle income people because they use their time, and they use their energy, labor to make money to live their lives, they don’t have the assets that the rich have. And so you’re killing them with this regressive taxation, known as inflation.

Peter McCormack 13:18
The truth is, and the sad side of it is, is like inflation is good for you and I, this and I don’t like this, like, I feel ashamed about it. But when you own assets, inflation is good. When you’re in Bitcoin inflation is good. When you own property, inflation is good. When you have debt inflation can be good for you because the inflation can wipe out. But we are crushing the win crushing the people

Anthony Scaramucci 13:42
who need it the most. We we agree and I obviously you know, I you know, I’m gonna say something staggering. And somebody said this to me, I had a look at it, but you can go verify this, the US dollar has lost 23% of its purchasing power since January of 2020. Okay, so we’ve taken a quarter out of the US dollar, and then people wonder why there’s anxiety in the system. So even though the full employment GDP number looks okay, certain things on the economic dashboard, look okay. It took 25 cents out of every dollar of purchasing power. And if you’re a middle class person or lower middle class person, you’re feeling it and you’re right if you and I borrowed money to buy that piece of real estate or even a Buy Bitcoin, we’re not feeling it. We’re feeling pretty good about it. So alright, so So let’s let’s switch topics because you sweat Another thing I love about you. You’re like a genius level guy, but like you try to pretend that you’re not, which is something I like about you. So let’s go with because I listened to your pockets. Let’s go into geopolitics for a second. Okay. How is that impacting things? Okay. I was bummed out about the Ukrainian war. are. But we’ve added the war in Gaza to the Ukrainian war. And we’ve got two full on proxy wars going right now. And you and I both know that there are war games happening in the Pacific. Us is girding. I hope it doesn’t happen, but they’re worried about certain things going on in Southeast Asia as well. So how do you think the geopolitical situation is shaping up? And what ramifications of that have on the economy in Bitcoin?

Peter McCormack 15:29
Alright, big questions. Let me tell you an interesting, let me approach this differently. Because I can imagine a lot of your listeners might be American, the lens, how people see these stories in the UK is very different from how it appears people see it in the US. And I think actually, I’d say across Europe. So there is no world. No person that I know, in the UK or in Europe, anywhere at all. That isn’t anything but 100%, supportive of Ukraine. Ukraine was invaded by a foreign nation. It was a successful democracy, and a thriving economy. Since it’s separated from the USSR. I’ve been there been to cave, beautiful place beautiful people. There is not a single person in Europe, pretty much when I say is not there will be some but very, very small amount of people who has anything but sympathy for Ukraine, and sees them as their their fellow brothers has been invaded and wants to support them. What I see when I’m watching my friends on the internet, or traveling across the US is it’s another political football. Your political ideology decides what you think about this. And so I find it really unusual when I almost see people finding an argument to defend Putin’s reason for invading Ukraine, I find it really unusual, because there’s, there’s no conversation like that happened here and in the UK. And that’s why I also was very critical. When I saw Tucker Carlson walking around supermarkets in Ukraine is no look, you can put a coin in a trolley and the trolley works. And, you know, it was very unusual for people here. And similarly, I find this really interesting lens with regards to what’s happening with Israel and Palestine, for me is this story that is very simple, is that I don’t for me, I don’t know how anyone cannot hold these two same truths. That the the people of Palestine have been, certainly in Gaza have been living in, essentially a prison camp. They’ve been dehumanized, they’ve lived on the edge of war. And they’ve suffered huge and severe consequences, both economically and with the death and destruction there. And at the same time, hold the same truth that the people of Israel deserve to live in peace. Those two truths are easy to hold at the same time for me. But again, when I look across my friends in the US, it seems like there has to be a side, which is picked. And I’ve seen all these protests with regards to people protesting for the people of Palestine, and these kind of very, very critical, people very critical of the people kind of defending Palestinians living in Gaza. But if you look at the people who are protesting the young people, I mean, don’t you want young people to have huge amount of empathy for for women, children and families being essentially subjected to what what is not far for genocide, within Gaza? And so the lens of all these things, where I am in, in the UK, and Europe is always very clear. But there is this political dimension always in the US, which kind of comes down to whether you’re a Democrat or Republican. And that to me is like a frustrating thing. The wider question that you’ve asked is, is my own personal feelings is we’re heading into unknown territory. For my lifetime. I always thought big, large wars. Multi region wars were a thing of for the history books I learned about in history, World War One World War Two. I’m now in a position where for the first time, I’m very fearful of escalating global conflict. We have very high tensions between Russia and Ukraine. We certainly have global PACs. We certainly have escalating tensions in the Middle East. And I don’t know where this leads to. And I’m definitely fearful as someone with two children. This itself isn’t isn’t at all helping the economy. And so for me as a As a father and a business owner, I’m just very nervous about it. And I can’t give any intelligent answer as to what the solutions are. But it’s a very it’s a time I’m very fearful. Yeah,

Anthony Scaramucci 20:13
no, I mean, listen, I mean, I wanted you on so you could express your views and that I’m not here to rebut your views. I’m just here to get make my observation as well. You know, Tucker Carlson, you know, he, you know, I think he’s a useful idiot for Vladimir Putin. I think that that’s ultimately what he is. And if you understand the money that’s been spent by the Russian government here in the United States, to distort public opinion and to literally create personalities on the internet, and they have large server farms, there’s a Brit by the name of Catherine belt and wrote a book called Putin’s people. She was the former Financial Times, bureau chief in Moscow. And she laid out for people what Vladimir Putin really wants. He wants the destruction of Western democracies. He wants to breed distrust. In the UK and France, Italy, United States, anywhere where there’s a semblance of a democracy, he wants people diving into conspiracy theories, he wants people to believe that their government is out to get them. He wants he wants to create this high level of dissension, the nonsense that he’s spewed on the internet here about the Ukrainians being Nazis. We, you also know that we’ve had this military grade bio weapons factory in the Ukraine, all of this stuff that he’s saying is just patently untrue. But there’s a very large group of Americans that, that that feel this Peter, and by the way, these are generally Americans that feel disassociated from the economic aspiration that you and I have experienced. Okay, I would tell you that I grew up as a blue collar guy and an economically aspirational family. But a lot of these people now are economically desperation all and it’s through no fault of their own, but they do need to blame somebody. And I think that’s, that’s leading to more political dissension and more of a crisis. So, so let’s, let’s go to a phenomenon a byproduct of this phenomenon is actually roaring kitty. Okay, roaring Kitty is back in the news. He has shown himself after a couple of year absence, He’s rising from a chair, it caused a doubling of the game stock, meme stock. The SEC in the US, you know, Jay, Clayton didn’t do such a great job of this. But I’ll paraphrase. He doesn’t like this because this is a form of collusion. So just imagine big companies getting together, or big hedge fund managers getting together and say, Okay, let’s put push up XYZ stock, or z y x stock. That’s actually illegal. But it’s being done in this bee swarm. So there’s not a lot of laws about the bee swarm, but it’s also a cause of the little guy. It’s the little guy, it’s David with the slingshot, versus the big guy. So I want you to react to roaring kitty, I want you to react to this economic dynamic that I’m describing. What do you think of the roaring kitty? What do you think of these things that are happening now? In the

Peter McCormack 23:35
Yeah, I mean, I love it. I love it. Right? Of course, I love it whenever there’s a little guy taking the big guy and when

Speaker 1 23:45
Natalie, Bruno stopped by welti, on to talk about the benefits of Bitcoin in terms of security, and offer her thoughts on the volatility of Bitcoin and investing in gold.

James Connor 23:58
So one thing that human beings do very well is that we exploit profit potentials. Right? And if people can make a buck doing it, they’re going to find a way. And I guess my question to you is what’s preventing someone from hacking the Bitcoin code?

Natalie Brunell 24:11
Well, so there’s a lot preventing it, there is a wall of encrypted energy that stands in the way of anyone hacking the Bitcoin network. I mean, people would have to harness the amount of energy that’s equivalent to two US navies to just make an attempt, and it could be caught very, very easily and Bitcoin could, you know, disregard that block and move on to the next. The most beautiful thing about Bitcoin is that everyone voluntarily comes into consensus on the state of the Bitcoin ledger, which is essentially the blockchain. Everyone has to agree that these transactions are legitimate that no one is double spending, that there isn’t some sort of nefarious hack, and then and the blockchain continues on it’s like, we have this thing tick tock next block. It would be, in my opinion, nearly impossible. I mean, you could have ever Every nation state collude, and then we would have to somehow not know about it so that we can, you know, it would just be sprung upon us in some way for that to even be attempted. And so I think we are we’ve we’ve crossed the event horizon, we are at a point where bitcoin is not hackable, it is incorruptible, it is nation state resistant, which is what also makes it such a great investment, because it is an institutional grade, nation reserve, state reserve status grade. And I think that more and more nations will start to adopt Bitcoin as a reserve asset. I’m not saying that nations will all suddenly flock to it being a currency because I think every country and government will still want to issue their own currencies, that they can tax citizens on and collect and do their their business via their own currencies. But I think as a reserve asset, we’re going to see an increased allocation over the next decade to gold, as well as Bitcoin. So

James Connor 25:58
let’s talk about volatility. Now, one of the things that really stands out to me in terms of the performance, you cannot deny it, okay, but it comes with extreme volatility. So we’ve had many 60 to 70% draw downs. And if you were a portfolio manager, managing other people’s money, you’d be out of a job if you had that type of drawdown. But given this level of volatility, it’s not really an asset you want in your portfolio to protect yourself because of these massive draw downs. And if you did, it would be very small allocation. But it also has a very high correlation with the NASDAQ. And I guess my question to you is, is Bitcoin just another risk asset that people trade like Nvidia or NF Ts?

Natalie Brunell 26:41
I mean, I think that right now, a lot of people see it as a risk on asset and so they they trade it in that manner. But those are the people that don’t really understand Bitcoin, people that are trading in and out of this asset, don’t have the kind of conviction that most people do to hold it. And if you look at the numbers, if you look at on chain metrics, most people actually hold Bitcoin. In fact, most people hold on to it for not just a year but several years. And I think that the volatility is actually it can be a benefit to portfolios, if you look at things like the Sharpe ratio of Bitcoin and the asymmetry that it provides. So if you have, there have been so many models done, including one by a gentleman by the name of Hoffa at Swan, he goes by at Alpha Zeta on on Twitter, he did, he did something called the Nakamoto portfolio, you can go to that website. And you can literally plug in different allocations of asset classes, including bonds, the s&p the indices, and Vidya and Bitcoin. And you can change the different allocations and then zoom out over one year, five years, 10 years, however much you want. And you will see that a portfolio that has even just a tiny bit of Bitcoin, just a little bit with that short term volatility that you refer to outperforms a lot of these other asset classes, most of them in fact, and so it’s just like very clear when you see the visuals show you that even just having a tiny bit of Bitcoin can send your portfolio into a whole nother range in terms of appreciation versus if you just did a more traditional passive passive strategy, which so many investors are, you know, accustomed to doing.

James Connor 28:22
Interesting, I will definitely check out that site. Now, I got to ask you about the Bitcoin haters in Bitcoin has many of them. And I guess the two that really stood out in my mind are Jamie Dimon and also Elizabeth Warren. But why do you think Jamie Dimon refuses to see the benefits of Bitcoin even after the success that we’ve seen with the Bitcoin? ETFs?

Natalie Brunell 28:42
So I think that Jamie Dimon is just a proponent waiting to happen, Elizabeth Warren to you know, you have to look at what they do not what they say Jamie diamonds bank, JP Morgan Chase is a market maker and an authorized participant in these Bitcoin ETF, so they must not hate it that much because they’re involved in these ETFs. I also, I’ve also heard that JP, or Jamie diamonds, family members, some of them have allocated to Bitcoin. I think when you look at it, just without a lot of context, you think that well, these banks could get intermediated or disintermediated, rather with Bitcoin? Because why, why? Why do you need a bank like that when you can become your own bank and you can transfer globally, but I think in the future, there will be components to Bitcoin that will be within regulated compliant rails, meaning that the banks will actually hold Bitcoin and allow you to buy it and facilitate it. I don’t recommend necessarily going down those avenues and introducing counterparty risk and holding with things like banks and exchanges. I teach people self custody, but I do think that there will be a huge portion of the population who says you know what, I don’t want to take that on or maybe not yet. I don’t want to do self custody. I’m comfortable trusting this Third Party and and so I think that banks increasingly retail banks will move into the Bitcoin sector, I think they will facilitate the ability for people to hold and transfer Bitcoin on their platforms. And when it comes to Elizabeth Warren, I just would satis I just don’t think that she’s opened her eyes and ears to how Bitcoin can really help the people she’s passionately fighting for. I know that she really, she strives to be an advocate for the working class and the working person. And bitcoin is the best way for the working person to save for the future. So I think that they would be natural friends, I don’t know why their foes, maybe we haven’t done a good enough job getting her attention and getting her to really listen to us. Because the only other alternative in the conversation about Elizabeth is if she really does understand Bitcoin, and I don’t think she does, but if she does, and she’s against it, then that’s that’s malicious. And I don’t want to believe that our leaders are actually sitting there being malicious about our ability to have this asset that allows us to protect our purchasing power. I like to sometimes just think it’s people being misinformed well intentioned but misinformed and not having the right information and education.

Speaker 1 31:09
On next week on the trading floor, Michael Presti off market rebellion gave us his fix for the week and went over the picks from last week to keep track of how they’re doing.

Andrew Brill 31:23
Let’s talk about next week it is cold next week on the trading floor for a reason. So your your I love the name of your winner for this app lovin. Oh, yeah.

Marc LoPresti 31:32
HPP Yeah, listen, man. We’re big time data nerds, as you know, we are I co founded a company called battlefield that’s one of the first in the data business in terms of as a platform John and Peter investors in that company involved in it with me for a long time. We love to see companies like this. This is a data driven business and they are just blowing the freakin doors off. Totally beat the Street’s expectations year over year increase in revenue, and you have 47.9% on almost 70 cents earnings per share versus negative a penny. For a year ago, this company just absolutely blew the doors off the stock closed up yesterday. I think up 15% stocks up another two and change as they looked just before we went live today. We’re loving app lovin. And even as much as this thing has run, it could go even higher based on what their anticipate what they anticipate and what we’re reading in terms of the overall demand for what this company does. And

Andrew Brill 32:44
like you I check that I’ve popped $10 last week alone. So App love and look for that one to continue to run and your loser of this week. Mark, I was surprised because coming into the summer travel season people look, you would think that they would travel but your Airbnb stock you’re looking to not do so well.

Marc LoPresti 33:04
Yeah, I mean, and this one was was another one, where your earnings, were in line revenue beat, right. So that’s pretty good. As far as an earnings report is concerned, you got it in line and a beat in terms of the top line and revenue. But the guidance not so great. Particularly on the overseas demand side, look, I think Airbnb and other put your property up for rent on a platform, peer to peer type thing. I think the major bearish headwind that these guys are facing, is from a regulatory perspective, right, you see in here, city after city cracking down on the ability for folks to put their apartment or their home up on these platforms without incurring all sorts of taxes, fines, penalties, those, of course, attempts by local governments to bring the money back to the hospitality industry, wherever that may be. So and I think also, this is gonna see a theme here, folks, looking at that, you know, ongoing concern about whether or not the consumers are going to be able to continue to spend, even with summer travel, which people tend to splurge on as much as they did the previous two summers. And I think the answer, especially when we look at that sentiment that came out just before the show, the answer is probably no. So that’s why you got that guidance from Airbnb that things may not look as rosy and it may be as I said on our representative show yesterday. It may be a Cruel Summer I forget who sang that song from my high school days, but it may be a Cruel Summer for Airbnb. It’s

Andrew Brill 34:38
a cruel Cruel Summer Yes, I remember the song. So what let’s move on to our options and our explained to us the unusual option activity and then explain to us what you’re seeing with that activity

Marc LoPresti 34:50
yet sure. So you away or unusual options activity. It’s one of the things that we are known in particular for at market rebellion and that Pete and John have been Known for four years, essentially what we’re doing is the algorithm. And our editors, there’s humans involved. It’s not all just computers, folks are scanning the markets constantly for options, trades, bullish or bearish puts or calls buying or selling of either of those instruments that are unusual in a particular way, either by the size of the trade, or the date of the trade, or the lack of news around a particular or anticipated news around a particular name, right, or combination of those things that sort of gives us the indication that somebody somewhere knows something or thinks that they know something. So we track that activity, we run it through the algorithm, we look at other factors as it relates to the stocks, and we offer this unusual options, activity to our subscribers as signals as things that they can use to help inform. We don’t tell people to buy or sell, we don’t tell people to put a particular trade on. This is educational in nature, but it helps inform us and it has served us very well. So what we have up on the screen from our fantastic editors is called buying buying the right to buy a stock at a future point in time at a particular price. We saw that tends to be a bullish indicator we saw bullish call buying in Citigroup a couple of times they rolled this you away that we’re talking about now. It’s actually a roll that’s from an existing position that gets moved out in time or in price. We saw that in Citi Group actually saw a fair amount of strength in the financials this past week, based on you know, higher for longer for banks tends to mean that they can continue to make good money. Citigroup has been dazzling investors over the last couple of earnings calls. Not terribly surprised to see that but yeah, that’s the unusual we have today. And I believe that that’s also one that we’ve covered on John’s three, three service. That’s one of the subscriptions that some of our more active traders follow and watch every day.

Andrew Brill 37:07
Yeah, and if you want to know more about options, head over to market rebellion. Not only they talk to you about options they teach you, as part of their educational stuff, teach you how to deal with options, but I have a little tidbit for you cruel, cruel summer Bananarama. I think no Bananarama, but Taylor Swift or if you’re a swift the Taylor Swift has a song by the same name. So Bananarama Taylor Swift, however you want to go, that’s cool, cool summer for you. So let’s recap your winner of the week app lovin. I guess they’re an app company, right? They give you a platform with which you can put your apps on and with with people out of work, they need something to do, they’re going to sit with their phone, and they’re going to play with their app. So App lovin is already popping, you think it’s going to go more? The loser Airbnb, maybe the travel season isn’t going to be as robust as we think it was. And the unusual activity for the week. unusual option activity, excuse me, is Citi Group of bank stock. And the banks that they actually reported early in this earnings season. All of them reported fairly well. So that was a great, you know, great time for them. And we’ll see if those those we’ll recap those next week. And we’ll see how we did.

Speaker 1 38:25
And finally, financial analyst and Bloomberg contributor Kyla Scanlon joining Wealthion to talk about mean stocks and Gen Z’s economic outlook.

James Connor 38:37
We started this conversation off by you telling us about how you got into business and economics and it had to do with Gamestop during 2020. And now Gamestop came roaring back with roaring Kittie coming back to life. So Gamestop I think it was up 100%. The first day it was up over 100% The second day, mature word is now but AMC also went parabolic. What are your views on these meme stocks? And I’m sure you speak to a lot of investors. What do you tell them about playing or trading these memes stocks?

Kyla Scanlon 39:10
Yeah, I mean, the meme stocks are they’re pervasive. They survived the hike cycle. And that says a lot about them and the persistence of whoever is buying them. You know, I think it’s not there was a piece from I think John authors in Bloomberg, where he was talking about this is not 2021. Again, like this is definitely a different market. There aren’t as many short sellers, like it’s not going to have that same sort of squeezing bursts that we saw. But I do think this is a sign of stock market that is disconnected from fundamentals. It is a stock market that is more of a casino, then than anything, and I don’t think anything’s necessarily wrong with that. I just think it’s important to know that like GameStop, like there’s a difference between a company and a stock specifically with Gamestop like Gamestop Because maybe not a very good company, but they seem to be a tremendous stock. And I think that’s the confusing thing. But it says a lot I think about this current state of affairs, like there’s an element of financial knowledge and baked into that. There’s an element of people just sort of wanting to get rich quick, like it ties into the sports gambling phenomenon that we’re seeing here in the United States. And I think that it deserves a serious consideration as a cultural movement, honestly, because it does tell us so much about how people feel about their economic circumstances, not to get like too deep onto something that’s obviously a meme. But I do think there’s a lot going on there. So

James Connor 40:41
okay, so let’s dive into that. All right, you represent a younger generation. And I’m curious how you feel about the economy right now? The political situation in the US and, and your financial future?

Kyla Scanlon 40:54
Yeah, yeah. So I’m 26. So I’m an old Gen Z. I am worried, I think I think a lot of people are worried. And, you know, oftentimes, I’ll talk a lot about like, how my generation is feeling, which I’m always very grateful to have the opportunity to do and a lot of people will say, Well, you know, this generation had a tough, the other generation had a tough, and I think that’s true, like every generation has had these hurdles that they’ve had to overcome. I think for Gen Z, specifically, they are worried about their housing prospects, they are worried about the polarization. And the distrust is just as pervasive throughout every corner of anywhere you look, they’re worried about inflation, they’re worried about a labor market that could be impacted by AI, in a way that I don’t think any of us are prepared for. both good and bad, right, AI is a compliment, and AI is a replacement. So I think the younger generation has an economy that is relatively strong. But there are all these issues that are at the forefront of their minds, that are making them feel like they are not able to benefit in the strength of the economy. And I think that’s the tough part is like, how do you help people through a moment where there are there is a structural affordability crisis, there are all these issues that you’re having to grapple with on a massive national scale. And, you know, how are you going to feel good about things when all that’s going on? Yes,

James Connor 42:26
you touched on a lot of interesting points there. And one of the words that really stood out to me was this whole element of trust. And I think this really came to the forefront during the pandemic. And after because people realized, Oh, my God, what just happened here? Right? And what are they trying to sell us? They’ve been the government. But what are your thoughts on that? When you look at the government, and whether or not you can trust the government or trust Wall Street or trust the media, or Congress or the Supreme Court? What are your views on that? Yeah,

Kyla Scanlon 42:58
I mean, the Harvard youth poll came out about two months ago now. And trust in all these institutions has declined substantially. The United Nations is the only group that’s gained more trust, everyone else has dropped by like, like literally 40%. Nobody trusts the Supreme Court, nobody trusts the president, nobody on both sides, media, Wall Street, whoever. And so I think that’s like the hard part is, you know, we have this it’s sad, again, the structural affordability crisis, but we also have lack of trust in the underlying structures. And so I think that’s like, the really hard bridge to walk over is like, okay, so we don’t trust in these things that are maybe contributing to issues around affordability. And we don’t trust them to address the problems of affordability. And I would say like trust, what I say often is trust is the most expensive commodity in the world, because it is. And whether it be you know, media headlines, or polarization or bipartisanship, people feel like they’re not able to even you know, have faith in these institutions to make the right decisions for them. And that is, is a crisis of confidence in a really big way that I think we have to address like sooner rather than later. But the how is extraordinarily complicated, because it is about being transparent and telling the truth. And, you know, telling people that yeah, like things are kind of weird. And like, there is all these issues, and we’re fixing it, and here’s how we’re fixing it. But breaking through to the algorithm and sort of this like, you know, how do you break through to that? How do you break through past people’s biases, or just their ability to even absorb that information? When they already have a wall up? It’s a it’s a really tough problem to solve. And

James Connor 44:43
I want to hear your thoughts too, on the fact that a lot of the institutions that I mentioned, the White House, the Congress, Supreme Court, every one of those people are 70 or 80 years old. What are your views on that?

Kyla Scanlon 44:55
Yeah, I think it it’s not good. I think that there’s so much value to having sort of that wisdom, that mastery of, of knowledge of politics in those places like, I do think there’s plenty of room for that sort of mindset. But I also think you really have to start bringing up the young people, you really need to start reinvesting in the younger generations and allowing them through. And I think this is the problem with the labor market at large is like people are just staying in their jobs for a long time. And so that’s kind of creating this, like lack of promotional viability, and a lot of the more traditional companies. And so I think that’s one problem. And then I think, number two, it’s hard for someone to govern somebody that they don’t understand. And I think that’s kind of what we’re seeing with older generations, there’s a lot of policy to benefit the older demographic, which makes sense, like, that’s who is running the country, of course, they’re gonna design policy to benefit that. That’s who they are. And so I think you do need younger voices in there to sort of advocate for policies that benefit younger people. Like in the US, if you’re a homeowner, it’s just one example. There’s all sorts of tax incentives for you to stay into your house, well past, you know, prime age to be owning a house that is like with four bedrooms, that you should be downsizing at some point. But all the incentives are in place for you to stay. And that means that there’s lack of mobility, right? There’s all sorts of incentives to be a homeowner, there’s tax write offs, etc. Versus when you’re a renter, you don’t get any of that. And so I think the laws are very much designed to benefit the older generation, those who have been able to accumulate wealth, and deservedly are like benefiting from that. But you have to, like, bring up the next generation behind you. And I would say, I’m not alone in this opinion that the older generation has, has failed at that.

James Connor 46:58
And you mentioned that a lot of people are staying in their jobs longer. Well, maybe that’s because you’re not doing that well, economically, right? They can’t afford to quit or retire. 25%

Kyla Scanlon 47:09
of baby boomers have no retirement savings. But baby boomers are the richest retiring generation ever. And so it just goes back to that point of the bifurcated economy. We have a lot of boomers, honestly, who are kind of keeping the economy afloat. There was a Wall Street Journal piece talking about their their travel expenditures and their expenditures on like golf courses and stuff. So you have this group of boomers who is spending spending spending, because they’ve saved and they’ve invested and they’ve done everything, right. And then you have another generation that maybe hasn’t had the same offer, or the other cohort in that generation that maybe hasn’t had the other opera, the same opportunities to do so. And so I think that’s kind of what we’re seeing is that like, yes, you know, there are those who can retire and definitely have, and then there are those who have no money. And that is really problematic. Because when we look at what’s happening, like we are facing a demographic crisis, like not to be a boomer about it, but like we do have an aging population that is not being replaced, the fertility rate is far too low to replace the number of the number of babies that we would need to fund the aging population. And so elder care is like $10,000 a month in the United States. It’s exorbitant. And I think that that’s tough. That’s a really tough one to solve. Because what do you do with an aging population? And you can’t pay for them? Like everyone talks about Social Security being underfunded, what do you do?

Speaker 1 48:38
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