Stock Market Collapse Coming Summer 2020?! 3 Signs it likely is...
Application form to apply & try and get in my Private Stock Group/Financial Fortress
Today we talk about the possibility of a stock market collapse in Summer 2020. The Nasdaq is only down .7% for the year! S&P 500 is down only 11%!!! A once in a 100-year event is going on… Corporate earnings are trash… Unemployment numbers are down massive… Corporate debt is sky high… Uncertainty is the highest since WW2… And… The stock market is hardly down. Let’s talk about all this and what is going on with the stock market.
Want to join our free STOCKHUB discord chat? Here is the link
This is where you can chat for free with other investors in the stock market about individual stocks or things going on in the market. Enjoy!
*My Instagram is : FinancialEducationJeremy
This is a Jeremy Lefebvre Production
Created by Jeremy Lefebvre
Well guys, at this point, I don’t even know what to say anymore. Oh, it’s painful this market is. It’s bad. Okay, let’s put it that way. And you know it’s not bad as in the usual way bad meaning like it’s going down. It’s just it keeps going up and it’s bad.
Okay. s&p 500 is somehow up today NASDAQ’s up another 1.1% here today. Tell me from somebody that has the majority of their wealth in the stock market. I’m here to tell you, this is bad. Okay, this is bad. That’s it. Like, it’s just ridiculous. Okay.
And here we are, like, let’s just go back to sleep. We’re like, will this ever happen? Will the stock market collapse? You know, Summer 2020? Is it gonna happen? Or are we just gonna keep going up and up and up what is going on with this market NASDAQ’s now?
Only down point 7% year to date. Think about that. Think about like, like, we’re gonna go through a lot. I don’t even want to get into that right now. But just just take them into context. The Nasdaq is almost at breakeven for the year. Who would have thought that okay, the s&p 500 is only down 11% for the year, only 11%.
Now most years, I understand 11% would be like, dang, this is a rough year, what the heck’s going on? But with the, the, the numbers we’re gonna look at in just a moment. 11% is like if you had to tell us like, we’re only gonna be down 11% it’d be like, take that. Let’s take that.
Okay. It’s extraordinary. Okay. There are two things I really want to discuss in today’s video. The first thing is, why is this market holding up so well? There are three core reasons why the stock market continues, day after day to hold up pretty dang well NASDAQ being right around breakeven, s&p 500 down only 11%.
In my opinion, that is a win for the stock market, like just flat out when we look at some of these numbers. It’s a win. But why is this specifically happening? Okay, I’ve put a lot of thought into this. And I’m gonna go ahead and share why exactly this is going on.
Okay. The second thing I want to talk about in this video here today is what will it take to break this stock market? What will it take to finally get a stock market collapse going and get the stock market just go down and down and down and down?
Just downtrend for several months, or maybe even a year or something like that? What will it take? Okay, and I’ll give you my opinion on that. And then I’ll throw in a little bonus. And I’ll give you my opinion on if you should short stocks out there or do anything like that.
Okay, no, yesterday’s video, you know, just trashed. Okay, I must have let you guys down because that video didn’t get many views. And you guys let me down. I’ve only got 2100 thumbs up. Okay, but you know what, let’s let’s just forget about yesterday’s video. Let’s just forget it even existed. Okay.
This video, I think we can hit 20 118 comes up in the first hour is out. There will be a new record in the History Channel. Can we do it? I think we can in let’s freakin accomplish it. Okay, let’s accomplish it. And let’s hit 10,000 within the first 24 hours, I think that’s possible. That would be a record as well. Okay. Let’s get started.
Okay, so first, I want to start with the facts. Before I give you anything about my opinion on this, I think it’s important to start with facts, what is actually going on the numbers and themselves because men lie women lie. numbers don’t lie at the end of the day. And then I’ll give you my opinion on why the stock market is holding up so well. Okay. So real unemployment rate soars past 20%.
And the US has now lost 26 point 5 million jobs. These numbers were as of April 23. It’s gotten worse since then. Okay. It today’s may 6. Now, numbers have gotten worse, real unemployment rate has gone up since this article came out. And the the job losses now I believe are over 30 million at the moment.
Okay. Those are some facts for you. Look at this chart. This shows you weekly initial unemployment claims in 2020. And they have just gone to levels like we’ve never seen before. I mean, we’ve never seen these levels ever in history, just ever in history. Like this is just it’s extraordinary.
The amount of unemployment claims that are going on right now. And the thing is, it’s still pouring in. Yeah, that yeah, it’s not quite as bad. But the numbers are still pouring in. It’s still gonna be really bad this week. It’s still gonna be really bad next week.
And so it’s not like it’s over. It’s like all the unemployment claims have already come in know that the numbers are slowing, but they’re still pouring in. It’s still in the millions and expected to for at least the next few weeks. And so that’s just as that is, you know, the numbers just speak for themselves.
It’s like something we’ve never seen. 30 million Americans have filed Unemployment Claims since mid March. That’s that’s just ridiculous. I mean, no one could have ever predicted this. Even even in any type of scenario where you thought there could be a recession 2020 no one could have ever predicted 30 million Americans filing initial unemployment claims in about a month and a half span or two months.
And like it’s just, you know, that’s just ridiculous. It’s ridiculous. It’s ugly, okay. No, it’s not just that these numbers are coming out. It’s really you got to pay attention to like, what are some of the biggest, strongest mightiest companies that have the best insights in the world?
Like, what are they doing? What are they actually doing? Okay, Google to cut marketing budgets by as much as half. And directors warned of hiring freezes. Google McDougal, one of the most profitable companies in the entire world, the best balance sheet company in the entire world, a company that will expand regardless of recession is going to cut down massively on hiring that is extraordinary.
And when you hear something like that out of a massive company like Google McDougal, who once again has the best balance sheet in the world, you gotta you got to take a moment to just think about that and just let that process like Google, Google’s doing this not the local restaurant, Google, okay.
Microsoft, you know, they’ve been flirting with the it’ll kind of being the biggest market capitalization company in the world, right? They’ve been kind of battling it out with with amazings on in the apple rate, look at Microsoft job listings, they have plummeted through the floor.
Microsoft is essentially saying, We don’t need that many employees right now. We’re not going to hire aggressively right now. Like, that’s just you know, it’s just it’s fallen to the floor. Literally, Microsoft’s like, more good. Okay, they’ve cut back on nearly 50% 50% of job listings in just the past three weeks.
And it’s continuing to downtrend in terms of Microsoft job listings. A company that is actually a lot of people look at it right now. And they’re like this company is benefiting, and yet, they’re cutting down massively on hiring. Okay. Apple, I mean, the most profitable company in the entire world, right?
Apple is is basically has hiring freezes for most of their business outside of hardware, some hardware jobs, machine learning and artificial intelligence. Outside of that they have some hiring freezes on right now. This is Apple, we’re talking about, okay, the most profitable company in the history of the world.
That’s extraordinary. Okay. And these are, these are massive big tech companies with cash loads in the hundreds of billions. And they’re doing this right, Uber is laying off 3700 in signals more cuts to come OBD buba they have, you know, 10 billion plus in in liquid money sitting around and they’re, they’re cutting back like crazy, you know, just like the slowing down on hiring.
They’re completely stopping hiring right now in laying off massive amounts of employees. And these aren’t like layoffs of drivers. Because remember, drivers for Uber, or, you know, independent contractors, these are actual like, like people that work in the corporate office and things like that, okay. You know, these numbers are extraordinary.
The only company in big tech really, that is hiring aggressively, still is Amazon. Amazing is on and the only reason Amazon still hiring is because there’s they’re benefiting in a massive way, by the move to online retail. It’s just like, it was already a trend that was going and it’s just gotten, you know, way bigger in this whole situation.
Obviously, with a ton of physical retail locations being closed, so amazing. So they just have to hire, they have no choice, okay. I’m sure if they weren’t benefiting in such a big way, but just happened to be in the perfect place at the perfect time, they would not have hired just 75,000 employees like they just did, but they did it.
And they’re the only company you can really look at right now in the whole space that you’re like, wow, they’re actually still hiring. Okay. Now, when you go through all those, those huge companies with amazing balance sheets that are super profitable, and they have hiring freezes, and some of them are doing layoffs, right.
And nevermind, the smaller tech companies, we had gone through those and they’re almost all you know, hiring freezes or, or layoffs right now, imagine what the local businesses are going to do. Right, which is a huge part of the economy, right, the local restaurant?
I mean, do you think they’re really going to bring back all their employees, when whenever they’re allowed to open back up? Do you think that’s very realistic? No, it’s not because at the end of the day, there, the restaurants not going to be very busy, right?
It’s not like everybody’s going out there and running out there. And it’s going to be packed restaurant as it was no. So which means that restaurants got cut back on hiring right? In some of these restaurants, a lot of them, they might not make it as much as restaurants, I’m just using that as an as an industry example, right?
When they open back up, and they find if they can get to that place where they open back up, they open back up, and they find their businesses down. 50% 40% and, you know, 30%, even a lot of them just aren’t gonna make it and they’re gonna have to cut workers huge if they want to even dream about making it through, right?
My city, Las Vegas, so this is where I live, right? And Vegas talking about opening it within the next few weeks. Okay. You know, I’ll be happy to drive around and see see how things are, I can guarantee you it’s going to be probably pretty dead, okay, there’s gonna be dead, you know, they can open back up and you have some people will come, it’s gonna be that many Okay,
It’s gonna be a very small percentage that actually ended up coming out here. The restaurants aren’t going to be nearly as busy nightclubs who knows if nightclubs will even be open. If you ever gone to, you know, a crazy nightclub on the strip, you know, it’s like, you know, you’re jammed in like a bunch of sardines, right?
The pools. You know, the pools are usually insanely packed in the summertime. Here in Vegas. It’s like people are on top of people. I’m not so convinced that whole thing is going to go on. Okay. So needless to say, they can open back up the strip, get ready for business to be down massively still is no way they’re opening back up. And it’s just like, Whoa, everything’s crazy.
It’s, you know, I’ll drive around. I’ll make sure on that, but it’s not going to happen. Okay. Keep in mind with Warren Buffett the, you know, arguably the greatest investor, one of the best businessmen of our time. He’s not buying anything right now is the proof is in the numbers, right?
You know, we can talk about opinions we can throw about that. But what what are people actually doing out there? We looked at the big companies, we look at, we look at Warren Buffett, he’s not buying anything, he hasn’t bought anything recently, with the market being, you know, lower than it was, he’s still like, No, I’m good.
All that money sitting around, and he doesn’t want to throw a few billion to this stock or that stock, he sells out of all his airline positions at a loss at a loss of somebody that has a, you know, a vision for companies that go way longer than probably you were I or anybody else watching this video, right. And he sells out of airlines, which means he thinks that the industry will never be the same.
And you might have a difference of opinion. And you know, that’s cool respect to you. But for Warren Buffett to sell out that things have fundamentally changed forever for him. And this is a guy that probably knows these airlines, the airline industry better than any other, okay, he owns an actual private jet company, the biggest private jet company, which is called net jets, Berkshire actually owns that, right.
And he is his ability to talk to all these executives understand the airline business on a very high level, he thinks it’s never going to be the same, he could be wrong, maybe it bounces right back, and everything’s amazing. Or maybe it doesn’t, and these companies are stuck losing money for a long time, we’ll see a lot of bankruptcies in the space, and things like that.
We’ll see what happens, okay, Warren, when Warren Buffett’s not buying it, after we’ve had a dip, you know, you’d be a little worried, let’s put it that way with with higher cash levels, by far and away than they’ve ever had, they’ve added $100 billion in cash and short term investments in the past eight years on that balance sheet.
And he’s still like, I’m good. I don’t want to buy right now, I’m actually going to sell, you know, that’s something to take into account. Okay. corporate debt, more facts on facts, okay, corporate debt is skyrocketing. For most companies in the world right now, you know.
The amount of companies that have taken out debt issued bonds, issued shares, you know, drawn down on credit facilities, it’s almost every single company out there, it’s very hard to find companies that haven’t done this, it’s 90% plus of companies have done this.
So essentially, if you’re thinking about buying into any stock, right, now, you’ve got to understand the balance sheets in a much worse place than it was previously. And that’s almost every single company in the stock market. Right now, almost every single stock in the stock market has a much worse balance sheet than if you’d bought two or three months ago.
And so you have to you, when you ever you’re trying to think about a valuation of a company, you have to always account for the balance sheet. And the fact is, the more debt a company takes out, right, the more debt they take out, the more debt they have to pay off of, which means you get less dividends, or the company can, you know, not reinvest in the business as well.
And especially a lot of these companies have taken off some pretty high interest debt. Yeah, interest rates are very low right now. But a lot of these companies have had their, you know, debt downgraded and looked at, like junk bonds and stuff, and a lot of them have had to, you know, get interest rates that they’re gonna have to pay a 7% 9% 11%. Just because Apple might be able to raise money at 1%, or 2%.
Doesn’t mean that a lot of these other companies can, they just can. So the fact is, corporate debt is at sky high levels. That’s the highest it’s ever been right now. Literally right now. I mean, the numbers are going to be staggering, as we see over the next few months and then might not be done by the way, corporate debt could continue to possibly rise.
That’s something we’re gonna have to keep an eye on. Okay. So, with all that being said, like what we just went through is bad news on bad news on bad news on bad news on sad news and bad news. Okay. And so why, why are things holding up? Well, why is the stock market holding up?
Well, in this whole scenario, okay, three reasons, in my personal opinion, why the stock market is holding up pretty well. I thought I put a lot of thought into this, but one is the obvious one, right? The Fed is flooding money out there in the market right now.
They’re not necessarily flooding money directly into the stock market. But what they’re doing is they’re they’re basically not allowing most of these companies go out of business. They’re buying bonds in mass, and it pretty much doesn’t matter what it is across the board.
They’re doing everything possible. They’re trying to force banks to give loans to small businesses, midsize businesses, any business in general just to get them through. So what that has done essentially people think it’s just like the.
Fed just plowing money in the stock market doesn’t work like that. But what it has done is it’s made investors hedge funds You know, a lot of the individuals that have a lot of money a lot of the big ETFs and funds in general they looking at it like they’re not scared so essentially there’s a situation going on right now where investors aren’t scared because like all the feds gonna backstop in any ways on this company is not going to go bankrupt anyways.
Oh, things can only get so bad because the feds backstopping everything, and by the Fed backstopping everything, it definitely does help but I can just tell you You know, we’ll get into that we’ll get into the the part in a little bit. Okay, we’re only going to talk about right now what you know why the markets holding up? Well, second reason is inflation fear.
So a lot of investors haven’t real inflation fears right now, obviously with the quote unquote printing of money, right. And just the, you know, the Fed flooding money in the market, you have the government sending out checks left and right, right, a lot of people are worried about inflation fears, so essentially worried that the dollar is gonna become worth less and less and less, okay.
So if you’re holding a million dollars in cash, let’s say, you know, in a few years, it might only really be worth 750,000, or something like that, because $1 could just depreciate depreciate over time. And so when you have a situation like that some people that have cash, they’re like, I gotta get in the market.
Because if inflation goes up, asset prices usually go up. And so they look at the stock market as a place to, hopefully, hey, if inflation happens, my money is gonna become worth more in the stock market, because that shows you that’s just usually what happens when there’s inflation, usually, all assets get more expensive, homes get more expensive, the stock market gets more expensive, you know, just assets in general get more expensive.
So that’s the way you have a lot of investors looking at it. And then the third reason is hope. You know, a lot of investors are just writing on hope right now, they hope that the economy opens back up fairly soon. And they hope when the economy does open back up, that it will be a robust economy in the hiring, we’ll get back and unemployment rates will come down massively, and things will get back on track very, very quickly.
Now, that’s, that’s a hard thing to believe. But the fact is, there’s definitely an investor base out there, that is investing right now is still buying the stock market after his bounce so much. And with all the uncertainties, just, you know, there’s just riding on hope.
And you know, it’s not bad to ride on hope, if you’re getting SILLY PRICES in the stock market. But here’s the thing, the s&p 500 is down 11%, the NASDAQ soundpoint 7%. The fact is, you’re not really getting silly pricing on these stocks, you’re really not, you’re not getting silly pricing.
So you know, if the stock market was down 50% right now 60% buy on hope because, you know, the risk reward is very attractive when the markets hardly down. And with all the uncertainty, real uncertainty, you know, that’s, that’s a dangerous time to buy on hope.
Okay. Now, what will it take for a summer 2020 stock market collapse to actually start and actually happen? Okay, what’s it going to take to actually get the stock market to go down? Okay, so in my opinion, there’s two things that could start this, the first one being truth coming out.
Okay. So essentially, matching, the economy starts to reopen, you know, over the next few weeks, or the next month or so imagine we start to open all across the United States, and worldwide economies open back up, and everything’s really like technically open, okay?
And then imagine when the truth comes out in these businesses aren’t even close to 100% of what they used to be revenues profit wise, for most of these businesses, let’s say 80% or 90% of stocks in the stock market. Once the next quarter is reported in these companies say, Hey, you know what, yeah, business is down 60% in our, in our stores, hey, business is down.
You know, 40% in our restaurants and things like that, when the actual truth comes out, there’s no more hiding, there’s no more like, Oh, you know, there’s no more that hope game because then you know, the numbers and then you know, what you’re looking at, and then what ends up happening, you know, basically happening is, you know, s&p 500, analysts have to start downgrading, essentially what they think these companies can do.
They have to start lowering their their earnings expectations for not only this year, but next year. And then you start kind of really getting the fear rolling back in the market where essentially, the, you know, a lot of investors looking at like, dang, I own this stock right now. And we’re in a situation where their earnings could take three years to get back to where it was four years or five years, or maybe it never does, okay.
And as long as the markets holding up good in terms of like, praising those thoughts don’t go through investor’s mind. But as soon as you start getting some sell offs, that’s when those thoughts start going through investors minds more and more, it doesn’t matter if it’s small investors, big investors or something in the middle, okay, everybody starts to take that into account.
And as the sell off gets worse, you start getting the dominoes to fall the wrong way. And you start getting a lot more people to say, you know what, yeah, what am I doing in the stock? Did the earnings gonna be down the stocks probably gonna go down for the next year. So let me get out.
And so outside of us having a truthful situation where the economy looks really strong and corporate earnings look really strong, and they’re gonna bounce back and 20 you know, late 2020 into 2021, outside of that scenario, that could definitely start you know, some type of stock market collapse in the market. Okay.
The other thing that could start is if Roni Rona takes off again, okay. So imagine if the economy starts to open back up and imagine the number for Ronnie Rona absolutely take off once again, and it starts spreading like crazy. That is a scenario that could definitely take the market down because then they’ll start to be talking about could we are we going to close down the economy again.
And if we do that, that would just be you know, the nail in the coffin really for the stock market and for You know, the global economy for many, many years, let’s put it that way. Because that would just create such a traumatic experience just for the markets in general right now.
And if you think the Fed’s balance sheet is big right now, which the Fed’s balance sheet is, you know, absolutely gone up, like insane the past, you know, basically, since Ronnie Ronnie took office, I guess 6.7 billion and 6.8 billion, wait to see what it goes to if Ronnie Rona takes back off, and we have to close the economy, again.
The Fed’s balance sheet will go to 10s of trillions, okay, it will go to literally 10s of trillions, they would do everything in their power to just flood money out there, you know, government would have to send, you know, checks to everybody’s homes are on a whole nother scale to basically pay for everything for a year, it would create such a dramatic experience that, you know, let’s hope that doesn’t happen.
Let’s hope they’re only around a dozen take back off. But if it does, that is definitely something that could you know, cause the stock market just go. Okay, now, and one thing I want to bring up real quick, a lot of people assume that in regards to Ronnie Rona, and people that, you know, let’s assume assume the economy opens back up, the restaurants open back up sporting events open back up, disneyland opens back up and all those sorts of things, right?
Some people assume Well, you know, I’ll go out still, and other people will go out because some people aren’t scared of getting the running round up. But here’s the thing here. Some people don’t just think about it in regards to themselves.
Some people think about it in regards to, you know, at least with talking with friends and family and other folks in general, some people are worried that if I go out, and I get running run, it’s not just about me, but what if I get my parents sick?
What if I get my kids sick? What if I get my wife sick and things like that. And that’s the way a lot of people think. And that’s why I think this whole scenario, with the economy opening back up, I think it’s hard to believe that things are going to bounce back super strong, because you have a mass amount of people that are really literally scared to go out and do anything because of Ronnie Rona, because they don’t want to get it.
And then you have another big portion of people that are scared that they’ll get it and then give it to somebody else in their family who you know, could be at risk. And so you know, it’s just going to be an ugly situation for a while, in my opinion.
But those are definitely two scenarios that could start this. Okay. Now, I said I would throw in a bonus to you guys about shorting the market. Okay, because I know a lot of people are wondering, should we start shorting the market? Should we start buying put options, you know, the markets crazy right now.
It just keeps going up and the NASDAQ’s probably down, there’s massive risk out there. There’s possibility, you know, many things could go wrong in this scenario on the the markets, pricing and a lot of good news. And I just want to say you got to understand who you’re fighting in the scenario, you’re fighting the Fed, and the Fed is a tough fight, okay.
And that’s why this, it makes us so hard to short this market. And I’ve never even really had thoughts ever about shorting the market. Let me be very clear about that. But the thoughts have even gone through my mind as somebody that’s, you know, been called a perma bull in the past, and somebody that has the majority of my wealth, invest in the stock market, you know, I’ve even had thoughts about it.
But man, it’s a tough fight when you’re trying to fight the Fed. It really is, guys, it is a really tough fight. I mean, so at the end of the day, I feel like you know, it could be interesting, but I can’t do it. I just can’t do it cuz I don’t want to fight the Fed. But the one thing I will say is a Fed can’t make people go spend money.
So the Fed can backstop a lot of things, they can buy bonds, they can, you know, help these companies get through, they can try to force banks to give loans and things like that. But at the end of the day, the Fed can’t make me go to the restaurant, if the restaurants opened down the street, the Fed can’t make me go to the football game. In fact, no, the football game, right?
The Fed can make me go on vacation and get on a plane and travel somewhere the Fed can’t make me do that there can be I can have all the money in the world, right? I can have a billion dollars if I don’t want to go because I’m afraid to get in the brownie or getting getting the brownie and giving it to somebody else that I love.
Right? I can’t go spend that money. So that is that is something to take into context. I think, you know, shorting the market is it’s dangerous. You know, even though there’s it looks like one of the most attractive times and maybe in history to do it. It’s honestly too dangerous. And remember, this thing is a famous saying, hey, the markets can remain irrational a lot longer than you and I can remain solvent.
And that’s something to think about, you know, you know, obviously, you know, it looks intriguing shorting the market, but I can just say it’s too dang dangerous, okay, it’s too dang dangerous, because there’s unlimited losses on the other side, and one we could be wrong.
And two, even if we aren’t wrong, still the market could go up. It’s just facts. It’s just the way it works. And so I just say it’s very dangerous. And if you’re actually considering shorting the market or buying put options, suddenly that like just make sure you fully understand the risks before you ever even think about going that route because that’s a dangerous, dangerous game to play.
So I’ll just leave it at that. Okay, so hope you guys enjoyed today’s video. As always, don’t forget to smash that thumbs up button. We’re going for 2118 thumbs up in the first hour. I think we can accomplish it. It would be an all time record. Thank you for watching. Have a great day.