The Practical Islamic Finance Podcast

What is the market telling us?

Rakaan Kayali

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What is the market telling us?

In this episode, we will cover:

  • Intro
  • Market Sell-Off: What’s Behind It?
  • Tesla & Bitcoin Take a Hit – Buying Opportunity?
  • Consumer Confidence Falls – Should You Be Worried?
  • Bitcoin Reserve Race & Future Outlook
  • Final Thoughts & Q&A


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ABOUT OUR PODCAST
Our podcast is about helping people ethically build wealth. We cover a broad range of topics including stock and crypto investing, product reviews, and general financial well-being.

DISCLAIMER
Anything you hear in this video is an opinion. It is not personalized financial advice. Make sure you do your due diligence before making any investment decisions.

As-salamu alaykum, folks. I hope you are doing well. A pretty red day in the market today. Investors are fearful. We'll talk about why that is, but we'll also talk about why I think there's a lot more noise in the market nowadays, or at least the noise is what is front and center in investors' minds as opposed to the signal. And that is the fundamentals of the market that you can actually bank on. So looking at the map here of gainers and losers today, it does seem like consumers are in risk off. They're in the consumer defensives. They're in the health care stocks. They're not in consumer cyclicals. Technology is down. Semiconductors are down. Tesla, notably Tesla, is down eight point three nine percent, at least that market close up a smidge after market hours. Salam alaikum, nice to see you. If we look at the indices today, Dow Jones was up now point three seven percent. Nasdaq was down one point two four percent. We got a really tough day in the market for the Nasdaq. The S&P was down half a percentage point. Russell was down point three eight percent. As I mentioned, Tesla was down eight percent. Bitdeer was down a whopping thirty percent. I'm, you know, too long. Didn't read the version of the report I sent PIF members today was that. nothing has really changed that this is a company that is in transition from a bunch of businesses that they really work to I think becoming the only vertically integrated fully vertically integrated bitcoin miner and therefore has a chance to have the lowest cost of bitcoin mining on earth and uh it's also in the business of now producing asics with its fourth generation being five joules per terahash Currently, if you're an efficient miner, you're at fifteen joules per terahash. And so there's a lot. So this is in addition to mining Bitcoin mining business, this is also a picks and shovels business. I really think that this is very undervalued and therefore there's a lot of opportunity here with that stock. Iris Energy was also down today on basically no new news. And you saw, if you recall, I did talk about Palantir not too long ago. I told you guys what I thought of the recent hype around it. It peaked at one twenty four. It's now at eighty eight. I really don't have a good feeling towards the Palantir CEO at all. At all. I think he seems like a slime ball. Bitcoin is at eighty eight thousand for those who are waiting for the eight handle to buy Bitcoin. Well, now's your day. Doge's at twenty one cents. Briefly dipped below twenty cents. Solana's at one forty three. So blood in everywhere. uh in crypto uh crypto has absolutely been decimated but now let's start oh and by the way something I would be remiss not to mention on the day where you know tesla is down close to ten percent they've unveiled that uh fsd has been rolled out in china and it's actually working quite well in china And how did they train FSD in China? They trained it on video from China. So even before they had real world miles to use, they were training it on video from China. Now you contrast this to the geofence solution that Waymo presents. There's just no comparison. People who think that Waymo is a competitor in the FSD realm to Tesla just don't get it. And so basically ignore those voices. That, ladies and gentlemen, is noise. All right, now let's talk about, I'm going back to the slides a bit here. So if you'll if you'll indulge me, So let's talk about why I'm ignoring the fear, uncertainty, and doubt that has gripped the market today. So what triggered the latest drop in the market is the consumer confidence index coming out, fell to ninety eight. It was expected to be at one oh two. This was the steepest decline in three point five years, declined for three consecutive months, reaching its lowest level since twenty twenty two. And you can see in the chart on the right for context where we are from a historical standpoint. We're certainly not at the lows that we saw in two thousand eight, two thousand nine. In fact, we've seen these levels not too long ago, multiple times in two thousand and twenty four and two thousand and twenty three. And so, yeah, it's We've gotten three consecutive months of decline. Yes, this is true. But if you look at the levels, they're very similar to where we've been in previous years as well. Not too removed from those levels. And also, it's very important to understand that consumer confidence is about consumers' feelings about the future. And consumers are often... wrong about the future their feelings are very fickle the way in which this report is gathered is a suspect you know gauging people's feelings at any point in time is a very is often a very subjective exercise so this is about feelings it's not about facts now here are the facts in terms of potential catalysts we have a a serious prospect for an end to the russian ukraine war in the near future We have, yes, talk about tariffs starting between the United States and Canada in March and the United States and Mexico, same time period. That being said, what we've seen so far is that this talk has been really a negotiation tactic. And there will be a catalyst, I think, when an agreement is reached, as was reached in the first Trump administration. And so I just think that this will not be any different, especially if the market continues to react in the way it is. There will be a lot of incentive for the current administration to reach an agreement with its neighbors. Trueflation, as we've pointed out, is pointing to cooler future inflation reads. So we got the hot inflation read in January. I'm expecting that we're going to get less hot inflation reads moving forward. ISM continues to expand. We talked about that. We're above fifty. That means manufacturing is expanding in the United States. The race for Bitcoin reserves is heating up. I don't care what the price is saying, but the fact of the matter is we are closer to having a Bitcoin reserve than we've ever been. And in the United States, no less, the largest economy on earth. And the elephant in the room is that there is seven trillion dollars in money market funds that are just sitting on the sidelines. And they've been sitting on the sidelines because interest rates have been high. The only real fact here that is negative for the markets is that we are expecting an interest rate cut in the not so near future. That's the only adverse reading that we have currently. Everything else is bullish. Now, seven trillion on the sidelines, this will start moving towards risk assets when the interest rates come down. And as I mentioned, if we get a cooler than expected inflation print, there's going to be a lot of speculation about the time horizon for this money moving towards risk assets being shortened. All right, if you're not a PIF member, make sure to become a PIF member. If you like these slides, let me know. Or if you like me switching between tabs more, let me know. If you're looking for the link, as opposed to trying to type out what you see, that long link, the link is in the description. All right, let's go to questions very quickly. Assalamu alaikum, brother. Stay strong. Indeed. Nice to see you, Tahir, as always. It's been a while. It's nice of you to check in. Salam, Ali. Nice to see you. So optimistic. Good feeling to position well for future. It's very nice that the PIF membership seems to have, you know, the battle scars that comes with being in the market and have the right disposition, I think, and interpretation of the events that we're seeing. Assalamualaikum, Ahsan. Do you think NVIDIA will slip on earnings? I think it'll probably beat earnings, but may fall anyway. But I actually think NVIDIA will have a good earnings. And from the smartest voices on commenters on this topic, it does seem like NVIDIA is poised to have a really strong next twelve months. As-salamu alaykum, brother Khan. Nice to see you. When do you expect crypto markets to top? I think probably Q three of this year. All right. I hope you guys found this useful. Yes, I do think Dogecoin is a buy and you should always DCA. Until next time, make sure to take care of yourself. Leave a like if you enjoyed this live. As-salamu alaykum and peace be upon you all.