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There is so much doubt about this deal with Iran. It is no wonder to me what is happening underneath the surface. You've got bears complaining about the nitty-gritty going dirty. We're going to talk about what the bears are talking about. But, you've also got margin statistics absolutely skyrocketing as people are going into debt to chase this rally. And they're chasing the sector that everybody is chasing. Except today is potentially the start of reversal. So, rocket ships, reversal, a lot to talk about here. Let's do the usual. I'm Meet Kevin. Let's get into the facts and break down some of the core things that I'm seeing in this market with you. So, first of all, you've got Citadel's Scott Rubner.
Citadel is a hedge fund and market maker high-frequency trading firm. They've kind of got everything under the sun. And they've got a lot of data in terms of what's happening with market premiums, with options, you name it. And it's useful to know that when they give us some of this data, you should watch it. Now, there's often an ulterior motive, but fortunately, they're not onto my moves yet. So, take a look at this. They say that the current pain trade is for US equities to keep rising even after the double-digit surge we had over the last 2 months. We've frankly had the best winning streak since 1985 because the market has essentially
V-shape recovered. Larry Kudlow V-shaped straight up. It is the This is why I said at the beginning of April, this is going to be the most frustrating rally for people because all their financial advisors said raise cash in March, we're going to be like, "Oh, well, now I've got all this cash to deploy. What am I going to do? Now the market's at all-time highs. Is it too late?" No, there's still plenty of opportunities. We're going to talk about that, but take a look at this. Uh Scott says that the rally is forcing investors who remain cautious through much of the rebound to reconsider their positions because of an a slowly improving, mind you. It's like a stair-stepping with this Iran deal, improving geopolitical sentiment,
subdued volatility, right? The VIX is going down, and relentless leadership from mega captures. I don't know about that. I think uh you know, some large-cap stocks, but not like I guess you could say mega caps. Yeah, that's fine. I was thinking mag seven. Is there plenty in the mag seven that aren't really leading? Google's gotten stuck in the mud. Microsoft is finally having a green day today, which is really important. This morning on the live stream we did on Iran, I said, "Look, Snowflake and ServiceNow." And we'll talk about their earnings in just a sec. They can help push us on the software sector, but as we talked about in the course member live stream this morning,
ServiceNow and Snowflake are not part of the NASDAQ 100. So, for us to hit our course member price target for tomorrow for the triple Qs, NASDAQ 100, we need more than just ServiceNow and Snowflake to advance. You need that to spread like uh like a virus almost, like a contagion, where all of a sudden other software stocks start getting sick and they have to go up, which is the I guess a great kind of sickness. Uh and so, somebody specifically in our course member live stream this morning, they said, "Hey Kevin, what do you think about Palantir?" And so, I called it a fair price at 133 and said, "Look, it's going to go up as well as long as Snow and ServiceNow hold on for the first 5 to 10 minutes. They don't instantly get
profit took, right?" Cuz you could have a short squeeze, and there could be profit taking, it could fall. That usually happens within the first five or 10. If it holds past that, that's great for all software. And so, what a surprise. What do we see right now? If you look at Palantir, it's literally gone straight up since I answered that course member's question this morning. We're up over 7.8%. This is just in a day. We're almost at our course member price target for the Qs, which is phenomenal. That's because we found this floor at 725 that we hit three times yesterday and once the day before over here on the Nasdaq 100,
which is a massive safety net that we bounced off of. Frankly, Axon, another stock we love, up 13% on the day. Robinhood, we had great things to say about Robinhood this morning. These are all stocks that have really sold off a lot historically, but now are becoming an opportunity to go into at actually cheap values. My fair price target for Robinhood has been 70 bucks. I made that price target when we were at $150. I'm like, "Course members, don't buy it at $150. Wait for it to get to 70." It got to 70. It's great. Anyway, go back Going back to the facts for a moment on the data, on what Scott Rubner
is saying. Uh let's pull that up here. So, Scott goes on to tell us that once we have this sort of repositioning going on, one of the next things we see is volume and options premium well, premia go up despite the fact that vol is low. And keep in mind, if you're so inclined to join the membership and get these insights before everybody else, you can still do that until tonight at 11:59 because of the Iran deal this morning, we said, "You know what? Let's literally keep the price just for an extra 13 or so hours. We'll call it coupon code deal over at reinvest.co for the AI uh and coupon code deal for the Meet Kevin membership. If you buy a Meet Kevin membership, you can actually bundle up the reinvest AI.
This will probably be cost somewhere around 3x once this product is really up and running. So, we're really excited about that. That'll be the end of June is the target for that with some new things coming out for the Meet Kevin membership June 8th. So, a lot of cool things happening in June. But anyway, go back to this. So, right here we see Rubner's firm suggests that this lower volatility and leadership of these large cap tech stocks as well as slowly improving geopolitical sentiment helps the market move up. But he didn't even mention something that I think is really important. You need to delete those rate hike expectations. Even PCE coming in better than expected this morning is
just yet another way to say those rate cut expectations are too high. We shouldn't be seeing rate cut rate hike expectations. We should start pricing in rate cut expectations for next year. Except we're not. So that is another tailwind for the market. Market expects rate hikes to the tune of like a 60% chance next year. That's going to compress down to zero. As that compresses down to zero, it's going to drive the market up including what's going on with margin. Now margin is something else. I got to show you some of these margin statistics. I wrote them down over here somewhere. Oh yeah, here we go. FINRA margin statistics as of April are 6.8% higher than March. That represents an annualized 81.6% increase in margin. Folks, that is
almost a double of margin debt. That's how quickly people are taking on debt right now. That is dangerous. That's not sustainable. I'm not calling for a crash now. There'll be a crash again in the future. We still have a broadening of this rally going on. And that's actually what's happening today. If you notice, a lot of software names, Palantir, Microsoft, are rallying very well, which is phase two of this most frustrating rally. Phase one, April roughly to the SpaceX IPO, June 12th, hardware rally. Although I will say, Snowflake was given a little bit of an early treat to the software play today. Hopefully it holds, but phase two of the rally in my opinion is software.
21% of the Nasdaq 100 is software. And so if all of a sudden software rallies, the S&P 500 and the Nasdaq 100 will go to all-time new highs and people will be like, "How does it keep going?" Well, cuz it hit all-time highs solely on the back of hardware. It's like 70 to 80% of what drove these indices was hardware. That's it. That's That's a lot of concentration and that all collapses unless you broaden. Fortunately, today we're seeing some broadening. Now, another thing that's interesting that you're seeing is uh this is the first month since January that we have seen a decrease in free credit balances and cash accounts. So, people who don't
have ca- uh who don't have margin are basically using their cash to go buy stocks. People who do have margin accounts are taking on more margin debt at an almost doubling per year pace, which is definitely not healthy, very scary. On the bear bull scale, I personally have been revising it up since the beginning of uh that was actually about the be end of March, beginning of April, because remember that underlying data, and I'll pull up the chart of it, the underlying data has been improving. ADP jobs data has leveled out. We've been doing really well with that underlying macro data. Not saying every consumer is doing well. I'm going to talk about the Mark Zandi bear piece in just a moment,
which gives some credence to how there are definitely people getting screwed right now, especially customer service, work from home, the AI replaced jobs. We just talked about this a few days ago, where the call centers in Phoenix, all these people are worried about getting fired because AI is taking their jobs. So, it's this is not a booming economy for everyone, but this is our bear bull scale and we've purposely started tracking this on a chart because we want to be as transparent as possible that this In fact, I might even be able to widen this a little bit just so you can see it a little bit better. But uh we make notes on all these dates when we update it just so it makes it really nice and obvious
sort of where sentiment has been. And right here around April, I want to say this was around April maybe 7th, right around the ceasefire deal, we jumped in April. We're like, "Buy time. Buy time." That's when we called the most frustrating rally is about to come to hardware and then software. Uh so that was our big jump. And then, you know, we've actually still ticked up a little bit since then because do you see the ADP data on Tuesday? Just keeps getting better, not worse. Now, with all that said, here's some other things to consider. Right now, this is retail cash deployment activity. So in other words, retail is deploying this cash and that's where you see this bar chart
skyrocketing over here. Now, it's labeled retail cash, but that implies it's cash people have. That is incorrect. Whoever wrote this story is a knucklehead. This is not retail cash. This is buying because, you know, gross notional purchasing is the subtitle of this. Anyway, the other thing that you want to consider is that Scott Rubner says right here, "Retail options activity on semiconductors skyrocketing with the highest gross premium that we have ever seen on options." This is because we are currently seeing a 2.7x increase in semiconducted semiconductor related options volumes leading premiums to run about 5x their historical average.
That's insane. So in other words, people who are buying options right now are paying a fat premium for options on semiconductors. People who are selling options right now are loving it. Which then naturally means market makers are absolutely loving this as well because generally when you're in a low ball era, which as you could see here, this is the Dow Jones volatility index. Uh, you could see here we're almost at our long-term support line, which is about 15, 16. We're 1564. We're almost down at that long-term support line.
Not the most perfect, but it's it's a tool. Um, we're almost down there and when volatility is this low usually you can't make a lot of money on options. But the hedge funds, high frequency traders, and the market makers are loving the premiums right now in semiconductors. Problem is even the Scott Rubner got I think they're blind to the software rally that's about to happen. Now, I'm not affiliated with this. I did pitch this a couple days ago as well. IGV is a software uh, ETF. You know, obviously not personalized financial advice here, but look at the volumes. This is getting a lot of attention in this ETF right here. And there are plenty of other software ETFs. I mean, you could always just go Nasdaq 100. The broadening
should help them as well. But it's something that I noticed that Citadel is not paying attention to. While they say uh, the pain trade likely remains higher because of momentum dynamics of people chasing other uh, you know, similar stocks and semis, institutions and retail chasing the same stocks, it's worth paying attention to yes, Snowflake did raise its forecast. Now, I wrote here that they did admit their pricing power for artificial intelligence products isn't I shouldn't say isn't great. I should say it isn't as great as their other products. But they were able to raise their forecast. They massively cut mostly their G&A section. Their S was still elevated, but the S uh, the G&A portion, general and
administrative portion was still um, saw a massive cut. And that helped their loss narrow and is one of the reasons Snowflake is basically getting short squeezed. Now, if we look at some of the other data that we have from institutions right now, we can take a look at Goldman and Goldman just raised their S&P 500 price target to 8,000 for the end of the year. That's because of the exceptional earnings they saw in Q1 with their S&P 500 forecast for earnings in 2026 expected to be up 24% nearly double the 13% of last year. And they argue that they need this to broad Well, actually, sorry. I wrote this red part. I wrote that we need leadership in the stock market to broaden to normalize these earnings. And I think
you will because ultimately businesses win from artificial intelligence and we shouldn't only be relying on AI hardware driving these earnings beats. In other words, if the stock market only gets propped up by hardware earnings, it's a little problematic. It's a more fragile foundation. If that broadens out and software companies like reinvest, house hack, right? Like the software we're building. You know, I was mentioning it this morning in the course member live stream. I said, "Hey, look, you know, if somebody could just vibe code away certain products, that to some extent would be great. But the harder it is to vibe code something away, the more of a moat you know you have.
We believe It's obviously I'm a little biased. But we believe we have a massive moat with what we're building with our real estate AI because it's hard and a lot of people don't understand how real estate actually works. I happen to, which is great. But that gives us a competitive advantage. That's why we like the company. But anyway, let's focus back on Goldman over here. And my point of this is to say that I think businesses are the big winners of AI. It's not people. You know, Mark Zandi is right. Let's jump to him for a moment. Mark Zandi is right with his bare piece.
Um regarding the consumer. The consumer is literally running out of financial resources, he says. I'm going to go through that bare piece, but I did promise that I would go through some of the calls from our Alpha report today because somebody asked me. These are some of the things we said in the Alpha report this morning. I copied them over. So, this morning we identified in the course member live stream, just so you can get a free sample. So, this is either free education for you, or if you're thinking about joining using that coupon code deal expiring tonight over at meetkevin.com. Here you go. This morning we said and identified that 725 holding yesterday and the day before was
critical and bullish. The negative GDP revision is bad, but it will get ignored and instead people will buy the dip. That's the argument we made this morning. And the Nasdaq 100 was flat. Now, it's up like 80 basis points. Which on an intraday call going from 729 to our target for the Qs tomorrow of 738 to 739, we're pretty dang spot-on right now. I can't obviously guarantee that we have calls like this all the time, but I actually also said that it's possible if snow and now hold today, certainly past the first 5 to 10 minutes, we could actually start a software bottom. That's why we made that bullish call on Palantir this morning. That's again up 7 and 1/2% intraday.
Now, yes, hardware, I'm not calling a top on hardware. Hardware is toppy. There is still room for hardware to run. I think certainly through the SpaceX IPO. I don't think there's a need to rush out of hardware yet, but I do think software is getting some short squeezing happening today and that could continue. These are all the calls that we had by the way in the Alpha membership this morning. Not part of it yet? Consider it. Shout out to iHome HK who just joined. Advait who just joined, Wendy who joined, Chen, Hunter. hi Hunter actually got the bundle option. Hunter got the Alpha membership and the Reinvest AI beta. Shout out to Richard, Charlotte. If Katia Uh more women today. This is great. We
got Joseph, we got Dan, we got Matthaeus, we got Raj. Welcome aboard. We appreciate y'all joining. Okay, let's get to Mark Zandi's bear piece and we'll keep going with some of the other things. So, Mark Zandi here indicates that first quarter real GDP was revised down to just 1.6% and this includes the bounce back from the government shutdown at the end of last year. Then there is also a durable goods report which showed a decline in core capital goods in April. The decline comes after strong readings, but it's still not great. So, basically he's saying, "Look, we understand why it went down because it comes right after high readings in Q4. But, there's still weak points. And then his version of weak point is pointing to
new home sales. Come on, dude. No duh, home sales are weak when you have the 10-year Treasury hitting its ceiling of the 4.57. No duh. Then he says there was also a decline in real disposable income and another sharp decline in the personal savings rate. Right. The personal savings rate basically went stagnant because the inflation rates due to oil prices and gas prices skyrocketed. So, it looks like your household savings rate is basically flat. It probably is. And he's probably right, consumers are running out of financial resources. Some of them are. Not the rich ones. And I hate to say it, but this stock market is not driven by poor people earnings. It is driven not by middle
income people earnings. It is also not even really driven by high income people. It is driven by entrepreneurs and businesses who are blowing money investing into artificial intelligence and finding out ways to make profit with that. We're doing that. I'm We are putting our money where our mouth is on a daily basis. That's my goal. Daily basis, just be transparent with you. We like software stocks, we buy software stocks. We like real estate because nobody else likes real estate right now, we buy real estate. Over $80 million free and clear of real estate. On top of that, we build artificial intelligence products because not everything's going to get vibe coded away. In fact, building software is hard.
Building great software is even harder. And that's what we're doing. And we're going to sell it. And we think people who buy our products make even more money than they spend. And that's the whole point of capitalism, right? So, the point is Mark Zandi is being a little weenie baby bear. Like, you know, I'll just leave a little comment here. I won't say this on YouTube because I'll probably get um banned. Uh but well, I'll just leave him a little comment here. And um yeah. So, um and that's no offense to, you know, GAY. Why? Uh just supposed to be offensive to Zandi. Anyway, all of this uh with the benefit of massive deficit finance tax cuts.
Yeah. Yes, that And he says, "Which are now fading fast." He's writing this He sounds like a bear. I'm sorry, he just sounds like a little weenie baby. That's just what he sounds like right now. And then there's a surge in inflation, which is double the Federal Reserve's target. Okay, first of all, as soon as Hormuz opens up, which we are inching to this deal, oil prices come down, the tariff inflation from next year lapse. By the beginning of next year, oil prices will be lower, maybe back to 60 to 70. That's my goal is by the second quarter of next year, oil's back to 60 to 70 range.
It's not that big of a deal. Yes, we agree. the Iran war needs to end. But are we on the edge of a recession where a recession will become more likely than not? No. The data does not support Mark Zandi right now. I'm sorry. I'd I'd love to have a bear porn video, but I just disagree with it right now. Mostly because of the following. The market is at all-time highs because of hardware. If this truly brought out because of software, this narrow breadth that Goldman Sachs calls up spreads out. And when it spreads out, the market goes even higher.
I actually think that the three IPOs, Anthropic, ChatGPT, so OpenAI, and SpaceX, those will be more toppy once we get all of those out. But listen to this, Goldman literally writes, "Speculative sentiment today appears far less extreme at the ends of past overextended markets. For example, while retail trading activity has recently increased, it remains below historic and recent highs." Yeah, exactly. Because what's happening is people are pulling this cash they raised from the side and they're deploying it. They're like, "Dang, I'm getting left behind." And there's still plenty of opportunities out there. And then I
pitch these tickers all the time. And we got we do analysis every day in the course member live streams. One of my favorites right now, I'll just throw one out there. I mean, I personally love Axon. Uh and but, you know, one of the favorites uh sort of newer favorites uh just in the last few months is one that I've been looking for and it's this double bounce that you could take advantage of here on Microsoft. It's an interesting one. This is a really important line that it's at, 428. If Microsoft can break through 428, it's probably going to rocket past 526 or 562, the next line over here. Because we will hit our third attempt to break through this.
And if software truly broadens out, we will go right through this. Just good. Then the entire economy goes up. This is also, you know, this is a component of the Nasdaq 100. And all the stupid things that, you know, were unfinished from Donald Trump just get covered up by the glory of the stock market. Donald Trump's political and economic sins get covered up and left in the dust by the stock market. It's a weird thing to say because then it sort of like implies that, you know, oh, well, everything Donald Trump does is okay. No, that's not what we're saying. We're saying it just doesn't matter to the focus of the economy right now. Uh let's look at the Atlanta Fed. Atlanta Fed real GDP tracker estimates for the second quarter, 3.8%.
Fantastic numbers. Really good numbers. Let's keep going over here. Strong earnings revisions have outperformed year-to-date so far. So, stocks that are beating or outperforming year-to-date, that makes sense. Geopolitical outlook uh should extend the market upturn. That's right. We've talked about that. We talked about auction premiums. Uh we have, let's take a look at this here. Uh this was interesting. Munitions depleted by the Iran war will take until 2030 or 31 to get restored. Yeah, it's not good. You even got Japan complaining that they can't get their hands on Tomahawks. This was interesting. Younger
and more educated people in Europe are using artificial intelligence, but more older folks, uneducated folks, and people in like Italy and Spain are not using AI as much. In my opinion, this is very ignorant. This is a great way to end up getting replaced or left behind in the future. You should do everything in your power to make sure you know how to use AI better than the people next to you. If your friends are using AI better than you're using AI, you need to step it up. You want to like you could This sounds backwards, but you kind of want to be in at the person in the room that knows you're using AI better than everybody else. And if you're not, you better learn how all the other people are doing it
better, and you better get ahead of them. All right? So, cuz the moment you're not the best AI user in the room, you risk getting left behind. Just something to think about. Uh TS Lombard argues that we should get back to $80 in Q3 for oil. They think this is the base case, the most likely case, uh and that the red zone of oil back to 100, you know, or getting to 150, not back to, is less likely. We believe that. Uh and then just remember, this is a chart I showed you last week as well. Right now, underweight and cutting.
I wrote right here, sad. Software and over here, semiconductors, I wrote momentum. Overweight and adding. So, institutions and retail are plowing into semis. That's momentum-based. That will And it won't last. I'm not bearish. I'm just saying there are better deals over here at software. Not all of them, some of them. Now, the other thing I actually wrote right next to it, and I was talking to course members about this a few days ago, I said, finance. Finance stocks like, guess what? Banks, Robinhood, SoFi, JP Morgan, and I hate JP Morgan. There was nothing today that made me happier than seeing scummy, douchebag JP Morgan getting fined $4.5 million because of the salami incident,
okay? Nothing made me happier because they suck. And they took over the Apple Card. I have like a $40,000 credit limit with the Apple Card. I basically stopped using the Apple Card because I hate JP Morgan that much. I put a different card as my default option, so every time I go to Apple Pay now, it's something else that's a default option. Just saying. But the salami incident was basically where this guy expensed like $630 for a football party at his home that he invited a prospective JP Morgan client to. And so, over $630 because it was like expensed the wrong way, they didn't like it how it was expensed, even though the guy was trying to recruit a client and he managed a billion dollars for JP Morgan, they fired him.
And the guy filed a complaint with FINRA, and FINRA's like, "Dude, JP Morgan, that was effed up. You guys need to pay him $4.25 million for basically wrongful termination." And I'm like, "I don't know anything about this guy, but because I hate JP Morgan, this guy's my friend." It's sort of like the enemy of my enemy is my friend. If you want a really good bank, by the way, and I have an affiliate link for this. It's a fintech. Go to meetkevin.com/mercury. I kid you not, the I don't just dump on JP Morgan because I think they're horrible. I think they are a I have other videos on this.
It's beyond that. It's also that the features and services that you get at some of these other banks are so much better. They're so far behind. So, let's just talk positive for a moment. If you go to meetkevin.com/bank, you'll get $250 in cash if you deposit 10K within your first 90 days. That's for the business banking side. They also have personal banking. So, you should be able to also enter your email for personal banking because they just opened up free personal banking. Really big fan of Mercury and what they do. We use this regularly over at House Hack. And anyway, sorry, I got on this little tangent over here. But, um banks, brokerages, and anyone who's going to integrate stable coins and artificial intelligence will
be able to continuously monitor compliance, broker-dealer activities, uh you know, cash settlements with artificial intelligence. They'll make more money than ever before. So, I hate to say it, but even companies like JP Morgan will make more money than ever before because of artificial intelligence. The finance sector's been really left behind. So, I do look at stocks uh and I salivate a little bit. Uh I look at the discounts that I see at Robinhood. It's pretty dang close to my fair value estimates for them. It's come down a lot as it should have. The fundamentals told us it would. JP Morgan stopped its uptrend. I'm never going to buy JP Morgan because I hate them, but they've they've slowed their uptrend. Uh they
almost broke out of uh of this wedge over here. In fact, if anything, you could argue that this, you know, ascending wedge here signaled a drop was coming right on a technical basis. But, fundamentally, finance as a sector has been sold off. So, there're probably opportunities there. You're even starting to see software pop back up. The software uh sorry, cybersecurity. But, cybersecurity never had really big discounts. So, it's been hard to get into cybersecurity if you're looking to get into it, but um Snowflake might help rise all tides, if you will. We'll see. But, overall, I'm bullish right now on the bear-bull scale. Uh not bullish enough to go into margin, though. On the bear-bull scale, we sit at Let's find out here, and let's get to
the bottom of it. Bear-bull scale, we sit at an 8.2. So, this is what I had I wrote this down yesterday morning before the market opened up. My take remains hardware runs through the SpaceX IPO. Hiccups like we saw on May 19th totally to be expected. So, we had a slow down there. Saw a little bit of a slow down on sort of the Iran shock yesterday. Oh, no, is it happening or is it not? But underlying 3575 weekly on jobs at ADP is huge. AI will crush workers pricing power and corporations will keep reaping profits. Especially since AI is still only 18 to 35% adopted at companies.
There's still broadening work to do. Labor market tells us that somewhere jobs are being created through this jobs transition. Underlying GDP growth, consumer spending jobs growth, so far fine. Could things break? Yes. But the fun fundamentals are not breaking down yet and I highly expect rate hike expectations to plummet, which is bullish. So I'm sorry, it's all bullish and the good news is if you want more bullishness, you go to meetkevin.com, join the membership, use that coupon code deal and we'll see you in the next video. Goodbye and good luck. Sorry this was so long.
Why not advertise these things that you told us here? I feel like nobody else knows about this. We'll We'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you. People look up to Kevin Paffrath there, financial analyst and YouTuber Meet Kevin. Always great to get your take.
