Oh, if that post-fed rally was quite short-lived I mean, would you look at these numbers when I shot this video? You at the Dow down Three point Eight Six percent, The S P down four point Four nine percent, The Nasdaq down six percent The Russia's down four point Eight Nine percent. Our Uv Xy fear index broke again over our Red directional Sma this morning and hit 28 plus on the day. But I really want to take a moment of silence for our dear friend, the Nasdaq. How often can you say the Nasdaq was down six percent? Today you had a good run friend.

You really did rest in peace. But seriously, pretty vile day for the entire market across every sector. That's why I always say the Big D word: Diversification, Diversification. Diversification.

People always say Charlie would just shut up about diversification. But why restrict your losing of money to just tech when you could be losing money Also, in healthcare, the financial sector, consumer defensive industrials, consumer cyclicals, and now even basic materials. Why put all your eggs into one sinking basket when you can put your eggs into 15 individually sinking baskets? It's like Easter, but for demented bunnies. But jokes aside, I for one am very happy that the Fed has everything under control here.

Imagine, if we had an irresponsible fed right now, where would we be? We could have inflation at four decade highs, markets could be panicking on the weekly worker productivity could be going down, and Johnny Depp could be suing Amber Heard for defamation. Okay, let's talk about some of the catalysts that take The market today, and then we'll talk about what the real issue is here. I'm trying to put the Zip back in Zip Traders, so we're going to keep this short and to the point. Firstly, it was reported today that worker output fell 7.5 in the first quarter, which is the biggest decline since 1947..

that's like a 75-year record. Pretty freaky, and worker output is another way of saying U.s labor productivity. You look at it short the last couple of decades. This is what it looks like all the way down here.

This is where we are. So think about this. Labor productivity just suffered the biggest quarterly drop since 1947, but labor costs saw the fastest year-over-year increase since 1982.. you're really getting killed from both angles here.

Labor is less productive, but a lot more expensive. Rising productivity is, of course, a inflation fighter. If labor is getting more productive, what does that mean? Well, you get more labor for your dollars, But declining productivity is the exact opposite. It amplifies and worsens inflation, which freaks people out because number one: profit margins for companies, but also number two: how the Fed's going to react to this data, and how much worse this is going to get quarter of recorder.

That said, this report was a lot more redundant than it sounds, and a lot of people were trying to say that the market reaction today was very, very overblown because this kind of just reiterates data that we already had. Labor productivity is calculated by dividing an index of real output by an index of hours worked. So essentially, this kind of tells us in a nutshell that businesses and people overall are spending more and getting less in return, which is another way of saying that inflation is out of whack, which of course, is something that we already knew. So thus is why it's redundant.

More so than anything else. though. the truth is that a catalyst like this reminds markets the scale of issues that we're dealing with right now. 1947 is a long ways back.

Imagine all the different crises administrations and Fed chairs that we've had since then. I looked up the top 10 songs from 1947 and I didn't recognize anybody on here. I didn't even see Kanye West. Secondly, you also had some international headwinds today.

We woke up to the British Pound plummeting this morning as the Bank of England warns of a recession risk and they raise interest rates over there. Many people are worried about stagflation and they see inflation hitting potentially as high as 10 percent. I, for one, am very happy that we got away from those guys in the Revolutionary War. I wouldn't want to be dealing with those problems.

Cnn ran an article this morning that analyzed data showing that China's economy is moving backwards, their main sector services shrunk last month due to extreme coveted lockdowns, and China, of course, is the second biggest economy in the world. Many American companies either rely on China for parts of their supply chain, or also transact with Chinese customers. So when you have the government going and locking down major cities and major manufacturing hubs because of small outbreaks of Covid that is going to have global ramifications. And I think that as we finish up this earnings season, you're going to notice that people start thinking about China a lot more.

You already saw some companies like Starbucks mention that. that's a big problem, but seriously, pretty damn rough day. Sometimes it feels like I'm a commentator for a losing sports team. Oh, better luck next time.

S. P. Nasdaq. Ah, it's just had a few bad seasons arc uh, and then of course, in the game, you've also got referees who call the games unfairly and bet on whoever they are going to favor.

And then of course, you can't forget the maintenance staff on the field who lets the field get ripped up and then says, don't worry, the field issues are just transitory. We're gonna maintain that real soon. And I gotta admit folks, as much as I like to be an optimistic little trooper during the sell-offs, it's pretty damn difficult. I think for me, the challenge isn't so much the bloodbath, it's not the percentage down, it's more so the longevity.

For me, an 80 drop that takes place over two weeks, or even two or three months is very, very preferable to an 80 drop that takes place over like one, two or three years. It's sort of like if you get a big boo boo and they give you a band-aid and they're kind of ripping it off very, very slowly and then they put it back on a little bit more and then they rip it off again. They put it on a little bit more and then they rip it off all the way. But that process takes place quarter after quarter after quarter after quarter.

But let's be real. If you're watching this video, you didn't choose the market. The market chose you. The market sucks us in and gives us passion and plays with our emotions, but teaches us to be better people that are disciplined and can deal with setbacks no matter how long and how stretched out they can be.

It teaches the skills that we can learn and apply to all these different areas in our lives. Not just the market, but this isn't a pep talk video. Point is that pessimism is very, very contagious. And sure, there's opportunities for traders, right? We like our Uvxy index going up, we like our S Triple Q index going up and providing a lot of opportunities, and we like getting good deals on stocks.

but I think we would be lying. We'd be dirty little liars if we said that this market wasn't challenging and that pessimism wasn't contagious. Especially considering that these days we're more dealing with the whims of the Fed than we are of a free market. Even if you find the best companies and project earnings and revenue to a T, odds are strong that the market's not going to allow that valuation to be factored in.

at least not until we get out of this current cycle. I'm not talking any type of sector or category. if you choose any stock right now and you value it, odds are strong that the market's not going to allow it to grow into its deserved valuation, but I think that understanding that the pain that we're seeing right now is actually by design to a huge extent is very, very important. I read a fascinating conversation from former New York Fed President Bill Dudley this morning.

He explained that what's happening right now is exactly what the Federal Reserve wants to happen. Turmoil on Wall Street is a feature, not a bug of the Federal Reserve's fight against inflation. They want a weaker stock market. They want higher bond yields.

The less the market reacts to the Fed, the more the Fed has to do. Let me repeat that: the less the market reacts to the Fed, the more the Fed has to do. Alternatively, the more the market reacts, the less the Fed has to do. The more that markets tighten themselves.

the less intervention needs to be had from the Fed. And look, obviously we've talked about this before. The Fed has been very, very quick to hamper expectations every time. The market has gotten frothy since pretty much the beginning of the year and to some extent even last year, the minute markets get too bullish who comes out Mr.

Equity Chopper, or some of his minions suggesting more hawkish moves are saying I'm considering a higher rate hike And then all of a sudden that verbal message tightens up the financial market before they even have to do anything. And so when you ask yourself, why does the market go down so much in a single day? sure, you can blame it on some redundant productivity report You could tell yourself, oh, the big money, They just don't know how to read a report. This is an overselling or you can look at it as everybody playing chicken markets want to make a return. But markets also know that the minute that stocks go up too much, the Fed's gonna come in and say stop it And if equities don't get chopped after that, the Fed's going to go and force the hand of equities.

But honestly, at the end of the day, I think this video is probably going to come across as critical of the Fed. But it's not meant to critique. It's more meant to pin the blame on the real enemy of the market right now. that's 100 the Fed.

You know it and I know it, too. They were the biggest helper of the market when market should have gone down back in 2020 and stayed down for a while. But now they're public enemy number one in terms of equity valuations climbing, and their mandate right now is to bring down inflation without hurting employment. They're probably going to have a hard time doing both of those, but eventually they'll win.

And as market participants, we do have to check ourselves and say, hey, wait a second. We weren't complaining when the Fed was pumping stocks to new or newer highs and helping a lot of these valuations hit their targets a lot faster than they otherwise could have. And so also, we do have to check ourselves when things are going the opposite way. but we do have to acknowledge that over the long run, these cycles are short term in nature.

Sometimes they're a little bit longer short term than we'd like them to be, but they are short term in nature. So if you want to be able to enjoy both the headwinds and the tailwinds of the Fed, but also the long-term actual non-foofy realization of valuation expansion, you have to keep your eyes on the ball and look at the full context. Right now, you could certainly throw up your hands and say, you know what, screw the market, this sucks or you can look at it strategically. Hey, every single market throughout history has had a ton of opportunities.

We've had catalyst plays. We've had beat down stocks to oblivion which realized huge profits over the upcoming years. Afterwards, we've had leveraged Etf plays that were huge like your Uv X, Y or S Triple Q. We've had short squeeze opportunities which are a lot more prevalent now because of heightened retail engagement.

and more importantly, every single bad market condition has been insane. Insanely productive training ground for making you into a killer trader in the next market condition. Those that survive and train and learn in the worst conditions are the ones that are most prepared to reap the benefits in the best conditions. Anyways, folks, look at this red and get excited because we have a lot a lot of opportunities in our future and I'm looking forward to being there with you every step of the way.

Anyways, folks, make sure to hit that ravishing like button and also subscribe if you're looking to learn how to trade with our step-by-step lessons, private chat, daily morning briefings as well as of course our full price target list. I'll put a link to Zip trader you below coupon code Charlie Fever. We'll get you a discount if you're looking to get up to five free stocks with Moomoo. When you both sign up and deposit, make sure to check them out below Excellent trading app.

Have a good one folks and I'll see you in the next video.