Okay, so the market has been clawing back gains pretty much all week, and we've discussed some of the issues here on the global scale. Number one: you have Chinese fud. China is cracking down on a lot of the big tech companies. over there, you have U.s China tensions rising and you have some sketchy Chinese ipos.

Number two: you have us fud around. Tech companies. Big tech companies are coming under huge scrutiny right now with rising court cases, executive orders, bad mouthing from both parties, and anti-trust investigations that's driving a lot of uncertainty in big tech. Number three: you have pricing pressures increasing.

We just talked about that Cpi Index a couple days ago where you had rising prices in many different categories. We talked about how much of it looks transitory and much of it is driven by certain sectors like used vehicles and trucks or energy prices, all of which are set to go back down as we enter fall and winter. But pricing pressures continue to freak out the market. Yet, the Fed has remained very consistent in terms of their outlook that inflationary growth and these high numbers are just transitory and that you're going to see them come back down.

The fourth problem is also the Delta variant spreading. It's causing a lot of anxiety for a lot of the logistical hurdles around the world, but if there's one big issue that needs to be discussed, which I would argue is the biggest issue, it's this. I believe that the biggest reason that the stock market is adjusting right now is specifically because speculation is turning into actual numbers throughout all of 2020. And throughout early 2021, the market projected, debated and cycled back and forth, trying to figure out what the world would look like this summer.

And now that we're here, speculation is meeting actual numbers and that's not as sexy. It's real news instead of just rumor. And guess what, real news is a lot more boring than rumor. And while many sectors of the economy are seeing great numbers, well once they start getting back to those mature levels which many companies are, when they get back to those mature growth rate levels, they're not going to be that massive massive rebound recovery rates that you saw from the last year.

Of course, there's also problems with the recovery on top of that. but overall, there's more good than bad in terms of the recovery. But it doesn't even matter because the market is starting to shift away from looking at the pandemic recovery, and it's starting to think about what's going to happen post pandemic recovery. And when you mix that in with all the other points that I mentioned earlier in the video, it creates this interesting environment where the market can't figure out where it's going, so it's basically slowing down and it's having some concentrated sell-offs.

And in this video, I want to discuss with you what are the biggest areas of the market right now that are struggling which have the most opportunity and where are the numbers matching up and were they not matching up? And I want to give you some projections on what is going to continue to grow post recovery instead of what's just going to recover and then stop growing or grow back to its normal rates. And the only thing that I ask before we get into any of this is that you hit that ravishing like button and also don't forget to subscribe either. Also, if you were looking to join us at Ziptrader, you are a Ziptrader. You battlefield 75 75 off coupon code will be expiring tomorrow.

So if you'd like to join us and get lifetime access to our step-by-step lessons, our private chat, and of course our daily morning briefings where we brief on all the latest catalysts and what's going on in the market each and every morning. Well, I'll go ahead and put a link to Ziptraderu and go ahead and check it out before tomorrow. Okay, let's start. So you look at the Jets Etf, which is a composite of the major airlines.

You had it cut into a third as the pandemic started, and then by March 8th of this year, you had it essentially recovered to a lower average of what it was in 2019. people were anticipating summer months. People were happy with the vaccine. They were anticipating a massive rebound in demand and so forth.

Airlines were a hot damn recovery play, but now we are in the summer we're in that period that they were speculating on and we're seeing actual numbers and what are we seeing? Well, we are seeing great numbers, but we are far from 2019 levels despite the fact that it was just trading at the lower average of 2019 levels just this year. And it's not like you can just erase a year of having dramatically reduced traffic. Just go ahead and take Delta Airlines. Delta traded very similar to the overall airline index and they just reported earnings yesterday.

and they said they are expecting to generate pre-tax profit profit for the second half of 2021. about exactly a year ago, people were dreaming of the day where airlines would again be projecting profitability or have any sort of chance of profitability. I saw some estimates saying 2025, 2026 last year. Well, here we are in 2021 and look what it is expecting profitability in the second half of 2021.

So right now, but the stock keeps going down. Why? Well, because the euphoria has already gone and left. The reality is that we're nowhere near 2019 levels. This company is not as healthy as it was in 2019.

Delta said themselves that they are positioned to achieve 2019 revenues no later than 2023, which is great. Hey, this is a lot better than anybody thought, but that's 2019 revenues not being hit by 2023. And you look at where the stock is trading at and it's assuming that we're already back to around those 2019 levels. And again in March of this year we were trading at prices on the lower average of 2019 levels already.

So it's like, okay, great, we're back. But how much more can you really price into this company? It's not so much that people think that airlines are going to go dramatically down again unless there's another random virus, but it's more so the question of is there actual value in staying in this position over the next two years? Is there better use for your capital elsewhere? You have two years just to get back to 2023 levels. Meanwhile, it's already trading near those prices. So it's like, okay, well, is this the best opportunity in the market or am I taking on some risk for very little upside that's going to take two years to realize could my money be better utilized somewhere else? Even once you get back to those 2019 levels in 2023, you're gonna have a lot more debt, so you're not going to be in that situation that you were in in 2019.

Now, Delta, in my opinion, has been very, very responsible, and they've been handling their debt situation very well. If you look at their debt repayment process, if you look at pretty much any of the metrics in terms of how they've handled themselves throughout the pandemic, they've done well. But in terms of an actual growth potential, it's hard to argue that there's a lot of growth potential here in the upcoming years. The rebound effect that took us from 17 to 50 is now gone.

And I don't mean to isolate the airlines, but this is the same sort of situation that's happening in pretty much all recovery stocks. Right now, they've enjoyed almost all of the rebound effect. The companies themselves haven't actually caught up to their stock prices yet, and on one hand, it's like, okay, great. They've pre-factored in an awesome recovery, and recovery is fairly likely, but you have to start thinking about it in terms of okay, well, what happens when they catch up to their valuations? And I'm not even talking about some of the difficulties that they're facing right now.

For example, there's many different bottlenecks in terms of labor shortages, part shortages, delays, overall logistical issues. Look up any airliner or airport right now and you're going to see a ton of complaints. A lot of industries are struggling to get back up, but they will get back up. It's just a matter of time when demand rises, the supply rises to meet that demand, and it will meet that demand eventually.

But the fact of the matter is that a lot of these companies have already priced that in. so if they're not delivering on that, or if people are just like, okay, well, this isn't the best opportunity anymore. Well, you're gonna start seeing some stagnation and some selling off. It's like, okay, well, a lot of these airliners, they factored in a lot of growth.

There's more risk than reward now, and there's not much reward in the first place anymore. And again, I'm using the airlines as an example. But this is true in almost all of the recovery industries right now. For example, Mgm trading well over 2019 levels, booking websites well over 2019 levels Even outside of tourism, I mean, many popular retail store stocks are well above at least 2019 highs minimum.

And of course, the more extreme a company was hit during the pandemic, the more this story is true. But you're seeing this to some extent pretty much everywhere in the stock market. Many, many companies have factored in the moon, and yet their growth rates are set to go down after this initial recovery period. Let's go ahead and look at some of the biggest momentum markets right now.

Let's just say, financial Sector. Look at Goldman Sachs: The Sacks of Goldman. They had record quarterly net revenues in Investment banking in first quarter of 2021, But in the earnings report they just came out with, you're seeing second bests pretty much everywhere. Trading revenue is down, investment banking revenue is down, loaning is down.

And to be fair to the Sacks of Goldman, this is actually a blowout earnings for them. They beat so many expectations, but still, it was a drop from the previous quarter. A lot of these companies had unprecedented opportunities to make tons of money because of the dramatic economic situation that we were in and the dramatic change in the stock market. Now, what is happening? Well, you're starting to see it get back to more mature levels of growth.

So in totality, you look at the composition of the stock market and you think yourself, hey, there's a ton of major companies that are factoring in a great recovery and then some, and many of them are probably going to actually earn that. But how much more can they possibly go up And you say, well, you know with those easy money policies, they can keep going forever. But I would argue that as a lot of these so-called value stocks start reporting lower and lower growth and earnings and start getting back to those more mature stages. You're not going to have investors so willing to throw money at companies with lower and lower growth rates that are extremely expensive for value stocks.

When you're paying gross prices for a value stock that's supposed to barely move in a year, you have a problem. I would argue that capital is going to be more likely to flow to companies that have continuously growing growth rates in terms of revenue, sales market potential. I think that right now we're stuck in the moment. The stock market is very very very much stuck in the moment and starting to look a little bit more in the future.

But it's not there yet. But I think that once it starts looking in the future, it's going to be looking towards industries where revenue numbers are exponentially growing. I think that that's in Tech and Innovative Tech. And yes, I do think that Tech and Innovative Tech have priced in a lot.

But when you look at the growth rate projections in terms of value stocks post pandemic and you compare that to the growth projections of any major big chip blue chip tech company, you're almost always going to see the tech company outperform. And the reason is because most of the economic growth is going to come from those industries. And that's just the big blue chips. We haven't even gotten to the medium caps.

It's certainly possible that random shifts in Fed policy can totally delay that, but in the long run, companies that have higher growth rates are going to find more capital. Chase them. Once you get sick of buying Mcdonald's at all-time highs, you start thinking, okay, what are some industries that actually have some high growth rates? I'm not knocking Mcdonald's I love their Big Mac. They have great ice cream when the machine's working, but at the same time, where is the growth coming from? It's coming from the growth sector.

It's coming from tech and people don't want to see it because we're like, well, wait a second. But tech is volatile. I would rather get a couple percent return than have to deal with these fluctuations to potentially get a lot more. I might think that electric vehicles are coming, but hey, electric vehicles involve a lot of volatility in my opinion.

If you're looking at the data that we have right now, it looks pretty damn clear that we are heading into a period where recovery plays: start seeing lower and lower revenue growth, and when those start seeing lower and lower revenue growth, Capital is going to chase companies that have higher revenue growth that have a higher addressable market size and a growing addressable market and that haven't realized that they need to price that in yet. But think about how short-sighted this is. What are the top 10 growing industries right now according to this website. Well, they are all pandemic hurt companies.

You have airlines, hotels, casinos, ooga booga, movie theaters, tour operators, travel agencies, concerts, taxis. the hottest growing industries right now are quite simply the rebound place, but they've already factored in a majority of that growth on the stock chart, if not all of it already. But are they going to be able to keep these growth numbers post recovery? No, this is just the rebound. The hottest sectors that are going to see the biggest growth in 2021 and early 2022 are not going to be the ones that see the biggest growth in 2023 and 2024.

And the market is forward-looking And since the market is forward-looking and the market has already factored in all of these value stocks, to the Moon. All these recovery stocks to the moon, it's important to realize that very very soon they're going to start looking for better opportunities. Opportunities that have growth rates that aren't going to just die after the damn pandemic recovery ends. One of those companies? Well, if you're thinking blue chip, Well, yeah.

Healthcare, software, data science, social media companies. Even if you're going more into innovative tech, you have electric vehicles. You have artificial intelligence, information technology, green energy, Digital payments, Next-gen E-commerce Blockchain genomics, cloud computing, chip manufacturers, different new software as a service companies, The next generation of energy storage. In my opinion, it'll always be the first to tell you.

The tech sector, The growth sector. They're the most stressful sectors because of the specific fact that they're so damn volatile, because of the specific fact that if you're buying a company that has most of its growth in the future, well, there's a lot of debate over what the value is. And that means that every single time you have an interest rate scare, you have a regulatory scare. You have all this.

They're hugely susceptible to fund. But at the end of the day, if you're in a market where everything's very, very highly priced, and you're looking for opportunities where growth rates aren't going to come down in a couple years, Well, most of those opportunities are going to be in tech and innovative tech, There's some other opportunities with some innovators in different sectors, sure. But just making a generalization, you're not going to see a lot of these major old school blue chip companies do anything more than what they would usually do on a normal year which is barely move. But anyways, folks, that's my take.

Who knows I could be wrong. I'm just the guy on Youtube that likes to yell at a camera. You got to pick the battles that make sense to you, right? Anyways, that caps off the video. If you have any questions, feel free to reach out to us below or join us in Zip Trader Circle and of course Quick Plug if you'd like to learn how to trade.

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