Recession Indicator Flashes Warning: Investors Prepare
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Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

Good afternoon, fellow investors, and welcome back to InvestTalk. This is our March 6, 2025 edition of InvestTalk. And we are in quite the sell-off in markets. And things are changing rapidly. We know that with tariffs. They're coming. They're going. I don't know what to really expect. But you can expect volatile times, both geopolitically as well as economically. And that's what we are here to walk you through. It's volatile.

as challenging environment as I've experienced in a while. Let's say that maybe not ever, but in a while. And that means the average investor, which is most of you, are likely struggling as well. These are unprecedented times. And that means you have to have an open mind, be flexible and not bring any preconceived biases to the table. Focus on the facts on the ground.

as they come in and make adjustments. And that's what we're here to help you with. Filter out the noise and focus on the reality of the situation, not the emotions, but the facts. And I'm Justin Klein, and I'm here to answer your finance investment questions, as well as bring you data and perspective with over 25 years of investment experience. So

In just a bit, we're going to talk about today's marked performance and run down the show topics for the hour. But first, let's tackle this caller question first. Hey, I want to know about Marvel technology, technology.

Ticker symbol, MRVL. We just had earnings when the stock has dropped substantially. Wanted to see if this would be a good time to pick them up. Maybe I'll hold it for a few years. Wanted to see what your guys' thoughts are. If that's 74 right now, if that's not the price, what do you guys think a good entry price would be? Thanks for what you guys do. Looking forward to hearing on the show.

All right, looking at Marvel Technologies, and they did have earnings, and earnings disappointed, even though revenues were up 27%, earnings were up 30%, but it's always about what the future looks like, and the future looks not as rosy as the market had been expecting. Earnings this year expected to go $2.81 from $1.57 last year, and that's the big jump.

And that's what the market has priced in with this big move from 34 back in beginning of 2023 all the way to 120 recently. 52 week high is 127, spot 48. Now we're down to 72. So we're down 43% from its 52 week high. And just look at the history of the moves in this name. Back in 2021, it peaked around $93 and it bottomed around $34.

So you're talking about roughly a 70, about a 65% drop, peak to trough. And if you head back to 08, it peaked out at about $36, and it bottomed around 5, down around 80% from there. And that's typically what happens with these names. You get a 60% to 80% sell-off. So a 60% sell-off would bring this all the way down to...

50 bucks around there an 80 sell-off would bring you down to you know the mid-tie 20s which frankly the 200 month moving average is around 28 bucks would it shock me to get there no i mean it's as i said its earnings expectations for this year are 281. it could easily not make that right there's a semiconductor company if the uh

demand in the data center space, which they sell a lot into the data centers. And that's been a big boon for their business. If that doesn't come to fruition, this could easily only make a dollar, right? And then suddenly, what are you going to pay for a dollar, $1.50 in earnings when earnings are falling instead of growing, right? You're not going to pay a big multiple, especially for a business that is not very consistent.

So I think there's a lot more downside to come. I don't see really any major support here until probably $45 in that range. That's 72 now. So, you know, it's a name at some point you probably want to pick up because the history is they do have they're fairly profitable. They do have a lot of debt. So I would not be buying Marvel and stepping in front of this.

Let's go take a live call. Nick in Seattle looking at URI United Rentals. Yeah. Hey, Justin. Do you own it or looking to buy it? Yes. Yeah, I have about a half a position. I've averaged into it over the past year, so I'm about even money on it. I'd like to add a little bit more, but before I do, I would love to get your analysis and see if you like the company and if you think this is a good point to add a little bit more.

Well, United Rentals, for everyone else out there, they provide construction and industrial equipment rental sales through about 1,600 locations in the U.S., Canada, and Europe.

Now, this could be an issue with tariffs, right? If they're operating in the U.S. and Canada, then there's products going across the border. What does that look like? That would be a bit of a worry for them. Revenue growth looks to be slowing this year from last year. Same with the earnings growth. Earnings supposed to go up 4% this year when they went up 6% last year. And those estimates for this year and next year continue to come down.

So and that's why it's in a downtrend. You know, it's 30 percent off to two week high. It's below all the major moving averages. And historically, this is a cyclical name and they tend to have. Let me look at their debt levels right now. Right. This is a highly capital intensive business. They rent equipment to their customers and in an environment of higher interest rates and maybe a down a down trend.

Economic cycle. That could suddenly be a challenge. For them. Now they're.

Cashflow peaked out in 2021. Everyone was building, especially apartments and people remodeling, all of that. Now it's down to $419 million. So certainly that's come back down to earth. Their profitability is very good. It's 30% return on equity. I like that. Solid dividend. The issue is...

the cyclicality right and the the trends here uh which let me find a support level for you because that will be vital yeah major support's gonna come in around 488 right now it's at 625. so

It's approaching the 100-week moving average. That's going to be at 605. That's going to be decent support. But major, major support will be around the 200-week moving average as well as the 618 retrace from this move from 2022. 488 would be that level I would want to be picking this up.

But I just don't like the recent trends in the economy, in earnings expectations, as well as the chart. So I'd be patient on picking up more until 4E. All right. Thank you. Thank you for the call. Now we're heading into a short break. And on the other side, we'll talk to Don from Orinda on our live line. He wants to talk about Pella Nova, symbol is K. So we'll talk to him next on InvestTalk.

InvestTalk is made better when listeners add their voices. My name is Robert and I'm from Florida. Great show. I learned so much from just listening to you. Hi, this is Susan from New Jersey. I'm calling about AXOA. How much of the information that came out today on the whole AI play with deep seek and all that, how much of that information can you really trust?

And Justin Klein and Luke Guerrero are always ready to provide unbiased answers. I am very much a person that does not trust Chinese data. Net income is growing and margins are staying pretty steady. Let's go take a live call, Paul.

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Let's go talk to Don from Orinda looking at Kela Nova. Symbol is K. Do you own it or are you looking to buy this name? It looks to be bought out. That's the real question. Yes, I own it. I see that Marge is looking at purchasing it. I don't see how much of the owners of...

of whatever they are. I don't know what we're going to get for it. I don't see it. The offer is $83.50 per share. Right now it's at $82.43. If you wait until the deal closes, you'll get a little bit more. There's obviously the risk that it could fall through as well. It's an all-cash deal.

They probably have the money. It's probably going to go through. There's probably very little risk that this will fall through. So, you know, you're talking about a little over 1% gain from here on the buyout. You know, when it closes, I'm not sure. I'd have to dig into it. But yeah, it's likely going to close and you'll get 8350. But, you know, you can also just sell it and put that money into something that might yield more as well.

Okay. Fantastic. Thank you very much. No problem. Thank you for the call. Now we have another live call. Roger from the Bay Area asking about CGXU listening via our podcast and occasionally listens on AM 1220 as well. CGXU is the symbol. Once again, do you own it or looking to buy it?

I'm looking for it. So basically, I allocate 20% of my portfolio to international stocks. And mostly I've been with the VXUS so far. But that is market weighted. And I felt there's a need for some active management over there, given the situations we are in right now. And I came across CJXU. It's from Capital Group.

They are known for their active management. And so I was thinking, how about putting up like 5% to 10% of my international allocation into this ETF? So I'd like to know your take on it. Well, this would be a large cap growth ETF.

foreign large cap growth ETF. 93% of the portfolio is invested in foreign equities. And like I said, leaning towards the growth side of the market. So, you know, depending on how those other type of

businesses or ETFs, how they lean, you know, this could be a good diversifier. Now, this is an environment where you're starting to see the growth of the market underperform once again. But, you know, how much is that is just the mag seven underperforming versus the other kind of smaller caps? You know, I'd have to I haven't looked at that in a second, so I'd have to take a look. But it would be a good portfolio diversifier. Now, it is.

a bit on the expensive side, 54 basis points is the annual expense ratio, but for a actively managed ETF like this, that kind of makes sense to be honest with you. So as your sole

as your sole way to get exposure to foreign markets i'd probably say no but as a once again a portfolio diversifier you know i would say yes now if you look at the performance however it has been subpar this year it's up six percent but the category is up eight point six percent okay

And last year, it was up a little over 4%. The category was up 5.18% on average. And in 2023, the first full year that it was in operation, it was up 15.75%. The category was up 16.18%.

Okay, so it's been lagging a little bit the first couple of years. Now, not dramatically, it's just slightly below the average. And obviously this year it's actually lagging dramatically. So, you know, one of the main reasons to invest in foreign markets is because it's a lot cheaper, you know, from a multiple standpoint. I think it's part of the reason why you're getting the outperformance in foreign markets is that you're getting money flowing back to those names that are,

a bit more value oriented and this wouldn't benefit from that but like i said as a portfolio diversifier as a small position of your foreign exposure i don't mind it but definitely wouldn't be the only way to gain exposure to foreign markets thank you for the call

now we have a lot of ground to cover over the next 45 minutes or so and with time permitting i'm going to focus on a few areas our main focus point is about the inverted yield curve does it really mean a recession is in the offing so we'll look at that also what impact have the tariffs had on the m a activity and how does that impact the finance sector right especially those investment banks

And then we had the ADP jobs number that came out yesterday. Well, the official jobs number tomorrow. But what did that tell us about different sectors and different slices of the economy? And then if we have time, we'll get into some data on what is the downside from a sentiment standpoint of these tariffs. Okay.

So we'll look at all of these and more coming up over the next hour, but we're moving to a break. So hang on. On a best talk.

The InvestTalk Market Madness competition is underway now, and someone is going to win $1,000 just for showcasing their investment skills. But you can't win if you don't play. So visit investtalk.com right now to get all the details and join the fun. Now let's go take a look at the market for today.

March 6, 2025. And it was a decidedly red day. You continue to see every bounce in the S&P being sold off the next day. And it's really the major...

mega caps uh you're talking about nvidia down nearly six percent broadcom and earnings that down six point three percent of the day meta down four point three netflix down eight and a half percent amazon 3.7 tesla down 5.6 even vista mastercard they were struggling down 2.4 on the visa side and a lot of the investment banks and anything related to private equity

Blackstone down 4.2%, Morgan Stanley down 3.5%, Goldman Sachs down 4.2%. So certainly the big banks, whether that's commercial, J.P. Morgan down nearly 2% on the day, or investment banks, like I said with Goldman Sachs down 4.2%, that's really struggling. And you're starting to get that, continue to get that risk off money flow into non-cyclical names like Consumer Staples,

That was broadly green on the day. Coke was up a half percent on the day. For example, Procter and Gamble edged out again. And then on the health care side, you certainly had some strength. United Health up two and a half percent and some of the biotechs and biotech.

Pharma names, it got a gain as well. And energy, the oil names certainly held in there. They balanced Exxon up over 2%. That was kind of the breakdown of different areas of the markets right now and or for the day. And so on the economic front, you certainly had the.

Initial claims for unemployment that actually beat expectations. So that was a bit better than expected. Expected USQ for productivity was revised up to 1.5% from 1.2. So that was actually a positive that the work, the the companies are getting more out of their workers than they were before. And

You're continuing to be in the midst of earnings season. Marvel Technologies, as the caller said earlier, they were in line, but their guidance was not as good as the market had expected.

And let's see what else. Dollar was flat. Gold was roughly flat. Treasuries are roughly flat. Bitcoin was down nearly 2% and crude oil was roughly flat. So that was the market today. Continue to see downside. And as I said at the top of the show, we're kind of the crucial point for the NASDAQ and whether or not we'll get there. If you get another about 3.5%, 4% drop from here, that's kind of setting in motion a much deeper drop

in the Nasdaq, kind of like 2022 when you had a 33% drop in the Nasdaq. If we kind of hang around this level, around the 200-day moving average, and we get a bounce, then that is just a refresh of sentiment that will likely mean new highs probably later in

the year so we're kind of at a crucial point for markets in a time when there's a lot of uncertainty so we'll be watching keeping you updated on where we are for the major indices let's keep things moving get get a fresh question from the comment section over on our youtube channel

Finite Finite Anarchy says, can you take a look at Tempest AI? This came up in a monitor of stock trades in Congress. Apparently Nancy Pelosi sold a chunk of her Nvidia shares before it tanked on Monday and bought this on January 14th. Now it's got me curious because I've never heard of it before. Interesting. Okay. So following the Nancy Pelosi trade, you

Usually doesn't disappoint, but let's take a look at AI is the symbol. And this one is certainly disappointing. This is C3.AI. And what they do is they build enterprise scale applications for organizations.

in data intensive industries. This is a name that has lost money, continues to lose money, even though revenue growth is pretty solid. Not amazing. 26% year over year for a small name with $2.7 billion market cap and only about $100 million a quarter in revenue. That's frankly not gangbuster

Gangbuster growth. Now, if I look at the chart, as you would imagine with what's happening in the AI space, this has reversed in a big, big way. Let's take a look at January. Yeah, it was trading in the 30s, mid-30s. Now we're down to $21. So not all Nancy Pelosi trades work out. And that's why you have to take those trades kind of with a grain of salt. But yeah, I wouldn't be buying this. It's now approaching $1.

Major support here around $20, but with the kind of trends you're seeing within the tech space, as well as the fact that they don't make money, they're burning capital. This is a type of name you want to avoid until kind of the dust settles and.

I frankly don't think the dust will settle on the reversal of the AI trade for a little while. I think it's just getting going. And a name that's, like I said, burning capital, issuing more shares to stay in business, then I wouldn't be jumping in front of this. So I'm passing on C3 AI. Symbol is AI. Now we're going to take a quick break.

And on the other side, more answers to your questions. And of course, my focus point as well. So if you have any questions, don't hesitate to give me a call at 888-99-SHARP.

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Your questions are free. The answers are unbiased. Justin Klein is here now, ready to take your calls live. InvestTalk 88899 chart. Now, my main focus point today is in regards to the inverted yield curve. OK, and this is part of the growing evidence that we are based on current policies coming out of the White House.

heading towards a recession. Now, 61% of US investors feel pessimistic about the market's future. And this is from the AAII survey. Now, historically, that is a good buying opportunity, except when you are truly headed into a recession. And we know historically a inverted yields curve has been a good indicator of recession 12 to 18 months down the line. However,

we know that it's not infallible and you have the recent example as evidence and that was in 2023 when Deutsche Bank said it's 100% chance we're going into a recession because of the inverted yield curve and over two years later we still have not seen a recession so the question is are we are we going to recession well I think it depends

It depends on and I've said this before Trump came in office, that there's an order of operation here. There are deregulations, there are tax cuts that could stimulate the economy. There is industrial policy that could stimulate the economy. On the deregulation and industrial policy, that could spur companies going out there and investing in maybe new manufacturing,

which would mean hiring employees, borrowing money, all of this that can spur economic activity. And on the tax front, obviously, if you get a tax cut or you know the current tax rates are going to stay in place, they're not going to expire at the end of the year, you're more optimistic about your future. You're more apt to go out there and spend. So those are stimulative efforts that most people expect President Trump to embark on at some point.

Problem is that's not really at the top of the list. Clearly, geopolitical concerns as well as tariffs have been at the top of the list. And both of those are not exactly topics that are spurring optimism throughout the economy. And then you have Doge, which is trying to cut jobs, right? Lay off people. We all know that when you lay off people,

They're less apt to spend, and that is a sign of recession. And so that's the issue here. Now, you could easily flip. We know that President Trump is notorious for going from one topic and priority to another. And so you could have a fear of recession today, and in a month that could flip because he's focusing more on getting the budget done and getting tax cuts through, and all those things are stimulative.

Or, you know, theoretically stimulative. And so the answer to the question, is the inverted yields curve predictive of a recession? Well, maybe. Now, I think a lot of the factors that made the 2023 warning not valid remain today. Number one, the average consumer has a good balance sheet, especially if you own assets.

You have a locked in 3% mortgage at a time when you've had inflation and a lot of people have increased their pay because of that inflation, been able to increase their pay because of the inflation. They have cryptocurrency assets. They have equity, stock market assets that allows them to feel wealthy and continue to spend. That's largely in place, even though we've had a pullback in a lot of those things.

And then you have the Federal Reserve, which still has a large balance sheet. Now they're doing QT. They're likely to end that soon. That could be stimulative and bring more money into the financial system. And the fact that they have a large balance sheet does distort the yield curve a bit. So the signal of an inverted yield curve signaling recession is not as valid as it was 20 years ago when they had very little impact on the treasury market.

So there's still, I think, still a higher likelihood than not that we will head into recession sometime in the next four years because of the volatility of policy. And the question for you is what should you do? The first is focus on the bigger picture. Just as you're getting this downturn in AI and tech, there's going to be a point where there's great opportunities.

Same with a lot of the cyclical names, right? If there are policies that are put in place, industrial policies to kind of spur us out of a recession, that likely will be America first. It will likely mean industrial companies do better because especially the ones here in the United States, smaller cap companies, mid cap companies, and you need to be prepared for that. Do your research now before you...

Before you have to right through your force to all the markets going up. What should I buy? Okay, be prepared have your buy points have your companies that are on your watch list and then get down to your price target in order to buy so, you know a Bare market a recession. It's frankly a buying opportunity and you need to be prepared for that buying up to now Let's pivot back to the best like voice bank for a question that came in earlier from listener in, Florida. I

Hello, Justin and Luke. This is Jim down in Miami Beach, Florida. I haven't talked to you guys in a while and I'm calling today about Grindr, G-R-N-D. It's a niche dating site that has a unique client base and I'm fortunate enough to be in on it long at $5.60 a share. It

It's up pretty good right now, and I really want to get more of it and was thinking with all this volatility and the broad dips in the market that it might be a good time to get more. If you could just give me a little bit of insight on how the company's doing and if it's worth investing more, I'd greatly appreciate it. Thanks so much, and I'll listen on the podcast. All right, looking at Grindr. Grindr, let me take a look here. This looks like a name that has been bought out.

So I don't think there's a reason to pick it up here. Yeah, it looks like a name that has been out. So interesting niche name. Actually, no, I'm wrong. It has not been bought out. I apologize. Let me take a look at the chart. The one chart looked like it was bought out.

All right, so earnings were negative last year. They are rallying or they're headed to $3, sorry, 38 cents this year to 56 cents next year. But it's still a $15 stock. So you're talking of 30 times multiple going forward and more. Analysts expectations for earnings next year and the year after continue to go down. And it looked like it just broke.

lower technically so i probably would not be picking this up i don't think it's cheap enough let me give you a price on this name just broke out night down nicely today down over three dollars so certainly that is a problem let me give you a price i would say honestly ten dollars i probably wouldn't own this till ten dollars i wouldn't be picking it up in fact just technically broke usually when you get these high volume

reversals from a high this wants to go lower and frankly i would be selling it and i would be maybe picking it up at ten dollars um but i wouldn't touch it until then thanks for the call now we've got time so let's fit in another caller question from the invest talk youtube channel carter erickson says what do you think of i e s c i e s c is the symbol let's take a look here

uh this is ies holdings they provide electrical data communications contracting services to commercial industrial and residential customers and as you would imagine this is a this is a name that did very very well because of the ai data center boom they only made a dollar 79 in 2019 and last they made nine dollars and 62 cents so a big boom

for them and this is another one where the stock has rolled over in a big big way so it looks cheap because of that those earnings but this is the market telling you that little deep seek news and just the expectations from a lot of these chip makers that the

recent growth in demand over the last 12, 18 months is not likely to be sustained. This is telling you the same thing. So the technicals are broken and it's a very small name, $3.3 billion market cap. And even last quarter,

excuse me, last quarter revenues grew 18%, but that is a stark slowdown from the 31% just a couple of quarters ago. And earnings were only at 42%. I once going to start slow down from peak when it was up 147%. So, uh,

I don't think that this is going to maintain its momentum and I would be very patient on it. These names could fall much, much more even though it's already down about 50% from its 52 week high. There's not a lot of clarity on earnings going forward and so I would be patient on it. Keep on your watch list because it could be a good buy at some point, but I would not be buying it now. Let's go take a live call. Sammy from San Francisco asking about Netflix.

Hey Justin, thanks for taking my call. Yeah, I would like to get your view on a good entry point for Netflix. It's down pretty significantly today. Do you think this is a good time to get in or wait it out a little bit?

Well, this is another one of those names that went down on big volume and has had a massive run. This bottomed in 2022 around $167. Now it peaked out around over $1,000, $1,055 or so. Now we're at $906 per share. So to me, this is just starting its rollover. I don't see major, major support until about $600.

dollar let me see yeah around 612 615 dollars in that range that's where i might pick up netflix but i think this is just starting it's pullback you know if you have a broader nasdaq drop like you did in 2022 you know netflix then fall from 700 to 100 and what was 160 dollars

like i said when you get money these are these are these are retail names and when the retailers are out remember they're they're weak hands they sell and and that's why you get these massive drops in these names 60 70 80 sometimes 90 percent depending on the strength of the business how much retail weak hands are in there and i think netflix is is just one of those and so uh certainly a name to have on your watch list but this is just beginning

and it's trading at 50 times earnings. So to have this thing to be cut in half to 450,

Would not shock me at all. So I would not be touching Netflix. I think there's much more downside to go and I would pass on it. But keep it on your watch list. Now, real quick, let's fit another listener question from Derek Johnson. 5 2 1 9 says my question. Would you say that Microsoft will continue to trade in this range between 400 and 450 despite its trading at a lower P.E. than other growth stocks?

if you look at meta it was a smaller pe than other mag sevens and i think it's because they're hoarding cash for some big products they want to bring to market i want to spend on air what is your opinion on microsoft going forward okay well microsoft certainly has the steadiest business i always say if you rank the mag 7 names of quality of their business and strength of their economic moat shall we say i think apple is clearly number one but microsoft is pretty up there as well

You know, Apple kind of has that lock on the consumer when it comes to the iPhone, the iOS ecosystem. Microsoft kind of has the lock on the business ecosystem.

consumer and the microsoft 365 ecosystem shall we say now microsoft has pulled back but it is that support right here at the 100 week moving average right around 400 per share and it was down about four dollars today about one percent certainly outperformed the broader mag seven now let's take a look at some of the numbers on microsoft

And it's trading at 32 PE. So think about that. You're talking about that being lower PE for a lot of the MAG7, still relatively elevated. Earnings expectations for next year and the year after, this year and the year after are coming down, but still nice growth, 11 and 14% respectively,

I do expect it to trade in a range, probably go through somewhat of a corrected period, especially if the NASDAQ goes down. You're going to get money flowing out of big tech.

And you'll see weakness and sympathy. Will I think the Microsoft and Apple's outperform the NVIDIA's and Netflix's of the world and Tesla's of the world? Yeah, I do. In that corrective type period, you you're likely to see that and you can just go back to 2022. Microsoft was at 345 or so and fell to 219 at its low.

So it didn't have the 50% plus pullback that the rest of the market had. It fell to the 200 week moving average. And that's where it found support. And, you know, could this, could you have a repeat of that right now? The 200 week moving average is around three 34. Obviously it's going to go up as the weeks go, go on, but this heading back to three 50 would not shock me. I

at all. So I would actually put that range a bit wider, probably between 350 and 450 in that range. So that's what I would expect for Microsoft. Certainly should be on your watch list. I think it's a stronger name than a meta, for example. But

Yeah, it's probably going through a corrective period that it needs to that needs to needs to happen. Okay. And I think the broader Nasdaq is going through a corrective period very similar to 2022. Now, the next the best talk we're looking at this story mortgage rates fall. Should you buy or refinance with mortgage rates decreasing for various loan types? Potential home buyers might find more favorable conditions for purchasing and current homeowners should carefully evaluate their circumstances.

That story tomorrow, but for now, I'm Justin Klein. I'm ready to take your calls at 888-99-SHARK. The InvestTalk Market Madness competition is underway now, and someone is going to win $1,000 just for showcasing their investment skills. But you can't win if you don't play. So visit InvestTalk.com right now to get all the details and join the fun.

Hello, Justin and Luke. I'm calling today about Amazon, ticker symbol AMZN. Ignoring the PE ratio and looking at its EV to EBITDA, price operating cash flow and price to book value, it looks undervalued compared to its five-year averages. So given its increasing profitability and high growth potential in cloud business and advertising, I'm wondering if it will be a good purchase between mid-190s to low 200s. Thank you, and I'll be listening on the podcast.

All right, looking at Amazon and...

I like that he's going beyond P ratio. He's looking at other ratios that are more telling. And one is enterprise value to EBITDA, enterprise value to EBIT. And they are the lower end of its range. However, you have risks that are bigger than they were before. You see this with tariffs, right? How much do the 20% tariffs impact the sellers on Amazon, for example?

And so that's certainly one worry. And then there is something to be said about full earnings. It's not something you should just throw out completely. And if you look at sales growth, certainly slowing 10% sales growth last quarter down from 14 late in 2023. And then earnings estimates are growth is slowing as well.

uh and then the technical right p ratio is 38 if you look at the technicals those are also breaking uh i've talked about this pretty much this entire show that you know you're getting that weakness of the max 7 it's at the 200 moving average for amazon which historically is good support so it should hold here if it doesn't you're going to get a much broader pullback uh in amazon and in 2022 just for

just for comparison's sake, that peaked out at about 185 and hit a low of about 82. So that fell over 50% from its 52 week high. Would not shock me to see something like that and get a more reasonable multiple in the low 20s is probably what Amazon really deserves. So I think there's much more downside for Amazon and I would not touch it. Okay. Let's talk about the impact of the trade wars on M&A and deal making. Okay.

And the trade war is certainly having a major impact. And this is coming from a Reuters analyst and was interviewing 20 investment bankers. They talk about M&A lawyers, private equity investors, hedge fund managers as well. Okay. So and what you're seeing is a larger slowdown that we haven't seen really since 2009. Okay.

The pace of M&A in the first two months of 2025 was the weakest since 2009. Only 1,603 deals were signed through last Friday. Total deals fell 19%, and the total value of deals fell 29%. And really, it's all about uncertainty. The executives that are running the numbers here don't know how to do it.

What will tariffs be? How will that impact the companies that I'm potentially investing in or buying? And this is the top concern for US corporate borrowers, according to S&P Global. And this is already weighing on the big investment banks. Goldman Sachs has already started to roll over in a big way. And these deals are just souring. Now, there is a view that over the medium term, under the Trump administration,

It will reverse that taxes will be lowered. Regulation will go in the right direction and that these M&A deals will start to pick up. But clearly, uncertainty is the enemy of getting any of these deals done or most of these deals done. And I know this just from personal friends of mine that run businesses and they're up in arms about the tariffs. They hate it.

uh some of them do import from places like china and mexico and it throws a giant wrench in their plans for the year which they've been you know spending the entire 2024 gearing up for and so it's no shock that these deals which are many of them are still in the pipeline they're just not going through because they don't know how to run the numbers now there is hope that big mega deals will come down the line uh but you know that may not be until later in trump's presidency

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