Behind the video
Is the Recession Beginning?!?!?!
Overall Thesis
Kevin attributes falling Treasury yields despite hot inflation data to investors moving out of technology stocks as large capital raises strain market liquidity. He sees near-term equity downside but retains a year-end QQQ target of $800, favors Apple and long-duration Treasuries, and expects a recovery following an Iran deal.
Narratives
QQQInvesco QQQ TrustKevin expects liquidity pressure from large capital raises to create further near-term downside in QQQ, with $700 becoming the next destination if $715 breaks. He nevertheless maintains an $800 year-end target because economic activity and AI demand remain resilient.
Key Arguments
- Large capital raises absorb liquidity and can force leveraged investors to sell.
- QQQ has lost $725 and is approaching the $700–$715 area where he previously bought.
- AI revenue growth and ongoing employment gains argue against the investment cycle ending immediately.
- An Iran deal could catalyze a strong equity recovery.
Risks acknowledged
- His recent $765 objective was missed, with QQQ reaching only $762.
- Consumer spending outside gasoline shows weakness.
- Further liquidations may occur before a rebound.
Predictions (1)
TLTiShares 20+ Year Treasury Bond ETFKevin favors TLT as investors seek Treasury exposure during technology-stock volatility. He identifies $78.77 as a long-term support area and expects bond values to rally if an Iran deal is signed.
Key Arguments
- Equity-market stress is directing money toward Treasuries despite inflationary economic reports.
- TLT's cited $78.77 support area has repeatedly attracted buying.
- He describes its approximately 4.93% distribution yield as attractive.
- An Iran deal could support a sharp rise in bond values.
Risks acknowledged
- Hot inflation data would ordinarily push yields higher.
- TLT has price fluctuation risk.
- The support area was breached in 2023.
- Holding an individual Treasury to maturity differs from owning a bond ETF.
AAPLAppleKevin presents Apple as an exception to the technology-stock weakness associated with large capital raises. He reiterates an upward investment stance because Apple does not share the capital-raising pressure he identifies elsewhere.
Key Arguments
- He explicitly reiterates the 'AAPL up' stance.
- Apple is described as an exception to the capital-raising pressures affecting technology stocks.
Risks acknowledged
- The broader technology sector faces liquidity-driven volatility.
Predictions (1)
AMDAdvanced Micro DevicesKevin reviews his earlier assessment that AMD was overbought and his recommendation to sell year-end calls. He says the subsequent decline vindicated that trade, but does not clearly issue a fresh AMD forecast in this segment.
Key Arguments
- He previously viewed AMD as overbought around the cited $620 level.
- He reports that AMD subsequently fell roughly 13–14% from the level of his earlier recommendation.
- Hardware stocks are vulnerable to liquidity pressure and leveraged selling.
Risks acknowledged
- AMD initially rose another 4–5% after his recommendation.
- He expects the broader hardware trade eventually to rally strongly.
Hedges & Caveats
- Consumer spending and labor-market data show early cracks, but he says it is too soon to declare a layoff recession.
- AI revenue growth remains strong, although major AI companies are spending heavily and are not genuinely profitable in his assessment.
- Leveraged investors may face liquidations or bankruptcy before a recovery.
- An Iran deal and the timing of a recovery remain uncertain.
- TLT carries price fluctuation risk; its cited support level failed temporarily in 2023.
- Portfolio suitability matters, and the commentary is not personalized investment advice.