Netflix and AT&T earnings recap | higher 10y | Earnings preview of Amazon, Microsoft, Intel and more

Biden and Yellen comments about spending more. hi everyone sleepy Soul here and in today's video we're going to cover a host of macroeconomic topics uh as that seems to be what's driving the news uh interest rates as well as a large number of earnings like Netflix AT&T abot Labs Proctor and Gamble and then an earnings preview of the other Mega caps Microsoft Amazon uh Facebook all report next week as well as many other stocks like Intel Verizon uh uh Abbot or ABV uh Exxon Chev Chevron uh Ted do if you're interested in that uh etc etc so it's going to be a longer video there'll be time stamps Down Below in the description below uh if for those that are looking to jump around uh please click the like And subscribe button though if you do enjoy the content uh we've been growing the channel pretty nicely and I'd like to keep that going uh quest to 200,000 Subs um so I guess the the most important for the market in terms of the Israel Hamas War uh was when Janet Yellen said on Wednesday uh the US can afford to support two morees America stands behind Israel period uh and that kind of freaked out uh some of the market participants because uh with with yields pushing as I say this they're just below 5% uh on Friday the 20th uh the yields uh kind of teasing around 5% the the the discussion of more debt to finance a war that we really don't need to be in I I don't think is a uh is a AR is a is a small small tiny or tiny held belief on Wall Street uh from a numbers perspective it doesn't make a lot of sense uh you then follow that up with on Thursday night we had Biden uh talk about his seeks for 105 billion for Ukraine Israel and Taiwan and border security um so they're trying the with the implicit dis discussion of you know the majority of the money would go to Ukraine I think 10 billion would go to Israel uh like two billion would go to Taiwan and then about s billion would go to border security with the implicit discussion that the majority of it yeah 61.4 billion would be for Ukraine and about 15 billion for Israel uh per CNBC but the notable thing is is you know the the Border funding operations uh it they're not really to to fix the Border crisis they're actually just to help resettle migrants as they come over the border so they don't fix the problem uh so you're going to see that balled about once uh the Republicans figure uh for political football reasons once the Republicans figure out who the new speaker is going to be uh so like again we're just throwing money into a pit in Ukraine uh there's a new pit theoretically opening up in the Middle East with the Israeli War uh Taiwan while is it's very emission critical $2 billion for Taiwan and indopacific security is is pretty di Minimus on the grand scheme of things and and then we have this you know 6.4 billion for Border operations which uh again will become political football and will likely not make the final bill he's just saying that for uh Biden is just asking for that so for campaign purposes uh is a likely thing and the reason the reason the the the border security doesn't really solve anything is you know the Democratic party again I (some politics) how MMT is ending because of the interest rate. don't want to get too too political in here but it's just important to note that like everything's kind of becoming a money issue uh which kind of circles back into the market I promise this will get to a stock market Point uh you know the Democratic party in New York and Chicago again uh I can't Chicago Tribune like yells at me uh Chicago Tribune approves one of its largest settlement uh police increases in years uh because they're accepting more migrants and they need money to to basically police the migrants uh again I'm Chicago Tribune aggressive popup ads uh to get me to sign up and then uh a migrant crisis is straining New York uh dividing Democrats and here's why uh you know etc etc and it's just about how Eric Adams and and the uh Governor is fight are fighting over the migrants in New York because nowhere outside of New York City really wants the migrants but New York City wants them to go outside of New York City because they are heavily straining their uh their debt and and make no mistake about this this is from a this is going to be a serious impact on the stock market uh maybe not tomorrow but or this upcoming week but it is something to keep an eye on because what happens is if if your budget like if you are running a city in theory you can issue more debt but like you're not the federal government you can't issue in perpetuity and you need if you need money there's only a certain point that the the interest rates get so so aggressively high and again remember municipality interest rates tend to trade depending on municipality higher like in this say case of Chicago than the federal debt uh even on a even on a tax adjusted yield or even before you get to the tax adjust yield uh but what happens is they need money sorry if they only have if they get a dollar of tax revenue and 33 cents of that dollar go to immigration crisis or prices uh or issues and let's say 20 cents go to fixing roads but now suddenly you need 50 cents on immigration they're going to pull some money out of that road budget and roads are going to get crappier which is going to which is basically kind of what happened in Detroit minus the migration uh mitigation uh immigration crisis excuse me I'm sorry I'm saying a lot of different words they had an outflow of uh of of natural migrants leaving the city to go find jobs elsewhere uh outside of Detroit outside Detroit area uh their tax base plummeted uh suddenly basic uh like just just fixing potholes type things couldn't get fixed because they didn't have enough money cuz they had to meet their social service things they blew up they default uh there was an argument on whether they could were allowed to go bankrupt etc etc long story short they they elect a new city council who's very focused on fixing potholes and kind of revitalizing the city and really turned themselves around in the last 15 years but this is this is stuff that kind of starts the the aggressive downslide if it doesn't turn around and really what all these headlines are really talking about and and they're really complaining about is there's no in the Sha tribun when I closed there's really no more money coming in and interest rates are going up okay uh with interest rates now pet again peing to 10% or 5% again which is a fair number right like you look at you just make a line here uh you know at 5% basically you know they were they were at or below 5% uh or at around plus or minus you know a percentage point for since basically 93 which is right here and then if you go back you know 60s and 70s uh let's let's pull up somebody 6% here so that's 6% and where's 4% that's 4% so you know interest rates for a large portion of the United States let's say golden periods and to the 60s obviously the 80s were were the 80s were considered at the end of the 80s were considered a pretty good time but really from 91 when uh or ' 92 when when uh Bush lost to Clinton all the way to basically 08 that's considered a lot of to a lot of people uh America's Prosperity era the interest rates were always in the 5% range so where they are right now is is considered a fairish point to to to pay for the US government to issue money but what this means is because interest rates aren't down here at zero Mo modern monetary Theory no longer works and make no mistake about it there is a a lot of people who still subscribe or still want to believe the mon monetary Theory um and I'll talk about that in a second but what what is happening is because the cost of a dollar is going up because uh these municipalities Chicago New York La San Francisco etc etc Baltimore no there's no more there's not another infrastructure Bill coming there's not another uh inflation reduction act coming there's not another uh one of the two Trump dck but bucks uh bills that were passed when he was president there's not another influx of Cash Coming they are starting to panic about where their next dollar is coming from and they are looking around noticing their tax base and they are getting cranky because people are starting to notice or that the governments are starting to notice they cannot afford everything and and the one thing with government is it is very you you get you get every two years you could get fired um which is why you get headlines like that the Democrats are sted to get divided uh it's why uh you know I mentioned in the Israeli uh pales Hamas War last week when I made my video I said very briefly that it was it is going to be a little it is a little bit affected by interest rates because the higher interest rate means there's not going to be a lot as much foreign aid coming on either side uh usually Hamas and the Palestinians get most of the foreign aid uh the UN is notorious for uh really only supporting uh the palestin pal uh palestine's uh but which isn't an issue just you know that's just kind of historically accurate uh I don't mean to make that uh either way but because of that like they don't have as much Hamas doesn't have as much money coming that you could clearly tell the Arab area has no interest in backing Hamas I mean Iran isn't even getting involved and is Israel's kind of allowing them or is kind of being allowed to do whatever they want uh in the fight to uh enact Justice in their local fight and part of that again I don't mean to editorialize too much and part of that is just there's not enough money for like the US Yield cycles and where the 10y might go. government to send all their troops and equip and not to mention all their equipment that has been D being destroyed over in Ukraine down to Israel they just and and the UN peacekeeper Force doesn't have that money and it's all because the the the the 10 year is going up okay so again I don't want to make light of a war I want to make that very clear but I said said a couple weeks ago when I did my giant 10-year video I said like listen we go in 40-year Cycles with this stuff uh you from 19 uh uh 30 to about 1970 or 81 1940 I think I said when the war happened we saw interest rates CL crashed down into the war they went to zero during World War II and they went up to basically 81 they peaked in 81 by exploding higher uh and then uh but again it was just you know general you know uh had uh upward movement uh I could draw those lines a little better you know General upward movement and then it's because then it was basically a general downward movement and you could clearly tell we've broken above the downtrend because again it's been another 40-year Cycles it's always two generations it's always two generations the re and this goes back to like that fourth turning BS you see everyone talk about all the doomers talk about every once in a while really what it is is it's a it's one generation overp populates the Next Generation has enough kids to to push out to to replace the older generation and then the third generation doesn't have as many kids so you had whatever parents you want to call that were like the recessionista uh that were above the older than the greater generation greatest Generation the greatest Generation then overpopulate the Boomers the Boomers have enough is people to replace the greatest Generation but then millennials are not having kids at the same levels which means the future earnings uh or the future debt payments in the United States are going to go higher which means I have to get paid more to lend money to the US government and again these are mostly funds these are not individual investors that are lending money uh to the US government these are uh these are mostly hedge funds uh mutual funds uh other funds that just need or want to lock in uh pensions uh uh uh foreign entity that are government based foreign entities that are company based that do a lot of business in US Dollars uh and then commodity and then Traders that's who really move around the tenure oh and Banks lots of banks so you know the good news is this is the weekly or the monthly calendar if you we scroll over to a daily we can kind of see some exhaustion and I'm sure if we pull up the RSI if you're a big believer in that you'll see some exhaustion so it would not surprised me again we saw this just just oops we saw this uh massive just rip higher uh you know right here and even like really you think about it since the beginning of September it's September was at 4.2 and it's just been aggressively going higher higher higher but we finally got a pretty nice red candle uh which which will probably drop yields a little bit uh again you can see that we've had a few of these though uh really like this one uh and this candle and a couple of these but yields have kept progressively going higher the 5% though tends to be a uh nice round number and really you really need to see volume thrust through this like we got to open one day at 5.1 so I think like in terms of the yields affecting the broader Market I think you're going to see some weakness uh in the yield it's probably going to correct sideways for a little bit there's an argument to be made that the the 10 years is only really going up or the whole long end of the crows because of uh um there's been more auctions uh well there's no upcoming bonds or tips uh uh they got a seven-year uh they had a seven-year yesterday went okay the fiveyear yesterday went okay uh um I mean sorry they sorry got announced that it's getting it's happening uh next week I'm sorry the 20y year that happened this week went okay it was a 13 billion round uh OD Odd Lot but no one really trades the 20 year it's kind of a new newer issuance I think it only just started issuing in 2020 um but the auction date for the five and seven year next week so we'll see with how those do my guess is we're going to start seeing more and more fund start locking in uh kind of so let's pivot away from some of the some of the macro talk and start talking about markets um broadly speaking hedge funds are net short a huge amount of oil they're net short a huge amount of consumer staples they're net short a h a huge amount of uh utilities uh cons uh and anything related to uh uh and materials and and Healthcare they're basically short defensives because uh hedge funds feel at least that the way the positioning say uh are their argument is we are going to see a collapse in yields because the FED thinks something they think something's going to break here and if something breaks uh the fed's going to cut interest rates which means Tech's going to run so long tech short everything else the problem is and and and again this goes back to like Market structure the problem is we've basically been on this massive uptrend since the since like August first where's August 1st here uh August 1st right so since August 1st we were at 3.9 we've been nonstop going up since then just straight up like I mean this you can't even like we you can't even describe how beautiful this straight line is it's literally just straight up into the right and what that means is uh uh you know the the the the re sorry the not what that means the reason we're going straight up like this is because nothing is breaking that's the insane part if something broke at 4.5 if something broke at 4.8 if something broke at five this this thing would just collapse down it would just be straight down into the right uh like you you would everyone would go everyone in their mother would try to Long bonds because the carry the carry uh spread would just I mean you would make M thousands of percents in one day it would just well not thousand annualized you know thousand in one day it would be nuts like it's it's uh there's a reason why a lot of uh a lot of people the bond market used to be uh more volatile but larger than the stock market because you used to be able to make fortunes in seconds uh Paul tutor Jones notoriously shorted into Black Monday in the 1980s uh what was it October 19th or 18th but then he immediately went uh short bonds if I'm not mistaken and tripled his money it was some obscene number like that that's really where he made his wealth was in the bond market not so much every every one talks about his short Equity position but it's really the bonds that did it I might be a little off on that but you guys can look that up on your own um else elsewhere but if uh if you're interested in kind of one of the titans of the industry but broadly the fact is we keep going higher not lower because Banks aren't breaking the consumer's not breaking uh the the the the job Market's really not breaking nothing's breaking and I mean yes there's pain uh commercial real estate is notoriously feeling it Venture Capital companies are just slashing jobs left and right and you're going to see a lack of growth in Tech name soon uh but saying all that it's it's you're you're not you're just not seeing the widespread pain that everyone thought was going to come at 5% interest rates and we could talk about that more and I can literally spend 25 Minutes Alone talking about that I mean the correct answer is basically since 2014 when the oil Quick pivot on how the shale crash created the tech bubble. you know okay let's talk about it real quick uh oops that's the Mexican crude I don't want Mexican I want uh and then we want monthly okay so here's what happens uh the energy Mark exxon's like the largest company in the world uh here okay uh Exxon ramco and IBM um those are like the three biggest companies that every Boomer cares about it's why everyone still buys everyone still buys IBM even though their earnings are kind of garbage and and Exxon was still in huge positions in people's portfolio until basically 2020 okay so xon's the largest company in the world uh oil Market crashes um because there's a little bit of an over Supply issue into uh into 2009 it just I mean you can see it in the chart I don't really need to pay like draw it it just it crashes obscenely low it gets to $35 a gallon uh uh you know bottoms uh bottoms a little bit after like the broad Market bottom in March of 20909 it bought the oil Market bought him I think in July or August okay after that until 2014 it just goes higher okay it just grinds higher then the Shale bubble happens okay uh everyone in their mother is buy uh is investing in Shale companies there's a Shale boom all the Venture Capital private Equity money are in Shale Shale Shale Shale Shale uh the Middle East doesn't like that they th they throw throw inventory at the market so it goes from 105 and again this is when Obama was in office in or4 and like gas of California was like $6 uh gas uh it was like it was like six or seven dollars uh gas in the midwest was like five uh it was nuts I mean it was like everyone was talking about how gas might be $10 a gallon and uh and everything and this is when Shale was going crazy but the break evens were nuts uh so the Saudis and the rest of OPAC plus dump a bunch of oil oil Falls to $50 and you can kind of see it just stays there um you know I don't really oops I don't really need to draw you know two perfect lines but you can kind of see it just it trades higher than that in 2019 uh kind of when when uh Dron Paul started cutting the first time collapses in 2020 and and it's ever since that collapse it's been on an uptrend okay uh little bit of little bit of a pullback uh from mid of 2022 to early 2023 but uh generally on uptrend so really going back to what I was talking about with tech the tech bubble was created in this drop this drop if this drop never happens and let's just say the oil price just kind of goes like that right if if this drop never happens The Venture Capital boom of Silicon Valley just does not materialize to the same level it does today uh like you like give you an example Uber would still be around as Uber existed during this time period but Uber would I think Uber came public at like a hundred billion dollar valuation it would come public at like 50% of that at best and it would still be trading 50 probably 50% lower than it's trading today all of the VC money uh was was really uh allowed to expand and allowed to grow because uh uh because of cheap capital and uh you know cheap Capital uh was allowed to was created because energy costs were low and energy costs were low because OPEC destroyed or broke the back of the Shale market so again this is kind of another video uh time to because this is really a historical thing and I got to show you guys references and everything but really pay paying attention to energy costs uh it you know there's a one it's not one for one but there's a pretty strong Cor corelation with energy costs going up uh and and uh If tech goes down what happens to the market. and the costs of of yields going up broadly again not so much US Government just yields in general um but but yeah th this this created the Silicon valy bubble so going back to why the Market's weak and we can now look at the market remember 30% of the market is made up of the M Magnificent Seven as they're called right 30% so let's go to the weekly uh and and remember out of that 30% outside of really Amazon outside of Amazon they're all really heavy tech companies and you're saying you're going to say to yourself sleepy why are you saying Amazon's not a tech company Amazon is a logistics company Amazon is a transportation company they have Amazon web services and then all their garbage like Alexa and and uh Amazon video and all the the other garbage but that's all stuff I wish they got rid of but their bread and butter is they are the best the second best or second best logistics company in the world depending or in the country depending on where you want to put Walmart um right now I think I'd argue that Walmart is slightly better because of their physical locations are are are u in terms of uh their storefronts but Amazon's a close second so you can make an argument they're the best so you have am you have Apple tech company they make Mo their their growth area is uh is is the Walled Garden of the iPhone as well as tech people use the phone um and they need app growth to continue growing uh meta and Google I don't know really need to explain Microsoft I don't need to really explain Netflix I don't need to really explain we're going to cover on Netflix's earnings in a few minutes by the way uh Nidia I don't really need to explain so so that's six out of seven again if your argument is energy costs are going to be generally higher that just means there's going to be less money for let's call it BS industry or BS Tech stuff so you're just going to see less startups because there's not going to be as much Venture Capital Money flowing into that for including then you add in the fact that yields are going crazy and so then you go okay well if if for example again this is I'm not don't quote me on this but like there was a company called stack Overflow I have no idea what they do but they do some sort of they're being disrupted by Ai and they have to lay off 18% of their company um like all of those people probably were able were bought iPhones because of their uh because of their job uh by they were bought by their company or they were able to afford uh iPhones and told basically told to buy it for their job they all had they all had slack uh licenses they all had uh CRM licenses from Salesforce those are all zero so now salesforce's uh total uh uh either you can either call it it's Tam goes down or they're just their numbers go down so Salesforce isn't spending as much money so you just you just go around and around and it just adds in the point where the tech sector is going to continually being continue being weak so that's the area the market should be or the hedge funds you would think would be aggressively short but they're not because in ' 08 where is it okay scroll all the way back here to 08 you want to know what the best four stocks were when the market dropped Apple Google Amazon and Netflix I don't even think Microsoft was considered that good because it was it had the Boomer money from 2001 uh but Apple released their new iPhone Amazon took started taking a huge share because they were because people were trading down uh so they were buying cheaper items on Amazon instead of going shopping at the various retailers that were overpriced and going out of business uh Google was just you know people more and more people were using the internet and Netflix more and more people were doing uh their their streaming thing obviously the Fang trade takes off in about 2015 2016 when Trump comes in and does the Trump tax cuts but but really that's the weakness of the market so anyways that's that's again that's enough market history uh for today but you know the the tech the the where the the positioning is has been very interesting to look at uh and I did mention in a previous video and on my Twitter feed a couple things to Note IV for for the the IV for options for Tesla going in on Wednesday uh were low was the lowest IV I had seen since the pandemic I think it it was possibly the lowest ever in terms of uh in terms of a percentage but I don't know that because I really didn't pay much attention to Tesla pre pandemic uh just because it wasn't that important to the stock market uh so the the IV being that low shows that there was a lack of retail interest L lack of people playing options uh Schwab noted in their in their call on I think it was Tuesday Morning might have been Wednesday you guys can check the video I did on on that uh again in my on my channel Schwab noted that the day the total date the trades per day uh was down about 20% year-over-year so there's a lack of retail participation so that's one of the reasons why uh you're seeing such aggressiveness to the downside because there's just no buyers uh retails tends to be long only generally uh but you can kind of see this weekly there's there seems to be a little bit of megaphone developing kind of a little one you know you can kind of take the uptrend line they clearly broke the uptrend uh now my uptrend was a little bit higher uh than some other people some other people drew their uptrend from like here it went like that uh but but yeah there's clearly a megaphone developing so it wouldn't surprise me to see a bounce and then and then a drop into into next year but uh I think broadly and clearly my line I I drew this line uh earlier this year uh where we end up at 450 for the year uh this is spy uh clearly uh that that's been gone we we broke through that and and I don't think that's coming back there's a potential we get there but I don't think that's coming back um sorry for rambling a little bit with uh with the energy stuff I wasn't really planning on talking to crude um so yeah again no auctions coming up so that outside the five and 10 year so we should see some uh strength in yields we should see the f 10 year come down a little bit that should be a little bit supportive to the broad Market despite everyone freaking out that we broke the 200 day uh here I don't think there's really a fear there's really any worry until we get to 390 uh on spy and I don't think we're going to get there uh and I'll talk about that in a second um okay earnings P&G earnings recap. that happened that I haven't talked about yet so Proctor and Gamble is is you know this is their uh really what they make they don't they're consumer staple but they don't make um sugary drinks or sugary Foods uh like you know they're mostly hair product uh you know cleaning product uh like tide uh Dawn uh uh sh you know and then and then Pampers charman uh uh FaZe and then you know oral and face clean uh and body odor stuff like Old Spice or uh oral bee Crest Gillette Bounty again you know you can kind of you can kind of look at their uh um look at their product and their product tends to be a little bit more on the high end but I wanted to show this specific slide again we're not going to no one really a lot of people I've I've made consumer videos St the past no one really cares too much about them uh so it's not too too interesting for a lot of people but I just want to show you what like real uh a real Monopoly looks like okay organic sales growth was 7% they had uh they had negative 1% volume growth but their's total sales grew 7% That's What real pricing power looks like where is uh do they have a thing about uh they don't have a thing about that but uh the the the the sales growth of 7% on 1% organic volume depression again their stock price has been killed the last six months um much like all the consumer staples uh is this the weekly still it is still the weekly so you know since it isn't bad as General Mills but you know since May when they peaked in April May they fallen from 154 down to 142 back to 15 8 back to the low 140s and now they're now they're at 147 after pretty solid earnings uh this week so you know that's this is a stock if it falls into the 120s even the 130s it's it might be interested interesting in in picking up because again you think about it volume's low because people are trading down uh for product but the moment the consumer feels strong enough um which they will eventually again you know if you assume let's just just again these are Ballpark numbers these aren't real like let's assume 10 % imp uh uh inflation from uh the beginning of 2022 till the end of 2024 okay um and that could come you know up down sideways there's some deflation there whatever just just assume broad price inflation of goods 10% in that time period uh if you got a 3% ra a 5% raise at the end of 22 and a 2% raise at the end of 2023 and a 2% raise at the end of 2024 you are now back at that 10% so if all that 10% price raise happened in 2022 it'll and but you're not getting you'll get two more raises at 23 and 24 assuming you keep your job you don't get laid off etc etc uh I know there's caveats around all over the place that said it'll take it takes that period of time for you to catch up to now feel comfortable buying the higher end product instead of buying like the Costco brand of toilet paper you buy charman for example uh you like charman better so that that volume will come back uh and meanwhile their prices are going to be higher so yay it's it's built-in margin expansion um so the that's why Proctor and gambles help holding up so much and and that's why you see like General Mills holding up better than Coca-Cola or Pepsi uh or other sugary drink Staples because the idea is if you trade away from Pepsi you can always go to Coke so we don't know if those consumers are coming back again if you wash your clothes with Tide or Dawn dish soap there's a a use you know uh if your hair only uses Head and Shoulder stuff I again I don't know you know who uses what anymore but if you use that stuff specifically and then you're like well money's tight so I'm going to trade down you're only going to trade down temporarily the moment like you're able to you're going to trade back to the product you're familiar with and Proctor and Gamble has that pricing power again this isn't great for the consumer uh but it's great for Netflix earnings recap. shareholders I want to be very clear so just something to keep an eye on uh Proctor Gamble's great company uh just good good like throw it in your account and don't ever look at it again you'll be fine uh got fine with the cash flow I think it's like the dividend is like three% right now 2.5 okay so the big one uh Netflix um so Netflix had gang Buster earnings for their quarter and you could see this year-over-year growth 7% in 7.8% in Revenue uh and their forecasting 10.7 which was also fantastic for q4's forecasting uh it operating income was uh 22% o uh year-over-year growth uh and then uh uh and then even quarter over quarter it was up about uh about what 5% that's still fantastic net income uh was up uh was up only about 20% Which you know is appropriate to the operating Mar operating income um given that they don't really have like their operating income and their net income should be relatively close and then uh you know but but the thing to note is their EPS is likely to come down uh next quarter uh and we'll talk about that in a second the the big number was the global paid streams uh grew at 10% mostly on the back of AD their ad-based platform which was very strange because literally 3 weeks ago uh it didn't really leak it was almost almost the equivalent of a press release Netflix was saying how they had to uh they they they were not seeing ad fills because the ad stream signups were about 50% of what Netflix was projecting and it took took a bite out of the stock that mostly got reversed on this earnings move uh and then net cash flow provided by operating activities again this basically matches operating income free cash flow again very similar number to operating income uh and then shares outstanding actually decrease slightly which is good because they're buying back shares um listen let G say two things about Netflix okay first Netflix is the best Hollywood stock to own the best uh for growth reasons um for just moat reasons uh there's a real possibility that Netflix might be one of the only two or three streaming services uh left standing at the end of the decade I imagine and I'm just spitballing here this is I mean no evidence uh Nath wise I think it's going to be uh HBO discover I think it's going to be Netflix and I think you can make an argument that Hulu stands as a separate entity away from Disney uh and uh and I think that's going to be it at best for streaming services I don't I just don't think uh and then maybe like Apple TV or Amazon Prime but I like those aren't those are more like add bolt-ons to Mega caps those aren't really streaming services in the in the uh nature of Hollywood but saying all that I think n is the best Hollywood stock Zone also saying all that I think all of Hollywood is uninvestable um Netflix free cash flow spiked hugely you look at this Q quarter over quarter it's up four basically 4X uh even even from q1 uh and Q2 it's up B I mean q1 it's a little bit lower but Q Q2 was up uh big quarter over quarter uh this is mostly related to cancellation of projects and uh uh and depreciation and the uh the white writer strike they even said free cash flows expected to go down slightly or imply that it's supposed to go down slightly because they're anticipating they're going to spend more money uh rebuilding their show backlog um I think the H the Netflix growth story is over again I think it has a it's a very good Moe it has its own platform uh that is like you could say I'm going to watch Netflix uh and and that is it you could do that in a way that people know what you're going to do and you don't need to you don't need to explain it similar to like oh Google that type of thing or check just check it out on Amazon like it's it's it becomes colloquial for multiple uh multiple things like oh what's on Netflix tonight when it's when you really mean all streaming services so there is some builtin uh there is some built-in you know brand security with that and I think they they're one of the I think when when all of of when we wash out all of the the excess that happened in the 2010s uh free money I think Netflix is going to be one of the few companies that was able to spend its way into existence uh due to debt uh and I think they're going to do it successfully but I just don't think you're ever going to see serious returns from Netflix and I think the stock price if if you imagine a world where the interest rates stay high and I'm not even talking about 5% just four four to 4.5% there will become there comes a point in time where Netflix will will not be able to issue as much debt as they can they'll have to license shows but I don't think they're going to get as sweetheart of a deal to license shows if other Hollywood corporations are either struggling to make rent or or pivot to some other entity or aren't doing their own streaming services and their only income is licensing from Netflix that will C cause Netflix's price uh cost to go up and I think Netflix is getting to the top end of what people are willing to pay per month they're going to raise their premium streaming level to 29 $22.99 again that's $22.99 and I think right around 25 bucks is where it goes from hey especially in a high inflation environment where you know we might not be living in it from a numbers perspective but people still feel like there's a prices are too high I think if you're raising prices now really just because you can um it uh not really for any other reason besides that uh I think there's a big uh there's a big big problem uh with with your your you're going to see a big big problem with your brand loyalty and again that saying all that I do think Netflix is making the correct decision most of their new shows are again partially because of the writer strike but most of their new shows are anime related or like one piece or they are uh reality TV show related like selling Sunset and that's really what their bread and butter should be because those are both extremely cheap to produce and can just create raw hours of watchable TV for people and that people just want some crap to watch on TV They Don't Really Care um I'm not saying one piece is crap for those that like it defense yell at me for that but uh but you know my my wife just puts on whatever garbage reality TV is on Netflix and just goes and does whatever she wants to do anyways it doesn't really matter what's on and I'm sure she's not alone in that I mean there's a reason why most people put on Netflix then immediately get on their cell phones they don't really want to pay attention to TV they just want noise in the background and I think the reality TV and na does does that so saying all that I do think free cash flow is going to come down though because you're going to have to spend more money uh on uh on uh content as well as remember a large portion of their free cash flow is their depreciation schedule and if you are they are not producing new content their free cash flow will drop because they they aggressively depreciate in year one uh and then kind of trickle your depreciation in years two through four um again I just don't think Netflix is investable uh for those of you that are really looking for really any type of metric that indicates you're going to get paid out uh your income again you know they're doing on a trail 12-month basis uh about $12 in earnings they're probably going to do similar numbers next year again uh maybe a little higher you can kind of see that Q4 year-over-year is going to be a lot better but you know I don't know where q1 two and three are going to stand next year probably again it depends on really how their ad networks go in the in the various countries that they're rolling them out in a big aggressive way and you know even if they do let's say $15 of earnings you're buying something at at you know 23 times earnings uh right now at $45 uh 24 times earnings excuse me or yeah 23 23 times earnings right now at $15 a share like that's really aggressive for a company that really just the the only uh like their sub growth just isn't uh here it is where's where's the sub growth numbers um uh sub growth thought they had a sub growth they used to I apologize um the uh the sub growth just just is mostly uh mostly not there in the same way that it was uh Circa you know five six seven years years ago even 2021 so without that growth uh you're buying a company that that is growing you know at 7% but maybe even 10% but that's 20 times earning multiple that again $15 a share 20 times earning is $300 you're at $400 right now uh you know if you're assuming 17 times earnings you're still expensive uh by by 60 bucks so I I think that the you're you're you're seeing a very aggressive uh aggressive aggressive numbers from the market on on what are o good earnings for Netflix especially with how crappy they were all of last AT&T earnings recap (and Verizon earnings preview). year but I think I think the Netflix's backstory is playing out is played out um a company that I do think is about to enter their their uh where back story is AT&T AT&T crushed earnings absolutely destroyed them they uh I mean every number was higher than they than than the market thought it was going to be post post pay phone subscribers were up everyone assumed they were going to be flat Mobility Services revenues were up everyone assumed that was going to be just slept slightly uh Mobility iida was growing solidly uh fiber subscribers were up fiber revenues were up consumer Wireless were up and oh my God they did 5.2 billion of free cash flow in the quarter that's 20 billion run rate they're $ 1110 billion market cap company right now um their problem is and has been forever their debt load they are at they are at uh 100 they'll be at they're at about $140 billion dollars of debt if I'm not mistaken uh next year uh this time next year is the goal they're paying down about $3 billion a debt a quarter uh it's uh but like notably they said that they have they're making so much money from cash from operations that their dividend by the their dividend 4 Q4 was already set aside in Q3 like at the end by the end of Q3 so by the end of by September 30th you know it's now October 20th they pay the dividend first of the month of November uh their their money was already set aside ready to go um they are going to uh see $20 billion of cash flow next year free cash flow they pay about 6 billion to the dividend um uh and and there's this awesome chart here uh this is from slide this is this isn't from uh Q3 this is from Q2 uh you know so they had 132 billion of debt excuse me not 140 it's going to be 130 uh as of the end of this quarter uh and then free cash flow for trailing 12 months was 15 billion dividends was 9.3 uh so the uh uh nonre occurring it discretionary discrete items were four FX was 1.5 and they're back to the same debt load uh they've now paid off three billion of debt in Q3 so but it's 9.3 is dividends and distributions is the number so if they're doing 20 billion in debt uh or 20 billion of free cash flow they're going to put down they're putting 9.3 of that into their dividends uh uh and what and various other distributions and then they're going to have about 11 billion just to pay down raw debt so they're going to go from a buck 30 to a buck 20 to a buck 10 by 2025 uh they're going to do $52 billion in eida um likely be on that run rate by this time next year at $52 billion of eida uh I don't can we even show like I don't even know you can show evid on uh on AT&T um uh let's see here earnings dividends per performance by no okay so um they are a 110 market capitalization 110 billion okay debts 130 that's 100 it's 240 they want to get to uh two and a half times net debt to eida they're going to do 52 billion they're going to be on a run rate of close to 52 billion of iida by the end of 2025 that gets you to a buck 20ish on eida I mean on debt that puts you at a 230 times uh or 230 Enterprise Value um uh because again we're just assuming debt plus current market capitalization so let's call it two two 240 just to round up a little bit it's 240 uh and then they want if they trade at five times which is low for them five times EV EV uh Enterprise Value to eida that gets you to a 258 billion Market market cap which is 20 billion to the upside so right now just on the low end let's move us over to 2025 low end where's 2025 25 right there 20% upside so we are at 15.8 so that's $18 this is low oops uh how do I put text here low price Target uh 5x EV to evida so we're gonna see how good this how good this gets we'll make this font 28 oh nopes 20 low price Target approx 18.2 okay that's good okay you know what our let's assume they get to six times EVD now which is a pro which is fair for them Fair that's uh that's so we have 20 we have 20% upside there it's another 52 billion from that number so we're at 100 we're at 240 uh or sorry 2 258 um we right now we're at sorry right now we were be at 240 so we're going up 20% 258 then we're going up another 52 billion so that's uh five five half a percent or half 50% from here so that's 57.5 plus 18 is 25 I mean you can't even see it because it's been it's been a mess uh this thing's been this Stock's been a mess okay so high price approx 25 let's call it 24.8 Target 6X EV e okay so that's that's where I think the price Target ranges for for uh for AT&T is is is that that somewhere in there and now again that's a wide range that's basically where the market wants to trade them to again they're growing at about 2 and a half% uh so really you multiply that number by two you get a five times uh EV to eida um uh multiple is is probably Fair uh on the low but again they are almost a monopoly outside of Verizon and then T-Mobile there is a couple like Cricut and and a few other ones that do exist but they are uh you know pretty much their own little beast now that saying all that they have been in this massive downtrend since 2017 I mean I I or 2016 you know it's just been grinding grinding grinding down uh the the the 200 day 200 week has just been been aggressively above it I mean it's still in their 20s uh mostly that mostly that collapse is because of the Warner Brothers uh drop so again I wouldn't be surprised to see this go to 18 and then push back it really is going to need some volume to thrust through that uh and I mean it took it was volume today but you can kind of see on the volume profile again this is the weekly you can see on the volume profile the green uh bars are aggressively higher uh than the red bars uh except for uh a little bit earlier this year a few years ago in 2021 again if you think AT&T might flip from one of the worst stocks on to one of the best because if you think about it uh they're getting punished because of yields if yields go higher people who are in AT&T for the income are going to move elsewhere etc etc but if yields Flatline or start going down you know people are going to try to lock in the seven and a quarter uh yield on AT&T because they know that's pretty stable for at least a few years uh you know because people are going to be paying their home bills so you know you're you're not so much worried about that so you'll you'll buy AT&T it'll it'll see flows inflow net inflow instead of net outflow um but yeah again I think end of year 2024 beginning of 2025 it would not stun me to see a 22 is dollar a 20 to 22 dis doll AT&T stock which is approximately 33% to the upside plus your 7% divided I think there's a real possibility AT&T which again is looking to is looked kind of had a little bit of bottom forming there on the weekly uh and then Verizon which is reporting this week so we'll talk about that in a second is broken out of there channel right so this is their down Trend Channel it was much more aggressive than AT&T but it was a lot shorter um they've broken out of that they found some support actually on the top end of that this is this bottom line is their support they've had I'll show you guys here we got to do three six three month I think one uh it's been the support it created literally uh on like like from the get-go uh since it's ipoed is the first is the first line uh or the lowest line um so you know we're we're we're kind of approaching uh uh you know end all Beall if ryzen breaks below this it's there's the I mean there's no buyers here uh this is not adjusted for dividends obviously but I drew this line a couple weeks ago I still think we we we probably find you know it just Trends sideways until till it gets through tax loss harvesting uh next month or sorry uh not next month end of November early December and then I think it Rockets next year for similar reasons I think it's a little bit of a anti- uh yields trade uh but yeah AT&T earnings just fantastic uh they're going to do again $20 billion of free cash flow it's $10 billion market cap again the Enterprise Value is extremely high because they have debt but they're going to pay back you know 10 billion is of that debt next year it's and then and their weighted average debt will go lower right now it's 16 years at 4 point I think 4.3 I have in my notes might be 4.4 I can't I can't read my handwriting um 4.3 4.4% might even be 4.2 cuz again it's a squiggle after that four point number I could have be 4.x but I know it's low fours uh so you know let's say the 10-year yield goes to the long end of the curve goes to north of 6% what AT&T can do because a lot of that's dollar denominated debt is they can just instead of paying down the debt they can just buy the equivalent treasury for that period of time and just make an extra 1% every year that debt is in existence and then use that money to either pay back their dividend or or buy back more debt it it it creates these very unique scenarios where a company like AT&T that has low debt payments uh and low carry cost of debt can kind of slow their debt payment period and uh period and then uh just buy bonds once the once the thing uh uh once the market flips um the other fun part about phones is that there's only one sector that people pay more for their phones uh or pay more um pay their phone bills is is Quick discussion of Ally auto loan charge offs. more important and that's their auto bill so I thought we could check out Ally real quick I don't want to spend too much time I don't I don't really have much of an interest there I don't think Alli is a very well-run company they basically went Whole Hog into auto loans including like basically earlier this year until Silicon Valley Bank blew up um and you can kind of see you know I just wanted to show Retail Auto delinquencies are trending slightly higher uh though not too too aggressively higher we're basically only up you know uh uh you know it's a 10% move from Q4 of last year to q1 of or Q3 of this year but you know it's a negligible move on the grand scheme of three 3.5% to 3.8% uh now the 60-day delinquencies are moving up semi- aggressively again 10% move to the upside uh and then the values are in the purple boxes the values are increasing as well uh then consolidating net charge off ratios at 1.3% again that's going to be lower sorry sorry everyone that's going to be lower than uh than what your credit card debt is because again people will make their auto loan payment they will choose to live in their car before they before and before they give up their mortgage because they need their car to go around places their house cannot move um but yeah I think the uh I think like the charge off rate of of 2% on the autos and Consolidated 1.3 isn't really super dangerous discover is a little bit higher they reported as well and that's why the stock got hit um but yeah I think broadly uh alli's doing okay all things considered I think that they're poorly run and they got a lot of problems because their duration hu poor because they they warehoused a lot of the debt they didn't sell it so it's a mess of a company don't actually I don't think you should look to and buy it too much but uh just kind of an interesting Earnings preview for Microsoft, Intel, Amazon, Kenvue, Meta and others.65:51 note on on where the charge offs R is there're still relatively low compared to Historic numbers um earnings preview so I just pulled this from Wall Street bets because they were the first ones out with it and they also have the little uh notes so GDP is due on Thursday it's going to come in at like 5.3 5.2% if ATL is to be believed durable goods orders are likely to be higher than expected you can see that in the ism uh surveys uh new orders are going up so I imagine this is going to show uh that were in a minor expansionary area but not an inflationary expansion which will be good and core pce should come in a little is probably going to come in lighter than the market expected because the only thing that's really ripped higher is oil uh nothing else going through earnings uh you know Cleveland Cliffs is always a fun one uh but there's nothing really else on Monday that's really of note uh Coca-Cola is obviously the Buffett stock and everyone cares about that because of that I I could I think there's nothing interesting there rathon I did a video on a few weeks ago I think that one's really interesting because again their industrial is going to be growing and the war piece uh is still doing well uh they're not as much a pure play as General Dynamics or lockie Martin but they do make the missiles for the Iron Dome for Israel so that's going to be kind of some Tailwinds to their EPS they do have the Pratt and Whitney uh engine issues uh which should which should be uh eaten their EPS is again the markets kind of adjusted their EPS lower but you're going to see that in this this quarter's earnings and next quarter's earnings uh Verizon I mentioned again interesting uh I think honestly um well we'll skip over Spotify for a second actually uh 3M in General Motors again I think Industrials are undervalued here uh same with Dao uh now that I mention it nexter's gotten killed and they're the first um the first major utility to report uh nex's gotten killed because a lot of the ESG stuff is just ch find shown to be unprofitable uh due to higher interest rate costs so we'll see what they have to say again there's still Florida Power and Electric in there so that's pretty good um I think Spotify is probably the most important earnings on Tuesday and I'll tell you why Spotify makes it makes a margin of like 2.2% it's ridiculously how little money they make for basically having a monopoly in the music space uh outside of YouTube uh and a little bit of Apple music but they just cannot they just cannot stop spending money and they cannot do any of their business profitably I I think the earnings are going to their sub growth is going to be slightly better than expected uh but I don't think it's going to be like bantly better but I their margin still going to be terrible so if you see the market sell off because it's focusing on margin I think that is an extremely poor sign for basically all tech stocks if they do okay because they're focusing on so the Market's focusing on sub growth I think that is a good sign for all tech stocks and I mean so I think Spotify is a more important thing to watch for this Market than pretty much any other stock uh any other Tech stock this week uh Snapchat is reported Tuesday afternoon they're always a disaster they're going to continue being a disaster until uh they actually care about profitability and I don't think that's ever going to happen because the market I mean they're they just their publicly traded float doesn't actually have voting shares so it doesn't matter uh Microsoft's Tuesday after hours the only thing of note would be to see what they talk about with activ the Activision Blizzard uh as well as their cloud computing uh Visa obviously uh we we kind of got a read already on the consumer but Visa is already always interesting because they do a lot of crossb uh traffic uh and then again you got like Ted do um which is a big Kathy Woods position and then you start with RC with the natural gas companies and Waste Management's obviously just a production General Dynamics on Wednesday is another War company I'm sure they're going to report good earnings though my guess is they're not going to be as good as the market wants because again a lot of the the indust war industrial complex or military industrial complex just isn't uh doesn't move as fast as the market thinks that it does uh CME Group will be interesting just from Trading volumes uh because again we we've heard from Schwab that they're just lower I wonder if that's true on the professional level as well uh and then you know IBM service and service now are both going to be interesting uh for Tech reasons uh and then meta I think meta is g to be weak uh and I'll tell you why I think Zuckerberg uh has kind of abandoned his year of cost cutting whatever you want to call it um and I think as soon he I think it's basically aine the sand if the stock is below $200 or probably about 205 right now because they have bought back a little bit of their shares it's below 200 let's call it two we split the difference $22 I think he cares about uh cost cutting I think if it's above that number he does not care because he thinks stock is stock is f overvalued i will be very interested to see what their BuyBacks look like they did not buy back like any shares last quarter comparatively to how much their uh number was and I think that's partially because they thought their stock was overvalued and was going to pull back it obviously didn't it's been above 300 basically this entire quarter this entire past quarter except for a brief blip so uh let's see if they' they've been buying back shares if they haven't I think that's a pretty clear sign he thinks that Zuckerberg actually is paying attention and that he he believes the stock is overpriced so he's GNA he's going to stay away uh from buying the stock then uh we'll see we'll see what happens uh there again that's kind of an interesting one but not for any of the reasons why the market uh what the Market's going to be paying attention to do I do think the stock is going to trade lower after the earnings though um I think meta is priced to Perfection right now and there's just not enough I mean unless the market is back to like we're going to just buy everything for some reason like the war there's a peace agreement sometime this weekend I think meta is going to is going to be the worst performing out of any of the mega caps after the earnings I just I just don't think uh there's not there's anything there that's uh that's really worth uh buying it at 23 times earnings uh with potentially slowing growth because the economy be slowing um mastercard's going to be the same as Visa Comcast is is I guess interesting mostly because of the H Hulu discussion with Disney because Disney doesn't report for two more weeks after this um uh what else we got here that's interesting Honeywell again industrial uh they've been hit hard this year that'll be pretty interesting Ken view this will be their first time reporting as a independent entity uh and has broser company I did a video on a while ago I've done a video on Ken view as well so they'll be kind of interesting there uh Intel and Amazon uh Intel and Amazon kind of had the same bull case as AT&T uh AT&T had to in Verizon they had to spend a ton of capital expenditures over the last two years to both whether you want to call it modernize or just improve uh their company's position uh and that they that is coming to an end it will be pretty much at an end for Intel it's going to be early 2024 but for Amazon it's the end of this year uh so I think you're going to see free cash explode much like with Verizon and AT&T has seen that you're going to see the same thing on Amazon and Intel uh or or the expected that you're going to see it and I think that both of those companies are going to uh do well relative to their peers uh Amazon's peers are obviously the mega caps and Intel Intel's peers are obviously a lot of the semis um I think Amazon's going to I think Amazon's going to be a $200 stock at some point in the next 18 months irregardless of how the market does I now again if the economy collapses that's a different story but I think they're they're they're seeing an inflection on the consumer uh storefront and while AWS is weak I don't think its weakness is uh I think it is a better buy now at 125 and change than it was at $80 last year that's that's kind of how confident I am in this Amazon pick right now uh which is weird to say uh and then Friday is going to be a big day for the oil guys it's Exxon and Chevron ABV is obviously uh uh going to be interesting to see what they say about huma's roll off um because that's that lost patent protection at the beginning of the year uh and then I know a bunch of idiots on Phil uh in twit are going to care about ex uh no this is XL Energy this isn't X xcl whatever that company is that does the uh Auto stuff uh and then AutoNation on Friday is usually pretty interesting because uh they do use car stuff but uh it's going to be a very very very fascinating week um uh upcoming this is the big week now the other thing to note is Google does not report this week this is the first time in a while uh Google has not Google and am Google and apple have not been the same week as some of these other guys usually Microsoft's like Thursday the week before and then the other four are the are the same week but everything because of uh the way the the market I mean the the calendar fell uh Microsoft was Tuesday uh and then meta and Amazon are Wednesday and Thursday Apple again you do not see alphabet here which is very surprising so they're getting pushed it looks like till to Monday or Tuesday then uh the week after I'll have to look at a calendar for that but um but yeah so they'll be interesting to see uh you got to you're going to have to and Apple's going to be obviously the week after so you know if if these all report bad earnings and then Google will be you think Google's going to crush it you're going to have a great chance to buy some cheap Google Shares or the opposite you know if you think Google's not going to do well uh and these all crush the opposite will be true but yeah again uh Amazon's the one I'll be watching I think it's the most important uh but I apologize but yeah so that's my week in review and week looking forward uh kind of a couple other things I got a video on gp1s and Healthcare sector broadly coming out Monday morning uh or or actually I'm going to probably put it out Sunday because I think more people watch videos on Sunday uh so uh if you get a chance check that thing out um and then I'll do more I'll probably do a video uh probably none on Monday because nothing on Monday looks really interesting uh I I'll probably do a just a real quick recap of Tuesday's earnings with Ron and Verizon in the afternoon to post Wednesday morning uh or Tuesday actually I probably post Tuesday afternoon and maybe I'll cover Microsoft while the report's coming out uh Wednesday you know again not really a lot there um yeah I don't really want to make a video just on meta unless something interesting happens on that maybe they'll talk about their VR headsets and I'll do one on that because that's kind of an interesting subtopic and then Amazon and Intel will likely do a video a video on those because I think those are both very interesting companies uh at their current Ventures and then maybe a video on Hasbro can view or Honeywell as well I think uh I think Hershey again kind of falls into the opposite bucket of Proctor and Gamble it's a consumer staple you want to stay away from and not buy not buy it on weakness um okay I guess that's it like hit the like And subscribe button talk uh I don't really have anything else to say uh though I did talk for over an hour I will talk to you all soon have a great rest of your evening or day uh enjoy your rest of your weekend hope you're all happy healthy and and enjoying yourself uh before Halloween peace