 The Morning Market Kickoff with your host, Tommy O'Brien. Good morning, everybody. This is a special edition of the Morning Market Kickoff live at 2.06 p.m. Eastern Time. It's Fed Day. We have the Fed keeping rates where they are. We go forward to March. We have markets pretty much where you came into this event. We were a little bit higher. We have a little bit of a pullback, but it was already a tough day in the markets. S&Ps off by 46 points right now. That's almost a full percent. NASDAQ 100. We're off by 1.35%. Dows off 64 points. You get the Russell off by 16. We jump over to the 10-year to see the volatility. You run up for a higher price, lower yield. You see the volatility as we come in, and it seems like the Fed is just not ready to cut yet, folks. I'm going to go over some of the verbiage. We'll take a look at it. We had the 10-year. Think it like 1.12.15. Maybe somebody can help me out in the den in terms of what we were lower for yield. I think we're at 3.94, approaching. We're at 3.98 right now. Still under 4% the yield on the 10-year right now. You jump over to the dollar index before we jump back to some of the quotes from the statement. As I mentioned at 2 o'clock there, I'm going live from 2-till-2.30. We're going to have Chairman Powell, his press conference live from 2.30-3, and then my dad following that up live from 3-till-4. It's going to be two fast hours, folks. We have the dollar. We got higher yields. We have dollar strength. This market's going to face some winds, man. I'm not sure anything was going to help the market out to tell you the truth. I was posted in the den beforehand. I really thought they were going to go for it in March, and they still may, folks. We got 23 minutes till Chairman Powell goes live. We see where this market goes. You have six weeks until their next meeting. Their next meeting, March 20th. It's my birthday. 44 years old this year. Can't forget that one. March 20th. I don't think they're going to cut from this verbiage, but it could still happen, and let's jump to some of that verbiage as we jump down the line. This is probably the most important one that you're going to see out there. The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence and inflation is moving sustainably toward 2%. Well, can they gain that confidence before their next meeting? Yeah, they probably can, but they might have opened themselves up to it a little bit more. Now, on the other side of that, we jumped to some of the others. They take out firming and policy. They're now neutral. They've now shifted, folks. They had firming and policy in there. The language about policy going forward has removed the reference to the possibility of additional firming and policy. It's gone. It's now neutral. They lay out general criteria for considering any adjustments to the target range versus considering that firming and policy. They were only thinking about firming. Now it's neutral. Probably means they're coming one after March. Maybe then they go to that next step. Then they go. Note the word adjustments. That is not easing specifically. So it's adjustments as in considering any adjustments, not any easing to the rate that they have, the target rate. A little bit different. So they can make adjustments to bond purchases, bond sales, anything in there. But the fact that they say does not expect it will be appropriate to reduce the target range until there's greater confidence in hitting 2%. I would say that's an important one you want to hang your hat on, folks, because it seems like the market might have been getting ahead of itself. Now we're going to talk about New York Community Bank, man, because I don't know what's going on with New York Community Bank, but it seems pretty remarkable that they're the bank, and let's just jump to it right now as we're going to jump through the hour, okay? Here's the headline from New York Community Bank as they report, got to get all the way to the top. New York Community Bank Corp plunges on surprise loss and a dividend cut. Now the loan loss provision was like 10 times what the market was expecting, okay? 10 times. They cut their quarterly payout to five pennies from 17. A worsening credit outlook contributed to the unexpected fourth quarter loss as the bank's loan loss provision surged to $552 million more than 10 times analyst estimates. You can expect that that's going to hit some of the other regional lenders as well. Now we know there's good participants and bad participants in the banking industry. We've seen that play out before with the likes of Silicon Valley. They picked up signature, okay? When they picked up signature, that got them to the level where I think they got over $100 billion in assets. They talk about it here. Yeah. Total assets above the $100 billion threshold so they bring more regulatory scrutiny, okay? The bank's 9.1% key capital ratio is below peers such as Key Corp and Regents Financial. Now I'm talking about this. We're going to go right back to the Fed, man. We're going to look at those markets. We're going to keep up with what's in those statements. But this is an important one today because the last time this all happened, folks, which remarkably was like 10 months ago, more so, more, yeah. You had to pull this thing back. We're just going to take a look at the S&P on a daily basis. Look at all that volume, man. March 10th, right? 13th, 14th. Let's zoom in on it. 14th, 15th, 16th, 17th. We go on the weekend on the 17th and what happens? New York Community Bank scoops up signature, among other things, okay? But so that's what happens the weekend, 17th to the 20th. I had to go pull up the articles. I want to see the exact date, all right? Signatures, banks, assets sold to New York Community, Bank Corp's Flagstar Bank. This one dated March 19th. It was over that weekend, okay? Now I bring that up because here is New York Community Bank. $6.49 down 37.5%, wiping out everything that they gained from when? From the weekend that they gapped higher from March 17th to March 20th, when the banking sector seemed to be saved, everything was replenished. And from there, the market had a little bit of an oscillation, right? You plowed higher from that time from 3,800, 4,600 was your high. You pulled back on a little bit of worry that the Fed, which might happen again, folks, okay, wasn't with the party in terms of cutting where you thought and then you accelerated higher. But there's no way that they would have bought these assets if they were okay, folks. Things have changed dramatically. The fact you're talking about loan losses of $500 million, 10 times what the market was thinking, they purchased all that stuff in March, asset quality completely deteriorated in a pretty large scale over the last 90 days, right? The amount of the company's loans that were 30 to 89 days past due, so you're talking about one to three months past due, jumped almost 50% in the last three months. Now, percentages off small numbers can be deceiving, okay? How many were in a loan loss before that, right, in terms of how many were delinquent coming 30 to 89 days in the previous period? But pay attention to the number that loan loss provisions are 550 million, 10 times what the market was looking for, okay? They talk about two loans were a dramatic part of things. One of those loans, there's just so much in this, I'll jump around, an office loan that went non-accrual during the third quarter based on an updated valuation, right? Given the impact of recent credit deterioration within the office portfolio, we determined it prudent to increase the allowance for credit losses coverage ratio. You want to pay attention to that one, and the Fed is going to pay attention to that one, okay? Because that is a risk. If you start having the banks deteriorate, what does that do? That tightens up the economy, okay? At a time when it might be over tightening, so yes, they may come in and save some bad decisions there, but it is a very real deal when the banks get in trouble and credit tightens at this point in the cycle, especially, I'm sure that's got to be a fear for the chairman. So I can't wait to see what he has to say coming up in 15 minutes, man. At 2.30, we're going to air it live right here on Tiger TV. Don't go away, folks, as we got markets, kind of just sitting here to probably hear what the chairman's going to say, man. We jump over to the tenure. We've drifted a little bit higher after that. We're sitting at 1.1206. You spiked initially lower on that strong verbiage. And let's see what we got. We'll check back. We'll see. We'll get some more updates from the statement, folks. We have 15 minutes till the chairman goes live. We have markets in negative territory. We're still above 4900 for some context here in the S&Ps, right? Stay tuned, folks. We've got a lot to talk about. We've got 15 minutes till the chairman speaks. We'll be right back. Currencies, commodities, and bond markets are as important as ever right now with how they're driving the volatility in equity markets across the globe, which is why it's a great time to try out Teddy Kegstad's Tiger Forex Report. Teddy Kegstad breaks down the Forex markets every Monday using his 30-plus years of experience as a trading veteran of futures, forex, stocks, and options. 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We did hit 48.96 briefly. These are one-minute bars we're looking at. You can see right near the bottom range of where we've been. NASDAQ 100. It was already a tough go-around with Microsoft, AMD, Google, all trading. I think Microsoft was almost flat to slightly higher AMD than Google. Pretty dramatic to the downside this morning. Even worse now, off 1.5%. You get the Dow. It was in positive territory. Dow has given up 200 points from its highs earlier in the day and you get the Russell. Down by 19 right now and, yeah, things are picking up steam, man. We're going to get the S&Ps off 52. Be careful today, folks. Not only, I think optimism is at all-time highs right now with what's going on and we talk about New York Community Bank. You throw that in there, 37.2% to the downside, $6.51. They are trading in the same area that they were trading at when the banking crisis was at its height, when it was at its height. I would pay attention to that. They were the ones that picked up signature bank's assets, so you would think that they would choose a bank that's strong enough. I mean, look what happened to that equity once you picked them up. You traded to 8 the next day and you traded up to 14. And now we have one earnings event. You trade lower. One earnings event. You chop around while the market plows higher and complete decimation just like that. And I'd say there's more going on there as well. Chairman Powell is going to get a question about this one. Can't wait to see what he has to say. Is he going to say something like, well, you know what, before I finish that, okay? Because let me make sure I find this correct one. Something in there, they remove something about the health and safety or something of the banking sector. I'll try and pull it up real quick. We got 10 minutes till the chairman speaks. These are always fun segments. Here we go. Perfect. Now, this is from Bloomberg. This was right after it came. The Fed omits language that had been included in the statement in some form since March of 2023, calling the banking system sound and resilient and warning that tighter credit conditions were likely to weigh on the economy. They omit that language on the day that New York Community Bank is down 36%. If you don't think that's going to weigh on them, folks, it is. So whether it's March or it's May, I think it's coming. They shift from a bias towards potentially hiking to now being neutral. And there's going to be a lot of hot takes, but the bottom line is they stay. They say they're not quite ready yet until they're positive and they see more guidance to get more numbers to give them more confidence than inflation is on its way back to 2%. And listen, we're going to get some of those numbers, okay? We get the jobs numbers on Friday, right? We're coming into the end of January. We're going to get genuine numbers after that. And we are going to get February numbers before the March meeting. Remember, it's the end of January right now. When we come into February, we're going to get all of January's economic data. And we're going to come into February and come into March, excuse me, and get all of February's data in the market. So they're going to get two full months of data before that March meeting. So it is possible. Keep your eye on the banks, though, man. That was a huge surprise from Community Bank. Yeah, S&P's down by 50. Let's check in on yields. We jump over to the 10-year right now. Yeah, just chopping around. No huge action, and since that statement was released and we jump over to the dollar index, yeah, the dollar's still carrying, though. Nah, those are 15 minutes. Excuse me, you put it back to a five. Yeah, one real reaction, and then we've been chopping around for the last 20, 25 minutes since that first move. We jump over to the gold contract right now. Gold pulls back a bit from 2074 to 2061. Anytime you get that type of movement in the dollar index, folks, dollars strengthen. You're paying for gold in dollars. That means you need less dollars to pay for that same gold. All right, we jump over to Tesla shares. I didn't get to this one on my program this morning, but buy or beware for Tesla shares, man. Tesla, news out last night. Elon Musk, he's getting a retroactive $55 billion pay cut. Now, there's going to be some type of replacement compensation package. I don't know what that's going to be. Who knows how this thing plays out? But I was joking with friends last night saying, can you imagine an employee finding out that they're getting a retroactive $55 billion pay cut? And what do you think their performance reviews are going to be like for the near term going forward, receiving that type of a retroactive pay cut, right? Whether you think it's fair or not, it's going to affect your performance. And when you get into the money of the shares, folks, Elon's already threatened to step away from this company. I don't know what's going to happen, but you better be aware of the risk that one day it comes out, okay? And he is not going to be CEO anymore because he still has his shares and all that's happened. Do I still have it up? Yeah, I do still have it up. Perfect, these are some of the numbers that you're dealing with, okay? Then the shares he just lost have a value of about 48 billion. Let me see if I can make this bigger, perfect. He has a remaining worth of $74 billion worth of shares, okay? He has pledged $42 billion worth at Morgan Stanley for a loan. If you hit some type of a drop in Tesla, all right, and I got, please check these numbers. I haven't checked them, folks. This was coming out last night, 17 hours ago, I was looking at all this stuff. The general idea is correct, though. Man, he just lost a ton of shares that he has. The shares that he has left, a decent portion of those, are on pledge to Morgan Stanley for a loan. So if you get a drop in Tesla stock, this one's saying to about $104 a share, you could trigger a margin call. And we all know how margin calls work, man, that makes sense, okay? He just lost a huge chunk of shares. Well, guess what? Where's the low almost in the last year, 101. So you're telling me to use the coin phrase, catch phrase. If Tesla trades down to the low it was trading at just about 12, 14 months ago, that you're talking about Elon might have a margin call for the shares that he owns in Tesla or have to pay that money. So where do you go forward from there, okay? Where you go forward from there is, he's got a couple of dilemmas. One of these is, you walk away from Tesla. Yeah, you keep 160 million shares. You surrender the 240 to Morgan Stanley, okay? Or what happens if we hit that point? This is what happens in a margin call if it hits that price, right? You can just surrender the shares. You've put them up to Morgan Stanley. That's the deal. You keep them what you have, you surrender the rest. They gave it to you on loan. They don't lose money because they get the shares. They cash them out at whatever percentage. Or you could pledge SpaceX shares. Yeah, he could pledge other parts of his wealth, right? I don't think he's gonna do that. So if you face some problems here on Tesla, and the fact that the market now knows that, my goodness, you got a price down where it just was at where you might force Elon to sell and go, I don't know how that plays out, man. But be careful because it is a risky, risky proposition. Many times that stock traded lower after hours last night. On the news that Tesla wasn't gonna have to pay out $55 billion, many times the stock will go up. The reason why it went down is because the market knows that that is a wild card and that Elon might just burn the house down. Not quite, but keep that in mind. All right, folks, we got one minute to the break. We're gonna take a three minute break from 2.27 PM Eastern time. We come back live at 2.30 PM Eastern time on the dot. Chairman Powell will be live. We'll be airing it live right here on TFNN Tiger TV on our YouTube channel, right at our website, TFNN.com. And we got the markets down 50 points and we had a lot of questions for Chairman Powell this time, man. Gonna be an interesting press conference. Seems like that's always the case, but this one, especially so, they're not quite ready to cut it, seems. So what's it gonna take? What is it gonna take? We're gonna find out. And what's he think about New York Community Bank? No mention of the balance sheet as well. So you're gonna get some balance sheet questions, what they're doing with the balance sheet as well. Stay tuned, folks. Chairman Powell, he's coming up live right here on TFNN. Thanks for tuning in for a special edition of the Morning Market Kickoff. We got my dad, Tom O'Brien after that. I'll see you tomorrow morning. Stay tuned for the Chairman, folks. We'll be right back. Are you ready to take your training to the next level? Introducing Tom O'Brien's award-winning newsletter, Market Insights. Your key.