The US is already in a recession or it's

coming. Well, at least that's what all

the media headlines tell you is pretty

scary. Almost every media headline out

there is calling out the Rword. So, just

over the last one week and take a look

on CNBC. Critical economic reports

Wednesday show how close the US is to a

recession. Trump trade war update firm

predicts empty shells and recession by

June. Uh, America is dangerously close

to the worst kind of recession. Dow

tanks 200 points as US economy shrinks,

recession fears loom. So is it time for

us investors to run for the hills to

sell all our stock or is it time to just

hold on to great stocks and keep on

buying? Let's find out in this video.

[Music]

Yesterday, the US stock markets

initially opened very low because of

this report that the quarter 1

preliminary GDP came in negative. Oh my

god, it's

negative0.3%. We're going to die. Okay.

And of course, that sparked even more

fears of a recession because how do you

define a recession? A recession is

defined as two quarters of negative GDP.

And of course, the media always likes to

play up the fears. That's how they get

engagement, right? But again you have to

always dig into the numbers and see okay

is this really really something to be

concerned about. So first and foremost

you have to understand how is GDP

calculated is calculated based on

imports exports consumer spending

business investments and they calculate

GDP. So one of the reasons why GDP was

negative in quarter 1 was because it was

heavily influenced by a record surge in

imports in the first quarter which grew

at an annualized rate of

41.3%. So what happens is that when a

country exports it's positive for GDP

when they import it is negative. So in

quarter 1 there was a sudden 41%

increase in imports into the US. Why do

you think so? Right? Because a lot of

companies were front running the

tariffs. They want to import in before

the tariffs hit. So you got a lot of

tariffs, sorry, a lot of imports coming

in quarter one. So that created a big

negative. In fact, that surge in imports

contributed to a negative 5 percentage

points drop to the

GDP. Uh so that's the reason why. So

this import spike was again attributed

to the businesses frontloading goods to

avoid anticipated tariffs imposed by the

Trump administration. So this surge in

imports is what we call an outlier. It

is an anomaly. It it will not recur.

Right? So, if you actually reduce or

remove this import surge as a one-time

response to tariff expectations,

excluding the import drag, GDP growth

for quarter 1 would actually

be

3%. Right? And uh supported by strong

consumer spending that came in 1.8% and

strong business investments that surged

21.9%.

Once markets realized this, it reversed

by the end of the day to close higher.

And not only that, but there was also

very positive news coming out from

inflation data as well as uh consumer

spending data. So yesterday you can see

that the core PCE data which measures

inflation which is what the Federal

Reserve looks at uh core PCE yearon-year

came in at

2.6% which is as expected which was

2.6%. And if you look at this chart over

here, you can see core PCE yearon-year

continues to decline. So inflation

continues to moderate uh despite the

concern and the fears that import that

tariffs would inflame inflation. Of

course, it could happen but for now the

data shows that all right inflation is

uh going as expected. Now at the same

time you can see real consumer spending

uh which accounts for inflation grew at

7% which is better than expected. So

this positive news helped to reverse

markets higher by the end of the day.

After the market close, you can see that

the futures data shows that the market

is probably going to surge even higher.

So reason why is because of very strong

earnings from Meta Platforms as well as

um Microsoft which are two of the

biggest positions in my portfolio and

Alphabet also announced pretty good

results. So all in all we are in the

earning season and companies that have

reported so far have reported better

than expected earnings. So you can see

that uh the companies that have reported

so far have reported a year-on-year

earnings growth of 10.1% for the first

quarter of this year and this is above

what analysts expected which was 7.2%

earnings growth. Profit margins have

also come in pretty strong. uh S&P 500

companies reporting showed a net profit

margin above 12% for the fourth straight

quarter for quarter 1 2025 and uh higher

net profit margins I expected for the

rest of the year and that is why the

market has been so bullish uh and going

up for the last uh couple of days. So,

of course, if you had listened to Bank

of America, and by the way, I showed

this in my last YouTube video, right?

Where a lot of people say, "Oh, short

the S&P 500." And on the 11th of April,

uh these analysts and and big banks,

they said, you know, "Short the S&P 500.

We're going to die." And if you listen

to them, you'll be screwed as usual. So,

pro tip, right? Just go opposite of what

all these experts in the media say, and

you'll do pretty well. I'm sure many of

you would ask this million-dollar

question. Has the market bottom? Are we

going back to all-time highs? So, first

and foremost, uh some of the media would

say that we're in a bare market. Now,

first of all, that is absolute rubbish

because a bare market is defined as

price closing 20% below the high of the

market. So, we came very close to a bare

market. If you recall, the market

dropped 20% on this day, but did not

close 20% below the high. It closed

above 20%. So, technically, we are not

in a bare market. We are in a

correction. Yeah. So just bear that in

mind. So again the question is is has

this correction bottom? Now I wish I

could tell you 100% yes but no one can

predict 100%. Because there are too many

moving parts. I can't predict what Trump

or she or Putin will say the next week.

They say some crazy Of course the

market can drop even lower to a new

bottom.

But

satis everything else remaining equal uh

barring any other crazy that they

say which I can't predict based on

technical analysis based on price action

it looks like the market has bottomed so

I would give like a 70% probability the

market has bottom and is going higher

from here of course not in a straight

line but through ups and downs. So why

do I say the market is bottom? Well, if

you if you watch my last two YouTube

videos, I gave you some reasons why I

thought the market was bottoming. One

was the Williams percentage R uh being

oversold as well as the VIX going above

60 and below 35. Those were indications

of a market bottom. And I'll run through

that again. But let me just uh go a bit

more into the charts of the S&P 500. So,

first of all, you can see that during

this correction, that was the high of

the market, right? And then we've got a

correction. We've got a wave down there.

Wave up, wave down, wave up, wave down,

uh wave up, wave down. So this is a

downtrend pattern making lower highs and

lower lows. And you will notice that

this line over here is what we call a

trend line resistance. So many of the

traders were watching this trend line

resistance to see can it be broken?

Because often times when the market

rallies in a correction, hits the trend

line resistance and fails, right? So

what happened in the last few days has

been pretty constructive. So you can see

that on this day

uh what happened? Yeah. So the S&P

managed to close above the trend line

which is no big deal. Sometimes it could

be a breakout failure. Closes above and

then comes back below. Right? But since

then you can see the market has uh 1 2 3

has spent 4 days above this trend line

which is a very bullish development. Now

at the same time you can see that this

level here 5,000 about

5,5 yeah 55

uh is a pretty significant level because

this was a

previous support that could become

potential resistance. So many traders

were watching this level, this 5,05

level. And so the market managed to also

break above and close above this level

over here. And we are also above the 20

exponential moving average, the the red

red line. So that is also showing us

short-term market momentum is bullish.

Yesterday when the market opened, it

looked initially like it was going to be

a breakout failure because the market

initially uh kind of like opened here

and then it went all the way down uh

looked like it was going to break back

below that trend line. But again,

because of the strong inflation data,

the strong consumer spending data and

the fact that GDP was not as bad as what

people thought, the market managed to

close back above that level. So again,

that's a very bullish signal, very

constructive signal. Now I also said if

you recall in my last YouTube video that

if you look at the weekly candles it

also showed signs of a bottom. Um in

fact about two weeks ago two 3 weeks

ago. Why? Uh because you can see what is

known as a bear trap pattern or like

what Elson Chu my buddy who teaches

price action manipulation calls a force

bottom pattern which is a very powerful

bullish pattern. So a false bottom or

bear trap is when you have got a major

swing low and then you have another

second swing low that forces the first

swing low because at this swing low a

lot of traders place their stop loss

below the swing low. And so what market

makers do is they force the price down

to hit the stop losses causing retail

traders to sell. Market makers pick up

the stock and then run the market up.

That's how they manipulate the market to

collect stop- losses. So, this is a

classic double bottom uh bare trap

pattern. So, once you got a double

bottom and the market closes with a very

strong candle. So, we had a very strong

bullish candle that closed back above

this swing low, that was a very powerful

uh reversal pattern on the weekly

charts. And I did cover this in my last

YouTube video. Or was it the LA the one

before that? Either one of them. All

right. Uh so, yep. So this has been a

um a bullish signal as well. And I also

mentioned if you recall if you take a

look at the oversold signals on the

Williams percentage R. So when whenever

the Williams

R52 and Williams R13 they both go below

this dotted line which is minus 80 right

below - 80 below - 80. That is a

potential bottom. Again not 100% but

potential bottom. Same thing here. Below

- 80, below - 80, potential bottom,

right? Below minus

80. Uh, yeah, below - 80, below - 80,

potential bottom. Okay, so every time it

does that, it's a potential bottom. Now,

like I said, it doesn't mean it is the

absolute bottom. It could still make a

double bottom. It could make a double

bottom, but it is a potential bottom.

Now, of course, the next level of

resistance a lot of people will be

watching would be this level here about

5648. Why? Because this is a

61.8% Fibonacci retracement level. So,

you can see that if you take this as the

A to B wave, right? So, A B to C, this

is a 61.8% Fibonacci retracement. So

some people could say this could be the

part of a larger uh downtrend which of

course everything is possible. So this

is the next level we'll be watching the

61.8% Fibonacci retracement level which

is at 5648. So you can bet that once the

market reaches this level, you would see

some kind of resistance, right? The

market could go up there, find

resistance. You could bounce a bit,

bounce a bit, but it can break above

this and close strongly above that for

at least 3 to 5 days. We are pretty much

uh home free back to all-time highs by

the end of the year. Will that happen? I

don't know. I'll be watching that level

pretty closely. Some people would ask,

what if this really turns out to be a

recession? What if tariffs remain high

enough that it kills demand for goods

and services or shelves remain empty and

we get into recession? Could that

happen? The answer is of course it could

happen. But you know something, there's

no way to predict it. And if you can't

predict something and you have no

control over something, there's no point

worrying about it and letting it affect

your investment decisions. You see, over

the years, I've learned that even the

top economists in the world who look at

macroeconomic data, they can't even

predict a recession. So what makes you

think that you can or I can? No, we

can't. So good example was back in 2023

where almost every economist said a

recession was

inevitable. In fact, in late 2022, early

2023, you could see a lot of the news

headlines. The Economist magazine said

why a global recession is inevitable in

2023. They say it's a 100% chance of a

recession. Not 99%, 100% chance. And

then the stock market will fall 25% when

the looming US recession hits in mid

2023 said Deutsche Bank. This was again

late 2022. And in early 2023, the

International Monetary Fund IMF chief

warns of a very tough year for the world

economy. That was early

2023. So if again you read all these

macroeconomic news and thought, "Oh my

god, it's a recession. I'm going to sell

everything and get out of the markets."

What would have happened? Well, you

would have missed out tremendous gains

in your investments. Why? Because number

one, there was no recession. And number

two, what happened in

2023? Well, the stock market gained 25%.

One of the best returns in history. That

is why Warren Buffett has always said

that he himself, he never pays attention

to the macroeconomics. He only looks at

it for entertainment. But he never

factors it in to his investment buy and

sell decisions. Why? because it said

that the economy is important but it is

totally unpredictable. Once again, even

the top economists can't predict the

recession. What makes you think you can?

What makes you think I can? None of us

can. Here's another very good example.

Um, in December 2022,

um, Fortune said this top economist

Muhammad Elan says, "We can't avoid a

recession."

We can't avoid a recession. Now, four

months later, that same guy, Mohamad El

Arian, but this time they didn't call

him a top economist anymore. They

renamed him as alliance adviser, but

it's the same guy. I mean, I thought he

was his evil twin, but it's the same

guy. And what he say on the 10th of

April, he said, I think we can avoid a

recession. So, again, even these top

economists, we're going to have a

recession. No, we're not. Yeah, we are.

No, we're not. So why even

bother trying to predict a recession

when these guys can't even do it? And

the other reason why we shouldn't bother

about macroeconomic data or even if a

recession is declared is because

remember this, the stock market is not

the economy. The stock market is not the

economy. The economy can go to crap. The

market can still go up. That's what

happened in 2020. So the stock market

doesn't reflect what is happening to the

economy now. The market reflects where

it thinks the economy will go in the

future. So in other words, the stock

market is always a leading indicator of

the economy by 6 to 12 months. And

here's the interesting

thing. By the time a recession is

declared that we are in a recession, it

is usually 6 to 12 months after the

recession already started. So in other

words, by the time a recession is

officially declared, the recession is

almost over. So why even bother looking

at all these macroeconomic data? It

doesn't help you in your investment

decisions. So look back at 2020 during

the COVID recession. Market crashed and

made a bottom on the 22nd of March. And

if you read all the news headlines once

again, they were all very very

pessimistic. They said that the worst

isn't here yet. It's going to get worse.

It's a bare market is going to collapse.

A bare market is going to collapse. All

the negativity, right? Then on the 19th

of July, which is

here, the NBER, which is the National

Bureau for Economic Research, officially

said, "The US has entered a recession."

Now, what do you think most people do

when they read the headline? We have

entered a recession. Oh my god, let's

sell everything. Right? But by the time

they announced the recession, the

recession was already almost over and

the stock market had already gone up

48% by that time. And if you had sold

there thinking, "Oh my god, a recession

has been declared, you would have gotten

out just before the next big bull run in

the market that took it another

double-digit returns, right?" And you

can see

that people always say, "I want to

invest when it's safe." When when the

media says that there's no more

problems, when there's no more

recession. Here's the trouble. By the

time you buy when it is safe, you're

buying when all the companies are

overpriced again. You're buying it when

it's already too late in a way, right?

You missed the bottom. So for example,

it was only on the 7th of February that

the media turned positive and they said

the stock market is bouncing back for

the right reasons. And by the time they

announced that the market had already

gone

up

70% from the low instead of trying to

predict whether there will be a

recession, instead of doing that, focus

on building a portfolio of the highest

quality businesses that are the most

resilient. So, even if a recession hits,

your businesses will continue to do

well. They will continue to grow their

revenue, their profits, and cash flow.

If short-term pessimism causes their

stock price to drop below the intrinsic

value, use it as an opportunity to

increase your stake in these great

businesses where over time they will

keep increasing in value and compound

your wealth. How would you know which

stocks are resilient even in a

recession? Well, very simple. look at

the last recession and look at which

businesses continue continue to grow

their revenue and profits even in the

recession. So these are companies where

people have to use the products, people

have to use the services in in even in a

recession and ideally you want companies

that have what we call recurring income

that people still got to pay for it

whether is it rain or shine. So let me

give you uh five examples right now. The

first would be Microsoft that just

reported earnings yesterday blowout

earnings. So, of course, the price is is

gapping up. But if you take a look at

Microsoft, ticker symbol

MSFT, look at what happened during the

2020 uh crash or 2020 recession, right?

And you can see this was uh 2020. What

happened? Their sales revenue in blue

still went up because people still had

to work from home, work in office. They

got to still use Microsoft. You got to

still pay for your Microsoft

subscription, right? So, revenue went

up, profit went up. We call this a

resilient business. Uh but of course you

only want to add more if it is

undervalued. So currently you can see

that the intrinsic value for Microsoft

is

$415 and the current share price is

$395. So it is still slightly

undervalued but by today if the market

you know goes up a lot more after

earnings then of course it could get a

bit overvalued. Then you want to wait

for it to get undervalued again before

looking to add more shares. Uh here's

another example which would be

uh S&P Global also one of the bigger

stocks in my portfolio. I've held this

for uh many many years and S&P Global

they are doing a lot of the ratings and

financial analytics. So again very very

recession proof. Why? Take a look at

what happened during the last recession.

Again in 2020 what happened? Sales went

up, profits went up. So these companies

are immune to recessions. These are

companies you want to own. So no matter

how bad the recession, revenue goes up,

profit goes up. Zero worries, right? Uh

and I bought a lot more of S&P Global

about 2 3 weeks ago when the share price

dropped. I scooped up more shares. So

you have to understand the difference

between the business and the stock

price. You want to own businesses that

keep growing even in a recession.

But stock price is affected by

manipulation and by news and by

sentiment. So when when a stock price of

a business drops but you know the

business is doing very well, you don't

get worried, you don't get concerned,

you take advantage of short-term

manipulation and short-term market

mispricing. So that's what I did with

S&P Global. So again, uh S&P Global

pretty recession proof based on how it

has responded in past recessions. Uh but

right now is it still cheap? Well, let

me put it in to my stock oracle which

would by the way be launching for a

select group of my students next week

and for the broader public you'll be

launched probably in

um July or August right okay so

intrinsic value of S&P Global is 495 so

now it has gone above valuation so right

now um I wouldn't add more right so the

time to add was a few weeks ago when it

dropped all the way down undervalued you

grab it right now. Got to wait. All

right. Uh again, this is not a

recommendation for you to buy or sell.

It's just sharing with you for

educational purposes and what I own in

my portfolio. Uh what else? The other

one would be cyber security companies

like Forinet. I mean, think about it. If

you're a big multinational corporation,

you need cyber security to protect

against hacking and stuff like that.

right now. Even if we get into

recession, do you think you'll cancel

your uh cyber security services? No. You

need it to protect your business. So

these are things that you companies have

to spend on. And again, they pay a

recurring subscription. So they lock in

the customers and it's more or less

recession proof. So once again, you can

see

foret how did it perform in the 2020

recession? Revenue still went up, profit

still went up. No worries, mate. And uh

what's the share price right now? Is it

overvalued? And how much overvalued is

foret? Let's take a

look. Yeah. So now Foret is back above

valuation. All right. So intrinsic value

$92. Now it's 103. Now it's now above

valuation. But again, you know, a couple

of weeks ago it fell all the way to

about 80 plus dollars. That was the time

I I grabbed more. many of my students

were grabbing more, right? Uh another

example would be u HCA which is one of

the bigger uh private hospital chains in

the US. So as you know whether it's a

recession, if you got to go to the

hospital, you got to go to the

hospital. It's pretty recession proof.

And again, take a look what happened

during the 2020 recession. Sales still

went up, profits still went up. It's

recession proof. And for HCA, let me

just double

check. I think it is still undervalued

if I'm not wrong. I've already bought a

lot of it. Ah, sorry. It's now

overvalued. Okay, so intrinsic valued

331. Currently, it is slightly

overvalued. So, yeah, you have to wait a

while for this to get undervalued again.

And final example will be essential.

This one is still undervalued. I bought

quite a lot of it in the last uh 3 weeks

and um but now I think it's uh yeah it's

still undervalued. So again you can see

2020 revenue still went up, profit still

went up, very resilient recurring income

in most cases. And if you look

at which is an IT technology company

that will benefit a lot from the AI

revolution, you can see intrinsic value

334 and currently still undervalued. So

right right now in the market you still

have got pretty good businesses that are

selling at attractive levels and for

those that are already overvalued. I

would be disciplined to wait uh to only

add if we get another selloff and again

market doesn't go up in a straight line

there will be ups and downs and we take

advantage of these temporary panics uh

to build a portfolio of resil resilient

companies. Thank you for listening guys

and may the markets be with you. If you

want to catch my latest videos, click on

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is Adam Coup and may the markets be with