holy sh*t! this changes everything

I think I figured out exactly what's

going on and I think I know what that

means for what our stocks are going to

do which stocks are going to perform

well which stocks might underperform

which countries might over or

underperform what's going on with

inflation the wage price spiral the

labor recession capex spending in S&P

500 companies what happened with earning

season what Jerome Powell has told us

literally everything together in one

video now that's a lot of information so

I absolutely encourage you take a deep

breath press the Subscribe button get a

drink like me of kaloa coffee and take a

sip and just relax because we've got a

lot to cover because you might remember

after all that I went bearish in March

of

2024 I made a video saying I'm going to

cash why would I do that after all

everything's fine now

that's true but why did we go bearish

and have things actually changed has the

data the underlying fact set

changed well to understand what's

changed we have to first understand what

we thought in March so let's think about

zooming back to

March first quarter so far hot inflation

data offsetting the disinflationary

progress we had noted in goods and some

some non-housing services in other words

inflation coming back for a second wave

wages were growing faster than expected

leading some to fear there might be a

wage price spiral in other words second

wave of

inflation GDP weakened for q1 despite

hot estimates in other Woods

stagflation not good right manufacturing

was booming out of a recession but

credit card and Auto Loan delinquencies

were Rising so we were this impression

that okay so are we going into

stagflation at the same time as people

are going bankrupt and then Jerome

Powell's being blind to the pain people

are feeling by killing flexible average

inflation targeting That was supposed to

be our bunny coming out of the hat that

was supposed to be good freaking news

that he was going to one day just

go it all averages 2% and we were all

going to go okay whatever bro but

whatever you know stonks would go up so

it'd be okay well then he killed

flexible average inflation targeting

this was a terrible setup March was a

horrible setup everything was positioned

for a

selloff after March I mean consider for

a moment not only were we screaming

second wave of inflation we needed

higher rates was another thing we were

screaming the wage price spiral poor

folks are defaulting no fate earnings

season is coming up Iran is literally

attacking Israel and relying on the

United Kingdom and the United States to

defend them holy smokes this is bad like

all of that was really really bad so I

went to cash and I decided to start

trading in fact I'll show you the

account really quickly I decided hey

while I'm sitting in cash I may as well

start trading and I'm going to keep this

trading account even when I go back to

sort of Allin if you will but this is my

trading account it started at about 900k

a couple months ago and you'll see that

here I just put some screenshots up this

is my actual account this the only

account that I really trade in otherwise

it' be long form longterm portfolio

adjustments here you could see this is

my p&l uh of just the last three trading

days so Friday Monday Tuesday so you can

see my losses and my winners over the

last three trading days here and uh you

could see I'm up

209k over the last 2 days I'm up

133k and my realiz pnl today was

$43,000 over the last 1 month we're up

$870,000

is pretty awesome now it's not always up

but if you do want all of these Buy sell

alerts that I send when I see a trend or

when I make a move check out the stocks

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seeing you there the goal now is how

much can we grow that portfolio now

really with that said what ended up

playing out so we just had a lot of fear

remember second wave of inflation wage

price spiral uh Iran Israel people

defaulting this was really really bad

setup so how did it unfold well jome

Powell killed the idea of higher

interest rates instead he settled for

longer rates basically being uh at this

level but very very unlikely higher he

also somewhat brought back flexible

average inflation targeting like I think

people think I'm a flip-flopper because

I cover the Fed so much I I do also

change my mind too when the data changes

but quite frankly how many freaking

times is jpow going to flip it takes a

flip flopper to know a flip flopper the

Bro literally killed fate and then

brought it back in a new life it's like

no no no no we don't need flexible

average inflation targeting anymore

because we only used that when inflation

was averaging too low we were at 1.75 so

we're like no no no it's okay we're

still at 2% now that we're above it we

don't need it anymore so he kills fate

how does he bring it back literally with

well if inflation between the three

buckets Goods Housing Services and

nonous in Services average 2% we're good

with

that this guy cannot make up his mind

come

on then we're like okay but but what

about the stagflationary GDP report well

if you adjust out exports and inventory

buildup GDP is growing at over 3.1% so

we are

doing really well

actually okay what about the wage price

spiral drone power

we're not worried about that one either

Mr meat Kevin because see wages grew

rapidly in 20123 yet we had rapid

disinflation what disinflation prices

are still high yeah prices are still

high and you know what JP says to that

hopefully you can make more money

because prices might not be coming down

anytime soon you're just going to have

to suffer with those higher prices but

at least the rate of growth is coming

down bro Jay is is going to piss a lot

of freaking people off let's just put it

that way but these are the unwinding

that he's giving us of concerns he's

literally I feel like going through the

list of why Kevin sold and one by one

going you're wrong wrong wrong still

wrong also wrong

wrong

bro so so then it's like okay okay but

but but bro we now have three months of

higher inflation data remember how he

was like in January ah one report

doesn't make a trend ah two reports

doesn't make a trend then we get three

reports in a row of inflation data and

what is

it we expected the first quarter to be

lumpy all along

expectations okay but what about the

delinquencies

jout those are only slightly above 2019

levels what about interest rate Cuts J

pal we see what the market thinks

markets pricing in 1.7 cuts for this

year likely in the fourth quarter and

that's incorporating some of the FED

speak that we had this morning that

we're likely going to get it somewhere

between September and

December okay but but what about Iran I

mean Iran and geopolitics are going to

nuts oh president race

dies of course it was an accidental

death sure a presidential helicopter

happens to fly in really bad weather and

I guess doesn't have an instrument

flight rating or functioning tools for

IFR and instead is using an older

helicopter that clearly can't fly in the

weather but then flies in the weather

anyway yeah makes sense to me no CIA

involvement here at all because that's

just purely a speculation it's not like

the CIA was known for literally having a

what was it a Venom gun that they could

shoot people with a Venom gun and make

it look like they went into cardiac

arrest from natural causes the CIA is

famous for making people disappear

accidentally it was an

accident okay but what about Israel

Crossing Biden's Red Line come on man

you can't undo any all of

this oh wait Biden then read defined his

red line as well Israel didn't

technically you know go into

Rafa they went into Rafa but but they

didn't go into the population centers so

it's it's different you see like what

the I just want to scream and go are you

kidding

me like what okay okay what about

earnings

earnings I saw I saw saw I seen some

stalks go down after them earnings came

out

yeah well we still beat with an average

of

88.5% and headline growth was up 11.6%

across SMP 500 companies the highest

level in two years per Deutsche Bank and

no Deutsche Bank doesn't say that STS

usually go down after that instead

Deutsche Bank says growth typically goes

higher in a cyclical recovery because

frankly they see the rolling recession

of 2022 as having been just that a

rolling recession and now we are

cyclically recovering from

it and then who would have guessed but

Mike Wilson capitulated

again and then almost out of nowhere

roaring Kitty gets resurrected and we

get a 2021 style momentum rally in gme

and AMC and then some penny

stocks who then promptly raised money

which is what you're supposed to

do what the hell this is so crazy this

is like what okay anyway so on May 15th

about uh 6 days ago I suggested that

indices and mega caps could leg higher

since then Microsoft is up 26 Apple up

23 Google up 42 Nvidia up 31 Tesla up 36

Tesla's actually up quite a bit today in

what I believe is a short s squeeze

remember you got like 19 billion in

notational short out there uh the

percent of flat is really only like 3.9

5% short or whatever it's on the smaller

side and Tesla's really a whole other

story a whole separate video uh it's

possible a lot of the negative of Tesla

is already priced in though there's a

lot of fear around the stock uh uh you

know vote that comes out within really

the next 3 weeks so you'll have some

volatility between now and then but

what's next outside of Tesla broadly for

inflation and the second wave and and

stocks and and which stocks and Kevin

what is going

on well just don't look at Bitcoin oh

wait actually maybe do look at Bitcoin

because as usual it's bouncing between

my lines the 711 line that Line's been

here forever the 61,000 or 69,000 line

that Line's been there forever you know

these because you've watched my videos

and you could see oh wow we had a

breakout of the downtrend what is that

breakout of the downtrend signal it

actually signals that Bitcoin and

ethereum are a either really excited

about maybe the SEC given that now JPM

is rolling over on this and suggesting

the you know ethereum ETF is going to

get approved suggesting maybe the SEC

will roll over and approve the ethereum

ETF and or it's pricing in a

continuation of the Nike

Swoosh parte now a lot of people get

upset when I say the Nike Swoosh but

remember I've always said a volatile

Nike Swoosh

so just because I went a little bearish

in March doesn't mean I haven't been a

believer of the Nike Swoosh now before

we keep going on inflation and some of

the other really important things about

election and which sectors to pay

attention to is just really worth

clearing up the record of my mistakes

and uh what what has happened so people

can kind of see the trajectory quickly

let's see how fast I can do it Jan 22 I

go cash I make Titanic videos I'm like

get the hell out now I went bullish

Tesla ear like Q2 in the summerish Q2 in

the summerish of 2022 that was a mistake

in November of 2022 I launched a fund

this is not an advertisement for that

fund and I reiterated that I was bullish

the interest rate sensitive stocks like

Tesla and face oops that was a mistake

and chips along with the Nike Swoosh

recovery well interest rates were the

wrong choice interest rate sensitive

stocks they were the wrong choice way

too early on those but the Nike Swoosh

was based on the idea that it would take

time for people to realize that

inflation is gone and deflation is next

don't mind the fact that Costco Target

and Walmart are now having price Wars

over Goods to get people to come back to

their stores and basically any single

goods company you read an earnings call

on when's the last time you read an

earnings call well if you're part of our

course member live streams probably like

yesterday because we read them almost

every single day so I hope you're a part

of them you get lifetime access to those

course member live streams as well and

you can go through the archive and see

our analysis on individual different

tickers too people really like that good

added value that sort of keeps growing

every day okay but anyway chips

obviously were the right choice some

luck there and the Nike Nike Swoosh

played out through 23 and early

2024 the downside is Tesla didn't and

Tesla had its own problems that was a

bit of an anchor but again that's really

a topic for a different video now yes I

went bearish in March but I think it's

really important to remember that was

based on all of the insanity that quite

frankly was kind of scary in March it's

like whoa we're due for a pullback and

we did have a pullback 6.9 in Nas and 5%

on the S&P 500 just didn't last long so

even though at one point I was like 40%

cash uh or more and I was rotating into

stocks slowly I didn't get fully into

stocks so where do we sit now is it time

to go all in on stocks well first I want

to reiterate I believe the Nike Swoosh

will

continue and I believe it is time to

start deploying the rest of the cap

into a diversified portfolio of stocks

and I'm going to explain why first and

then look at potentially which stocks

and sectors okay let's start with the

second

wave Deutsche Bank has convinced me and

this just reiterates all of the reading

that I've been doing through 2022 and

2023 this is the mindset that I've had

for basically 2 years this is just a

reiteration it's putting me back on the

path Deutsche Bank has convinced me that

the second wave of inflation is

dead yes it is true that Commodities are

rising and becoming slightly more

expensive you'll notice that Commodities

I'll show you on screen here Commodities

have been rising since about February

23 and we have seen certain sectors lag

in inflation specifically we've seen car

insurance lag the healthcare sector lag

especially health insurance very normal

by by the way it takes a while for those

costs to show up in insurance companies

and then it takes even longer for

insurance companies to actually raise

your premiums without losing all their

customers so that can take sometimes two

years hence the lagging effect of

insurance car insurance Healthcare

Healthcare affecting car insurance uh

and then obviously the scam of owner

equivalent rents look I I don't have

this plane to stare at I have this plane

to fly around the country and understand

what's going on on the ground I

understand that rents are either

collapsing in certain overbuild markets

or are flat to slightly declining in

some of the underbuilt markets

underbuilt markets are seeing home

prices rise overbuilt markets are seeing

home prices fall all markets are likely

to see inventory rise meaning the third

and fourth quarter of this year should

be pretty dang juicy for buying real

estate multi family is already pretty

juicy quick real estate segment point of

that is Market rents are down baby but

owners equivalent rents are a weird

measure we use in America to Define

what's going on with rents in America

and it's basically a way of saying hey

what's everybody paying in rent right

now and so it looks at let's say 100

people says oh yall pay $3,000 oh okay

well one person leaves rents a new place

rents the new place for 20% less that'd

be $2,400 a month what's the average

rent now I don't know probably like

$29.95 but is that what the market rent

is no the market rent is the last rent

the market traded at which would be400

so basically rent has fallen a lot but

most people aren't realizing that

because they haven't moved and that's

moving is a pain in the butt so the fact

that moving is a pain in the butt is

actually keeping rents artificial or um

inflation artificially

high should be a lot lower based on

Market rents but that's not how we

calculate our inflation data we

calculate it in a weird way to reflect

what people are currently paying versus

what the market is offering you okay and

there's a reason for that it's not that

easy to get a rent reduction good luck

getting a rent reduction from your

landlord it's

hard so is there a way we can

isolate this problem well the answer is

yes we can isolate the problem by using

something known as the harmonized index

of consumer prices this is the hicp it

is the European version of measuring

inflation and what does good old

Deutsche Bank get it Deutsche European

Bank say about US inflation if you apply

harmonized

inflation here you go take a look at

this a comparison with Europe indicates

the stickiness of US inflation measures

reflect reflects that in owner's

equivalent rent with comparable Core US

hicp inflation running at 2% for the

last 9 months in English inflation

already dead instead US inflation

reflects second round effects basically

the insurance

problem so in other words Deutsche Bank

is like yo it's already dead bro it's

done man inflation

gone now I understand a lot of people

like bro man I don't know man food's

still really expensive groceries again

it a the idea is that it's not getting

more expensive not that it's getting

less expensive it's less expensive you

better hope you got a really good job

because you might lose your job because

if you got deflation you might be going

into a recession now you're starting to

get Goods deflation look at the price

Wars but you haven't broadly seen

deflation

yet okay

so huh inflation is dead Okay so well

what's next then I mean like consumers

don't have a lot of money anymore to

keep spending to prop this economy up

right well consumers are driven by jobs

and the labor market is still tight part

of that due to legal and illegal

immigration but part may also be

sustained by guess

what an increase in capital expenditures

by companies yes per Deutsche Bank

we have an upside risk from capex and

inventory restocking the S&P capex

growth has slowed sharply from its late

2022 Peak however capex typically lags

earnings by about

3/4 in other

words as earnings are coming in really

well right now in q1 we might actually

in the third and fourth quarter when

people were worried about us going into

a recession see a

Resurgence of

capex that means growth might actually

accelerate rather than

fall huh and Deutsche Bank believes that

residual inflation will be gone by

roughly January of 2025 quote without

requiring a Slowdown in growth or higher

unemployment obviously this is ideal for

the larger companies not so great for

the interest rate ones interest rate

sensitive ones though they might do

something known as rubber banding what

is rubber banding rubber banding is oh

sorry I didn't mean to pull that up

those were let me put that away those

were the realized pnls of the last few

days and my trading account again sorry

it's just it's just so delicious have

you joined the stocks and psychology a

money group yet if you haven't yet

coupon expires soon email us if you need

a bundle code at staff atm.com or if you

got any questions we'll take care of you

somebody reached out to me personally

today I made sure they were taken care

of my goal is to make sure you are taken

care

of I live to please and to teach I

actually kind of like I could spend all

day making a video like this and then I

get really excited about it and then

I'll take a day off and I'll go focus on

real estate so it's it's uh it's all in

Balance but there's something known as

the rubber band up and inflation or

interest rate sensitive stocks May

rubber band see the rubber band would

be Microsoft and Apple keep getting more

and more expensive more and more

expensive more more expensive the more

expensive they get and the more Tesla

trades sideways the more it actually

looks cheaper the higher that goes the

cheaper this little baby looks oh and it

could actually kind of rubber band up

with

them something to keep in mind I think

that's one of the reasons we had like a

6% rally on Tesla today it's definitely

trading calls on that I'm like oh

breakout here we go trust the

lines anyway what about earnings

growth well multiples have expanded but

but Deutsche Bank says this is normal in

fact they go as far as saying the last

time we came out of a recession we had

multiples exceed 20 we're now at

22 and this is really normal because

you're coming out of very very low

growth and we basically had a mini

recession even though it's technically

not defined as a recession

yet okay so what are you saying Deutsche

Bank well Deutsche Bank is basically

saying the Nike Swoosh is here here's a

logarithmic scale showing you that a

$5,500 price target for the S&P 500 is

actually in their mind

conservative for the year

end in fact they say equities have ried

every time rates went into a range and

volatility

fell what does that mean well uh first

of all rates going into a range means

trading range and if you look at the

10-year treasury you could see it's

basically been dropped off of 4.7 it's

been sitting around 4.35 and at the same

time what's happened with the volatility

index uh oh volatility's fallen so a

consolidating 10-year yield and low

volatility has equaled higher stocks and

they expect that to

continue I see well what about

geopolitics oh Deutsche Bank says

geopolitics will create sharp but but

short-lived sell-offs like what we saw

in

April okay well what about elections ah

yes well usually in a close election

stocks fall in October leading into the

election but in both close and

predictable elections stocks are higher

afterwards you remove the uncertainty

the the fear of what might happen after

an election

okay fine then but what about the fact

that we have a tight labor

market that would be bad for the wage

price spiral even though jome Powell

told us not to worry about the tight

labor market

right Deutsche Bank has a response to

that as well Deutsche Bank says oh

yes the tight labor market might

actually create a boom in productivity

and productivity booms actually allow

the cycle to continue much like it did

in the 9s in fact productivity booms are

just a response to tight labor supported

today by artificial intelligence but you

won't be able to identify that until

it's too late you notice that in the

rearview mirror so just assume the

productivity boom is already

happening these either

Peres or they on to something and when

you tie together what they're saying

with what jpow told told us what

earnings told us and what the data

says yes we could still fall into a

recession if unemployment claims

Skyrocket and then it's too

late but are the signs that that's

around the corner right now not really I

mean after all what are companies

doing oh that's right companies are

issuing record stock BuyBacks

okay so what sectors do they

recommend well they suggest you should

get in well they're neutral on Tech

neutral on Industrials energy and real

estate and they're bullish on

financials those are like Banks Sofi

know consumer cyclicals those are going

to be your

Teslas materials

and utilities and

Europe okay I have home bias I prefer

the Europe uh us over Europe and net

interest uh income uh at financials uh

may still be in Decline for the next two

quarters at least from what we're

hearing from Banks uh and cyclicals are

kind of like cars but DB responded to

both of those and says yeah both of

those negatives are already priced in in

fact just this is my opinion you could

look at Rocket mortgage and you could

already see them starting to perform

pretty well and and price in that boom

so to

speak well hot

damn so what am I going to

do

well rain or shine maybe a little bit

before probably some more

after I'm going to take that extra bit

of cash we got I'm going to start going

shopping again but I'm going to do so in

a diversifi

ETF in fact something that I thought was

really interesting uh was you had a b

OFA piece on flows in recent weeks ETF

outflows uh inflows rather have outpaced

single stock flows and year-to-date

cumulative inflows to ETFs are larger

compared to that of single stocks okay

English please people buying ETFs they

La instead of single

stons people burned by the Tesla people

burned by the sofa the Allin on the

palen of the

tear these are all great

companies but having some

diversification is a really good thing

so personally I'm probably going to

increase my exposure to a diversified

ETF that has uh exposure to Apple Tesla

Nvidia uh probably trade desk is a juicy

one to be in there Amazon's a juicy one

the these are some of the the things I

like I might even be open to some of the

other SAS businesses I've really been

eyeballing and

wanting as well as some other pricing

power based stocks in other words

companies that I think in a deflationary

time will have the best ability to

compete not just you know on on actually

lower prices but higher margins with

those lower prices that is a form of

pricing power if you can lower prices

and have higher margins that is a form

of pricing power

Next Level derivative almost uh it's a

little more complicated to think of it

that way but anyway uh I did notice that

um Industrials saw the largest outflows

which you

know you you also saw consumer

discretionary materials uh have the most

inflows and energy and Healthcare also

have the most outflows basically when

people buy ETFs they're just buying

stuff that's going up and they're

selling stuff that's going down this is

very very normal personally I'm just put

me in a delicious ETF that's not like

too Diversified but has some

diversification that's just my POV

that's just my personal transparent POV

I'm not pitching any kind pick whatever

you want this is not a sales pitch the

only thing I am selling is a beautiful

educational group that you could join

the stocks and psychology and money

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be square anyway you got questions email

us at staff ofme kevin.com and we'll see

you in the next one thanks so much

goodbye why not advertise these things

that you told us here I feel like nobody

else knows about this we'll we'll try a

little advertising and see how it goes

congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analyst and

YouTuber meet Kevin always great to get

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