yikes... buckle up

hey everyone me Kevin here coming to you

from a lake in Canada and I'll tell you

it is awesome to just sit in the middle

of the lake and think and of course what

do I think about nothing other than the

Federal Reserves see the Federal Reserve

has a very big weekend coming up a lot

of the Bears are telling us that this is

going to be the week that we finally get

rug pulled and a lot of the Bulls are

saying this is the week that we finally

go to the moon so which is it and what

expectation should we have going into

this week especially since I'm going to

go through numbers in terms of not only

the Federal Reserve but listen to these

data sets we've got coming out CPI this

week PPI this week and retail sales all

this week along with the FED potential

hike and the ECB potential hike that's a

lot coming out this week so let's

discuss the first thing that we have to

keep in mind is that the Federal Reserve

has to this week really Telegraph to the

entire world what strategy are we

undertaking no matter whether you are a

bull or a bear this week will be that

moment where the Federal Reserve finally

has to decide what is more important to

us maintaining the economy in such a way

that we don't have mass unemployment and

we fight inflation with everything that

we have or do we fight

patiently that is we patiently allow

disinflation to occur we patiently allow

the markets to resume their activity and

we essentially slowly Nike Swoosh

recovery back to where we were and

potentially Beyond that's the question

and the reason this week is so pivotal

for that is because obviously it is

widely expected that the Federal Reserve

is going to pause

in pausing the Federal Reserve will

likely give us a hawkish pause that is

they'll talk to us dirty they'll talk to

us about how they're going to in the

future be open to hiking again but not

only are they going to do that they're

going to give us a summary of economic

projections and SCP and they're going to

use that yeah Jack

um that there's a I don't know what it's

called this a person getting yeah

there's there's somebody uh what are

they called uh like a um what yeah what

are they called water skiing yeah there

are water skis over there are people

having fun out here all right Jack I got

to keep talking about fun things like

the summary of economic projections okay

you want to say hi really quick yes all

right so back to the summary of economic

projections this will be another tool

for the Federal Reserve to Telegraph how

seriously they want to take inflation

and there are two ways to really go here

you can go in the direction that the

Bears expect which is okay the stock

market is going up real estate is

starting to go up uh again since January

it's been trending up we still haven't

seen that surge of inventory it is what

it is markets we just have to absorb

What markets are doing and play the best

we can right so markets recovery and the

FED might look at that and say wait a

minute in 2022 we were actually hoping

markets would go down

weekly real estate market because that

via the wealth effect contributes to

people feeling less rich and therefore

spending less money that puts less

pressure on Supply chains which puts

less pressure on prices right jack would

you mind sitting down you're distracting

me dancing around like

so anyway that puts less pressure on

inflation

so the idea was okay let's ruin people's

wealth basically wait for a reset so to

speak as drone Powell suggested and uh

then inflation will go away because

there'll be less availability of capital

for people to make investments to hire

people uh to buy goods and services and

that'll reduce inflation uh Mr Schiller

Robert Schiller uh famous for the case

Shiller index for Real Estate home

prices is a famous economist He suggests

that real estate home values have more

of an impact on the wealth effect that

is people's propensity to spend money

then the stock market but personally I

as an anecdote I somewhat disagree with

that somebody who's more heavily exposed

to stocks I personally believe will feel

a little bit more like yeah we could go

on that vacation if stocks are up versus

when stocks are going down and you're

like I don't know man and we're gonna

hit a margin call like logically it

seems to me that both of those wealth

effects would matter but who knows

so a lot of the Bears right now and I've

been I've been reading a lot of what the

Bears have been saying so that way I can

have a really good understanding of

what's going on uh at least what the

bear argument is the Bears are

reiterating that look you can't have the

stock market going into a bull run

territory when the fed's in a tightening

cycle you need to crush the stock market

rally and therefore this is the week

that stocks are finally going to get

their reality check so load up the

shorts and quite frankly loading up the

shorts could have contributed to the

rally that we've seen over the last two

weeks I know that sounds crazy but think

about this for a moment when people are

buying short position put options for

the 16th I think I previously I said the

17th it's the 16th it's the Friday then

uh thanks to Delta hedging and basically

the way my these these um uh market

makers work is they start buying the

counter position a couple weeks early

and so you have this really weird

phenomenon where potentially in front of

a lot of shorting you get this run-up of

box which we've kind of seen so that's

somewhat consistent with this leveling

up of shorts or Hedges going into this

particular week here so you've got the

FED set up for telling us what's more

important slowly fighting inflation or

quickly fighting inflation you have the

opposite of the wealth effect coming

right now no matter what you believe

about the wealth effect the reality is

things are up right now so if the FED

cares about the wealth effect they got

to drive markets down this week if uh

and that'll prove short sellers correct

however that thesis is based on

the Federal Reserve needing to cause

more unemployment

and see this is the interesting part

about the FED what if we get a Fed which

we may that says hey

we don't actually need to destroy the

economy we have enough

disinflationary pressures that if we

just stay on the course we are now in

other words stay at five percent and

inflation the next inflation reports

continue to come in as they are

currently

we expect we will return to two percent

inflation by say the first quarter of

2026 which their summary of economic

projections may show

well in that case the Federal Reserve

doesn't actually potentially have to

hike again they just need to stay at

this level for higher four longer right

five being the higher level and then for

longer

now the problem with that is it also

assumes uh that the best thing to do is

just stay in stocks but wait a minute

markets at least 60 of Bloomberg

economists are still projecting a

recession this year that's because if

you look at the bond market it's still

insanely inverted

but that actually suggests that the FED

has maybe gone too far that they've

already over tightened that inflation

isn't actually the boogeyman the real

boogeyman is the earnings recession and

that we're really going into a harsh

recession and because we're going into a

horse recession and then that's when the

job loss Will Truly Come when that

earnings recession occurs that's when

we'll see the mass unemployment at the

same time as stocks potentially hit new

lows that's sort of the argument

well then the Federal Reserve actually

has to balance that as well and

ironically that's a scenario that would

suggest Fed rate cuts

so really what I've just set up or three

scenarios that we're trying to evaluate

and that's what makes this so blurry

you're trying to evaluate hey hey is

inflation sticky you need to hike more

the second scenarios no no we're good

inflation expectations are anchored just

be patient and let this slowly roll off

just like we've done historically

opportunistic disinflation slowly roll

inflation off and the third scenario is

you've already gone too far we're going

into recession we're screwed

in scenario number one where they hike

rates even more and more and more we go

to a six percent terminal or whatever

you don't want to be you know you're

going to have some downside to stocks in

scenario number three where we go into

recession you potentially have some

downside to stocks but then again you

look at Germany you know they're in a

recession and there's stock market is at

all-time highs and then you have this

Middle Ground which is often associated

with a soft Landing which is maybe no

recession and

wow inflation just slowly Trends away

very slowly

it's everyone's guess obviously as to

what's going to happen the bond market

says the third scenario is going to

happen the Bears say the first scenario

is going to happen that is we need to

raise rates more to make sure we get rid

of inflation but then we're going to

cause that dirty recession so you'll end

up with the third scenario anyway and

then the Bulls are in the middle going I

think actually everything's going to be

okay

and I think this is where it's worth me

imparting my opinion so I wanted to

catch you up with fact uh and then we're

going to go through data as well we've

got some data to go through as well uh

see like here's one of the Hawks going

uh this next fed meeting is going to

usher in the next phase of the Central

Bank hiking cycle and they use the Bank

of Canada to suggest that that's it here

it comes here comes the next hiking

cycle they've they've gone from pausing

in January to starting to hike again in

June uh we're going to have a shallower

monetary easing path Beyond 2023 that's

going to be something the markets have

to price in and all it's going to take

is a hot CPI report here to knock the

fat Off Their Rockers and let's go

through some inflationary projections as

well here

but let's first

give you my opinion and then I want to

hit data okay so so far I've caught you

up with the FED now we're going to go

into my opinion uh also I'd like to

announce uh that we're going to be uh

slowly slowly slowly remaking a lot of

the lectures in the stocks and

psychology of money course and the real

estate investing course uh that's going

to be completely for free for existing

members and uh once that process is

complete we'll have another quite large

price increase because the Quant the I

think the quality is going to go from

amazing already to amazing times too uh

so feel free to use the coupon code down

below uh we're calling it AI more this

time because we're going to be

incorporating AI to every lecture as we

go through and remake the courses uh

which will be really incredible so

really remaking everything thanks to AI

now which I'm very excited about so stay

tuned for that but use that coupon code

down below so what is my opinion uh and

Jack I've got maybe about three or four

more minutes all right so my opinion is

that we are right now looking at a wage

disinflationary process happening if you

look at wage growth is basically a chart

that peaked in January of about 2 2022

and CPI peaked about six months later

okay what's interesting about that is

the rate of wage disinflation has fallen

the most in the last month compared to

the last six months therefore they're

after there before so in other words

we've started seeing wage disinflation

really come down and in this last month

it's come down even more

in other words the next six months we're

going to slowly start seeing that wage

disinflation priced into CPI

well where do wages generally show up in

CPI

they show up in services

is the last argument the Bears have that

Services inflation is sticky and because

Services inflation is sticky we are

going to have to hike more

but I think the Federal Reserve will

take a path of patience and say you know

what let's let's give it let's wait for

the data to see will that wage

disinflation translate into Services

disinflation if it does we could stay

here and eventually talk about cutting

if it doesn't if for some reason

Services inflation takes off again

well then obviously we have a problem

and we're going to have to hike more and

we're going to keep that optionality

open so if I were the Federal Reserve

right now I would be very transparent

and say look

at this point with the data we have and

inflation expectations where they are we

think inflation will roll down to two

percent by the beginning of 2026 and we

are okay waiting that long however we

realize markets are up

housing prices have started to rebound

again and because of this there is a

risk that people spend more money and if

Supply chains were not available to

absorb that additional demand because

remember that as well a lot of people

like well people go back to spending

that inflation will happen no because

Supply chains could have potentially

been prepared for a new surge of

spending again this is why I actually

don't think you're going to see a chip

shortage again because you had Supply

chains build up massively and even

though now everybody wants chips for AI

we're ready and available to manufacture

more although there's a limit to that

okay because even Elon Musk is

complaining that he's starting to see

some trip shortages again so there's a

limit obviously to everything but the

point is that in most areas we've really

built up these Supply chains again so

anyway

um so the FED should be very transparent

and saying look if Supply chains are

available to handle the extra demand and

as a result we don't actually see

a a pricing pressure

then we are okay patiently waiting until

the beginning of 2026 for inflation to

return to 22 uh in in such a case as

long as we don't get hot CPI PPI data

between now and then we don't

necessarily need to keep hiking we are

at sufficiently restrictive levels and

we will stay here until we are convinced

that we are not going to unanchor

inflation expectations which they are

anchored very low right now and we are

not going to return to any kind of

larger inflation uh it reports that's

what I would say if I were the FED but

then again the FED can't necessarily say

that because there is a risk of the FED

saying that leading to people going all

right take out every loan we can get oh

there's a b take out every loan we can

get and uh and and spend money uh and

then that actually ends up creating too

much

of us spending oh it's right behind me I

mean I don't really mind if it's just

sitting next to me sometimes it's not

coming after me but anyway uh that is

going to create uh this potential risk

of people coming out and borrowing money

and spending money like crazy again so

that is a big risk uh so

um the fed's going to have to figure out

how to massage that message uh and

there's going to be a lot of reading

between the lines to determine okay is

the Federal Reserve uh going to uh going

to be as transparent as this probably

not because that level of transparency

risks uh basically inducing too much

buying and too much recklessness

although we're already starting to see

fomo trades come back like crazy right

the exception of old coins and crypto

but that's really a topic for a

different video and that has a lot to do

with regulation not so much uh the Fed

so let's get to the data and wrap this

video up so here's the data first of all

uh we have uh some researchers uh credit

agriculture credit Agricola believes

that they think headline CPA is only

going to rise by 0.1 percent month over

month slowing from the point four

percent we got last month uh and then

year over year we're going to see CPI go

down to four percent down from the 4.9

last month uh now what we'll also expect

Jack what's going on

I'm just

amazing okay because they're like kick

in your leg it makes me think you have

to like go to the bathroom or something

really badly all right can you just sit

down and chill

all right so uh regarding

um month over month core they expect

core to rise

0.35 and the year over year slowing to

5.2 uh now they also believe

that this is going to lead to a gradual

core slowdown to 3.5 this is credit

agricola's expectation this gradual

slowdown of core is going to really

trigger the fed's patience is the Fed

willing to be patient and that's what

we're hoping to get as a signal this

week hopefully is the answer but anyway

when we look at uh the Bloomberg

Economist projections for CPI CPI survey

for month over month is actually 0.2 as

opposed to credit agriculture is 0.1 and

then core they're looking for 0.4 which

actually if we look into the detail it's

actually 0.37

so we'll see when we actually get the

numbers but probably a 0.2.4 anything

less than that would be good news for

the stock market and the FED because

really if we get a bad CPI release Here

the FED will give us a 25 basis point

hike the markets will price it in right

away they'll send a text message to Nick

T going we have to switch to hiking

he'll publish a Wall Street Journal

article and then every mainstream news

organizational published an article

going fed might have to transition to

hikes and then they'll they'll hike

again but it would really require a miss

that none of the leading indicators are

really suggesting we're going to get so

I wouldn't be betting on a Miss but then

again if most people don't bet on a Miss

maybe the most profitable bet isn't

betting on a miss right that's the irony

like if everybody knows the stock is

going to fall everybody shorts it and

then nobody makes money shorting it it's

this crazy irony especially when you're

playing options anyway uh okay so then

we have PPI the very next day we

actually think PPI headline month over

month will go negative point one PPI

core will be 0.2 uh point two is

actually fantastic because that brings

you to about a 2.4 year over year uh

when you annualize him uh then of course

we have the rate expectations we're

expecting to hold but then we also uh so

let me be clear here on CPI we're going

to get CPI Tuesday the 13th at 5 30 a.m

I will be live streaming even though I'm

in Canada so stay tuned for that uh then

we are going to get CPI or PPI Wednesday

at 5 30 a.m I will be live streaming

that even though I am in Canada then we

will be covering the fomc meeting on

Wednesday at 11 A.M California time I

will be live streaming that even though

I'm in Canada

retail sales Thursday morning at 5 30

a.m I'll be live streaming that we're

expecting a month over month advance of

negative point one percent uh that's

going to be after the fed's meeting so

we're really not terribly expecting that

to really affect uh the federal

reserve's decision making because the

only Central Bank making decision that

day is actually the ECB and they're

actually expected to hike by 25 basis

points so we'll see so most economists

right now expecting this to be a hawkish

pause uh and then we're looking for data

on what's going to happen with these

next uh with these three scenarios these

three scenarios playing out I would

argue that if we're going to go into a

recession it's probably going to be

relatively shallow and in a recession in

that lower scenario you would expect Fed

rate cuts and honestly even though

you'll have volatility in stocks and

you'll have some kind of earnings

recession much like what I've been

calling for in the Staples sector you

know the targets the Costco whatever I

really think the the lows is the Home

Depots I think these guys are going to

get hit a lot more than than the tech

that's why I've been positioned in Tech

and growth uh certainly since November

of 2 2022 basically been all in but it

did get get in pretty early before that

as well uh which you know still led me

to ride down a little bit but oh well it

can't be perfect with the timing but

anyway uh I still believe in in Tech and

chips uh some of them are getting a

little frothy though so we have to be a

little careful I think probably the

weakest sector right now and the most

undesirable sector is actually retail

it's gonna be like your your non-staples

retail more of your discretionary retail

so like uh your your Etsy right uh just

as an example so I'm watching that maybe

like even your Dave and Busters although

that's done well after earnings so I'm

watching those I haven't made any moves

on those yet so uh then after that and

of course when I do I'll send an alert

to everybody in the stocks and site

group uh then uh after that as far as

the the middle case scenario I want to

be in stocks so recessionary scenario I

want to be in stocks middle case

scenario I want to be in stocks and oh

fighter jets right there Jack yeah and

then in the uppercase scenario which is

the Fed hiking more honestly I'm not

terribly and let's see if you guys can

see the Jets Jack can you point at them

point at the Jets

yeah I don't think we can see him unless

we come back over this way I don't know

if they will

um anyway uh so the top scenario which

is okay well the FED might have to hike

more honestly I don't really care

because in my opinion the Federal

Reserve oh they might be turning this

way in my opinion the markets were

pricing in Paul volcker last year and in

pricing and Paul they are coming this

way they're putting on a show for us

what a treat they're trying to remind

everyone oh my gosh they're gonna come

right over us

look at that where are they there they

are oh that's so cool oh wow Jack we

gotta fly by

dude

that was so cool

they're like hey it's me Kevin making a

video trying to pitch his coupon code

let's silence them

oh that's awesome uh oh okay

wow that was awesome

so uh last scenario is is fed hiking I

don't care that's why I want to be in

stocks because even if they hike more I

don't think we're pricing in a Paul

volcker so quite frankly even if raids

go up to six percent I don't think we

get back to New lows to Paul volcker

levels uh so basically in every scenario

I I lean bullish am I suggesting things

are going to go straight up and it's all

in in video or mean stocks right now no

of course not you know so so I think

there's a cautious optimism that I have

I don't think that's associated with

Perma bullish because you know obviously

the beginning of last year we were

extremely bearish but going into this

year we've been extremely bullish

In fairness because

it was the right move I mean I remember

November December January March people

like Kevin we should be going all in on

crypto I'm like why these stocks have

such great fundamentals they're so cheap

right now now a lot of things I will say

Have Become uncheap again right Tesla's

pegs back over two and I'm like dang it

you know end phase is still someone

cheap uh and the housing market is

actually trending up which should be

good for sales again but it's expensive

to borrow for solar panels right now so

TBD but anyway I'm looking for more

deals I suppose I would I would pay

attention to I'm not convinced 100 yet

but I'd be looking at things like uh and

phase Etsy uh and um

and you know honestly I'm looking for

more suggestions so if you give me some

more suggestions they can go oh ubiquity

ubiquities Dirt Cheap right now uh

that's another one that's ticker symbol

UI so anyway uh check out those I do own

all three of those so I want to be

transparent about that I've exposed to

all three of those uh so it's not that

I'm just trying to pump my book it's

it's that quite frankly I

I I'm looking for where the other deals

are and I'm like dang things that were

cheap aren't cheap anymore so anyway

hopefully that's insightful to you uh

let me know what you think leave a

comment down below and uh we'll see you

in the next one remember we are doing a

complete course refresh Jack you're

welcome to turn the engine on and we're

doing a complete course refresh for

stock since I can zero to millionaire

real estate investing oh Jack you have

to put it in neutral pull the stick all

the way to neutral there you go okay now

you should be able to turn on and um

we'll see you soon thanks bye