**Shocker - What Jerome Powell JUST Said**

is amazing we just finished the Jerome

Powell fomc press conference and we got

a lot more bullishness than we were

actually bargaining for we expected that

Jerome Powell would be neutral to

slightly bearish maybe try to talk

markets down a little bit but you won't

believe what he just pulled off and it

was mind-blowing I'm gonna break it all

down here right after of course

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so kevin.com and the coupon now expires

February 3rd uh through the week uh and

that'll be the final expiration so what

happened well first of all we got we've

been getting really good data right

we've been getting this great data we've

been getting indicators that hey look

we're starting to see a wage gain soften

we're starting to see the employment

cost index which is softening yesterday

we got the ECI report and it's softened

but guess what a big banger was in this

one we've previously heard Jerome Powell

regularly tell us that the joltz report

the job openings in labor turnover

survey should be in line with the market

availability of jobs in other words

there should be about one available

worker for every about one available job

unfortunately the jolts report went bad

this morning last month was revised up

slightly and on four or the month before

last month that report was revised up so

bad news and today's job openings number

was revised up again and Jerome Powell

was asked about it twice and guess what

he says in response to the joltz

indicator one of his previous favorites

which actually gave us bad news guess

what he said in response to being asked

about it he goes eh yeah it went up but

it's an indicator in other words Jerome

Powell was not as enthused about this

number going up as a reason for

continuing to hike instead he decided to

give us plenty of hints that a slower

pace of not only rate hikes is coming

but a pause is already being discussed

multiple times was he asked about the

potential for a pause being discussed

and Jerome Powell wanted to at least

tentatively punt the question by saying

hey you know what we'll let the minutes

decide that but we did spend a lot of

time about talking about on talking

about the directionality of where we'll

end up going in terms of how much longer

are we going to go on with these 25

basis point hikes and of course we want

substantially more data is what he

started with but even though he started

with this idea of having substantially

more data

starting with saying I want

substantially more data ended up turning

into an idea of a um you know uh the

disinflation process has started and

we're actually very excited that the

disinflationary process has started

remember there are three big portions of

inflation there's Goods inflation which

we are starting to see Goods deflation

number one check done housing deflation

we expect to see a show up in CPI data

over the next few months Jerome Powell

tells us that we are at the beginning of

disinflation and it's happening and the

next step which quote we see coming is a

decline in core Goods inflation x uh

sorry core Services he actually stumbled

on that so I wrote it down wrong core

Services inflation X housing and he

believes that process is going to get

started soon now they're not entirely

sure when so he wants to be very clear

that he's not trying to be an optimist

or a pessimist but he says the

disinflation process has started we

still need to make sure we can complete

the job and it's possible that there

could be more persistent inflation in

core Services which would be like

Medical Services or getting your hair

cut or car insurance right these are

your core services and he gave us a

warning that while the disinflation

process has started there is still work

to be done and we don't want to kind of

start stop or stop start so to speak

with rate hikes there's a stupid

suggestion from The New York Times but

that's almost redundant suggesting that

hey you know why don't you take a

meeting off and and you know start

stopping literally he's been saying for

years we do not want to repeat the

mistakes of the 70s whenever we have to

hike rates we don't want to stop hiking

and I have to re-hike we just want to

make sure we get it right this is why

they've reduced their Pace down to a 25

basis point hike and by the word Pace

they actually revise substantially their

opening statement by making sure that

they remove actually a lot of items that

have been contributing to inflation

consider some of the things they removed

they removed the fact that war is adding

inflationary pressures uh to their

statement they also removed that supply

and demand balances are adding

inflationary pressures they removed a

lot of the things that are causing

inflation war was removed covid was

removed Supply demand and balances

removed and we even had food and higher

energy prices removed all of the things

that were really contributing to

inflation have been magically removed

from the Federal Reserve statement and

yes while prices remain elevated and

uncertainty is elevated the Federal

Reserve expects to now be in a process

of debating the future extent of

increases rather than the pace now

initially this was seen as bearish

because they wrote s increase says which

implies more increases potentially 25 in

March 25 in May before a predicted pause

which the market is predicting a pause

the market in fact is predicting a peak

federal funds rate after today's meeting

of

4.91 in July and then the market is

predicting we're going to get down to

about

4.25

by December now that's interesting

because that means the markets are

already once again trying to predict a

flip to uh a lower uh rate level for the

Federal Reserve that is the ois swaps

showing the FED cutting rates by the end

of the year now Jerome Powell was asked

about cutting rates and he says look

look at what I wrote in December we

expected he would say look what I wrote

in December but what was really shocking

is the fact that he actually came out

and said hey look you know if things end

up worse we might have to go a lot

higher but yeah um

you know if if inflation ends up falling

faster than we expect then we would

consider that as well he totally stopped

short about using the word cut like he

was clearly clearly prepped do not say

the word cut in the context of

potentially cutting rates so that's why

at least two times when he was asked

about cutting he said look we think we

don't have any plans to cut this year

but if inflation comes down faster we'll

consider that in other words yeah we

would cut now one of the most empowering

moments mostly because I just need

another reason to Pat myself in the back

I'm just kidding okay I don't know

um that sounds bad but no one of the

most empowering moments to me because

you all know I've been talking about

this thesis that I have that we're not

going to get this like huge capitulation

in the market unless there's some kind

of Black Swan event that crashes

everything and then you have as massive

Panic selling and that's when the FED

comes in after they broke something and

they bail out the markets right I don't

think we're actually going to have that

kind of U-turn of a moment I've actually

really been theorizing that we're more

going more likely to experience what I

call the Nike Swoosh style recovery

which is we've gone down really fast in

2022 okay we our stock market fell three

times as fast as it did in the.com

bubble yet everybody wants to keep

comparing this time to the.com bubble

and we fell three times as fast in 2022

as we did in the.com bubble this was a

pretty damning fall but Jerome Powell on

the rebound said the following quote

we're not going to have a light switch

moment no light switch moment where it's

like it's off and then it's on

that to me is basically saying the same

thing as we're not looking at a v-shaped

recovery kind of moment we're looking at

a Nike Swoosh where as long as the data

keeps coming in positively we slowly

Trend up and this is why I'm a big

advocate for hey look it feels like the

bottom is probably behind us knock on

wood you don't want to go being too

confident go YOLO margin but it feels

like the worst is behind us it feels

like the worst of earnings is either

probably here now or slightly behind us

and the stock market tends to bottom uh

you know relatively close to when we get

uh an earnings bottom so if we get the

worst forecasts now and I want to

clarify that if we get the worst

forecasting Q4 q1 over here and we think

EPS earnings per share actually ends up

bottoming in Q2 Q3 then the stock market

might actually be in the bottoming

process between December and now where

we basically have been and potentially

it makes sense why we're starting to

break the 200-day moving average of a

downtrend in the stock market and things

are starting to move up and close higher

because maybe the bottoming process is

already in effect that we're getting a

lot of good data and drum Powell makes

it clear we are not only not seeing a

wage price spiral but one of the largest

conditions for a wage price spiral is

actually going away and that is people's

belief that inflation is persistent

Jerome Powell says that sentiment could

end up picking up pretty soon here

boosting the economy again and based on

information sentiment data and and sort

of salient information that they're

collecting and talks with people from

their federal reserve banks they

actually find that consumer expectations

which they say are at the very heart of

building out inflation are actually

softening to the tune of inflation that

is people are happy and they're seeing

that inflation is starting to go away

and that's actually having a very

positive effect on potentially pulling

all overall inflation down that

expectations are the Bedrock of

inflation and this makes a lot of sense

I mean just think about it logically for

a moment if you think that next month

the prices on the programs on building

your wealth link down below are going to

be you know five or ten percent higher

than they are today net net then you're

better off buying today we also have a

coupon code expiring on February 3rd

which is in two days and we promise with

a three-month guarantee that you're

going to get the best price anyway link

down below but the point is inflation

and the expectation for high inflation

leads generally leaves you wanting or

spending money earlier that's actually

bad from an inflation point of view

because it could potentially crimp up

Supply chains more and Lead inflation to

rise but what's actually happening is

inflation expectations are falling so

people have the belief that no don't

worry that Apple iPad is going to be

cheaper in three months I'll just wait

for three months look at maryborough for

example from GM what did she tell us she

said we think our cars are priced

appropriately that's what she says but

what was actually talked about in the

earnings called more incentives and more

discounting coming to GM vehicles over

2023. it's just like Procter and Gamble

saying inflation is expected to subside

by the second half of the Year Johnson

and Johnson talking about inflation

subsiding by the second half of the Year

McDonald's talking about high paper

inflation but when you actually look at

the paper manufacturers what are they

saying because I read the earnings calls

is the kind of stuff that I do on a

daily basis it's really fun well I sit

there I go oh pulp price is coming down

freight costs for Shipping paper coming

down all of the leading indicators are

like inflation is coming down now I'll

be the first to tell you when I start

seeing it prop up again okay yeah we had

a Miss on the joltz numbers this morning

but so far everything is trending down

pretty dang nicely and the fact that

Jerome Powell came out here to say that

look we think

core Services X housing are going to

start the disinflation process very soon

I'll tell you that is pretty dang

bullish very very bullish very happy

about that uh Jerome Powell when he was

asked about the summary of economic

projections as expected he punted back

to the December meaning the December

meeting is hawkish enough that's all he

had to do I said that up front up front

I told you all he has to do is if he's

asked about the projections punt to

December and be neutral and it's

literally exactly what we got we got

punt to December neutral if anything I

was actually surprised we got a little

bit more bullishness because he started

talking about how the fact that

deflation and the disinflationary

process has started that's really

exciting and the fact that the only

piece of data that's coming in bad

Jerome Powell basically brushes that one

piece of data off and goes eh it's an

indicator you know that's kind of like

when people come up with an idea and I

don't want to you know like shoot it

down immediately I'm kind of just like

that's an idea

uh at this point everybody around me

already knows that that means I'm not

the biggest fan of it so it's just kind

of become a joke at this point but in

reference to Jerome Powell Jerome Powell

going that's an indicator oh that was

pretty damn bullish uh I'm actually

really surprised that uh that he came

out this this positive uh I I think as a

as a group of Watchers here at one point

thank you so much for being here we had

around 35 000 individual people watching

and we ran a survey that over five

thousand six thousand of you voted on

and the survey that we ran beforehand

was the following it's on screen right

here it was that we thought uh everybody

was leaning slightly negative slightly

to we we calculated roughly about the

negative point one eight uh percent

level in terms of of how negative

individuals are feeling so more bearish

than positive and uh and that is is kind

of the opposite of what we got if

anything we got slightly more neutral

then we got negative so I was very very

impressed with that uh and uh it's it's

actually quite exciting so so we'll see

but at least at the time of this

recording you've got the NASDAQ up a

couple of percent pretty much everything

uh is moving up uh and you've got a risk

rally that started which is uh partially

quite ridiculous uh carvana is up 39

it's up four dollars Peloton which

reported horrible or tarvana by the way

should be going bankrupt the only reason

they would survive is because they're uh

uh you know basically getting bailed out

by j-pow here this is the danger is that

bank companies that should be going

bankrupt don't go bankrupt because their

stock prices rise and then they end up

dumping a bunch of shares on the market

they're able to dilute everyone and

raise money but anyway huge huge risk on

rally here it was asked before uh what

do I think would happen if if uh Jerome

Powell was bullish and I thought we'd

see some kind of risk-on rally including

crypto rallying up that's exactly what

we're seeing we're seeing Bitcoin

sitting at 35 a six about right now

still Rising this is the 30 minute chart

if I zoom into the uh one minute chart

it should be even more apparent yeah

this is basically a straight rise here

after the uh Jerome Powell press

conference a lot of small caps really

rallying here big risk on movement Open

Door uh which should be called closed

door uh near bankruptcy here jumping up

about 10 you've got a company like a

Tesla up five a point two percent at

182. this is actually a risk factor for

me because I said if Tesla hits 200 by

the time the coupon expires which I

didn't realize but we just by pushing it

to to Friday means if we hit 200 a share

on Tesla by Friday a company I think has

a huge PP huge amount of purchasing

power pricing power uh I I have a huge

allocation obviously to Tesla because of

the pricing power that I think it has

then I have to dye my hair green so I

kind of uh extended that potential

reality we're even getting a move on end

face here which I've been buying the dip

on on end phase getting some more

exposure to that which is quite exciting

but uh really it just seems like a

broad-based move here with the exception

of Embraer embrae are lagging a little

bit uh at just up about half a percent

not too much movement over here at the

airplane manufacturer embryo what are

you doing hanging out over there in the

face of the small caps rallying in

America trade desk though up about three

percent uh right there with uh with end

phase so pretty incredible I would say

widely bullish actually and really when

it comes to other catalysts look next

catalysts are this Friday 5 30 a.m I'll

be covering the jobs report at 5 30 a.m

you're welcome to join me then and then

of course we have the next CPI report

which comes out on Valentine's Day on

v-day we will be getting the next CPI

report which I'll also be covering that

live at 5 30 in the morning I hope you

can be there and make it uh this is uh

this is actually pretty incredible so uh

so pretty pretty impressive uh this is

definitely the uh the the threading of

the soft Landing needle anyway if you

have questions about checking out by the

way nurse Colby thank you so much for

the 49.99 donation it's really awesome

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he's probably eating a burrito anyway

thank you so much and uh we'll see you

in the next one thanks so much goodbye