WORST Economic *Warning* Since Covid | Yikes!

the US economy just suffered its worst

decline in manufacturing since the

pandemic and the question is could this

be a leading indicator of what's to come

in the Great Recession 2007 we saw

manufacturing lead the recession and

then worsen during it much like that

damage that we're starting to see now in

the bubble it really took the bursting

of the well frankly and telec

region to reduce Manufacturing in

semiconductors he had less of a broad

manufacturing decline but a lot of

people are wondering now is the

manufacturing economy in the United

States sending us a warning signal well

this morning we did get the SNP PMI

numbers so we're going to go through

those and we'll add some commentary keep

in mind even though right now we've got

Bitcoin knocking on the door actually

just over 999,000 now and we've got

Tesla one of the greatest manufacturers

really in the world but also in the

United States a little pricey right now

but sitting at 351 up 35% qes are

positive end phase who uses contract

manufacturing also up four you got bonds

again down about 1.8 gold also up 1.4 at

the same time you got oil up 1.4 so a

lot of people are scratching their heads

going huh is this really a strong

economy is this going to last or are the

problems Brewing that allow the stock

Market to rise while gold and oil also

rise and bond yields come down well be

really interesting but the easiest thing

to start with is get into the PMI report

and also pay attention to that inverted

yield curve well uninverted we're only

uninverted by four basis points right

now so technically we're not close to a

recession right now usually see that

between 5090 but let's take a look at

this first this is the uh S&P Global uh

PMI release we got this data this

morning and I wanted to read you some of

the quotes from the actual analysis a

strong and accelerating expansion in the

US contrast to that of a stalling

expansion or even slowdown in Europe and

Japan but what led that in the United

States you're about to find out us

businesses contrasted with gloomier

moods in Europe suggesting this growth

Divergence could widen things could keep

going in the US and things could worsen

in Europe you'll also see why a key to

the Divergence has been a substantial

outperformance of the US Services

economy relative to other economies but

at present the US Goods producing and

Manufacturing section is actually

reporting a steepening downturn now even

though that downturn is less bad than

what you're seeing in Europe thanks

heavily in part due to tariff

uncertainty I want you to see this line

uh this paragraph right here a fallen

manufacturing output was meanwhile

common amongst the G4 economies with the

Euro Zone registering the steepest

decline out of all of them however the

US received or or the US notably

recorded its steepest manufacturing

decline for two years registering a

significantly steeper pace of

contraction relative to the modest

decline seen in the US and Canada now

that's not great uh but there's more

data to get here and then we'll make

some conclusions and try to draw some

understanding out of this uh so service

is doing okay we want to know what this

is doing to prices as well and

Manufacturing is getting whacked and we

see this as a very unusual Divergence

you could see here uh upside means that

the service sector is growing more

downside means the manufacturing side is

growing more and we're at some of the

highest levels we've seen since the

summer of

2023 which this could be our first hint

to trying to understand what's going on

here why are Services booming like this

well frankly a lot of folks believe it

almost all has to do with spending on

artificial intelligence that companies

almost every company is hiring

Consultants left right and Center to

consult on how can we Implement AI into

our business to run it more efficiently

unfort Al that comes with a risk the

more people you're hiring for AI

Services Business Services Consulting

Services AI infrastructure Services

whatever Finance Services you name it

the more you might end up with the same

conclusion each company needs fewer

workers and unfortunately more people

are potentially prone to layoffs not

great but at least right now the good

news is the United States is

outperforming its peers or outperforming

the United Kingdom um Europe Japan and a

lot of this really has to do with fear o

recently at least with fear regarding

tariffs other countries are really

worried about how are tariffs going to

affect them and even though tariffs uh

tariff uncertainty is affecting us

consumers here's a survey the first

survey since uh the election suggesting

that uh postelection confidence has

declined so much in 2016 when Trump won

you didn't see this decline so it's a

little weird that confidence fell a

little bit by consumers and that their

short-term inflation expectations

actually declined although longer term

ticked up a little bit right now our uh

inflation expectation is at the lowest

level since December of 20120 which is

really good right lower inflation in

fact if you go over here to the S&P

report you'll actually see selling price

inflation cools especially sharply in

the United States the good news out of

the Us flash PMI didn't stop with output

in future expectations as inflation

pressures also cooled average prices

charged for us goods and services in

fact barely Rose registering the

smallest monthly gain in the S&P uh

Global PMI this side of the pandemic

even though you had slight increases in

the Euro Zone in UK so let's let's try

to put all this together for a moment

because it's a little confusing we're

talking about the steepest decline in

manufacturing we're talking about price

PR is stalling out which is good we want

that and services still crushing it

especially around the AI booms release a

Blackwell over here you know super micro

is blowing up just like we kind of

thought it would uh remember if you're

not part of the meat kevin.com alphar

report it's totally free you may as well

get that over there uh but this is this

is not good some of the worst

manufacturing numbers and look

manufacturing may only be about

10.2% of USG GP understandable but a lot

of manufacturing

leads Services the more we manufacture

the more Consulting install Services we

need Finance Services we need lending

Services we need you name it now of

course the manufacturing industry is

going to be a bit more exposed to higher

interest rates higher interest rates do

have the potential of crimping the

manufacturing industry because you know

people don't want toy buy cars or

washing machines you know these are

durable goods people don't want to buy

uh Capital infrastructure like larger

Machinery cnc's

whatever uh and when you don't do that

you know we actually saw asml come off

some of their High Peaks lately because

it seems like some of the uh um you know

Peak Euphoria on uh equipment purchasing

is really stalled I mean look at asml

it's almost down 50% from its highs

that's crazy it's not quite that high

but let's divide it here 673 is the new

divided by the old ah it's down 39%

almost 40% that's that's a lot that's a

big Decline and part of that is because

of what you're seeing in manufacturing

and this lower desire for for for

tooling basically so how do we put this

together how do we reconcile this well I

think the easiest way to start by

reconciling this is to tell you um a

little secret okay I'm going to let you

in on something uh so we're going to

talk inflation we're going to talk man

manfacturing we're going to talk

recession we're going to talk Services

we're going to talk about that in just a

moment we already talked about and you

already know this so this is old news we

already talked about me kevin.com Alpha

to get your Alpha report we already know

about that but what you don't know about

yet is that Kevin's not the biggest

don't tell anyone this okay Kevin's not

the biggest fan right now of public

markets I think public markets are

mostly overvalued and that's why what

I'm looking for are uh private companies

that can really make a lot of money in

uh either a soft Landing or recession

because they've got strong balance

sheets and can really pull us through as

we get to likely higher layoffs and uh

so what I've done don't tell anyone I've

quietly launched roboh hack.

AI okay don't tell anyone roboh hack. a

it's a venture capital firm it's only

open to 99 investors that's an SEC rule

it's not mine go check it out if you

want okay what does this mean for

everyone else well you have to

understand this in the.com bubble just

for history com bubble you had a uh

manufacturing decline really more so

follow uh the com verst right so think

about it kind of like valuations popped

then semi uh manufacturing

plummeted okay in the Great Recession

you actually had manufacturing lead

declines as a sort of barometer of

economic

certainty because I want you to think

about this for a

moment when what is the most bullish

thing a business can

do well frankly it's to buy Machinery

that uh will take 5 to 10 years to pay

back right to actually start making an

Roi on like one of those asml

machines okay what is what is the most

bearish thing a Biz can do well I mean

it's frankly the opposite it's don't buy

Machinery so business confidence leading

business confidence about the next 2

years is

dictated Often by

manufacturing and this is why people say

manufacturing leads GDP more than

services do what leads Services well

frankly strong earnings so these are

things that already happened uh and uh

and then of course um so not just strong

earnings at businesses and companies but

also higher

valuations you have more to

spend and services can be cut rapidly in

a Slowdown right and the contract pay a

little early termination fee or whatever

it's over it's really hard to do that

when you just took delivery of a $500

million machine and you're like JK I

don't want this anymore cuz we're going

into recession so this is why people

find that manufacturing is such a

leading business confidence tool because

it tells you that there are serious

concerns now is it possible uh you know

possible explanation uh maybe fear over

tariffs right maybe possible explanation

but what's something else that's also

possible well it's frankly possible that

as as EPS levels off uh earnings per

share levels off at

companies uh the Consulting that they've

been doing in Services leads to layoffs

which then crushes consumer spend and

consumer services that's

recessionary that's possible usually

though usually you don't have to worry

about this until the stock market

corrects so usually not an issue until

Market corrects so keep that in mind not

an issue until the market corrects oh by

the way on roboh Haack just to be clear

this is like robotics AI nuclear this

this is like you know these are all new

Venture Capital Investments okay just

want to be clear about that it's it's

not like it's like oh you know more

house house has its own fund race going

and house Haack isn't in any of those

categories right now I just thought I'd

cleared that up but anyway so so this

this inflation this sort of price

decline is expected uh in fact this is

why I'm so bullish

bonds uh because I don't really see

inflation coming and this S&P report

reiterates that yeah you had a little

bit of volatility with a port strikes

and and sort of front loading before the

holidays that's normal uh but I will

say uh this is something to watch watch

because think about it manufacturing

already in worst decline since

pandemic if stock market Peaks and

starts falling you know for three to 3

to 6 months of

red uh layoffs will

follow uh and recession will be

guaranteed the problem is right now even

though we're sort of ripe for that

correction there's no indication that

you're definitely going to have one

because you just don't see the Black

Swan right now it's the nature of that

now I mean some of the things you could

look at is you know you could go in here

and go okay well you know the S&P 500

has peaked out a little bit you know

it's been sitting here for about a week

to 10 days the uh sorry that's those are

the q's the S&P 500 same thing though

you've kind of peaked out about a week

ago you look at a company like meta uh

you also see it's peaked out a little

bit Nvidia probably peaked out yesterday

on earnings and now it seems like people

are taking profits I mean it's down

3% uh better opportunities right now

seem to be super micro bouncing off the

bottom over here and enace finally

starting to bounce off the bottom here

both of these creating their first green

Candlestick I did buy into both of those

though was just saying these are like

very very very very cheap companies in

my opinion uh and they don't have some

of the euphoric pricing built in uh some

people think that you know once Bitcoin

crosses 100 that's it everybody goes

profit taking otherwise some people say

it's just going to keep going on forever

I don't know but what I can promise you

is every single day I will be providing

you when the Market's open maybe on the

weekends if there's breaking news I will

provide you a report over at

meetkevin.com

alfha that report is totally free uh go

to meetkevin.com Alpha I'll text or

email it to you and uh you'll get lots

of insight like this morning I was

talking about the potential for a Tesla

breakout and a super micro breakout both

of them did I was more confident that

super micro would break out I didn't

actually think Tesla was going to get to

347 but I said it watch it because if it

does it's going to pop and it's going to

start trending towards 414 and that's

exactly what's happening right now so if

you want that sort of Intel make sure to

pay attention to that Alpha report it's

totally free go to m kevin.com Alpa and

get signed up and if you want to learn

more about that VC opportunity go to

roboh hack. a thank you so very much for

being here if you're still watching this

I love you and appreciate you and this

is what mk.com Alfa looks like cool

folks thanks see you bye do 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 P there financial analyst and

YouTuber meet Kevin always great to get

your take