Why Stocks will Rocket Higher.

Well, it's the morning after the Federal

Reserve meeting and we've got some new

information. Unfortunately, it's not as

quick or fast or as great as we would

like. The United States Supreme Court is

going to hear its initial oral arguments

in tariffs on November 5th. Right here

it is on the docket. And this could get

delayed, but typically after we get oral

arguments, it's going to take probably

anywhere between 3 to 6 months to

actually hear a Supreme Court decision

on whether or not tariffs are legal. So,

in other words, even though tariffs are

probably illegal, we're probably still

stuck with them for at least the next 6

months. See, that's not necessarily

bearish. It's more less bullish. I'll

put it that way. I would hope that

tariffs get declared illegal because

then our economy will see rapid

deflation because, you know, now we'll

be lapping year-over-year inflationary

prices from tariffs. That transitory

overtime inflation the Fed is worried

about will disappear. You'll have

year-over-year now negative numbers,

disinflation and deflation in

categories, and it'll really give the

Federal Reserve a license to continue to

cut rates. Unfortunately, that decision

isn't going to come until, frankly, next

summer. So, it's going to take some time

before we get those tariffs gone. Either

way, you know me, I expect tariffs will

be gone at some point in the future.

Either courts declaring them illegal or

ultimately we end up getting a new

administration that says, you know what,

we're not doing this. Now, do understand

this, though. This is a uh a potential

downside to uh this thesis that you know

the tariff will end up being declared

illegal. Uh this is a little reminder uh

and then we'll talk about the Federal

Reserve since it's the morning after

here. This is a little reminder of how

the Supreme Court votes when it comes to

Donald Trump uh versus Biden. And so if

you look really closely at that, you

could see that uh when it comes to

voting for Trump, the Republicans tend

to vote in favor of what Trump wants 80

to 90% of the time, and the Democratic

justices vote in favor of what Biden

wants a lot of the time. Uh so in other

words, yes, the Supreme Court is very

politicized, which does mean there's

also the risk that the Supreme Court is

just going to say that tariffs are

legal. But again, we won't know until

next summer. So, uh, worst case

scenario, we're stuck with what we have.

Best case scenario, they declare them

illegal and and we get some deflation.

Now, what's going to matter more is that

economically, we just cleared a really

big catalyst. We really have no catalyst

now until the beginning of October. And

this is why in the meth membership I've

been talking about, hey, once we clear a

catalyst, we should be on a clear path

to $600 on the cues, which is remarkable

because even from this morning when I

mentioned it, uh we're we're up

substantially. Well, actually the $600

target we've had for a few weeks now uh

in the me Kevin membership, but this

morning just to give you a little

spoiler and then we'll talk about the

Federal Reserve here. To give you a

little spoiler in this morning's alpha

report, I said bearish real estate

stocks today because of the yield

rebound on a neutral Powell. Bullish

Palunteer, bullish hood, bullish Q's,

bearish Tesla on the day. Those were my

calls in the meet Kevin Alpha report

this morning. Remember that's at

meet.com. And take a look at this cues

from or hood from what we mentioned it

way up over 3 and a.5%. Palanteer from

when we mentioned it up over three and a

half%. The Q's moving up, real estate

stocks down, and Tesla down. Mostly

because Tesla is in no man's life. But

beyond this Supreme Court catalyst, we

kind of have to look and go, okay, you

know, what is there that's actually

going to hold this market down right

now? Well, not rates, because the

broader stock market doesn't really care

if yields move higher a little bit. This

is very normal. Federal Reserve doesn't

want to aggressively cut. So yields move

up. 10 years almost at my target of 4.15

for a neutral power. We almost ran up to

4.15. We're at, you know, 4.126 right

now. Uh this my expectation is actually

that this is supportive in the stock

market until we actually get some real

bad catalysts. Now, we had the leading

index this morning that came out with,

you know, their recessionary uh triggers

or sell triggers, but really the leading

index has just been wrong and wrong and

wrong for the past 3 years. The leading

index registered its largest monthly

decline since April of 2025, so

liberation day. They think that tariffs

are going to continue to be a drag on

the economy. And you can see the leading

index has been in decline for 3 years.

On top of that, the leading index is

indicating recessionary triggers, but

these triggers have been firing in 22,

in 23, and again now. So, I don't know

how reliable this is. And the only thing

that's actually propping up the leading

index is the S&P 500 more broadly. A

little bit credit here, but that's a

little circular in nature. It's like the

more the S&P 500 goes out, the the more

bullish the data. But that's ironic

because the S&P 500 goes up off of the

data. that is sort of based on the S&P

500 going up. So, it's this circular uh

momentum of of bullishness. But the

reality is, you know, people are

cheering that unemployment claims uh you

know, have their largest fall since 2020

today. But that's only because we

normalized after that crazy spike we got

from Texas last week. If you actually

look at unemployment claims o on a

sixmonth rolling basis going back to

2022, unemployment claims have basically

done nothing. I mean, look at this.

Unemployment claims 218 in the first

half on average in 2022. Right now,

we're at 227. Who cares? Doesn't mean

anything. Now, if you look on a week

overweek basis, of course, you're going

to have volatility. Now, look at that

volatility.

But, you know, once you smooth it out,

we're really not much meaningfully

higher than we were in 2022. Uh, and so

this is leading, you know, the

economists to actually make the argument

maybe there's a chance the Fed's going

to end up having policy that's too

loose. All of this, mind you, bullish

for stocks. The stock market just wants

to avoid a recession. The stock market

doesn't really care what rates do. The

stock market wants earnings to go up and

wants to avoid a recession. And by

getting three 25 basis point cuts, what

Jerome Powell is essentially trying to

set up, just like Nick T mentioned in

his Fed article this morning, is that

hey, we're trying to set up for uh a a

you know, an economy that avoids a

recession just like we did in 1995 when

we had our prior soft landing. And what

did we do in 1995? Well, we ended up

with loosening

interest rate policy. We never got

higher than 63 basis points on the 102

yield curve and we ended up soft

landing. Yeah, we had a period of slower

economic growth growth, but then we soft

landed after that. So now you've got the

102 yield curve sitting at 55 basis

points. We're below that 63 high, below

that high that we saw in 1995.

Uh and

really you've got no catalyst until

October. What do you have in October?

again October 1st ADP October 3rd jobs

report then we'll get some inflation

numbers and at the end of October we'll

get another Fed meeting but unless jobs

fall off a cliff this idea of being

modestly bullish on the cues for a slow

kind of schlog up to 600 which is what

we've been calling for in the course

member liveream makes sense it is

entirely reasonable that we can keep

chugging along and there's really

nothing that says in the morning after

that Powell you know should be a lot

more bearish and should be rapidly

cutting. Now, he was very aggressive

yesterday. I was frustrated with him

because out of one side of his mouth,

he's like, "We have serious risk to the

downside." But I also get it because

when we look at the data, it's like, is

it really rolling over? And this is

where the economist said something that

they haven't said before, which is this

idea that net migration could end up

going negative. This I thought was

really interesting. Some researchers

think that net migration this year will

be negative. Well, damn. No. Well, we've

talked about the unemployment or the the

jobs break even rate being very low.

Now, Jerome Powell talks about that jobs

growth is below the break even rate

right now. But nobody really knows

because what if we end up having

population shrinkage this year? Nobody

wants shrinkage.

>> Little PP. Nobody wants shrinkage. But

it's possible that if our break even

like if net migration goes negative,

then the break even rate for employment

would actually also go negative.

So maybe there really isn't a jobs

issue. I don't know. Obviously, we'll be

paying attention at the beginning of

October, but between now and the next

two weeks,

I just can't be bearish on the market. I

think it's slow up. no analysis over the

last, you know, 12 hours or whatever or

24 hours almost here since since the Fed

has has made me think otherwise. Uh and

uh we're looking looking on a daily

basis, you know, where are the red flags

in the economy,

waiting and seeing.

Of course, the labor market is the

biggest risk. Of course, the fact that

the top 10% of spenders make up roughly

half of all spending in America is an

issue. Of course, slightly elevated

inflation still contributed to by

tariffs is an issue. But if we're

waiting for that big moment where, you

know, Treasury yields plummet, the stock

market sells off, and there's some kind

of crisis. The only place you're really

going to get it is in jobs data.

That's the only thing that's going to

move this. So again, October 1st and

3rd. and until then probably slow it up.

Uh and uh I think we're going to hit

that $600 Q's target very quickly and so

we'll keep sending the alpha reports.

But we're pretty excited about it. Uh so

anyway, that's my take on on where we

sit with the market right now. And it's

it's not bad. Uh I think that's why it,

you know, puts me at basically 50/50 on

the bare bulls scale. I mean, we're

buying stocks for, you know, top 10

stocks to buy for the next 10 years. Uh

but um you know these are stocks we

think will do well recession or not. You

know, as I like to say, recession or

not, here we come. But um wow,

kind of in a good spot right now. I

don't know. Leave me your comments. Let

me know what you think in terms of why

maybe uh we're missing something.

So here's a great question from the

chat. Uh we've got Hybrid Universe says,

"I'm curious. Do they actually put

immigration jobs in the jobs data? How

can that be used to adjust for how many

jobs we should have? This is a great

question

and the answer is the Bureau of Labor

Statistics has absolutely no idea if the

jobs are immigration based or not.

That's because when the Bureau of Labor

Statistics calls businesses to say, "Yo,

how many employees you got?" They don't

say, "How many Americans you got versus

how many people from Mexico you got?"

They they don't ask that. So the Census

Bureau,

they when they ask how many people are

in a household, they try to get

information on where people are from,

but they don't ask if people are legal

or illegal.

But the Census Bureau will count

population growth and so the delta in

population growth. So we'll get net

migration from the Census Bureau, which

will tell us how much is is the

population growing or shrinking.

Typically growing. Uh, and then the

Bureau of Labor Statistics, they're just

calling businesses going, "Hey, how many

people you got working?" Or they're

calling households going, "How many

people in your house are working?"

Right? Household survey, payroll survey.

So, nowhere do these two things get

reconciled. Basically, you just have

economists that are going, "Hey,

uh, if migration is slowing down, then

we would expect to see fewer jobs show

up in the jobs report." That's it.

So, like it's possible though that that

economist argument is covering up what

is truly a serious weakening in the

labor market. That is the risk factor

that this immigration idea is uh

covering up and masking real underlying

issues.

And uh and that then leads the Federal

Reserve to go, we don't really have to

cut that aggressively because things are

mostly fine. You know, things are a

little softer than than break evens, but

you know, mostly fine. And that's why we

had such a neutral Fed yesterday. Uh

could that lead them to make a policy

mistake? Of course. But remember, Jerome

Powell is of the mindset that if SH9

hits the fan, he'll just cut to zero. So

that's why Powell was so neutral

yesterday. That's why my base case

yesterday in the alpha report was that

POW's going to be neutral and yields are

going to go up to 4.15.

You know, that's what I told course

members before it happened. That's what

I thought the base case was. You know, I

mean, we didn't get all the way to 4.15,

but we got to 4.126, which is pretty

damn close to 4.15, and we could still

settle out over there last few days. But

uh really it's it's a really good

question because

it's basically economists guessing that

if the economy is slowing or if if the

if the population is growing slower then

how many jobs we should be getting would

be lower. That argument though could

mask real weakness. And then again this

is why I say the two things that you pay

attention to are the labor force

participation rate. If it goes up, the

unemployment rate will skyrocket.

Uh and or if layoffs go up, the

unemployment rate will skyrocket. Those

are the things you really have to pay

attention to. So it's it's tough. It's a

tough tough environment.

Uh no. So that's so somebody's asking,

hey, why basically the question is

basically why did yields go down

yesterday? Okay. So in the dovish

scenario,

yields would go down, right? So you have

to see you need in financial analysis,

you need nuance and it's really really

important. So I'm going to make it very

clear. Why did yields initially go down

yesterday after the Fed meeting? Uh

let's explain. So yields initially fell

yesterday because the statement seemed

doubbish. Uh

you know my prediction uh if Powell

doubbish yields down under 4%. Uh if

Powell neutral yields up to 4.15%.

Right? The statement was doubbish yields

fell under 4%. Powell was neutral.

Yields

up on Powell. uh which matters more than

the statement. So that's that's what you

have to understand when when you look at

financial analysis. You have to

understand what are you basing the

scenarios on. The scenarios are based on

POW. That's what matters. But you get

the statement 30 minutes before Powell

comes out. So of course the market is

going to have a reaction function to

that statement as a potential tell of

what Powell is going to do.

Uh,

obviously we got a neutral pow. So

anyway, uh, so

Antonio's House of Pizza says, "Kevin, I

want to become a member. I really like

your analysis." Oh, well, thank you. Uh,

yeah. Well, join us over at mekevin.com.

We'd love to have you. I want You're

making me hungry, man. I want some

pizza. The one thing that is fair is

worrying about that 27we unemployed

number. The 27-we unemployed number

usually only rises when you're in a

recession, not at the beginning of a

recession. It's not a leading indicator.

It's a tell that you're already in a

recession. And this is probably just the

most bearish thing that we could pull

out in addition to having been inverted

on the yield curve. Right? So, yield

curve inversion and the 27 weeks

unemployed. This is one of the reasons

why one of the major reasons why I'm

still like, you know, only fiveish on

the bare bull scale. Like I'm not I'm

not uber bull here. Valuations are high.

Yes, I'm buying. I've got 10 stocks to

buy over the next 10 years. Uh but I'm

buying very specific stocks for what I

think will do well no matter what

happens, recession or not. But this

number is bad. So there was a question

here in the chat that says, uh, is it

true that if you've been out of a job

for 6 months or more, they no longer

include you in the unemployment number?

Yes, that is absolutely true.

So, you end up showing up in this chart

if you're long-term unemployed. You kind

of get like categorized into your own

little bucket. And this chart has been

rising consistently.

Uh, and it is a sign that you are in a

recession historically.

So, yes, this is a lingering red flag.

Absolutely. Tell us 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 Praath

there, financial analyst and YouTuber,

Meet Kevin. Always great to get your

take.