Watch Before Tomorrow: Critical Inflation Report.

everyone meet kevin here i just want to

give a sincere thank you before we get

into the cpi stuff to all of my

supporters because yesterday i ran a

poll on twitter and i basically asked if

i'm a certified flip-flopper and i

should just own it or if i have the

right to change my mind and i'd be dumb

not to change my mind if certain

conditions change and the pull was kind

of split between you know a certified

flip-flopper and you have the right to

change your mind when things change and

thank you for giving us a heads up when

things change uh which that's what i

always want to do the problem with that

is if you're too transparent and you're

like one of the first people to change

your mind well then you get all the hate

that goes with it it's a problem but

well i'll deal with it uh but the third

option i gave was i just hate you you

could go check this out on twitter at

realme kevin i got like 17 votes on that

i'm like at first i was really

disappointed because i'm like wow 17

percent of people literally interact

with me solely to hate me i'm like okay

then i compared myself to trump or biden

and i'm like wait that's actually not

that bad

so it felt a lot better but anyway so

i guess that makes sense

and it kind of explains why uh sometimes

there there are some people let's just

have a miserable life if you're leaving

hate comments all the time but uh oh

well uh so uh thank you to the 83

percent of you who are supporters and to

the 17 of you i i just wish you the best

a better life because hating is quite

exhausting uh so thank you uh and as a

thank you to everyone including my

haters you can now get up to 12 totally

free stocks by going to medcap and dot

com slash weeble

go to bedkevin.com weeble deposit any

amount of money and get up to 12 totally

free stocks okay now let's talk about

cpi data so tomorrow we get cpi data

it's at like 5 30 a.m it's like a really

tiring kind of time of the day uh and

like the good old days i'll actually be

covering that live

and i want to be very clear inflation is

bad it hurts lower end consumers

substantially

and you know we this morning in the

course member live stream we were going

through the american express earnings

call and it's really not a shocker

that at american express

they're seeing an increase of real

transactional growth this is above and

beyond inflation they're saying the

spending growth they're seeing is not

just inflation driven because usually

when i talk about oh

spending going up people like well of

course spending is going up it's because

of inflation it's like well it's not

only that but one of the things that i

think is really interesting is you do

see at american express this

quote no significant signs of stress in

their consumer base and it's really

important to know that the american

express consumer is is a lot wealthier

and typically has a higher credit score

than uh any any other consumer maybe

like a more of a capital one or like a

city kind of uh mastercard kind of uh

customer

or even honestly apple card kind of

customer where the credit standards are

a little lower actually in the case of

apple a lot lower

by the way if you have a bad credit

score and you want to build your credit

like shout out to the apple car you

could get into that thing with like a

pulse and like a 580 credit score okay

it's crazy but

they just want you to buy the freaking

iphone okay

uh but anyway uh one of the things that

i've been talking about since the

beginning of the year when i was talking

about sort of the stress of 2020 and the

hell that we're about to go through is

that you probably want to position

yourself to where there's a higher

income demographic

and for me that was remarkably tesla of

course another high income demographic

stock would be something like uh you

know an end phase right although you do

have the potential headwinds that in q1

q2 of 2023 you have this housing market

disaster that that leads even higher net

worth individuals to stop spending on

upgrades on their homes even though

there's a really good tax advantage to

spending money on solar

but but regardless here the point is

higher income consumers are obviously

going to be a lot less stressed by

inflation and so that's something to

keep in mind when you're looking at

stocks

and that's one of the reasons i've

chosen tesla to sort of ride the

disaster of 2020 through uh but of

course there are other higher income

stocks you could look at as well again

whether that's uh enface or american

express or others that cater to higher

income demographics it's good to know

because it's the lower income ones who

get hurt more through inflation and

that's terrible you know procter and

gamble at the beginning of the year was

bragging about how their consumers were

not downgrading to cheaper products yet

and i'm like

you just wait now they're complaining

about consumers downgrading because the

people who were buying the gillette

razors with their stemi checks now are

like yeah okay

maybe we got to go back to the store

brand ones and and that's okay it just

means less margin for for companies like

procter and gamble right

in fact i think that's a smart thing to

do i think most of the time

you should just buy store brand stuff

like personally

i buy store brand stuff too like

it's like the brand name is just

freaking name okay planters is probably

making the same freaking peanuts and the

archer farm stuff as they are in the

planter's box or can or whatever anyway

now one place we're actually not seeing

this sort of disinflation is actually

rend and that's because of something

known as inertial inflation now that's a

really fancy phrase but basically

inertial inflation just causes more pain

to people and it's it's a terrible thing

see inertial inflation is basically when

you say to home buyers

boom you're not allowed to buy a home

because interest rates just skyrocketed

and so that makes it more expensive to

purchase a home and so what individuals

then say is well golly okay i won't

purchase a home then because if home

prices are

still relatively high and my purchasing

power just got eradicated by 35

basically homes are much more expensive

on a monthly basis i'll just stay a

renter if you stay a renter then you put

more demand on on properties for rent

and rents actually go up even as prices

potentially go down now that's really

bad for renters but it's also very great

for investors and it's why i'm launching

a company called house hack which in the

future will give equity to tenants which

will be really really cool i can't wait

for that that's our expectation at least

but anyway you could learn more about

house hack and my startup by going to

househack.com we are accepting

investments from accredited investors

and soon to non-accredited investors but

i'm still working on that the sec takes

like nine months for that but don't

worry i haven't forgotten about

non-accredited investors so stay tuned

anyway talking about rent inflation it's

really important to remember that

rent makes up 32.9

of the cpi report and unfortunately

because of inertial inflation we're

still going to have high cpi reports for

a while because it's going to be a bit

before rents actually start coming down

the problem with this is it actually

risks the federal reserve being a little

overly aggressive because even though we

might see inflation go from nine percent

to seven percent or six percent if cpi

is still being propped up by high rents

the fed is going to continue being

aggressive for longer and this is where

a lot of individuals say the fed risks

potentially making a policy mistake

because

even though their actions are crushing

demand and crushing in the market

inertial inflation is in a weird way

keeping rents higher

even though they should be coming down

part of that is because of

cpi having this really stupid way of

calculating rents so initially rents are

going to go up due to inertial inflation

then they'll come down but when they

come down we're gonna it's gonna take

like six months for us to actually see

them come down because they use a stupid

way to calculate rent called owner's

equivalent rents and it tends to lag by

six months so in other words you've have

this terrible thing where like

even as overall inflation might go down

rent inflation is going to keep us

propped up for longer and then even

though rent

actually might start eventually coming

down we won't see that in cpi for

another six months so it's like ah

it's like a terrible thing right so what

are the projections uh for tomorrow so

let's hit those uh

and then wrap it up here so i'm gonna

i've got a gone ahead and written these

down right here so you have these uh

although this is a little bit messy uh

we could

have okay i mean we could just throw

them up i do want to mention that there

are three big things that we want to

watch for it's cpi for the united states

uh its ppi producer price index of for

the united states tomorrow and then

we'll also talk about the united

kingdom's uh cpi release tomorrow i do

also want to briefly talk about what i

think might happen in the stock market

so we'll talk about that in just a

moment but let's take a look at this so

here

the month over month expectation for cpi

is expected to be negative 1.1

the last read was zero percent so

totally flat we do have a range of

negative 4 to 0.2 so that actually has a

little bit more of a bias to the

downside so we could get a really nice

negative read tomorrow like negative 0.2

negative 0.3 that would be phenomenal

year over year we're expecting to go

down to eight percent from eight point

five this is a little bit of a skewed

bell curve uh where it's it's really

heavily skewed towards about eight

percent although we do have a range from

7.9 to 8.3 it'd be nice if we could see

something come in like even below that

like 7.8 or 7.7 right

core when you take out food or energy is

expected to be stable at 0.3 this is

actually not that bad because if you

annualize that you'll end up being at a

3.6 percent which that would be

acceptable

now uh ppi that comes out on wednesday

we're expecting year over year to come

down to 7.1 versus 7.6 month over month

not declining as much as previously last

month it declined point five percent now

expecting point one uh and then the

fifth largest economy in the world right

here followed by california right but

that's not a country i wrote here

because well california is not a country

but if it were a country california

would be bigger than the united kingdom

but they do have a cpi release tomorrow

which is kind of cool

however what's not cool is that you're

not actually expecting much movement in

the united kingdom uh you're actually

expecting inflation to go from 10.1

percent to 10 so you're

you're gonna see more pain in europe for

i think a lot longer and i think that's

why the dollar is so much relatively

stronger to the euro right now uh

because there is a lot more pain in

europe than what we're experiencing here

and it's not just energy either because

if you look at core

you can see core is is 6.2 versus 6.2 so

so even if you take out food and energy

you're still not seeing a decline in the

united kingdom so you've got these macro

implications as well where it's not just

a united states phenomenon that we have

all this crazy inflation right it's it's

entirely global

so uh okay let's now go ahead and jump

into my expectations for the stock

market now we briefly touched on this

this morning in the course member live

stream which if you want to be part of

those we usually do them around with the

opening bell you join any of the courses

and you get to be part of them the

biggest and most popular right now is

zero to millionaire real estate

investing course you could use the

coupon code link down below called seed

for the best pricing we have at the

moment

and uh let's just talk about my

expectations for the qqq so i think the

biggest fear that people have is that

the nasdaq is going to retrace to lower

levels from june but it's really

important to remember that in june we

were expecting inflation of like 8.8 and

we got like 9.1 percent like it was

terrible it was july 4 june right it was

absolutely terrible and so this really

helped our stock market fall to to low

levels uh because we had two bad reports

in a row both the report that came out

in june and the report that came out in

july and we didn't end up peaking in

march as expected so things really ended

up getting worse and not better

now though we're seeing more broadly

things are really getting better rather

than worse especially with commodity

prices falling the bubble is out of oil

and wheat and other commodities uh you

know we've got russia retreating from

kharkiv which is phenomenal uh the

ukrainians are absolutely kicking butt

so good for them but in the meantime

what uh what what it would really take

in my opinion to get back down to a zero

percent fibonacci here on the weevil

which remember kevin.com weeble for 12

free stocks uh what what's really

remarkable here is we would in my

opinion need to have

more fear

than what we had this summer when it

felt like inflation was out of control

and even with these expectations today

uh for tomorrow i don't see that i just

really don't see how

we could really get more fear than what

we had this summer it's possible it's

entirely possible that we could hit

lower lows

but

we would have to have some really

terrible news inflation would just have

to be completely out of control and

unhinged to where we would have to get

paul volcker to go even lower so uh you

know i i

hate putting my neck out there because

people make fun of you for it but me

personally at least

i i don't see catalysts for us being

able to go below

the that that 268 number can we bob

around the 23 to 38 fibonacci which is

like the 300 to 318 yeah absolutely

however if i think if we

beat expectations tomorrow and uh that

is to the to the better side and we have

lower inflation i think we'll very

quickly uh solidify 3 18 319 again on

the nasdaq as a floor

if we miss uh then then we'll probably

go right back to about 299 on the qqq we

could have a minus three percent day uh

tomorrow and and sit right back to that

299 3 300 level so we'll see what

happens uh fingers crossed i'll be there

with you really appreciate you thank you

so much for watching check out the

courses linked down below use the coupon

code go to mattkevin.com weeble for

weeble and of course go to house hack to

learn more about my new startup house

hack thanks so much goodbye