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Bible Code at staff meet kevin.com hey

so a lot of people are wondering why the

stock market seems like it retraced into

the close it's kind of like we had this

really euphoric yay we have a deal and

and then we kind of let out there into

the close what happened what was the

reason for that uh well there were a few

reasons for that and we're going to

break those down so the first and

probably most important is that folks

are realizing now that wait a minute

even though we're really fearful and

we're pricing in the recession

specifically because of that inverted

yield curve the economy keeps throwing

data at us that suggests maybe we're not

here yet but maybe there are other

problems that could keep the FED hiking

for longer see we got two sets of data

this morning number one we got consumer

confidence and number two is probably

even more important and then we've got

some other things coming up this week

which I'll explain the first is we got

consumer confidence which the

expectation was that we were going to

get a read of 99 uh as a consumer

confidence read we ended up beating that

by quite a bit we came in at 102.3 so

this is what we got versus what we were

expecting and then in the prior release

we were at

101.3 so you can see we were expecting

to go from a prior we were expecting to

actually weaken but we didn't actually

weaken we actually

strengthened uh and that led the market

to realize oh wait a minute maybe maybe

we don't need to price in this recession

talk but then you'd think like but

that's good right yeah but then it also

pushes up the odds that the FED has to

do more which then reiterates the whole

recession narrative that the FED is over

tightening see that's the bizarre thing

in a weird way it's like wait a minute I

thought

good news is now supposed to be good

news again and this seems like it's good

news because it means no recession right

yeah but again no recession would mean

is the Fed really done with the

inflation fight and that's the second

data set that came out that wasn't so

good but before we get to that second

data set let's finish on consumer

confidence so we were expecting consumer

confidence to come in lower it actually

went up

but in addition to that the prior read

was revised it was revised to be even

stronger in the prior month which now it

creates even more confusion because the

prior read was actually moved up to

103.7 now this is confusing because

technically that is a little bit of a

softening but everything is still much

stronger than everyone expected and so I

think forget about all this noise for a

moment right here because trying to

understand oh this is higher this is

lower or whatever it's just it's just

going to make your head spin okay the

point here is consumer which makes up 70

percent of the economy

stronger now you have to think well the

other part is significantly made up by

businesses well what are businesses

doing well businesses are spending money

like crazy on artificial intelligence

now even Elon Musk is suggesting wait a

minute we can't get our hands on enough

gpus Elon Musk just bought a bunch of

space over at Oracle to run AI

processing on their servers and elon's

complaining about not being able to get

enough gpus which is also leading Nvidia

stock to rise now it's worth noting some

people as just sort of a tangent over

here some people are like but Kevin

Nvidia just did a 10 billion dollar

shelf offering what why are they you

know rug pulling by trying to Shell you

know dump shares on us at these inflated

numbers first of all that's the point of

the stock market to raise money for your

business first that 10 bill is a lot of

extra investment potential that Nvidia

can conduct to make sure they can

continue to innovate and provide new

products it's actually the right thing

to do stock goes up you dump some of it

especially in euphoric time so you have

more money to keep innovating and keep

growing in the first place it's what the

stock market is designed for second of

all give everybody his valuation today

that only makes up one percent of the

company and given that the stock Rose

2.99 today

basically nobody even noticed that they

just raised 10 billion dollars of

working capital and to some extent

that's the beauty of the stock market so

you have to be careful when you hear

this kind of nonsense uh I hate to say

it because I do still like Twitter but

when you hear this kind of nonsense on

Twitter it's like oh they're trying to

screw us it's like no that's the point

of the market and it's actually a good

thing and nobody really cared

okay so here we've got consumers

spending more money we've got businesses

now spending likely more money to catch

up with this AI craze and so this is

making this whole recession thesis kind

of crazy in other words maybe the

recession's not canceled but it seems to

be continuously getting delayed the

recession was supposed to be Q3 Q4

honestly it potentially is getting

pushed out to q1 now and only I am

saying that at this point I'm sure there

are other people saying it but I haven't

heard anyone else saying it I keep

hearing second half of 2023 but I'm

starting to think with the data we're

getting we're probably looking more like

q1 or not at all

which is interesting because the more we

kick the can down the road the more time

we have for inflation to go away but

then of course that's where we got

unfortunately some not so fantastic news

about inflationary numbers remember the

whole point of seeing inflation come

down year over year and we're expecting

inflation to come down at four point

down to 4.1 percent year over year for

headline inflation uh when inflation

comes out in a couple weeks which is

great but the whole point of seeing this

and the core numbers coming down which

core is expecting to come in at like 5.3

still pretty high and sticky whole point

of seeing this come down is expecting

housing prices to come down specifically

rents CPI doesn't actually show home

prices but it shows rents but rents can

sometimes follow what's going on with

housing

housing prices that is now what's

fascinating about this is from May of

2022 you actually saw home prices

Nationwide drop about 10 percent to

December now they've actually recovered

about seven of those 10 points so you're

actually only down about three percent

right now which is pretty remarkable

year over year across the country some

areas are down more like Austin or Boise

Idaho and some areas are actually

positive like parts of Florida

specifically Miami and even potentially

Tampa

but the point is if you're starting to

see this recovery in home prices that

could actually lead rents to start

slipping up again slipping might not be

the right word but the point is if rents

go up again what do you have oh you

potentially have pressure on inflation

again because it could mean you actually

pressure those core services including

housing right now it's this foregone

conclusion that oh yeah rents are

falling year over year rents are going

to go down and that's going to drag

inflation down well what if

that doesn't happen and what if rents

actually start Rising again well now you

have inflationary concern again which

means you do have to go higher for

longer at the fed and then it brings

back the long-term idea of that okay

well if the recession comes in q1 the

recession is going to come eventually

then then the feds can have over

tightened by q1 Q2 it'll be the first

half of 2024. in the meantime and in

sort of this

bizarre weird way the stock market had

its 2022 Decline and now we're getting

this volatile Nike Swoosh so far it

feels a little rocket Shippy so you know

there's been a little less volatility

than we would expect but it's been doing

pretty dang well a lot of that of course

driven by the mega caps because they're

investing in Ai and people are excited

about that which is this part so all of

a sudden this part of the economy is

doing great this part of the economy is

doing great that's basically your entire

economy and housing starting to recover

it's kind of tough to look at this

economy and go things are that bad but

why then did potentially the stock

market slow down towards the end of

today well it's because of three things

number one we talked about it the

consumer if the consumer is hot it means

potentially higher rates number two

housing data which drove up some

inflationary fears for example we got

housing data that just came in CoreLogic

housing data which suggested on a 20

City basis that we actually got a 0.45

percent increase versus a zero percent

month over month increase uh and then on

an fhfa basis we were expecting a 0.2

percent increase and we actually got a

point six percent increase with a higher

Revision in the prior report so in other

words hot real estate so you have the

consumer doing well you have hot real

estate and then we've already talked

about we've got hot businesses this is

the AI part the consumer part is not

actually only driven by dat it's

actually driven by higher incomes and

higher savings the savings rate is

actually Rising so far in 2023 which is

remarkable it seems like it would all

just be driven by debt but it's not so

it all of these are characteristics of

and I know it sounds crazy to say this

because you go to the grocery store it's

like uh prices are expensive you know

this this doesn't seem right the freight

economy is in the complete toilet and

recession Commodities aren't doing that

well yeah there's some parts that aren't

doing well but all of these hot consumer

hot real estate hot business big

business innovative business all of

these are actually characteristics of a

I hate to say it strong economy so so

yeah this strong economy could lead to

more rate hikes but it and and yes maybe

there are ideas that could suggest we're

going to see more stickiness and

inflation here but as long as we keep

slowly trending down on inflation this

might be okay the FED might look at this

and go hey man as long as it comes down

a little bit and inflation expectations

don't unanchor

we're okay with this we don't want

people to lose their jobs people have to

lose their jobs inflation slowly comes

down we're okay with this I

wholeheartedly expect the FED to do that

through a process known as opportunistic

disinflation so this uh this is a very

real potential in addition to this it's

worth noting we have some catalysts

coming up Friday you've got jobs data so

now people are talking about jobs data

you've got the mainstream media talking

about which is the debt ceiling actually

going to get passed it's all nonsense

don't worry about that and if you want

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watching bye