Oh my F*: This Jobs Report Changes EVERYTHING.

Today's job numbers look really good.

And frankly, there's nothing in the job

numbers today that say we're in a

recession. Absolutely nothing that says

we're in a recession right now. There's

also nothing that really tells us we're

going into a recession. However, there's

plenty that tells us we are in a late

stage of the employment market. And I'll

explain what I mean by that. It's not

something that's like, oh no, it's

really oo bearish. but it's something to

pay attention to because it sets up uh

for potential weakness and I'll show you

exactly how to look for it. Uh but

first, we are now 13 minutes after the

opening bell and I just like to mention

that this morning in the alpha report, I

mentioned that Robin Hood because of

this tokenization drama was probably

going to lose its momentum. And as you

could see when I made that call in the

opening, Robin Hood fell right after

that. I also made a call suggesting that

it was really good that Symbotic was

holding on to the 4298 line and it could

be a breakout catalyst towards 50. As

you can see, Symbotic is absolutely

crushing it. Somebody in the chat here

uh just actually reminded me of it.

Thank you for saying that. Uh because

they're like, "Hey, thanks. Good call

this morning." Now, can't always

guarantee success, but the last few

alpha reports, actually last many alpha

reports, I feel like I've been killing

it. And if you haven't tried it out yet,

go to meetcaven.com, check out the

one-time payment option we have. You pay

once and you're in forever. Now, let's

understand what's going on with the

labor market and why I say we're in a

late phase of the labor cycle. It's very

simple. Of the 147,000 jobs that we

created, 90% of the gains came from

health care and local government

employment. In fact, 73,000 came from

government. Usually, when we're in a

later stage of the employment cycle,

the government is more capable of

hiring. Note that local and county and

state governments aren't affected by

Doge. Uh and so when the local

governments can hire, it's usually when

it's harder or when it's easier to

compete against the private sector

because the private sector really isn't

creating jobs. And so when we jump into

uh what we had in the labor report this

morning, what we really saw was a labor

report that barely showed us any private

sector job growth. 10% or about 15,000

jobs were created by the private sector

outside of health care and government.

At the same time, what we've seen over

the last 3 months is a very weird

plummeting of the labor force

participation rate. The labor force

participation rate is really sensitive.

Uh we should pull up sort of a a um a

larger chart of it. So, let's go ahead

and do that. We'll pull it up on the St.

Louis uh FRAD database here. But as you

can see, the labor force participation

rate it, you know, it moves by decibb.

So it moves like it seems like it's a

very small number that moves. But what

we've seen in the last 3 months is we've

seen this decline in the labor force

participation rate by basically one

percentage point well one.1 uh every

single month. And you start seeing that

somewhat of a rotation down. Uh now this

could be due to many things. This could

be due to people leaving the labor force

because they're retiring. It could be

because they're frustrated and that

they're discouraged that they're not

finding uh work and they're saying, you

know what, f it. I'll just I'll just not

work. Uh so retiring, leaving the labor

force, or frankly, you could also be in

an environment where you just find

people are getting deported. And so,

usually when people leave, you want to

pay attention to sort of balance out

like, uh-oh, is this decline in the

labor force participation rate an issue?

You usually want to look at the 27 weeks

unemployed level as well to try to

understand how many people are just like

they want a job but they just can't get

one when they're more than 6 months

unemployed. And you generally also find

that the labor force participation rate

stagnates or declines in recessionary

environments. Right? So just look at

history over here. Uh when you go into

recessionary environments is typically

when you get the downtrends. When you're

in expansion expansionary environments,

you get the uptrends. So uptrends and

expansion either deceleration or

stagnation and recession. Here you can

see stagnation in recessionary

environments, acceleration during

periods of growth. So you can really see

our growth period 2021 all the way into

2023. And then at 24 we we really

started hitting a turning point. Now,

sometimes it doesn't always equal

recession though because I mean, well,

it's hard to say because look over here,

2002, 2003, early 2003. These were still

environments where we're coming out of

the dotcom bubble. So, they could also

be postrecessionary reverberations. You

didn't really see the participation rate

start expanding until 20 uh 2005. And

you could actually see the participation

rate just kept collapsing following 2011

all the way out to 2015.

So the participation rate isn't always a

really useful tool to say, "Oh, we're

definitely uh having problems uh in in a

recessionary state." This is why we like

to look at the unemployment rate, the 27

weeks or more unemployed rate. We can

see this has popped up again, but not

meaningfully above our April high over

here. We're just more of an in an

environment where yeah, you know, we're

getting more 27 weeks or more

unemployed, but we're not at a level

where we're, you know, skyrocketing by

any means. So overall, this is good. I

mean, usually you see a skyrocketing 27

week unemployed level in a later portion

of a recession. These higher

reverberations at a more stagnated

level, they could be symptomatic of a

2005 or 2006. And so when I say we're in

like a later stage where you're getting

local state government hiring and you're

getting healthcare hiring and very very

little private hiring, it just tells you

you're probably somewhere in like a 2006

2007ish like a 67ish somewhere on there.

Not necessarily some kind of

recessionary 0809 collapse. So overall,

this is this is a good thing. This is

one of the reasons why we saw the

unemployment rate go down. It's one of

the reasons why we're seeing the odds of

a rate cut in July now basically get

crushed. Now, what it does set you up

for is potentially a layoff cycle, of

course, but that's always the concern

that we would have some kind of layoff

cycle that comes. And really, we're just

not seeing that many announced layoffs.

Yes, we're seeing these sort of rolling

announcements that get these uh, you

know, breaking news headlines. Microsoft

lays off 9,000 here or there or

whatever. But what you really need to

get a real like layoff crisis is some

kind of shock where small businesses

across the board are going I can't I

can't handle it anymore. I have to lay

off and we're not seeing that which is

frankly very good. So uh 147,000

obviously better than expected. People

talk about revisions. We actually

revised last month's employment numbers

up. Now, in fairness, in August, we get

these sixmonth revisions, uh, which last

year were so negative on like an entire

half year that we ended up having a

really nasty August, but there's nothing

to say in these last two employment

reports that that is very bearish. I I

it's very hard to find anything bearish

in here. Yes, you could look at the

households numbers. The households

dropped about 130,000. So

yes, we are seeing fewer people

participate. The labor force is

shrinking. You know, household number

down, labor force participation down.

Both of those numbers contributing to a

weaker market when it comes to getting a

job. But again, the one thing that makes

that beverage curve so weird, the lack

of layoffs. And that's the same thing

that's keeping the unemployment rate now

moving down because we're not seeing the

layoffs. uh and potentially while people

are exiting for deportation reasons or

retirement reasons or whatever, there's

nothing to really say there's this huge

negative scary catalyst. And that's why

I think what we're seeing in markets

broadly is that the 102 yield curve is

actually moving in a direction of less

shock. So you can see the 102 curve,

I'll pull that up here. The 102 curve

right now is sitting at uh 46 45 now

which is significantly lower than what

we saw yesterday. Yesterday we were

starting somewhere around 55 to 52. Then

we got the Vietnam trade deal which is

good news. It's it's the first trade

deal that we have with the deficit

country. Fantastic. Finally. Now, yeah,

the rates are higher than we expected.

Is it good that we have a 20% tariff

rate on Vietnam? In my opinion, no. It's

going to create dead weight loss. It's

going to show up in in in earnings

somewhere.

But does it matter? Like, does does

Amazon care? Does uh uh you know, do the

consumers care? Probably not. Who's

probably going to care? Probably the

companies that have to import like the

Nikes. You know, they're going to have

to beat up their manufacturers and

they'll probably eat some of it, too.

Now, is that an economically horrible

thing? No. In fact, we're making

progress, which creates certainty. Now,

you get certainty on tariffs. You get

certainty on jobs. Reduces the urgency

for the Federal Reserve to to panic cut.

However, I do think the Federal Reserve

like JP, he's going to look at these

numbers. is going to go ah you know this

is these are numbers that they they they

basically they guarantee us that we are

not going to be resilient against

layoffs because again we only created

15,000 private sector jobs outside of

healthcare and uh state and local

government which is very very weak right

so that's why I say late cycle so think

about it sort of like the business cycle

you know you're not like in the crash

portion but you're just sort like you're

on that that curve where you're not

growing. You're not on the growing side

of the curve. You're on sort of the

slowing side of the curve. Does that

mean things are going to go crap

tomorrow and sell everything? No, of

course not. Uh but does it mean we're

we're prone to very crappy labor reports

if people started losing their job?

Yeah, but that's been a big if for like

a year now, right? We've been waiting

for these layoffs and they frankly

haven't come. So, which is good overall.

It's it's a bullish thing for the

economy. So, we'll see. We'll see how

things uh develop. All I know right now

is Symbotic keeps kicking butt. And

actually, if you think about it, the

labor market and the labor market

surveys that that we're getting might

actually be great for a company like

Symbotic because Symbotic is a robotics

company. Uh and I don't want to hijack a

jobs, you know, report discussion to

talk about Symbotic, but I kind of like

Symbotic. So, I've I've been doing

fundamental analysis on Symbotic for a

while now. uh not only on the YouTube

channel but in our course member live

streams. We've been talking about this

one for a while. Symbotic is a very

interesting company because in in an

expansionary economy, this is a really

fantastic company because what you have

is you have essentially the robots that

support warehouse infrastructure. So,

think Walmart, uh, Walmart's expansion

in Mexico, Walmart's, uh, uh,

distribution centers in America, other

companies like Target that start waking

up and realizing, wow, we need robots,

we need to adapt. Obviously, you know,

Amazon buys a lot of its own robotics

companies. Uh, but Symbotic is sort of

the way to roboticize your warehouses if

you don't have that internal stack. uh

and in an environment where we're moving

away from more expensive labor towards

more AI and robotics, I think symbolic

is is a very interesting play. And I

don't think it's valuation is so

terribly unreasonable. Let's run the

valuation on it, though, because it's

been a minute since I've run the uh the

price earnings on it. So, let me see

here. So, Symbotic,

you're only looking at like 10 cents of

earnings, but the earnings are expected

to explode for it. This is based on Wall

Street's expectations, right? So, let's

look at 46 divided by uh let's see here.

46 divided by 10 cents. Yeah, I mean

technically for this year's PE ratio, it

sits at 460, which is crazy, right?

Because their earnings are 10 cents

because you're coming out of a loss. So,

that's something to keep in mind. When

you transition from loss to positive,

you're always going to have what looks

like a very uh expensive PE ratio.

However, that's expected to get to 41

cents in 26. It's expected to get to 89

cents in 2028, a buck 50 in 20 uh sorry,

in 27, buck 55 in 28, and $2 in 2029. So

uh on an EPS growth basis, EPS growth is

expected to grow 305% 116% 74% and 33%

divided by 4, you're looking about 132

on a growth rate for EPS expected. Uh so

if you divide that out, you're you're

sitting at about a three peg. It's a

little it's getting a little bit on the

pricey side. Uh, and this is why I liked

it so much when it was over here in the

20 because it was trading for like a one

and a half peg, right? That said, right

now it's got momentum and that's always

a funny transition where you go from

like, wow, this is good fundamentals to,

whoa, it has momentum. And that's going

to be something to pay attention to in

an environment where we continue to see

expansion

uh of of markets because we're not

getting bad data. people are going to be

really looking for momentum plays uh and

and and things that that do benefit in

an expansionary environment. I mean,

it's one of the reasons I think Amazon

is up today because hey, good jobs mean

more people can spend, right? Maybe

government jobs, healthcare jobs,

there's still jobs. Uh private sector

really isn't hiring, but people are

trading Amazon up, which is suggestive

of potentially warehouses trading up as

well. Something interesting to pay

attention to. But that's sort of my

distillation here. Not great, not

terrible. That's sort of like the

Chernobyl line that I keep referencing.

But it's important because it it is

true. This is not this is not an economy

that's creating job everywhere. These

are not broad-based gains. These are le

cycle reports uh that show us that we

are indeed prone to uh to problems.

But those problems could be months away

or they could be years away. There's

really no way to bet on that. Uh so

we'll see. Anyway, uh oh, as far as the

Fed and the odds of them cutting, I know

that's something that's been

interesting. So, we are now at a 6.7%

chance of cutting for July. Now, this is

actually quite remarkable. We went from

almost entirely pricing in a guaranteed

cut in September to now only having a

69% chance. So a twothirds chance of

cutting in September. So you've really

seen a plummet in the odds uh of a rate

cut not only for July but also for

September. Uh as far as data that's

coming out, we did just get

S&P Global Services. They came in

slightly weaker than expected on the

services side. Composite fractionally

higher. Uh both in the expansionary

territory. So not uh necessarily

uh you know anything to phone home about

here. S&P services read

uh yeah okay

broadly in line over here with

expectations.

Okay. So, that gives us an overview of

uh some of what's going on this morning

and and my take on it. Again, check out

those courses over at meetke.com. Look

at that. Symbotics now almost up 10%.

This is remarkable. Uh almost up 10%.

That's serious momentum over here. And

uh again, if you want this sort of heads

up, remember I sent this signal out here

uh before any of the explosion uh which

is kind of cool. Check out the alpha

report if you haven't yet. And if you're

an existing course member, remember you

can actually use the Meet Kevin app to

uh to get your alpha reports, which is

great because you know, you don't have

to rely on like YouTube or Discord

notifications or or whatever some other

app through there. You can customize

your notifications. If you're not a

course member, you can get the Mechan

app too if you want. It just doesn't

have the alpha report because that that

part's for course members. And as

always, if you ever have any questions,

you can uh email staff me.com. I guess

we may as well look at ISM services as

well because those come out in about 10

seconds. So

ISM services slight beat prices paid

comes in lower. That's good. New orders

big beat. Uh employment misses but new

orders that big beat that's bullish.

So another another you know both of

these data reports here on the surveys

which are technically soft data. S&P

Global and ISM services. Both of these

good uh especially since you have better

than expected uh prices paid there on

the ISM survey, which is fantastic.

These are things you you want. This is

good for the uh market and the economy.

Uh and look at that Q's keep kicking

butt, which was also in our alpha report

this morning. Bearish hood, bullish

cues, bullish symbotic.

And I also said that I thought Tesla

might get stuck under 318. Uh that there

wasn't really a catalyst for it to

collapse. Like it wasn't a short

catalyst, but it was uh you know, not

not something that necessarily was

primed for a breakout today. I don't

know. Alpha Report's got something

cooking today. Why 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 Pra there,

financial analyst and YouTuber. Meet

Kevin. Always great to get your take.