Watch before Thursday | Disastrous Inflation Report.

in this video we need to prepare for

catalysts that are coming this week I'm

also briefly going to talk to you about

things like the minutes and PPI numbers

that came out but most importantly we're

going to talk about CPI and then retail

sales we got to get ready for these

numbers they're a big deal so let's get

started first Catalyst of this week

actually just came out it's the PPI

figures the PPI figure that was for a uh

this is a producer Price Index right so

this measures prices from the seller's

point of view and we were expecting the

final demand to decline uh to a level of

0.2 percent that was the surveyed

expectation uh that actually came in at

point four percent which is 4.8

annualized not great uh some weakness

there then we've got the uh core PPI

which also came in higher than expected

final year over year was expected to

drop from 8.7 to 8.4 actually came in at

8.5 so literally across the board worse

producer price inflation numbers and I

think that sets up a little bit of what

to expect for tomorrow CPI data comes

out tomorrow morning at 5 30 a.m Pacific

time that's 8 30 a.m eastern time I will

be covering CPI inflation live I

encourage you to come and if you want to

click the little reminder button or to

get a reminder from YouTube go to

metkevin.com Links there you're going to

see two live streams coming up one for

the FED Reserve minutes which I think

are actually a lot less important but

those come out at 11 A.M today so I'll

be streaming those live and the second

is the link that you're going to see for

CPI and that's tomorrow at 5 30. that's

going to be critical I mean JPMorgan is

estimating the market could drop as much

as five percent literally tomorrow that

is the S P 500 to drop as much as five

percent if we get PPI numbers or I

should say CPI numbers like the PPI

numbers where not only do we not see the

trend of inflation going down but if

anything it's solidifying broadening out

and going up that's going to be

devastating to Market and I think that's

why markets today are kind of like oh

gosh these PPI numbers weren't great

what is this saying about tomorrow now

regarding CPI expectations we're

expecting the month over month CPI

inflation report to come in at 0.2

percent

look if the CPI numbers come in at

expectations I I don't think the

Market's gonna be happy like the market

doesn't want ad expectations the market

certainly doesn't want worse than

expectations that's going to be terrible

if we get worse than expectations the

Market's just going to tank if we had

expectations okay fine maybe maybe

things will be stable but the

expectations aren't that great and if

anything they're kind of in my opinion

skewed to a fall in inflation but

they're still not that great so meeting

these expectations is great it's like

you know winning winning a foot race

when they've already given you you know

a half mile Head Start and and you've

only got to go another half mile and

everybody else got to go a mile the

point is like

even if you win you're still a loser

okay uh the core inflation expectation

is expected to be point four percent I

wouldn't be surprised to see these

numbers come in hot I mean core

inflation uh uh you know if we strip out

food and energy point four percent

that's terrible because that's 4.8

percent year over year that's way higher

than two percent inflation Target that

the FED has and it shows you again

probably a broadening of inflation and

it's just gonna freak the fat out year

over year we expect CPI to come in at

8.1 headline down from 8.3 so still not

breaking that eight percent I mean for

us to really have like a green rally and

solidify a bottom here I mean work

backwards imagine inflation tomorrow

comes in at five percent year over year

and you know negative point three

percent month over month well the

Market's gonna rally the Market's gonna

freak out like oh my gosh this is it

we've hit Peak inflation and if we got

another report next month that

reiterated like super low inflation and

a negative month over month again the

Market's gonna rally that's it the

bottom will be in and and the pain will

be over but these expectations

even if we meet them it's not that great

you still have 8.1 percent inflation you

still have 4.8 annualized core inflation

and broadening of inflation it's still

not that great so the expectations just

suck uh for CPI now the expectations are

often wrong I just hope they're not

wrong to the upside so if they're wrong

to the upside we're gonna

we're gonna have hell to pay tomorrow

and and it you know like what we saw in

the September inflation report you could

see the JP Morgan uh assumption come

true that we end up having another five

percent day to the downside terrible now

again if we could get in my opinion let

me let me do this okay here's here's the

way you do this we have to look at the

expectations based on the economists and

look at the range

so the range for this survey is very

important because if you get a Miss to

the downside where no Economist was

expecting it could be good most of the

economists surveyed here 43 of them are

sitting around 8.1 it's kind of like a

bell curve

nobody is expecting it to come in at 7.8

so if you got a 7.8 headline

that would be very bullish that would be

extremely bullish uh and when it because

all of the economists would have been

wrong they would have assumed that

things were going to be worse when they

actually ended up being better now if we

go for let's do that same thing but

let's do it for core so if we do CPI

excluding food and energy month over

month

the survey is that we're going to get a

0.3.4 yeah median estimate point four

percent report nobody is expecting it to

come in less than two and a half percent

so or I should say 0.25 percent

so if we get something on a month over

month basis that's less than a quarter

it'll be good you're like if we could

get a zero if we got a 7.8 and a zero

rally mode

I I'm not optimistic I'm really not

optimistic but I'm hopeful but hope is

not an investing strategy now again

we're going to have the FED minutes but

again those are going to be looking back

to September where I'm almost certain

we're just going to have a fed that's

talking about broadening out of

inflationary pressures and uh and how

they have to do everything in their

power to control inflation I'm not

really expecting anything crazy new from

these minutes unless they give us any

kind of insights into the economy

beginning to weaken potentially the

housing market or the jobs Market those

are actually going to be critical notes

so we will look for those but in terms

of inflation I'm not really expecting

any big hints from the minutes I'm

expecting more insight on that tomorrow

now on Friday we have two really big

things happening at number one is the

final exploration of that coupon code

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at 11 50 29 PM we've got a big release

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be coordinating with Shopify on on some

of this so it's gonna be really

interesting uh anyway the second thing

that happens on Friday is we actually

get retail sales numbers now this could

be good or could be bad so last month

retail sales numbers actually I mean

that's like redundant well anyway last

month retail sales data came in with a

month over month excluding Autos decline

of 0.3 percent and if we uh if we

excluded both autos and natural gas we

ended up actually with a rise of 0.3

percent now that actually tells you a

little bit of a story it tells you that

the decline in gas prices actually led

to a decline in retail sales last month

well that number is a number that means

retail sales other than gas and Autos

actually increased by the rate of 3.6

percent on an annualized basis that's

not what the Federal Reserve wants to

see the Federal Reserve wants to see

this number negative across the board

and we're not getting that right now

we're getting positive numbers and so

now the expectation is that retail sales

excluding autos and gasp will be

somewhere around 0.2 percent for Friday

that data comes out at 5 30 a.m as well

but if that number misses hard

it's just going to be another exhausting

argument that'll tell the FED hey

consumers are still spending money

they're still taking on more debt kind

of ridiculous then you also have

sentiment numbers coming out on Friday

and so this is always a weird one

because consumer expectations for

inflation have been trending down and

sentiment has actually somewhat been

trending up the problem with that is

when sentiments trending up and people

think inflation's going to go down they

ironically just keep spending because

they think the recession is going to be

transitory and then that actually makes

the recession less transitory right

because think about that logically for a

moment if people think the recession and

inflation is transitory

because their inflation expectations are

low which they are the one-year

inflation expectation Friday is expected

to be 4.7 and the five to ten years

expected to be 2.7 those are actually

decently anchored expectations just like

what we're seeing in the market if I

measured by The Five-Year break-evens

inflation expectations are low excuse me

well if people have low expectations for

inflation and the market has low

expectations for inflation a year to two

years out then they just tell themselves

okay we just have to get through high

inflation for the next couple years

let's just borrow more money

let's keep spending and supporting our

lifestyle at the same time they're

creating that consistent demand that's

actually creating the inflation and

leading the inflation to be entrenched

in the first place

terrible so uh You've Really Got Just

bad numbers everywhere now to me I just

want to make this clear and we've got a

couple other numbers to talk about here

too I just want to be clear that doesn't

mean that this it's time to escape the

market like the time to do that was you

know the beginning of the year not not

now in my opinion not Financial advice

obviously but I'm personally a big

believer that

yeah we're gonna look back at some of

these numbers we're gonna go those were

a lifetime of deals right there in the

stock market uh but then again does that

mean more pain can happen no a lot more

pain can happen so

especially when we finally get to that

capitulation anyway

building permits expected to come out on

the 19th so that's next week

building permits we actually expect to

fall from uh from let's see the survey

oh no actually the survey is looking for

a slight little push up in building

permits the prior building permits month

over month was minus 10 now they

actually think we'll have 0.5 growth I

doubt that but we'll see building

permits though are different from

housing starts and then like filing for

a perimeter getting a permit issued

doesn't actually mean you're starting

work on the project

and housing starts in my opinion is the

number that we really want to pay

attention to that number is expected to

come in with a month over month decline

of 5.4 percent that's a huge

month-over-month Decline and I mean that

just reiterates the pain we're seeing in

the real estate market obviously if

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so uh those are the big catalysts that

we have coming up remember I will be

streaming live at 11AM for the um uh for

the minutes I'm again housing maybe some

insights jobs some insight what are they

seeing in their local markets but we've

had so much fed speak and I'm not

jumping up and down for anything really

new here but we'll see sometimes we get

surprised and then obviously tomorrow's

CPI so just go to metcaven.com links and

make sure you sign up as a reminder for

both of those live streams uh and if you

watch this video after the minutes are

done well then you can click that link

to watch the minutes all right folks

thanks for watching we'll see the next

one