holy sh*t

[Applause]

yeah yeah I don't know let's do this get

the opening bell oh man today is going

to be an interesting day because we just

had some data come out and I think you

just potentially caused a flip-flop in

how markets are responding this is

really bizarre so the buckle up for this

because I want you to think for a moment

don't look at what the market is doing

right now although you probably already

have and I want you to think to yourself

if I told you what I'm about to tell you

what do you think the market would

ordinarily do okay so ordinarily what

would happen if Europe was afraid of

inflation

American retail sales came in way

stronger than expected

and inflation numbers both CPI and PPI

came in stronger than expected

based on your experience over the last

two years what would happen

well generally what would happen is

everything would tank the stock market

would tank bond yields would Skyrocket

and everybody would be freaking out

about how much more the Federal Reserve

has to raise rates

and now something really bizarre is

happening and of course the day has just

started so we don't know but we do know

that the data is out and I'll tell you

there is something weird going on you

ready for this first I'll come up for

the data

stagnation crisis in Europe Europe

naturally raises rates again as expected

about 67 chance that Europe was going to

raise rates another quarter BP and

that's exactly what they did American

retail sales the survey was a one

percent increase we got a point six

percent increase now a lot of that could

have had to do with natural gas and

gasoline and energy expenses but it's

okay because we have this category here

that says retail sales X Auto and gas we

were actually expecting negative 0.1 so

in other words a shrinkage of uh well

Auto and gas uh and all well a retail

sales excluding Auto and gas and we

actually got an increase of 0.2 so we

beat by point three percent retail sales

control group expecting negative point

one we got point one

then we got initial jobless claims where

we were looking for 225 000 people to

file for unemployment and no we only got

two hundred and twenty thousand so in

other words stronger retail sales

better jobs numbers continuing claims

also coming in two thousand less than

expected although the revision was about

five thousand hotter so call that

neutral then we get PPI producer price

inflation which some people are like I

don't know man PBI that comes in high

that you know is eventually going to

lead to well CBI coming in hot so you

know we got to be careful over here

right okay fine so what do we get PPI

final demand

expected to be 0.4

wait 0.7 pbix food and energy we do get

a match at 0.2.2 but PBI X food energy

and trade also comes in hot at 0.3 which

is your core in PPI even the year over

year number X of food energy and trade

comes in at three percent versus 2.7

percent

okay all of this ordinarily ordinarily

and this is what is absolutely insane

okay I had to get myself the Siri Brew

potion out mostly because I got a lot of

crap going on because we just got word

from finra and from the SEC on house act

my real estate startup we got a ton of

emails for the real estate coupon

expiring tomorrow the financial advisor

and I gotta go leave right now to go on

a big mission oh my gosh anyway the

point is

I'm like frazzled because I got so much

stuff going on just in these next few

days and here I am getting what is

ordinarily bad data right the last

basically two years when we get data

like this we're like oh damn we s we

screwed son but instead what's actually

happening and this is what is bizarre

well what's actually happening is the

following all of the indices are green

oil is green treasury yields on the

10-year are basically flat and if I go

to the two-year yield

treasury yields are actually negative so

in other words the the 10 years kind of

slipping up a little bit in the two

years coming down a little bit which is

sort of in the direction of uninverting

the yield curve which this is like wait

a minute this is like good news is

turning into good news dare I say that

but it's not just that listen to some of

this so uh Nick T shared some delicious

Juicy and Delicious commentary from the

Walmart CEO which we've known this we

read the earnings calls all the

companies we do this in our course

member lives as well merchandise prices

are lower than a year ago but don't hold

your breath on declines in food or

groceries oh so in other words the

Walmart CEO is like yeah there's

deflation Happening Now relative to last

year which is obviously still

substantially more expensive than it was

pre-covered but you actually have

deflation according to the CEO of

Walmart but he says don't hold your

breath on groceries it felt to me like

because of inflation things were going

to be tougher this year than they had

been it feels like though because of

employment wages and some disinflation

things are kind of hanging in there says

the CEO of Walmart but beyond that

listen to this 12-month uh core good CPI

is literally where it was before the

pandemic and the curve of housing

disinflation on both a 12-month and

three month curve is just finally

starting to roll over and much of that

is still ahead of us that's why now

people are thinking okay the Federal

Reserve is going to still hold in

September in fact Nick D says this

doesn't change anything for December

although the jury is still out for

November and December we're still not

convinced we need to raise again

but then you have more economists now

talking about grocery prices because

rightfully so people are pissed off that

groceries are still so expensive and

I've kind of been pounding my fist on

the table regularly going hey man look

they ain't coming down again and and

people like what do you mean it's not

coming down like grocery prices don't

have to come down it's not fair like

Jerome Powell he's got to fight for us

right no no he doesn't he he's not

fighting for you okay we just have to be

clear about that and he's not going to

come rescue you

but what's fascinating is an economist

looks at grocery prices which in 2023

are basically flat but compared to 2019

are still up like 17 18 percent

and economists realize that wait a

minute we've actually never had declines

in grocery prices from today going all

the way back to like 1950. so in other

words we have not ever seen grocery

prices go down in the last three

quarters of a century so no grocery

prices probably are not going to go down

but will they stop going up

hopefully okay fine so now we're caught

up on this what is this this critical

shift well I mean you should know what

it is by now but I do want to also

quickly remind us

what the FED terminal rate is because

remember the FED terminal rate and how

much we're pricing into that fed

terminal rate like we explained

yesterday I personally am paying a lot

of attention to this number and

it actually fell it fell this morning

after the data okay yesterday after hot

CPI the number was sitting at 5.46 now

5.439 basically 5.44 it fell two basis

points the odds of another hike at all

in other words

basically the market took two basis

points and it's like yeah now after this

data we're good with a cap we're there

we're there we're at Peak I think what's

actually happening with my dragon chain

body over here I think what's actually

happening is markets are finally

flipping they're finally saying damn all

right look

we were expecting inflation to come

skyrocketing again in the economy to go

into a recession but

it's time to roll and throw in the towel

because inflation's not skyrocketing

look is is it perfect is it immaculately

going to zero no but is it so bad that

we're going to get Paul volckerd into a

recession

now all right maybe it's time to go long

stonks then who knows uh that I think is

why we are seeing this unpricing of high

yields uh although we are still well I

shouldn't really say on pricing of high

yields I should say stability but I

think the unpricing of the uh 210 is uh

starting to happen the 210 is obviously

the yield curve we're at 73 basis points

to the negative side still pretty dang

negative but it's interesting because in

the last few weeks data has come in

hotter than expected including inflation

data coming in hotter than expected but

rather than going deeper into reversion

and a likelihood of recession we're

actually going out of reversion we're

trending in that direction yields feel

like they've hit a ceiling oil prices

are skyrocketing and despite oil prices

skyrocketing you have a fed that's like

now we we might be done yeah we're

probably done like

what it is the opposite of what we've

been experiencing for the last two years

and that's something to keep in mind

like clearly that is a style of a flip

here for two years every bit of good

news was bad news and I'm about to say

it now all of a sudden good news and

even some slight bad news like some

slight misses is good turning into good

news no knock on wood I don't know if

that'll last but think about what I just

said for a moment good news is good news

again

and even some bad news is like well

that's not that bad and then things go

what

today is the first day I mean obviously

we've been talking about the Nike Swoosh

you know this for for almost a year now

where it's like look I think people are

slowly going to probably saying that

inflation's going to go away that it's

going to end up being transitory if you

said that a year ago you ended up

getting punched in the face if you say

it today people like yeah okay it makes

sense I don't know man I still think

there's gonna be recession but uh yeah

yo kind of the inflation's gonna go away

yeah you know that's like the attitude

is massively changed but beyond the

attitude massively changing it's Crystal

Clear

that the way the market is behaving

today on worse CPI data yesterday worst

PPI data worst retail sales data well a

better retail sales status so in other

words a beat on eco data but uh a Miss

on where we want it on the inflation

data the fact that all of that is

leading the market to actually go green

I mean the nasdaq's up at the time of

this recording 44 basis points Tesla's

up over half of a percent uh I mean

everything on my Charter screen and face

is great okay look end face is green

between you myself and you know the

dragon median helmet right there

that's all you need to know like that

stock is never green what

anyway check out the coupon code linked

down below it expires tomorrow I got

stuff to do I'll see you later I'm not

advertise these things that you told us

here I feel like nobody else knows about

this 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 financial analyst

and YouTuber meet Kevin always great to

get your take