Prepare for THIS Next | The Stock Market Crash

hey everyone welcome back we got to

cover some important catalysts and I

recommend you write these down because

they're going to be stock market shakers

over the next week we'll also talk about

some of the implications of what

happened in the bond market after

Jackson Hole and let me just say it's

not what I expected the bond market

would react as so let's hit the numbers

here first uh we're going to have jolt's

data coming out on Tuesday mark your

calendar for Tuesday morning we're

looking for 9.45 million any softening

here in the job openings and labor

turnover survey uh is actually going to

get us closer to the end of the hiking

cycle remember Jerome Powell in Jackson

Hole made it clear that even though we

don't want to see unemployment rise we

do want to see the pressure on jobs and

wages continue to slow so that way wages

could go up at a stable level but not

overheat the economy and so we are on

the track of slowing down less job

reports as in less higher ring and less

job openings but it's not decelerating

as quickly as we expected and that

reiterates the need for well in Jerome's

view higher for longer so really what

you want here is you want this number to

come in soft you want to see that 945

come in under to be a positive Catalyst

although last month's jobs data came in

stronger than we expected a lot we

basically almost felt like we had a

blowout especially in those ADP numbers

speaking of which on Wednesday we'll get

our ADP numbers the ADP numbers are

expected to come in at 198 198 000 jobs

added last time we had a blowout at 324

000 that comes out at 5 15 a.m

California time on Wednesday then we'll

be looking at GDP annualized which comes

out next week as well the annualized

figure for GDP we're looking for is 2.4

obviously well away from recession

Germany just had its last quarter GDP

come in flat just yesterday morning and

helping helping them maybe uh say hey

look this recession is really shallow

because they've already had a few

quarters of negative GDP anywho focusing

on America here we'll get our GDP

annualized obviously we're not close to

a recession at the very moment in fact

yesterday I was going through some of

the real fed now uh sort of current

estimates for GDP and I mean we know

they're sitting at 5.9 percent in terms

of what GDP might actually be right now

it seems a little ridiculous I went

through what some of the drivers of that

were and the drivers probably the

biggest driver that really drove that

number up the most was the day we

incorporated the retail sales data we

actually had a pop off in the real GDP

chart and that's because it's one of the

factors in it so this is so weird

because you have Capital One and Target

and Home Depot and Amex talking about a

Slowdown in expenditures for people both

discretionary and non-discretionary a

firm is talking about more travel and

entertainment spend so maybe people are

spending more over there but a lot of

companies reporting above slowdown in

June and July a firm doesn't seem to see

it uh where the retail sale numbers for

June uh in July don't seem to imply it

so we're kind of scratching our heads

right now going so is the consumer out

of money or is the consumer not out of

money it's really bizarre but either way

we'll get our GDP figures uh next week

then we're going to get pce the fed's

preferred inflation gauge on Thursday

we're looking for 0.2 core month over

month and 0.2 headline month over month

Friday we'll actually get the real jobs

report real I mean I'm going to put a

little asterisk on that because we know

they revise this crap all the time the

first six months for example of this

year they subtracted another 300 000

jobs so it's kind of like the numbers

come in hot the FED hikes more and then

all of a sudden the numbers get revised

down and it's sort of like

obviously some people on the you know

anti-biden side are like

they're rigging the numbers because

nobody talks about the revisions people

just talk about the headline and he

wants to cheer by nomics

other people on the left say no this is

normal there are always revisions and

when you're in uncertain times the

revisions are larger and uh when you're

in a decelerating economy of course

those revisions are going to Trend to

the downside uh wow we are going in for

a big Bank angle here look at that for a

moment can you get a focus on that yeah

you can kind of see it it looks kind of

cool big old turn uh anywho okay so uh

that's um those are the catalysts coming

up next week after that obviously the

most important ones oh and of course on

jobs yes even though we want people to

have jobs you want this number to start

coming in below Trend Trend right now is

about 180 000 jobs anything below trend

is going to help reiterate to j-pow that

okay good we are we're good maybe we

don't need to hike more right anything

above trend of about 180 000 is going to

reiterate okay maybe we need one more

hike we're expecting 168

so that's Friday Friday morning we'll

have that jobs report 5 30 a.m

California time uh so we want this to be

below Trend but ideally we don't want to

be negative negative is going to be

recessionary right now it's lagged uh

jobs data has always lagged so it's not

a great leading indicator but it is an

indicator that the FED is going to use

to determine okay how much stronger

would we have to go here because we keep

pushing on this jobs number and the more

it doesn't go down the more we think we

have to raise rates and stay higher for

longer right the real big Catalyst

obviously is going to be September 13th

though that's CPI day no estimates for

that yet but obviously we want to see

that come in a low duh that's on the

13th then uh the FED meeting is

September 20th this is going to be a big

one because it's a summary of economic

projections meeting we did not get a sep

summary of economic projections in the

last meeting uh so we're going off the

June sep right now but uh The Next Step

will give us another reiteration of okay

we're probably gonna pause

but what's your long-term outlook for

rates for the end of the year and the

end of next year and that's really going

to forecast how many Cuts is the Fed

actually pricing in for next year so

that that's going to be a big day

September 20th buckle up that's gonna be

a big day we're gonna look at that step

we'll be like oh my God the fed's not

pricing in any Cuts we're screwed right

that'd be a problem uh then of course we

do have uh

um Loretta Master coming out saying hey

you know the worst mistake we could make

is over tightening or sorry the worst

mistake we could make is under

tightening uh and that is a worse

mistake than quote over tightening a

little bit because we can correct that

yes so uh this is why the bond market I

think is reacting the way it is how did

the bond market react after Jackson Hole

well the bond market said okay well

pricing another rate hike and that's

basically what they did we went from a

terminal expected a lower bound rate of

5.34 which was pricing in like a 10

chance of a rate hike uh and then all of

a sudden just skyrocketed up to uh

5.48 so we added another like 10 11 bips

right there which is basically pushing

you up to like a 30 40 chance of another

raid hike by the end of the year oops uh

and getting to uh terminal so getting to

that terminal rate so anyway uh that's

uh that at the same time also led the

yield curve to unfortunately steep him

uh oh I'm sorry not steeping uh

steepening is getting better right

remember we have the spread between the

210 so remember when it seepens you're

generally getting closer to uninverting

but this actually inverted more it went

deeper not steeper is the right word so

deeper uh is the opposite of what has

been happening over the last few weeks

over the last few weeks we've actually

seen a compression between the 10 and

the two which was kind of like okay cool

we're steepening at the same time as not

having too much pain although the stock

market did soften quite a bit during

that and all of a sudden after Jackson

Hole we just went right back down

another 20 bips into inversion so we're

like 80 bips inverted right now

basically further away from being

uninverted right and I think this is

happening because if you look the

two-year skyrocketed like I don't know

what skyrocketed it went up and the

10-year was stable so after Jackson Hole

the tenure didn't move much it was the

two year that moved and that's kind of

the bond market telling you okay we're

pricing in yet another rate hike and we

don't think they're going to be that

high for the long term

so that's why we see that 10 years stay

stable uh which it basically aligns with

everything that we're talking about here

uh and this this talk from Loretta

master so I think and this is my opinion

I think there's a likelihood we're going

to end up getting a Fed that does end up

giving us just one more I think that's

going to be a way of the entire board

being appeased at the FED I don't think

it'll come in September I think it'll

come in November and then that way the

FED can reiterate their confidence they

don't need to do another hike in my

opinion I think they've done enough but

I think they will give us another in

November just a short a sort of like

keep the boot on the neck of the economy

go and see we're serious about inflation

they're not actually trying to make

everything more unaffordable or

expensive of course that that is

technically what they're supposed to be

doing what they're doing is they're

playing with your inflation expectations

they're like see look at that we went

from July to the end of the year and

over those six months we gave you one

rate hike see we're still in hiking mode

they don't want to send the signal yet

that they're done so just skip a bunch

of meetings in between throw one out

over here you keep the expectations

getting pressed down it's the boot on

the neck that's what it is they're

playing the psychological game and

that's because they know they can cut

two percent tomorrow if they needed to

and they they will the question is how

bad is something going to break when

that time comes so hopefully nothing

breaks obviously that's the bull POV is

nothing breaks if something does break

maybe it's a good idea to have a little

bit of cash on the side I'm uh you know

believer that having maybe five ten

fifteen percent of cash on the side

maybe not a bad idea but we'll probably

keep going with that volatile Nike

Swoosh Jack you want to open the door

yeah all right we're here thanks so much

for watching we'll see you in the next

one bye