what the heck.. stock market | EMOTIONAL DAMAGE

holy moly the stock market is really

upset today and you know what it quite

frankly should be because there are a

few things that are really exciting

people's inflation expectations and in

the near term it's obviously going to

lead to more volatility especially

especially and it just it drives me nuts

when you see this kind of stuff

you guys remember Bullard right what is

what does that make you think of Mr

Bullard oh you think he's that the fat

right no he quit from the FED he quit to

go be the dean of some school and guess

what today we get headlines Bullard

suggests additional rate hike based on

recent data Bullard suggests fed should

hike again it's like bro don't even work

there anymore

but it's bearish so gotta use Mr Bollard

on the headlines but now look there

there are some some things that are

creating at least some heart

palpitations on the inflation side and

this is normal nobody expected this to

be straight down on inflation most

specifically oil oil is creating some

real issues because oil is not just that

headline energy read we get inflation it

flows through to everything it makes

Trucking more expensive shipping more

expensive commuting more expensive

plastic's more expensive everything

becomes more expensive when oil goes up

and quite frankly we've had one hell of

an oil rally over the last a few weeks

we're at uh almost 90 bucks a barrel now

on Brent we did break 90 for a hot

minute uh but we uh we have been

basically straight up since about June

29th uh then you get to July 19th we

kind of had like a little pause and then

it was straight up from July 19th guess

what else was straight down from July 19

well pretty much stocks they've had a

little bit of a recovery mode because

oil fell again now it went to New highs

it's a lot of this has to do with

people's expectations for inflation and

anytime you start screwing with people's

expectations for inflation the market

almost algorithmically trades like this

and it probably honestly is all

algorithms like I really doubt people

are waking up you know in the morning

going

well ISM Services a little hotter than

expected

time to sell

like this is totally people who last

night are like all right let's program

the algorithms okay if uh if I SM uh

employment and prices paid comes in high

oh let's just go ahead and set it up uh

sell risk

that's all this is It's the suits and in

honor of those to just demonstrate it I

wear suit and I actually have a zoom

meeting so obviously I'm

but they don't need another anyway

obviously the suits are doing whatever

they can to take advantage of this

volatility and make money that's what

they do dude that's what Traders do

that's what hedge funds and institutions

do especially to Rob money off of retail

that's okay because if you long-term Buy

and Hold that's great if you're a Trader

great and you use this data and you're

like perfect give me more it doesn't

really matter what you are how you want

to make money that choice is yours so

what data came in this morning and what

the hell did it do to us while it was

ISM data okay so we got Institute for

supply side management and this is

Services data service is data for August

and the services index came in a little

hot at 54.5 versus 52.5 fine that's

relatively benign the problem was the

price is paid level Rose a good chunk we

went from 56 8 to 58.9 and that price is

paid index does actually relate to the

services component of CPI it's one of

the things that economists use to make

their projections for CPI which isn't

great because we'd really like CPI

especially services to start filling out

a little bit Services though now uh

despite this ISM the current estimates

for CPI month over month on September

13th are 0.5 that's up from 0.2 last

month and most of that is because of oil

and gas and then core still expected to

come in at 0.2

so we haven't seen it dis anchoring yet

here of those expectations though the

Market's kind of like Trade It Trade It

Don't hold it trade it you know uh now

it is interesting that this comes the

day after you get Nick T our famous uh

fed Watcher and leaker over here from

The Wall Street Journal saying the New

York feds inflation gauge that attempts

to capture the underlying trend of

inflation called

multivariate core Trend Falls to less

than 2.8 percent in July June was

revised down as well to 2 8 from 2-9

this is the lowest reading since January

of 2021 and a way to see this a little

bit better is just zoom in on the blue

line you can see that there is

volatility in even the multivariate core

but it's been rapidly falling today's

ISM numbers did not move the five-year

break even though the five-year Break

Even is sitting at 2.26 a little harder

after the labor read last week and the 5

your four five year Break Even basically

five year Break Even how much inflation

you'll expect over the next five five

year forward is going forward the next

five years after that one actually fell

after this morning's data to 2.23 so the

numbers coming all over the place like

this is this is not a surprise what is

also not a surprise is AMC dumping on

shareholders we saw that happening from

a mile away so that's not a surprise and

that's why AMC is tanking and guess what

I promise you and this should just serve

as a warning every single time every

single freaking time AMC goes up whether

it's on Taylor Swift hopium or whatever

I guarantee you they are going to dump

stock well I shouldn't guarantee that

because like I I'm not them I can't

guarantee that and don't sue me bro I'm

just trying to give you a heads up

anyway fed terminal rate now sitting at

5.46 markets are pricing in a little bit

of an increase for having one more raid

hike now if we look at the terminal rate

and monitor and we can we get a little

bit of a an estimate of how things have

changed over the last day we're still

looking for that pause in September but

the numbers on a hike in November did

move up about eight percent from 38

chance to 46 honestly right back to a

coin toss this is really not that big of

a surprise but it is leading tech stocks

to sell off risk stocks to sell off this

is not a surprise markets are really

ready for the FED to be done with hiking

and until the FED is done with hiking I

don't think it makes sense to actually

for for most traders to buy the 10-year

treasury maybe you buy two year or

honestly if you're gonna buy the two

you're just going to money markets but I

think for most Traders it probably makes

sense to wait to buy the 10-year

treasury until you know the FED is at a

ceiling because once the FED is like

we're done hiking well now you basically

have a license to buy that longer

duration part of the car curve which is

otherwise more subject to risk in the

event the FED keeps going with its

higher for longer stuff so as soon as

the FED is like we're done treasury

yields on the 10-year probably and

probably not the two-year yet because

you're too similar to the money market

rate but the 10-year probably comes down

but the FED doesn't really want the

10-year to come down yet because if the

tenure comes down they loosen Financial

conditions which they don't want to do

so they're purposefully manipulating the

yield curve to stay inverted the way it

is and keep that 10 as high as possible

honestly if it weren't for this feds

talk it could be even higher if they

just stay higher for longer but this

this this talk about potentially raising

even more keeps that 10-year yield

higher because people are like okay

maybe I'm not going to touch it just yet

maybe I'll wait because remember if

you're an institution like a Trader a

hedge fund or a money manager or

whatever you know people are gonna be

like why are you buying this crap you

know that you you have to answer your

clients it's a little annoying but

anyway look the bottom line out of all

of this bottom line out of all of it

congratulations we got some inflation

volatility at least in some of the data

that's what we would expect we would

expect to have some of that in this sort

of Market it's not going to be a

straight down I don't think this

fundamentally changes anything and I'll

see you in the next one 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 looked up to

you Kevin path right there financial

analyst and YouTuber meet Kevin always

great to get your take