JUST OUT: Important Fed Report!

hey everyone meet kevin here so this

morning we had some data that came out

uh from the jobs market and that's

really important because even though

usually jobs are a lagging indicator

that is companies see oh consumer

spending is going down oh no we better

cut jobs or stop hiring so that way we

can protect our bottom line and that is

usually a lagging indicator of a

recession generally that's what we see

one of the tools that we can look at to

try to understand hey is what the

federal reserve is doing working it's

called the jolts it's a measure of job

openings and even though that too is a

lagging indicator it is one that's

really really closely watched because

people want to know

hey

is the federal reserve hiking rates

working because guess what folks if it

ain't working well crap that means we

got more pain ahead because then then

the fat has to come out and be like

marie daley this morning going we're a

long way away from getting inflation

down don't get too complacent our job is

not done here our work is important

please pay attention to us more

that's that's kind of what the fed wants

they got the limelight and they're like

don't stop paying attention to us just

because we rallied a little bit off july

don't get excited the work's not over

yet all right fine

so what's really important here is that

if we

get a jolt's reading that shows there

are more job openings rather than less

than it shows that businesses don't

really care about higher rates and that

the impact of higher interest rates

haven't really hit

the

broader labor market yet or companies

yet that would actually be bad because

that would be a sign that the fed is

trying to move markets in one direction

depressed demand and by depressing

demand depressed business activity

overall depressed spending to bring

inflation down that's what the fed's

trying to do right

and the federal reserve in the last fomc

meeting came across as

actually somewhat dovish which is a way

of saying that like the fed's kind of

like yeah it looks like uh our work here

is uh starting to have an effect

especially with the first line of their

statement the first line of their

statement for the first time this year

was changed to it seems like the economy

is actually starting to slow down a

little bit i'm paraphrasing but that is

true they've changed it from the economy

is growing and expanding to oh things

are slowing down a little bit and along

with that the fed's like hey

so we've gotten to neutral rate you know

the stuff that we do has a little bit of

a lag time uh we think it might be

appropriate to slow down a little bit

here in the future those comets came

across as actually very very bullish to

markets markets are like oh my gosh this

is it the fed is you turning so

obviously if we get a jolt's number that

is way above the economist's estimates

then we're screwed because it means that

the fed is actually wrong to be

suggesting oh yeah yeah it thinks things

are softening right well the good news

is the jolts number came in in our favor

today now we're going to touch on that

and kind of what it means for the

broader market and is there the

potential for more of a decline here

well let's hit this so the first thing

that you have to know is that the

expectation was that we were going to

have 11 million job openings that would

be down from the last job openings

report we had at about 2.54

million now keep in mind last month we

were expecting 11 million openings as

well and we got

2.54 so this report came out and they

actually revised up this we're reading

here by about 49

000. so this came in at 2 uh 250

sorry this uh was revised up to 11

million 303

000 job openings uh this should be a k

right here but anyway that was revised

up to 11 million 303 000 job openings so

that's a plus 49k

but the estimate of 11 million

was missed by 302

000 jobs the number came in at 10

million

690

which is good

you can't write properly here there we

go which is good because it means that

the federal reserve is actually starting

to see what they want to see remember

what jerome powell told us jerome powell

told us that right now we have 1.9

openings for every single one job that

there is or sorry one unemployed person

that there is so this right here is your

unemployed person and this is your

opening right here and jerome powell

wants to see this in balance and you

bring this in balance by crimping down

on companies and reducing people's

spending which then leads companies to

say well then we don't need to hire as

much and jerome powell wants to see this

be in line at about one job opening per

one unemployed person so if you have

6 million unemployed people you want to

see this being at about 6 million

for the jolts reading so we're finally

slowly starting to go in that direction

this is called a cooling it's not like a

big shock you know if this number came

in at eight mil it's like oh my gosh

yeah like this is it this is gonna be a

bad recession that's not what we got so

we didn't get like really ugly news that

says oh we should be really concerned if

anything we actually got data here which

we don't get a fed meeting until

september 21st we just got fed data that

gives us the thumbs up and says hey

the feds what the feds said in the last

meeting is working and the data is

reiterating it now we have jobs data

coming out at the end of this week we've

got inflation data coming out on the

10th that's next week that's going to be

critical right now the expectations and

you might think this is crazy okay but

the expectations for inflation next week

folks holy crap it's only a point two

percent let me write that a little bit

better it's only a two percent month

over month expectation uh or 0.2

that corresponds to 2.4 annualized

inflation that'll be like the lowest

read that we've had in a very very very

long time so that would be very very

good and that also would go with

reiterating this jolts report that we

just got that the fed is actually on the

right course

so what does that mean well this means a

lot of folks are

really looking at this market as you

know what this is the time to buy this

is the time to move from cash and move

over into quality stocks speculative

assets are still having a rough time we

saw what happened to roku we saw what's

happening to lower income related stocks

those are going to be kind of your

walmarts and your targets and your best

buys versus like the amazon the american

express the visa where we're so louis

vuitton where we're still seeing a boom

and so you are seeing a favor towards

quality apple google amazon and still a

risk-off approach to some of the more

speculative names but folks we've got

seven weeks to go before the next fed

meeting and as long as the data keeps

coming in like this it reiterates that

wow we might yes actually be at or

beyond now a bottom now one thing that's

wonderful to keep an eye on and we

talked about this in the morning opening

live stream

that we've brought back is take a look

at this when we redraw the fibonaccis

from the top of the year to the bottom

of the year we can actually see that

right now we're sitting at a 38.2

percent retracement from bottom to where

we sit roughly now and even though the

nasdaq is down half of a percent today

what's really incredible is that where

the nasdaq sits right now is where it's

getting rejected is actually at the same

level that marked the bottom

in february march and briefly in april

before we broke that

and then we ended up bottoming out in

june and so it's really interesting this

level at about 318 nasdaq

really really critical if the data keeps

coming in to support that the fed is on

the right track that inflation

breakevens are right and inflation's

going to trend down then we could see a

real

rally potentially i would say up from

38.2

all the way to about 78.6 i don't

actually think we should be past 100

probably until like at the end of the

year maybe even next year like a

christmas rally or beginning of next

year rally uh it's so i i do think

there's there's a nice room for

continued rallying here especially if we

get good cpi numbers so personally i'm

looking at this market saying hey uh i

i'm 99 long uh i've got a one percent

short position i'm also shorting the

dollar so that's somewhere around one

two percent these are these are nominal

positions uh but those are trades that i

think are

great uh and and and one of them's a

hedge one of them is a trade i'll talk

more about those different at a

different time but i do think right now

where we sit in the market is a testing

point right here and i think that after

this jolts data the only reason we're

rednet right now is because nancy pelosi

is going to taiwan and therefore you

could take short-term uncertainty

potentially move in but do keep an eye

if we get a bad cpi read we could easily

retrace back to qqq 300 or all the way

back down to where we were previously

that's 268 level we'll see thanks so

much for watching folks we'll see you in

the next one and make sure to get up to

12 free stocks with weeble by going to

metkevin.com

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