recession & $100 oil is clickbait.

why are markets going bullish this

morning well it's because we got durable

goods data it's like what's so exciting

about that well potentially avoiding a

recession see there are a few trains of

thought leading to the support of the

bear argument number one is that Jerome

Powell is going to turn into Paul

volcker we're all screwed because we're

going into a deep dark depression I

think most people listening to this

don't necessarily lean on that argument

I don't think the Bears are that extreme

although of course that is a tail risk

you know like a you know five percent

risk that something like that happens

whatever percent risk you think it's

probably on the smaller end anyway

I think most of the people who are

bearish right now whether you're in cash

you're like Steve and you love

Commodities uh you know you just want to

rub those come on

um

the bear argument right now is very

clearly that a recession is likely to

hurt earnings per share substantially

and then once earnings per share are

hurt guess what we go into a situation

where we look at S P 500 earnings we

look at the price to earnings multiples

for indices Staples stocks across the

board and we end up seeing uh oh wait a

minute this isn't actually priced into

markets that APS could plummet and the

VPS plummets well then our valuations

are too high and basically we've got a

giant leg down further well the data

that we just got called the durables

good orders data gives some signs of

brightness some signs the year over year

uh figure here actually let me uh

actually oh sorry this is actually all

month over month data so this month over

month data gives us uh some uh

individualistic uh data and when we look

at durable good orders overall we see

what looks like At first a decline the

above expectation so the expectation was

negative four percent on durable goods

data we got negative 4.5 and the prior

data of 5.6 was revised down to 5.1 that

seems bearish right

but when we start taking out

uh not uh uh the Aerospace sector and

the transportation sector and we then

just look at things like maybe cars

washing machines dishwashers you know

other larger purchases for people uh and

durable goods what we end up getting is

something that looks a lot brighter so

last month we were sitting at a negative

point two percent for durable goods

excluding transportation that was

actually revised lower to negative point

four percent which isn't great right

but the current report so looking at uh

at uh January the last report being the

December report the January report shows

durables excluding Transportation were

expected to rise 0.1 percent they

actually came in at point seven percent

and that supports the argument that

maybe GDP will be propped up a little

better than we expect and maybe we can

actually avoid a recession and that's

probably why stocks are moving up right

now because of the expectation that okay

look yes Paul volcker is one of the

arguments but we want data that suggests

things just aren't as bad as they are

maybe because consumers and businesses

have more access to Capital more access

to debt maybe they're using more data

although that's even started tapering

down a little bit maybe they just have

more cash and they can support still

buying stuff we go to the next line we

have capital good orders for the

non-defensive sector excluding Aerospace

we were expecting no growth

what we got was point eight percent

which annualizes to about 9.6 percent

it's fantastic capital goods shipments

for non-defenses excluding Aerospace

uh these this is different from orders

this is now shipments came in at 1.1

versus the goal or the survey rather of

0.2 percent so you've got a nice speed

here on orders the likely explanation

for uh why we're seeing uh at least here

in the early uh pre-market or with early

pre-market data the likely explanation

for the rise in indices here is that

this is anti-recessionary right now this

doesn't give us too terribly much uh

inflationary data but it gives us data

that hey maybe things just aren't as bad

as feared maybe the FED isn't tightening

as bad as fear consider this right

before the durable goods data the

10-year treasure yield was knocking on

the door of 3.98 percent

within 30 minutes after the release of

the durable goods data the 10-year

treasury yield fell to 3.91 so that

means we were at about you know we were

Rising on the day and we basically fully

u-turned on the 10-year treasury yield

maybe because markets are saying oh okay

well these durable good orders are great

because they suggest that negative GDP

level isn't near just yet people are

still able to spend through it so that

gives us some insight into why we're

seeing some of these indices move right

now Dow s p Nasdaq futures positive oil

moving down again remember there was

this massive thesis and I've been

pounding on the table going it's

[ __ ] have been pounding on the table

saying oil's not going to a hundred

dollars people are like but Kevin China

is going to reopen it's going to go to

100 it's going to go to 100 and I'm like

it ain't going to 100. I think if you

look back at my videos over the last

three months I'm like this is nonsense

China was reopened for three you know

for for like 40 years before the

pandemic and we didn't have massive oil

spikes that were that weren't you know

uh predicated on the disasters that we

had uh elsewhere outside of China anyway

a lot of other data suggesting as well

that this was just a a Wall Street

institutional trade gone wrong but

anyway Brent sitting down now about half

percent only at 82 bucks that'll

probably be trending towards the 70s

here soon especially as uh Traders

continue to unwind their oil positions

realizing that oh crap oil is not

actually going in the direction they

thought uh WTI sitting at the lowest

level that we've seen basically since

even before The Invasion into Ukraine by

Russia now that is remarkable right now

sitting at 75 84. is the level that we

last saw in December of

2021. that's that's when when the uh

when the uh uh you know War the invasion

of Russia into Ukraine what wasn't even

really a topic that was being covered it

was it was a fringe thought a fringe

idea it was Western media hysteria back

then it was until January we actually

started seeing fears of the war actually

occurring when when oil started Rising

this idea of it heading back to 100

bucks so far has been a faltering trade

uh and it's one that we saw the writing

on the wall for so uh great job though

on the durable goods data we'll see how

the market ends up playing out uh on the

day

well but that's uh that's some of the

movement you're seeing a lot of folks

asking me by the way hey like you know

what about oil companies as maybe a

Green Tech investments just look at the

earnings calls any most of the Green

Tech Investments that the big oil

companies are making are profit losing

Endeavors that in my opinion are just

being made for the political appearance

of oh yeah we're an oil company but

don't worry we love ESG you know

environmental and social governments

right

anywho uh look I I think the important

thing to look at in the market is very

very clear it's are you betting on pole

Volker coming uh then you're all cash if

you're not betting on Paul volcker

coming then you want to invest in

companies in my opinion that have strong

pricing power not personal advice

Financial advice for you even though I

am a licensed financial advisor it's not

personalized Financial advice for you

you want to look at pricing power stocks

where are companies that are going to be

able to maintain margin even through

a potential recession but so far even

the idea of a recession continues to get

sort of kicked down the road more and

more and more and more