**This is Good!** Why the Stock Market is Red Though.

hey quick reminder today's march 25th

which means a coupon code on building

your wealth does expire today check it

out a link down below for any of the

programs you get lifetime access to them

the price does go up over time so if you

want to lock in that price live streams

with me and lifetime access to that

content check it out link down below you

won't regret it hey everyone kevin here

okay i know feelings might not be great

in the market today and there is a lot

of fun the indices aren't doing too

miserably down about half of a percent

but there are a whole heck of a lot of

stocks especially in the consumer

discretionary consumer service space

that are getting whacked today honest

company down 21 although that is up from

being down almost 30 earlier but even

others like purple and a firm down 8.3

percent along with uh matterport and

etsy down in the six to seven percent

range a lemonade poshmark wayfair zillow

sofi you name it all of these stocks

down over four to five a percent uh or

of course more some of them down eight

or nine percent so what happened we had

good news this morning and it was also

some bad news and then there was even

more bad news and so let's break down

some of these things i'm going to start

with the good news because quite frankly

we've had so much fun in this market and

it's not that it's you know fake news

it's true there is fear uncertainty and

doubt that uh you know it's time for

starting with some good news so let's

start with the good news

this morning i talked about how the

consumer sentiment survey was going to

be coming out and while the media is

picking up on the headline number which

is that consumer sentiment fell a little

bit more than expected the expectation

was a read of 59.7 any number above 50

is optimism it came in at 59.4 so slight

miss there but the stock market didn't

really move on this because this wasn't

really bad news

what you did have in it though was

actually something that surprised me a

sign of good news and light and again

this is not what a lot of mainstream

media is covering at all

it is

consumer inflation expectations one year

out

and then out into the longer term future

these two numbers are critical for what

the federal reserve looks at for their

interest rate hiking path

they're looking at market expectations

of inflation and they could do that with

the five-year break events we talk about

this almost every day at this point and

of course they can look at consumer

expectations for inflation regarding

consumer expectations we expected that

uh

inflation expectations would stay at 5.4

percent one year out and three percent

for the longer term three five ten years

out

and

they state consumer expectations for

inflation despite the war in ukraine did

not actually go up if consumer

expectations for inflation go up from

say 5.4 and consumers start saying yeah

next year inflation's still going to be

six six and a half seven percent and

these expectations get anchored into the

economy that is probably your biggest

red flag for the federal reserve having

to rug pull us and force a recession to

get rid of inflation but this is exactly

what we've been talking about

consistently for the last two months the

more the federal reserve says inflation

expectations are anchored we do not need

to rug the pull the more we want to be

exposed to equities under that 50 range

on the indices i don't want to buy them

once they've run above that retracement

level take a look at what's actually

happening with qqq here it's only down a

third right now so we've got a little

bit of a rally coming towards the end of

the day but i want to show you a

specific level here and then we're going

to talk about why this is happening look

at this 50 level here we got rejected

hard here in the pre-market right off of

161 41 which is the 50

retracement on the qqq what does that

mean it means that even though the rally

has been killing it since about march

14th the rally has its limits now i drew

this right here on on my weeble which

these this line here is just to depict a

potential path that i would

would maybe expect for the indices

i believe that i said a few days ago if

we get rejected at 50 percent there is a

risk that we drop back down to the 23.6

fibonacci uh probably break through that

38.2 and then bounce back up to maybe a

new high in sort of a relief rally of

this pain afterwards so this i don't

think it's just gonna be like straight

up here and we're certainly not gonna

get to this level of of all time new

highs again in in my belief because this

would be the area uh to sell or to to

hedge your positions

up here you know generally hedging over

here implies that you really think the

market's just going to keep tumbling

down generally you want to hedge in this

this upper third and we're not there yet

so we'll see what happens but i do think

it's going to beget some volatility now

we'll see qqq's recovering right now

into the end of the day but why are the

indices right and why are some of these

other stocks burning so badly today

if consumer expectations for inflation

remained anchored that's a good thing

right and what's happening with uh with

with five year break evens well five

year break evens for markets the

market's expectation of inflation those

slowly still taking up a little bit just

a little bit of a problem okay we still

got that slow little take up

but why is some of this happening well

it has to do with that dang 10 year

treasury and just the treasury sell-off

in general the more treasuries sell off

the more the yields rise and look at

what happened today it's disgusting it's

hap this is happening way faster than i

thought it would

remember how i've said consistently on

the channel i think the 10-year treasury

is going back to 3

we were 1.7

like 2 and a half weeks ago then we were

2

2.1

2.2 2.3 now we're almost at 2.5

this is going to hammer mortgage rates

really fast and hard and it sucks

mortgage rates are just they're going up

faster than a meme stock right now and

so there is the potential that this is

going to depress some consumer spending

as well now one of the things that i've

said in terms of my portfolio is i want

to be more exposed to consumer service

style stocks and less to consumer

discretionary especially those with

maybe less price power now so far we

have not seen evidence that consumers

are not willing to go out there and

spend on travel restaurants

food airbnbs cruises disneyland

universal if anything if you look at

trends for consumers here you are seeing

moves to the upsides you're seeing moves

to the downside in searches for things

like video games instagram tick tock

facebook anything that involves staying

at home wayfair appliances but so far

you're still not seeing the consumer

actually change their consuming habits

but that could change as those yields

continue to spike starting to put some

pressure on an individual's ability to

borrow from the lifeblood so to speak of

their home

and use equity from their home to start

uh spending right we're going to see

less of those cash injections though a

lot of folks are still right now trying

to rush to get some refinances in before

those rates just ultimately continue uh

to

move on up to about three percent for

the 10-year treasury which would push

mortgage rates to somewhere around five

to five and a quarter percent like we

briefly saw in 2018 so this is why i

believe you're seeing some negativity in

stocks right now but we've got a big

positive set of good news today so i'm

optimistic