The Economy *JUST* Flipped | NEW Rate HIKES Coming

GDP just beat GDP just came out 10

seconds ago 1.3 percent the expectation

was 1.1 jobless claims coming in at 229

versus the 245 expected uh wow this is

actually really incredible both of these

numbers are better for the economy than

expected uh this is uh this is once

again really impressive so you've got

initial jobless claims sitting at again

229 you have a revision down of the

prior are you kidding me okay here we go

hold on personal consumption coming in

at 3.8 percent that's more than expected

than the 3.7 percent beats last time

beats the expectation GDP price index

not gray GDP price index I mean this is

for the quarter uh and it does have to

do with uh but even core popped in high

uh GDP price index comes in at 4.2

versus 4.0 expected uh core pce quarter

over quarter comes in at five percent as

opposed to the 4.9 expected uh and

that's actually a tick up from last

month which was at 4.9 so I'm this is

not this is not stagflation this is this

is sticky uh somewhat slightly sticky

inflation and strong economy this is

potentially why the FED looks I mean

data like this could potentially lead

the stock market or the FED to to say

hey hey whoa whoa whoa wait a second we

can't rally like this we can't have

Nvidia up 30

uh in the day the darn thing's almost at

400 to share uh well yeah that's because

they're freaking amazing I mean every

time I do another analysis on them I get

sold on them more it's crazy uh and it's

mind-blowing I didn't think it would

happen that fast but anyway we need to

break down these numbers a little bit

more so again understand what just

happened initial jobless claims which

everybody keeps suggesting oh the

unemployment rate's gonna Skyrocket

that's that's how we know we're really

gonna go into recession really the

initial job claims last week that we

thought were finally rising at 2 42.

just came in at a revision of basically

minus seventeen thousand so you're at

225. the forecast for this week was 2 45

which should have been in line with last

week but no it came in at 229.

continuing claims came in lower than the

survey and lower than the prior read so

companies are hiring more people now you

might be asking yourself why the hell

would companies be hiring more people

when they could just have ai

well because here's what's going to be

crazy you ready for this I have another

thesis I like having Theses I have lots

of ideas okay and I don't think my ideas

are that terrible

some of them are some are better than

others

but anyway what what what does this mean

how could you potentially see hiring

actually go up okay because of AI you

ready for this this is let's depict it

first so let's say

this is hiring before AI

this is hiring after AI

and then this is hiring

long after AI or or a good amount after

AI and then you get something that that

sort of longer term Trends up so so why

could this happen why could the thesis

of of job growth look like this where

ironically right now we can actually see

jobs increase rather than decrease

because of AI

why well the thinking is everybody and

their mom working for a company right

now is like how does we make money with

AI okay that's what every company is

saying right now and so in my opinion I

think if every company is saying that

right now there's probably a Big Driver

that's saying let's hire engineers

and figure it out

let's let's create and this is not just

existing companies but it's also

startups I mean I wouldn't be surprised

if you end up having 50 000 AI startups

the vast majority of those AI startups

will fail the vast majority will fail

like if you were a venture capitalist

dude I would have to bet that 98 of

those AI startups will fail and when

those startups fail guess what happens

what happens is this

the unemployment segment but that could

be three years away

so the the pruning will come in the

future but the boom could potentially

start now on the thesis of AI which is

wild because it would seem like it's a

bad economy right but that'll pull us

right out outside of the economy now so

if you're investing in software you're

probably at the 98 failure level if you

invest in Hardware like Nvidia what do

you get

you get what everybody uses all these 50

000 startups that could start up for for

AI the vast majority of them I would

guess

99.99 of them are not trying to make a

better server chip

I bet you they're trying to make

software using AI

and those startups are going to want the

biggest competitive advantage that they

have to succeed the biggest competitive

Advantage will be their personal

intellectual property

and the h100 Nvidia server check

uh and so the cool thing too is all of

those startups are going to want to

train their artificial intelligence

models test them operate with them

provide them to Consumers every query

with those startups

is going to go through server chips

and even if 98 of them fail 100 of their

AI effort will go through Hardware this

is why I've been so like shaking the the

this YouTube channel going

guys girls whoever you are chips chips

chips get away from software software's

scary

chips anyway uh so but the remarkable

thing about this is this is somewhat

what you're seeing in the data right now

now it's scary to some extent because I

mean look the the GDP pricing pressure

numbers those are quarter over quarter

numbers uh I'm not horribly worried

about those what's more important is

this next inflation reading which will

get the next inflation reading uh on the

13th of June which is in about three

weeks it's about two weeks after I

release uh the initial uh lectures on uh

AI in the uh how to make more money and

get sh9t done faster uh course but uh

that's going to be more important but

but this you know when you start seeing

core GDP prices paid numbers ticking up

a little bit it is going to give uh it's

gonna make people scratch their heads a

little bit I'm not terribly worried

about inflation lasting longer

um mostly because I think the market is

relatively accepting of that already in

fact it's weird but the Market's been

rising at the same time that the market

has been unpricing fed cuts which is

quite remarkable because if we look at

the rate cut curve right now I'll pull

it up the implied overnight rates and

then let's also pull up the FED terminal

rate uh so if we go to

fed terminal rate

hmm

let's go to this

fed term and

World interest rate probability okay

here we go

okay and you made it now it just doesn't

want to load right now okay that's fine

oh there we go

uh oh whoa how interesting oh that's

very fascinating

so okay well we'll have to talk about it

see as much as I'll have an opinion I do

have to be realistic too and if the data

changes you got to change your mind but

look what just happened

so this is a big deal this is the fed's

terminal rate expectation and uh the

current fed funds rate terminal rate

expectation has been five to five point

two five percent

uh and that would be where we are now

this is where we are now and this is

conducive with a pause right pause five

point five to five point two five

percent uh well what look at what the

market just said the market just said

well we think there's a chance the fed's

actually going to go above this is

starting to price in one more rate hike

and the data is coming in pretty strong

the banking crisis doesn't seem to be

hurting GDP or anything right now

wow but this is really incredible so on

top of that the Market's already

reducing its expectations for rate hikes

or sorry for rate cuts

so uh this right wow wait a minute look

at this this just popped off too this

just priced in another hike

so this world interest rate probability

chart right here shows us right here

seeing potentially another hike by July

so this would be by June or July seeing

one more rate hike honestly AI could

give you more rate hikes if AI creates

this sort of hiring and uh and GDP boom

this is insane

oh wow this is crazy just what AI is

doing is just mind-blowing anyway so

okay so the implied overnight rates

all right I've actually now started

pricing in another raid hike by July and

then we get a cut by September back to

where we are now

so this is basically just this could be

flat in theory I think it'd be more

likely that we're going to be flat

but uh it's interesting to see the

market start pricing this in uh and then

you are still seeing about 1.7 in cuts

by January 31st of 2024.

that's really incredible

uh wow wow wow I want to see some of

your commentary here all these no feasts

all these no fees you know I don't

really know what that means but thank

you for the five dollars computing power

as a whole is a fuel of the Cyber rage

chips are not going away completely

agree in the future in the long term

chips will become commoditized

in other words they like you will look

at at chips just like you look at CPU

chips in the long-term future and you're

gonna be like ah well I mean these are

all like garbage and and basic and you

can't really make money off of them uh

that'll be the future you know like like

on screen here you go to the GPU chart

of pricing and these are like relatively

dirt cheap for c for CPUs okay

especially compared to the uh I know

there's some variants in the pricing

here but you go to uh uh the gpus it's

insane anyway uh wow uh during the Gold

Rush sell shovels those are chips

those are chips I'm going to try to

create a business need Capital AI find

me money everybody needs to find money

in this market uh Nvidia is selling the

shovels to AI but TSM is the provider of

the shovels uh that's true yeah well the

peg everything just got turned upside

down for a TSM as well because uh you

know the PEG ratio for TSM was really

high but now because of nvidia's

orderings it's probably not that high

uh

uh you know it's yeah you take a two two

month course and get up to date in AI

for programming yeah I completely agree

completely agree

Nvidia canceled the recession yeah

yeah it's I'm mind blown that's that's

all I gotta say I'm mind-blooded about

all this but this data is good uh let's

see what Becky quick has to say about it

do you have anything to say what is this

what's this earnings learning there are

a lot of them right it's been a busy

morning for all of us so we'll start

with best yeah reporting better than

expected earnings a dollar fifteen on

weaker revenues though of 9.47 billion

compared to estimates of uh 9.43 billion

the total comparable sales down 10.1

percent now that was as expected it was

weaker in the United States though down

10.4 percent U.S digital sales week are

still down 12.1 percent the Consumer

Electronics retailer reaffirming is full

your guidance but the CFO saying it

looks at this point more like they're

going to hit the midpoint of this really

wide range and the company says it is

quote preparing for a number of

scenarios within that range weaker

categories at Best Buy Computing

appliances home theater and mobile

phones gaming and services were stronger

that's so crazy that gaming is picking

up gaming was in such a hole

such a hole consumers are clearly

feeling cautious and making trade-off

decisions as they continue to deal with

high inflation and low consumer

confidence due to a number of factors

yeah well

um

these GDP numbers are just not bad I'm

just blown away let me see what the

suits are saying about these GDP numbers

because uh this is very very impressive

so uh and it's totally the opposite of

Germany too so GDP uh yeah the

annualized quarter over quarter is 1.3

percent

I mean that's low but if that's in the

annualized number but it's still way

better than uh than you know going into

reset I mean there's there's no

recession indication yet

Steve I see you're sad about gold it's

it's because of these GDP numbers you

know gold was going up because

everybody's like oh yeah definitely

recession

but I think you yourself said it earlier

if AI bails everyone out of the

recession

Jerome Powell is going to go down as a

straight up hero I mean nobody's gonna

look and be like oh you know AI save

jpow they're just gonna be like j-pow

did it it's it's kind of like the irony

of if Donald Trump got reelected in 2024

he would have literally sat out the

garbage he was there for the boom time

sat out the garbage

came back from the new boom time

it's possible

uh but uh yeah let's see what the what

the suits are saying because these these

GDP numbers are are just mind-blowing so

they are saying

uh okay here treasury data provides a

further boost uh yeah oh sorry Thursday

data not treasury data uh this morning's

data isn't going to help put short-term

rates back in their box initial claims

printed well below the uh the

expectation uh with the prior week

revised down the warning signal from the

weekly figure has slackened in intensity

particularly with the rise in consumer

continuing claims also leveling off in

other words the recessionary warnings

kind of going away meanwhile real GDP

growth was revised up this is real which

is inflation adjusted from uh 1.1 to 1.3

percent in inflation measures both Total

deflator and core deflator were

unexpectedly nudged higher the higher

trajectory for both prices and nominal

GDP is certainly not consistent with

second half rate Cuts true and it's

totally surprising

and it's not totally surprising to see

the June fed pricing tick up to a new

recent High that's what I showed you

about uh oh oh we're getting a take up

and potentially another hike coming here

U.S data are all bearish for treasuries

U.S economy is growing faster with lower

jobless gain claims and higher inflation

than we thought the message we received

from three U.S data prints this morning

uh were that and the upshot of those

figures is that fed still has work to do

to bring inflation down

uh these data will keep 2023 rate cut

expectations shrinking but it's funny

you know as the rate cut expectations

are shrinking the stock market is

freaking Rising look at this is insane

this is like 20 20 all over again uh

look at this you see this right here let

me show you where the data came out you

ready

okay hold on hold on wait for it wait

for it the data came out right here here

this is where the data came out it's

like somebody spilled the punch bowl and

everybody's like

yay party get it she's so ridiculous

ah

I I mean like look I'm happy I'm all in

on stocks man you know like I I've been

waiting for for this excitement again

I'm heavy into chips I've got a lot of

exposure uh uh to to Nvidia and Tesla

and NASDAQ style stocks and stuff like

that uh yeah you know I I wish like not

all my decisions were perfect by no

means am I trying to say that I mean

there there are some decisions I make

where I'm like okay I was off on that by

a day that's always gonna happen but um

so so like overall I mean obviously I'm

happy but uh you know do I wish I bought

YOLO call options when we were talking

about in the course member livestream

yesterday morning on on a video hell

yeah

but I'm so you you can't think like that

otherwise you'll always be depressed uh

and then you'll turn into an alcoholic

and kill yourself okay that sounds

really extreme but it's true you you

can't you can't let the little Miss and

every single person watching this has

had the feeling before that that feeling

where like you get a Feeling your gut

and like your eyes like water up a

little bit it's like damn it man how

could I have been so dumb I made this

place you couldn't have known

you couldn't have known that's the thing

like you you have to you have to accept

that you know there's so many things

that we just couldn't have known and and

that's it's like you don't know is is

the Russian roulette table or the Russia

is the roulette table gonna land on

black or red we don't know uh so um it

makes it entertaining but uh just as

exciting as it is when you're right

you have to you have to get over the the

sort of like sadness in the event that

you're wrong but that's okay you just

have to adjust uh and and do the best

that you can with the information that

you have available

so uh yeah I mean so I think this is an

interesting question somebody donated

five dollars saying as a fund manager

how do you balance not buying big Banks

now at a discount and instead spend 400

a share on Nvidia and risk a bubble pop

I mean that's an interesting uh argument

so I'm not buying uh at least at this

point I just want to be clear like I I

haven't made any decisions to buy Nvidia

at 400 but I understand what you're

saying like I'm obviously been talking

very bullishly about Nvidia and and

maybe 400 is actually a good price I

don't know

it there there are a few things that

matter

um

first of all with uh with with Nvidia we

have to look at two things one how much

is the growth of Nvidia at potential

long-term risk as well as where are we

in the macro cycle well for the macro

cycle I believe we're in a Nike Swoosh

recovery in a Nike Swoosh style recovery

you don't want low growth you want high

growth because the high growth is where

everybody's going to flock to all the

cash that's on the sidelines the money

that's in bonds money market funds all

the money people have saved for the last

two years that's going to go straight to

growth when 2023 is over and people are

like what the hell I made five percent

on my treasuries but the NASDAQ returned

50 percent

damn it I got screwed by 10x you know

people are gonna realize the opportunity

cost of cash cash was great in 2022.

cash sucks so far in 2023 because in the

Nike Swoosh recovery so with that you

want high growth well where are you

going to see the highest growth well

sure you could argue that JPM is going

to see high growth because of the the

nature of people wanting to go to too

big to fail Banks and sure there's some

argument that maybe that's the place to

invest in uh and I think that lenders

will do really really well when we have

a refinancing boom when rates start

falling but that could be years out and

I don't know that the growth rates for

banks are that enticing especially with

the future regulatory risk of now having

three banking crises within the last 15

years whereas so what you really have is

you have the government that's probably

going to try to constrain banks with new

regulation and so that'll affect their

profit at the same exact time the

government is basically giving the nip

to chip companies via massive stimulus

money and that's where you actually have

massive growth

and our GDP over the next decade

according to the financial times

globally uh could be 20 percent higher

uh because of artificial intelligence

it's insane

so uh you know as as a fund manager uh

and just sort of as a regular investor

you know because I I don't want to talk

specifically about any particular fund

because they don't get in trouble but so

as just let's just say as an individual

investor I'd like to look at what has

pricing power over the next seven years

and I don't really care if Pepsi thinks

they have pricing power you know from q1

of 2022 to q1 of 2023 I really don't

care that's that's going to be a

short-term party it's not the party I

want to show up at I want to be at the

party where uh you know in seven years

you're gonna be like okay yeah

this is the new world we live in uh so

so that's that's my belief and that's

why I'm a big fan of chips because I

can't pick software software is really

tough to pick uh and um energy and and

autonomy so robotics that's that's where

I want to be that's that's the future

for me so hopefully that's a that's a

good answer

but uh good question thank you

so uh but yeah at this point then you

also have to balance out like okay great

Nvidia is doing great

but uh you know there are other

companies that have somewhat been left

behind in the magnitude of rally to some

extent Tesla has still been left behind

and this is normal like stocks move at

different times

but really to some extent

Tesla's got a lot of room to still run

you just have massive lingering

political hate for Elon Musk and cars

are very difficult to sell when interest

rates are this high

server chips are not that hard to sell

because you're you're taking companies

that are already spending billions of

dollars at capex and you're just

allocating it to Nvidia

it's crazy

it's it's absolutely crazy but it's it's

also very very exciting so great GDP

numbers very excited uh about uh these

GDP numbers so very good

so with that said make sure you check

out the programs on building your wealth

either stocks or real estate we do

fundamental analysis every single day uh

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High detail on just facts and reports of

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[Music]

now I want you to know this when it

comes to AI

time is what's going to make you money

and if you can prove that value to an

employer you'll always be able to be

employed so this is another way of

making sure that you don't get replaced