nasty

well folks just as it felt like we were

getting some relief in this painful

stock market which has just been

straight

down

we ended up

crushing our five-day rally in the

nasdaq with today

the nasdaq being down two percent why

are stocks falling today are we going to

crash through

uh now new lower levels the nasdaq

getting all the way down to 268 at one

point sitting at just around 290 right

now when we use the etf qqq as a

tracking measure folks

what's next and why are people and

markets so uncertain today a lot has to

do with the numbers that are coming out

this week so let's talk about those

because it's going to give us a lot of

insight into why all of a sudden stocks

ain't very very happy and we got quite a

few of unhappy campers i mean just take

a look at this fastly down 13 up work

down 10

open door 8

peloton another 8 roblox another 8 a

firm down 7.2

and of course you've got tesla also down

3.9

following the potential that elon musk

is going to get sued

by the twitter board twitter of course

being down 6.9

at the time of this recording so what's

going on what's creating all of the

anxiety well folks the answer is pretty

simple

this week in just two days we get a cpi

release that is expected to be the worst

cpi release

yet again in 40 years now it feels like

we've been saying wow this is the worst

cpi release in 40 years for many months

in a row now but it's true we keep

hitting new peaks yes on wednesday at 5

30 a.m we expect a cpi to come in at a

higher rate previously we had inflation

that came in at eight point six percent

year over year and now folks we expect

that to not be eight point six percent

we expect eight point 8.8 at least based

on bloomberg consensus estimates cpi

will be coming in at 8.8

on a month-over-month basis and remember

we can annualize this by multiplying by

12 to get sort of an idea of the speed

at which we're traveling we expect

annualized inflation to come in at one

percent if we multiply that by 12 it

implies we are still growing inflation

at an annualized rate of 12

that's pretty high any time the

annualized rate is actually greater than

what the current inflation rate is it

means you're still trending up and this

is by a large margin by 3.2 percentage

points there's a difference here now you

might think hey but maybe core is

decelerating well not really when we

look at core the projections for core

are going to be about a half percent on

the month over month basis which still

means we're inflating at six percent

on an annualized basis substantially far

away from the federal reserve's two

percent goal and a lot of folks are

suggesting now that hey the fed's two

percent goal is not even realistic

especially since we need to consider

that inertial inflation that happens

when

essentially more people move into

renting from home buying

leading rents to actually go up creating

pressure under cpi because well after

all rents make up about 30

of the cpi read and even that is flawed

it's the owner's equivalent rent which

lags by about 6 to 12 months it's pretty

remarkable but anyway even as we do see

some of these items come down we get at

a peak airline travel season we could

still see inertial inflation hold these

inflation numbers up and unfortunately

it's not a good thing that's the read

that comes out in just two days from day

today of course today we did have small

business optimism that came in low but i

don't think that's really what's moving

markets i think this is a typical

sell the rally kind of market rather

than buy the dip or selling the rip

because folks expect that that cpi

number is going to be pretty miserable

on wednesday now some say don't worry

that bad cpi number is already baked

into the cake and what we're really

expecting is that the wednesday number

will officially be our peak and then

it'll be down in glory since for from

there

sure and that's what we said in march

and april in march and april we said oh

well the march numbers are going to be

peak and so we got our peak march

numbers and then what happened april

numbers came in lower and we're like see

look the peak is over and what happened

right after that inflation came in

higher again come on folks it makes it

very very difficult to get happy anytime

we talk about inflation the only thing

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do fundamental analysis as well for

stocks and real estate

so then on the 14th so we have cpi on

the 13th on the 14th we're going to get

the ppi read and this is the purchasing

price index here

we are expecting a gain of 0.8

on a month over month basis for

purchaser prices and a 10.6

bump year over year

on the purchasing price index these are

also substantially high figures 10.6

percent year over year to get to those

double-digit reads folks tend to get a

little bit more nervous but i think the

most anticipated read of this week is

probably going to be the u of m

consumer expectation survey see we can

go to the bond market pretty much on the

daily basis and see what expectations

are for inflation and expectations for

inflation have been falling in fact if

we look at the five-year break even

right now and we do so together

the five-year break even right now is

sitting at 2.6

that's a relatively low level here it is

on screen you can see year-to-date we're

at almost the absolute lowest level that

we've been for the markets expectations

of inflation which is great but consumer

expectations for inflation have been

relatively stable we've been sitting at

expectations of a one year 5.3 percent

inflation rate and a 5 to 10 year

expected inflation rate of

3

that should be down from 3.1

but still relatively stable here still

above that 2 fed goal i believe if we

end up getting a miss here like we did

in june where initially it came in

higher and was revised down later this

could end up leading to more shock from

the fed especially combined with what

will probably be the highest cpi read in

again last 40 years so these coupled

together make for quite an uncertain

week and could explain why there's some

tumult in markets though

if you take a look at what commodity

prices are doing commodity prices are

trending

straight down let's take a look at this

right here here you can see commodity

prices

or industrial metals in this case this

is the bloomberg industrial

metals sub index which kind of gives you

an idea for pricing of things like

copper or aluminum steel iron altogether

what we end up getting is this massive

decline where we've really fallen about

61.8 percent of the way uh back down to

the lows that we previously had here

in 2020. the fact that we're 60.8 61.8

percent of the way to our uh april uh

and march of 2020 lows is pretty

remarkable and is showing an absolute

decline in those commodity prices which

is good news hopefully for inflation but

it's going to take a few months for that

to actually show up in inflation it's

got to get through production first and

then it's got to get to the consumer

uh and one of the neat things too is you

do have analysts that are substantially

bullish right now and bloomberg is

suggesting that

analysts being this bullish tends to

actually be correlated with some of the

best returns in a market some of the

worst returns in a market come from

times when analysts are actually not as

bullish

and this is obviously creating

substantial debates that we're going to

face in earnings recession and that

analysts are going to have to revise

down their earnings expectations

remarkably but

if analysts having bullish expectations

might be wrong in the short term very

short term say two weeks three weeks

four weeks they might actually be right

in the long term and this is what has me

buying the dip and dollar cost averaging

into my favorite positions whether it's

my m1 finance pie that's a more

diversified pie or some of my higher

conviction names all of which including

every single trade i make or posted in

the stocks and psychology of money group

whether it's options or shorts or longs

or puts or calls whatever they're all

posted folks

something to keep an eye on

maybe if analysts are this bullish

either they're totally wrong or they're

right and in a year from now we're going

to go dang we got a nice 20 or 30

percent return year over year fingers

crossed but hopefully this video gives

you a little insight into some of the

drama that's happening this week and boy

oh boy there's gonna be drama