The Fed JUST Crashed Markets | Prepare for THIS *Now.*

China is doubling down on its covet zero

policies the bank of England is going a

little more dovish than markets expected

yet Jerome Powell is doubling down on

what appears to be this core mission to

get all stocks to lose at least 50

percent of their value as we saw in

videos I made yesterday Jerome Powell

seems really frustrated at the thought

that stocks could potentially Rally or

move up not only because of what we saw

during the press conference of Jerome

Powell doubling down on talking the

market down as soon as there were any

kind of a potential thoughts that the

market might actually be going up but

it's literally what we were told by

Nikki leaks in the Wall Street Journal

where the biggest risk to financial

conditions for the Federal Reserve is a

loosening of tight Financial conditions

which we would see a loosening of tight

Financial conditions if we saw treasury

yields fall and a sustained Market rally

undoing the federal reserve's work so

another other words there's this direct

correlation between markets going up and

a Federal Reserve feeling like their

work is being undone so does the FED

actually have any freaking clue as to

what it's doing because after all we

have to say it's very weird that this

morning the bank of England came out

with their highest rate in 33 years

highest rate increase in 33 years they

came out with a 75 basis point hike but

what was fascinating about the 75 basis

point hike is they combined that with

actually a dovish message they combined

that by saying that terminal rates that

is Peak interest rates at the bank of

England will actually likely be lower

than what the market is expecting we got

the exact opposite here in America which

is hey we've got a little dovish memo

that we're going to take into account

all the cumulative lags but we're going

to raise rates more than markets are

expecting and at this point I just feel

convinced that Jerome Powell has

absolutely no clue what's going to end

up happening with interest rates or

quantitative tightening I think he has

no clue and he said himself that the

markets that we're in now are modern

economies that have differences in them

than what we've seen in the 1970s era

inflation or any time before that and as

a result I think Jerome Powell is

basically politely saying look

it's November and like Kevin said before

the FED meeting of November the Federal

Reserve can't risk going super dovish

right before two jobs reports and two

CPI reports let's wait for those reports

let's wait for those reports to come out

and hey you know what if those reports

come out and show that joblessness is

increasing and that CPI is falling

faster than expected hey maybe then it's

time to take the foot off the brake

maybe then we can U-turn in fact that's

what Jerome Powell suggested he told us

yesterday that they would rather over

tighten and start printing money again

then under Titan and risk losing control

of inflation and that tells us bluntly

especially since right after that he

said by the way we haven't started over

tightening yet he thinks we've tightened

a normal pace which basically means we

can still over tighten it's kind of like

we're going 60 miles an hour and he's

like hey you know if we hit 80 miles an

hour we could always hit the brakes by

the way we're not at 80 yet so let's hit

the gas little bit more on rate hikes

and aggressiveness and hawkishness right

so what do you have is a Federal Reserve

that's basically telling you look so far

we're failing and as we continue to fail

we're just going to have to get more and

more aggressive and we're going to do

whatever we need to do to be correct

about how we handle inflation and if

that means reducing the value of your

stocks the value of your home the value

of your home equity which is at record

highs I'll have a separate video coming

out on home equity

what ends up happening you get a fed

that's more aggressive and of course we

do have the hope that the next reports

are going to be good but hope isn't

really the best investing strategy or at

least I should say hasn't yet been the

best investing strategy sure if the next

two CPI reports and two job reports come

in soft dronepal can not only reduce the

pace of hikes to 50 in December but

maybe they'll actually reduce their

summary of economic projections maybe

right now they're saying hey today the

summary of economic projections would be

worse than the terminal rate instead of

being 4.6 would actually be five percent

or five and a half percent but what if

those reports come in bullish and what

are the expectations for the jobs report

that comes out tomorrow I have those

expectations right here in addition to

those job expectations what do we think

about CPI expectations going forward

into next week let's talk about both of

those right after our message from our

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expectations and could we potentially

beat these expectations which would lead

to an actually dovish fed rather than

this aggressive fed that just says

stonks should go down well regarding

jobs we are expecting tomorrow the jobs

report to come out at 5 30 a.m and when

it comes out at 5 30 a.m California time

we're expecting a change in payrolls of

200 000 that means a gain of two hundred

thousand jobs we expect most of those to

be in Leisure and Hospitality as we saw

in the ADP private payrolls report

yesterday that is a Slowdown from the

263 000 jobs that we gained the last

time and it would potentially take the

unemployment rate up to 3.6 percent

while keeping average hourly earnings

stable at point three percent and

reducing the average hourly earnings

year over year to four point seven

percent with labor force participation

also staying stable at sixty two point

three percent those are the expectations

for the jobs Market that actually

doesn't show you any kind of meaningful

slowdown yet but if we tomorrow get a

jobs report that comes in Weak and we

get one that suggests hey we only added

50 000 jobs or a hundred thousand jobs

way less than the expectation or we're

getting anything close to zero wow we

went a month without actually on net

adding jobs because you've got people

like Elon Musk now threatening to lay

off fifty percent of Twitter stuff which

would be somewhere around 3750 employees

hey that's fewer jobs created right and

if all of a sudden you get on the

balance of having more negatives in a

month then that actually shows that the

FED is potentially going in the right

direction and will much more likely be

reducing wage inflation especially since

people are unlikely to quit their job

jobs to go to an uncertain path of a job

market that might not actually be hiring

in a recession so there's jobs then on

the 10th which is a week from today it's

Thursday at 5 30 a.m we're going to get

the inflation report and now I have to

tell you I'm actually kind of excited

about these estimates because there's

one thing I want to tell you about

estimates it's that they're almost

always wrong the problem is when the

estimates come in really really low it's

hard to show a beat because markets are

already expecting that inflation read to

come in low so for example when markets

are like oh we expect inflation to be

0.2 percent month over month it's like

Ah that's already pretty dang low like

how are we going to do better than that

expectation right

well listen to this expectation the

expectation for CPI month over month is

0.7 that's an 8.4 annualized Pace I'm

actually optimistic we can beat that not

only that but core CPI numbers are

expected to come in at point five

percent uh that excludes food and energy

this is going to be lifted up by housing

but if we could get larger declines in

other sectors we could actually anchor

down that services-based inflation from

housing that expectation is point five

percent it's also not great it's a six

percent annualized rate and we see the

CPI year-over-year figure coming down

only from 8.2 percent to 8.1 percent

which actually isn't a really bullish

CPI estimate in my opinion it's actually

a pretty bad CPI estimate but I think

it's one that we could meaningfully beat

to the low side which could be really

good and so here's the fact here's the

bottom line about whether markets are

going to go down another 50 percent or

not and you have to place your bets on

what you think for the next two jobs

reports and the next two CPI reports do

you think those reports are going to

show that we're starting to lose

momentum in the jobs Market that things

are slowing down at companies that we're

seeing layoffs not just at Twitter but

Open Door laying off 18 of their staff

and more that we're seeing these

slowdowns

and that CPI is actually in the next two

reports going to come in lower than

expected and CPI is going to fall

quicker than expected if you believe

that for the next two reports between

now and the December meeting we could

actually end up having a drone power

that in December says look we're going

to go 50 but we might actually be good

we get really good reports these next

four reports two jobs two CPA reports we

might get a Fed that literally tells us

you know what

we we actually might drop to 25 in

January and and just stay stable and

hold by March

that would probably lead to some

substantial bullishness now I know that

the Federal Reserve because I started

with it as worried about causing a stock

market rally

but I don't think the FED cares if the

stock market rallies as long as the

reports are coming in good if the stock

market rallies and the reports are

coming in bad he's going to talk the

stock market down and this is where you

have to ask yourself if you think

inflation is going to get worse and you

think that labor market is going to

remain strong going into December with

these next four reports then you

probably want to be shorting this Market

you probably don't want to be long

stocks because there's not actually

going to be a dovish fed you can only

get a real dovish fed when these reports

come in positive now I think the

expectations are such that we set

ourselves up for positivity especially

with what's going on look at some of the

industries okay residential investment

slowing it companies like Generac even

though you've got Beats at companies

like Enphase and Sunrun recently we are

starting to see some signs of slowing

and cracking in household spending

basically this fixed investment starting

to decline we're seeing layoffs and

hiring freezes across the board not just

at tech companies but at manufacturers

at Autos companies but also take a look

at this report from Fast Company 85

percent of small businesses say they

plan to implement hiring freezes during

the economic downturn 78 of small

businesses plan to lay off employees 87

percent of small businesses have to

re-examine fixed costs like leases and

insurance benefits and potentially ask

for discounts the Jamba Juice I worked

at as a kid just went out of business

crazy 43 percent of small business

owners are planning to use Freelancers

to fill the Gap here's a Barons article

hiring is slowing in the downsizing

events have are beginning to occur

retailers so far cutting 11 of their

Workforce Amazon not increasing the

number of seasonal hires it's looking

for this seasonal sector layoffs in the

tech sector jumped 86 percent for the

first nine months of the year compared

with the same period last year Walmart

is cutting 200 Corporate jobs GE cutting

20 percent of its U.S Workforce Bed Bath

and Beyond well I mean they're gonna go

bankrupt here reducing its Workforce by

about 20 Wayfair 5 Peloton uh another

600 job Cuts obviously Tech but even in

financial services Goldman Sachs down

one to five percent uh advertising

companies like Google and snack snap

plus snack snap planning uh layoffs so

you're seeing the inflection points it

just unfortunately is going to take a

while to see these actually come to

fruition hopefully they come through

within the next uh four reports here

before the December meeting but things

might just take longer I do believe

wholeheartedly though because quite

frankly j-pow doesn't really know the

impact of the tools he's using he's just

gonna be really aggressive until he

doesn't have to be really aggressive

anymore so if we actually start seeing

some of these cracks show up in the data

which unfortunately lags and we have to

have a lot of patience for it to see

then we don't have to pay per hand we

don't have to capitulate and we can hold

through what could be another two three

months of pain

and hopefully we see some light at the

end of the tunnel then they really

believe that once we see that light at

the end of the tunnel and we see that

fed policy is working we're not going to

be dragging the anchor along the bottom

of the market anymore which right now

we're a teeny tiny little bit above that

bottom but I do think we're going to be

bouncing around and range bound until we

actually have good news on those reports

I think it's coming it's just more hurry

up and wait