*Critical* Watch BEFORE Tuesday.

hey everyone me Kevin here this is so

exciting and such an honor coming to you

from the New York Stock Exchange we've

got trading booths behind me we've got

CNBC right here there is the Bell that

we're going to ring for the closing such

an honor presidents have been up there

celebrities this is so cool and today we

get to ring the closing bell this is Jim

Crane Cramer's uh CNBC Mad Money set

when he films on the floor they bring

out the buttons I really wanted to push

the buttons but he keeps those under

lock and key because those are special

buttons but in this video we're going to

talk about expectations for how CPI

Tuesday could affect a pricing power

play because that is why we're at the

New York Stock Exchange we believe there

could be an opportunity now to make bets

on pricing power you all know that I'm a

licensed financial advisor but this

video is not personalized Financial

advice it's all about pricing power so

let's think about this on Tuesday at 5

30 a.m We have the potential for

reiterating

what we had in the last CPI report

exceeding what we had in the last CPI

report or going right back to the

disaster we've had over the last six

months we thought the bottom of the

market was somewhere old in the summer

that didn't happen we are still dragging

an anchor along the bottom of the market

and pricing power will get substantially

affected by this CPI report here are the

expectations

so in November we got the October CPI

that came in well below what Bloomberg

analysts were expecting we so here's the

lay of the land a Tuesday the 13th at 5

30 a.m we're going to get a CPI report

this CPI report is either going to

reiterate the downtrend that we have and

hopefully more of a downtrend than what

analysts are expecting remember the last

CPI report that actually started a rally

and started Jerome Powell calming down

Jerome Powell stepping back on his

aggressiveness because he realized the

lagging effects of monetary policy are

starting to hit the more lagging effects

of monetary policy start being realized

by the fed the less pressure the lower

the potential terminal rate for the fed

the lower that potential terminal rate

the more likely pricing power stocks I

believe no guarantees do well this

Tuesday is so critical because it's the

second CPI report that could reaffirm

falling inflation in a row that's so

important because every time we've had a

report previously what have we been told

we've been told it's just one report

it's a one-off one report doesn't make a

trend this Tuesday is so critical when

we talked with Peter on the floor of

this trading floor we know that when

reports come out they are volatile it is

like watching the Super Bowl here at the

exchange and this is this would be the

place to be for CPI but as individuals

who are investing and thinking about our

personal portfolios what are the

expectations for CPI on Tuesday and how

could they affect the market so last

month we had 7.7 and 0.4 on the month

over month that 0.4 came in below

expectations that's 4.8 percent

annualized what are we expecting this

time well this time on the 13th we have

lower expectations which would be good

if we just met them we are expecting on

the survey 0.3 percent on the month over

month point three percent on the month

over month would bring us to 3.6

annualized in my opinion if we we could

just meet that expectation we could

really see pricing power stocks do

extremely well of course no guarantees

in fact some might say if we get a low

CPI read below expectations here on

Tuesday we could see the beginning of a

Santa Claus rally I'd like to see more

Santa Claus here I've seen snowmen here

but I think after the 13th we might see

some more blow up Santa Clauses Come

Around The Exchange which would be

pretty cool so on the year over year CPI

we're expecting 7.3 percent down from

the 7.7 last time again I want to

reiterate that if we just meet

expectations we will affirm the

downtrend we're looking for and I

believe we could go into an end of the

year rally for Tech and pricing power

style stocks the biggest danger we have

is if we miss expectations to the upside

we will hurt the downtrend we will

remove the second report in a row of

affirming disinflation when we remove

that we'll give more ammunition to the

Federal Reserve and Jerome Powell to say

look we still don't have a downtrend in

inflation we still have wages rotating

up just yesterday we again saw the job

Changers wage gains rotate up this is

not what we want to see just this

morning we had a PPI producer price the

seller side release and what happened

it was mixed it was a mixed bag sure

some parts we can look at came in low

but other parts came in high and this is

a problem when we see Services continue

to press prices up those could trickle

through to goods and other service

prices in CPI now I am personally

hopeful that in this CPI we are going to

see a consumer driven report that is

hopefully companies aren't pricing

through all of those PPI gains we saw

leading inflationary prices to continue

to move up we want to see consumers

keeping a lid on those how do we see

consumers keeping a lid on prices we see

them not buy as much we see inventories

go up even a company that has extreme

pricing power that doesn't reduce its

prices like Lululemon saw inventory take

up today or in their earnings report

yesterday that's not necessarily a bad

thing though because in my opinion the

companies that I personally am looking

at again not Financial advice for you

even though I'm a licensed financial

advisor not personal advice I believe we

want to go into 2023 looking for

companies that are going to have the

fewest EPS downgrades there are two

phases in a market downturn phase number

one is multiple compression this is when

price to earnings multiples get written

down in anticipation of either High

inflation or requiring higher discount

rates which basically pushes stocks down

give you a quick example stock sells for

25 times earnings it has four dollars in

annual EPS it sells for a hundred

dollars a share very simple if that now

trades for

12.50 times as a multiple the stock

halves goes from a hundred dollars to

four times twelve and a half which is

then 50. but what if that four dollars

goes to two dollars because you have an

EPS downgrade well now you risk that 50

stock that was at 100 now going to

twenty five that's the second phase of a

recession is when you get EPs downgrades

and this is exactly why we're focused on

pricing power and that's why we're at

the New York Stock Exchange to talk

pricing power because pricing power

stocks are companies that may have gone

through multiple downgrades you may have

seen pricing multiples already get

adjusted down you look at Amazon meta uh

Apple Tesla these stocks across the

board technology stocks down 50 55 these

are our multiple downgrades now you want

to do your best in my opinion to stay

away from the next phase of the down

cycle and that's staying away from

companies that are going to revise EPS

down or Miss substantially on EPS the

companies that Miss on EPS are companies

that have to drop prices without being

able to sustain High margins see just

dropping prices does not mean you don't

have pricing power think about that for

a moment if you drop prices but your

input costs plummet you could actually

grow and expand margins and have more

pricing power overall with your margins

how much you're bringing from price down

to net by investing in companies that

have that capability for example we

strongly believe that a Tesla has very

strong pricing power the reason we

believe that is as they renegotiate

their contracts we believe their trade

contracts their commodity contracts we

believe they're going to increase be

able to increase margins while lowering

prices that test is a company with

pricing power Lululemon is a company

with pricing power in our opinion you

look at Nvidia they design chips but

they don't manufacture them who

manufactures them Taiwan semiconductors

both of these companies though pricing

power why Taiwan semiconductors taking

over a lot of Chip production for a

company like apple another company with

extremely high margins on their products

and they're doing so to to move

production to America that's a signed

Taiwan semiconductors has pricing power

when they get contracts from companies

like apple and those are the sorts of

plays we're looking for but we're also

wanting to be cognizant of issues like

macro when we look at a company like

Enphase and we or solar Edge and we see

wow massive margins on batteries what

happens when lithium costs go up how

much is that actually impacting these

battery margins on top of that what

happens when residential fixed

investment declines and we start seeing

housing prices decline is there the

potential that we're going to see less

people investing in solar panels less

people investing in inverters for their

homes or batteries for their homes

because they decide you know what we

just have less available cash remember

JPMorgan expects consumer excess cash

will go to Zero by the middle of 2023.

that is going to hurt a lot of companies

that I believe are price takers price

takers in my opinion and it's not to bag

on any stocks but I believe price takers

are companies that appeal to the regular

everyday consumer grocery stores the

Walmart the target the Staples there

will be a race to the bottom I believe

in these we'll see premium Brands move

to White Label Brands move to Discount

Brands this is how we know margins will

come down at companies that manufacture

these products remember you go buy let's

just say Planters nuts that's a premium

product you go move to the discount

version it's still Planters but often

it's still Pleasures but it's at a lower

margin the companies that sell this

product I believe will end up with less

pricing power via lower margins because

they have to reduce prices certainly we

expect to see that happen in Autos in

clothing we've already seen it happen in

PCS we actually think PCS might be at

the bottom and that this CPI read if we

can get an optimistic read this season

this report the November report which is

going to Encompass the seasonal

adjustments for Black Friday and Cyber

Monday if we can get this report to come

in optimistically instead of friend of

two positive CPI reports in a row we

know what happens next when CPI Trends

down ppi is going to roll over PPI will

roll over services will roll over wages

will roll over and this is something

that's very interesting people say that

unemployment takes the escalator down

and the elevator up the first shoot a

drop is CPI then PPI drops then

unemployment goes up and so this Tuesday

at 5 30 a.m I will be live streaming the

report I invite you there I invite you

to think about your pricing power

strategies and invite you to be ready

for what could be the start of our Santa

Claus rally unfortunately

if we get a bad read

all bets are off and we'll have to be a

whole lot more patient because then

we could be dealing with pricing in a

whole lot more aggressive federal

reserves terminal rate right now

expectations are around 5.2 could go as

high as five and a half some folks say

we might be ready to price in a six

percent terminal rate if we get a bad

CPI read this time because it will again

break the downtrend and we don't want to

break the downtrend if we could just

meet expectations

we're sitting pretty so good luck

everyone thank you so much for watching

look at the New York Stock Exchange I'm

so excited and honored to be here I

cannot wait to ring the bell it's

December 9th which also means there's a

coupon code PP is the code expiring

today check that out in the links down

below for the courses on building your

wealth and we'll see in the next one

thanks bye