yikes - big poopey doopey

all right the inflation report this

morning was absolute poop like poopy

doopy it wasn't good now there are some

potential upshots as to why it wasn't

good I'm going to start with those

because I am generally a believer that

we are more likely to face deflation

than we are to face a second wave of

inflation now on a day like today that

sounds like a very stupid thing to say

but you know me I'd rather give you my

opinion than lie to you and make some

random crap up just to go with the trend

so what happened here well there are a

few things that could explain what's

happening and again we'll start with

that uh first is seasonal adjustments uh

and revisions so every January the

Bureau of Labor Statistics yes which

does the CPI report uh they revise uh

their waiting and uh they they make

these changes to what categories they

include in CPI and which they don't and

that actually led

to disinflation in the second half of

2024 being revised down at a faster Pace

than previously expected which means

good news just got buried into the

second half of last year so inflation

was now according to the revision lower

than what we were told in the last 6

months of 2024 okay well anybody who's

been studying company earnings calls

like us in the course member live

streams we already know

that we already knew that a long time

ago speaking of which by the way uh this

morning was the first uh course member

live stream uh and we're doing this

daily now where we started at 510 a.m.

and we went all the way to about 6:47

a.m. usually 6:45 is the goal uh so we

went you know we did the whole Market

open live stream and we're doing trade

ideas which was fun we're like all right

here's an opport

paler got high volatility sell put on

paler all right it's at 365 boom 20

minutes later you'd be up like 15% on

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sell put which obviously carries less uh

risk than like a YOLO you know buy put

or or buy call but anyway if you're

interested in that kind of stuff and

seeing the difference between credits

debits volatility you know we have a PP

coupon code over at M kevin.com but

anyway these

revisions un fortunately when when you

lower the second half of the

Year things are going to look hotter in

your New Year comparing to that old year

on that month-over-month

basis and that's what we got

unfortunately uh the month-over-month

numbers were hot we had our largest pop

in inflation since March and now people

are wondering oh my gosh are wages going

up feeding into uh inflation oh no this

is bad because that means the wage price

spiral could take effect and and we'll

have inflation that runs

away no it's not going to happen but at

least in the near term I have to say

it's this is a hot inflation report you

know you could you could argue that

maybe it had to do with the fires maybe

it it had to do with you know some

rounding but honestly it was a hot

report so let's just be real it was hot

only five out of 73 forecasters surveyed

by Bloomberg had core inflation going

up0 4% this month that's you know 5

divided by 73 that's only

6.9% uh of uh

forecasters super core inflation was up

76% in one month that is the most since

January of 2024

that's a year right and if I multiply

that by 12 core super core super core by

the way takes out Goods energy and

shelter super core was up 9% on an

annualized basis that's not good now

again maybe it's because of the

revisions and I hate that they do this

because it makes it so hard to sort of

analyze the data it makes it really hard

to analyze the data but that's what they

do this is just the way the market you

know the the way the cake is sliced if

you will I I don't know that's probably

a bad analogy but looking at some of the

data uh shelter like owner's equivalent

rent and uh rent of primary residence

that was stable from last month now it

would have been nice to see more of a

decline but it was stable from last

month and 95% of shelter

inflation is made up by owner's

equivalent rent and rent of primary

which was flat since last month which is

why I think there was some rounding

going on because the overall housing

item went up 04 versus. 3 last month

which I thought was weird because the

95% contributed to that category was

stable so that's why I think there's

some rounding going on that we're not

seeing but anyway lodging away from home

hotels were up 1.4% insurance for

households up

1.1% uh Medical Care Services up

9% transportation services were up 1.8%

led by truck rentals and repair work as

as well as motor vehicle up Insurance up

again 2% air airf fars were up 1.2% this

feels broad-based and again the the only

thing that I could say that is

potentially an explanation for this

would be

revisions but what's not good about this

is you're going to get people say oh my

gosh this is just like 2024 where now we

get three months in a row of bad

inflation data and uh and then we're

back to second wave fears of inflation

so obviously Bond the bond market is

selling off uh you've got the 10year

treasuries up uh 11 basis points you've

got literally the odds of a rate cut

this year have just collapsed to maybe

getting one rate

cut in

December that is we are only pricing in

one rate cut between now and December

now it's entirely likely that uh drum

Powell had a heads up on this CPI report

as he went to testify because he's like

yeah no no plans to cut rates at this

point and honestly with this inflation

data you can't blame him now you know is

Trump going to try to twist his arm of

course but I mean hey Gold's almost at

3,000 bucks so I know some people are

going to be excited that this inflation

report over the next 30 days is going to

push gold up bonds up or sorry bonds

down bond yields up gold up uh but you

know it could end up being a little bit

of a wait for shs as well uh and this is

where you sort of get this broader

concern that at some point if this sort

of like NeverEnding rally since uh the

you know just before the Trump election

and the Trump election that never ending

rally you know could that start facing

some headwinds under the weight of okay

we're not getting support from Ray Cuts

we're also starting to miss on guidance

uh you know this morning in uh and I've

been mentioning this for a while now but

on super micro I expected there wouldn't

be any issues with their financial

uh and and sure enough they said no

issues with our financials however they

did guide lower for Q2 so I think you

probably Peak out around this 4444

resistance level get that Alpha report

for free for the rest of the month still

at meetkevin.com otherwise course

members will get it uh for free forever

uh but anyway uh we we s it out together

this morning it was great but something

to to really watch for

now is how

does the market react for the next 30

days to this potential that okay yes we

had to deal with the revisions and maybe

that comparison hurts but on the flip

side we were told that hey inflation in

the first quarter of 2025 should be

lower because you're comparing to the

higher inflation that you had in the

first quarter of 2024 you know the whole

second wave of inflation well

that's not what we got this morning so

as much as I want to be bullish on

disinflation and we actually did get

more

disinflation it was just buried in the

second half which is a pisser there it

is where we thought it would be but now

all of a sudden the data now looks a

little hotter where it matters in

January because that's the most recent

data sort of makes you scratch your head

and go man I pay so much attention to

this data kind of sucks anyway

so in the near term there's probably not

a great Catalyst unless there's some

kind of shock to the market for bonds

rallying uh

however this does also put some sort of

lid

on how aggressive can the stock market

keep going here we're going through

earnings earnings weren't really enough

of a catalyst to pull the NASDAQ to

higher levels uh if you look at the

NASDAQ 100 look at how we've been range

bound how we've been stuck so in fact we

could go in here together and just draw

a um let's draw a trend line and let's

go in over

here this longer term

uptrend just became a

ceiling now we've got a

few we've got sort of this this wedge

forming right here

and so it'll be interesting to see if we

end up getting

rejected by either of these and we

slowly

bleed uh now not calling for a market

crash I'm not short the market or

whatever it doesn't matter but the

things that would really push us to the

next level this is this is what I always

like to think of you know for the more

short to medium term in the long run

obviously the market should be fine even

if there is a recession the market Will

Survive and be fine but think about

this uh what would really help stocks

right now at these valuations well

number

one uh more growth and earnings okay but

but we're getting more misses and uh you

know flatter growth right

now uh certainty on tariffs and

War me uh although uh usually

tariffs IMO are by the dip I wrote by

the tip by the dip opportunity usually

so I'll just go ahead and put the uh the

opinion Emoji there we go uh and

then low

inflation and rate Cuts would help but

that's not happening right now so all

three of

these unfortunately are not happening

right now

which isn't

great uh and and remember we are on the

people ask me you know Kevin where are

you on the bare bull scale I'm at a 4

and a half the reason I'm at a 4 and a

half is because we we I feel like we're

we're on the edge where we've sort of

like we've hit Peak hit Peak now slowing

on the edge of uh Glory I like to say on

the edge of glory which is as soon as

the layoffs come you fall off the

clip and I don't know if that's going to

come because of do or because of the

government spending uh which I guess

those two are related or because

companies are hiring less so far we have

not seen them just know that as soon as

we see them we're on the edge of glory

and it tips

over now Powell is going to use the

inflation report this morning to

reiterate how ah see this is why we're

going to hold which will be unpopular

because people are going to complain to

him again about well the cost of eggs is

a

15% yeah yeah yeah yeah we

know

anyway uh those are my thoughts on CPI

this morning hopefully this is helpful

to you I really appreciate yall uh

supporting the channel and uh hey I I

I'm never going to keep trying and

working for you so appreciate you see y'

all in the next one goodbye and good

luck why not advertise these things that

you told us here I feel like nobody else

knows about this we'll we'll try a

little advertising and see how it Go

congratulations man you have done so

much people love you people look up to

you Kevin P there financial analyst and

YouTuber meet Kevin always great to get

your take