The MOST Important Report Yet (WARNING).

there's good news and bad news about the

economy and this week is going to be one

of the most critical weeks that we've

had all year long I'm going to start by

first breaking down exactly one of the

concerns one of the concerns we face now

is that broadening employment growth

which is actually really great for

Humanity and people and the economy and

GDP across the board broadening

employment growth potentially leaves the

Federal Reserve in a place where maybe

they need to wait a little bit longer

before cutting GDP estimates right now

are sitting at 25% via the Atlanta real

now GDP measures and one of the reasons

TS Lombard suggests we have time to wait

before Cuts is even though Tech and

finance has had way more employment than

our previous trend line which means we

have this extra sort of level of fat

right here here that's all the extra

sort of fat of extra

employment we don't have that extra fat

in fact we're too lean in the category

of restaurant Health retail versus prior

Trends and that leanness as well as in

all other private sectors that leanness

which is below Trend could actually lead

to a sustainable continued beat of jobs

numbers look at the jobs numbers that we

just got Friday we substantially beat

everyone's expectations I mean there was

no economists the last week that thought

we were going to get the jobs numbers

that we did in terms of how high of of a

number we got and we even got a positive

revision for once uh in January the

January numbers were revised up for

employment the survey this Friday was

214 we got 303,000 uh and we even saw

the household survey move up so across

the board that last employment or board

is like this economy is doing great so

obviously the good news here is the

economy is doing great and what does

well with the economy well things that

tend to do extremely well uh regular

spending that's not to say that

consumers aren't loading up in debt but

really while I do agree the next

recession could be driven by a Consumer

Debt bubble basically because people

will buy now pay later everything and

eventually you'll have to refinance all

your buy out pay laters and if you can't

do that because you lose your job well

then even a problem but that's nowhere

close I don't think I think that's still

years out what's actually much more

interesting is like what we wrote over

on ec.com is companies like Blackstone

are now making bets that the real estate

market is bottoming they are now

acquiring air communities it's a luxury

real estate reate uh that's redundant

real estate reat but anyway uh it's at a

25% premium for $10 billion because they

see the recovery the pillars of the real

estate recovery coming into place they

bought a stake in a $17 billion loan

portfolio backed by a lot of real estate

last year in Signature Bank in December

they spent seven or or have agreed to A7

billion partnership with digital realy

for data centers uh and then earlier

this year they bought a a 38,000 single

family home portfolio for $35 billion

Blackstone doesn't do this if they don't

if they think the economy is about to

crash or we're about to go into a

recession so really recession bets are

kind of Le leaving the table this is the

same thing as what we saw with uh well

what Janet yellen's been yapping about

which is hey no recession soft Landing

right now we do have some issues that

come with that one of the issues that

comes with that is the Fed funds

forecast for rate Cuts is is starting to

shift the market is starting to pair

expectations of Fed rate Cuts we went

into the year thinking we were going to

get rate Cuts uh in the neighborhood of

six to seven times uh well now we're

only pricing in a little bit more than

rate cuts for the year the blue line is

the Market's expectation of the FED

funds rate and the pink line or purple

line here is where the FED has forecast

via their summary of economic

projections where rates will go now the

issue with this is jome Powell I think

is stuck between a rock and a hard place

because he keeps telling us that

inflation expectations are anchored that

they're well anchored and they've

remained well anchored but at some point

I think jome Powell either needs to give

up the lie or start

projecting reality here but he might not

and I'll tell you why he might not but

these are inflation break evens which

are one measure of inflation

expectations you could say that the

University of Michigan inflation

expectations have been stable but when

you look at the five-year break evens

what you find is we're at the highest

level we've been over the last 5 years

and we've been skyrocketing on inflation

Break Even since December this is

leading uh bonds to move up you've got a

uh you know a sell-off in the bond

market it's not a surprise to me that

you have a sell-off in the bond market

uh you're at 4.42 on the 10 year right

now why is it not a surprise to me

because right now you don't have to buy

bonds to get a delicious yield I'm not

affiliated with this product so this is

not a sponsorship uh but look at this

you could just go right here go to a

Vanguard treasury money market fund to

Ticker vusxx I get nothing by you

investing in This I Promise uh have

nothing to do with them uh I I don't

even invest in them personally I use the

Fidelity version of this but I actually

think the Vanguard one's a little bit

better if you have exposure to the

Vanguard one or you already have

accounts with them but anyway the

Vanguard one

5.27% 7day sec yield you do have a nine

basis point expense ratio and a 3K

investment minimum but look at this

you're getting

5.27% minus this you know 0.9 so you're

getting

5.18% on on a t bills you're at like

5.1% you're getting more money in this

money market than you're getting on t-

bills right now now of course if rates

go down this can fluctuate but right now

expectations are that rates might

actually go up not down see the problem

is repeating the mistake of the 70s

where you cut rates and then all of a

sudden you have to raise rates again and

you send a signal to the market that the

FED doesn't know what the hell it's

doing and the FED is already on thin ice

they screwed up with the inflationist

transitory argument with how late they

were to raise rates and yes while it may

be true that eventually inflation will

be transitory it wasn't good enough to

help anchor inflation expectations down

so you create this nasty risk factor now

that personally I think the fed's

probably going to have to wait to cut

rates until September or November before

actually driving uh uh rate Cuts because

if they cut too soon with these sort of

job numbers and these lagging gains for

job numbers then what happens we risk

having to raise rates again and then we

break inflation expectations that would

be the worst case scenario especially as

we're seeing wages also rise remember

folks California just raised its fast

food minimum wages to $20 an hour unless

of course you're associated with Gavin

Newsome that's really a topic for a

different video the Panera Bread

discounts but one of the things you have

to consider and a lot of people won't as

say go well that's just cforia that

doesn't affect the rest of the world or

or or the United States economy well

according to Bloomberg intelligence it

does they actually think that ECI the

employment cost index could come in 2%

higher than where would otherwise come

in simply because of California's wage

increases now again I I'm supportive of

people making more money I think that's

actually what expands this economy it's

one of the reasons you could

see I think a company like Amazon hit a

crazy new all-time high people just have

more money they make more money and yes

prices have gone up but now people are

finally getting real wage gains again

we're still behind you know people still

have some catching up to do but I think

that catching up is really suppored by

what we're

seeing in labor market

factors and that could really Drive cons

assum a consumer-led recovery and a

strong economy and no recession now of

course we know that

Unemployment uh lags right when this

turns and we start getting Mass layoffs

then that's when we start having rapid

problems but we're just not seeing that

we look at layoff trackers layoff

trackers are like a third as high as

what they were in uh 2023 at the

beginning of 23 but on top of that you

have to consider this layoff trackers uh

are occurring a lot in Tech and finance

but in Tekken Finance that's where you

have the excess jobs anyway you're not

really getting as many layoffs in

restaurant Health retail certainly not

government if anything that's where

you're getting a lot of job gains so

this econom is on a lot firmer footing

than what we'd like to think now don't

get me

wrong gold prices are going up partly

because Chinese investors are going all

on gold ETFs because they think their

economy is going to start or their

government their well it's basically the

same over there their Central Bank and

their government uh is going to start uh

basically stimulating again so they're

buying gold as a hedge uh some people

see gold as a fear indicator that things

are about to go really bad and it is

true fiscal spending is off the walls uh

and off the charts you've got Consumer

Debt which is at record highs but again

if people have the money to pay it and

we're not getting the leading indicator

yet of layoffs or even War notices which

we're not war notices are relatively

stable compared to last year if anything

they're slightly trending down then

maybe it's too soon to say the FED needs

to go for Rapid Cuts remember they could

cut 2% in a day why do they need to

Signal the start of rate Cuts now and

start moving down 25 bips probably don't

have to frankly that at this point is

not necessarily bad for the stock market

anymore the stock market is actually

moving up as rate projections are moving

up so you're actually sort of saying all

right economy is good rates aren't going

to come down immediately party keeps

going so you've kind of switched to this

good news is good news environment as

opposed to oh no yields up stocks down

not seeing that as much anymore so maybe

it doesn't even really matter maybe this

Wednesday will be the biggest tell after

all this Wednesday is a day we not only

get the FED minutes which kind of

already expect to hear the same thing

we've heard from the FED meeting so

don't really care about that what I care

most about is going to be that CPI data

the CPI data for uh this month is

critical why because you have CPI month

over month expected to come in at .3 CPI

month-over-month core expected to come

in AT3 as well and this data set for

March is almost the equivalent of three

CPI reports put together because if we

get a bad CPI report this Wednesday then

it means January February March are all

bad and it's going to be bad news for

the economy well maybe not bad news for

the economy but it's going to be bad

news in the short term for for rate cuts

and then of course stocks that relate to

rate Cuts if we get a good CPI report it

kills the bad news of January February

and it basically just means solar

eclipse baby moon oh but what does that

mean potentially going into CPI morning

Wednesday it potentially

means we might end up seeing some

aggressive selling if it's anything like

last week before the jobs dat on

Thursday Tuesday so I wouldn't be

surprised if we get some aggressive

selling tomorrow into the close as

people get nervous about oh no cpis

tomorrow pull somebody off and if we get

a good CPI report plow in like back up

the truck plowing

in

um so watch your trades over the next uh

24 to 48 because this this CPI report

could be the most important report of

2024 let's see what happens keep in mind

if it's bad you've already got people

like Jamie dime and the CEO of JP Morgan

Chase saying yeah you

know rates might go all the way up to 8%

or more 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 ising in CR congratulations man

you have done so much people love you

people look up to you Kevin PA there

financial analyst and YouTuber meet

Kevin always wait to get your

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broker and becoming a stock broker this

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