I’m Nervous about CPI Inflation Tomorrow.

tomorrow we get a huge data release it's

the CPI release it is the last massive

data release of the entire year and it

is probably the most critical in this

video we're going to talk about

mastercard's inflation expectations

we're going to talk about JP Morgan's

breakdown of how much stocks may

actually move tomorrow and we'll share a

new piece from Nikki leaks along with

all my thoughts on it hey everyone me

Kevin here due to my ringing of the bell

at the New York Stock Exchange and us

not having been able to respond to as

many emails as we should have yes we are

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so in this video we'll also be revealing

my personal thoughts about the CPI data

release and what number we might like to

see you tomorrow first MasterCard

suggests that Based on data they're

seeing inflation has peaked and likely

will continue to Trend straight down

however they do think inflation will

remain elevated above the levels that we

saw free covet in addition to this we

got a report from JP Morgan JP Morgan

highlighted quite a few things that were

optimistic and gave us some scenarios of

how stocks may move tomorrow I will be

live streaming at 5 30 a.m I have one

more stop and then I will be back home

the University of Michigan survey that

came out just recently here showed a

preliminary data for December that

expectations one year out for inflation

are only 4.6 percent based on consumer

beliefs this latest figure is actually

the lowest read that we've had in over a

year and it's a nice downturn from the

4.9 expectation we've been used to those

are just the preliminary numbers so

we'll be getting final numbers in the

future but it's a great move in the

right direction JPMorgan also tells us

that even though the PPI data came in

slightly hot in the last report it's

really interesting that if you look at

the last like the first half of the year

compared to the current last five months

basically the second half of the Year

you'll see that monthly changes average

one percent per month over the first

half of the year for headline PPI and

actually fell to 0.1 percent over just

the last five months and the core moved

from 0.7 in the first six months to 0.3

of over the last five months which is

actually really really incredible their

expectation is that tomorrow's CPI will

come in at 7.3 month year over year and

point three months over month I'll be

revealing my personal expectation in a

moment we talked a lot about inflation

in the course member live stream this

morning and with indices up today we

actually expect the market is expecting

that inflation is going to come in in

line with expectations here are the

scenarios though from JP Morgan if CPI

comes in over 7.8 they believe that has

a five percent probability S P 500 down

four to five percent if we get seven and

a half to seven point seven spy down two

and a half to three and a half down 25

probability if we get 7.2 to 7.4 50

probability based on JP Morgan's

opinions we could see a spy rally of two

to three percent a 6.9 inflation read

which is the lowest potential with just

the five percent probability could Mark

the end of the bear Market it says JP

Morgan Goldman Sachs agrees with this JP

Morgan thinks we could see an eight to

ten percent rally if we get a 6.9 print

instantly Goldman thinks we could see a

seven percent plus rally if we get seven

to seven point two probably more like a

four to five percent rally but if we get

anything under seven percent JP Morgan's

basically calling for an end to the bear

Market which is really quite incredible

now I'll go through my estimates in just

a moment the street is also expecting

7.3 and 0.3 but Nikki leaks gave us a

little bit more clarity on the FED today

I love Nikki Lakes this is Nick from The

Wall Street Journal he basically gets

texted from the the uh uh you know folks

over at the Federal Reserve and we get

some opinions and some of the changes

that I wanted to highlight which we want

to pay attention to in the fomc meeting

in a couple days they say that the easy

lifting is done 75 basis points getting

to the restrictive territory that's the

easy part the hard part now is not

repeating the mistakes of the 1970s this

is where inflation became entrenched as

the Federal Reserve tried to repeatedly

raise rates then lowered rates then

raise rates and lowered rates and that

actually LED inflation expectations to

become anchored which was really bad and

ended up leading to a pretty bloody Paul

volcker recession however Neil Kashkari

had something really interesting to say

about this Kashkari by the way is

somebody who's been a dove but he has

now flip-flopped to being one of those

with the highest expectation for the

fed's terminal rape which means he's

actually one of the more hawkish

individuals now he said quote when there

are recessions triggered by tight

monetary policy to crush inflation the

recovery can actually be very quick from

that now that's really interesting

because it stands in contrast to what

I've been suggesting that I don't think

we're going to see a v-shaped recovery I

think we had a v-shape recovery in the

pandemic but I think we're gonna have

more of an anchor along dragging along

the bottom floor of the ocean recovery

that's not so ideal Pat Harker from the

Philadelphia fed suggests look if we

pause we could always hike again but

remember Jerome Powell doesn't want to

do that that so this is where they're

having that issue of okay maybe we end

up having a Fed that in February goes

down to 25 basis points but then they

just keep going and going and going

until they get to five five and a

quarter five and a half or whatever they

need to to get inflation down and so

that's going to be What markets care

about most we're not even close to that

fed U-turn yet the only way we get close

to a Fed U-turn and rates actually start

plummeting is of inflation plummets and

their easy possibility of that not only

are we seeing housing inflation turn but

wage inflation has taken a turn though

it's it's been a little stubborn so

we're waiting for more data on that and

we think by February by the spring we

should have some more insight on are we

going to get that or not and that's

obviously why cash has been probably the

best investment lately that certainly

hasn't been Tesla thanks Elon Musk an

economist over at UBS who actually used

to work for the Federal Reserve doing

wage predictions predicts that inflation

will actually plummet he believes that

inflation will plummet to 2.1 percent by

the end of 20 23 of 1.6 percent in two

years which actually puts us below two

percent again and puts us back into that

world of oh no do we have to go to zero

or negative percent interest rates now

what's interesting about this is that

Economist was actually quoted by

Nikki Leakes and Nikki Leakes is the guy

who's talking to the Fed so I think

that's actually pretty bullish along

with obviously references to Elon Musk

suggesting the recession will worsen if

we keep hiking Elizabeth Warren saying

there's a big difference between Landing

a plane and crashing it and a lot of

folks saying that look Jerome Powell

he's going to Flinch a lot of people

think he's not going to say the course

of continuing to hike because of what he

told us in the last November meeting

which was look we're gonna hike but we

don't want to cause tremendous human

hardship by causing a deep recession

that's actually a flip-flop from what he

previously said where he said hey look

if we over tighten we can always print

money again but I think they realize no

that's probably not a great idea and

maybe that's Jerome Powell now but

anyway okay look my thoughts there are

two number one you probably have the

buying opportunity of a lifetime with

how much uncertainty there is in the

market right now or just wait for the

U-turn and stay in cash or mix a boat

probably logical most important thing

stay out of debt and minimize your

expenses don't do what Kevin does right

now but anyway don't worry about that

part worry about yourself so in the

meantime uh another thing uh oh my

prediction so I actually think

don't hold me to it okay but uh if I'm

right I rock if I'm wrong I didn't say

this okay uh I think we're gonna get the

expectation is seven three and point

three I actually think we're gonna get

seven four and point four that's going

to be the same month over month read as

we had last month I don't think we had

enough energy deflation on the month

over month to get a 0.3 uh and I think

7.4 is actually still a nice Trend to

the downside so we're still moving in

the right direction uh look bottom line

though from the Nikki leaks article in

my opinion this really hints at the idea

of slowing down to 25 we're gonna stay

there wait for the data for a while it's

way too soon to expect any kind of huge

fed U-turn and folks good luck tomorrow

I'll see you at 5 30 A.M