this is very bad.

this morning's economic data was a shot

her around the world and you need to

know what the details of the data were

because we got doubly bad data on top of

this I think I heard the worst news ever

that Hooters might be filing for

bankruptcy let's start with these two

terrible data points first this morning

in the alpha report which you could

still get for free uh till the end of

the month for uh andme kevin.com in this

morning's Alpha report I warned that

this morning SNP data that comes out

from manufact in and services could move

the market if we're within half a point

we should be fine if we get a larger

decline than a half a point markets may

get nervous depending on the details of

the report and Michigan sentiment

shouldn't be an issue unless it's

drastic so in other words if we got

benine reports plus or minus a little

bit or close no big deal no problems for

trading bullishness might be able to

continue great that is the opposite of

actually what happened we got two

hellish reports and I mean not good we

had the highest month-over-month

increase in inflation expectations since

May of

2021 in addition to that we' have now

hit the highest level of long-term

inflation expectations in 30 years now

this may be because of people's

uncertainty around tariffs uh it may not

actually be representative of everyday

prices skyrocketing we know they have

already skyrocketed but not NE

necessarily continuing to Skyrocket so

we'll have to pay attention to it and

watch but the PMI data really gives us

some insight into what might be going on

the first thing that I'd like to do

though is just set you up with something

that we've been talking about on this

channel since uh about November and

that's this idea that under Trump you

would get this surge of enthusiasm right

here's a surge of enthusiasm as

everything moves up the problem is when

any politician takes office the moment

they take office is usually the moment

of peak enthusiasm so once they take

office you start seeing enthusiasm come

down and that's when the reality of

markets hits so when that reality hits

that's when you have to start

considering okay what's going to happen

with tariffs what is the economy or how

is the economy going to respond to Doge

you I'm not here to make a political

opinion saying something is good or bad

I'm just saying businesses from a money

point of view people are going to look

and go I don't know man I don't know

what's going to happen with tariffs I

don't know what's going to happen with

Doge I don't know how how cutting those

contracts is going to affect us because

a lot of those are private contracts and

those affect the economy and GDP uh I

don't know what's going to happen with

geopolitics you know we we were betting

on the war with Ukraine and Russia being

over within the first you know certainly

a few weeks it's not over yet could

maybe maybe maybe we made more progress

but again my point here is not to get

political it's just to say this this was

the expectation now something that I

also warned about was that as you rotate

uh down on sort of this reality of of

enthusiasm which happens after every

politician gets in doesn't matter

democrat or republican you also have to

remember if you're being promised tax

cuts tax cuts usually don't come until

2026 maybe best case the end of the year

2025 which you won't actually get a

benefit from probably until tax season

2026 so you kind of get stuck with this

front running of Happiness over here

before candidate gets in then you get to

the levelof phase so this is I'll call

it the front run right here this is the

levelof phase right uh and then you sort

of get like that that bleed out of

enthusiasm as reality slowly hits that

things are just going to take longer in

politics well that's where this morning

we got this absolutely hellish S&P

Global Flash PMI report now this data

was collected between February 10th and

20th and this data indicates that us

business activity growth came close to

stalling in February note this is growth

so it's not business activity it's

business activity growth so in other

words getting to Flat growth uh or like

zero GDP right uh on the flash PMI

survey data as a renewed fall in

Services output offset faster

manufacturing growth so in other words

Services really got hit here in fact

remember how I said anything more than a

0.5 would be a little bit painful this

morning in that Alpha report well on

manufacturing we beat by 02 that's fine

that would have been a benign reading

great great news Services were 52.9 last

month 53 this month everything over 50

is expansionary right so we're over here

at like 52.9 expecting 53 to come in a

little bit higher it actually came in at

49.7 so not good and so the question is

why well it says here New Order growth

also weakened sharply and business

expectations for the year ahead slumped

amid growing concerns and uncertainty

related to federal government policy so

this is inclusive of everything this is

tariffs Doge geopolitics taxes

everything the upturn in manufacturing

output was also linked to the front

running of tariffs hinting at merely a

temporary boost this is interesting

because this is exactly what I said

months ago about hey be care F some of

this boom we're seeing in November and

December even January could be because

of that buildup of inventory that

buildup of enthusiasm people like Yay

this is going to be great in 2025 but

then you build it and then people don't

come and then you start going a crap now

we've built up all this inventory now

we've pre-ordered all this stuff but

nobody's buying it or fewer people are

buying it's a problem that's when

layoffs come and then people like but

Kevin you know tariffs are going to

cause inflation yes they're going to

cause inflation to cost but businesses

in my opinion are going to have to take

it into the margin nobody wants to take

it in the margin and by taking it in the

margin businesses are unfortunately just

going to suffer with lower earnings per

share so then they start cutting and

they start laying people off because

they can't pass on the prices because

there's too much competition that's at

least what we predicted months ago and

what are we seeing here in this report

out today input cost pressures meanwhile

spiked higher notably in manufacturing

as suppliers passed on tariff related

price hikes and wage pressures persisted

however intensifying competition helped

limit pass through to the consumers of

selling prices in the service sector

where inflation sank to a 5year low mind

you we talk about this cycle daily in

the course member live streams and just

how we're seeing indicators and where

we're seeing indicators so this is not a

surprise it's just now it's a little

nerve-wracking that it's coming on so

hard and so fast because the drop in

these sort of sentiment reports is

sudden I mean look at the chart right

here on the flash PMI for future

expectations you could see the

enthusiasm post the election but look at

the plummet we basically just gave it

all up weakness was centered on the

services economy where output fell

slightly in February to Signal the first

contraction in 25 months in Services

representing a sharp contrast to the

robust expansion seen last year new

business inflows into Services sector

the services sector came close to

stagnation showing the smallest rise in

10 months to indicate a marked worsening

of demand growth since last year see

manufacturing taking up over here but

services and composite

tanking service providers commonly link

the downturn in activity and worsening

new orders growth to political

uncertainty notably in relation to

federal government spending cuts and

potential policy impacts on growth and

inflation

outlooks uh now manufacturing may be

boosted because again this front running

we talked about the deterioration in

February was primarily reflection of

increased uncertainty about the business

environment okay as far as hiring this

was an interesting note in hiring we had

the first employment decline uh hold on

let me read this correctly yeah it was

the first decline in employment for 3

months to represent a market change in

hiring after jobs growth hit a 31 Monon

high in

January okay so it's basically the first

time we're seeing this big hit and take

a look at this the upbeat the upbeat

mood seen amongst us businesses at the

start of the year has evaporated

optimism about the year ahead has

slumped from a near three-year High seen

at the turn of the Year to one of the

gloomiest since the

pandemic sales are reportedly being hit

by uncertainty caused by Chang a

changing political landscape and prices

are rising amid tariff related price

hikes from suppliers so in other words

again companies are taking it in the

margin now because there's so much

competition and Supply chains have

expanded so much it's hard to actually

increase consumer prices I understand

consumer prices still going up for

things like food and groceries it's

different talking about unrelated to the

volatile food or energy category it's

harder now it doesn't mean insurance

companies aren't you know going to try

to not rip you off anyway but that that

is a different topic the point here uh

is to say that most businesses are

actually probably going to face

deflation and providing you things for

cheaper which is actually good for you

like I think that the iPhone 16 Echo e

is 98% of the phone for 98% of people

you know I think only an edge of people

really care about some of the features

that the pro has versus the e but you

get 98% of the phone for 75% of the

price that's deflation and we're going

to see more of that vehicle deflation uh

phone deflation computer deflation

Furniture deflation I think it's all

coming especially as businesses start

laying off because they realize they're

taking it in the margin now can it turn

around well from my point of view is

that what it takes to actually get this

to turn around is tax policy you need

that you need the tariffs to be

solidified you need the potential damage

of Doge to turn into an economic

stimulant this is why there's so much

talk about Doge stimulus checks because

if you're cutting so much from

government spending that's fine but if

you're cutting it and then not doing

anything with that money then you remove

that stimulus it's anti- stimulative to

the economy now yes does it save the

government money absolutely but guess

what happens well when you personally

save money the velocity of money in the

economy goes to like

1.1 when you save money and you don't

spend it your money doesn't turn that

often and you create less gross domestic

product less growth in GDP makes sense

when you spend your money your dollar

circulate through the economy four to

five

times velocity money is a simple concept

how often does that dollar circulate

before it gets

saved so you go buy a hot dog from the

hot dog vendor outside Contractor's

Warehouse they pay their employee

employee pays their rent the landlord

pays for repairs the person who got the

repair money goes and saves It Whatever

right that's just an example you save it

you're the dead end so the government

creates a dead end with when they cut

and again I'm not saying they should not

cut I don't want this to this is not a

political video this is an economic

principle

video sorry I'm still sick this sucks uh

and so from an economic principle point

of

view cutting can be offset by

stimulus uh and it actually would not be

inflationary unless that money is being

spent in places where there are tight

Supply chains Supply chains are pretty

loose after Co supply chains really

really loosen and so what I'm most

worried about right now is that their

supply chains are so loose they actually

end up in a deflationary spiral where we

are on the precipice of

layoffs Southwest for the first time in

53

years conducted Mass layoffs 1,700

people not Pilots but people inside the

company and they had a reputation of

being the company that just didn't lay

off people so these are problems and

we're going to have to pay attention to

these and markets are going to have to

evaluate these especially as we're at

all-time highs you know and again we had

the University of Michigan inflation

expectations reaching the highest level

in 30 years this is probably because of

tariffs I don't think that is actually

going to be indicative of the inflation

that we end up seeing so I think we're

going straight towards deflation uh as

soon as we get the layoffs the fed's

going to cut rates very rapidly what's

that going to do it's going to make real

estate more expensive because rates go

down I think more people will be able to

afford it but not everybody because if

you lost your job you can't buy so it's

going to be like the rich few that go

around picking up all the real estate

cheaper it sucks for the average person

it's not the fault of the companies it's

the fault of just

timing you know whose fault is it if you

lose your job while rates are coming

down it's not somebody else's fault I'm

not saying it's your fault it's

just sucky time uh there there's also

talk about uh uh

this the seasonality uh we which we

talked about at the beginning of the

video of the economy where you know as

you go into tax season maybe people have

already fully deployed and we're seeing

some of the lowest levels of cash that

we've seen in quite a while Bank of

America I think it was just yesterday

had a report uh oh yeah cash is at

15year lows right now just 3% of

people's money is sitting in cash right

now and if we see any kind of blowout to

momentum to the downside then people are

going to be looking to raise cash

rapidly again and that could hurt a lot

of assets I'm not advocating for that I

don't want to see people get hurt I

think that's that's painful I like it

when everybody succeeds everybody

succeeds right a rising tide lifts all

but I think it would be unwise to to

ignore this information as just like fud

or whatever because you're just blinding

yourself uh I mean if you look at this

chart right here oh that's the NASDAQ if

you look at this chart right here this

is a chart of the number of times we hit

alltime highs in the S&P

500 and it's just it just adds so every

time you hit a new all-time high it just

the number goes up a little bit what

you'll notice is there are flat periods

the flat periods are when you're not

hitting new all-time highs guess when

those periods are oh wow what a surprise

uh after the dotc bubble you didn't hit

any new highs for 10

years after the

1970s uh inflation disaster you didn't

hit new highs for about six years after

the Great Depression you spent 20 years

without alltime highs so notice how you

go through these massive cycles of no

all-time highs no alltime highs no

alltime highs and then in between you

get these cyclical bull periods or

secular bull periods we should

say some people worry that we are coming

up on the

end of this cycle and we're looking at

one of these flat periods coming up

which could mean falling prices it just

means no new alltime highs

right W freaky anyway

look uh if you like my analysis and my

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trading anyway love to have you there

check it out over me kevin.com and folks

we'll see you in the next one goodbye

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 financial analyst and

YouTuber meet Kevin always wait to get

your take