Transcription
did we just get closer to a recession
and what is the Federal Reserve Eerie
warning we need to talk about in this
video we are going to cover all of that
we're also going to touch on the fact
that now Big Lots is going out of
business the corporate buyback Blackout
Window has begun which means no
corporate BuyBacks to prop up lofty
share prices and some are accusing Jim
Kramer of just ringing the bell at the
top of the market with Donald Trump
causing the market to crash others say
this has everything to do with the
government shutdown that starts tonight
at midnight in line with the expiration
of the trumponomics coupon code sale
expiration Tesla's under 420 markets are
red pre-market and expected to be red
during the day but we'll see what
happens NASDAQ lost 51720 yesterday
which is a pretty important line and
Bitcoin sold down a chunk though it did
bounce a little bit after we got those
pce numbers this morning some were
worried that the Japanese carry trade
2.0 is about to take place maybe another
banking crisis people freaking out about
the yield curve and the Philly fed gives
us some warnings in this video we're
going to break down all of this and more
so let's just get right into it uh first
one of the most scary things that some
folks are bringing up rightfully so is
the letter from the Federal Reserve the
fomc statement from October 31st no not
this year but
2007 I highlighted it for you and ignore
the blue because that is different that
talks about the housing correction but
just listen for a moment to everything
outside of the blue that's highlighted
in yellow and red and I want you to
remember that this was 14 years ago
before the Great Recession this is what
it sounded like the fomc decided today
to lower its target range for the
federal funds rate by 25 basis points
economic growth was solid in the third
quarter and strains in financial markets
have eased somewhat on balance readings
on core inflation have improved modestly
this year but recent increases in energy
and commodity prices among other factors
may put renewed upward pressure on
inflation the committee judges that
after this action the upside risk to
inflation roughly balance the downside
risks to
growth which is eerily similar to what
we just heard from Jerome Powell that
the risk to the labor market and
inflation are roughly balanced that
inflation has recently ticked up a
little bit again causing little bit of
concern though hopefully it just ends up
being a technical issue or rounding
issue and that inflation truly isn't a
problem the eeriness of how similar that
letter is isn't great it's leading a lot
of people to reiterate that remember
when the FED cut 50 basis points they
did so on the exact same day in
September in 2024 as they did in
September of
2007 and this is why a lot of people are
now looking at the New York Federal
Reserve which posts an indication of the
probability of a recession in the 12
months ahead and they argue wow it
dropped the odds of recession actually
plummeted from around 70% to around
33.5% but wait a minute this is the
probability of a US recession predicted
12 months ahead in November of
2025 and so what actually happened if
look at 2007 is you also saw the odds at
the end of 2007 and beginning of 2008
plummet that we would be in a recession
in 12 months because the market started
indicating yeah we're not going to be in
a recession in 12 months because that
would be say the middle of 2009 will
already be through the recession that's
happening say within the next 9 months
so this is making some folks nervous
that actually a fall of this recession
probability 12 months out could be an
indicator that the reason the recession
indicator is falling is because we're
about to go through one now that's not
great nobody's excited about that and a
lot of people were referring to the pork
barrel uh Government funding bill that
failed yesterday as potentially a reason
why markets are uncertain we're going to
break that down and go through that but
first Mary daily did have have some
commentary this morning so let's start
with that let's hit what's going on with
some of the PC inflation numbers we'll
look at some technicals here and we'll
make sure we talk about that Government
funding bill as well because I know a
lot of people are concerned about what's
going on there I do want to mention that
some folks have asked us hey would it be
okay now that the market is starting to
correct a little bit to extend that
deadline at house hack.com for the
offering that we have you know the bond
yield and it's a convertible so you get
all the upside in the stock and you get
a 5% yield some people are like hey man
look if the Market's going to turn here
I'd like to diversify into maybe the
private Market uh so if that's you if
you are interested in that maybe we can
pull that off we'll see email us at IR
like investor relations househ hack.com
okay so uh with that Mary da this
morning says that policy is in a good
place she says that positive sentiment
amongst firms is giving her
enthusiasm now I personally think that's
crazy that sentiment amongst firms after
you had a presidential election of a
republican which generally always leads
to a boost in sentiment would actually
lead the Federal Reserve to say oh okay
well everybody's so excited maybe we
should be a little tighter I think
that's kind of dumb because sentiment
changes very very rapidly uh and I don't
think that's really a way to lead the
Federal Reserve uh especially since you
know when the Federal Reserve was
excited two days ago you know we were at
greedy levels in the stock market uh and
and all of a sudden Market momentum I
mean we were almost at extreme greed
levels in terms of Market momentum and
all of a sudden when you look at the CNN
greed and fear index oh wow look we're
at extreme fear see sentiment changes at
the drop of a hat I don't know that our
Federal Reserve should really be guiding
their policy decisions on B like
business sentiment but then again uh
they've lost a lot of credibility during
this last cycle and it seems like
they're just continuing to lose even
more anyway inventory building up is
causing a reason to be cautious says
Mary daily this actually aligns with
what the Philadelphia fed warned a
little bit uh this report actually came
out yesterday very very few people
talked about it and I wanted to bring up
some of the details from the Philly Fed
so this is what the Philly manufacturing
uh indicator read it indicated the
lowest level of manufacturing since
April of 2023 okay not going back too
terribly far the index for new orders
and shipments both declined and turned
negative all right that's not great and
the employment index EDG
down but more than 70% of firms reported
no change in employment levels in this
month just 177% reported increases that
actually didn't sound too horrible uh if
it stays that way but it's worth noting
this current activity bar doesn't look
great just because we're getting back to
the lows that we saw at early 2023 and
I'm worried that potentially those could
continue if we end up seeing this
buildup in
inventory remember the whole point of
what Mary Daly here is saying is that if
inventory builds up then manufacturing
slows even more when manufacturing slows
even more because inventory builds up
that's when you truly start seeing more
layoffs and unemployment gets hit and
when unemployment gets hit that's when
consumer spending plummets so the order
in which a recession takes hold
generally starts uh with a buildup of
inventory
then the layoffs then the spending goes
down then the unemployment claims
Skyrocket then the unemployment rate
goes up right this is why some of those
latter things are Laing indicators but
then again there was some hope because
this morning we did get pce numbers
which came in a smidge lower than
expected personally I think we're not
facing an issue of inflation in the
cycle we're facing an issue of deflation
but not everybody agrees with me on this
I think most of the categories that are
left in terms of inflation because I I
go through every single inflation report
every single time in detail the
categories that are left of inflation
are really super lagging I think most
companies have really lost their PP and
you don't want to lose your PP when
you're a business you need pricing power
otherwise you're screwed so I I'm very
disappointed in over the last year
seeing how much pricing power has just
absolutely been destroyed at companies
and so it it has made me more nervous uh
than typical anyway uh pce did come in a
little bit lower than expected this
morning PC and core PC both coming in at
.1% month over month versus the0 2
expected year-over-year numbers did Miss
by 0.1% as well personal income missed
by 0.1% and personal spending matched
this did help boost Bitcoin by about
$1,500 right when that number came out
but from a trading point of view I'm
still a little bit nervous because take
a look at this yesterday in my courses I
sent this post you could see here
yesterday at 7:41 a.m. this is an
example of the kind of trade alerts that
I sent but actually this is more of a
trend alert because I send Trend alerts
and trade alerts like if I actually
actually execute a trade then I'll be
like hey look I bought this option uh
whereas this is a trend alert uh setting
up for a trade so I wrote this QQQ at
decision Point 5720 was my warning this
morning when the qes were at
$520 bouncing here is critical otherwise
I worry we may or we could start a few
days of a selloff losing this line may
put options uh desirable for the third
week uh may may make I guess I type with
that but anyway you get the idea may
make put options desirable for the third
week of January so basically buying put
options a month out for some of the
volatility that we're about to
potentially experience uh and what
you'll find is if you actually line this
up with the line that I have over here
that 51720 when we lost the line here
after you know failing to break break
out twice on it with what looked like a
double bottom we really just continued
to lose and lose and lose that level
which is not great and this is leading
some people to say Hey Kevin thanks for
having a launch sale for the
trumponomics course which comes with all
of these stock alerts so if you want
those alerts where all of a sudden you
get a little ping on your phone oh Kevin
sees a trend or Kevin has a trade idea
make sure to join trumponomics today you
can grab it by going to meetkevin.com
comes with some critical Tax Strategies
you could still implement this year and
next year obviously under Trump uh as
well as insights into stock growth
sectors real estate analysis job and
income strategies negotiating strategies
sales strategies everything related to
Trump and making money in the economy
even if you don't like Trump now with
that a lot of folks are also asking me
Kevin what about the carry trade well
it's worth noting that the Japanese Yen
is sitting at about the same devalued
level as it was around July 10th
remember the Japanese carry trade blew
up over here because all of a sudden the
Japanese Yen had lost so much money that
people had to cover uh their uh their
margin loans and their loans on US
Stocks basically uh and that led to some
Panic selling now that did end up
leading the yel yen to fall afterwards
but if you notice July 10th was our
summer stock market Peak we were at 161
Yen per dollar if you look at where we
are now we're at 156 pretty dang close
to the same levels we were at that peak
in the summer now Tom Lee is saying hey
man just back up the truck and buy the
dip and maybe that's the right strategy
after all uh AT&T is mandating a 5-day
return to work uh that is return to
office in January which kind of follows
what Amazon is doing a lot of people
think this is just a quiet way of trying
to fire people who can't go to the hubs
AT&T has see AT&T for example says all
18,000 of you must go to the hubs that
we have in Dallas Atlanta La Seattle St
Louis Middleton or Bedminster New Jersey
well what happens if you don't live
close to there you'd have to potentially
move well moving and trying to get a new
home or even a new rental in this sort
of e economic time or around the
holidays might be a little tough anyway
uh Bond yelds are up roughly 100 basis
points since the Federal Reserve cut 100
basis points and this adds a lot of
restrictiveness to the economy just as
the corporate Blackout Window is
happening Big Lot is going out of
business and a lot of people are angry
that Elon Musk should now be called
president musk because he has so much
control over Donald Trump almost like a
puppet master others say no he was just
trying to kill a wasteful bill I broke
down what was inside of the bill in
another video so I won't break that down
again now just look on the meet Kevin
Channel and you'll see exactly what's in
there in fact the title of the video is
Elon and vi just killed a wasteful
Congressional spending Bill see that Ty
that in with me Kevin with that said the
replacement a shorter Bill substantially
shorter bill in fact you could see a
picture of it here uh looks like it
should be a whole lot easier to pass
after all this 1547 page bill was
destined to pass and this one was
destined to fail oh wait that's the
opposite of what it should be yeah this
smaller or shorter Bill failed miserably
uh in fact fact 38 Republicans voted
against it including people like Tom
Massie who keep posting on X about how
great Elon Musk is and how all of his
ideas are wonderful yet he also
contributed to voting against that
shorter bill that shorter Bill did call
for extending the debt ceiling by two
years to sort of open the door to what
Donald Trump could do with the
budget but it wasn't convincing enough
to get uh 38 Republicans on board with
it and you only got two Democrats to
vote for it and since Republicans don't
have control of all Chambers yet until
the beginning of next year this is not
only potentially a preview of the
gridlock of what's to come but it's also
a sign that even if you have control of
all houses you might not convince all
Republicans the government shutdown
deadline is tonight at midnight and
there are arguments being made right now
by people like Bernie Sanders and AOC
that uh Elon mosque is a billionaire
who's trying to rob people of Defense
contract money your money for Pediatric
care research and it is true there was a
yes give kids a chance Bill added in as
a rider to the continuing resolution to
keep the government funded it's a
smaller bill as part of a larger Bill
package now a lot of people including
Tom Massie and V and musk say hey why
don't we just vote on these bills
individually like why do we keep doing
these giant package deals why can't we
just do them a little bit at a time
individually to keep the government
funded H separately from the debt
ceiling separately from funding the
government's uh defense contracts to
cancer research like we can pass these
separately and there's a reason for that
see it's worth noting that Congress has
operated like this pretty much forever
Congress is a two-party system and it
rarely passes legislation compared to
really other forms of government so when
you look at other governments they pass
a lot more legislation than we do this
makes each package like one big package
really critical for negotiating writers
onto them it's kind of like this hey man
I'm a republican I'll vote for your
package if uh you know you let me hook
this little seven page bill in here
because the people donating to get me
reelected wrote it for me I don't really
know what's in it I just want to kind of
slap it in you mind if I do that and so
all of a sudden what happens is you
basically take a must pass Bill let's
call this pink newspaper here the must
pass Bill and you take a must pass Bill
like funding the government and then
somebody comes along and says hey man I
need the New York Post in here and then
somebody else and then I'll vote for the
whole thing all right cool vote secured
hey man what are you going to need to
vote for this well man I'm gonna need me
a slice of the LA Times okay what are
you going to need I don't know man I
didn't read it but I need all this okay
will you vote for it then
yep all right who's ready to vote it's
kind of the way it works and I'm not
saying it's right it's just one of the
reasons this happens is because each
individual bill could get vetoed by a
president and Congress doesn't really
want to give a president that much power
back in the day like in 1996 Bill
Clinton used the line item veto to kill
pork barrel spending line by line like
he'd literally go through and go nope
nope he did that like 82 times in budget
bills and then that got ruled
unconstitutional in 1998 it gave the
president too much power so if each
portion of a budget was separated or
each little bill was separated you'd
probably die in committee you'd probably
get killed by filibusters or you would
just get individually vetoed by a
president that's like nah we don't need
funding for cancer research for
kids not specifically saying that that
particular one wouldn't make it I'm just
saying that's how it could work and this
is why a lot of people are saying well
let the chaos begin of nothing getting
done because even though you're going to
get Doge bragging about how hey look how
we simplified the new bill versus the
old Bill the new the old Bill had a
chance the new Bill had basically no
chance it was Dead on Arrival so some
people are saying that musk and Viv are
going to be great at keeping the
government shut down other people say
hey let it get shut down the government
is so dysfunctional they need to have a
cleansing and if that means you need to
Chaos Theory it you know destroy some of
it to get it all working again then so
be it let me know what side you're on in
the comments down below at this point
it's also worth noting that the uh yield
curve between the 10 and two is
steepening and this is usually how you
get onto your path to uh a recession
generally when the yield curve spikes
you have red markets and so far we've
spiked from about four basis points
uninverted to about 24 basis points
uninverted now that's somewhat arrested
today is yields are catching up a bit
today but usually when this spikes again
to about 50 to 90 you start the
recession that's just historically what
has happened now what else do we want to
pay attention to well there are indeed
warning signs in the labor market that
unfortunately a lot of people just don't
want to pay attention to Jerome Powell
did give us a heads up of some of these
and so it's worth just taking a peek at
kind of what these look like here you go
the job finding rate has collapsed over
the last 2 months you could see the
collapse in the job finding rate over
here on the right it's not ideal and it
looks eerily similar to what we saw in
2001 during Co and in 20072 2008 in
addition the employment deposit
population rate is falling which is
usually a characteristic only seen
during recessions though you did have a
little bit of a nudge nudge over here in
1995 which was associated with a soft
Landing giving Bulls some hope uh then
uh let's see here what else we we talked
about the New York recession odds we
talked about some of the data yesterday
remember this talk about continuing
claims and initial claims these are not
incredibly useful and then the leading
index I think is kind of funny because
the leading economic index came in and
it beat expectations yesterday but it
actually includes stock prices and stock
prices have been pretty euphoric moving
into that so I'm not entirely sure that
the leading index which uses the stock
market could be much of a leading index
for a potential stock market correction
now with all of that said you know me at
this point I'm pretty low on the bull
bear scale I'm somewhere around a 2. to
on the the bareable scale I should call
it which means I'm pretty bearish what
does that mean I'm a big fan of paying
off margin take profits I'd rather see
you pay 30% in profits than to get the
scars that I've gotten in my career I
have tried to avoid paying 30% in
capital gains taxes you know 20 plus 10%
California maybe it's only 20 for you
because you're not in comifornia but
anyway I've have tried avoiding those
taxes by Diamond handing only to go on
to lose 70% instead of 30% to taxes so
consider that I also think I also think
that diversifying is a really good idea
if you want more insights from me
obviously you can always join us in the
trumponomics course just go to
meetkevin.com and that way I can send
you my alerts as well there is a sale
ending tonight when the government's
supposed to shut down at 11:59 p.m.
calling it The launch sale because we
just launched the lectures so you could
be a part of it right away but as far as
you and protecting yourself I always
like to say get out of margin get out of
bad debt make sure you secure your
income because whether or not we go
through a recession it is a logical idea
to diversify to minimize debt I
personally think one of the great ways
you could do that and email us if if if
you want because right now we you know
this this expired but we might reopen it
if we get a bunch of people emailing us
saying look Kevin if you're going to pay
me
5% and I get all the upside in house
hack stock uh you know until conversion
why why would I not do this consider
checking this out go to house act.com
you could learn about it you could learn
about my uh private real estate uh
business business uh the multifamilies
the single families uh the perks that we
have for investing before and after
photos of properties whatever you're
welcome to see all of that over at house
hack.com also uh the deadline to uh send
your money for robo hack you really had
to fund by yesterday to participate if
you have some issue and your money's on
the way today just email us at invest at
roboh hack. thank you so very much for
being here I wish you all the best and
good luck 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 goes
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 great to get
your take