Meet kevin here in this video. We need to talk about eight massive catalysts for for july. If you are investing in the stock market you need to know about eight of these and no it is not that the programs on building your wealth have an expiring coupon code on july 28th you already know that that would be redundant that would be just as redundant as saying that 70 of the s p. 500s market cap reports by the end of the month at this point.

That's obvious. We already know that the prices on the courses on building your wealth are going up and we already know the value increases exponentially with the prices. Instead. Let's talk about catalysts catalyst.

Number. One is gdp and boy. Oh boy. Do we have a lot to talk about about a gdp gross domestic product when it comes in at a negative read for two quarters in a row.

We are technically in a recession now there is still a bureau of economic research that technically needs to define that yes we are indeed in a recession. They don't necessarily use the technical definition of recession. They define a recession by a significant decline in economic activity. That is spread across the economy that lasts more than a few months and generally they look at a few things like depth diffusion diffusion excuse.

Me and duration and generally. Generally what they're looking for is a big weight on personal incomes and employment figures. But folks i don't know how many people actually care about the national bureau of economic research and their opinions. Okay these suits opinions as to whether or not we're in a gdp recession.

I think what markets are going to look for is look q1 folks q1 of 2022. We had negative gdp. I don't care what the number is i don't care what the suits say if q2 comes in with a negative gdp read we're in a recession. We are in a technical recession and folks are going to freak out mostly the mainstream media.

My expectation is you're going to have sort of the tucker carlsons and the anderson coopers trying to figure out ways to blame. Why we're in a recession. You know you'll have anderson cooper suggesting that it's uh. It's um.

You know. Mitch mcconnell's fault. And it's joe manchin's fault. And tucker carlson will say it's joe wyden's fault.

You know. It's it's and of course. Nancy pelosi's fault you know it'll be just the typical uh. But on july 28th.

We're actually going to get that gdp read so mark your calendar for july 28th. That's the same day as that coupon expiration. But that's a big one now remember the economy did shrink slightly in q1 so again a slight negative read over here means we're probably technically in a recession. It's kind of tough though to to even consider that we might be in a recession.

Given that we just added 372 000. Jobs in june. Which seems pretty remarkable. But you know it's this kind of uncertainty that's also leading to some crazy estimates in fact if you are a bear you're probably already familiar with the atlanta federal reserve's estimate of gdp in fact if you just jump over here you'll see that the atlanta federal reserve suggests that for the second quarter.

We are probably seeing negative gdp to the tune of negative one and a half percent see where this circle is down. Here. This is the suggestion of where gdp is uh based on sort of current indicators. And if i go ahead and draw a line here at that zero percent level you can see anything below.

It indicates that we're in a recession. And you can see this really started over here. In kind of uh well q. Q.

2. Really starts right over here. And you can see we sort of bobbed at the beginning of the quarter around potentially negative. But we certainly felt negative here in june and uh or rather in july right here right here we were still slightly above it which creates some what of a potential argument that okay well maybe the second quarter will actually be spared because again if i draw a second quarter here with a red line here.

And i'll draw a red line right about here you can see it looks like we really turned negative with the atlanta gdp either slightly right here. But certainly here in july. Now this creates a little bit of an issue because if we have a q1 negative read. But then we have a q2 positive read and then we have a q3 negative read technically that's not a recession that's problematic we're not consistently growing but it's not a recession because we don't have two consecutive months of or sorry two quarters of consecutive gdp declines right now bears like to use the atlanta fed estimate of gdp bulls like to use the saint louis federal reserve's estimate of gdp which right now actually sits for the second quarter at 411.

So you can see how like either manipulated. Or just off estimates are given that atlanta for q2 has a sitting over here nearly negative and the st louis federal reserve doesn't even have us going negative once over here not even presently here as of july 15th. So it shows you the numbers are a little bit skewed. The the fact of the matter.

Though is it just highlights the importance of july 28th. So mark your calendar for this day. It's a very very important day it's gdp read it will determine whether or not we're in a recession or not. It's coupon expiration day.

So it could be a double sad day because prices go up and and we might be in a recession. Which is kind of remarkable uh okay so that's the first most important catalyst uh and and i would certainly say that is that is by far very very important though. We do have some other quite strong uh catalysts. The second catalyst has to do with housing starts.

Those actually come out today 7 19. We are expecting 1 million 580 000. Housing starts. We'll have that number around the time that this video comes out so you'll be able to see the headline news on this and we'll see what what kind of housing starts.

We get housing starts are really important because they're sort of a leading indicator as to what home builders are thinking about the real estate market home builders. If all of a sudden. We see a big miss in this and let's say we got a number like 12. Mil could be sort of an indicator that oh no home builders are really concerned if we get a beat.

Then then that could be a sign that home builders. Think hey. The housing market. Sure we might you know housing market may have boomed.

We might slow a little bit here. But we're going to go off to the races again and housing starts are a good leading indicator to try to help us understand what what do we think could happen in the housing market. So housing starts. Those will come out today pay attention to those 7 26.

We will be getting consumer expectations quite important to see what a consumer sentiment. Really is and their expectations for business development. Though probably not going to be as important as the catalyst on the 27th which on the 27th. We're going to get retail inventories now.

This is a pretty important number that we will also get some insights from through earnings right. Remember that you can go to the balance sheet of any company. And you can see the uh. The inventory increase quarter over quarter or year over year.

And it's it's quite fascinating to see the transition in how much inventory companies have very very important because this can become very deflationary or i should say disinflationary remember that inflation means that this is a zero percent line. Where prices stay stable inflation. Means that prices are above that let's say a four percent increase here so positive four percent and if we get disinflation that means that prices are slowing down their increase. Maybe now they're only increasing at a rate of about two percent and then of course deflation.

Would be a decline in prices. Now do keep in mind. And this is probably one of the most important things to think about inflation and this is something that actually makes inflation somewhat difficult to stick around you know a lot of folks like to say. Oh.

No inflation's going to be here forever. We're just going to keep seeing these inflationary reads. It's very very very very difficult for that to actually be true. And there's a particular reason for that and it has to do with base effects.

So what that means is if you have a hundred dollar widget. That sells for a hundred dollars today and next year. It sells for a hundred and ten dollars well how much was the inflation rate. Well in this case.

The inflation rate was ten percent. If the year after that the uh. The product was also selling for a hundred and ten dollars then in this case. The inflation rate was actually 10 compared to two years ago.

But year over year was actually zero percent and now if we see inflation go to let's say 105 well now we've actually had negative. Uh it's slightly less than that it'd be like negative 49. Percent inflation. And and so we've actually now seen uh deflation.

In in this kind of example. So. Here. You would have no inflation.

This would be deflation. Which is prices going down and then disinflation is another example here where that hundred ten dollar product. The next year goes to let's say a hundred and twelve dollars and uh even though it's slightly less than this just to make math simple that works out to approximately a two percent increase. Well.

This inflation means instead of having 10 percent inflation. Like we had here. We now have two so when you go from 10 to 2. That's disinflation when you go from 10 to negative that would be deflation right and then obviously inflation is continuing to see that number increase and inflation is exactly why on the 27th.

We're also going to see massive movements in in markets. Because it's fomc day on the 27th. We will get a decision from the federal reserve in terms of how many basis points to actually hike interest rates. We have a lot of estimates in terms of where the terminal rate is going to be for the federal reserve.

The terminal rate is sort of the end point in terms of how much people believe or markets believe that the federal reserve is going to increase interest rates be that 375 percent or 4 which are roughly the current estimates before the federal reserve begins to soften again and brings those rates back down to maybe more accommodative levels around three percent and eventually closer to a longer run average. Which the fed is trying to achieve of about two and a half percent now the federal reserve right now is also going to likely have to give us a lot of commentary on whether or not we actually think that commodity prices coming down and inflationary costs uh coming down in energy uh are going to affect the the future outlook of the federal reserve in other words put sort of a slightly different way if the federal reserve comes out and says hey you know we're seeing all these commodity prices fall. We're starting to see disinflation. We're seeing inventories build up then that could be seen as the beginning of sort of a federal reserve u.

Turn and that could be priced into the market very very nicely by rewarding long term investors if the federal reserve says you know what we're seeing these disinflationary signs but they're not enough yet we need to be hawkish. Then we're going to get a stronger rate hike and we're going to get a more hawkish and verbal federal reserve telling us that the fight isn't over we might see some prices coming down. But so far inflation is broadening. Which it did in the last cpi report.

It's rising which it did in the last cpi report and if anything it's getting worse and we need to make sure that we prevent a wage price spiral and service based inflation. Like insurance is going up for cars or health insurance is going up because costs for labor or whatever are going up. Right now the federal reserve is expected with a 638 percent probability to hike by 75 basis. Points and there is a 362.

Percent probability that we actually see a full one basis or 100 basis points. Or one percentage increase in the fed funds. Rate this would leave the federal. Funds rate at.

225. Percent on the low end or 25. Percent. On the low end.

If we get that full one percent which goes to show that if we're trying to get to 375. To 4. There's still quite a bit of tightening to do at the federal reserve and and so this this idea that the federal reserve is ready to u turn anytime. Soon is is a little bit hopium based.

But it's also built into this idea that well markets are going to try to price in that future u. Turn somewhere around six months before it actually happens. So. Even.

Though. The fed might still have six months of tightening. Ahead. If markets are already assuming that the fed is going to loosen their trajectory at some point in the future.

Then markets will potentially start a bull run or at least a relief rally substantially before the federal reserve actually u turns although and this is important to remember that's not actually what happened in 1987. When the federal reserve first set the precedent of bailing out markets. It's not what happened in 2003. It's not what happened in 2009.

It's not what happened in 2018. And it's not what happened in 2020 in other words in all of these years it actually took the federal reserve actually u turning not just talking about u turning for markets to bottom in other words markets. Did not bottom until the fed actually u turned and accommodated the markets by stimulating. The markets of course.

Many folks today say don't worry this time is different. Though the four most dangerous words in investing are this time is different. But what's not different is that you can get life insurance in as little as five minutes via the link in the description down below go to matkevincom. Life to learn more okay uh.

The next thing that we have is that's on the. 27th that is at 11 am pacific standard time and then at 11 30. We will have comments from the federal reserve the very next day we'll have that gdp report because remark your calendars. This is going to be 7 27.

The next day you get gdp reporting coupon. Expiration and then on the 29th. We're going to get a number that the federal reserve. Very actively pays attention to and it is the university of michigan consumer sentiment and consumer expectations survey.

So far we've actually seen inflation expectations not only anchored. But they in the last read rotated down. We want to see that continuation of either stability or rotation down. Because if this survey comes in hot on 729 expect markets to go red because that's usually what turns the federal reserve hawkish the last thing the federal reserve wants is for inflation expectations to become anchored folks frequently asked me kevin how is this different from paul volcker in 1979 1980 1981.

The difference is very very simple it's one word it is expectations that's it expectations of the bond markets. Measures of inflation. Which are usually the 5 and 10 year break evens. Don't worry so much about that.

But consumer expectations also critical follow for more make sure to subscribe check out the programs on building your wealth and thanks so much for watching bye.