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Greetings and happy tompo chico to you all right folks, today, jobs day jobs day is uh, something that uh could lead the market to be very happy or very disappointed. Um i'll i'll, explain why. But i just spilled some topo chico, oh well! So here's the thing markets are going to be looking for not just a top line number here. The top line number is going to be uh.
It's going to be important. Don't get me wrong we're going to want to know what the unemployment rate is we're going to want to know. Are we going to fall under four percent uh, which is entirely possible? It's not expected, but it's possible and we're going to want to know how many jobs are or were created in the month of december uh with this. Obviously, we can then calculate the unemployment uh uh reading we're expecting it to drop uh from let's see here, 4.2 percent to 4.1 percent, we're expecting a change in non-farm payrolls of 450 000 that was actually revised up from 420 000.
The reason that was revised up is because the adp report came in with an expectation of 375 000 jobs and it came in at more than a double uh, just over 800 000. On the adp report. Now the federal reserve has been the center of uh all financial news over the past few weeks. The reason for that is because the federal reserve has something known as a dual mandate: number one is price stability and number two is maximum employment, and as long as the fed needs to accommodate employment, the federal reserve likes to keep interest rates low, especially if there Is no inflation or, if there's little inflation, however, if maximum employment has been achieved, and we don't necessarily need the federal reserve to help us accommodate to getting businesses to hire that is, businesses, don't need cheaper interest rates to hire individuals, they just need people to hire, Which is kind of the environment that we're in then that leaves the federal reserve open to checking off the box on maximum employment and instead being able to focus on inflation, which, given that so far, the employment situation has been.
You know such that, if anything businesses are trying to hire too many people. If anything, we've been overheating with how many jobs we're trying to recreate so quickly, making it very challenging for the labor pool to actually fill all of the demand that we have leading prices or wages weight prices of labor right. The cost of labor wages uh to rise uh. Then it really signals that the federal reserve maybe doesn't need to accommodate uh hiring.
What they need to actually focus on is inflation, and they could do so by raising interest rates and tightening monetary policy using the big vacuum cleaner. Taking money out of the system by selling bots selling bonds leads yields to go up. Yields going up hurts a lot of stocks, specifically higher growth stocks, because the expectation is that the future value of our money is worth less. A lot of that is just driven straight by algorithms. So what are we expecting today? Well again, if we get uh a numerical beat of this instead of 450 000 jobs, we get something uh in excess of, let's say 800 000 jobs kind of like the adp report. Uh implies that that could potentially be a negative catalyst for the market, because markets might see that as oh okay, we're see, we are getting a little hot here. No, we have been a little hot, let's uh, let's, let's tighten a little faster fed, come on. Let's get with the program uh, however.
Last month we had a massive miss which was really interesting. Last month we were expecting somewhere around 400 000 jobs as well, but we actually got 210 000 jobs. So we got a huge miss to the downside last month, but what's more important than that top line number, because the implication might be oh well. If we get a miss to the downside, maybe then that will be good for stocks right.
The flip side, though, and this is pretty dang important - is we have to flip over to look at what average hourly earnings are doing on a month to month basis year to year is is okay but in my opinion, it's not exactly the measure the market's going To care that much about see on a year to year basis, we in the prior report had wages, increase about four point: eight percent uh. So that means wages have gone up about four point: eight percent. You are making a hundred thousand dollars in theory. You should be making a hundred and four thousand uh and eight hundred dollars.
That's the theory uh but anyway, so uh, the last annual read or year over year, read again was four point: eight percent, think of it kind of like you're. Oh, that's really annoying your cpi uh for for jobs now. The other thing that you have is the month-over-month read and, in my opinion this is the more important one. The reason this is more important is because the month-over-month read gives us an idea of the speed at which we're traveling right now.
Now a lot of people get this very, very confused, but when you get a month over month number in order to figure out what speed you're traveling at what speed of sort of inflation, you're traveling at all, you have to do is multiply it by 12. uh And then sometimes the people get confused and they try to be a little bit more fancy and like well you're supposed to compound that rate, so you'd have to use exponents. No, no, no, no just multiply it by 12 is we're not trying to figure out what we think the annual inflation rate is going to be in some of the entire total as a compounded growth rate, we're trying to understand what the annualized rate is. What speed are we going at in a particular month and the speed that we were going at in a particular month last month was .3, which means the speed of wage growth was about 3.6 0.3 times 12..
This month it is expected to be 4.8 on the annualized, which is 0.4 in the uh in the average hourly month to month, earnings rate, and so we can figure that out by somewhere about halfway down the the bls report, we'll see uh the average hourly report. In fact, what we could do right now, employer employment is, we could actually pre-pull up the last one. So that way, if there are any kind of revisions, maybe it is slightly easier for us to see but uh, let's see here we'll do a little bit of luck in here uh anyway. So yeah. This news comes out in uh seven minutes now, and this is kind of what it looks like. It honestly looks like a fax machine or something you're gon na get the d from the dmv, which is kind of sad uh. But anyway, if we just search for the word hourly there, we go see, take a look at this. This is what the report kind of looks like.
This gives you just a little bit of prep work, see in november average hourly earnings increased eight cents to 31.03. So 08 3103 is uh. What what is that about two hold on here? Let's, let's hold on, let me make sure i'm doing this right. Uh! Oh, look! They actually they're just doing the math here, uh average hourly earnings have increased by four.
Well, that's the annual, but i'm trying to find out of all in november average eight cents to 31.08. Oh right, let me do it actually. The other way hold on sorry. The way i used to do this is 3103.
Minus eight cents is 30.95. There we go. It's a little tricky, especially at five and uh. No, i'm still getting the same thing.
This is weird hold on a sec. Maybe i'm screwing up how to do this uh. It might just be too early for me to comprehend how to do this right now, but that's okay. This is where the average hourly earning spot is uh.
That is interesting. Did they change this? No, because what we have is that this was at uh at three percent unless they're rounding, you know it doesn't make sense, i don't know, i don't know if this was revised or what uh, but anyway, so we'll see what the new report says. Uh and we'll get it we'll get a summary listed anyway, so uh, okay, let's see so eight cents did i just do. Did i type it in wrong, nah anyway? Okay, so uh.
In the meantime, other things that we need to talk about are uh the following uh, a lot of folks believe that yields will increase substantially yeah, potentially over uh, well over two percent for things like the ten year uh, and so what you want to look at Are is or things that are quite interesting in uh in the past, which, in the past, when the federal reserve raised interest rates, treasury yields didn't necessarily rise over the uh. The fed funds rate and take. I want to show you this chart here, take a look at this, so this is sort of a screenshot of a computer screen. So it's a little dusty, but anyway uh you can see.
The blue line here is actually treasury yields and this sort of red, more jagged line here this red jagged line. This represents your fed funds rate, and so you can actually notice here. In about 2003, four and five we had the fed funds rates rise substantially. Above what treasury yields were, and despite this increase in the fed funds rate, we didn't necessarily get treasury yields rise, that much more you had the same thing. Uh or a similar thing happened here in 2018 or 19, where you did have a run of of yields, but it's not like they they substantially exceeded. In this case, this was maybe more of an abnormality here, because here it does look like uh. The treasury yields kept pace with the fed's funds rate, but this was interesting here is that you, you had uh the fed funds rate really exceed what treasury yields were uh, and so that's actually giving or creating some hope. Uh some hopium that uh that wait a minute, uh yeah, exactly uh or dave yeah we're doing the math right.
It's it's weird that it's listed at uh uh that that percentage i'm a little confused anyway, uh the the um. The potential implication here is actually big and it's that what if the fed funds rate does go up uh and it eventually goes up to two and a half percent. Does it necessarily mean that treasury yields have to go to uh? Let's say on the 10-year have to go to three percent or something which could be devastating for, for, let's say, tech stocks or something like that. No uh, you know not not necessarily so uh in in the early 2000s uh show us that uh, which is very interesting, so uh, we'll see what happens uh.
Okay. So, let's see here we have we. What else do we have we have? So this is goldman sachs. We do have bloomberg believing that 10-year treasury yields will go up to about 2.
2.04 is their estimate. This is uh actually substantially more than where we sit right now. So if we take a look at futures and bonds right now, the dow is relatively actually all of the indices are relatively flat. This makes a lot of sense because the market is very much on standby right now for what's going to end up happening with the uh unemployment report here, uh or employment report, i should say uh, it doesn't matter same thing uh, so here you've got the u.s Tenure uh one point about 1.75 right now, and this is about similar to the peak that we had in february to march now february, to march peaks for this treasury yield, which isn't loading right now, but anyway, uh 1.75 peaks for in in that february march period, Did lead stocks to come under some substantial pressure uh during this time frame, uh, and so there's this concern that if these yields rise on whatever comes out of this bond report, that we could end up seeing some more pain in the market uh, especially amongst those Higher growth stocks amongst uh, profitless tech companies, software companies, tech companies, you name it uh, let's see here um by the way.
There's a note here that tech stocks got a lift uh big companies, including apple google, microsoft, are advancing ahead of the bell chip stocks. Look set to extend thursday's gains with news of the ces tech conference, boosting nvidia uh and some of the other chip manufacturers. Yeah, look the more we talk about the metaverse. The more chips become important, i mean think about rendering people in 3d. I mean come on folks, you want to play the metaverse chips or matterport. I think that's the earliest iteration of the metaverse that we'll see but uh anyway. Okay still confused a little bit on uh on on. Why all of a sudden, the uh we had that uh sort of potentially this revision here uh? Sometimes they revise the numbers, it's kind of after the fact it gets a little confusing, but anyway, let's uh.
Let's see what happens here. What are we going to get? What's the top line number going to be remember, the expectation is oh there it is wow. We only had 199 000 jobs, uh unemployment rate 3.9 unemployment rate that beats expectations 199. That is a that is a huge, miss uh that we were expecting a 4 50 folks, especially after that adp report uh.
That could actually help take some yup yup s. P is moving up on this. That could help uh. I do not have the average hourly yet because everybody's on this freaking web page and it ain't freaking loading.
So let's just listen in here hold on 34. steve. What's the number 199 000 another big miss here i beat cnbc just 249 from 210 000. uh private sector jobs were 211, so it looks like we might have lost some government jobs there, uh factory uh 26 000 goods producing overall, 54 000 with construction at 22.
000. yeah government was minus 12. uh, let's see average hourly earnings for all private workers, a very strong 0.6 again, that's a sign of a tight job market uh, raising questions about this bls number uh or the overall payroll number here. Let's see what else i can tell you uh, i don't have the unemployment rate, the u6 rate, the um uh, the broader measure of labor slack, seven point three percent down from seven point: seven percent uh: i have the hispanic unemployment.
I don't have the overall employee. Oh yeah wow, the unemployment rate dropping to three point: nine percent from uh uh. Four point two that suggests again. The household survey was stronger.
I don't have that in front of me i'll, throw it back to you, becky and i'll. Look for some of those household numbers, black unemployment rate, declining up to 7.1 percent from six and a half the uh white unemployment rate down a 3.2 from 3.7. Again, i'm guessing and i'll. Come back to you with this there's a again a stronger household survey than the payroll survey betsy.
This is exactly what you said happened last time. I think all right. Let's take a let's take a look through here so raised 19 cents to 31.31 and the average hourly. I think this is a little higher than expected.
Let me take a look here, though. Uh unemployment rate declined to point to 3.9 percent uh. We have, let's see over the year these measure: okay, okay, here we go among the major workers, unemployment rates for adult men, adult men at 3.56, adult women, 3.6 percent uh white's 3.2 percent uh black 7.1 asian 3.8, hispanics 4.9, teenagers, 10.9, so really uh, black unemployment. Really lagging here substantially, i do want to take a quick look at the market reaction here. I think this spy reaction coming right back down is is a little bit of fear about that unemployment, uh that that average hourly uh. If we're doing this right - and i'm just a little dumbfounded here - but i believe this actually came in at 0.06, because if you divide by this, you get 0.6 percent and unfortunately 0.6 in terms of a percent times. 12 is a 7.2 annualized inflation rate that comes in substantially worse than expected, and we were expecting a 0.3 if you get a 0.3 uh or even a 0.4. I'm sorry is what we were expecting it's 4.8 right.
So a 0.06 is an inflationary pressure while uh it is still good news to some sense that we're not overheating. With that top line number that inflation read coming in a little bit worse than expected, i think, is exactly what this market was concerned about. So i believe what you saw here was a reaction of the market going. Oh, my gosh! This is good, we're not overheating.
This is good good good. As soon as that number got calculated on that average hourly earnings, these candles turn to the red side uh. So not much, though i don't know how much markets really yeah markets are kind of confused by this. It's almost like we're getting a little bit of like a 50 50 reaction here, i'm gon na just try to look at some larger cap stocks here to understand how the market overall is reacting.
The market just doesn't really care. Let me see here. Let me look at a small cap here if any yeah, no but small caps kind of ran into the news. So let or at least this particular one - here's uh robin hood for exam.
Okay, a little bit of a u-turn to the downside. So, okay, a little bit of a softening. Let's look at btc, so this really doesn't give us much btc having a little bit of a run on the news coming right right away. When we had this, miss btc actually did well.
How weird is this uh? This is a very, very odd performance here by btc, just because of how aligned btc has been with uh with with uh tech stocks uh. So let's take a look at uh amazon. Perhaps amazon uh barely reacting to this very, very little of a reaction. If anything, skewed to the downside and again, i think it's skewed to the downside because sure we're not overheating on that that top line number, but unfortunately, that inflation number once again, inflation haunting us coming in a little higher than expected.
Uh again, though, crypto does seem to be a lot of cryptos do seem to be rotating uh positively on this, no matter, no matter the reason for it, ethereum btc solana, all showing significant moves to the upside on. What is a a report that potentially implies hey fed? Maybe your job isn't 100 done yet accommodating because we're still struggling to get those uh those jobs. Now uh they did revise up october payrolls, which is really interesting from uh 546 000 to 648 000, but even an additional one hundred thousand jobs, not that big of a deal. Uh yeah, okay, cr. All of a sudden, now crypto rotating yeah, crypto rotating right back down, see this is actually more expected, as it should be aligning with tech so and tech. I think right now is not enjoying this as as much as potentially hoped so you're, seeing a little bit of that rotation continue here on tesla uh you're. Seeing look at that a negative six, a six percent here on tesla or uh on d-wack. Sorry, uh not not honestly a surprise.
I said that yesterday, if i would not hold this thing overnight, uh and sure enough. Now it's rotating down kim came a little bit later than i expected, but still expecting that uh. So, okay, let me continue just reading the report for a brief moment here: uh the number of unemployed for 27 weeks or more declined by 185 000. The measure is down from 4 million a year earlier, but it's 887 higher than feb 2020.
So not much accommodation needed here anymore, number of permanent job losers at 1.7 million in december, declined by 202, 000 still down 1.8 uh through the course of the pandemic. Labor force participation rate unchanged. This is something that the federal reserve is also excited about, seeing increase, and so far we haven't been seeing this increase. The marginally attached individuals to the labor force was unchanged at 1.6.
The first people, not in the labor force, who want a job, is unchanged at 5.7 million. This figure is still 717 000 higher than where we were in feb 2020 pre-pandemic, the share of people who teleworked was 11.1 little different from november. This is interesting, despite all the omicron uh, you know madness: um total non-farm payroll, increased by 199, 000 uh, leisure hospitality, up 53k professional services; 43k, a loss of jobs here in professional and business services. Look at this 35 000 jobs cut or sliced in uh, business and professional services.
So i would imagine this is like white collar work, okay, again, the uh the rate over here at an annualized rate of 7.2 percent. This is not ideal uh. I also figured out the math i was so confused about uh. I mentally have figured it out because i was so confused.
I know what they did. I'm sorry. It took me 20 minutes to figure that out, but i figured it out so uh. If we go to uh where, where is the darn thing here, we go employment rate situation, okay, so so here's how we do it uh see this is the december one.
Did they do they just update it to december they get rid of the november one. Maybe that's what they do now. Oh, this doesn't move this latest news box. Oh, i see okay, whatever uh. Oh, i could go to all releases over here. No, it doesn't matter. I could just tell you that the thing the weird thing i was looking at when i did the numbers, it was something i basically got a number that looked like this. Basically, what they did is they just rounded this up last time to three: that's what they did, but it still looks weird because you're expecting to see a number, that's kind of like.
Oh, this is three percent right, but remember folks, this is the monthly figure. So you have to times that by 12 and there you go, there's your 3.6 percent times by 12 times 100 and you can see it even more clearly right 3.6. So it's a little bit of weird rounding that they did and that's why i was getting thrown off, but the math i was doing was right. I just i couldn't comprehend the result: uh i'll um, you know i'll - have some more ben mala coffee here shout out to ben mala in uh in florida, good guy, all right so uh again, this inflation read, in my opinion, not uh good uh for uh for Ze maquette uh d-wack, now down about eight percent etsy down about half of a percent.
Let's take a look and see how things are are shifting here we did have emeryn spiking here on dues of uh an updated uh, amazon partnership, which is very exciting. I don't know all of the particulars here: it's not a stock that i really particularly follow uh, but that was one of the reasons you did have gamestop substantially: jumping on news of creating an nft market space for uh for video games, which a lot of folks Were very excited about uh iron net up 5.4 sonos up four backed holding is up about 4.95 canadian solar moving about three percent here, so we got some things. Moving to the upside a lot of things still getting burned to the downside, specifically crypto related uh, like hud 8 mining. It makes sense that hud 8 mining is going down with bitcoin.
This is very common. A firm moving down about 1.7, not much of a big move to the downside here, uh. If we go ahead and just take a quick peek at tesla yeah, we do see that rotation. In effect, after that jobs report, you can see, volume has increased after the jobs report came in and again it is weighing on the market uh with inflationary concerns.
Yeah. Look at this folks. The s p 500 very interesting. The first sign of excitement on oh, my gosh, it's a big miss.
We beat cnbc to that one, that's cool uh, but a u-turn as soon as we realized that the inflationary numbers were still here, uh to bury us um shout out to topo chico. This is like the best sparkling water in the world. It's so good, all right, not sponsored, but anyway, uh crypto did have a very lagged response. I don't know what it is with the crypto market, but a very, very lagged response.
We initially saw euphoria begin uh. I guess i shouldn't call it euphoria. We saw some. Some nominal level of excitement come to crypto on on the miss uh, but it took it took a solid five minutes for crypto to get the memo. I would not be personally surprised folks if institutional traders love that kind of lag time, if you think about it, that lag time is ridiculous. I mean we're looking at it like. This is the opposite of what should be happening. I mean just rewind and you'll.
See me say that, and that's really interesting, because it it in my opinion sends the signal that kryptos still the wild west trading it is. It is not uh as as quick as uh as the stock trading world is now now on this news. Let's take a quick look at how the 10 year is reacting. Ah, unsurprisingly, it is spiking up so before the jobs report came in, the 10 10-year was sitting at about 1.72 and we have now spiked to 1.756.
So this spiking yield curve could also be now uh or not yield curve, but the 10-year could be weighing uh on the tech sector, certainly, and we know that crypto crypto no longer serves as an inflation hedge folks, i hate to break the news, but uh we Have we have now, i think, clearly, documented in numerous different videos that crypto has much more of a correlation to uh to technology stocks uh and and it's almost really just a placeholder for technology stocks, not quite there's still some diversification to tech uh. Some not much left but uh. It has lost its inflation hedge aspect by uh performing well uh in inflationary times uh. In fact, the best performance we've seen from crypto has actually been when we've had a lot of monetary stim, or, i should say fiscal stimulus and monetary stimulus for that matter, but not a lot of inflation.
That was the best time for crypto and uh. We are seeing yields somewhat rotate down now we did have a spike on the two-year to about point eight nine sitting at point: eight, eight right now uh it does look like we've capped out on this uh 10 year or the treasury reaction uh. Let me quickly just pull and then we'll go back to the sticks here in just a moment. Let me just get the tenure again.
I want to see if we've reached a peak, because that could potentially mean we're going to see a little bit of a recovery again in tech stocks, but not necessarily so, let's see here: okay, yeah we've peaked on yields and yields are rotating back down a lot Of folks get very confused why anybody in the world would actually buy bonds, because if you buy bonds, then you you're really committing. It would seem your money to either a trade that you're going to trade, the bond or a really low yield like 1.75 on on a 10-year bond like who cares right? Why would you want that coupon and, what's important to remember, is sovereign buyers? Sovereign buyers want our bonds because compared to europe or japan, uh or other markets, the risk-free yields are zero or negative. So the united states has a substantial advantage in risk-free debt and that we actually have positive, yielding debt, which does create some distortions. I would imagine for the market, because, if we didn't have that, is it then possible that less people would buy our bonds and yields would be actually substantially higher and uh? You know the market would be even more tattered yeah, possibly but anyway, um yeah, something to keep in mind. That's why we get some pressures here so looking again uh. So as soon as treasury yields started inflecting down, it does look like we started hitting a bottom here on btc, so you tell watching the treasury market and watching the uh, the essentially the ten year the two year and what's happening in the tech sector, is almost Critical for uh cryptocurrencies now we're not at a low where we sat last night last night. We briefly uh around 9. 00 p.m, hit this at this 41 000 low.
So far, we've been breaking uh, consistently down uh beyond uh, beyond support levels, as as we hunt for different levels of support, let's take a look for or at the spy yeah okay, we are getting a rotation back up now. In my opinion, this is because the treasury yield is uh is, is somewhat coming down. I don't know if that's continuing anymore right now, yeah it is it's still down. So, let's see here, okay, moving to the downside here, whack at eight percent of the downside boy.
Oh boy, look yesterday at the market closing livestream, and this is just, in my opinion, just basic uh trading psychology, basic training, psychology uh. In my opinion, it was uh. It was a very big mistake to to hold dwack uh through the jobs report, and i mentioned this yesterday in the closing live stream, because the the psychology of it doesn't make sense. If, if we get, if we get even a slight miss a risk asset like something that is a momentum play is going to get absolutely whack uh, and so somebody who bought on on hope yesterday that we would have momentum of of this stock continuing to run.
Probably bought at 59.60, and now it's trading for nearly 10 percent, less, not quite about eight percent less sitting about 55.. The reason for that is very logical. It just takes a small miss in this case a high slightly higher inflation rate, and so what happens? People sell off risk ass risk assets, it's basic basic, psych, uh psychology of money. Look, there's, there's a reason, and i know a lot of folks are tired of hearing it, but uh there's a reason.
My program won the stock market uh, in which i also include all my buy, sell alerts. So, whatever trades i'm making, i send those out uh. So you know, what's going on with my portfolio there's a reason: it's called the stocks and psychology of money, because a lot of, for example, even technical analysis is just basic psychology. It's where can you find the most generic ta that the vast majority of traders are using, uh and and oft like more often than not i'd, say nine out of 10 times it works perfectly. It's it's really incredible uh you know, and the nice thing is there are still so many doubters like the fundy people, which i consider myself, a fundy person, fundamental analysis person uh that really hate ta. But what you have to think about is stock. Investing isn't a matter of all fundamental analysis or all technical analysis or all momentum analysis. In fact, if, if you look at, for example, zoom uh and you consider kathy wood, somebody who's in, in my opinion, has an incredible mindset and and uh outlook uh on on our world and innovative companies, uh really highly respected and regarded lover uh, but uh.
One of the problems that you have is, i don't think, kathy recognized that we had a triple threat on zoom and it's what i call a layering, and this is another one, one of the other things we talk about in uh stocks and psychology money. But very briefly, oh i don't have my my apple pencil. My pencil is gone. Someone stole my pencil all right.
Fine, i guess i'll have to use the non-pencil here, but anyway, uh. What you kind of have in the stock market is a layering right. You have fundamental analysis, is your base layer. Then you get technical analysis, which is your next layer and then after that comes momentum, and all three of these things can contribute to the value of a stock.
But when momentum goes away, which honestly sometimes can be much more euphoric and be substantially large, you you fall back to ta when, when ta breaks down, you fall back to just basic uh, basic fundamental or more intrinsic value uh. In my opinion, this is because you can have traders that that trade up a stock and actually create momentum. You saw a lot of that happen in the stock upstart, but also it's important to look at again. Somebody who, in my opinion, is more of a fundamental analysis but but isn't considering momentum or or technical analysis.
You look at zoom and the technicals were horrible uh, but uh. You know - and this is obviously why we've been seeing these declines and these downtrends uh, but also you've, got to remember folks, there's a very simple momentum trend in zoom people invested in zoom as a safe haven stock during the pandemic pandemic, either over or less severe. It's certainly too early to say it's over with the omicron surges, so less severe. What happens? People rotate out of zoom? They don't need that anymore, so your fundamental analysis isn't even affected because you were just way beyond the levels of of fundamental analysis here so um anyway, uh important things to consider uh.
There is a uh birthday coupon for that program. Uh and all of the programs linked down below including the path to building your wealth. That is a new course that uh that comes out by my birthday, my birthday uh. This is gon na, be my 30th birthday, so it's special! So if you want to be part of that 30th birthday, here's that birthday food code - okay. So let's uh, let's take another look here at what some riskier assets are doing like tesla in the tech sector. You have a slight recovery here, but you're still net down. After the jobs news here, jobs news right here looks like we lost about seven points on tesla, which honestly seven points on tesla at about 10.75 uh hold on seven percent of the points there we go uh that works out to slightly less than than uh. Slightly more than half of eight percent uh in terms of movement, there you've got uh robin hood.
Also rotating down slightly. Only up about 0.13 right now see uh is baba still moving, that's excellent. If it is, it is yeah baba actually rotated down then picked up its uh, its movement again good job baba. Let's see etsy uh etsy rotating down slightly okay.
I think we've got a pretty consistent picture here that the market's not loving what just happened. Uh no shelly, no i'm not in the 30 club, not yet not in the 30 club. Let's see here, yeah trade, desk, plebes and ventura. Oh that's awesome! I love trade desk uh, oh yeah, adam no you're, absolutely right! So the layering can absolutely be applied to hood.
So one of the funny things about hood uh is that when robin hood first ipo'd and and ran here, this was so clearly your momentum layer right here that i sold calls right here at about 72 dollars, and i took a 99.9 profit on those sold. Calls uh - just i don't know like eight weeks later, because it had just been trending straight down so uh. There are opportunities that, even if you're in a stock where you could sell covered, call well sell calls which would against your position, which would be having covered calls and uh and actually capture uh, a substantial hedge and free income, essentially as a stock declines. Now, in my opinion, robin hood has fallen to this level, where it's actually well below the fundamental value uh position.
It's become. It's been an easy stocked, hedge uh or used as a hedge, but uh yeah. I mean just solely looking at the company's cash position. Crypto potential uh, it's uh, it's it's remarkable uh that uh the company is as inexpensive as it is.
But then again the retail community does not necessarily love it. So it's it's an easy way for hedge funds to actually play the retail community uh. You know the retail community is always always thinking. Oh, go get the hedges, you hate the hedges or whatever the hedges, love trying to predict what the retail community is doing.
It's a great great way to hedge, so fed funds futures imply now a 90 chance of a rate hike at the march meeting after this payroll data. So it looks like a fed funds, futures uh yeah, so uh blau. This is net of their debt. Actually so, if you uh look at their cash position, i want to say it's somewhere between 16 to 19 million, you subtract out their debt. They have somewhere around a billion. They have somewhere around seven and a half to eight billion dollars of cash, and their market cap is like 13.8. So your your every every bit you're putting into this stock you're putting uh. You know, somewhere between uh 55 to 60 percent in into just cash into just book value.
It really really incredible, uh, so 1992, the best year there you go - that is right. 92. kevin has the knowledge of an 80 year old. I don't know if that's a compliment, you know biden's almost 80.
um all right nvidia going down. Let's we'll take a look at that uh, a lot of excitement for nvidia longer term, specifically because of the um metaverse plays and and the excitement that we're getting out of ces, but we are getting more of a rotation down uh in individual stocks. Okay, let's see yeah smps vacillating a lot of this sort of vacillation here right now, in the s p 500. We do about 32 minutes to go before the opening bell.
So as the interesting thing about these, the earlier mornings is we get a lot more time when we have these early reports cpi data by the way coming out on wednesday, and then you do have the federal reserve also meeting uh at the end of the month. The i believe it's the 24th and 25th. I can fact check that really quickly. Those uh that meeting is uh is going to be yeah, i'm sorry it's the 25th and 26th, but that meeting will be uh another catalyst for the market, so first catalyst.
I think uh january 12, cpi catalyst - we did have a reduction in inflation reads in europe in germany, that is, you peaked out in november and had a rotation down in december for inflation. You also had that similar rotation down for inflation, with a pmi report here for manufacturers in the united states, which is quite exciting, uh all right, let's see here. Thank you, compliment, okay, awesome, good, good, good, uh, all right! So, let's, let's do a little bit of seeing what the suits are saying to the drama that has unfolded this morning. Okay, treasury yields just uh have uh, not only did they peak and then rotate down, they have now rotated back to the upside.
We are now at a new peak folks, the 10-year treasury, now at just over 1.76 and i'm going to go ahead and keep this. This chart my forefront here, so we have uh an idea of what's going on here with bonds. That's not that that's probably going to wait, okay, yeah and then we're now at point nine on the two year, so that oh yeah, oh nice, spike on on the two-year so that that should hurt. Okay, uh, we have futures retreat as payroll misses average hourly earnings rise as expected.
The hourly earnings was the catalyst that we were looking for and it is exactly what we got wasn't ideal uh. We have, let's take a look at what else we have here. What are the suits saying right now, so, okay, the speculation now that omicron is the reason for this weak jobs report uh. The report makes the 3.5 percent unemployment rate that fed policy makers are predicting by the end of the year, entirely, reachable on a full year basis: employment, climbed 6.4 last year, at a record as anticipated, most of more positive data, the long-term unemployed or those jobless for 27 weeks or more declined, black unemployment actually rose from six point: five percent to seven point: one percent um: that's that's a quite odd inflection up, yeah inflection up on black unemployment and uh black women, so uh black women and overall black rate up there's the thesis That this could potentially have to do with more exposure to sectors that could be affected by omicron, so social distance sector service sectors and so on. Okay, all right! So that's what the suits are identifying right now, yes star! The data has been out for about 30 minutes. Now we had uh just a recap. If you're just now joining, we had a miss on the top line, unemployment read but which was initially cheered by the market but actually turned into bad news, because when we calculated the average hourly earnings rather than rotating up 0.3 percent, as expected, i'm sorry 0.4 percent. As expected, they actually rotated up 0.6, which is an annualized inflation rate of about 7.2 percent, not good, and so that has left uh yields, rising tech stocks, selling off s, p, falling hospitals struggle to match walmart pay as staff flees omicron.
That means nurses are going to walmart because they're, tired of omicron in hospitals and the stress - probably wow. Okay, that's that's an incredible headline. All right. Let's uh, let's take a little bit of a peek again at looks like some stabilization happening here at btc.
Let's look at the spy and then see what what uh other news we can find. Okay, so you know we got. We had a little bit of pain, uh. I think what this is just going to imply that we're going to be more tentative until wednesday when we get the uh cpi report, but uh otherwise, uh, not not so uh uh, not so dramatically, terrible, all right, let's get to the overall futures read and then We'll look at okay, all negative everything read now uh, so i'm going to change the title here: jobs day, uh market there we go uh, oh okay! It doesn't want to.
Let me change it there. Fine then i'll change it here. Oh that's a mistake! There we go okay, let's see what news we have as we wait for the trading day to actually really begin in about 26 minutes. I think most of 2020 will be tentative yeah.
I uh. I actually agree with you. I think 2022 wouldn't surprise me if it's uh heavily sideways and painful uh this, that is, that is risky for options contracts. So keep that in mind if you're in options uh and get your puts, ready, nurses, someone here says: nurses are quitting to go to the travel nurse route direction because the pay increase is just saying some insane. Somebody else says: hospital nurses are quitting because wages are too low yeah and then becoming travel nurses to return to the same hospital for double the pay. Wow wow, that's interesting: okay, so um, let's see here, yeah well, they're correctly, identifying that futures are dropping on the spike in uh bond yields and uh wages prices; okay, uh. So this is about hospitals lowest since september, in a drop of 40 percent from a record. In bitcoin wall street is using tech firms like zillow to eat up starter homes.
Great makes it harder for the for families to get in uh, but that's capitalism. We need what we need is a government that can actually build more homes, but most of our governments are, quite frankly, incompetent, so investors braced for slowing corporate bond sales, less issuance eurozone inflation hits new record. Oh, that is the opposite of what was happening in germany. Not good, let's see what happened here: consumer prices in the eurozone increased at a record pace uh in the year through december, as food prices jumped all right.
Let's see here, okay, the european union statistics agency, said: consumer prices in december were five percent higher than a year earlier. This is a pickup from the previous record of 4.9. That is not ideal for what we're looking for in the united states. Economists surveyed by the wall street journal had expected the inflation rate to ease to 4.7, but while energy prices rose at a slower pace in the 12 months through december, food price inflation actually jumped to 4.6 from 1.9.
In november the pickup in inflation uh as 2021 drew do a close was a surprise for many economists. Oh look folks. Economists are surprised that inflation is higher than expected. Uh all right.
Oh no, inflation's higher. All right. Let's see what else we have here. Parents hiring was weak but still expect a rate hike in march yeah no kidding.
This shows you. This is actually a nice chart here on the uh jobs gains kind of shows you how uneven this has really been jobs. Report disappoints bitcoin falls to a three-month low barons here, seven things bitcoin fans say and why they're wrong ooh? Let's see what we got here, uh, really really. I can't baron's advisor subscribe.
I have a barren subscription. What is this and another 30 dollars a month? Oh my gosh, well all right, never mind, then you know, i think the big thing is uh that uh bitcoin's an inflation hedge. I think we've really just proven that over the last few weeks in uh in the latest pricing activity, it's been a lot more again. Tech related uh, it does look like s.
P. Future is recovering a little bit. So that's good. A little bit of a move here on recovery stocks like delta carnival american air arc, invest still down about 0.13 percent fractionally here, gamestop still making nice moves as well as embryon uh, otherwise, pretty consistent here as we wait for the opening yeah d went down as Expected starbucks down about 2.6 roblox, wow folks, roblox down at 87 nancy pelosi and her husband. They bought 100 call options for roblox, i believe for september of 2022. They were at the money roughly at the money at the time when they were bought a little upside down right now. Now you are upside down matapor, it's sitting at 1611, cloudflare 103., not a lot of moves. Uh in the middle, though middle seems pretty quiet right now, uh tesla up about point four percent in the pre-market all right why young adults are delaying parenting jobs.
Investing, let's see most of us in our 20s and 30s, are familiar with the rhymes of friend group life changes. First, people find their long-term relationships and in each case you hear all you hear: dude, okay, blah blah blah. Okay, so wait! Wait. Where is next? Okay? Wait: here's 22, but here's the thing about 2022.
I have ushered friends through whatever i don't know. If this is gon na tell us anything familiar lasting issues. Okay, many say they plan to keep delaying parenthood over and over and over again until they manage to pay down student loan, debt buy a home or otherwise attain some form of financial stability. See you know if folks, who are in the stocks and psychology of money course they'd be able to have children sooner hashtag, not guaranteed, not a fertility course uh anyway.
Okay, i mean that makes sense that those are sort of the common arguments that we've seen for um for for why we're seeing families delay having children or buy homes all right? Let's try the financial times see what's going on in europe. We got 19 minutes to go all right. So oh look at this here. Betting on transitory u.s, inflation is still valid.
Okay. I don't know why that title doesn't really jive with me, but it's a little confusing so senior fellow at harvard kennedy school. Who cares all right. Team transitory was in retreat at the end of 2021, the rapidly accelerating inflation predicted by economists, including former treasury secretary lawrence summers and former imf chief uh, whomever uh had appeared.
Consumer prices rose 6.8 percent to the year end in december, fastest increase since 1982. by december 15th. Uh, even the federal reserve policy makers were worried. The minutes yeah they they freaked out.
Those minutes were just bad worst minutes. We've ever seen now. This writer says i would caution the people abandoning the transitory argument not to abandon their position so easily after trillions of dollars spent on fiscal support, too much money may have been chasing too few goods by the end of last year, but this year i think the Situation will reverse with growth and inflation, slowing according to the brookings institute fiscal impact tool, local state and federal tax and spending policy added. Overall, an overall 7.5 percentage points to gdp in the first quarter of 2021, but the fiscal impulse turned negative thereafter and is expected to be a drag on the economy through the third quarter of 2023. And even if parts of the stalled 1.75 trillion dollar build back. Better stimulus are passed this year. Actual government spending in 2022 would remain small, partially offset by ramped up tax collection, interesting uh, okay, while overall, the stock of savings is astonishing, it is dwindling and it was not distributed evenly. In the first place.
The personal savings rate had reverted to pre-pandemic levels of around seven percent. According to the jpm institute, low-income families saw the highest percentage gains in savings from fiscal measures, but exhausted their savings fast for low earners. The proportion of any income increase was spent on consumption, and that is typically a higher occurrence than than those who are wealthier. This is true, i mean people who have more wealth, they just dump their money into the stock market when they get.
You know a ppp loan or or a cheaper real estate loan or whatever right, uh, lower income individuals. They get a stimulus check and it's let's go buy a prada purse uh, which is you know, sometimes what what comes first, the chicken or the egg like bad impulsive decisions or or or low income and low savings. I i don't know uh but anyway. Well, i think it all starts with the fact that our schools suck - i don't think it's people's fault.
I think it's the government's fault, but anyway the government people who have burned through their savings yeah moody's analytics excess well. This is also why i believe uh. Oh, i disappeared there for a second uh, because individuals who uh, who who have gone through their stimulus and their opportunities to uh, spend money might still want to spend money and uh. If they still want to spend money, uh, then uh, then then you uh, then you essentially uh.
You have to borrow, if you don't have that. So so. So, let's listen to this uh. Okay.
Somebody here says i don't think poor people bought quote prada purses kevin. You know you'd actually be very surprised because, according to prada themselves, product priced products specifically around the stimulus, check, amounts or slightly out of reach, because so many poor individuals were now receiving a lump sum of cash. That would finally allow them to purchase a luxury good. That they previously could not have and spending skyrocketed on consumer goods around the 12 to 1400 price range.
So you know, while the initial reaction that you had, i think is fair, that why would a poor person spend money on a product purse with a stimulus check? I think the prac in actuality they did uh and businesses took advantage of that businesses took advantage of the pricing power that gave them uh and uh and unfortunately uh uh. You know people blew their stimulus money. You know i. I know some people might say things like. Oh you know this is a bad take or whatever it is what it is. It's just. It's just the way. The way the market works.
You could stick your head in the sand and pretend that that individuals who get a stimulus check aren't tempted to buy crap. They don't need, but the reality is we don't have financial education in american schools uh. You know: we've got 95 percent of american students, learn chemistry uh, when only five percent of americans actually uh work with chemistry in their daily lives. Uh and and a hundred percent of americans need financial education, yet only five percent of americans actually learn it so uh.
You've got a very uh backwards: uh government uh you've got a backwards teaching so uh yeah. You know i mean look, i i don't understand what what what what your your like, what you're going for here like if, if your your goal is just to try to try to like put like, obviously no, it wasn't only proud of purses and making an argument That people who had more money uh were uh were now incentivized to spend money, not care. So much about sticker price. Incentivize companies to raise prices to stimulus levels or or or shift them around to stimulus levels and take advantage of of new pricing power that they had.
This leads to consumer price inflation. This leads to more sales and record revenues for companies. Obviously not every single human who got a stimulus check goes and buys product purses. I mean no, no, no person with with logic or an economic background thinks that there's only one thing that happens, things happen in a gradient.
So let's let's get off that and get back into uh the financial times here so uh. The upshot here - and i actually so i actually agree with this act very next line here now. This is this is what i believe for a very long period of time, and why? While i've been wrong about when uh, we would see an inflection point in inflation and i really think the delta surge was part of that, because the delta surge really set us back about four or five months, which we weren't expecting the delta variant and like the Taiwanese factory shutdowns and such uh, the the fact of the matter is at some point in 2021. We will get that or we should knock on wood, get that inflection down in inflation.
We don't know when it's going to be and that's what's frustrating for the stock market. Is it's entirely possible that the january that the cpi read that we get now for december could still be a big miss? It could still be high uh. It could be bad. Just like what we saw at the european central bank, which is not ideal, but it could still happen, uh so uh, you know, but at some point we do expect that inflation will will rotate down uh and uh, and so anyway, we'll keep going here. Uh, unemployed respondents, uh respondents to a survey, but indeed.com said their financial cushion was one of the top three reasons for not urgently seeking a job. That's actually interesting, as those savings run down. Many who dropped out of the labor force will try to return, boosting labor supply and easing upward pressure uh on wages and therefore prices. What about business? Investment even limited, fed rate rate hikes will increase borrowing costs in 2022.
10-Year treasury yields are rising and it's hard to argue. The investment environment will improve in 2022, the dollar will strengthen, pushing down inflation and exports. This this is also an interesting argument. Here is that the more our treasury yields rise, the more attractive our treasuries become to foreign nations, uh yeah - and we talked about this a little bit earlier, but that could actually keep a lid on treasury yields, but could could also hurt exports, as the dollar goes Up - and this is true - and then that could hurt, companies like you know, potentially to some degree uh tesla, although we do manufacture products in china as well, with tesla apple uh potential exports anyway, foreign demand may also be weak.
Chinese growth slowed precipitously uh as they're they're seeking financial stability. Uh beijing has signaled. They will do more to support growth in 2022.. You know this is probably the biggest qualm that i have with investing in china is the potential for uh a slowdown in in the chinese consumer economy, which i think is bad news for both alibaba and neo, though alibaba the last few days has been on a Rotation to the upside - hmm, let's see here.
Okay, let's see these may exhaust exacerbate existing global supply chain disruptions in early 2022, but there are other indicators that supply pressures are easing order, backlogs and supply delivery. Time frames have improved in recent months. According to the fed's new index, supply chain issues have peaked and might start uh. It might start moderating someone forward.
I was actually reading the new york fed's blog about this. It's really interesting. They put together like six or seven different charts uh into one and and uh think that there might be a peak in inflationary readings as they saw a tiny, tiny little inflection point to the downside.
Kevin looks bad, must be losing sleep over this downturn in his portfolio
Two words : Baby Doge!
Biden's economy is the worst we need Trump
Happy new year <I totally agree with what you are saying. I started in crypto in August 2017, and I bought in. I was up 5x by December only to watch that disappear quickly and then watch the original investment go down by about 85% during the ensuing 4 year bear market. I took the opportunity to accumulate more over the last 4 years which was hard to do and at the same time a smart thing to do. I wish I had bought more. I am in profit for now but I am planning on using my experience and what i have learnt from Scott. I have learned from you and other Youtubrs especially my mentor Scott Lyn, who taught me how to make trade and increase my crypto from 1 to 7btc that no one really knows what is going to happen and I know you are only saying what you think will happen based on the past. It is yours and my opinion so people should make their own investment choices based on their own research,..
if you believe that unemployment is 3.9% , i got a bridge i can sell you. nobody is even looking for work. they are quitting in droves.if you count unemployment as people out of a job, it is easily 20%. open your eyes , this economy is tanking.
YOU DID THIS KEVIN. YOU CUT YOUR HAIR. dye those little pieces green Now!
Hyper inflation is its way
This new look is your worst one yet.
another big day for your buddies Cathy Wood and Ross Gerber, got any other ways you can have your viewers lose their hard earned money
Me: bought the dip
The feds: YOU THOUGHTTT
Man, I don't see any positive catalysts in January… just a pile-on of news about hospitals over capacity, stores temporarily closing simply because nobody is available, businesses going into debt while interest rates are set to rise, more Powell talks… people sharply cutting spending to pay off Xmas debt, this doesn't look good at all for Q1 :S Looks like I'll be rebuilding my cash reserve. The fear of "missing the bottom" is pretty much gone for me. "Buy the dip" is over. Kevin not rubbing his hands together anymore lol.
Dude I don’t think anyone has the time to watch these videos Especially at the pace u post at
Buying the dip sure feels like catching a falling knife.
topou chicou
Wonder how much jobs market has been affected due to migration and covid?
Discovery is next netflix.
When you define inflation as an increase in the money supply, and not CPI, then you will see bitcoin/crypto is in fact a perfect hedge for inflation. High cpi means lower inflation “less money supply” in the future.
Dead cat bounces (his stupid convictionless rally term) makes Kevin very excited like a little kid in a candy store.
Binances BTC-exchange having a glith with the exchange rate on it
exchanges right now btc like x10 price to ethereum
I posted vldeo,
Kevin smoked the news
Time to crack open a cold one for my portfolio rip
running for Gov before 30 ? overachiever
FED is been buying bond because no one buys bond.
Kevin changes his look faster then im loosing money in the last two weeks…lol. Soon, if this keeps up, they will be giving away stocks. FML.
Stagflation
He's drinking at 615…crap
Stagflation
Stagflation
everyone is about to mass sell off all their shit.. you're better off selling and rebuying 2022 summers end before it all goes back up. it may be early 2023 before bitcoin surges to a new high
Let’s go Brandon!
Let’s Go Brandon!
Thank heaven…Kevin cut that cotton candy off his head.
Can someone help me understand where to get alerts and buy and sell signals from Kevins course, I only see pre recorded videos
Who in the right mind buys bond with the negative return
Can't wait for Powell to talk on Tuesday to tank the market. Lol.
Man… you should use Vuzix glasses, those are really cool stuff and very pro-productivity.