Hey everyone kevin here. As you already know, the programs on building your wealth have a coupon extended through thursday, but so far this year, folks, we have been off to the worst year since the great depression, that's actually leading to optimism. Despite kathy wood this morning, saying we're definitely in a recession in part due to her claim that inventory hasn't piled up this quickly at companies in our entire 45 years in the business. Take a look at the following chart that actually again gives us some hope.

So here it is, this chart here shows us that we've had the worst start since the great depression, but what's fascinating is anytime. We've had one of these substantial declines, going all the way down over here to about an 11.9 percent decline. We have followed up with some substantial gains in the second half of the year, so this was a measure between january 1st, through to june 17th, and anytime, we've had declines of more than 12 percent right here on the right side, you see we ended up the Second, half of the year quite positive, great depression, positive to the tune of 43 12.9 percent. Over here during the kennedy slide world war ii, we got a six percent bomb.

Obviously we sit here, we're hoping this will be positive and you can see only during these more modest falls over here. This 10 to 11 percent was oops. Was this much less of a positive indicator? In fact, in these cases, when we fell 11.9 percent during uh the the earlier part of the great depression, you can see here the 1931 great depression. The early report versus the 1932 version here - uh you you can see here we had substantial negative returns for the second half of the year, so it seems like substantial pain, though in excess of 12 percent historically has always led to gains in the second half of The year uh some measure of positivity, which is good because right now, investor sentiment according to the investor intelligence survey remains in what are known as capitulation levels.

You can see the level here which is uh. The blue line here is a spread between bullish, minus the bearish sentiment and when you take out bearish, if it's and then you end up, you end up with a negative number which we have right here. This line uh this this black line right here represents the zero percent line. If you have a negative number, then you have more bearishness than you have bullishness, and you can see right here.

We are actually in those bearish territories, quite quite negative levels. In fact, we have not seen levels this negative at all on this chart. You go back to the end of 2018 over here. It's not as bad used to go to the coveted pandemic.

It's not as bad, so uh. You've you've got certainly some more pain, uh in terms of sentiment, and then this particular chart here gives us some levels of rsi relative strength index. It shows us that telecoms autos healthcare, software sales, tech hardware, this these sectors - are starting to pop off a little bit here with strength, whereas we're actually seeing weaker inflows into energy and materials, which is really interesting, because these are the sectors that have really held up. Uh so strongly and uh have also in part, contributed to inflation, which we got to get rid of so anyway.

We've we've got some good optimism right now, bulls and bears alike are actually calling for. A rally bears obviously think it'll be short term and that this will be a trap. The federal reserve it's worth noting, though, has never ended a tightening cycle with negative real yields. So this is a potential tell to us.

Hey. Are we close to the fed potentially u-turning? Can they end their tightening cycle, yet not even close? In fact, if we look at the two-year tips yield, which is a treasury inflation-protected security, what you'll find is that the two-year real yield is actually still in the negative territory. Now, why does that matter? Why does it matter that we're still sitting over here? It's obviously steepened substantially since we've begun the tightening cycle here, but why does it matter that it's still negative because historically, since 1990, the federal reserve has never u-turned with this white line being under the red line, the white line or real yields always have to end Up turning positive, now, they're already positive for longer duration, treasury, inflation-protected securities, like your 10-year 20 or 30-year tips, those are positive, but the shorter end of the curve two years have not gone positive yet, and we expect that they have to go positive first. That means more hikes from the federal reserve.

Obviously, we're expecting a lot more hikes to come anyway, but more hikes to actually push the market's expectations here by the two-year inflation protected security up above uh, the zero percent yield sector. Now, what that would mean is that we finally are actually seeing some form of tightening we're still below neutral. If the two-year is negative - and this is going to be one of the ways that j-pal determines all right, are we above neutral? Yet how far above neutral are you uh? This particular two-year tips is one that he's referred to as being one of his favorite indicators in terms of how much tightening they have left to do so. It's an interesting one to write down sort of on your tracker of things to watch.

Five days ago, the bank stress tests occurred by the fed as well. What was fascinating to me is that they strengthened the stress test a little bit. They actually went from a gdp contraction of 5.5 percent to 6.2 percent, so a larger negative shock, larger shock to unemployment and weaker credit. But the big thing that i thought was fascinating in the stress test is rather than suggesting that real estate might decline 24 and the stress test.

They actually stress banks on what, if we have a 29 decline in real estate prices - and i think that's really interesting - to consider that the fed is running doomsday scenarios and they're, making their doomsday scenarios worse and one of the places where they're definitely pushing the doomsday Scenario: worse is a real estate that actually excites me because i'm personally preparing to buy real estate, hopefully at the end of the year, maybe into next year, depending on what inflection points that we see in the real estate market. Obviously, you can watch me as i analyze deals and you can see exactly what i look for in our live streams in the courses on building your wealth. We've got that expiring coupon code. Now thursday it was extended to thursday.

It gives a little bit more of an opportunity for the next price. Hike. Prices have gone up consistently over the last two years and they will continue to go up consistently over the next two years, especially as we add a lot more content. Now we have some really good news, and then we have some bad news that we have to cover both of these sectors of news are things that you're going to want to hear, but you have to stay tuned because we've got a message from our sponsor boy.

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Let's get some of the bad news out of the way, so first we're starting to see some signs that the earnings recession is coming. It's coming in fact yesterday, in the course member live stream, we went through the nike press release, amongst other things, and one of the things that's very interesting about the nike press. Release is if we jump over here, we actually see that in the three months ended in 2022 compared to 2021, we actually had negative earnings growth. You could see that right here, you could see a negative one percent year over year.

If we get two quarters in a row of this, we're technically in an earnings recession where we're seeing uh numbers that companies actually decline rather than increase - and this is very fascinating because we saw that decline in just this last quarter and take a look at this Right here, net income again also net earnings, recession right five percent decline quarter over quarter, comparing well it's actually year over year. Right because we're comparing the first quarter of uh 2021 to 2022 ending may 31st. They have a weird calendar. So that's not great.

We don't like to see that another thing that i want to show is we're starting to see a slight rise here in delinquencies, especially in not just uh well in all of these sectors. Okay, look at this. You've got traditional lending marketplace lending, and then you have subprime auto over here the green line and what you really want to take a look at is you want to mark where the pandemic is so we're going to go over here and we're going to mark the Pandemic over here, you can see that substantial decline in delinquencies here. This is really, as everything got forbearance programs and it became a lot less necessary to actually make payments, because we could just blame covet if we were delinquent.

But what you're starting to see here at really the end of 2021 and beginning of 2022, this sort of region here is you're, really starting to see this inflection point back up in delinquencies, now we're not yet to levels that are higher than where we were here. Probably because households to some degree still have excess savings that we didn't previously have but boy, oh boy, we're starting to see those delinquencies absolutely trend up now to some degree. Folks believe that don't worry, though, inflation is coming to a peak jpmorgan is suspecting the following based on their survey. They believe that only 13 percent of folks believe that inflation peak will peak in june this month, 14 believe that maybe it already peaked in may a full 36 percent believe no.

The peak will be in q3, 30 believe the peak will be in q4 and seven percent believe that the peak will not come until 2023.. If we add this together, this means that 36 of us believe the peak of inflation will come in the next six months, which is good because, as goldman sachs tells us the bottom of the market, the complete bottom like this is where we want to end up Going right at the bottom of the market, goldman sachs believes that the bottom of the market will occur three to six months after we hit a market bottom which comes after an inflation peak. So that's really interesting because if you draw that out and try to understand that a little bit, what they're saying is that, in order for us to hit a bottom in the stock market like an official bottom, we have to wait three to six months after we Hit a low in the stock market and that has to come after peak inflation, so in other words, if peak inflation is june, goldman sachs believes that the next bottom after that will start kind of a clock of three to six months, and only then will we Officially be able to say all right, we're good, we hit a bottom and that could be marked by another bottom, but that three to six month period. That is when we should be done uh that's when we should expect to hit our lowest low, which, to some degree kind of aligns, with the charts that we've been looking at pretty regularly about.

When do we actually think the market's going to hit a bottom? If we jump back on over we've seen this one a few times now, it's one of my favorites at this point all right. This line tells us looking at all recessions, going back to the great depression on average. How much more do we have to decline if we end up in a recession which we widely expect to be going into a recession? Well then, the answer is: if we go into recession with two more bottoms to go, if we don't end up having a recession, we could have already hit bottom, because this gray line here represents not recession, and in that case we've already exceeded that that means we've Priced in more of a recession than we needed to because it didn't end up coming, but if the recession does come, we've still got some pain ahead. Now that's a little bit of the bad news in terms of good news in ukraine.

Uh zielinski mentions that he wants the war to be over by the end of the year. I kind of take this with a grain of salt because we heard may from them and that we literally blew past may, with no hope of of ending the war in may, which is unfortunate. China this morning is making news for cutting the quarantine period in half for visitors and the president xi jinping is leaving the mainland for the first time since january of 2020 he's going to visit hong kong, we do believe that the federal reserve is going to be Debating either a 50 or 75 basis, point hike for the next fed meeting, we're not too clear yet here uh what we can expect, but there's a lot of murmuring on wall street right now that there are a lack of clear new downside risks, then maybe the Market has just priced in a lot of the pain and then maybe now it's time to just say: hey, let's see a rally. Are we going to see a rally like we saw mid-march? I hope so because that was great back in mid-march qqq retraced, at least back to about the 50 percent level, on the original fibonaccis that we have right here.

Uh. But obviously, even though we had this retracement right here on the phibi's, where we went from the sort of triple bounce here in february and early march - and we retraced over here getting rejected at the the uh, this is the 50 line right here, i'm sorry! This is the 61.8 percent line, that's where we got rejected. We just broke above 50 percent, uh, unfortunately getting rejected here, which we suspected. We thought there would be some kind of decline and this was correct, but unfortunately we didn't end up continuing with an up.

What we got was a nice little down over here. So hopefully we can get a run back and push back to some of these levels. That we had in march, but right now that's just hope. We still got a lot of work to do in this market.

Fingers crossed don't get too impatient, stay strong out there and folks we'll see you in the next one thanks so much for watching bye.