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Now we gotta talk Catalysts for the week because we've got a lot of them. Not only do we have CPI to talk about and some of the momentum revisions uh, but we've got to talk earnings as well. And since today is Monday well guess who reports on Monday It's Monday.com Monday.com reported they beat they're up about 10 in the pre-market but we'll see if that actually lasts throughout the day. But what was interesting was if you bet on cyber security last week you, you could have pulled off an easy trade.

And these are the kind of Trades that we want to, you know, start working pretty regularly with our course members. But last week you could have pulled an easy trade. Fortinet came out with smashing earnings and then that led to Cloudflare's bead. In our opinion, I Mean it was.

It was not necessarily one led to the other, but it was clearly a signal that cyber security plays were still being bet on uh for wins. and they ended up coming out with wins. And so what did we have here? Software service companies again beating Monday.com Coming in with fourth quarter revenue of 1499, Street was looking for 140. one, uh, their forecast smashed 2023.

Revenue was expected to be 660.. they're looking at closer to a midpoint of 690. That's about eight nine percent of a beat for the year. That's fantastic.

If they could pull it off, they only lost about six cents a share. They were expected to lose 42 cents per share. So, uh, a less money losing company or smaller money losing company. So great job! Monday.com could actually be good for software companies coming up that still have to report whether that's trade tasks.

although they're an advertising. We'll see whether that's Salesforce we'll see TBD Uh, obviously. Uh, we've got uh CPI tomorrow. Let's quickly just catch up on CPI And let's hit some of the other catalysts for the week because we've got a few catalysts coming up.

So of course, there's this potential issue with the CPI report that because of the revisions to CPI weightings, we actually expect that CPI ended in 2020 to higher than than we were originally told. That's not so much of an issue because it's not like we're going back and changing that data based on these new weightings. Although there are always revisions uh, which wouldn't be surprised to see some of that. Uh, the the big thing is, now we're dealing with higher Weightings for housing and that's going to end up being really good.

But probably not until towards the end of this year where we actually really start seeing those owner equivalent rents and housing as services start coming down. That's like lodging and rent, right? We really want to see that anchor. When we get to that anchor, it's going to be great. It's going to be fantastic to have housing have a higher weight, but unfortunately in the interim it's going to be bad to have housing have a greater weight because we haven't actually seen those declines yet.

So you do have this this momentum of basically housing being a lot stronger going into 2023. That could lead to a bad CPI read tomorrow and there's a reason why investors are loading up basically on contracts to protect themselves. For example, contracts against a 10 decline on the S P 500 a 10 percent decline folks are now 1.7 times more common than options that would benefit from a 10 rally. This is a 10 spy put call ratio here Uh, on on 10 gains or losses and that ratio is sitting at 1 point seven times that skew was sitting at the highest level of skew against the Spy this S P 500 since August of 2022..

Now keep in mind for some of you who don't know if when I say spy Spy is an ETF that you could use to trade the S P 500 In you can't actually trade directly in indexes or indices. you could trade directly in ETFs which basically try to mirror the index. Small clarification there. But anyway, Spy is one of those, so that's just one that I tend to regularly talk about here.

Uh, Anywho, so uh, there's a lot of hedging that's coming up because of this. CPI Read: obviously. Uh, the CPI read is expected to be 0.5 month over month. Headline: Point Four Percent Core: That Core is an issue because even if we meet, you're still looking at 4.8 percent on Core.

That means outside of food and gas, you're still looking at 4.8 annualized inflation. Yes, that's lower than the 6.2 percent we expect for headline. But still, it's it's quite a chunk, you know. a couple days ago, we were sitting at point three percent for Core month over month.

That was revised again to point four percent. Last month, we came in at point three and that was revised up to 0.4 already. So uh, in my opinion, you've got. You've got a potential for some negativity here.

but the issue with making bets on CPI is a lot of Traders already have priced bearish bets in pretty well. So there's actually this belief that hey, look, if we get a Miss on CPI it's already built in like you're not gonna make much money on your puts. That's the theory unless things really go bad, so things would actually have to probably miss substantially to the upside rather than just me. So I think a meat, you're probably looking at stability in the market.

Uh, if and if you get a slight beat, you're kind of I feel like almost gonna get the eye roll. So if you get like a point one percent beat, you get sort of the eye roll from the market where yes, the S P and the NASDAQ are gonna drop one or two percent, you know you're gonna see that right away. But I wouldn't be surprised that mostly you kind of have an eye roll from the markets because markets have kind of already been trying to price in a lot of that uh, that pain so to speak for. Uh, CPI we'll see.

Obviously, we will see. we don't have that for sure answer yet, but it's something to pay attention to and we'll see you tomorrow at 5 30 a.m that's in about 24 hours from now. Uh and uh, you know, hey, I'll be covering it, live so hopefully you're here with me when those numbers come out. Now The other thing to keep in mind is if we do break to the downside, even by a point one percent, it's probably going to be even easier to go green on markets because so many bearish bets would have to basically get covered.

Uh and uh, that's uh, that that would be nice to see here, right? So here's the JP Morgan Uh, expectation on a CPI and what the FED might do I think it's quite interesting. Look at this. So this is and this is the next two. CPI reads the the JP Morgan's going ahead to the next two CPI reads Before we look at that, take a look on screen here.

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Uh now I Want to be very clear? you're paying to Shadow Me? That's should be very obvious. Anyway, with these programs though, you get lifetime access to all of the new content that's added to them as well. But hopefully you've appreciated this breakdown and take advantage of that 69 off flash sale through Valentine's and what you end up having your look at. This folks, their bull case scenario is that no, we're not going to come out with a 6.2 percent CPI read, but we're actually going to come out with a 5 7.

In the uh, the bull case scenario, this is like smoke and hopium right here. This is ridiculous. They would expect the FED to immediately pause for March So a March 22nd pause if inflation comes in this low to 5.7 This is nutty. Okay, the expectation is six two.

Boy, if we could get headline in at five at Five seven, uh, moon. But but I I don't know I mean this. This seems like it would be ridiculous. and it also depends what the month over month numbers are doing.

but that seems like it'd be crazy. They would expect the 10-year yield to then end at 3.3 percent at the end of February at the end of the first quarter 3.25 uh, and uh. And then they they look at the yield curve ending uh, actually uninverted by the end of the year uh, and then potentially the Dixie falling with with some more BuyBacks their base case scenario. So this is JP Morgan's estimate of what's actually going to happen.

Are you ready? Base Case scenario. 5.9 The estimate right now from Wall Street is six two. Their base case is five nine. Uh.

and so as a result, they expect to get one more 25 BP hike and then a pause in this base case scenario. and then in the next report, they're expecting a 5.6 and their base. In their bull case scenario, they're five seven in tomorrow's report and then a 5-0 I Mean this. This is a pretty pretty interesting one.

Now here's their bear case. Oh man. so their bear case is that instead of getting 6.2 we get 6.3 Okay, their worst case scenario is just a 0.1 hike, uh, or or beat on CPI Now what's interesting about that is they bring you in at uh, a four percent 10-year treasury that's not going to be good for Real Estate Uh, after the month, potentially 4.3 That's back to like the October November highs. When we had like 7.3 interest rates in real estate, this would be terrible.

Uh, 4.3 by the end of the first quarter. So you really if if you want to see real estate bottom out here you really want, do not want the bear case to play out tomorrow Tomorrow, you really want the bull case to play up. now. what odds are they giving this? So on the bull case, let's see here.

What do they say? While we're considering just the near-term setup, it's worth noting that there have only been four periods where the Spy has printed negatively consecutively In consecutive years. Okay, only four periods where the S S P 500 has been negative for two years in a row is basically what they're saying. The depression World War II the 70s and the tech bubble of the early 2000s. Major drivers of the bull case include: CPI continuing to fall earnings beating expectations Top Line Growth Great.

Fantastic. Now they do have this bear case. Uh, and this comes out to economic deterioration, feeding earnings and then of course Global liquidity, less cash to actually do BuyBacks less cash to invest Uh, interesting. Okay, so so that's sort of Jpm's take I You know usually I like looking at Jpm's take I don't know why, but I feel like this is a little bit.

um, a little hope? Yummy Dare I say I don't know, that's it seems a little uh, well, well optimistic. Let's put it that way. they do throw in here: housing prices. Uh, on chart here you can clearly see we're well off the peak that we saw somewhere around May Uh, April May of 2022 well-off national median, a home price a well down from about 420 to about 380..

So seeing that sort of nice decline JPM Pointing that out here, you do have that used vehicle index popping off again. One of the reasons, by the way you're seeing that is is really is substantial decline in the amount of Supply That we have for vehicles. So you're still facing supply chain crunches essentially uh, in vehicles. So so that's CPI you do tomorrow also end up getting Coca-Cola reporting you get Marriott reporting Airbnb and upstart Reporting Now uh, you know some potential issues there with Airbnb uh Airbn somebody wrote and I thought this piece was really actually quite fascinating.

But with Airbnb there was a uh Business Insider piece that reported on a manager of 95 Phoenix Area Airbnbs stunned that half of their homes are empty over Super Bowl weekend. Now the price they were asking was absolutely nutty. uh, in my opinion. But they said they cut their asking price for a night for the Super Bowl from twelve hundred dollars for the night to 5 500 I'm like my God twelve hundred dollars for an Airbnb in Phoenix that seems nutty and they cut their price to 500.

Uh, apparently still half of them. uh, unavailable or unfilled I should say not unavailable. they're available, half of them were unfilled and they're suggesting here some U.S Spots are experiencing a glut of short-term rentals that can hurt hosts booking calendars. It's actually a massive concern that I have with Airbnb earnings coming up.

I Personally think we're walking into an Airbnb bubble. A vacation rental bubble. That's mostly because I believe that a lot of people who bought Airbnbs to rent them out and and hear this one out because I I think it's very reasonable. Okay I'm a big fan of the real estate industry and I love real estate.

I've got a housing startup at Househack.com so my take is you have a lot of people in the Bull Run who are like oh, I can't lose money on real estate. kind of like 2008, right? And so what they do is they buy a property at insane prices and they look at it and go Okay well if I wanted to rent this out long term I'd get 2 800 bucks in rent for this. say I don't know 500 000 property. Uh, but if I rented out on Airbnb I'm gonna get eight grand and my mortgage is gonna be five grand.

Let's say. so I'm gonna put little money down and my mortgage is gonna be five grand. So they look at it from a Airbnb point of view and they're like I'm a cash flow. three grand.

Let's go baby. You know, after fees or whatever let's say, uh, and I'm gonna manage myself, it's gonna be my side hustle. I'm gonna make all this money on Airbnb and so, but the long-term rent is actually 2 200 less than what their total payments are. So in other words they're They're massively overpaying for the property because of the idea that they could Airbnb it out and make this crazy return.

Well the problem is you're seeing that hotels after sort of this cover disaster have gotten so competitive that I mean you're almost stupid not to go into a hotel because the hotels are so much freaking cheaper in many different areas right now. and you could get a sweet sweet so to speak in many hotels for the price of of an Airbnb And then in the good hotels, you actually have a restaurant in them. You got a bar. I Love hotels with a bar.

Gotta love it when the alcohol is right there. Okay anyway, um, so you've got some awesome things with hotels and hotels have really gotten hurt during the pandemic and so they've been cutting prices and becoming very, very efficient. So now you have service and you have on-site amenities. Uh, you know, maybe that's a larger pool or a pool at all? Uh, you've got maybe that more consistent service because you've got folks over at Airbnb sometimes.

Uh, finding that the service isn't necessarily as consistent And so I think because of this, you're potentially setting up what I think is a situation where a lot of people are realizing crap I'll just go in a hotel rather than stay in an Airbnb And what you end up with is the situation where all of a sudden people are renting out their airbnbs for what they thought they were going to get. Now they're like, well, maybe I'll just rent it long term. dang. But if I rent it long term I'm upside down, maybe I should just sell it and take the L Now worst case that, they put little money down, they can't even sell it because they're upside down.

Now They just lose a ton of money and eventually probably end up selling it anyway. So I think you're probably there's a good chance you're going to end up seeing sort of a glut of inventory come on the market of people who need to sell out of their homes because they just can't sell on Airbnb anymore. and I actually think it bodes terribly for the Airbnb earnings. I Don't know if we'll see that manifest yet in the earnings that that come out tomorrow.

Uh, but but let's just say uh, Vacasa gave me the biggest red flags. You know this was the last earnings call or earnings report from Vacasa and they're basically talking about how many difficulties they were having uh in the third quarter going into the fourth quarter and basically this fear that all of a sudden, uh, they're they're just not making the money. They were getting too much variability in bookings, too much recent softness in bookings, uncertain macro environment, meaningfully reducing the capital we're allocating to our Acquisitions model because basically the numbers don't make sense anymore and it's become harder to actually, uh, get properties rented out on Airbnb So I think you could potentially run into a big Airbnb bubble? Uh, and I don't know that with certainty, but let's just say I'm I'm bearish on Tuesday's Airbnb report. Uh, you've got upstart reports as well.

On Tuesday Wednesday we get retail spending a December decline with somewhere around 1.1 percent. biggest drop. Uh, for that we've seen in quite a while. The estimate now is actually 1.9 growth excluding Autos point eight percent growth, autos and gas point seven percent growth and going back to a for a moment back to CPI or for to Airbnb.

It's possible that you really had like a soft December and maybe the numbers start coming out better in January. Who knows? Maybe that's a little bit more of the Goldilocks Theory but uh, who knows? Who knows? Uh. anyway, hotels also have great amenities. those instant gratification, exactly.

Yeah, So uh. then you've got Roblox Trade Desk craft Generac Shopify Roku and Cisco all reporting Wednesday A You've got UK Inflation reporting Wednesday Which comes a day after our inflation read in. December Their inflation was 10.5 percent. That's down from 10.7 percent.

Uh, the month prior. in November Empire manufacturing comes out Wednesday We're looking at negative 18 versus a 32.9 prior. January Industrial production is expected to come out. We are looking at up 0.5 percent.

That's versus the decline of 0.7 that we experienced in December On Thursday we'll get PPI the producer price index I Wouldn't be surprised if if the CPI comes in low and the PPI comes in high. wouldn't surprise me because I Think producers are feeling higher prices than consumers are going to continue to be able to support I think consumers are sort of refusing to continue to pay in certain cases here. So we're looking at a PPI expectation at the moment of 0.4 percent. month over month.

last month was negative 0.5 percent and then X food and energy we're looking at uh 0.3 percent. Last was 0.01 year over year, coming down to 5.4 on PPI expected. So we'll see building permits expected. uh for Uh Thursday to be 13.50 The last report no joke was 1337 on the revision.

uh, that's 1.337 a million a building permits. housing starts expected to decline month over month, negative point or negative 2.01 percent and building permits expected to be actually up potentially one percent. So so we'll see you do get some more SAS businesses here like uh, Data Dog, you'll get a DraftKings and then you'll get some others like Hasbro Dropbox and Redfin on Thursday Personally, I'm bearish on anything real estate related. so red fan sarium I'm not very optimistic when volumes go down in a real estate recession.

Uh, you know real estate agents leave the biz. So um, ah, cheers to Coffee Not very optimistic so uh, those are some of the biggest catalysts we're looking at personally for this next week. Uh, you know I'm I'm gonna I'm gonna run some numbers and and look into what the expectations are a little bit more closely for. Airbnb With course members and our course member live soon.

but uh, we'll see Cuban Friends that say Airbnb is going bananas. you're saying same same in Cuba Uh, let's see. we went on vacation last month to Costa Rica to talk to a local who said Airbnb is booming There people who make 300 a month can now make 300 a week by switching to Airbnb Nice. Uh, that's why Uncle Jesse says same in Cuba Man that reminds me of Full House I used to love Full House Uh Cuban friend says it's going bananas Well there's some very good anecdotes I Have to say that's pretty good.

So we'll have to look into potentially those International expansions. although how much is international expected to be as a percentage of revenue for Airbnb I Don't know. and who knows, maybe maybe Q4 is a trough for them or they ended up Surviving I Have no idea. Uh, we'll see.

Yeah, we'll also be talking about shorting Builder stocks potentially so we'll have a lot to talk about and of course member lives over the next week here so that'll be fun. Uh, anyway, those are those are the big catalysts that we want to pay attention to.