I was wrong. Two quick notes: I'm gonna be in the air flying today so you can follow me on Instagram to see what I'm up to. I'll be at a special place and you're gonna see a lot of cool stuff so follow me on Instagram And we did extend the flash sale to the end of the week for those of you who emailed us and for anyone else 69 off largest percentage basis sale for the programs I'm building it up. Link down below: I was wrong about individuals perception and Market responses to what would happen with Market data and I'm really surprised because I think there's a shift happening and I want you to think about the shift with me for a moment and I want you to see if you're seeing this same shift.

Okay, ready for this. This is really fascinating in my opinion. All right. So first, remember when all of this crisis started in January of 2022.

one of the crazy things about Jan of 2022 was that basically every bit of news in January of 2022, which is one of the reasons I sold I sold out of almost all I actually I actually sold out of everything, went to 100 cash and then started buying into what I thought would be more recession resilient stocks later. But anyway, the problem you had in January of 2022 was that good news was equal to bad news. So in other words, strong Earnings Strong PP Earnings Uh, EPS growth. All of that equaled bad news.

Good economic news equaled bad. And the reason for that was everybody was worried about the boogeyman of inflation. How bad was inflation going to get right? That's what everyone cared about. Inflation.

Inflation. Inflation. Now something really interesting happened by December of 2022, we got a retail sales report that came out. which is funny in some regard because today we also have a retail sales report coming out.

But mostly I Want to talk about this, this change here and I want to see if you're seeing this change in the market as well. When that retail sales data came out, it came out bad. December Retail sales were bad. Like the actual numbers were bad and the thesis of 2022 was, well, wait a minute.

The opposite of what was going on in January should be good, right? So bad news should be good for inflation, right? It's obviously bad for for earnings or bad for certain companies, but bad news should be good for inflation. The soap, but what you had in December was we got retail sales numbers that were actually bad and something really changed in December In December. All of a sudden, you had people worried about a recession. The idea that inflation was the boogeyman went away.

Inflation was no longer bad. What was bad was bad news. So bad news was truly bad because it meant potential recession, right? It meant that we were getting pushed into a recession. Nobody cared about the idea of a recession in January of 2022 because everybody's like things are so great the Fed's gonna rug pull us with with massively High Rates So What mattered in January was rates mattered? Inflation mattered This Is What mattered in January of 2022.

Big difference all of a sudden in December In December Inflation didn't not matter anymore. And this is going to be interesting because obviously we just got a CPI report run with me on this. All right. So inflation did not matter in January of 22.

What mattered was a recession mattered. In fact, I would go as far as saying rates mattered less as well. And then when you get over to January of 2023, you and I'll say early, uh, February of 2023, you had another interesting thing that happened. You had the Fed's terminal rate move up from about 4.9 percent Market expectations to as high as 5.3 percent so you had I'll write that down clearly you had 4.9 expectations cut 1.7 percent by end of 2023 turned into 5.3 percent expectation.

No Cuts in 2023. But what was crazy was the market actually did well. In fact, we got a CPI report that was bad. It showed inflation on a core level was still sticky core Services still showing a strong element of stickiness well above two percent.

Yes, if you take core Services minus housing, you're at an annualized rate of about 3.48 3.5 percent, which is better than it has been. But it was still a bad report in the sense that uh oh well. What if those used car auction prices start coming through and we start seeing an increase of getting used car prices? What if that Goods inflation slows down relative to when housing inflation might slow down right? And so what you ended up having was a report that missed on the headline numbers right? We had a report that missed on two out of the four numbers and then two of the month over month numbers match. So you actually got a report that I would say was hot I should call it a hot report and what ended up happening? the market rallied.

And that's because in my opinion, what did we learn in December of 2022? Inflation doesn't actually matter anymore and rates don't actually matter anymore. What matters now is EPS Fear. That's what matters right now. What matters is not a recession or inflation or rates.

What matters now is the fear of Eps Now earnings per share. Fear is very interesting because what you're actually seeing happen is companies are waiting like the market. The market is waiting for the Catalyst moment of earnings. and so what you end up having is you have stocks that are trading like this.

You get this sort of sideways trading and then all of a sudden here you get earnings. And what's been happening as of late for many companies is as soon as earnings happen, you get a massive move either up like Airbnb uh, you get a trade desk Tesla right or you get a massive move down. think lift. So in other words, look at how how markets have evolved here, how things have changed, and it's really important to think about this because if you're making bets on the market, actually giving a crap any more about inflation.

Even though that's what everyone's talking about, it doesn't seem like what. That's what the market cares about. The market used to care about inflation January 2022 All you had to do was go short the market because everybody cared about inflation which was getting worse, worse, worse, worse. Now that inflation is getting slowly better, even if it takes more time, the markets are not reacting to inflation as much anymore.

So the the economic sensitivity of inflation Has Fallen and What mattered more was this idea of a recession. But the reason a recession mattered is because of what it would do to company earnings. And that's why in my opinion, when we got our CPI report, markets are kind of like whatever man like. even though it's hot, we don't care.

We got that Catalyst out of the way. Even though it's hot, we don't care so much about inflation anymore. We got cash to deploy. Let's deploy that cash.

So while it was still a catalyst moment, even though the news came in hot, it ended up being a good thing for markets, which kind of feels a little clownish, right? It's like how can inflation come in hot and the market rally? It's because people don't care about inflation anymore Market wise. And when I say Market I'm talking about stocks, right? Stocks don't care about that. Stocks care about earnings per share Right now, look at all of the companies that have reported over the last uh, two months and see what happened after earnings. Usually you had pretty violent moves well above the expected moves for those companies and whether even if even consider and face, uh, you know, whatever.

there are plenty of companies that we could look at. But the point being here is for some reason EPS has become this substantially greater Catalyst And when we look at uh, our expectations, we have to adjust them because when I say you know in this topic I was wrong. What I'm saying is I Thought inflation disinflating. Improving the disinflation mattered the most right now I Thought the Federal Reserve's terminal rate mattered the most now.

I'm realizing this I think relatively quickly because this is something that has just transitioned within the last month. Uh, and yesterday really reiterated that to me where I'm looking going. Why This doesn't make sense. What has changed? The market is not behaving the way it used to behave in 2022.

It has changed and the reality is when the facts change, you should change your mind and you should change your strategy. And so I Think, especially if you're trading in this market or you're looking at Catalyst Something to know is it doesn't seem like inflation is the big one right now. Obviously, if inflation doubles up, it's going to be a big issue, right? But if you look at EPS that seems to be the big deal and that seems to be where, uh, whatever ends up happening. You get the massive moves in stocks after earnings per share.

especially once those catalysts are over because people are looking going. hey, what's the forecast? What's the outlook for the companies that I'm most interested in and companies that are saying hey, look, we're getting through this like Trade Desk or Airbnb despite potential red flags that have been seen and feared in the fourth quarter. What you end up having is big old moves, Big old moves. So that's my take on on this massive shift that's happening.

I Think it's important to pay attention to and we'll see what you think. Let me know in the comments down below.