Long way from pack West Rick But the ripples are being felt all over the place this morning. But what are these numbers? Yes, the banking Butterfly Effect is what we call it in Chicago All right, we're looking for initial jobless claims to be around 245, but it jump jumped up to 264 000. 264 000. Well, interest rates are going to fall down on that.

When was the last time we were that high on initial jobless claims? Uh, defined a higher uh time than that? It would be October 22nd week of 21. So a bit of a ways back and it's actually continuing claims that are more well behaved today, which is the opposite of lately expecting 1.82 million. We have one million, Eight Hundred and Thirteen thousand. so just a bit under that.

and our last slip was revised from one million Eight Hundred and Five thousand, One million, Eight hundred and One thousand. So continuing claims have definitely now remaining over 1.8 but not by much and they're not really clearing the hurdle higher. All right, here we go: PPI for April Headline Number Expected: up three tenths is up two tenths. And remember, all these numbers peaked in March of 22 high water mark there was 1.6 if we look at X food and energy which is core up two tenths.

As expected, that peaked at 1.2 x food, energy and trade expected Up three tenths is up two tenths and that peaked at up nine tens. Now the year over year and this is very interesting. What moved to CPI yesterday Year over year. Headline has been moving down consecutively for 10 months in a row.

Will it be 11? It is 11 months in a row. 2.3 This is following 2.7 high Water Mark there: 11.7 ex. Food and Energy. Year over year, it's been uh down, uh, 13 consecutive months even though there's been a couple of duplicates.

So 13 did it make it 14? It did. from 3.4 down to three point. two high water mark gear was 9.7 And finally, year-over-year X Food X Energy X Trade 3.4 percent that is now down for excuse me up up 14 months in a row. Excuse Me down see I Get so excited Joe that these inflation numbers are so Central to Strategies it's down 14 months consecutively in a row.

There were a couple of doubles meaning April and May and August and September of last year all were equal amounts and last month was revised from 3.6 3.7 So after all of that basically lower on every metric with regard to inflation, that isn't a bad thing. We can argue about the speed interest rates. It's funny because they did move down a bit, but here we are still hovering right around the same. We're at 338, we're at 336, almost at 337.

But that alone is down seven basis points. And when pre-opening the Dow futures, they've been hovering right around the same levels even though they're down on the session. Joe There's a lot of numbers there. What are your thoughts? I think Disney's down a lot So that almost accounts for the the uh, the Divergence in the Dow Uh.

Right there there's Disney Rick as you okay I'm gonna pause this and I can actually give you some analysis non-disney related. So the PPI and the CPI they work in tandem. The CPI which is the Consumer Price Index which is what we got yesterday is the index that measures the cost of a basket of goods that the government's determined that represents inflation. Now yesterday we saw it actually do better than expected, meaning that the price is not going up as much as expected.

Inflation is slowing down to below five percent year over year, which was good. Now the PPI which is the producer's price index which just came out a few minutes ago is the more leading indicator. that is the raw materials. The raw Goods the supplies.

Everything that producers use to make stuff that people buy. Basically, it shows you what is the cost of goods for the people who are building the stuff that we are buying. Now if their cost is going up, that means inherently that eventually this cost is going to be rolled over to the customers. and we will see that in the CPI.

So whenever the PPI jumps higher than expected, there's a lagging indicator there that actually leads to a higher CPI in the next month or two. Now here's the more interesting part. The fact of the matter is we got better than expected CPI Yesterday we got better than expected slightly PPI today, which means both on the current measurement of the Consumer Price Index and the forward-looking PPI we're doing better than expected. That means that the FED is going to have more leeway towards pausing and not increasing rates anymore, which I do not believe they'll do this year and I Also think that this is another kind of step in that direction of the FED reducing rates sometimes towards the end of 2023.

I Think they have to do it in order to bail out the banking system. We just heard today that Pacquest is down 20 percent because they lost nine percent of the deposits just in the month of May. So a lot of banks are struggling right now and the only way to bail these Banks out is actually to reduce rates and why. Well, I made a whole video explaining why and I'm going to put it right now on the screen.

You can go ahead and watch that video right now and learn about why the making system needs lower interest rate and why this setup allows the Federal Reserve to do just that. Watch that video. I'll see you there in just a second. Thank you.