Welcome back to another meet Kevin Report: Today we are covering the good old producer price Inflation report. We're also on episode 81 of the Meet Kevin Reporter: Welcome on. In all right, PPI comes out in about 20 seconds. We are looking for good old data that is going to hopefully reiterate the declining CPA We saw yesterday final month over month we're looking for Zero we are looking for X Food and Energy of 0.2 X Food Energy Trade of 0.3 year over year Three percent PPI Inflation: 3.4 percent year-over-year X Food Okay energy and uh.

Energy trade? Uh, that is Ppix Food Energy Trade Looking for 3.8 Here we go. Oh yes, okay, big old Midas Negative point: Five percent month over month on PPI Final: That's really good. Uh, Ppix Food Energy Trade Point: One percent. Let's go baby.

Inflation's going away. It's finally turning transitory. Look at that. PPI Final Demand: Year over year was expected to be 3.0 comes in at 2.7 Also below expectations.

Ppix Food and Energy was expected to be 0.2 We got negative Point One: Let's go. This is great. Uh, year over year, we did get Ppix Food and Energy a matching 3.4 3.4 Uh. Ppix Food Energy Trade expected 3.8 We got 3.6 So we got big misses across the board here.

Initial jobless claims were expected to be 235 000. We got a 239 000. Uh, we were looking at continuing claims of Uh 1.833 We got 1.810 It does show a little bit of strength. They're still in the labor market, which is good though because you don't exactly want a destroyed labor market.

and a destroyed economy. but you want inflation gone. But that's literally what's happening here. This is fantastic.

This in my opinion reiterates. Look, the FED can hike in May and go away. This is great. We do not want inflation to stick around obviously.

Uh, and now keep in mind and we're going to look at the PPI BLS in just a moment. What up? Keep in mind: I See this comment like every single day, but every single day. I Talk about inflation. I See people.

But at Kevin I went to the grocery store and stuff is still expensive. Yes, yes, we know prices went up, but that is not what the Federal Reserve is fighting. The FED is not fighting that things are expensive. The FED is not fighting that things got expensive.

The FED is fighting that things are continuing to get more and more expensive. And right now fortunately that is finally transitioning away. Let's take a look at the producer. Price Index This is absolutely fantastic.

Look at this this month over month figure. Keep in mind this was expected to come in at zero. The expectation was Zero Uh, point zero. What we actually got was negative 0.5 This is really good.

Uh BLS Final Demand prices. or were uh uh, unchanged in February Increased? Uh Point Uh, let's see what is this here. Final Demand Prices were unchanged. February increased Uh, 0.4 in January Uh, that is the uh.

let's see here. Final Okay here: Producer price index for final Demand declined 0.5 in March seasonally adjusted by the BLS Okay, then they go back into February was point four J Uh, unchanged in Feb and 0.4 in Jan So what you're really seeing is sort of that declining in PPI That's what they're really trying to show you here: 0.5 Uh, here you had 0.4 in Fab I guess would be the other way around. but I think you get the idea and point uh or sorry. Geez.

Kevin Wake up Uh. Point Zero here in Uh Fab 0.4 in Jan That's what they're trying to show you and here we are in March There we go. Okay, uh, two-thirds of the decline in the index for final Demand can be attributed to a one percent decrease in prices for final demand. Goods There's that manufacturing side, right? There's that disinflation happening in manufacturing.

in my opinion, that's your Consumer Staples That's sort of your regular consumer products that people just aren't spending money on anymore because either they've hoarded enough of it or they're like crap. You know if we are going to go into a recession because now even the Fed's talking about it. Maybe we ought to save a little bit of money. Prices for final demand, less food, energy, and trade edge up a 0.1 in March after Rising Point two percent in Feb right? That's fine.

We went through those numbers already That was expected to be 0.3 so the expectation for that number was uh, this number right here was 0.3 so we pretty much missed on every side here. Let's see if we can get a little bit more detail here. Uh, product detail: A 7.3 drop in margins for machinery and vehicle wholesaling was a major factor in the March decrease in prices for final Demand services. Oh, really? for services Final Demand services for machinery and vehicle wholesaling? That's really interesting because we've been seeing uh, negative negativity on um, uh, what's it called? Um, we've seen this negativity on uh, uh products, but to see it on Services as well, it's good.

The Index for Transportation Freight Portfolio Management Fuel lubricants, retailing, loan services, automobiles Parts Also moved down all of those I Just mentioned here. Uh, well. most of these truck transportation Freight Portfolio Management: those are all services loan services. Uh, that's great.

Prices for guest Room rental Rose 4.6 Okay, Guest Room rental? What is is that like, uh, like, almost like an Airbnb Uh index for food, retailing and Transportation for passengers Advanced Okay, it's fine, So what do we got? Oh, let's see here: Foods Energy Transportation Warehousing, fine processed goods and intermediate Goods Declined a one percent in March after moving down point four percent in February A major factor in the market decrease was a five percent drop in prices for processed energy Goods That's okay I Mean we we have seen and this is why we purposefully look at some of these numbers excluding energy. Remember, final demand not excluding energy came in at negative point five percent. Uh. and then when we exclude food and energy, we got negative point one: exclude food energy trade.

We got point one uh, and then uh. same thing for the year over year numbers. But but these numbers really came down nicely. Now do keep in mind we did get revisions for the prior release, so February did get revised up a little bit.

Final demand went from instead of negative point one to zero. Food and energy went from zero to point two. So you had some upward revisions here year over year went from four Six to four nine. Uh, four point Four on X Food Energy year over year went to Uh Four eight X Food Energy Trade went from four Four to Four five.

So the revisions are not that great. The revisions definitely hurt this report a little bit on the prior, but uh, this is very good for this month, at least. All right, let's keep looking here. huh.

Product Detail: One third of the March decrease in prices for processed goods for intermediate demand can be traced to 6.5 decline in diesel fuel. That's okay. Again, that's why we exclude energy from some of the numbers. and even if we exclude energy, we get some big movements here.

Uh, let's see here the index for unprocessed goods for intermediate demand moved down five percent in March The largest declines that's falling's 9.7 in October. The broad-based Uh decline was based on unprocessed energy Goods which dropped 11.5 percent. The index for unprocessed foods and feeds also moved lower fine. All right.

Uh, crude oil fell a lot. Fantastic. We know China's reopening didn't pump oil like people thought it would. That's great.

We also know that uh Opex price or I can always say price Opex Production Uh, cut was really supposed to drive oil up substantially, which it did I mean Brent said 87 bucks and the last month we were significantly lower. In the month of much of the month of March, we were sitting around 75 bucks 75 to 78 dollars for Brent. So we're going to be getting some re-inflation next month because of these energy uh, prices going back up this month unless they fall, start falling again pretty rapidly. But that might not be such a terrible thing because again, we're looking at inflation numbers that exclude a lot of the energy numbers.

Uh, and and all of those missed pretty pretty decently, which is good. Okay, let's see if we can get some more tables here so we can see some actual products, but this is fantastic news. Uh, this is a great Point while I pull up the chart here to mention uh that if you want to get, uh, super powered book summaries, check out short form A really great way to inspire you to potentially, uh, check out the entire book. Like for example, one of my favorites is this book called Good To Great Really great, actually phenomenal book, especially if you're trying to run a business.

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All right. Uh, so let's look at the actual Uh charts here. Now that we got this up: I Want to see where numbers are going down and let's quickly. Also see here: seasonally adjusted change one month percent change.

So we want to look at the far right column in this one so far right column. What do we got here? Durable Consumer Goods Point: Two percent. those are like appliances. Fine.

Final Demand Services Oh thank goodness. Look at that. That's what I Want to see. This is what you want to see.

Look at this Final Demand Services. This by the way, has a 66 weight I'm pretty sure. hold on, let me make sure that's weight relevance. Yes, Okay, good.

look at this folks. 66 weight of uh of uh Ppi is Final Demand Services. And finally for the first time in at least the last three months over here. I I Think we could even go back to four? Let me double check.

Oh, look at that one. two, three, Four Five five. We can go back five For the first time in the last five months, we've actually had a negative read on. Final Demand Services Thank God Uh.

Final Demand Trade Services Negative Finished Goods Negative Point seven and these are Big negatives too. Look how negative this is this is. This is finally starting to make it look like inflation is starting to be transitory. Uh I Know people are like a terrible word, but it's It's finally coming true Because look what happens is first.

PPI Falls Then you have to remember there's a big lag and then it shows up in CPI because when the production prices come down, then you don't have to raise prices as much. Uh, not even that you could raise prices as much because people are demanding less. But anyway, there's a lie between the two. But this is fantastic.

So Final Demand Services in aggregate Down Point: Three percent. That's awesome. That's literally 3.6 deflation on an annualized basis? That's wild. Uh, Final Demand Trade Services minus 0.9 I Mean think about what what 0.9 means.

0.9 on an annualized basis is negative. 10.8 percent deflation price is actually coming down trade of private Capital Equipment Like this is like Machinery right here you want Machinery right now coming up for sale baby. Mine is 2.4 on a month uh Government purchase Goods Down two percent Look at this. This is this is insane.

Uh, mine is four point Eight percent trade of government purchase Capital Equipment Trade of Exports minus 1.5 Final Demand Transportation and Warehousing Services minus one point Three percent but still passengers passenger Transportation So if people, right, people are still spending money but not on stuff. So this is where we are seeing some of the some of the items and that's but. It's interesting that in the services for goods, that's where you're seeing a lot of these these negatives it seems to be all right. Let's see what else we got here.

Uh, let's see: Transportation Transportation Lots of Transportation You got some mixed reads over here, but a lot of this Transportation stuff is actually negative Negative, negative, negative, negative, Negative: Oh, that sounds like Mario Uh, you know here. anything with passengers Positive: Okay, fine. what do we have here: Final Demand Services Less Trade Transportation and Warehousing Okay. Finished Consumer Services Finish Consumer Services only 0.2 percent Well, that's good.

Final Demand Services Less Trade Transportation Warehouses 0.1 percent. That's fantastic. That's really good. Okay, well I like to see that.

Final Demand Construction Point: two percent Fair game. Totally fine. There's nothing scary in this report at all. This report is freaking awesome.

This report is great. It's me. Hey, Final Demand: Uh, less Exports Negative Point: Five percent Final Man less Government Negative Point: five percent, blah blah blah Uh okay. this is I Mean it's so negative, it's crazy.

uh. Final Demand Goods Less Energy This is the highest thing I've seen here. Point Four: Uh uh, but that's interesting. 24.8 Final Demand Goods Goods Less energy So I mean energy really tanked.

A lot of this it seems. But I mean energy is not going to tank your services. this final demand Services over here. but it would make sense that it would.

It would take some of your goods prices. Um, but then again, even in aggregate, What we say without energy without energy, we're looking at the Ppix: Food Energy Trade Point: one percent X Food and Energy Negative Point: One percent. Yeah, that's fine. Okay, what else do we have here? Let's see here: Finish: Goods Finished Services See look at that.

Finished Services finished Services Negative Point: Two percent Yes, yes, very good. Uh, Finished goods excluding Foods Negative: 1.8 Finished goods excluding energy. So if you only exclude energy, it's interesting. Point six.

But then so if you only exclude energy does that? it looks to me like Foods then really pushes this up. So maybe foods are what in Goods Push this up because when you do Goods minus food, you get Negative 1.8 If you do Goods only minus energy and not food, you get point six percent. which is pretty high so that suggests food really popped up a little bit. We should be able to see that a little bit more clearly here somewhere.

We'll keep looking for it all right. Total Finished: Uh Less Foods minus 0.5 less energy flat fine and aggregate of all 1.2 Okay, good Total Exports Goods for Xbox One All of this is negative and just look at this. you don't even have to read it anymore. It's just all plummeting all of it.

Personal Consumption Negative Point Four percent. What else here? Uh yeah. as soon as you take out food, look at that. personal consumption of goods Less Foods Negative 2.9 So Foods must have had a big pop there to weigh this up so much processed Goods Uh.

manufacturing for Foods Manufacturing components for Construction Construction Still getting a little boost here. 0.5 percent unprocessed Goods These are feeds for animals. Fine, A lot of these numbers will be up for uh, the Energy Products next month because of the volatility of oil. But that's okay because once we look at less energy, you're still looking at good.

Ah, no, but that's interesting. Oh, these are stage four Goods Because here, food is negative. It's a little bit more of a complicated report. See here we go: Inputs to stage four.

There we go. Foods Yeah, Foods were up a little Okay, that's fine, but foods are one of those volatile ones and that's why we generally say x Food and Energy because on a month-to-month basis, these things are flying around. And again, what's more important here is seeing some of these services start coming down Trade Services Down Point: one percent Services Across the board point five percent Uh, pack Except for passengers. That's one part that's moving up.

Okay, anything else, let's see if there's anything that really stands out over here. Well, stage two: Looking for something that stands out Services Passengers Energy: We know energy fell a lot Sage One food fell 4.4 Okay, inputs to stage one: Service produces Foods Yeah, there are definitely some parts of foods components that were hot in this one. But beyond that, this is all negative here. It's pretty remarkable.

Wow, Okay, that's really great. So that gives us our PPI numbers now. would I Be curious to see Uh is how the Fed rate monitor is moving as a result of this. Uh, let's see here.

All right. Fed Rate Monitor: All right, let's see what we have. Great monitor right now is looking at a 69 chance of a 25 BP hike in May and then we're looking at a 67 chance of a freeze in May or sorry in in uh June So in other words, hiking Main: Go away. Some people are starting to price in it with a 28.6 chance that we get a 25 basis point cut or that we actually have Frozen in May and then stay frozen.

Uh for June indices now turning slightly positive down up 13 basis points s P 22 NASDAQ 36 10-year treasury sitting at 3.35 nine? Uh, so down. just a smidge here. and uh, oils down about a half of a percent here. Uh, so what does this really mean for the Fed? Well, let's see if we have any commentary from Wall Street on this.

I mean in my opinion, this is. obviously this is fantastic. This is exactly what the FED wants. The FED does not want to have to create a recession, but they will.

If they have to get rid of inflation, that's always something you want to remember. they will force a recession if they have to get rid of in fightship. Uh, but are we, um, you know, is it necessary to create a recession? If uh, if inflation goes away, No, of course not. You know, then they could, then they turn the money printer back on PPI Provides dovish surprise that claims data was broadly in line with expectations for initial filings.

More notable, however, was the unexpected decline in PPI which undershot Expectations by a considerable margin across every aggregate, falling half a percent on a headline basis. There were some upside revisions to Prior data correct I went through those, but in aggregate, producer price inflation looks a bit lower than expected. That would provide uh, another argument in favor of an end to the FED cycle coming shortly. Though given some of the trends in Energy prices, it may well be the case that PPI starts ticking higher again soon.

Well, yes, we talked about that. Brent's up 10 or sorry, not ten percent. It's up a little bit more than 10, so it brings up like 10 bucks, right? So I mean you're up like 13 on oil month over month right now. but that's why we look at these numbers excluding oil.

So next month is going to be a little bit more granular where we'll have to go through a little bit more and go. Okay, so that's related to oil, but uh, that should be pretty obvious. Uh, yields drop on PPI data in a headwind. Four dollar yields dropped on data.

Meanwhile, Uh, jobless claims were pretty much in line PBI below expectations, right? Uh, uh. Let's see here. What is this right? Pervasive deterioration and consumer and continuing claims data across the United States is consistent with a recession beginning very soon I Didn't see the jobs claims data actually deteriorating. Let me see here: Initial initial claims came in four thousand higher than expected.

But Continuing claims fell from the survey and from the prior report. the survey was 1.833 The prior release was 1.823 The actual was 1.810 So what do they mean? A continued deterioration here? A pervasive deterioration? Continuing claims data across the U.S is consistent with the recession beginning very soon. Historically, a recession should mean stocks making new loans, but this cycle is proving odd and this should not be taken as read: a very reliable and A very rare technical signal points to a long-term constructive outlook for U.S Equities Very reliable and one very rare. Okay, this is why can they not write English here? Hold on.

Percentage of continuing claims has never hit at this level and not gone on to spike much higher. Oh I See what they're saying? Okay, here, let me let me show you a screenshot of this so you can see what they're talking about. Okay, uh, that's not necessarily from this. Uh, percent of the United States Uh, Okay, all right, fine, so let me pull up.

I Press this button. Yeah, so here's the chart that they're showing percentage of Uh U.S states. So this is a percentage of U.S states. So this is very different from the headline number, but it's a percentage of U.S states with an annual change in claims Rising 30 percent.

So as soon as you get more than what is that, 18 of states seeing continuing claims rise over 30 percent on a four-week moving average. As soon as that goes above about 18, you've always seen it rise substantially higher is is sort of the argument they're making. We're basically there right now, which is quite interesting on. uh, continuing claims.

but I Want to understand what they're talking about here with this. Uh, when one very rare technical signal points to long-term constructive outlook for equities, why let me click it. Let me see what this is where: Buy Signal hints that worst is over for stocks. Let's talk about that in another segment.

So let me give a quick summary here on PPI and then we'll talk about that. So a quick summary here: PPI Look PPI was great PPI was great and your PP related stocks should be very happy today. Any kind of pricing power stocks should be very happy today because your input cost just went down I Think this once again reiterates the FED 25 BP in May and then pause and they're going to pause for a long time until inflation is convincingly dead. But that's okay because the longer the pot they pause, the longer we're not in recession, and the longer they're paused, the longer inflation isn't a problem.

Think about that. The pause on both sides is good. Pause rate increases inflation. No problem.

pause and not cut. no recession. So you want to pause to kind of hang out there as long as possible. That's your most optimistic scenario.

So very excited about that. Uh, and um, let's uh. let's get into the next segment. So uh, thanks for watching the PPI segment.

All right now. let's now talk about rare by signal. Kevin Loved your video on Life yesterday. Oh thank you for that same pump me up this morning I pumped Steve I'm honored.

Um, no. Well thank you for that. No, it was. it was sincerest you know.

I I Wanted to just share some. We're always talking about these numbers. You know, like in uh Wolf of Wall Street it's all the granular. uh and I think it's good to to talk about reality too sometimes.

Um, oh man, you know I Went to Colorado if you look at real estate and you know what sucks. it's so freaking dry. I Love Colorado Okay, don't get me wrong, like Denver's awesome but the Utah is dry too. Both of these places are so dry.

like my lights are so cracked uh and uh. and and like regular lip balm doesn't even cut it over there. you need like Wax It's so bad that you go into houses for sale rather than they give you rather than them like giving you like fresh made cookies or something, they give you lotion you can't make it up. Uh, it's crazy.

It's absolutely crazy. Uh, hot water warms you up I Don't really understand what that means, but okay, um. all right. Rare Bicycle.

Let's talk about this All right. A cure A purely based Pro Okay, here we go. Here's an article that basically just feeds right into the Beautiful deliciousness that I'm looking for every single day. It just makes me tingle inside because it makes my bullish bias get so happy and it just makes me feel so comfortable in my Christmas sweater.

It's an article that's titled rare Buy Signal Hints that the worst is over for stocks. Is this a piece in Bloomberg that could potentially be reiterating the Nike Swoosh may think so based on the title, but I haven't even read the article yet I Just saw the title and I'm like, so let's take a look. a purely price-based signal. Oh, so it's technical based.

Okay, a purely price-based signal suggests the bottom is in for stocks. Despite several lingering risks, this is by Simon White. this is a hard column to write. Oh, is it deposit flight? Poor liquidity, weakening earnings? A credit crunch recession? It would be much easier to list reasons why equities should be lower, but that doesn't necessarily mean it will be.

As anyone who has spent enough time in markets understands, they have a habit of being anti-utilitarian causing the most people the most amount of pain. That's an interesting line actually, because utilitarianism is is making sure you do the best for the most amount of people, right? But stocks basically do the opposite. It thus always pays to consider the other side of the case. But even with the best will in the world, it's hard to fully let go of one's biases.

That's why technical analysis can be so powerful. But in this case, technical analysis is bullish. Some call it Voodoo, but using Market data to identify Trends is as old as economics, dating back from the 18th century when Japanese rice Traders used Candlestick patterns to predict price movements. Recently, one very technical base Buy Signal called the Kovuk has triggered, suggesting the long-term outlook for U.S Sox is constructive and the bottom is potentially already in a rare but reliable Buy Signal for stocks.

Fascinating, all right. I'll pull this up in a moment here. All right. What does it say here? The Kappa is at base a momentum oscillator, which triggers when the medium and longer term measures of momentum begin to turn up on a persistent basis.

Okay, got it. Uh, moving averages essentially of momentum based on adapted parameters. It triggers only rarely, but the times it has triggered were October 1982. August 1988.

April 2003, August 2009 and all of those were good buying opportunities. It outperforms the S P average return over a three month, six month and six month horizons with the greatest absolute outperformance over 12 months 19.1 versus 9.7 percent. Wow. S P returns after.

that's the S P returns after you. You hit this. Okay, so here's a chart of what this uh reliable Buy Signal indicates And so here you could see: 82 Great Buy Signal 88 Great Buy Signal soft Buy Signal here in the early 90s, which was also correct 2003 April Very correct and uh and and uh 2009. Notice this actually isn't at the bottom like if I draw a little arrow here.

uh, that's not a little arrow, but whatever if I draw a big Arrow Notice that the bottom actually came before the indicator triggered right. so the the in, like the indicator actually triggers once you pass a bottom. Which makes sense because we we kind of passed the bottom. What? Um, you know.

December for some stocks, some stocks was October some stocks was July so you kind of passed that bottom. Okay, now let's look at the returns. Oh, that's quite interesting and see. this is why people like: Cavett Why would you be in stocks? treasuries are yielding four percent and I'm like that's nice.

you're getting four percent. I'm going for 20 for the year you know some actively managed ETFs are already up 25 year-to-date We won't mention any names. uh, because you have to go look and you have to net out fees and all this kind of stuff. And so that's why we just don't mention any names around here.

Uh, but there are many. There are many different ETFs that have done very well this year. Signal shows above average forward returns S P returns after the car park I Never never thought I'd be so happy to say cop pock. Overall return period data back to 1979.

the three-month Kappa gave you a five percent return on the S P 500. the six-month cop-box gave you a 10 12 month gave you that 19-ish percent uh compared to periods of time where you did not have uh indicator. All right, that's cool. The great appeal of technical Uh signals is their simplicity.

Uh, this technical analysis uses only the S P's closing price on a daily basis. No economic data, no political interference, no opinion. It's fixed, and it's unemotional. This also signals.

This also means signals such as the Kawak can trigger at very counter-intuitive times, a signature of contrarianism and a Hallmark of many of the best spying opportunities don't tempt me. Uh, the car park is previously Trevor triggered well before the FED has started to hike again when the Ism was under 50 and while unemployment was Rising as the signal is not trying to pick absolute bottoms, the S P is generally already off its lows. That's true. We actually that was one of the first things we saw as it wasn't really aligning with bottoms.

Uh. and and I I'll give a little bit of a of a potential thesis on why this is happening. Uh, and then I want to keep reading about this bro, because there's some other TA in this as well. But uh, car park thesis? cop pick? No, that's that's not what I wrote Apple Stop it.

No, No. I didn't write that word either. No, Here we go. All right.

Oh geez, Oh. God There we go. All right. So why? why would it potentially be possible that you could have this large downtrend and maybe that Nike Swoosh we've been talking about? But why would that? Let's call it that what it is.

Kappa Why would that trigger here as a big buying opportunity? Uh, well, aside from technicals, what what actual reasons could we potentially give to this potentially triggering? uh, Well, in my opinion, we've got. We have so much bad news, right? We have so much bad news. but uh, inflation is actually trending down. maybe not as exactly quickly uh as people had hoped or wanted.

But the pain is the pain is not getting worse, right? Uh, and and that's that's the one thing crushing the economy right now. And so when we actually we look at everything else is like a symptom of the disease. Like let me try to put it this way, let's Okay this. I I I Hate making this reference because it's so terrible.

The people who have to go through this and I wish this upon nobody and whoever has this. Affliction I wish you a fast recovery. but inflation is frankly like cancer. Okay, and uh, your vomiting is like the bank crisis.

Your medicine is like you know, your chemo uh is like higher rates, right? Uh, your your hair loss is like uh, you know hair loss. There we go. It's like earnings going away. Uh, your fatigue uh is like uh, you know cash going away right? Like cash savings going away uh and um and and loss of appetite.

You could call it right? whatever. Okay, so a little morbid, but I'm trying to make this comparison here. Okay so so everybody bearish because of like people are looking at the economy and people are like dude, the economy is vomiting, it's losing its hair and and it's losing weight like this is a crap economy. but what if you're able to look and say but dude, the cancer is going away well then if that's going away, then eventually all of those problems will go away too.

So yeah, there's an a never-ending list of crap you have to deal with when you go through something as terrible as this. But if the actual cancer is going away inflation then eventually all the other crap will go away. That's sort of. If I had to give an explanation as to maybe like on a non-technical basis why the bottom may already be in it would be that now I Understand, people are like, but usually there's a stock market, does the bottom until you're actually in a recession and the yield curve is resteepened I know.

But the weird thing is everyone knows that. and so the irony is, when everybody knows that stocks bottom when the recession begins, it's possible that the stock market's like, well, if the cancer of inflation is going away and the stock market's going to bottom when the re-inversion occurs, let me get in before the bottom. So that way I I Can you know Because we're not going to be able to perfectly time the bottom? let's get in before so we can get to get good deals before and then ride the the recovery afterwards, right? So it's possible that you sort of have that pre-pricing in of what's to come because that cancer inflation is going away. All right, my thesis, let's keep going on this similarly did I By the way, mention that if you could get if you wanted super powered book summaries uh, to get you inspired to maybe read the full book, you could go to Shortform.com Meet Kevin I Mean you could go through basically an entire book in 20 minutes because these are perfectly uh created and crafted super powered summaries they call them.

And so 20 minutes you get 2x? You could literally go through a book in 10 minutes. You're not actually going through the whole book right, but you might get inspired then to read the whole book later. But if you just wanted to check that out and get a preview, it's fantastic away. Uh, to uh to to go through some of the the core arguments within books.

Uh, check that out by going to Shortforum.com Meet Kevin and you'll get 25 off, uh, any of their subscription plans, which is pretty awesome. So make sure you go to Shortform.com Uh, that is a paid promotion. look I Fixed the phraseology up here. Let me fix the spelling All right.

Similarly, today does not appear here to be a good time to buy with economic data weakening and credit titing. But if we were to listen to only this signal, it tells us to buy and close your eyes. Another reliable signal. The Zig thrust thrust has also recently triggered.

The Svig activates more often and does have false positives compared to the Kappa, but it is a good gauge of a medium turn trends of the market. Is this like a Jason Slieg? the Intelligent Investor indicator probably I Like that guy, That guy's cool. Uh, what is this breath Frost the New York Stock Exchange Sleep trust with adapted parameters. Okay, good.

Lord that's got a lot of green signals. Uh, but anyway, you can see it's activated over here. Uh, it looks like over here you had a little bit of pain after it activated. One said here you add some paid after it activates so this one's not as reliable.

I'd say it's reliable here here. Over here here was great. This was too early, so they're definitely there are a few occasions where it's a little too early here. It was definitely too early.

Here's too early, but it seems like more often than not that's that's. probably at least somewhat correct. Okay, stand by, let's see what else we have here. Uh, okay.

okay. cool. The signal goes off whenever breath defined as the net number of stocks Rising on the New York Stock Exchange rapidly goes from being weak uh, very weak to very strong thrusts higher. Oh I Love thrusting.

Uh thrusting. It's fantastic. It shows good above average returns over the next one, three and six months. If technical signals strength is their Simplicity it could also be their weakness.

No. Trader or investor could ever take a decision based purely on them unless part of a more sophisticated Quant strategy. Ooh fancy. It would be tricky to say the least to explain to your client that you were long purely because of one moving average.

Well see. that's always what I think is so funny is I actually think a lot of the financial advising industry uh is is uh is based on well how do I explain this to my clients Seriously I think most of the most of the stock market and financial advising business is. How do I explain what I did to my clients And so in 2022 oh we are going into Consumer Staples because everybody's still gonna have to buy toothpaste and then the clients are like yeah yeah, that makes that makes sense. and then now it's 20 23.

gold is rising and if we're going into a recession, you know historically gold goes up and copper goes down. Yeah yeah yeah yeah yeah yeah yeah. that makes sense. And so you get this.

like all this trading and rebalancing of your portfolio, it's really moronic because it just sets up a lot of commissions. uh, in in the financial advising space. Uh, while at the same time trying not to have clients flee, right? Because if you have like a diamond Balls approach and you're like just give me pricing power stocks at good deals people gonna be like but you're not protecting me, you're the problem. and then they they go and then they go YOLO into gold at the top of the market and it falls and they YOLO and disables at the top of the market and then false and then and then they come back to a different financial advisor because it wasn't You know.

Whatever it the whole business screwed. This is why most people lose money in it. That's what I say like the easiest way to build wealth is Real Estate because this business is rigged and then oh, it's on stuff too and guess what I tell you stuff like that and a lot more. Some really good perspective in there.

Okay, what else we have? uh, it pays to incorporate these signals into your views. In today's case, the message is that despite everything pointing towards weaker stocks, price action is Whispering that it might be uh, in other words stocks May or have already bought them. As already said, this was a hard column to write. Stocks could very well go on to make new lows before they exceed last year's high.

But great buying opportunities only. look Elementary In retrospect and it would be remiss not to point out that this may be one of them. Oh oh tingle me on the inside, this may be one of the best buying opportunities. I like this column a lot.

This column this column talked talked right to my soft spot and she talked dirty to me over here. This was really cool. All right. Some uh so uh yeah, that was pretty cool.

Um uh, somebody's saying what are ways you can lose money on your ETF are you talking about me personally? Uh well. I have to pay for the dang thing. It cost me like half a million dollars a year to run. That's one way.

it's expensive. Financial industry is ridiculously expensive. But yeah, I mean ETFs are based on price movements of the underlying stocks right? Like you know, I don't even touch the money in it. It's like, that's that's all.

Basically it's done by other companies and stuff. So I just make the decisions all right now. What? I Kind of want more coffee but I want to see what's happening here. Let's so let's listen to Jimbo for a second.

It's just what I need more coffee? What's up Jim yeah no I think your her credibility and your view is taking a hit. Thank you yeah thank you. I mean look I mean you have, you'll have, you'll have set. You'll have people in uh in the NBA Okay and they will say you know we didn't make the playoffs and we screwed up But not in this world because the NBA is real money and these people are only just millions of jobs.

Okay, sorry, all right. sorry that I am actually thinking about this and not happy. Well that PPI fall was the biggest fall since the start of the pandemic. That's crazy.

Oh that's so awesome. And to Amazon today Andy Jassy with his annual letter to shareholders and in it he commits to cost cutting and Tech Investments following what he calls one of the harder macroeconomic years in recent memory. As for AWS Jesse writes the cloud unit faces some short-term headwinds as companies are being more cautious on spending. Here's what he told our Andrew Ross Sorkin a few moments ago about the future for the company: I'm very optimistic about what I was ahead for Amazon and I think there are a lot of reasons for it.

I'd Start with just a couple data points if you if you look at our our two largest businesses, if you look in our stores business which are retail business we still only have, even though it's about a 434 billion dollar business, we still only have about one percent of the worldwide Market segment share in retail and 80 of it still lives in physical stores. And if you look in our AWS business which is about an 85 billion dollar Revenue run right business. about 90 percent of that. Global I.T spend is still on premises, not in the cloud.

so if you believe that those equations are going to flip over time, which we do and we're seeing, we have a lot more growth in front of us. that's been a common refrain from Amazon both about the growth potential and also uh, antitrust right? right? We're small potatoes and they've got artificial intelligence and they have black so they pray so it was I lose about eight billion Bill Yes, that much Dirksen probably put that was not Memphis I'll tell you. He said something really interesting. He said that long-term stocks are a voting machine and short-term their weight machine.

No, all the way around that's leading up to my choke. I'm sorry I'm trying to do a little like I kind of figured ladies and gentlemen. Lenny Bruce here we go: July 20 July 12th of 2021 the stocks that are 185 and now it's at 97. So what kind of time frame is the weighing machine want to go back to like Wilkie Islam Remember women? listen.

uh Buffett of course is uh, says that all the time. and yesterday he was talking about things that happened in the 60s, the 70s, and the 90s. Yeah, we're gonna pull back here for a moment. Uh, you know I'll tell you what the problem is with Amazon Uh, this is the kind of stuff that we do in the course member live streams.

Uh, we're gonna be doing some fundamental analysis again. Uh, this morning it's gonna be fun. but um I much prefer being here in studio. Uh, but anyway, let's go let's look at Amazon really quick.

I'll tell you what the problem is with Amazon The problem with Amazon is really simple: AWS growth has slowed to under 20 at the same time as margins are compressing. But not only are you seeing that kind of pain, this is a this is actually this is a Q4 number here we should be getting. When are we going to get their Q1 numbers? Let me see: Amazon Q1 earnings report? Whatever. Oh, April's phone.

is it wrong? No, it's sometime within the next few weeks. Whatever. Oh, there we go. April 27th.

Uh. Anyway, that kind of compression hurts. But not only that, the amount of money they actually make from uh, from from selling stuff on Amazon is not really good. and uh, you're also seeing a decline in it.

One point two percent decline in their product sales. Their cost of sales they purposely make hard to understand. They put their cost of sales here at 85 billion and their fulfillment at 23.. and then their, uh, their content at 20.8 But then they bundle all of that together into net product sales.

and even when they divide out some of their other items for a Content production, you're still left wondering. Okay, well how do I divide out fulfillment and cost to sales like they don't tell you Amazon.com costs this much and makes this much. They don't do that. They purposely make it blurry by by putting together some of the other expenses that they have.

uh and so really I Think what they're trying to do is they're trying to cover the fact that they don't make money when they sell you stuff on. Amazon So when you're buying stuff on Amazon the seller like the goods manufacturer might make money but they don't make money. You know, like think about this all right, where is it I thought it. oh it's not here I um what's it called I bought a I bought this.

um uh. this ski jacket and outfit thingy. uh and uh. let me see if I have it handy here I'll show it to you.

oh yeah yeah yeah, look at this. This is ridiculous. Okay, like how how do you make money on this? Yeah I got this for 89. Oh, it went up to 99 dollars.

Oh and now what did I get? Yeah I paid 89 bucks for this. but anyway. oh I had good reviews when I bought it I don't know. it's fine for me Anyway, people got mad at me on Instagram they're like Kevin you're not supposed to wear Snow Camo in the snow like whatever man.

So anyway I bought this because it had like overnight shipping or whatever available. uh and I'm like sweet thanks So like how do you overnight me in a ski outfit for 89 with free shipping? It just does. It didn't make sense. uh this you just can't make money.

I I I I Don't know. Whatever. like I'll gladly gladly take advantage of it so you know it's it's kind of like kind of like the short shorts. man.

18 bucks? it's crazy Yeah I Live in a small town and Amazon is a lifesaver. but Kathy you're supposed to support local stores because you're supposed to pay more and support local business owners who don't have what you want. Oh man, all right. I Gotta go I Need to go make some coffee I'll see y'all tomorrow bye.