Oh boy. We got some numbers this morning that are sure to upset some of the Bears. Let's talk about those numbers. Oh, there's a lot going on today.

Not only these numbers, but then we got to talk what the heck is happening in the rates market and what's that doing to the yield curve? First, labor productivity backtack advances 4.7% boost of Labor productivity up from the 4.3 expected. This is good. More labor productivity means that people who are the more people who are at jobs. Given that we keep adding jobs every single month, we're at like a 266,000 jobs gain on average over the last 6 months.

long-term average is like 180,000 That's the weird part about more immigration and more labor force participation. But of those people who are going back to work and are already at work, their productivity is increasing faster than people expected. This could be because businesses are becoming more demanding of their employees or could AI be helping. Now it's probably businesses being more demanding and cost cutting wherever they can and ensuring that their employees are more productive.

This is a fantastic thing though, because it's also reducing labor costs. Now yesterday we talked about ECI the Employment Cost Index. It's basically a fancy quarterly report that says we kind of want labor to be rising at about 7% per year. 7 to 75.

Right in that range because if you multiply or or so, that's per quarter. That's because ECI is measured per quarter. If you multiply that out by four, you get to about 3% of wage growth. That's usually what you want.

You want. 2% inflation growth 3% wage growth. You want people to make a little bit more than what inflation is. That's the Fed's goal and the idea is if you have 3% wage growth, 2% inflation, then you have stable prices and potentially maximum employment.

Well, yesterday we talked about how ECI was still a little hot coming in at 1.1 but trending down for a quarter puts you at more of a pace of like 4.4% Going back to this chart right here though, look at what came in today: another measure called Unit Labor Costs unit labor costs were projected to actually go up 3% Well, they actually in the third quarter per the BLS unit cost measure went down Nega .8% This is quite literally the opposite of a wage price spiral, and we know this is volatile. You can see it here on the white line. it goes up and down, it zigzags, but the point is that helps smooth out or I should say lower the smoothed out 3 to six month Trends. That's very important because the Federal Reserve is worried that an expanding economy could mean inflation, but we're not certain that it will.

and right now you could actually as we're seeing here, have a more productive economy with less inflation. That is good. This is the data we want to see. We want more of this now.

Keep in mind the Jobs report comes out tomorrow and so we'll get another read of average hourly earnings on a month over month basis. We're looking for 3% with 180,000 job gains. Best case scenario, you beat on non-farm payrolls. You come in like 200,000 jobs, right? and your average hourly earnings come in low, like.

2% That's what you want. Expanding economy, Lower costs. That's what this chart says right here and it's fantastic. This is great news.

Is that why the stock market is rallying today? Unlikely. The stock market is probably more likely rallying today because of the plummet in yields. Remember, we've talked about this for a very long time that it has been my belief that as soon as the Federal Reserve indicates we have hit Peak You license people's willing willingness to buy the 10-year treasury again because you get you get to lock in basically money market rates for the next 10 years risk-free if you hold for that 10year period, right? And that's crazy to think that today you could still get 4.64% locked in for 10 years. If you think that yields are going to go down in the long term, that is an amazing deal.

you would want to go long on bonds. You want to see Bond prices go up. Yields come down, obviously not personalized advice, just generically. this is something to think about.

The benefit of this is if you're happy that you're locking in money at 5% at say, wealth front or Robin Hood or whatever that could go away like this. As soon as the FED Cuts 200 bips like Jeffrey Gunlock is calling for, he thinks we're going to go into recession by Q1 Q2 of next year and then we'll have 200 to 250 bips of cuts instantaneously because the FED will finally be convinced that they've done enough on inflation and they're willing to bring rates down to prevent unemployment from skyrocketing, which then becomes a self-fulfilling prophecy. If you let it continue happening, well, then what happens instantly? your money market yields plummet usually within a week I shouldn't say instantly, uh, at all these different companies because they're not willing to lose money continuing to feed you a higher yield. So all of a sudden you're like I'm making 5% and then you know in 6 months from now you might be like oh damn, I'm only making 3% now now I Wish I had bought the treasuries that I could have locked in 4.6% % on for the next 10 years and since yields are now lower, I'm also getting Bond capital appreciation.

You know who really like set the the stage here. Bill Amman It's like screw treasuries. I'm going short when 10-year treasury yields are at 420. So 10year treasuries fall because he's doomsday again Because that's what he does.

Um, 10year treasury yields rise to 5% because he says it's going to go way past 5% and then he covers right when it's at like 4 97% You know these yields are just too good not to buy BDS are undervalued flipflops and now he's writing the gains. I mean I Have to say as a Trader he is the perfect manipulator of markets. People Just listen to this guy. Anyway, it's crazy.

It's absolutely crazy. What else is crazy is I Forgot to change the banner here. We got to go back to the new verse Pro Banner Because we're going to raise prices before. uh, we get to uh, the uh, uh, Black Friday We'll have a couple more price increases.

There we go. Noob Verse Pro Uh and then after Black Friday when we start releasing content, we'll have pretty big price increases. so make sure you're part of the noob verse. Pro Crash courses.

Make sure you join those linked down below or just go to meetkevin.com They're really amazing. You'll learn about real estate investing. Uh, Stock Investing Whatever it is, there's a crash course for you. Okay, so what's going on with yields now though? Well, the 10e is down about 14 basis points.

the 2year is down 3.6 basis points. Now that does a few interesting things. Uh, number one. it actually makes the yield curve more inverted.

again. Yeah, here it is little bit of inversion again, but we're still the steepest. We've been this entire cycle. Uh, since the inversion? obviously.

Uh, this is the 5-year forward break. Even so no change here on long-term and inflation expectations. Still 248. Uh, but look at the shorter term inflation expectations over the next 5 years rather than 5 years out and another five years after.

Look at that after JP Pal's Peak Yesterday and some of these employment read numbers that we're getting, we actually saw a fall in this expectation despite yields coming down. This is probably because people are starting to get convinced that the Fed's done. In fact, the Fed's terminal Fed funds rate right now is sitting at 3.68% That is less than staying stable. It's basically starting to price in a cut.

In fact, you now just have a 14.8% chance per market futures of a rate hike December 13th. Remember that uh uh, that is the next Fed meeting and on November 13th apparently it's always the 13th. Now you'll get a CPI Read that'll be a big deal following this Friday's Jobs report which be covering Live Tomorrow morning. But anyway.

Uh, January 31st has a 20.6% chance of a rate hike, March has a 67% chance of being stable and about an equal 14 to 17 18ish perc chance of either a 25 BP cut or hike. Kind of interesting. Uh, and then certainly once we get to May you've got about a 50, 50 to 60% chance of 1 to 2 50 basis point Cuts All those things should be positive for your risky, more yield sensitive companies that could be your Tesla or other manufacturers. So this is great.

Great news, but is is the pain over? Is this something to cheer? Is this the bottom of risk assets? Well, in my opinion, it all comes down to your expectations for what Jpow is going to do. If you think inflation is going to keep going up and you think that as inflation continues to rise, JP's just going to have to come out and raise rates again. I Don't know where you're seeing that I would love for you to leave me a comment down below of businesses that are aggressively still raising prices with the exception of Aerospace or ski resorts. Please leave me a comment down below just so we can all learn together.

I'm not trying to like, be proven right or wrong here I Just think it's useful when everybody gets together and puts their comment down. Where are you still seeing price increases And we're not talking about where where has inflation happened? I'm saying where are you still seeing continued inflation going forward? Uh, so that's that's a very important question. So leave that comment down below. Uh, but if look, if that's what you believe, then obviously you're not going to go long treasuries.

You probably actually go short treasuries because you think their values could fall more and probably won't go long risk assets. But Jpow basically set in the top for rates is a license to buy treasuries and this could just be the beginning of a bond market rally where Financial conditions actually loosen. In other words, and this is the weird thing. You know how Jome PO is like hey, Financial conditions are tightening because yields are going up well.

If they tighten too aggressively, the FED might consider reducing rates right? But if they start cutting, then you're really going to lead to a plummeting of financial conditions. So instead all you really need is to manipulate the market. You send Jpow out with a little hint, a little hint that, uh, you know we might. We're making great progress.

We're really worried about maximum employment. We might be done what happens. yields fall. All of a sudden, the market is basically cutting interest rates for you.

Right now today, we are basically getting a 25 basis point cut. The way the market is responding: I Realize that's not full one to one on the tenure, but that's roughly how, uh, how the economy seems to respond when we get the 25 BP hikes. except now it's in Reverse so it's actually phenomenal. The market today is almost treating this last pause and Conference from Japal as a rate cut crazy.

and the market can do all of that itself. You don't actually need the FED to cut rates. if yields start plummeting and bonds start rallying anyway. that's my take.

Thanks so much for watching. Make sure to check out the Noob Vers! Pro Crash course is linked down below the fact that you could get a Crash course for 99 bucks and it's brand new Content: Really, really good content on entrepreneurship, building your way wealth How to start a B uh Business Nutrition for entrepreneurs? Uh, you know, stocks, real estate? uh renting out property, you name it, there's so much good stuff there. Go to Meet Kevin.com you'll absolutely love it. Keep in mind as well.

even though I'm a licensed financial adviser, licensed real estate broker, and becoming stock broker, this video is neither personalized Financial advice nor real estate advice not tax, legal or otherwise personalized advice and any stocks that I mentioned we could have uh, bullish and long positions in such as uh, the one stock I mentioned here that was Tesla we've got an actively managed ETF and hold long Securities that also probably benefit from yields going down. so always be aware of people's biases, especially the ones who don't tell you their bias. All right folks, Thanks so much for being here. We'll see you in the next one.

Goodbye, Why not advertise these things that you told us here I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes. Congratulations man, you have done so much People love you people. Look up to you Kevin PA there financial analyst and YouTuber meet Kevin Always great to get your take.