Why are markets going bullish this morning? Well, it's because we got Durable Goods data. It's like, what's so exciting about that? Well, potentially avoiding a recession. See, There are a few trains of thought leading to the support of the Bear argument. Number one is that Jerome Powell is going to turn into Paul Volcker.

We're all screwed because we're going into a deep, dark depression I Think most people listening to this don't necessarily lean on that argument I Don't think the Bears are that extreme. Although of course that is a tail risk. You know, like a you know, five percent risk that something like that happens. Whatever percent risk, you think it's probably on the smaller end.

anyway. I Think most of the people who are bearish right now, whether you're in cash, you're like Steve and you love Commodities uh, you know you just want to rub those. Come on. Um, the bear argument right now is very clearly that a recession is likely to hurt earnings per share substantially.

And then once earnings per share are hurt, guess what? We go into a situation where we look at S P 500 earnings. We look at the price to earnings multiples for indices Staples stocks across the board and we end up seeing uh oh, wait a minute, this isn't actually priced into markets that APS could plummet and the VPS plummets. Well, then our valuations are too high and basically we've got a giant leg down. further.

Well, the data that we just got called the Durables Good Orders data gives some signs of brightness, some signs the year over year. Uh, figure here. Actually let me. uh, actually, oh sorry.

this is actually all month over month data. So this month over month data gives us, uh, some uh, individualistic uh data. And when we look at Durable Good orders overall, we see what looks like At First, a decline the above expectation. So the expectation was negative four percent on durable goods data, we got negative 4.5 and the prior data of 5.6 was revised down to 5.1 That seems bearish, right? But when we start taking out uh, not, uh, uh, the Aerospace sector and the transportation sector and we then just look at things like maybe cars, washing machines, dishwashers, you know, other larger purchases for people, uh, and durable goods, what we end up getting is something that looks a lot brighter.

So last month we were sitting at a negative point two percent for durable goods excluding transportation that was actually revised lower to negative point four percent. which isn't great, right? But the current report? So looking at, uh, at uh, January the last report being the December report, the January report shows durables excluding Transportation were expected to rise 0.1 percent. They actually came in at point seven percent. And that supports the argument that maybe GDP will be propped up a little better than we expect.

and maybe we can actually avoid a recession. And that's probably why stocks are moving up right now because of the expectation that okay, look yes, Paul Volcker is one of the arguments, but we want data that suggests things just aren't as bad as they are. Maybe because consumers and businesses have more access to Capital more access to debt? Maybe they're using more data, although that's even started tapering down a little bit. Maybe they just have more cash and they can support still buying stuff.

We go to the next line. We have Capital Good orders for the non-defensive sector excluding Aerospace We were expecting no growth. What we got was point eight percent, which annualizes to about 9.6 percent. It's fantastic.

Capital Goods shipments for non-defenses excluding Aerospace Uh, these. This is different from orders this is now. Shipments came in at 1.1 versus the goal or the survey rather of 0.2 percent. So you've got a nice speed here on orders.

The likely explanation for uh, why we're seeing, uh, at least here in the early, uh, pre-market or with early pre-market data. The likely explanation for the rise in indices here is that this is anti-recessionary right now. This doesn't give us too terribly much. Uh, inflationary data, but it gives us data that, hey, maybe things just aren't as bad as feared.

Maybe the FED isn't tightening as bad as fear. Consider this right before the Durable Goods data, the 10-year treasure yield was knocking on the door of 3.98 percent. Within 30 minutes after the release of the Durable Goods data, the 10-year treasury yield fell to 3.91 So that means we were at about you know we were Rising on the day and we basically fully u-turned on the 10-year treasury yield. Maybe because markets are saying oh, okay, well these durable good orders are great because they suggest that negative GDP level isn't near just yet.

people are still able to spend through it. So that gives us some insight into why we're seeing some of these indices move right now. Dow s p Nasdaq Futures Positive Oil Moving Down again. Remember there was this massive thesis and I've been pounding on the table going.

It's have been pounding on the table saying oil's not going to a hundred dollars people are like, but Kevin China is going to reopen, It's going to go to 100, It's going to go to 100 and I'm like it ain't going to 100. I Think if you look back at my videos over the last three months, I'm like this is nonsense China was reopened for three you know, for for like 40 years before the pandemic and we didn't have massive oil spikes that were that weren't you know? uh, predicated on the disasters that we had uh elsewhere outside of China Anyway, a lot of other data suggesting as well that this was just a a Wall Street institutional trade gone wrong. But anyway, Brent Sitting down now about half percent only at 82 bucks, that'll probably be trending towards the 70s here soon, especially as uh Traders continue to unwind their oil positions. realizing that oh crap, oil is not actually going in the direction they thought.

uh WTI sitting at the lowest level that we've seen basically since even before The Invasion into Ukraine by Russia Now that is remarkable right now, sitting at 75 84. is the level that we last saw in December of 2021. that's that's when. when the uh when the uh, uh, you know War the invasion of Russia into Ukraine What wasn't even really a topic that was being covered, it was.

It was a fringe thought, a fringe idea. It was Western media hysteria. Back then it was until January We actually started seeing fears of the war actually occurring when when oil started Rising This idea of it heading back to 100 bucks so far has been a faltering trade. Uh, and it's one that we saw the writing on the wall for.

So uh, great job though. On the durable goods data, we'll see how the market ends up playing out. uh, on the day. Well, but that's uh, that's some of the movement you're seeing a lot of folks asking me.

by the way, hey, like you know, what about oil companies as maybe a Green Tech investments? just look at the earnings calls. any most of the Green Tech Investments that the big oil companies are making are profit losing Endeavors that in my opinion are just being made for the political appearance of oh yeah, we're an oil company, but don't worry, we love ESG You know environmental and social governments right? Anywho, uh, look I I Think the important thing to look at in the market is very very clear. It's are you betting on pole Volker coming Uh, then you're all cash. If you're not betting on Paul Volcker coming then you want to invest in companies in my opinion that have strong pricing power, not personal advice Financial Advice for you: even though I am a licensed financial advisor, it's not personalized.

Financial Advice for you: you want to look at pricing power stocks, where are companies that are going to be able to maintain margin even through a potential recession? But so far even the idea of a recession continues to get sort of kicked down the road. More and more and more and more.