Wow! Amazing numbers this morning just out minutes ago from the ADP Jobs report. I'm going to break this report down, tell you why this is amazing, but also talk about why Jerome Powell might end up being nicer to us over the next few months than you actually expect. Now this is very exciting I Believe for the markets and boy oh boy am I excited and ready for the markets to be happy again. But I'll also talk risk factors because we don't want to be blindly bullish. but we also don't want to be blind to is two updates quickly regarding how Sac today is November 30th Which means today is a deadline for signing your DocuSign at Househack.com If you're an accredited investor, sign your DocuSign at Docusign.com and make sure at Househack.com and make sure that you wire your funds within the next business week to qualify for the November warrants before that expires. Then for non-accredited investors, we are about to submit to the SEC which we're very, very excited about. So stay tuned for more House Hack updates. Okay, let's get into what just happened with the ADP Jobs report. Now this this is really incredible. Just so you know we were expecting and expectations are a big deal for the market, We were expecting 200 000 jobs. Oh come on I bet we were expecting 200 000 jobs. Last month we had 237 or 9 000. It was nine thousand. There we go two hundred and thirty nine thousand. So that was the last month gain plus 239 000. this month we were expecting plus two hundred thousand Folks What did we end up getting? Holy smokes, Only a hundred and Twenty Seven thousand jobs. Now that is actually good news for markets. I Understand it's not the best news for employees because the less jobs are actually created for employees means less ability for employees to demand higher wages and they're more likely to stay at their existing jobs because when they get laid off or or if they end up leaving their job, they might not have a place to go If they get laid off, same thing then they fill up other vacancies and that's exactly what Jerome Powell wants. Remember what Jerome Powell wants is he's very frustrated that for a majority of this year there have been two job openings for every one employee unemployed or person unemployed. He wants that to be about one to one. So the more we get jobs reports that come in low or potentially start coming in negative, the better. In fact, Goldman Sachs believes that we're going to see an average job gains of just 30 000 jobs throughout 2023 and that's going to align with potentially a recession. and Jerome Powell Really having to be less aggressive? Now take a look at where some of these jobs were lost and then let's talk about what to expect because Jerome Powell talks today and I Gotta tell you, is he gonna talk dirty to us? Let's talk about that. But look at this. I mean we're we. We are broadly negative in some very, very very clear categories. Here, we are clearly negative. A hundred thousand jobs in manufacturing. This is a huge negative number here. Goods Producing an absolute plummet here. Look, a lot of people are talking about how great Black Friday and Cyber Monday sales are and how there are record sales and all this when you adjust for inflation. Most of the Black Friday and Cyber Monday sales were actually negative year over year and companies are stocked to the wits end with product. You probably saw my Black Friday video and if you didn't I encourage you to go watch it because I think deflation is imminent with some of the madness that we're seeing. But this is reiterating that: Manufacturing jobs losses of 100 000 corporate jobs 77 000 Finance jobs Thirty four thousand Uh, information jobs 25 000 jobs Huge weakness in this number here. well below expectations of course. The one area that's still booming and this is no surprise is Leisure and Hospitality This is just expected to continue to Boom As people right now are starting to move from spending money, they have to spending borrowed money by borrowing more money on credit cards or using personal loans. If you want to get afraid, go look at Sofi's earnings and you see their personal loan growth. It has exploded because people are borrowing money and spending it now. Fortunately, people are still paying down these loans. but then, uh, and we're actually seeing a rising rate of loan pay down. But then you wonder, hey, if you borrow a hundred thousand dollars Just as an example, It's easier for you to pay down other debt, right? But you kind of just replace some debt with new debt and now you actually potentially have more debt. It's crazy, and it's fascinating, but there's no doubt that the economy is slowing down and we've got to talk about that in Jerome Powell But first, let's look at this briefly here. This is the median change in annual pay. Year over year, job changer is still sitting at 15.1 percent twice as much as job stayers. But when you start getting negative reports like this, what happens, people stay. Where's the most inflation? Well, tentatively for employees, it seems to be in trade, transportation and utilities coming in at about eight point one percent. So we'll see. but this is a very disappointing Report With actually look at this large Style accomplishments being the big job losers here and small establishments only a black screen of death here. only medium establishment. uh saw uh. real job gains here between 50 and 249 employees. Really interesting, especially given a Leisure and Hospitality A lot of restaurants have staff of between 50 to 200. all right now. Jerome Powell What to expect Jerome Powell Speaks today November 30th at Uh at 10 30 Pacific Time that is 1 30 Eastern Time Here's what to expect: Joe Powell is going to give us probably hints on getting a 50 basis point hike in December Of course he's going to tell us that inflation is his top priority and that they are not going to relent that they're not going to Pivot anytime soon. Keep in mind when the FED talks pivot, what they're saying is, we're not going to reduce rates anytime soon. We're going to keep rates higher for longer. He's got to keep talking the talk to make sure markets realize no, no, we're not stopping until inflation comes down. He's got to do that. But what do I think might be different this time? I actually think Jerome Powell can take the foot off the aggressiveness gas pedal a little bit I Think he could talk a little bit nicer to markets. And the reason I believe that is because we're seeing substantial softness in the housing market. Real estate agents a third of them can't pay their rent because there aren't enough deals to go along the private plane Market The private car market. All of these are coming to almost a standstill. You look at the housing market and I don't understand why why Gov the government is like this, but there they just came out with the Uh September numbers minus one percent. 1.2 percent on a month over month basis for Real Estate Uh, purchase prices or sales prices. This is kind of like what we saw in 2009 and it took until 2011. for the real estate market to bottom, and that's the last time we saw real estate prices drop over one percent. Uh, on a month over month basis, month over month, one percent means roughly 12 a year. Roughly, that's annualized. That's a lot for real estate. Real estate moves a lot slower than the stock market, where obviously we could see 12 stock market moves in a day. That's why it's important to diversify into uh, other things. But wow. Okay, what is Jerome Powell potentially going to say? Well, again, very clear mission on inflation, but break even in expectations for inflation have been coming down. Both the consumer expectations for inflation have been stable. They ticked up a little bit in the preliminary and then the final. They tick down a little bit, so we're kind of oscillating, but we're relatively well anchored and Market expectations for inflation measured by The Five-Year break-even are back to where we were in September which is really a good thing that we're seeing it stable. It was Rising there for a while, and that's why Jerome Powell Talked pretty aggressively to US during that last press conference in addition to an idiot reporter making a terrible mistake telling Jerome Powell all the markets rallying because of what you're saying Because they had started talking about we're going to respect the lags of our policy and Jerome Powell Let us have it telling us how no progress has been made over the last year. We're not backing down until we finish the fight. He went really aggressive. I Actually think because he went so aggressive when we got the minutes, it was clear they wanted us to clearly see that they think the odds of a recession are now just as likely as not. That was the big takeaway from the minutes last time and they started having other Federal Reserve banks come out and say we might end up in a recession here because we might be tightening too aggressively and maybe it's worth being a little bit more patient. now. doesn't mean lower rates, but it might mean hey, look, let's maybe slow down a little bit. go to 50 basis points. you could always tighten more. Now we have to be careful here because I will tell you this: It is easier for the FED to loosen than it is for the FED to tighten. Tightening is hard and sure they could come out and rug pull the markets and just raise rates one or two percent, but that generally is unlikely. They're more likely to cut rates like they did during the pandemic from say two and a half percent to zero overnight, which they did on an emergency meeting. I'll never forget it because they covered it, but wow. I Actually think Jerome Powell knows that at this point the damage is done and the market is convinced inflation is a big priority. But what did we just have in Europe and this jobs report that came out today signs that it might be okay for the FED to at least talk less dirty to for to US Inflation finally inflected down by the largest amount today in the Eurozone, it's still over. It's still at 10 percent. Uh, it's still incredibly High. But the change was the largest drop that we've seen in 17 months to the downside in inflation in Europe And it's potentially a sign that maybe we've hit a peak in Europe for inflation. just like we hope we've hit a peak for inflation in America in October. Of course we got the October report here in November and we're going to get the November report in December. mark your calendars for December 13th and even though I believe it would be okay for Jerome Powell to relax a little bit with his uh, aggressiveness and we might see a little bit of green in markets because of that and he might be okay with that he I think he has a lot of control over that. I Do think markets are likely to get tentative again in the week prior to CPI which means we really only got potentially a week of green and then the CPI nervousness ticks in again because CPI is December 13th and we're already at the last day of November. So we're within two weeks of that CPI report and everybody's gonna be paying attention to that one because we could have two in a row now of inflation finally coming down just like it came down in October just like producer price prices came down. just like inflation in the Eurozone is coming down. just like the real estate market is stalling, the car market is stalling. layoffs are happening. This jobs report was pretty terrible. Today the ADP report. we're going to have the the official Jobs report as well in two days from the Bureau of Labor Statistics I'll be covering that. live on Friday at 5 30 a.m There's a lot pointing to the downside and that's why I Think it would be reasonable for the FED to lay off on the harshness because so much is already happening. The damage is really starting to come in hard here in October November and I think it's okay for him to kind of play this Balancing Act where it's kind of like, okay, okay, it got a little too aggressive. You know we're We're starting to look pretty good. We're confident inflation is going to come down. Maybe maybe we see what he says right? but Market goes up a little bit. Okay, okay, let's let's keep it there. Let's keep there. Oh well. we gotta wait for the next report. Oh, let's keep it there, right? They're playing the fiddle right now. Okay, we're the ones getting fiddled. and I don't like getting fiddled. but what are you gonna do when you're in and you're looking for pricing power anyway? Thanks so much for watching folks check out Househack Via the link down below. We'll see in the next one. Good luck and goodbye.

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