All right PPI comes out in about 20 seconds. We are looking for good old data that is going to hopefully reiterate the declining. CPI 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 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 on a destroyed labor market and a destroyed economy, but you want inflation God 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 gonna 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 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 Finals Demand prices or were 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 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? a like, almost like an Airbnb Uh Index for food, retailing, and Transportation for Passengers Advanced Okay, it's fine.

So what do we got? 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 March 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. Vital 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 since 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 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. This is a great Point While I pull up the chart here to mention. uh, that if you want to get a super powered book.

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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 adjust to 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 the 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.

Minus 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 stuff, some of the items and that's but it's interesting that in the services four 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 a me.

Final Demand: Uh, less Exports Negative point: five percent Final Man: less Government Negative point: Five percent 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. 0.4 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 percent. 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. 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 export. 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's still getting a little boost here.

0.5 percent Car 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: 0.5 percent. Uh, 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. No Stage Two: looking for something that stands out Services passengers Energy We know energy fell a lot. Stage One: food fell 4.4 Okay, um, inputs to stage one: Service produces Foods Yet 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 what? I'd 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, Fat Rate Monitor. Um, all right, let's see what we have.

rate 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, hike in Maine 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 Dow up 13 basis points s P 22 NASDAQ 36 10-year treasury sitting at 3.35 9. So down, just a smidge here.

and uh, oil is down about 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.

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. The 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 ten percent. Oh 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 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 4 000 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 a 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 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, and one very rare technical signal points to long-term constructive outlook for equities. Uh, why let me click it? Let me see what this is rare. 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 costs just went down I Think this once again reiterates the FED 25 BP in May and then pause and they're gonna 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 worse action.

So you want to pause and 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 sincere as 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 talk about reality too sometimes.