And today, folks. JP Morgan Finally, Finally, finally, somebody else acknowledged that there are two different types of pivots. I Am so grateful that finally somebody has acknowledged that there is a different type of pivot. Because what I keep seeing on YouTube is this moronic chart that doesn't show you that there are two types of pivots.

This is the only chart you see. This is the only chart. Well folks, the JP Morgan recession argument is out. They are going to give us a breakdown of whether they think this Federal Reserve pivot is going to be good for stocks or bad for stocks.

They are going to compare to history to show us how historically have Federal Reserve pivots fared for stocks. Have they been good? Have they been bad? Are there different types of pivots? Hint: Yes. And what kind of pivot could we be facing before we talk about the JP Morgan analysis on a pivot though. So I have to remind you of something important and that is Costco What has Kevin been banging the table on for? Well, basically all year and basically the last six months Kevin has been banging the table about this idea that we are going to see a massive slowdown in Staples and that stocks that have performed very well with, uh, the consumer staple stocks that have performed very well the McDonald's the Costco's the Johnson and Johnson are likely to suffer as their sales will likely plummet and their margins will get squeezed.

Well folks, it has finally happened. These Costco failure has begun and this is not to bag on. Costco Costco is a phenomenal company. They have brilliantly figured out how to make money and I mean brilliantly figured out how to make money.

They know they don't make money off of selling food. In fact, if you go to some of their earning statements, that's an older one finding. Uh, let me see here. if we go to an earning statement from Costco an older one that I have handy here.

what do we find? We find that the vast majority of their bottom line comes from membership revenues. They make about 10 on the crap they sell you and about 98 on the memberships that they have. Which when you then look at the bottom line: the net income uh, before taxes for Costco uh in Feb uh for the 12 weeks ending Feb 12 2023 was sitting at about one. uh, 0.98 billion dollars.

of that about a billion. So more than half came from membership revenues because the margins are so high on the membership revenues. So it's it. Shouldn't be surprising that Costco has brilliantly figured out how to make money off of you.

It is not on the stuff, it is on the membership. That is what makes this company wildly profitable. It is just like McDonald's McDonald's doesn't actually make the bulk of their money on selling you Mech nuggets. They make the bulk of their money by selling McDonald's owners known as franchisors.

McNuggets That's how McDonald's makes most of their money substantially. Unfortunately, these flight to safety staple stocks are getting hit and I Want to start with this by telling you that in my opinion, this is where Starks get hit the worst and the hardest before. I Tell you about the JP Morgan piece which led the JB Morgan piece on the FED pivot is mind-blowing But what just happened? Take a look at this: Costco sales once you take out a foreign exchange and gas benefits E-commerce sales in the last five weeks, folks. Negative: 12.7 that is.

if you now take inflation off of that, they're down like 20 on E-commerce But then again, E-commerce for Costco Come on. Okay, fine. Let's ignore E-commerce Well, now you're down 1.5 percent in the US down two point four percent in Canada Add inflation in. Guess what? You're down about 10 10 percent inflation adjusted in real terms in the last five weeks, in Canada in the last 31 weeks or Canada and the U.S in the last 31 weeks, you're also on a real basis that is inflation-adjusted Basis Negative: if you don't provide uh, the uh, the uh adjustment for foreign exchange and gas.

What we find is that the five weeks ending April 2nd saw an increase of only half of a percent from last year. They're basically flat. There is no growth left at Costco. Even with inflation, there is no growth left.

So what gets hit next. What gets hit next is nothing other than margin. That's the way it works. Margin gets hit next now.

Beyond This We need to talk about this: JP Morgan Recession piece because it's Huge! JPMorgan is basically telling you as soon as possible you should Hedge for the FED Pivot That is approaching because guess what? It is a problem and you should be prepared for the FED pivot. But wait a minute. What Fed pivot? Because Kevin Aren't there different types of fed pivots? Yes! And in this segment, we are going to talk about those particular pieces now. I Want to be very, very clear? We have to remember that there is a 69 off coupon code for the programs on building your wealth linked down below.

That makes me very happy when you check it out because it is what enables me to come back every single day. And it is what makes me frantically look for Content updates every single day and quality information like this. So if you like what you're about to hear, think about how you can get an expansion of this lifetime access to not just the lectures on building your World, but the course member live streams linked down below and you're guaranteed the best price going forward. So what do we have here? Well, we have Market implied Fed rate expectations showing the market is expecting a pivot to be delivered over the next two to three meetings by the Federal Reserve Looking at market performance around previous Fed, Cuts suggests that near-term upside is limited If Market implied timing is correct post: Cuts Markets have sold off strong if Cuts were delivered ahead of recessions, while markets performed well if Cuts were delivered preemptively and managed to re-accelerate growth.

From today's point of view, it's hard to construct a sustainable bull case. And further downside appears more likely we believe the case for putting on hedges in this juncture is very strong, especially if these are funded by shorting upside that's called selling calls by the way, thus which you learn about in the stocks and site Group by the way, thus reflecting the asymmetrical risk we see in near-term equity markets. Okay, fantastic. Now, what does this mean? Okay, let me try to simplify this very quickly.

So here's what this means: There are two different types of pivots and this is very important to understand because I have been pounding the table over the FED pivot for the last six months and I've been yelling at this idea about there's a difference between the FED pivot and the FED U-turn And today, folks, JP Morgan Finally, Finally, Finally, some somebody else acknowledged that there are two different types of pivots. I Am so grateful that finally, somebody has acknowledged that there is a different type of pivot. because what I keep seeing on YouTube is this moronic chart that doesn't show you that there are two types of pivots. This is the only chart you see.

this is the only chart it shows Fed pivot and then a big minus sign. But they forget the U-turn pivots and so I've obviously made many videos talking about how the u-turns are blatant. u-turns are actually where these little X's are. These green x's and the u-turns tend to mark a bottom in stocks.

which means stocks rally after the u-turn So what's the difference between a pivot and a U-turn Well, thank the Lord Finally somebody, and this somebody being JP Morgan has put together a phenomenal piece to explain it to us. Now I'm going to read their piece first to you after I read their piece to you I am going to translate it to English. but I think both of them are very important. Okay, so we believe the upcoming Fed meeting on May 3rd or on June 14th could turn out to be a pivotal moment for the near-term direction of markets.

So in other words, expect an inflection point coming to markets very, very soon. This is going to be important. Okay, Market implied rates are showing a 45 probability of rate hikes or an 11 basis point. Uh, hike for May Okay, we can't hike by 11 BP But when they say that that's just what what the average is right? So they're basically saying 45 percent times, 0.25 is about 11.

that's roughly what they're trying to say here. Okay, the cuts from July onward would then occur with the market pricing in 2.6 cuts by the year end. JP Morgan Thinks there's going to be a hike of 25 basis points in May before the potential pivot starting as soon as June or July JPMorgan is expecting 200 000 jobs in the jobs report tomorrow. Fine, that doesn't matter so much now.

Powell has indicated in March a dove a shift would not be a reflection of conviction around inflation Dynamics but a recognition that tighter credit conditions could contribute to slowing growth. So I wrote on this: I'm torn on that. I actually do not think the Federal Reserve will pivot at all ever until inflation is convincingly on the path down. That is very clear to me.

It's very clear to me because the Federal Reserve is a necessitating that inflation expectations remain low. By the way. Unemployment claims. Uh, just coming out now.

Unemployment claims coming in at 228. That is above the survey of 200 000 that suggests a weaker economy. Continuing claims coming in at 1.823 million versus the survey of 1.7 million. Both of these numbers higher than expected.

Holy crap. The prior revision. Holy crap. The prior revision was.

Now we have the unemployment claims of last month move from 198k to 246. that is a a massive 25 revision to the prior number and the continuing claims for the prior month were moved from 1.689 to 1.817 million. In other words, the economy already much weaker than the data is showing much weaker than the data is showing. That is Recessionary news.

Recessionary News Okay Recessionary News Just out in the midst of recording this. Now continuing on here, looking past the pivots. Okay, so let me finish the thought here. So finishing the thought of me being torn on this I Don't think the FED pivots until they are convinced inflation is down.

That will be become. That will become very, very important when I explain the two different types of pivots. Using a JPMorgan as an aide here, looking at past pivots suggests that the Steep yield curve inversion we are seeing now would have triggered a rate cut already had it not been for this highly unusual inflation. That's important.

Very important to remember because what they're saying is at this point the yield curve is already so inverted. We are in such a recessionary environment. The FED has beaten this economy to the ground so heavily. They have taken our neck and driven it into the mud for so long that we're already choking with a lack of oxygen.

That ordinarily, the FED would have cut by now. So JP Morgan can't even get it straight here. On one hand, they're like, well, ordinarily, they would have cut by now. but they're not cutting because inflation is high.

Exactly. This is why this Dove a shift has everything to do with inflation. Dynamics So JP Morgan Kind of contradicting themselves right here a little bit, but that's just my opinion. But then again, I I I I Like to, uh, add criticism and commentary.

The reason we expect a strong risk-off reaction in June If The Fed does not indicate a pivot is that the FED may have already over tightened, increasing the likelihood of a deep recession. All right. So the first lesson that you need to take away from this JPM piece, The first thing that you need to take away. We're going to go through this order.

So actually I should say First, we talked about Costco That's the weakening of Staples This is why you want to be finding pricing power style stocks. You can learn more about those at Meet Kevin.com Pricingpower stocks. Meet Kevin.com To learn more about this, uh, then you're going to learn about the JPMorgan argument that if the FED does not pivot by June markets price in in more severe recession. This is actually compounded by data that we just got minutes ago about unemployment claims.

We use the UI even though that stands for unemployment insurance that tends to be a A A away. the government refers to unemployment. But anyway, all right. so that means potentially over tightening, right? So that's over tightening.

Okay, but you're going to learn something else now. So JP Morgan assumes a lag time of six months. This suggests we have only seen about half of the pain of rate hikes now. I Want you to think about that from a banking crisis point of view? From a banking crisis point of view, we have only seen half of the rate hikes about 2.5 percent.

Which means that the banking crisis or, uh, the crimp on economy on the economy could be just 50 percent progressed now. In Fairness? Uh, worth. Sort of hedging this on the banking crisis side. Banking crisis does, though, benefit from lower T yields.

Uh, and those T yields have been falling which helps prevent a continuation of the banking crisis. That's why in my opinion, we haven't actually seen the banking crisis continue and more. Banks Defaulting because bonds have risen. Remember, bonds rise in price when yields fall.

Just just remember that. Bottom line right there. We don't have to fully explain it right now. Uh, okay.

good. so there's going to be in more. There's a lot in this piece. Okay, uh, by the way, but shout out to Stream Yard uh, Stream Yards.

Really cool. They're letting me stream this in a hotel right now. Uh, not only that, but I'll be able to edit this video using the stream Yard platform later. It's really cool.

So not only can you record video with it, you throw up banners, throw up the little ticker at the bottom that you see I could throw up comments as well like there's somebody here watching on strip. Oh I saw on that strip on on Twitch Uh, Chillix says I'm in the hospital watching well I hope you recover whatever your problem is and now you're sending a little prince Emoji Fantastic! So anyway, check out House um sorry Stream Yard by Kevin.com Paid promotion there. So what do we have here? We have the lag time. Uh, then we have talk about commercial real estate losses.

potentially 350 to 400 billion dollars of commercial real estate losses, which would approach the level of losses seen in the great financial crisis. But that's not even the fun part. Ready for the fun part? This is the fun part. This is this is a lot.

I urge you to buckle up I'm going to make this as simple as possible and so if somebody says highlight me bro I will do that. All right. Buckle up. But this could be the most important video that you watch on the FED pivot.

and if somebody once again comes and starts complaining and saying stocks are definitely going to go down in the FED pivot, I'm going to choke them and I'm going to make them get life insurance and then I'm going to choke them. Uh, anyway, all right, listen to this. Actually, I'm going to make this a little simpler. You see this chart.

Okay, this chart says that in the blue line, stocks go up after the FED pivot. where is the Fed pivot? It's right here in the middle. see where I put the P fed pivot f P fed pivot middle. Okay, so that means there's an inflection point here and here.

Let's actually draw that in green here. and here is where the inflection point is right where the FED pivot is. So why is it that on one hand stocks go up and in the other fed pivot stocks go down? What's the difference? Again, this could potentially be the most important video you watch on understanding the FED pivot? Let's explain it using Jpmorgan's words. Then I will use my own.

By January of 2024, the market is expecting 3.5 rate Cuts or 85 basis points of rate cuts. A JPS JPMorgan Macro Strategist pointed out if the FED had cut rates at the speed it was cutting because the economy had already entered into a recession in 1990, 2001, and 2007 when it started easing as a reaction to Market stress or mild slowdowns. Uh, in 87, 89, 95, 98 growth eventually picked up. Okay, I'm going to translate this because this is complicated.

Basically, they're saying the FED pivoted once in 90, 2001 and 2007. then you had these different fed pivots. We're going to talk about those in a moment and they hear they talk about. There's a distinction between the pivots.

There's a mid-cycle pivot or a pre-recession pivot, and both of those lead to different reactions in the market. So pre-cycle and mid-cycle Okay, let's start here with this: pre-recession A pre-recession pivot is the typical pivot people talk about. A pre-recession pivot is bad. This is when the FED has lost control, lost the lead.

This is when the FED has no control. When the FED has lost control, it means they have over tightened. And because they have over tightened and the FED has once again screwed up and they have lost control. The FED may actually have created a recession without conquering inflation.

which ultimately is the worst case scenario. A pre-recession pivot is bad. So a PRP is actually this red line Here in a P R P stocks go down. In a pre-recession pivot, stocks go down.

however in a mid-cycle pivot. In other words, Kevin's U-turn which I've been banging the table about for actually since January of 2022. since January of 2022, I've been saying wait for the FED U-turn The FED U-turn will be glorious. The FED U-turn has happened in 87 in 89 as they mentioned in the 90s during the soft Landing.

But more importantly, it happened in 87, 2003, and 2009. the FED U-turn is what you want. The FED U-turn is the Fed saying. Okay, basically we're going to turn the money printers on because we have the end of the tightening cycle is here.

We may have tightened too far. Inflation has been conquered. And because inflation is conquered, we are going to turn the money printers on like crazy and prevent a nasty recession. We're going to cut bigly and we're going to go back to quantitative easing.

Okay, that then leads to the following chart in a U-turn scenario. In three months after a U-turn scenario, stonks, my friends. stonks go up. Almost every sector of stocks goes up after a Fed u-turn which is a mid-cycle pivot.

However, almost every sector of the stock market goes down in a pre-recession pivot. This is the most important distinction. and I think probably one of the most important videos. and that's why it will feature every single sponsor that Kevin can possibly think about from 12 free stocks with Weeble by going to Metcaven.com Free phenomenal platform from Life Insurance You can get into those five minutes by going to my Kevin.com Life and of course streamyard how I stream this video, making an outcome stream.

So what do we know about this? Well, what we know about this is the following: JP Morgan And their opinion is that we are actually more likely to see a pre-recession rate cut. In other words, JP Morgan is taking the bearish point of view. JP Morgan Does not believe inflation will be solved Timely So let's go to our conclusion page here. Okay, so let's zoom out on the conclusion page.

Let's do number four: JPMorgan Believes we are going to get a pre-recession pivot. The bad pivot. That's bad for pretty much all stocks. and it's likely If The Fed does not control inflation.

That would be bad. It's the stagflationary recession. higher. for longer, it's painful.

Stay in cash? Uh yeah. Protect yourself. Okay, then there is the other potential. This is the Kevin belief.

Okay, so it's either JP Morgan or Kevin here. Okay, if you believe them, maybe we can still have a cup of coffee together. But if you believe me, we can go skiing together. All right.

Kevin Believes, you know I do flip-flop a lot. but I think on really important things. I don't uh I have maintained Kevin has believed since January of 2022 that a massive fed U-turn will come as soon as inflation proves transitory. Okay, we're still just now in that process.

Labor inflation is basically gone. Look at any earnings call from Chipotle Starbucks Uber Lyft Darden McDonald's any of the recent earnings calls cloudflare that we've been looking at in terms of of of of people actually earning wages. wages have capped, Wage growth is slowing substantially. Inflation is going to go away.

The substantial Uh supply chain shortages that we had are going to turn into massive supply chain gluts. A glut, by the way, is Uh is a massive amount of uh of uh of of Supply Uh, Someone here commented, hey, and you're a mod too, That's it. You're demodded because you have a different opinion than me I'm just kidding I'm not going to do that. It's fine.

Somebody here writes two-year experience Kevin Hey man, that's an insult. It's like 13 years. Okay, come on man. Okay, 13 years of experience versus 100 year old JPM All right, let's make this.

let's let's just uh. let's just make a comparison over here. Okay, you ready for this comparison: January of 2022 Kevin Meets with JPM strategists for dinner. Those strategists include people who used to work at the Fed Kevin says we are going into recession I'm selling bye JPM says we see a 15 chance of recession.

Okay, that was January of 2022 actually happened I have proof actually happened Uh I had a fight over that dinner table and as the only person pounding the table going, you need to wait for the FED U-turn Basically okay, now there's a chance the stock market May bottom before the U-turn because the U-turn is so clearly uh established now. But the point is, that was my opinion in January of 2022. I was very clear about that. I've always been very clear about that and my opinion has not changed on that.

Okay, I just believe the bottom will come before the actual U-turn this cycle. Uh, just based on my estimations now. yeah, I could be wrong now. Kevin is saying yes.

still recession. shallow recession. but shallow. But we will have the FED U-turn because inflation proves to be transitory.

JP Morgan is saying okay. fine. Yes, we're going to go into a recession, but inflation won't be transitory. So pick your side, pick your side.

It's totally fine. Like I still I Still like you? Uh, and and like I mean I went to Peter Schiff's house. What do you think Peter Schiff uh uh, thinks about all this I mean I think it's obvious you could watch the interview. So I think it's very obvious that people have different opinions and you can still get along with other people.

But let's be very clear. this is what we're looking ahead at: either a U-turn or a pivot. It's very simple and if you want my perspectives first, make sure you join those programs by building your wealth. I get regular emails of people say Kevin I watch you every day because you give me so many trade ideas and I made so much money listening to your content uh, whether it's in the course member lives or otherwise and so thank you and shout out to those people.

uh, obviously no guarantees I mean yes, I'm a licensed financial advisor, but I can't give you personalized Financial advice I can't do it for you if I could do it for you Okay, you know we'd all be rich. Um, but uh, but I could definitely share my insights as much as possible. So uh, let's let's just put a conclusion on this because I think it's it's pretty pretty powerful. JPMorgan Finally, after a year, we finally have an institution responding to this fraudulent argument that the pivot only exists in a bad Direction Finally, finally, we have the realization that there are two forms of a pivot.

I've been screaming it for months and finally we have institutional analysis on it. Thank God Oh, you know what we should do. Let's do a quick poll. I Think this would be really cool.

So what we're going to do is we are going to pull the live audience now. remember I like to stream daily I I Really try my hardest to start at 4 20 a.m Pacific time I am usually late but that is my goal I'm going to now run a poll. to those of you in the audience you turn positive. uh or let's do fed u-turn good for stocks or PRP pre-recession pivot bad for stocks pre-r pivot you turn.

Let's run a poll and in about a minute I'm only going to give about 60 seconds to see what your thoughts are on the poll the poll is Live Now Go to the chat answer the poll question I Don't mind taking the L if I'm if I'm wrong but at least I'll give you my opinion. Uh, so again. uh I'm convinced that inflation is coming down I Am also convinced that the FED has overtyped I Am also convinced that the FED is probably going to go with the 25 basis point. uh, hike.

I Believe the FED is going to keep doing that because I I believe this. Okay, I'm gonna pretend to be Jay Powell Uh and uh. And then we're gonna go through the poll results. Okay, ready if I'm Jay Powell This is my opinion and this is not going to sound anything like Jerome Powell but I'm going to use I don't know.

probably agenda templates or something like that because it's funny To me, it doesn't have to be funny to you. Um, J pair and I know we have to keep inflation expectations anchored. So I'm just going to keep saying that there's upside, risk and um, we're gonna just, uh, do another hike. Uh, because psychologically, we're gonna get to five percent and then once we're at five percent.

Uh, we we will have about lots of time and we'll have hopefully gotten lots of reports to convince us that inflation is down and then maybe we'll Purge But after we purge, we can never go up again because we don't want to repeat the mistakes in the 70s or 80s. Uh, we don't want to Aaron Burr markets and we technically don't want to power vocal markets because I want my face on Mount Rushmore and if I could stick a shaft, Landing I will go down as a hero. So therefore, as Jerome power I would uh, really like inflation to be transitory. but I'm going to trick people into thinking I'm going to hike us into Oblivion but I'm basically just going to cut rates on Sunday five percent to zero and uh, and and we'll go back to the Moon All right, that's that's my take.

Terrible, terrible impression. Uh, it's that's okay. All right now. the results of the poll.

Uh, out of 6 000 of you watching, only 809 of you voted. What are you doing? Are you sitting on the toilet like unable to push a button? It's fine I Respect you anyway. I Understand people turn me on just to listen to me. Ooh all right, u-turn 60 percent Pre-recession pivot bad for stocks 39 out of 820 votes.

Okay, pretty good I'm sure that's statistically significant. So all right, that ends now. JPMorgan recession piece and my thoughts on shape. Oh.