Hey everyone me kevin here in this video i'm going to talk about what could crash the market tomorrow and why you've got to pay attention to something that happens pretty early tomorrow morning. So at 5, 30 a.m. Pacific standard time at 8, 30 a.m. Eastern time we're going to get the jobs report, which sounds basic, but it is one of the few remaining major catalysts that we have of mass potential uncertainty.

Remember the amount of uncertainty we had just three weeks ago, which led to a pretty horrible september and a drawdown in the s p, 500 of over seven percent. The first time we've seen a drawdown of over five percent in over a year since september of 2022.. Remember the catalyst we had government was going to shut down, the ever grant crisis was going to create a recession and we are uh. We were going to miss the debt ceiling and we were going to default on our obligations.

We were going to have an infrastructure nightmare lead to hyperinflation. We had inflationary concerns with inflation statistics coming out on october 13th. We have the uh jerome powell and the fed and the question of: are they going to taper or not, and how long is it going to take for them to taper and when they're going to raise rates and we've got the jobs report we've had all these Seven signs or seven issues of uncertainty and almost all of them have gone away with the exception of jobs and the october 13th inflation report, almost everything else has been resolved. We have solutions now for the infrastructure package that looks like it's going to be somewhere around one and a half trillion dollars.

We have the taper plan. We have a plan to avoid a debt ceiling crisis. Our government didn't shut down, evergrant didn't wasn't as bad as anybody thought it was going to be, which, by the way, is what we expected on this channel in almost every evergrand video i made. I said i don't expect this to create contagion, it'll, probably go away and i'm buying this dip.

I'm really glad i bought the dip, but tomorrow we could see a big fat dip if these jobs numbers come in in an unexpected manner. So we've got two potential directions. This could go very bad first expectations. The expectation for the jobs report is that we are going to see 500 000 jobs.

So a headline number we're looking for tomorrow morning. First thing is: did we get 500 000 500 000 jobs? More or less, in my opinion, if we're anywhere between 350 to probably 650 we're not going to be too terribly worried about what happens, it's just going to be another thing that we check off the list and go okay. Jobs report was a non-issue moving on. However, there is also a number within the jobs report.

That's going to be closely looked at and it's not just the unemployment rate which we expect to go from 5.2 percent to 5.1 percent, which is kind of nominal big deal: 0.1 movement to the downside. Whatever what we're actually going to be looking for is the average hourly earnings and their movement on a month to over month basis. This is basically trying to figure out what the inflation rate is of jobs and wages that people are being paid on a month-over-month basis. If we get, let's say a strong payroll report, we get - let's say 600 000 jobs, let's just say, but the average hourly earnings went up on a 1 month over month basis, which the expectation is point four percent last month was point six percent.

Well, the one percent change month over month would, on an annualized rate, be a 12 rate of growth in wages, which is a massive inflationary concern and is going to lead to potential issues for next thursday and the market's going to start pricing that in right away. I'm sorry next wednesday, when the inflation statistics come out, so you've got these two statistics, i would say probably the absolute worst case scenario is that we add way fewer jobs than expected. Let's say we come in at 300, 000 jobs and the average month over month. Pay goes up about, let's say 0.8 or 0.1 percent.

This would be a stagflationary fear that, in my opinion, has a very real possibility of leading to a an ugly and bloody red day. Just an hour before market opens tomorrow, i'll be buying the dip. But here's what if we get fewer jobs created than we expected in september, which would be odd because in september we're really expecting more jobs, because remember the federal unemployment boost expired, 300 a month expired september, 3rd and delta concerns mostly went away in september. We had many more delta concerns in august when we last had a big miss on the unemployment report.

So if we get a low number in new jobs in september, when some of these job fairs are gone again, unemployment delta and those things are gone and the number comes in low. That's bad! That's a sign that the economy is potentially stagnating. Having issues solving uh solving the challenges that we face, because we don't just face supply shortages or material shortages, we face worker shortages, which all lead to inflationary pressures, bad and if, at the same time, then wages go up at a higher uh rate. Again, something close to like crazy, like one percent the market's going to be screaming stagflation, we're probably going to see the 10-year treasury yield pop over 1.6 percent, and i would expect to see some serious pain in the technology stocks.

Now. A good scenario on a missed to the downside could be something like: okay, we get, let's say: 400 000 jobs. So it's a little bit softer than expected. Maybe 300 000 jobs, but we have a low inflationary number.

Let's say job wages are flat: no wage inflation, but a low jobs report. That could be good because it can actually signal to the market that wait a minute we might be having trouble getting jobs, but don't worry wages aren't going up, hey fed? Maybe you shouldn't taper as fast. Let's keep that cheap money flowing to keep bond yields low and keep money money, money flowing into technology and growth stocks, so that could actually be good on a miss the downside you're going to have to evaluate both these together. It's not just going to be that top line number now.

Then, of course, the a similar problem could be something like having a massive beat on the payroll report and an inflationary number. So let's say we get a million new payroll jobs and we just totally blow this number out of the park and we have a one percent, month-over-month inflationary read on wages. This is going to be a sign where the market is saying: oh crap, maybe we're not stagnating, but we're definitely inflating and we're potentially overheating. That could be another bad case scenario that actually motivates the federal reserve to speed up tapering.

So stagflation on one side is bad right: a low number on jobs and high inflation, very bad within the jobs reading. But another very bad scenario could be a massive beat on jobs, which is something you would expect. People to cheer it'd be a good thing, but if that number, that inflationary, that wage number comes in very, very high, the market is also going to freak out. So you've got two scenarios here where you could really have freakouts again: high inflation and a miss stagflation, high inflation and a massive beat overheating.

We got a taper sooner time to raise rates sooner inflation's out of control we're running away. Both of these are very real uh and negative scenarios. If we get a big beat on jobs and we have low inflation, that's probably a good scenario that would reiterate that the the fed's, probably on the right path - and i don't expect we would see much - of a change in market uh in markets. If anything, we could even see a little bit of a rally uh and and same thing to the downside if we slightly miss on jobs on the downside, but there's no real change on inflation on the downside probably be totally okay.

Now the scenarios that i've just outlined could also have implications not just for growth or or stocks, but could also have implications for in fl for crypto crypto, i think, is probably going to react positively to a higher month-over-month wage inflation. So uh watch for that in crypto, but tomorrow's going to be a big day because folks, i think it is literally one of the last two punch cards we have for a crises this year. I think if all of these issues go away, if this jobs report is benign, if the inflation report next week is benign. Personally, i think there's a chance.

We might see some volatility going into the end of the year as funds rebalance or take losses for taxes, but beyond that uh i really think there's a chance. People are going to be plowing money into the stock market and we could see that end of the year rally that have kind of been hoping for and somewhat expecting since february, but we've certainly been through a lot of pain since then. But these are the last two real market catalysts. In my opinion, uh jobs again tomorrow, 5 30 a.m.

I will be streaming, it live, so stay tuned. Please come! I would love to watch the reveal with you live and then uh analyze what's happening. I want to be awake for this because if i see a sudden panic in the market and a recovery, you know i'm buying that dip all right. Folks, thank you so very much for watching.

I will see you in the next one thanks again: bye.