Well, the Pce comes out at 5 30 a.m Pacific Time on March 31st, which also happens to be the deadline for investing in the house act. But this is a very key measure for the Federal Reserve and I want to give you the projection so that way you're prepared and you've got your expectations potentially aligned with what the heck economists think. Unless of course, you want to take the contrarian point of view by going with the over the under. So first, the Pce is the Fed's preferred inflation gauge known as personal consumption expenditures.

It's an index measured very similarly to CPI One Core Difference though is that housing is actually a lower weight in the Pce. In Pce, housing only comes in at around 25 percent, whereas in CPI you're closer to 34. Now that's actually quite potentially important because in the last CPI reports the last two, we started using new Way: States slightly higher weights for housing and Housing Services have still been hot. They've been coming in hot hot.

So the point where some are saying one of the only reasons we're still getting hot inflationary data is yes, some part because of the stickiness of some of the services though that may actually be going away thanks to tighter credit standards. Really a topic for a different video, but quick little spoiler alert. There's a lot of talks that has Banks Titan Lending Guess who doesn't open up restaurants anymore? or certain businesses anymore? I Guess I Kind of spoiled that one restaurant owners or hotel owners or service industry owners. Potentially Stop opening up new facilities which uh, then it makes you wonder.

Does that actually potentially increase inflation because you have less restaurants? Or does it actually mean there's less pressure on wage earners in retail and Hospitality at the same time the economy is a little Teeter ish. Maybe putting less pricing power into the hands of individuals, meaning potentially less inflationary impetus for the service sector. Either way, any kind of credit tightening is not what we're expecting to see in this next report. and that's because this next report is going to talk about February's data and I'll give you the projections in just a moment.

But it's just important to note that they have less of a housing weight than CPI and it comes out tomorrow. The stock market is very likely to move based off the numbers that we see in this particular report. So tomorrow, the personal consumption numbers are expected From a prior release of 0.6 which was the hot January number, we are expecting to get a 0.2 which is actually very good. If we could get a point two percent on the release, I Think that's phenomenal.

The reason we want to see a number like this is because the number would actually on an annualized basis be somewhat in line with two percent inflation. A point two percent read is about 2.4 percent, and the FED could easily, in my opinion, argue that point two is well within the bounds of averaging two percent inflation, so that could be a a good number to hit if it comes in less than 0.2 I would expect even more enthusiasm for the stock market right now. Technically, the NASDAQ yesterday entered into a bull market. Now this was pretty surprising to me, but I It's true, the NASDAQ is up about 20.4 percent from bottoming out in October And technically now the NASDAQ is back into bull market territory.

This is quite remarkable. This is actually leading Bloomberg to put together multiple different stories on how it's basically by the dippers going back into action and buying. and I think that activity could actually be accelerated by a weak Pce uh, producer prior sorry, not producer price that's PPI I'm thinking of by a weak personal consumption. Expenditures read: I mean take a look at this story here from Bloomberg this one right here.

Wild stock market reversals put dip buyers on his store or a pace for historic. Year All right, let's take a look and then of course we have some more projections to get into Uh for the survey tomorrow. But anyway, look at this in the 2023 stock market. When one group of companies fall out of favor, another usually is ready to take its place.

this is called the cyclical transition sort of of socks. Generally, you go into a recession, people go defensives, they go to utilities and health care, and Staples Uh, and then when the recession bottoms out, people go to growth because they think growth will lead you out and kind of get these sort of moves around. When there's war, people flee into the the military-industrial complex, right? These are very, very typical kind of moves. Anyway, the latest winner is the firms with the riskiest credit.

Uh, that's actually kind of scary. Uh, poised for their best week since January versus their sturdier balance sheet counterparts. The outperformance is happening as credit markets stresses ease, helping push the S P 500 up for four out of the last five days. The sudden popularity of firms with dicey credit is part of a large pattern in equities this year, where Harry Traders reliably find new vehicles to express bullish views.

Now, personally, I just want to be clear in case I haven't already been. I'm a big fan of looking for companies with high free cash flow which is operating cash flow minus Capital expenditures and high net income I Like both of those, Okay, and if they could be in growth and I could get all three of those and some pricing power, that's awesome. But Bloomberg's talking about 2023 is shaping up to be the second best year for the dip buying strategy. How Wild Is that a gloomberg? Bloomberg that's a good one a Goldman Sachs group uh, basket of companies with weak balance sheets Advanced For a fourth straight session, extending its week up 3.3 compared to a weekly return of about one percent for the Goldman Basket of companies with sturdier finances, weak areas of the market maybe seeing short covering or momentum trading that is looking for quick gains.

Now, personally, I think that's a little risky. It's a little speculative, so it's okay if you're trading these sorts of things. but I'm a little bit more of a fan of an In and Out if you're going to be playing with, uh, potentially more highly leveraged companies. But it's kind of wild to think we're back into a technical bull market territory.

Crazy. All right. So Headline: 0.2 versus 0.6 from last time. Then we get personal spending, personal suspense suspending.

Oh, it's too early. Personal spending in January came in at a gain of 1.8 percent. We are now projecting point three percent. Okay, reasonable.

Remember what the stock market is going to try to balance right now? We have a little bit of I like to call it the Teeter-totter So if I kind of draw a little triangle here and this is our Market that we're trying to balance. Really, what we're trying to balance right now: on one side is sort of our regular uh, inflation risk, but then on the other side we're also trying to balance. Uh, Financial uh, stability and recession right? So on the right side you kind of have your banking crisis and on the left side you have your inflation risk. Uh, and so we're kind of doing this right now because either of these being bad would mean the parties officially over.

Although I think the party has been kind of dead for for like the last year. But uh, beyond that. All right. So real personal spending inflation adjusted Expected to come in at point one percent versus 1.1 Then we get the Pce deflators numbers.

Uh, numbers. Now we're actually getting into Pce. So we get retail spends or personal income and expenditures. Then we get the actual, uh, inflating inflation version of the number.

Uh, Pce deflator month over month expected to be point three percent. Uh, it's a little higher than that, sort of average. two percent, right? Three point six percent. Then we get the BET And that's different from sort of personal incomes.

Uh, even though we want those to also be somewhat closer to two percent, because the idea is if personal incomes are close to two percent, that inflation might be close to two percent. Personal incomes really give you a measure of the wage price spiral. and that's again, expected to be point two percent. The actual Pce deflator month over month is expected to be point three percent.

a little bit hotter there, probably because of that housing and sticky Services side. Uh. And then the year over year is expected to be Point Uh, or sorry. 4.7 4.7 is the same read we got last time.

Uh, that is the uh oh sorry I Went ahead here. Let me read this correctly here: Pce deflator month over month point three percent PC deflator year over year 5.1 Pce core year over year 4.7 and PC core deflator month over month 0.4 All of those measures are down from the January read. the most important here probably being that month over month uh, 0.3 versus the 0.6 from last time. With the exception of a year-over-year core matching 4.7 that out report will come out tomorrow at 5 30 A.m Pacific Time 8 30 Eastern We'll also be getting the University of Michigan consumer sentiment.

Uh, now we'll have some talking about sentiment to do today, and there's some concerns that sentiment could actually fall once we're actually in an official recession. But uh, what's important from sentiment in my opinion, is that we're going to keep those inflation expectations stable U of M one year expected to be stable at 3.8 and 5 to 10 New York expected to be stable at 2.8 for inflation. So that's fantastic now. Uh, that, uh, that month over month? Uh, deflator number.

That's basically your CPI month over month read: very similar to that. Again, expected to come in at Uh 0.3 and that'll come out tomorrow. we've got for tomorrow I Want to give you kind of the the skew on this? It looks like we've got 44 estimates. The high estimate is 0.5 the low estimate is 0.3 and the average estimate is 0.35 So it seems like there's a real skew.

Uh, almost everybody on this chart is sitting under 0.45 Nobody's under 0.25 So what does that tell us? Well, it tells us if the number uh, if Pce month over month comes in at point two tomorrow, that would be pretty dang bullish, because really, nobody is estimating that we're going to be at Point uh, anything under 0.25 So if we get a 0.2 a Pce deflator month over month good sign it's a rocket ship on the way to Mars Uh, then uh, if we get any kind of number above, probably point five. Like point Five or up, that would be really bad news. My expectation is that's going to be the most important number specifically because those month over month numbers are really useful because they kind of ignore all of the last year stuff and they just tell us what's happening right now. So I Personally like this, That's not to say that the year over year number doesn't need to come down as well, but those are going to be some important data points coming out tomorrow.

Uh, and especially since at the same time as these data points are expected to come out, we're obviously in this environment where we're kind of starting to build the Nike Swoosh now I'm really excited about that. Do keep in mind that when we talk about the swoosh I generally like to show QQQ but if you're going to invest in the NASDAQ I'm actually a bigger fan of you using Qqqm, so just add an M to that ticker symbol. The reason you want to do that is the fees are substantially lower and it's basically the same index. It's actually provided by the same company.

Uh, and they. They just basically they do all their marketing for QQQ and not for Qqqm. So the price sensitive people can go over to Qqqm while they could still milk lots of profit off of the QQQ investors. Anyway, something to keep an eye on.

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No, that doesn't work. One of these buttons tells you it's a paid promotion I Can't figure it out. Oh, that one still says paid Promo motion. Uh, was it it wasn't six.

Was it seven? It wasn't seven. There it is. button number eight. All right.

Anyway, so where were we? I Gotta figure that stuff out. So what we got over here? Uh I Really think this is the start of it? Uh I I Really hope we don't drop down again, right? I Mean if we draw like volatility, totally to be expected I expect this. but if we break the lows over here, the Nike Swoosh is dead. Uh, which would be a problem because I've kind of been betting on the Nike Swoosh Uh, but uh, at least I'm making it bad.

So I believe that even though this was representative of a year I Believe that the handle over here is going to be 10 years long. so you know. Strong bet. But uh I I Think in in hindsight, this is gonna look like a joke.

Uh, look at like, remember when the NASDAQ was running for like two years straight over here. Uh, look at this like two year run over here. This is kind of an example of a Nike Swoosh over here, except it just uses the shorter covid pandemic to show you the left side of it. Look at that down straight up.

Basically yeah, was there a little bit of I mean this is why I buy the dipboard so well because you could buy the dip and just immediately get rewarded afterwards. So that's why we had such a by the dip area over here and this this was long. I mean that was from March of 2020 to December of 2021. I Mean that's almost two years? That's wild.

Uh, of course. now we're in in a substantially larger downtrend and hopefully that's the beginning of the swoosh recovery over here. Uh, so far, it actually has been tested I think a lot better than some of these other drops. I Mean consider this: Uh, this was bear that was not even really a recovery over here at the beginning of January Last year we look over here at this brief recovery in March it brought us to new lows right afterwards.

Brief recovery here in August brought us to new lows. and then really, it's been since about October November right around when I launched my ETF That's interesting. we launched the ETF like the 30th like somewhere over here like the 30th of uh of November Learn more by going to meet Kevin.com But anyway. uh I Really hope this is this is the bottom.

Uh, and so we'll see. And what's different here is the last time we had sort of this sort of red bear cycle here. Briefly, we didn't actually break new lows when in the past when we get our next bear psych or our next red bear cycle after our green upcycle, we tend to break to a new low. We didn't do that.

So in my opinion, that's reiterating. This sort of channel of of the Nike Swoosh which I think rides this line over here. So I think it'll probably be until it could be until July based on this right here before we actually break up to the next Fibonacci retracement line. No guarantees.

Who knows. Maybe we'll break it sooner, but if we break it sooner, we'll probably fall back to it in honor of that. Nike Swoosh Uh, like I say I think I think we're going to be in a little bit of a volatile uh recovery up. So um, we'll see.

So uh, that, uh, that's a little bit of my thesis on Nike Swoosh and uh, the uh, important Catalyst to pay attention to tomorrow of course I'll be streaming it live tomorrow. so make sure you come to your meet Kevin report tomorrow at 5 30 Pacific and I'll cover the news the second it drops. My goal is always to beat CNBC if I could beat CNBC Uh, I win and so uh. With that said, make sure to check out the programs on building your wealth link down below.

Yesterday we talked about short shorts. We also did fundamental analysis, but we also talked modeled short shorts. So if you want to see that, uh, for whatever reason, check out the programs of building your wealth link down below so you never know what you're gonna get. You just don't know what you're gonna get.

But usually it's fundamental analysis. We talk about the size of pp. Uh, and yeah, check that out. Link down below and make sure you remember that house act deadline.

Thank you.