Quick reminder to use coupon code cyberkevin for the best pricing on the programs on building your wealth, a link down below anything from real estate to stocks, building a youtube channel and sales. Hey everyone me kevin here. Okay, so we got ta, give an update in terms of this whole recession, noise that we keep hearing about, because this week we're going to finally start getting a lot of clarity, which is really important. We've got quite a few important things coming up this week.

Let's talk about those now, but first a look back at this last week we just lost six percent in the s p 500. In one week we are up eight percent from the lows, but we basically almost gave back half of that right. There's a lot of uh confusion because there's no clear signal i mean we've got the inversion of the yield curve. Then it uninverts and then it goes back.

It's back and forth. You've got a 10-year yields that are going absolutely ham. I think we're at over 2.7. Now and of course, you've got a lot of people maintaining higher shorts on on all sorts of equities right now.

Why? Because there's fear, there's fear that the market is going to fall further and that we will fall into a recession right now. Our sessionary odds are at 27.5 percent, the biggest thing to prevent that is going to be the consumer. So we're going to talk about that. But first, let's talk about what's coming out and the clarity that we're getting this week on tuesday we're going to be getting our cpi report, economists again boosted their inflation forecasts for this cpi report and for inflation expectations for the rest of the year.

Get this. We were at the beginning of the year. Expecting inflation would be about 4.5 at the end of 2022. That means a nice kind of curving down.

Well now, economists are forecasting that inflation will be 5.7 percent in the last three months of 2022, pretty high and they've downgraded growth expectations for the rest of 2023, which is also wild because now we're thinking this is going to last, not just 2022, but also throughout 2023, we do have the cpi report that comes out tuesday and that cpi report, because i just referred to a survey leading up to the cpi report. Cpi report is expected to show month-over-month inflation of 1.2 percent, which is absolutely highest. Month-Over-Month number that we've had in over 40 years, which annualizes to 14.4 of inflation, that's wild. However, the core inflation year over year is expected to be consistent somewhere around five and a half percent.

I think everybody's going to be looking at that core number. Not so much that headline number, which is probably going to be eight and a half to nine percent bloomberg forecast right now, sitting at about eight point: five percent, that core number strips out gas and foods, which obviously are extremely volatile because of what's going on in Ukraine uh, so what's the market going to look for tuesday, hopefully hopefully, hopefully a stable core inflation read if that inflation read comes in hot and we get something like a core of six or six and a half percent the fed's gon na have all the ammo. They need to keep crushing this market. Thank you to today's sponsor the motley fool.

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Five forward-looking stocks under fifty dollars that you can read for free at fool.com kevin, invest better with motley fool stock advisor and that's, ultimately, what they're doing is with their words and, of course, their actions which will be to follow. They are stripping demand out of this market, driving that 10-year treasury yield up driving up mortgage rates and reducing the consumer's ability to use their homes for cheap financing, increasing the cost of housing, increasing the cost of cars not yet increasing. The cost of credit cards, though, which is really interesting credit card interest rates, were an average of 16.3 percent january first right now, they're at 16.4. They haven't moved at all.

So that means that shock of higher credit card interest rates are still to come and that could strip out some more consumer demand. So we got to pay attention to that uh, so core cpi, that credit card uh, shifting in interest rates and of course, it's gon na take probably six months for us to actually see the consumer react to these higher rates, especially with real estate. That takes time, though, we're already starting to see the impact now another thing that we're going to look forward to this year, earnings or this week rather earnings on wednesday on wednesday jpmorgan reports earnings. This is going to be a big one, because what does jp morgan tell us? They tell us everything about the consumer.

They tell us about commercial spending, capital investment great but, most importantly, the consumer. How are credit card transactions going? How are bank balances going? Are people still flush with cash or not? Are they out of money? Those are going to be really important things to look for in that jp morgan's earnings call on wednesday really excited for that, and i'm going to be doing a dive deep into that earnings call. So we can see what jamie dimon thinks about the market going forward. Jp morgan, as of about two months ago, had the recession odds at about 20 right now.

Economists are sitting at 27.5 percent, so we want to see, is jp morgan going to exceed or come in under that 27.5 market expectation? If they come out and say, hey the consumers are spending less already and we're at 40 odds of recession, big red flag. It's our first part of the earnings season, really bad indicator for the rest of uh. The earnings season and you're probably going to see a lot of hedging and when you see hedges increase, what happens short interest goes up and that puts uh put selling pressure on stocks, bringing those prices down right. So big big big report, jp morgan's gon na set the stage here.

The banks always do now flip side. If they come out and say, hey, don't worry so far, it seems like the consumer is not reacting. The consumer still has high balances uh in their savings accounts or checking accounts or whatever they've got plenty of money. They're still spending money like crazy, which it seems like they are.

I mean we're here at this disney resort, shout out to disney phenomenal company. I'm a big investor in disney as well. Their margins are absolutely wonderful. I think q1 is going to be fantastic for disney.

It's going to be another important earnings call we want to look into, but uh. If, if uh, if we get positivity from the banks, then i'm going to continue to expect positivity from the consumer brands as well, so we'll see uh, then of course uh. Something else. That's quite fascinating.

Now is the 10-year real rate, which is the uh. We measure the real rate by looking at the inflation-protected tips. Version of the tenure just went positive. This is actually really interesting because, anytime, you get a positive real rates.

You reduce demand for riskier assets so uh. When you know the last two years, we've been like negative 1.5 percent on the 10 years, real rate and that drives people into riskier assets, especially tax stocks. You get real rates going positive people like hey if i can get an actual yield risk-free well that i don't need to be in risky assets, especially during a time where people are talking about a potential real estate housing bubble which could uh substantially affect consumer demand. People are talking about uh, just recessionary odds across the board, as consumers spend less money relative to the end of q4 uh 2021.

You know coming up at q4 2022 we'll have that year over year. Comparison of course, now we'll be comparing to the beginning of 2021.. It's gon na be really interesting. Uh, i'm not so worried about q1 compared to q1 of last year in terms of recessionary odds me i'm more worried about.

If we're going to see a recession, probably we would see that negative gdp era q4 of 2022. But here's the thing stocks do really well usually leading up to recessions and coming out of recessions. It's just a weird kind of in-between moment where stocks can really get hit hard. I get some good buying opportunities, which is why i'm encouraging patients and saving cash right and spending less, which is ironic because then, if everybody saved less, we would just self-fulfill a recession right.

But the other thing to keep in mind about uh about stop about the yield curve, actually looking at the yield curve, it was looking at when the yield curve says we're going to see a recession. Most people say within 18 months of an inversion. Well guess what the historic fact is: seven months to four years, it's like what are you gon na be out of the market for that whole time, it's crazy anyway. This is my update for this week coming up.

Thank you so much for watching make sure to subscribe. Use that coupon code cyberkevin link down below for the programs are building your wealth, we'll see in the next one.