Hey everyone kevin here, welcome back to another well market status report and why stocks are all of a sudden jumping, let's go through everything, including the retail sales numbers, walmart, a firm home depot earnings. Some highlights from these some other notes, including this one, that i want to start with lux capital. A venture capital firm is telling their companies that they've invested in, but the world is falling apart and i've lost my voice a little bit that the world is falling apart and that venture or that companies they've invested in need to act accordingly, no longer expecting higher Valuations potentially raising at lower valuations and expect job losses coming in. They say that 2020's covet disaster and that short recession was really a false alarm, because we had low rates and high spending and obviously the market boomed after that and uh yeah.

You know ultimately, their takeaway is, and this is an important one, i think, for all of us to always think about companies don't die because their product sucks they die when they run out of money. I think that's honestly true of people as well. It's like we. If we are, investors don't fail, because we made a mistake: we failed because we ran out of money, but anyway uh we're hearing more and more in the vc space.

A lot of this fear and angst i'm at a vc conference. A lot of people are complaining, suggesting oh yeah, it's harder to raise money uh. This is why people should be raising money for like recessionary, things which is kind of like. If you go to medkevin.com series, a that'd be really good opportunity, but anyway uh you're hearing a lot of this talk about.

Oh no we're already in a recession. It's a lot of kind of doom and gloom for me. I think it's the buying opportunity of a lifetime, i'm like i'm gon na look back in five years and go dang, i'm so glad i picked up as many shares as i did, but anyway uh. This was interesting because it stood out a little bit of a contrast to sort of this venture capital sentiment.

I think these people can be quite emotional, just like people in general. Uh analysts at jpmorgan chase uh quote reckon that global capital capital expenditures, so basically investments into businesses rose by 7.6 in the first quarter compared with the year before. So that's that's quite substantial, uh and uh and twice the rate towards the end of 2021. So, in other words, you're getting a lot of this mixed messaging right, you're, getting this messaging of some people having substantial fear, but then some numbers still coming in actually decent or not so terrible.

And i think this is actually one of the things that creates so much pain in our markets. Right now is we're like why. Why is it so unclear like, for example, we got the empire manufacturing survey, it wasn't that great. You know that was uh.

We missed on numbers and the number's too hot out here. It's ridiculous uh. The numbers didn't come in great uh, yet this morning we get manufacturing numbers and they beat and it's like wait so, which is it, and one of the things that i sort of tell myself is okay. Well, the more we have this sort of uncertainty.

The more you know, it's probably a time to invest, because when you have that kind of uncertainty, when you have quote u.s factory production, increasing point, eight percent, tuesday double the point. Four percent expectation, uh and standing in contrast to the empire manufacturing data. When you have that kind of unclear data, it sends large signals, in my opinion, that, okay, you can't fault the market for freaking out. You can't fault the market for selling down or having these bear market rallies.

I kind of feel like we're in like a really wavy ocean and uh. Previously we were on a flat ocean, and so we're sort of on our wave runner going to our destination, which is basically just like price, is just going straight up and so we're just on flat like flat floor to water. Now we're in these crazy waves and people are tipping over and nobody's enjoying their time on their wave runner, because it's like you, don't even know where the next wave is going to come from you're getting sideswiped and all this mess and and to me, that's reiterated By sort of unclear data like this, but i'd rather be buying in a time where waters are not calm, whereas that's in contrast to buying when times are calm, that's actually when you're most at risk, because you're not paying attention to those potential nasty rogue waves. That could come and crush your valuations right.

So keep that in mind. Okay, uh wow, this voice thing sucks, uh, oh by the way before i hit retail sales in walmart and some of these other things i do want to mention that i've got a ton of emails to go through. So if you are waiting for an email reply, because you had questions about the the bundle or bundling up courses uh and you send an email to kevin mekevin.com, i'm still going to honor uh the price i'm going to get through these. These emails.

For you all and make sure that you get taken care of, but it will probably still take another 24 hours, they're just they're too many of you, but i will take care of it. Um it'd be a lot easier if i still had all the employees. I had but honestly hey if you're, if you're, okay being patient uh, then then i'm okay, saving the money on the employees still want them, but oh well so walmart all right. Let's talk about this.

Walmart comes in uh, with price cuts. Actually on 10 000 items. They cut their profit forecast and they missed on the bottom line. Now they mentioned that they expect the second half not to be terribly different from their expectations, uh and that consumers are still spending on higher end goods.

This is consistent with what we've seen with like mastercard and visa, even the banks that people are still spending on expensive things, luxury goods like in this case and to me when i read this, i'm like oh, does that really seem like a luxury good and then I remember back to my childhood and i'm like yup when we were broke and uh going through foreclosure as a child which had substantial scary memories. For me, i uh i couldn't buy the gaming console. I wanted. I couldn't buy the patio furniture i wanted as a child uh and so anyway.

The statement here is many: consumers are still spending strong on high-end goods like gaming consoles and patio furnitures. However, others are more focused on store brand jelly, lunch, meat and bacon. So you're. Seeing that lower end, starting to feel that inflation bite, starting to compress a little bit and walmart is who's obviously caters to a lower end.

Customer average income of a household there's somewhere between fifty six thousand eighty thousand, depending on which metric you look at so catering to the lower end of the the household uh incomes throughout our country. And so it's not a surprise to see price cuts. To start seeing some sales get pushed again: uh, for example, a big place. They're cutting prices is actually apparel, which kind of makes sense, because i feel like when we started going out again last summer, everybody's like all right.

I need new clothes now everybody's, like all right. I got my new clothes, so kind of makes sense, and when we get the cpi data we see the same kind of compression in uh. You know clothing, so then uh retail sales. Let's talk briefly about this, then home depot retail sales came in at a two percent advance in uh in restaurants and bars.

That's after an already strong 1.9 last month gain so people spending more restaurants bars. I agree: i'm one of those building materials down 0.1 percent. More evidence that the property market is cooling, 2.7 decline in gas spending, as people potentially are driving slightly less under higher costs up okay, this was this was shocking. Okay, the march retail sales figures were uh.

It came in at a negative 0.1, so a contraction right, and that is part of gdp. Well now - and i know some of you and and like i can't like fault like - maybe the 20 of you were gon na - think this they're gon na be like biden rigged this but uh. Apparently the march figure has now been revised from negative point. One percent to a one point: one percent gain, and that is part of gdp, so that could potentially when we rejigger the gdp numbers uh, probably in july mean we were not at negative gdp in q1.

These are numbers they feel so rigged anyway, uh retail sales of 0.9 percent. The estimate was uh, one percent so slight, miss there, but honestly, quite good because core, which was excluding autos and gas, was one percent rather than the point seven percent expected americans kept spending at a robust click, relying on credit cards. Amid surging pricing, we got walmart seeing double digit inflation in the food section. We do have uh five fed speakers today, so you have a lot of fed speak today.

You've got home depot. This was an interesting one. It takes a while for the real estate market to slow down, but i think you're starting to see some of the cracks, and you have to look really closely at home depot. The headline numbers won't actually help.

You see. The average ticket at home depot was up 11.4 percent. Same store. Sales were up three percent, however, transactions were down 8.4, so people are paying more, but they're shopping less at home depot.

This somewhat expected, but they're still raising forecasts because they're still expecting people are still going to pay through this inflation. However, they've only got 3.8 sales growth, the smallest in two years, and it's well below that inflation. You know if they matched inflation in terms of sales, growth they'd, be like eight and a half percent year over year. Well, they're only at three point: eight percent, so they're not able to pass along all of the high prices and they are losing, but they're still beating expectations so uh.

Now this was an interesting one. It was uh out of the 38 oecd countries. Households, according to the economist households across the oecd countries, are still sitting on roughly four trillion dollars of savings worth about eight percent of global gdp or sorry, not global gdp. Eight percent of gdp of these countries - and this is money that was accumulated during the pandemic and contrary leave.

Contrary there we go to what's commonly suggested. Not all of that money is in the hands of the rich in america. In america the bank accounts okay. This is the bank putting together the numbers accounts that low-income families were still 65 richer or had more cash than at the end, uh at the end of last year, compared to 2019.

So, in other words, end of 2021 people were still 65 richer than they were in at the same time, in 2019, uh even poorer folks. This is kind of consistent with what we've seen that consumers still have about 140 percent, more purchasing power than they had in 2019, and so i think that's why we're still seeing these retail sales strong. The problem is: this could potentially push the fed into that mandating. The recession right, the man, the recession mandate was like.

Well, we got to get inflation down, so let's just force a recession and when jay pal yesterday started talking about paul volcker, i'm like oh crap, mastercard, starting to use facial recognition rather than con contactless cards or phones for their credit cards in five supermarkets in brazil. That seem pretty cool break even uh treasury yield on the five year rising a little bit. It's a little bit of an inflationary concern, 3.12 still down about 15 from its peak in march 10-year treasury 2.96, a quick update on uh elon and tesla spacex's, raising some uh or selling some shares well. Elon musk is selling some shares over at spacex.

It's believed that this is going to help elon with his twitter acquisition and take some pressure off of tesla and they're raising at about 125 billion valuation. A firm uh says that 81 of all transactions were from repeat users. No one business accounted for more than 10 of their revenue and during recessions they believe they get substantially more customers than not. We also believe paying overtime without late fees and gotchas will be in greater demand during a downtown, a downturn.

They say, wow. Well, there you go. I got some emails to respond to if you haven't yet uh emailed me or or you've emailed me and you're waiting. Remember kevin mckevin.com, you know onto those uh those bundle coupons for those of you who are asking about that uh.

You could also get the bundles when you go to meet kevin.teachable.com or use that link down below folks, thanks so much for being here, we'll see in the next one. Bye.