Holy smokes everybody. We got to talk about this report that just came in. That is actually like half good news, half bad news and has some implications for some stocks that we're looking at investing in and boy. Oh boy did.

We have some choice, things to say about tattooed chef this morning. In the course member live stream, we ripped into those financials. That's all i'm gon na, say: okay, no, i'm gon na say a little bit more. I just got ta say it.

I can't help myself: how do you have 65 million dollars more in revenue and only bring another 500 thousand dollars to gross profit? Oh, i said: okay, okay, all right, all right! All right! I'm sorry! I'm sorry! So the news this morning that we have to talk about is actually retail sales data and we're actually going to go into the report. You know i like going to the report uh it's uh and actually seeing the deeps here, and i want to talk about expectations here. But i do have to pitch that this video is brought to us by one of our favorite sponsors ftx. And if you use that check out code, meet kev they'll, give you up to ten dollars and totally free cryptocurrency.

Actually, i'm pretty sure they'll give you exactly ten dollars in free cryptocurrency, which is awesome and sometimes when you hear up to it's like they give you a dollar and it's like wait a minute. No you little ten bucks, which is awesome so check that out with ftx, you get the trading view uh built right into the ftx platform, which is great, but for right now we're going to jump on over right here, folks, retail sales, okay, so retail sales expectations. Folks, expectations versus reality, all right expectation was point four percent. What did we actually get point three percent, so that seems like hey.

That's only slightly less right. No, it was really bad. It was really really really bad because if you did the following okay, you look at retail sales, minus uh, retail sales, minus the following things: autos building gas and there's one other segment: food. Okay! If we take out these four things, which let me just quickly clarify, because sometimes people like oh, why would you take out some of these things like they matter? Okay, the reason you take out certain things is so that you can compare how everything else is doing.

So, if you take out like 20, then you can see the very volatile 20 being gone, how much retail sales in everything else are actually moving up or down? Now that's really important, because when you take out things that are very volatile, then you can understand an underlying trend of what consumer behavior is in the vast majority of categories, not just the ones that are getting more expensive because of wheat prices going up gas prices Going up supply chain constraints in autos and, of course, the real estate supply chain issues, which is also heavily commodities-based. I mean honestly, all of this is commodities here, right commodities are making all of these things more expensive. Freight is more expensive, which makes autos more expensive input. Costs for metals are more expensive, so autos are more expensive.

Building is more expensive because wood's more expensive and sheet metal is more expensive right. Gas makes freight more expensive, which again makes building in autos more expensive and food gets more expensive because of freight and commodities themselves like wheat and corn are getting more expensive. So we take out these very volatile sections and we had an expectation that minus the volatile sections we were going to see. Retail sales go up, 0.3 percent guess what we actually got.

Folks i mean this was terrible: minus 1.2 percent - oh gosh, terrible uh. Very, very, very bad! I mean that's, that's a very, very low, read uh. If you only pulled out autos and gas, we had an expectation of point four percent. We ended up getting negative point.

Four percent is so that's, that's also showing you. The impact here is not just autos and gas, but it's also food and building. That's where the spending is going. So the only thing that kept retail spending positive here was autos gas, food and building.

Now this matters for the stocks that we're investing in. Why well, because all you have to do is jump on over here and it's very important to know. First of all, let me say this see how it says adjusted here, that does not mean inflation adjusted. So the more there is inflation, the more you can actually see the sales number be higher, but people are actually getting less stuff because they're paying more right, so it adjusted does not mean inflation adjusted.

It means seasonally adjusted because, let's say february has less days than january right. So how do you compare february to january? Well, you make a seasonal adjustment not only for the amount of days, but the time of the year, like people spend more money at home for uh food in in november and december, usually than they do in january and february. This is just other examples of why adjustments are made and if you want to read the non-adjusted you can, but i think the adjusted gives you a better comparison. And if you look at the percent changes here, look at some of these okay motor vehicles and park dealers up point: eight percent uh, you add building materials, a point: nine percent gas stations up five point: three percent clothing up one point: one percent, but look at What fell? E-Commerce fell? 3.7.

That's a huge drop month over month. That's not good for our favorites, like the etsy, firm and amazon right, not good for those. In fact, i wrote down some ticker symbols here, but clothing store sales going up is good for, like your target, your nordstrom, your macy's, your uh furniture sales going down not so good for wayfarer, restoration, hardware, electronics and appliances going down not so good. For let's say, whirlpool right, motor vehicle sales going up and prices going up is actually good for something like tesla, where they continue to have demand and they're able to raise these prices so uh.

Why? Why is this happening? Okay? Well, we have to understand a couple things here, so there's the velocity of money, but the velocity of money is really interesting because we're not necessarily spending less money, we're just putting money into gas instead of other things right so to some degree, if you take look, You all know this example: you spend one dollar at the hot dog stand. The person ends up giving that to their employee. Who then has a dollar more? He goes and spends that at target, and then they give that dollar to their employee right and then the dollar circulates through the economy on average about five to six times: okay, so velocity of money. Well, it doesn't really make a difference.

If i take my dollar uh and now we're actually sad because it's all going to gas, see yeah, there's your sad face and we're going to take our dollar and we're going to give it to the gas station instead of giving it to etsy right. So we're going to give it to the gas station. Well, this is still going to circulate through the economy. You still get that velocity of money.

The problem, though, is when people fear that gas prices are going to go up even more that the situation's going to get worse. Then they actually end up spending a dollar on gas, but then, instead of maybe one dollar less at etsy uh, they end up spending. Two dollars less at etsy, so minus two dollars so now you're, actually getting a net decrease in aggregate demand. Why? Because people are fearful that things are going to keep getting more expensive and this happens when consumer sentiment goes down, and this is why we're likely to see the federal reserve reduce uh gdp expectations today in the summary of economic projections.

Yes, i will be live streaming. This uh, so you, you will see a lot of uh uh of drama about the potential for consumers, spending less money, but that is actually disinflationary, which is ironically, somewhat of a good thing, see the more consumers are spending on gas and the less consumers are spending On e-commerce means that e-commerce prices probably have to stop rising, because consumers are just saying no, it does mean that companies, like i said maybe macy's, target and and nordstrom have maybe some ability to continue to raise prices unless they already have and that's why we're actually Seeing those prices go up at some point, though, there's a limit so far, we've only seen coca-cola and heinz say: hey, there's a limit like we can't raise prices anymore. Everybody else is still raising prices like crazy uh. Tesla, of course, has some of the largest pricing power.

That's why it's such a large holding of mine, but, in my opinion, starting to see these retail sales go down, is actually a very good thing for inflation, so again stripping out autos building gas food seeing negative 1.2 versus the expectation of 0.3. That is good for removing inflationary pressures. Yes, it means less economic growth and it's probably going to mean worse earnings at certain companies, specifically the ones we listed, the e-commerce and furniture stores. So big heads up there on the retail sales keep an eye on that.

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