Wall Street Is NOT Ready for Tomorrow

[00:00] All right, we got to talk about Kevin Warsh, but remember what the Pope did to us. The Pope gave us a nod, and it's a pretty awesome nod. Look at that beautiful, powerful nod.

[00:13] And why do we care about that nod? Well, we care about that nod because the Pope coupon code expires today for the meat-keven membership, and you can also use that over at reinvest.co or husak.com because this valuation

[00:28] AI product drops later today, which means that we are raising the price a lot as soon as the coupon expires. If you have any questions, email us at staff at meatkeven.com. Kevin Warsh is about to speak at a panel on central banking and policy.

[00:42] This is going to be a very important meeting. We are going to live stream it on this channel. Here's everything that you need to know. And here's what's at stake, including the job's data and interest rate hike expectations,

[00:55] which right now Bank of America says we should be preparing and buckling up for three interest rate hikes this year, yikes. Okay, let's get started. First, there's going to be a policy panel in Portugal in Cintra, tomorrow.

[01:12] That policy panel is slated for 4 p.m. Portugal time. That works out to 6 a.m. California time and I've seen varying times on when this is actually going to start.

[01:27] I've heard verbally and in writing both numbers. So it's either going to start at 6 a.m. California time or 6.30 a.m. I'm going to assume they put 2 p.m. here and then they're going to start it at 2.30 in Portugal

[01:43] time. I'm just going to be live at 6 a.m. tomorrow and we're going to cover it. So sometime right before market open is when this panel is going to start, Andrew Bailey from the Bank of England is going to be on it.

[01:55] Christine Lagarde of the central bank, the European central bank is going to be on it. The bank of Canada governor will be on it and we will have Kevin Warsh of course. Now why is this important? Well, it's important because right now Bank of America suggests that if we get a strong

[02:10] jobs report this week, we could actually push the market towards pricing in three rate hikes for this year. I personally think this is cookie dookie though, I actually agree that jobs will do well.

[02:23] In fact, we have a coupon code expiring today for the alpha report and in the alpha report, we've been predicting strong beats on jolts and jobs data for this week. Jolts just came out and smashed expectations, absolutely beat and it's what's helping drive

[02:38] this stock market up, which we had some big calls on SpaceX and Tesla and Marvel and hardware continuing to have a run both Monday and today and you can see that Marvel, one

[02:52] of our favorite stocks is up almost seven percent at this moment. And even though I'm bearish SpaceX longer term short term here, we got another four percent day today. After an eight percent rally yesterday, eight percent on Tesla as well yesterday, just one

[03:08] percent on Tesla so far today, but it's some pretty impressive numbers. Part of this is being driven by a strong underlying economy or at least the impression of a strong underlying economy. A lot of these new jobs that are being created could be being created because of temporary

[03:24] factors such as the World Cup or temporary construction factors which could all really rapidly unwind in the event, well, we get these temporary forces going away and there's any kind of

[03:37] slowdown in artificial intelligence. It's worth noting that even some sectors of the artificial intelligence hiring market are seeing some signs of a slowdown, at least per Goldman Sachs, take a look at this.

[03:52] In aggregate industries with established AI use cases are seeing employment contract by around 11,000 jobs per month. And this has really been happening since the moment of chat GPT being released.

[04:08] Now this is specified down to broadcasting, phishing, doc prep, data processing, web search, software publishers, telephone call centers, office admin, graphic design management, consulting,

[04:22] so on and so forth. That's a very specific subset, but it does show that not everybody is winning in this economy. And this is what creates a really interesting duality because you currently had Lisa Hammock

[04:36] pop up from Beth Hammock from the Federal Reserve pop up. And she said this morning that hey, if consumer data keeps holding up the way it is, then just last week we had consumer spending numbers that were great, then policy may not be restrictive

[04:49] enough. In other words, we might have to raise rates, especially since she thinks the jobs market is at full employment. Now something to consider is that as probably going to keep doing well, we're looking at 120,000

[05:03] expectation tomorrow. I wouldn't be surprised if we beat that. The weekly data has been suggesting we should be between 120 and 130,000, so that should be pretty accurate, but again, wouldn't be surprised if we beat it.

[05:15] Non-farm payrolls last month was a blowout at 172,000. We're looking at 110,000 and that'll be on Thursday, so in two days that data will get released because the market will be closed on Friday.

[05:27] But unfortunately, markets are already starting to price in, some of what Bank of America is suggesting. Currently, markets are pricing in for July of next year, just a 4% chance of rate cuts.

[05:39] In my opinion, this is actually a potential bullish upside because if markets start pricing in cuts, you price in easing and you actually potentially move the market up higher. It's actually exciting that the market is so bearish on cuts because I actually think

[05:54] we're going to end up getting cuts from Kevin Warsh, and that's why Kevin Warsh's meeting tomorrow will be so important. Just to see if we can get any hints from him, then maybe he can finally show his dovish self. Remember, some of the things that he said were dovish were things like, we're going to look

[06:09] at inflation to the left of the decimal, in other words, 2.9 might be considered just as good as two, which would be a tool to cut. Or we're going to use AI data and task forces to see if the way we collect data is commensurate

[06:25] with the way the economy is moving and the way disinflationary forces are actually operating. All that to me just screams he's kind of setting up for his cuts, but the market ain't

[06:37] buying it right now. So there is a real tension there because he's been so silent. So maybe he says nothing tomorrow, but the risk is that he goes dovish, which could be a good thing, right? We'll see. Maybe he won't.

[06:49] He'll probably just be super quiet and silent on forward guidance, but look at the forward guidance from the bond market, 77.5% chance we get rate hikes by next summer, 43% chance we get two rate hikes by next summer.

[07:01] And if we scroll down here, we could see by December, we're also pricing in a 43% chance of two rate hikes. One one hike is being priced in at 82% for the end of this year, which actually then makes

[07:15] the Bank of America call pretty aggressive. Bank of America suggesting strong jobs report could push us the three rate hikes. Yikes. Now I don't know how they reconcile it with this because over here they say income growth

[07:27] remains supportive of consumption, but doesn't look inflationary. Okay, so people keep spending, but it's not inflationary. Then how do you reconcile that with calling for three rate hikes? I don't know, I don't get it, but they think break events are on 20K and we're clearly

[07:40] above that. Now, if we jump on over to the UBS call on this, UBS actually thinks they're one of the only banks I've seen that says, we're not going to see any rate hikes this year, which is the way that I lean, but hey, I'm willing to be wrong and so far the bond market is telling

[07:56] me that I'm going to be wrong. So I'm going to be looking very closely for any hints from Kevin Warsh that he can lean a little bit more dovish than he has been, and we're going to get to cover that tomorrow morning.

[08:08] So just wherever you are tomorrow morning, before the market opens up, just type into YouTube Meet Kevin, make sure to use your coupon code Pope that's expiring as well. You can join the Meet Kevin courses on building your wealth and the reinvest AI over at house

[08:21] hack.com. We'll have really big price increases on these products. So make sure you join before that and if you have any questions, you can always email us at staff at Meet Kevin.com. We'll see you at the live stream tomorrow. Thank you so much for being here.

[08:33] Goodbye. And as always, good luck. While you know how to advertise these things that you told us here, I feel like nobody else knows about this. Well, we'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you.

[08:45] People look up to you. Kevin Paffer out there. And YouTube at Meet Kevin, always great to get your take.