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now PPI expectation is 0.02 we are looking for core Point uh 0.2 uh 0.2 headline and 0.1 for minus trade oh we gotta Miss instead of 0.2 we get point one let's go instead of point two we get a point one and instead of point one oh we actually do match we get a point one final demand year over year oh my gosh instead of 0.4 we get point one as well all of these numbers are just absolutely a complete beat in in the good direction as in as in this is what we want let me reiterate this but this is insane PBI final demand month over month was expected to be 0.2 we got half we got point one final demand X food and energy so in other words that the headline month over month number came in under expectations the core number X food and energy comes in under expectations at point one versus point two then you get core which is the refined core food energy and trade excluded you're at point one and then you get year over year for the figure folks the year over year number it was supposed to be 0.4 basically flat and we actually nearly get flat at point one oh my gosh ppix food and energy year over year so this is your core comes in at 2.4 versus 2.6 and then your refined core where we also exclude trade matches the 2.6 estimate down from the prior of 2.8 this is phenomenal this comes at the same time as Delta earnings are much better than expected not only are Delta earnings much better than expected but we're seeing more gasoline disinflation combined with stronger growth expected for the next quarter now we get initial jobless claims at 237 000 versus the expectation of 250 000 in other words less jobless claims than expected and continuing claims came in a little bit hotter than expected at 1.729 million versus the 1.72 that was expected but but oh my gosh these numbers are very good oh oh my gosh this just came through the tape as well oh my gosh it just keeps getting better stop it stop it this is ridiculous now the prior PPI numbers have been revised the prior PPI month over month number was expected to be 0.3 what did we a negative point three we got negative 0.4 that's because we had this massive fuel decline then you have a core uh month over month excluding food and energy that previously was expected to be 0.2 which has been revised down to 0.1 the x-food energy and trade month over month number was .0 and they left it at point zero the final demand year over year number although I actually know I don't have that I don't have a revision at all yet so I'm assuming that's left with zero but I'll let you know if that changes PBI final demand year over year previously was 1.1 now it's revised down to point nine oh my Lord previous ex food and energy uh year over year was 2.8 revised down to 2.6 holy crap in other words this is fantastic we started this this day out saying look the worst thing that could happen right now is you not joining the programs on building your wealth and all the course member live streams where we look at leading indicators all day long every single day or stock Buy sell signals oh sorry that's not actually what I was supposed to say I was supposed to say the worst thing going into today was a potential Miss for PPI because if we miss PPI PBI being a leading indicator for CPI we would have literally undone what we got yesterday and crashed the market we would have taken all the good news of yesterday and crashed the market with a bad PPI print this morning but no we didn't even just get a benign PPI report this morning no no no no no no no that's a scam it's too good we got a substantially better than expected PPI Report with a completely revised lower previous PPI report this is insane take a shot every time I say PPI okay no don't do that uh holy smokes let's look at some of the uh the actual items here so uh okay wow uh this isn't this is absolutely incredible so let's get into some detail here so um the index the indexes for food and alcohol retailing traveler accommodation Insurance hospital and patient care an airline passenger Services moved higher conversely prices for truck transportation and Freight declined 2.1 percent the indices for food and alcohol wholesaling and for residential real estate loans also fell I mean residential real estate loans that's not a surprise your volumes in residential real estate are just complete trash because even though prices are up it is very very very very very very very difficult uh to get volume in real estate right now so that is going to lower your uh your potential here uh for um for for strong earnings uh or strong fees at some of these mortgage providers right I mean think about it mortgage providers are undercutting their fees just to get some food on the table just to give you a little bit more insight into that I used to be a loan originator prices for final demand goods were unchanged in June after decreasing 1.6 in May uh final demand an increase in the final demand for energy of 0.7 percent offset falling prices for final demand Goods less food and energy which declined 0.2 percent so in other words continued Goods deflation actually you have energy that actually popped up a little bit in this last month in the PPI report uh and then you're still seeing the same area that you would expect be somewhat strong uh for producer prices which is going to be your hospitality your insurance services uh and uh your travel services for Airlines this is somewhat expected uh again the headline numbers all coming in way lower than expected looking for a little bit of reaction here from the suits as well what I'd like to also get is a little bit more of a particular breakdown we're going to get that in just a moment but here's a comment already PPI affirmed the messaging from yesterday's Consumer Report exactly that's exactly what I is what that's why I started this this segment off today this meet Kevin Report with look PPI could literally screw us today fortunately didn't get screwed knock on wood this is good okay this is not how you would want to get screwed even if you were inclined to be PPI affirmed the messaging from yesterday with headline and traditional core undershooting expectations on the flip side initial jobless claims did come in lower than expected suggesting that any labor market deterioration is proceeding at a very gradual Pace that's a pretty happy backdrop for risky assets moderating inflation and moderate growth is about as Goldilocks as it gets these days no kidding not only is it about as Goldilocks as it gets these days but I'll tell you uh and I'll do this while I'm pulling up the um I want to get a little bit more into some of the charts for this but uh some of the Bears yesterday uh were were commenting that inflation overall seems to be getting substantially less sticky I commented that it seems to me the Bears are starting to capitulate but I thought this was an interesting one now I've made comments on on the macro elf here before and I was a little frustrated that I I haven't really got in response to some of the bearish charts that the individual has posted on Twitter uh and they've reached out multiple times but whatever uh he's generally been very bearish and uh posted this Powell's preferred inflation measure using core CPI services at shelter here are the three-month annualized rates these are for Consumer prices not to be confused with the producer prices we're reviewing right now but anyway looking at this what what has he said well he tells us that ah okay in January we had a 4.1 percent level of a three-month annualized inflation rate which increased to five one increased to five two in March decreased to 4-1 in April decreased to 3-0 in May decreased to just 1.4 percent in June to where now he's making the argument that quote starts to look very unsticky to me the last thing the Bears had was that inflation would be sticky forcing the fat to continue crimping this economy and destroying what has proven to be the sexy Nike Swoosh recovery that we've gotten in markets and the Nike Swoosh recovery has been so amazing some people have been sending me emails and letters going Kevin you got to stop calling it a Nike Swoosh because Nike's gonna get mad and I'm like bro why would Nike be upset for being associated with deliciousness and then they're like well the short sellers are going to get mad and then I said well that's something everyone can get behind isn't it anyway so Finance Finance you know you got it you gotta try to have entertainment where you can okay it's it's otherwise it's either so final demand for goods let's look at just the right column here are seasonally adjusted May to June change month over month final demand 0.1 it's nothing all these people on yes yesterday tweeted that inflation is transitory which which we've been talking about for quite a while but anyway people got so mad at me they're like well the grocery store disagrees and I'm like good Lord most people really had still have this fundamental misunderstanding that inflation coming down does not mean prices are coming down it's this complete disconnect from reality that actually makes me very happy because it means I get to buy stocks at lower prices well people actually still think inflation is a problem whatever uh final demand for Foods is actually deflationary here via PPI at negative 0.1 let's look at some of the more headline character characteristics here without going too deep household Furniture 0.2 okay let's just point out some of the items here tires negative point three thank God Cosmetics still hot 0.4 on Cosmetics you know Ulta's just been a stock that's been killing it I wonder if they still are oh yeah Ulta at 484 uh they've they've had this crazy trading range though look at this is like a beautiful trading range it's a really wide wedge is what I've been defining it as look at this rejection and then the balance I mean it's almost perfect this trade range that we've got for Ulta and it looks pretty sexy right now and seeing that over here on PPI potentially indicates some leading pricing power there at Ulta it's been one that I keep looking at I'm like this has gotta roll over at some point uh oh hot off the press SEC sues Celsius oh yeah more crypto lawsuits baby that's ridiculous we just need we just need some rules from Congress but they don't even know what they're doing it's ridiculous they didn't know what they were doing during covet either we all knew that who are tracking Congress every day was ridiculous look at this electronic computers and computer equipment down again 1.6 it's not so great for indicating uh some leading Surge from AI here uh that's uh potentially actually a little bit of a leading downside indicator I would have thought I would have seen at least some kind of strengthening versus the previous numbers but no not getting that at all uh in in the technology segment X-ray equipment zero oil and gas Machinery zero floor coverings negative commercial Furniture negative household appliances these are your durables this is nothing uh passenger cars down point seven percent lawn and garden equipment and tractors down as your John Deere basically uh look at all these zeros here I mean this is just beautiful aircraft what did I tell you one of the places you have remaining inflation is aircrafts Aerospace is very difficult that is one of the last holdouts for inflation it's it's incredible uh so then we've got uh mobile homes oh my gosh who cares 0.2 uh railroad equipment toys games and children Vehicles sporting and athletic Goods okay medical surgical devices those are all zero medical Surgical and personal aid devices 0.8 yikes uh a little little hot over here although the weight on this is I believe relatively small let me see if I can get the weight uh group code item code we don't actually have a weight listed on this probably very small though final demand services this is uh this is where you do not want to see escaping inflation what do we have over here 0.2 for final demand Services fantastic really really good uh this is despite food and alcohol retailing up 2.3 percent offset by 2.3 percent of the downside for food and alcohol wholesaling an apparel wholesaling to sound okay look at that computer hardware software supplies retailing down almost a full percentage point in just a month folks RV is up though that might not be a surprising summer expense I think a lot of people are taking money out of home equity lines of credit and uh they're jumping into you know whatever they want whether that's you know buying a travel paying down other debt and consolidating more expensive debt or potentially RV travel so look at maybe some of the stocks like Winnebago to see if we can get some leading indicators from them on what's Happening going forward with the market Winnebago reports next oh what are they report next well I don't know it's a little bit difficult to figure out right now that's w-g-o okay we can figure this out hold on looking at another comment here from the suits if yesterday CPI data caused traders to all but eliminate the probability of a second rate hike after July today's data may cause them to bring forward Cuts but assets seem reluctant to move much maybe there just isn't much further to fall after the July 26th fomc meeting in terms of uh how long we're going to stay high with rate expectations PPI surprised obviously all over okay wgo for Winnebago the next earning set for Winnebago which is a section we're seeing some potential inflation here is uh June 21st which just happened and then you have October uh 17th so that's if you're looking at Winnebago if you're looking for Ulta which could be a pretty big Catalyst especially for them especially since you're seeing such a move in PPI for Cosmetics the next Ulta report is August 24th all right continuing final demand Transportation warehousing negative point nine it's fantastic I'm really just honestly just going to start looking for the the problem ones here because everything's just down Airline passenger Services you know I was expecting this to be up yesterday and CPI it was negative in CPI air traffic revenue or or air ticket Revenue uh maybe maybe you'll get a little bit of a bump here because of a PPI leading 1.1 bomb wouldn't surprise me since I do think there's a chance you're going to get a Core Services bump for July and August because of probably hotter travel than the seasonal adjustment we'll take care of all right application software publishing point eight percent wonder what this has to do with AI pay attention to that all right uh what else do we have here Point negative 0.27 in Consumer loans deposit Services up 5.4 oh get a little more expensive to handle your banking Property and Casualty Insurance this is a problem the full two percentage Point bump here and it's it's been hot so uh insurance is still running up it's likely though insurance is is a very lagging indicator because think about it you would see your goods prices go up then you would see your Construction Services prices go up and only after those things go up are you going to see Insurance Services go up and those items goods and and services could actually be coming down and you'll still see Insurance Services going up because they are adjusting to a new reality of a lot more expenses and this happens with a lag obviously insurance companies are going to try to price this in as much as they can up front but you also have to wait for renewals you can't just call everybody up and go all your rates are going up today you have to wait for the contracts to renew uh so uh yeah not not great all right uh so uh not great but explainable we'll put it that way travel accommodation Services up 2.3 yeah I think you're gonna get a Core boost in CPI next month because of travel I I just I'm not gonna hold my breath on a for sure miss on the next one but this so far is banned freaking fasting yeah this is very good here's here's some of your Energy Products almost all negative uh organic compounds negative some of these these other byproducts of of oil production a paper a point four percent yeah but this is actually the lowest increase that you've had in the past few months you've had substantially higher increases over here uh okay so that's actually a Slowdown good good good good good good what else let me see what else we have and then I want to get into some more commentary on these numbers here we're getting into some more of the raw building materials here looking across but look at that services for intermediate demand zero flat no inflation how is the Postal Service coming up as zero they just raised um yeah what's it called stamp prices advertising sales zero this is despite the fact that trade desk just hit a 52-week high I've got some personal exposure to uh trade desk uh I uh yeah I I wow it's just I was not expecting trade desk to rip like that yeah but uh I like the exposure I have to it do like trade desk I like trade desk but wasn't expecting that rip wow okay all right the rest goes on what else we have here non-residential management fees for commercial property management fine Staffing fees just trying to see if I could get anything to really tell me I'm looking at something scary here even in services and I'm just not seeing it's either in lagging segments or you know or travel here Airline passenger services that one's hot it's there and it's an insurance but otherwise we're broadly negative uh so this is this is fantastic I'm gonna look for a little bit more commentary from Wall Street here so okay this is this is great let me see if I got any other revisions in the economic data and no everything's a missed the way we read it off so rewind if you missed that okay so that's really good uh okay U.S producer prices rise at the slowest Pace in nearly three years extending a months-long D cell in pipeline inflationary pressures well normalizing Global Supply chains stabilizing commodity prices and a broader shift in consumer demand towards Services away from Goods have generally helped alleviate inflationary pressure at the producer level Services costs edged higher despite a saw a sharp decline in transportation warehousing costs right we just went through specifically which some of those Insurance some of the airline travel but then also uh software development but not but not in the computer products the software uh prices of goods meanwhile little change that's flowed through to consumers in the form of lower prices known as deflation imagine that excluding the volatile food and energy components core pce barely Rose and we saw that these These are Jerome Powell is going to get his Monument for sick in a soft Landing here figures come out just a day after consumer Prices rose at the slowest Pace since 2021.
while a July hike is all but assured the rapid descent and price growth now just a third of its 2022 Peak right offered fresh hope that the FED can soon wrap up the most aggressive tightening campaign in decades no kidding Let's uh let's do our favorite analysis now and let's look at the five year break uh when is too much deflation a problem oh don't worry don't worry don't do not fall into the bear trap of suggesting we're going to have a deflationary problem we will print our way out of deflation I promise we will print our way out of deflation and then people are going to go wait a minute it shouldn't be like this it's all rigged maybe it is but you got to learn how to play the game and the game is they're gonna print money and if it doesn't cause inflation because we're actually avoiding deflation so be it at some point all currencies collapse the dollar will be no different at some point the dollar will collapse but knock on wood that time is no time soon five year Break Even actually sitting up a little bit at 2.19 it's quite interesting fed terminal rate expectations after PPI and CPI now sitting at uh drum roll 5.3375 basically fully pricing in one more rate hike and nothing thereafter if we look at the futures rate monitor tool we are looking at a Fed meeting in one week six days and five hours that does align with the expiration of meet Kevin's coupon code which you can now use if you're a course member to get a pretty big discount on shadowing with me as well I expect shadowing probably for nearly the rest of the year to be booked out uh within the next two weeks if not before that so check that out at mekevin.com you basically get tier discounts based on how many courses you have so the more of a bundled up course member you are the more of a discount you get for shadowing you know it's a big benefit to existing course members as always I try to add more benefits to existing course members as prices go up over time they lock in their prices and value and the same could be true for you if you join before the next price increase on July 26th we're sitting at a 91.8 percent likelihood of a 25 BP hike with an 81.7 chance we are going to stay there by September we are looking for our first cuts by about March with a an over 72 percent chance that we have at least one cut in March 2020.
this is phenomenal absolutely great news uh so also by the way interested to have anybody on Twitter spaces chat in if you'd like to jump in on Twitter spaces and we're now streaming on Twitch Twitter spaces we're also streaming on Twitter via live video so if you want live video or you want Twitter spaces uh you can uh you could join which is phenomenal actually a lot of that is thanks to stream yard if you have not yet checked out stream yard make sure you go to metcavin.com stream yard allows me to multi-stream to different platforms at the same time as well as throw out comments up on screen uh some of these we'll talk about a little bit later don't hate the player hate the game there you go exactly the proper ninja Nails it uh absolutely right so uh that does it for PPI absolutely phenomenal now we do have some other things to cover now I want you to know this when it comes to AI to
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