저자: Kevin · 외국인
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정부 셧다운 임박으로 BLS 고용·실업수당 데이터 발표가 지연될 수 있고, 트럼프 측 의도상 셧다운 가능성이 높다고 봄. 셧다운 중 주식은 대체로 저점매수 기회, 채권 금리는 하락(채권가격 상승)·금은 안전자산으로 상승 경향. 구인/실업자 비율 1 하회 등 노동시장 약화 신호가 있으나 Fed 금리인하 기대는 유지. 테슬라는 414 부근 재하락 가능성 언급. 장기적으로 주택시장은 과열보다 다음 경기침체 시 대출 기준 약화가 리스크라고 봄.
다듬은 글
Well, it looks like the government shutdown is upon us and we might not get a lot of different data from the Bureau of Labor Statistics, which is really critical this week. Yesterday, we heard the BLS tell us that they will stop reporting any government data in any statistical work if the government shuts down.
The government is now less than 24 hours away from a shutdown. And this is really unfortunate because this week we do have some catalysts which we were hoping would be bullish catalysts. As you can see uh on screen here you've got job openings that came in this morning which we'll talk about in just a moment because Nick T has some charts for us on these.
We can also see that uh the ADP private survey which is expected to come out tomorrow set up a survey of about 50 to 51k 51 on the Doomberg and 40 uh sorry 50 over here. And then we can see the initial uh claims data and the non-farm payrolls data. These are the ones that we got to pay attention to because both of these could end up getting halted if the US government shuts down.
Both of them. Just minutes ago, the Bureau of Labor Statistics came out and reiterated that they will not release unemployment claims data on Thursday uh if the government shuts down. It is likely that they also will not release payrolls data because that's what they said yesterday. Yesterday they said we won't be releasing payrolls data.
Today they're saying we're not going to release unemployment claims data. So it sounds like if the government shuts down we're not going to get anything. Now yesterday I'm going to save you the 20 minutes from actually watching it. But yesterday we had Jay Vance flanked by Vbot uh and Thoon and Johnson uh come out and basically say we're heading towards a shutdown.
Uh that's because JD Vance says that Democrats want medical funding for illegal immigrants. This is not what Democrats are looking for, but this is what Republicans are using to brand the Democrats hold up to make it look unpopular for Democrats to cause the shutdown, which of course would just lead to Donald Trump being able to fire as many people as he possibly can, which is exactly what Donald Trump wants to do.
So my anticipation is we are almost certainly going into a shutdown because it gives Donald Trump what he wants. We already know this. We saw the Washington Post article and we also see the Bloomberg headline this morning. Trump threatens a lot of firings as deadlines loom. Yes, we know Trump wants to do this because he could blame Democrats for it.
Look, remember, Democrats are looking for extensions of the ACA, the Obamacare credits, especially now that we're at medical enrollment time. Republicans are saying, "Let's deal with that later." But the problem is at the beginning of enrollment time is when you're going to start seeing price changes and enrollment time starts roughly now for insuranceances where they start building out their pricing.
Most enrollments really done in November. So if we kick the can down the road until after the holidays, it'll be too late and people lock in higher health care costs for the next year through the Affordable Care Act. That said, you've also got Democrats who are looking for funding to be returned to Medicaid.
Now, Medicaid funding, somewhere around a trillion dollars of Medicaid funding was cut in the big beautiful bill. That's because, you know, the big beautiful bill is estimated at like a $3.3 trillion cost. It would have been like $4.3 trillion if they didn't cut Medicaid. So, Medicaid really helped reduce the appearance of the cost of the big beautiful bill.
So, of course, you know, Republicans are like, "Oh, we don't want that back in cuz that's just going to make our tax cuts look more expensive." Okay, so that's where the stand still is right now. Republicans are like, "Just give us a clean resolution. We'll debate all these other things later." Well, the problem is we know that Republicans don't need to debate anything with Democrats.
So, Democrats take the opportunity that they can get, which is a government shutdown negotiation where you need 60 votes to keep the government funded basically, and they use that as an opportunity to try to leverage and get what they want and create some at least some sign of backbone for midterms.
That's also what this is about is standing up for what each side wants to posture for midterms. Problem is, I really think Donald Trump wants a shutdown. Now, what is that good for and what is it not good for? Well, that's exactly what we're going to break down. Uh because there's some data, frankly, on this.
Uh just worth knowing as we go into this. Uh if the government shuts down, we end up hiding unemployment claims data. We hide jobs data that comes out on Friday. So, we're really left with just the ADP numbers for tomorrow. It lets VA fire people or vote, I guess, is how you say his name. Fire people, which is what he said.
That's what he outlined from project 2025. That's what he wants. It prevents spending on Obamacare and Medicaid, which is what Trump wants. It basically gives Trump exactly what he wants, smaller government. So, a shutdown is kind of perfect for him. Now, it comes at a time where we have some economic weakness.
I mean, look, the Chicago Business Barometer dipped in September, but it's not just that it dipped in September, and this is seen even though it's a survey of the Chicago area. The the company says they're a leading national indicator, that's how they pitch their own survey. So, it's probably a little bit biased in that sense, but keep in mind what they say here.
They say that uh the largest proportion of respondents is now reporting the smallest level of employments of employment growth since the immediate aftermath of the 2008 financial crisis. And usually after a financial crisis, that's when you have the worst job numbers. And they're basically saying we have the worst job numbers right now in this leading indicator per them since the financial crisis.
uh and that we are seeing a decline driven by quote another sharp slowdown in new orders alongside declines in supplier deliveries and employment. So basically you're seeing parts of the economy that are sending these warning signs of hey like things are slowing down. Trump doesn't want anything to look like things are slowing down.
So it's beneficial to him to have a delay of some of these unemployment surveys. Look at under and understand how these government shutdowns work. Congress gets partially closed. Federal courts say open. The housing department is partially closed. The Treasury Department is partially closed. The IRS is mostly closed during a government shutdown.
Keep in mind like you have personal tax extensions due October 15th. Like this is this is tax season. You just had corporations that had quarterly earnings due on September 15th. You had uh uh corporate uh reports due September 15th for a lot of companies. A lot of uh reporting companies have uh six-month reporting requirements that are due today, although that's more SEC for September 30th.
So, you got a lot going on. The Federal Reserve stays open. Small businesses uh Small Business Administration partially closed. Museums and part parks partially closed. So, you know, government shutdown is going to hit some things. Now, what like how does the market usually respond? Well, Doomberg suggests that usually in a government shutdown, you get mixed effects.
Goldman says this as well. One thing that seems to be a consensus is that yields tend to go down. So take a look at this chart right here. This is the 10-year Treasury yield change from day before shutdown. So this is the last day of open. And you can see that yields tend and they're volatile, but yields tend to trend down after a government shutdown.
Even when you reopen, yields tend to just move a little bit lower. Now the rationale for that is associated with fear. People are fearful uh and so they move to potentially the safety of bonds. This comes at the same time that you have fears that the labor market is softening a lot more than expected.
Now in fairness this morning we got Jolts data that was pretty good. Well at least decently good. The Jolts data was along expectations maybe even slightly better than expectations. But Nick T gave us a warning. He said, "Look at the ratio of job openings to unemployed workers." And when you look at this ratio, you actually find that we're dropping below the one level on the 3-month moving average.
The Fed is targeting one. We want the labor market to be such that if we have 7 million unemployed people, we have 7 million job openings. That's a 1:1 ratio. The problem is we now sit at 977 uh 978 basically 978. And we can calculate that by using the household survey of uh 7,384,000 unemployed individuals in the household survey, which is literally lifted from this chart right here.
You can get all this data, by the way, that's written down in the Meet Kevin app. It's literally free. Download the Me Kevin app, press data, and you can see all of this. Okay? Uh and then you if when you divide these two, you get a ratio that's below one now. So that's how many people are unemployed by job openings.
So the job openings number is slowing. That might be why markets are pricing in a 96.7% chance of a rate cut in October. October 29th is when we have our next rate cut. Now what happens if the Fed stays closed until then or or rather uh the the government? Well, we might not actually get our jobs data.
We might not give the Federal Reserve the ammunition they need to give us another rate cut. Now look at the S&P 500. This is why I always say generally, and I've been saying this for days, , unless of course you have some kind of shocker in the labor market this time. So in the S&P 500, typically once the government reopens, you go straight up.
So when the government shuts down, you had a low and you go straight up. So almost always a buy the dip opportunity uh on on the you know um your your your S&P 500 over here and you can sort of look at these different levels here. You got 2018 20 uh January over here you're up you're up you're up. There have been cases where you're down though.
You can see this sort of dotted line over actually yeah over here 1990. So not always but more often than not you trend up. Same with the 10-year Treasury yield except in reverse. So bonds gain in value but their yields trend down almost all of the lines here below zero and then the US dollar does tend to slip a bit uh afterwards.
So this is somewhat interesting data. Uh now Donald Trump believes this morning along with Chuck Schumer both of them actually Donald Trump was last night, Chuck Schumer was this morning. Chuck Schumer this morning says we are heading towards the shutdown. Donald Trump said the same thing yesterday in an interview with Politico, which I could show you in just a moment.
But take a look at uh this. Government compensation of employees represents about 1.2% of GDP. So it's not like the largest factor as part of GDP. And discretionary spending, which gets paused in a government shutdown, only represents about 25% of the government spending. So, it's not like it's the, you know, the employees are the core driver of the economy at the Fed, uh, federal government, or that, you know, government discretionary spending is a core driver here.
That's not the case at all. That's probably why they're usually a government shutdown. Last time in 2013 over here, we delayed Bureau of Labor Statistics data by 18 days. The risk now is if we delay and we end up having a long government shutdown like we did over here, we actually might not give the Federal Reserve the unemployment data that they need for the October 29th deadline.
October 29th is when the Fed makes their rate decision. And the next one, we don't have a Fed meeting at all in November. So the next meeting then isn't until December 10th where we're pricing in a combined cumulative chance of uh or or total of 1.73 cuts. So, we're not fully pricing in those two rate cuts this year.
This unemployment report was really supposed to be the data that tells us, are we going to get a soft landing or not? Employment in the DC area has fallen this year, of course, cuz Trump wants to fire a lot of people. Most furled workers do not get counted in unemployment numbers. So, just because these workers are going to get furled, you're generally not going to see them show up in the unemployment reports.
They're not filing for unemployment. They're just doing their job without getting paid. So, usually these shutdowns just not a big deal. The only issue is delaying our data. That's the pisser. We don't want to delay our data. Uh and and that is unfortunately exactly what might happen this time. Uh as again, as you can see here, the big ones being claims.
I personally don't care about the weekly data. I think it's a very volatile and noisy number and it doesn't really matter. Uh and then of course non-farm payrolls. Those are going to be the ones that get delayed. Now, I'm a little bearish, ad bearish the last two days. The last two days in the Me Kevin Alpha report, I've been saying, "Hey, like I think Q's are going to go down.
I don't think you want to like bet on some skyrocketing cues here." Uh because frankly, I think people aren't pricing in the risk that we're going to shut down. And I think Donald Trump wants to shut down. Uh and so what I've been saying in the alpha report, I mean, it happened. I mean, look at the cues yesterday, you know.
Uh let's get rid of this. Look at the Q's yesterday. The Q's ran up uh and that was only for like the first 30 minutes and then what happened? The Q's closed lower and bled for the rest of the day and now we're right on the cues again. So, you know, that's not because I'm bearish the economy right now.
It's because I recognize that usually leading into a government shutdown and leading into data, you get weakness. This is the kind of technical, you know, analysis that we do regularly. We do this on a daily basis. I also set up, by the way, trades. If you want to join, you can join at mekevin.com. We've got coupon code daddy's backup.
Uh, but u remember what you get uh if you do this. Oh, that's funny how that does that. Uh, but anyway, remember what you get if you join. You get um all of the uh trade alerts, you get uh all the courses, all the new lectures coming out, all the live streams, all the alpha reports. But anyway, uh you know, my take is that over the next, you know, few weeks, the best thing that could happen is we end up getting uh how should I put it?
Over the next few weeks, what we want to get are the best possible job numbers to finally confirm a rounding out of the labor market. That would be the best case scenario. Donald Trump's layoffs I actually don't think are that huge of a deal because this is just Donald Trump's MMO anyway. Donald Trump threatens a lot of fires firings.
Yeah, but people don't look at government firings as really like weakness for the government anyway. The White House last week directed agencies to draw plans for mass firings. Uh this will be the 14th government shutdown. This bill doesn't have an iota of Democratic input, says Schumer yesterday. I watched the full video yesterday of what Republicans are saying or what Democrats are saying.
Like there will be a path to them getting the government reopened. I'm not worried about that. Uh but it is extremely likely in my opinion we will shut down before we get to that that stage and that's okay. I think that's why Khi is showing an 82% chance of a government shutdown. I also think, you know, this is correct when Politico says that, you know, Donald Trump thinks, "I'm not worried about people thinking that it's Republicans's fault that there's a shutdown." Exactly.
Uh we have Donald Trump who's blaming Democrats and it gives them an opportunity to fire people like generals. See, Trump says he'll fire generals on the spot if he dislikes them. That's the situation we're in right now. So what does that mean broadly? Well, it means gold up like qu like frankly. Uh and the reason gold's going up on the shutdown fears is because of a safety asset.
This happens every single time you get uncertainty with a lack of data or uncertainty in the stock market. Yields down on bonds. So bonds up and gold up. But usually it's a buy the dip opportunity for the stock market almost always. So uh we'll see. But uh again, the only thing that could really screw it up right now would be bad jobs.
Adam, we need to round this out. Oh, that's interesting. Tesla's now down 1.4%. Yeah, I was bearish on Tesla as well the last two days. So, I called the 414 bounce and then yesterday morning in the alpha report, Tesla was trading at like 447. And I'm like, guys, look, we're in no man's land. Okay, the N Kevin Alpha report, you could fact check me on this yesterday.
It's in the report yesterday. We talked about it today as well. Tesla's in no man's land. It's probably trending back to 414. And I think a lot of the enthusiasm around uh the deliveries coming up next week are probably a lot of that enthusiasm probably built in uh which which then just creates downside risk you know along with the broader economy right now which is on a downtrend.
So again 80% chance of a shutdown. It's basically a foregone conclusion right now, which unfortunately means we're going to get delays with our government data, which sucks because that's what we want to confirm with soft land. Again, we want growth in those labor numbers. Again, we talked about this yesterday that most institutions actually are forecasting uh growth in the labor numbers.
I mean, look at this. Most of the estimates, which haven't really changed, I'll verify. Most of the estimates are that we are going to soft land and get really great data. So best case scenario, the government doesn't shut down. We get really bullish job numbers and then what happens? S&P 610, man. Actually, potentially towards 630 by end of the year.
I got to stop giving out price targets that I usually only do in the me Kevin Alpha report. Um, okay. So, non-farm payrolls. Let me get the latest estimate here because it changes all the time. So if I go to change of non-form payrolls, the current estimate is 51,000. I just want to see if it changed at all in the last 24.
So it looks like yesterday we had 58 qualified economists. Now we have 65. Nobody on the downside, dude. Wow. It's it's one guy. one guy at -20, but the chart's basically not changed and we had seven more estimates. I can't even see where the delta is cuz it looks so similar. Uh, it moved up. Actually, the average estimate moved up.
It's at 56.4 and you've got pretty much everybody is above 30,000. Uh, so that's wild. That's wild. I'm When I'm talking about the Q's, I'm talking about the triple Q's. Kevin, when would we get the jobs report if the government shuts down and we don't get it this Friday? Well, uh, in 2013, we got it when the government reopened.
So, when they all showed back up to work. So, that sucks. You know, that's that's a long ways out. Uh because this shutdown, this is an opportunity for Democrats to really try to f with Trump. But ironically, Trump wants this because then he's going to get to go around and fire a ton of people. So, I love buying the dip on government shutdowns, and I probably will.
What I'll probably do is I'll buy the dip on my 10-year stocks because remember I have a list of 10 stocks to buy for the next 10 years. Those are not stocks that I think are like guaranteed going to do great in the next 6 months. They're stocks that are just slowly building out like portfolios in that I'm not going to sell between now and the next 10 years.
I'm just going to hodddle them and I'm going to keep building them. In fact, I kind of want them to go down because I want to build a position in them. So I could buy I could increase my Q for a lower P, right? Increase my quantity for a lower price. Um, but there are also stocks that might buy that I think could be like swing trades u over the next six months.
Like this morning we did an analysis on a stock that probably once we get to the meat of the government shutdown might have a low buying opportunity. Uh I don't I even said this morning like I don't think I'll buy them now because I want to wait for the max pain of the shutdown. Like that shock. It's like oh my gosh, Friday's coming.
It's 5:30 a.m. and we didn't get the jobs report. Dude, markets are going to freak on that. It's going to be such a buy the dip opportunity for your long-term place in my opinion. Uh, of course, you know, if the jobs data comes in bad, we go into a labor market recession. You also want to have stocks that are going to do well in a recession.
And I don't think all stocks will do well in a recession. It's uh you know you're going to be looking at sure interest rate sensitive but you also have to consider and this is something to think about people forget this when it comes to debt people will leverage up to the tits we call it you know you leverage up and let's say you buy a house today for a million bucks okay and you put 20% down or or 10% % down cuz you're Lisa Cook and you say you're going to live there and then you leverage up at, you know, 6 and a half% on a 30-year mortgage.
Okay, everybody's idea is, "Oh, I'll just refinance when rates come down. Then hits the fan, you go into a recession." Okay, then you're in a recession. What appraiser is going to let you refinance? That's the problem, right? So rates go to zero and you're like, "Oh, I could refinance and get a lower rate." But then all the appraisals start coming in low because the appraisers are worried.
It's not just that prices can go down on real estate. I actually think lower rates will drive prices higher, but it's that you create fear in appraisal land. Appraisers are worried about getting sued because if we're in a recession, oh my gosh, I better sharpen my pencil on all my appraisals. appraisals are going to come in lower because now what?
Well, if I if I write this too high, I could lose my license. If the banks lose money and I get sued. So, everybody sharpens their pencils. It becomes harder to refinance. Worst case scenario, home prices fall, which, you know, could happen. And then you're saddled with debt on a fixed rate mortgage at 6 12%.
And rates are at zero and you can't refinance and you can't sell. That's the downside of being levered to the tits. In other words, you're effed. So, and there are people today buying real estate uh at negative cash flows making the bet that oh, it's all going to be okay cuz rates are going to come down and then, you know, home prices are going to go up and I'll be able to refinance.
Yeah. Well, what if you can't refinance? And so, you know, that's why like maybe just call me like a doom boomer. Okay, call me here. Call me Bowser. That's what you could call me. Call me Bowser. You got a satur. Uh, and uh I I just think people forget that, you know, just because rates go down, not everybody's going to be able to turn around and go refinance.
And a lot of people will be able to like house we have no bank debt very very little corporate uh you know outstanding corporate bonds very few relative to the assets we have uh and they're convertible to equity so as long as we perform well you know people get stock so it's not a cash like there's no cash outlay to pay those bonds um which is we think win-win but the point of that is you know companies with no debt will be fine but if people are lever to the tits uh and then they think they could refinance but they can't.
That's when you hit the poopy oopies. Now, the reason I bring that up is just to keep on your radar. Just be careful with the your assumptions around when things go bad and and consider that when you're looking at stocks to buy. Uh so anyway, that's that's that's all the reason I wanted to bring that up.
So, somebody here says home prices already falling in Florida or Texas. Yeah, Florida, Texas have this uniqueness to them in that they they do overbuild. Uh so they are much more cyclally sensitive. However, sometimes they've been seen as a leading indicator as well. Uh so you know, in the 2008 financial crisis, Texans of Florida got hit the worst too.
So did Vegas. Uh so if you put more money down, you're less at risk of being unable to refinance. Yeah, exactly. So, you know, if you put down like in the depths of the financial crisis, what did real estate single family homes go down? Like 42%. That's not going to happen again. Knock on wood. But the reason I don't think that's going to happen again is because our loans are so much more stable today.
We're not doing negam loans. We're doing ability to repay loans. But the thing is those standards are starting to loosen. They're just now starting to loosen. I actually think if we're going to have a housing market bubble, it'll be fueled by the next recession. So, like I don't think this will be a real estate recession.
I think it'll be a labor recession. Uh which will affect some tenants obviously, but it'll mostly be a labor recession, not a real estate bubble. We're not in a real estate bubble at all. Like the underlying fundamentals are very, very strong of lending. Uh however, the next recession will lead to shittier loans.
Donald Trump just gutted 90% of the Consumer Financial and Protection Bureau. That was the very entity responsible for enforcing the DoddFrank protections that forced ability to repay qualified mortgages. They just gutted it, dude. 90% fired. Well, that doesn't turn all of the loans that were made over the last 15 years into a bubble asset.
What it does is it sews the seed for the next bubble. Very interesting. Very, very interesting though. Yeah, Austin's a great example again because you overbuild. That's actually why I love the dumbass I'm not calling liberals dumbass here. I'm saying the dumbass liberal policies of blue states because they suck so badly at building.
I swear to you, the worst place to get permits to build is in any libtard city, this is not to be offensive to liberals, okay? I I love my liberal friends. I love my MAGA friends. I love them all. But I'm telling you that the the these blue state cities like the LA's, the Santa Monas, the San Francisco, the San Diego, worst places to build, best damn place to buy.
Nah, I I don't want to buy in Santa Monica because of the rent controls, but uh these are great places to buy cuz they suck so much at building. They just squeeze prices up. Uh uh. So, you know, that's that's just my take. You know, that doesn't mean I'm right. Somebody says I'm looking pale. What? Oh, my filth.
What happened to my Oh, okay. Hold on. Let's Let's add some Let's Let's fix that for you. How much Trump do we want, folks? How much Trump should I put in? We're going to make real estate great again. Nobody knows real estate better than your boy me Kevin. In fact, if you want the greatest bond ever, some might say the greatest investment ever.
Don't sue me, bro, though. You know, the legacy media, they'll they'll come right after you, okay? The fake news. They'll tell you there's risk to every investment. They'll tell you to read the financials, uh, to read the private placement memorandum at househack.com because this is not a solicitation, but some would say a 5% yield on an annual basis paid monthly with all the upside in the stock at a valuation that's so low.
Some would say the lowest valuation ever, almost real estate only, there's no pricing of the artificial intelligence they've got. Some would say it's just a great deal. You could that houseack.com. All right, I'm going to remove some of that Trump orange now. Uh, there we go. Okay, back to normal. All right, cool.
There you have it. And use your coupon code daddy's back at me.com. &. I think the bigger question is like if the government shuts down and the coupon code expires on jobs day, does the government shutdown affect the expiration of the coupon? I don't think it should. I think the coupon needs to expire because we already gave an extension to the people who are begging me to extend it in email.
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