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um yes regarding AI lectures we're putting AI lectures in the stocks and site group and the zero to millionaire group and you still actually have a few hours left before we start changing the pricing mostly because I'm still recording lectures and I just haven't gotten to it yet so it's my fault but I'm working on it let's get into the video hey everyone me Kevin here in this video I'd like to talk about an opportunity ahead of us specifically with regards to inflation and what that could do to the stock market yeah and that in order to suggest There's an opportunity means there might be a negative Catalyst ahead of us and I think there actually might be and I'd like to talk about that so that when and if it occurs we're prepared in America and people don't freak out although there is a chance people will freak out I do think there's a chance there could be a short-term buying opportunity coming up if what we're seeing in Europe ends up happening in the United States now no guarantees that this is going to happen but let's make this very clear obviously the banking crisis did not tighten credit conditions more than we well were somewhat expecting them to be tightened by in other words credit conditions were already tightening going into the banking crisis I'm coming out of the banking crisis credit conditions have continued to tighten at roughly the same level which means the banking crisis was really an edge case and area of banks yes on a nominal value greater in size than what we had during 2008 but then again we have a lot more money in circulation today hence inflation but really in terms of a systemic crisis and a lack of credit availability haven't quite seen that yet we've seen continued tightening on Broad credit availability for subprime loans but that's been happening going into a tighter economy that's the first thing to tighten so that's not a surprise the problem with that though is it gives the Federal Reserve more ammunition to say okay well then we'll just keep hiking rates because if credit conditions aren't going to tighten the economy then we will by raising rates which is another way of tightening credit conditions all of that to say is with that and anchored inflation expectations but not low inflation expectations the fed's going to have a license to do more but the near-term Catalyst that I really think everybody should pay attention to is the following on this yeah this is a ripped section of the financial times this is a newspaper somebody comes by at five in the morning and throws it in front of my house and then I read it the beautiful thing about it is it's a day late but that's okay um but what it reiterated was something a lot of us missed in the news and this is actually why I personally like the newspaper people like Kevin why why do you bother with the newspaper like that's stupid like no it's actually not because it doesn't change unlike the front of the New York Times or the Wall Street Journal or whatever online which changes every like five freaking minutes this doesn't change so you get a snapshot of everything you missed all the good research you missed the day before in the paper form anyway remember how I'm going to talk about this because it's important it's going to set up the Catalyst here remember how the United Kingdom saw this happening this is the really concerning jump in core inflation we've talked about this like 20 times before so I'm not trying to regurgitate the same crap here what I am trying to suggest is this de-anchoring of core inflation is a problem but look what just happened in the Eurozone broadly I'll let you uh read the title here if the camera is so inclined to focus on you Eurozone core inflation rise tests European Central Bank fantastic rebound and key consumer figure increases chance of higher rates Arizona inflation fell more than expected to 5.5 percent on the headline in June its lowest rate since the start of last year but excuse me any relief for policy makers was tempered by a slight Rebound in core Consumer Price growth uh-oh core inflation which excludes the more volatile energy and food categories was 5.4 up from 5.3 percent year over year in May and this increases the chance of maybe seeing more hiking from the central banks okay this is understandable and to some extent reasonable we would expect that however what does this potentially mean for America now that you've got the United Kingdom seeing core rise more than expected although much worse than what we saw here I mean this was a tenth of a basis point it's not that big of a deal but what does it potentially say to America well to understand that we have to first try and this is not a science we're just trying to do our best try to understand why core inflation is de-anchoring in European regions and personally Lauren and I were considering traveling to Europe but one of the reasons we actually decided probably not to this year is the following take a look at this going to Europe this summer you're not alone after three years of pandemic restrictions Travelers are flocking to Europe in record numbers despite High airfares limited accommodations and crowded sites here's what you might encounter and basically they talk about how even though Europe in the summer is always like sweaty and crowded this is probably going to be an exceptionally sweaty and crowded summer I'm oversimplifying the article but whatever it's it's the times and we're not going to spend too much time on it uh although I know a lot of people give the times crap they do have pretty decent stuff so that led me to think okay well if Europe is blowing up with travel and people are paying for travel no matter what and travel is one of the biggest parts of guess what core inflation then who's tracking just core inflation can I get a little bit of insight into just core inflation and these categories and so nerd wallet actually has what they called a travel inflation report and I found this very interesting I'm just going to slide to the part where it matters look at this change in travel prices and this Compares travel prices back to the pandemic and you really have to draw a line right about here at the zero percent marker and obviously everything's up you can see that flights are only up about five uh you know ten percent last month five percent this month so prices for airlines are starting to decelerate but what you're finding is food away from home staying strong at about 25 more expensive than before the pandemic hotels at about 15 to 19 percent more expensive than before the pandemic and car rentals up nearly 50 percent and if we compare that uh to the past year we could see airfares are down about 13 but hotels still up 3.4 percent compared to last year you've got car rental prices down 12.4 from last year but still way up from the pandemic as we saw and a food away from home prices up 8.3 percent as well as movie theaters concerts uh and entertainment of 6.6 so what you're finding where's hotels here hotels and motels yeah up 3.7 so outside airfares everything else airfares and car rentals everything else is pushing up that core at least according to nerd wallet so then I thought okay well let me see if that's corroborated at least to some extent are we starting to see some of those signs in the CPI data that we last got obviously we've got a new CPI data set coming out soon but what do we have over here this is the last CPI data was released from about two weeks ago next one comes out again in about two weeks duh we're at the midpoint airfares slowly starting to decline that's great but how are other services going well transportation services right here leased car rentals are down which reiterates what the uh nerd wallet site indicated here but in terms of Motor Vehicle maintenance and repair Motor Vehicle Insurance parking fees uh public transportation let me actually see if I can pull that yeah public transportation way up which is much more common in Europe I understand this is American and CPI right but there are some similarities much more common in Europe to see this public transportation transportation services over here up 0.8 percent so potentially some similarity where else can we see some similarities well alcoholic beverages you're seeing a rise in CPI here you're seeing a rise in alcohol away from home at 0.7 and understand the weight of alcohol away from home is really just under one percent of CPI but still it's a contributor along with all of these other aspects transportation services makes up almost six percent of CPI it's actually a big deal public transportation being part of that airfares again we know is going down but there it is Intercity Transportation up shift fare up you're seeing more of these prices going up as well for cruise liners as well uh what else is going up well of course your miscellaneous personal services uh whether those are legal funeral or otherwise expenses but I'm specifically looking for travel items right here so we're going to look for maybe food away from home and see where that is calculated food away and then we want to look at lodging so food away from home index Rose 0.5 and then what about lodging let's pull lodging in here so lodging away from home here we go lodging away from home look at that large bump here 1.8 percent uh and this is going to be look at this other lodging away from home including hotels and motels 2.1 percent as we're going into the summer months so I think what's potentially happening I'm going to try to bottom line this here and then let's talk implications I think what's really happening is the following and I can't know for sure but let me put it this way individuals excess Savings in the upper 60 of income is still vastly positive the bottom uh this is going to be the bottom forty percent the bottom two uh quintiles they call them are negative uh compared to the savings that they had pre-pandemic and I always like to write in Red so it contrasts from like reports for reading and stuff but anyway individuals excess Savings in the upper 60 are still vastly positive uh I mean thousands of dollars positive we're talking to the tune of probably three to five thousand dollars still positive if if not more so I'll put K plus again bottom two quintiles negative okay so these folks prob not going to travel but who's going to travel anyway to Europe prob these folks going to Europe right so now what we're doing is we're actually taking the excess savings and we're actually taking that and contributing to core inflation because the economy for a normal American isn't actually that bad as a result we're contributing to core inflation around the world and in America uh because you're not just gonna obviously travel in Europe you're going to go to Vegas you're going to go to Texas you're gonna go to the Florida beaches you're gonna go to New York with the exception of all the smoking crap they have over there I'm gonna travel again and this makes sense in in an element of like if if we're in 2030 and we're looking back and somebody told you that you know we printed a ton of money and then we had a lot of goods inflation people be like uh yeah that makes sense you guys printed a lot of money and then that Goods inflation went negative people were like yeah that makes sense people bought all the stuff they need they got their new gaming computers they got their new Lululemon pants or whatever they got their you know meet Kevin short shorts uh dude I love these things they're like 18 bucks anyway so so then what happens if we're in 2030 and somebody's like Okay cool so what happened after that you know as if you're telling the story of living through 2023 and somebody's like so so what happened then and then you're like well you know after the pandemic people were still somewhat afraid to travel but then all of a sudden people who hadn't spent all their money on Goods or were still making money at jobs because jobs were readily available even if they lost their job they got another job and maybe even got paid more or at least the same what ended up happening well then they decided they wanted to live a little so they went traveling especially to Europe because they haven't been there for a while especially since Europe had covered restrictions a lot longer than America did so what ended up happening oh we got this boom in travel inflation afterwards and then that ended up normalizing after people spent the rest of their money by the way we would probably be like right here you know there'll be some normalization of actually Goods inflation that you're going to see and so we're probably somewhere you know right there at that messy kind of line where we're still in the summer period where we're going to see probably a boost in core inflation because of travel and so I think this sounds reasonable if you're a 20 30 looking back you'd be like yeah that makes sense why you had Goods inflation now that makes sense why you had travel inflation so what does this mean to you well what it means to you is there could be a near-term problem in the next few inflation reports uh so if I had to if I had a crystal ball I'd probably say June should be mostly okay because of the year-over-year comps for the year-over-year numbers however that core which is expected to be 0.3 percent could miss however uh where the most likely miss will occur and this is what I think is really important I think it's most likely we'll have a Miss for July and August and then at September you'd probably have some kind of plummet plummet in core inflation so I would expect uh in core month over month so high core month over month and over here I'd say High Core month of month now what is the CPI schedule of releases and what are these dates that we have to pay attention to well we know this one here is July 12th we know that these next reports come out on August 10th that's Lauren's birthday August 10 and then September uh sep 13 and you're gonna have a few fed meetings over here the September fed July fed meeting probably more benign this will be a little bit scary probably and then OCT 12.
so this is where maybe you see the plummet so frankly what does that mean that means some volatility uh could be high that is high likelihood of potential stock pain as people think inflation is de-anchoring again uh between August 10th to really oxed about 12. this would be maybe your hedge period something to consider uh it could also be by the dip uh whatever but if I was looking for a potential Catalyst coming up it'd probably be in this range and it's all based on that sort of core inflation that I think might explode so hopefully that's insightful and useful to you and um I wish you the best of luck and I will be here with you either way with whatever happens thank you by the way to stream yard for always helping me a live stream go to metcaven.com streamyard to learn more about how easy they make this with software that you could run through Google Chrome it's really incredible super powerful as well paid sponsorship check it out
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