저자: Kevin · 외국인
요약 보기
ADP 고용보고서가 예상(15만)을 크게 밑도는 8.9만으로 나오며 국채 금리 하락·채권 강세 기대가 제시됨. 가계 부채·소비 여력은 2012~2020 수준과 비슷해 경기 악화 우려는 과도하다고 주장. 주택시장은 횡보 전망, 스키리조트 등 고소득층 소비는 가격 전가력이 있다고 봄. 채권 숏 포지션 축적 가능성(TMF 등 레버리지 채권 ETF 언급)과 11~12월 채권 랠리 가능성 제시. 본문 중 강의·뉴스레터 홍보가 다수 포함됨.
다듬은 글
We have a lot to talk about in this video , but I hate fear , uncertainty, and doubt. We have something to talk about. Fear, uncertainty and doubt. It's just fear, uncertainty, and doubt. And this should not be confused with disinformation. This is true. What we experience in today's market , in today's economy, is fear, uncertainty, and doubt.
I mean , when McCarthy was voted down yesterday, and now maybe we'll have Jim Jordan . What will happen between him and the Democrats? Can Congress do anything? Will we have a budget adjournment? Will we have a recession? Will we have a recession? Will it be worse than 2008? Wo n't it be worse than 2008?
All this, and we could go on, because there is so much more. Will the dollar fall? Eventually, it will happen , but probably not soon. But all this increases fear, uncertainty, and doubt about our lives. And I think we need to be very, very open about what's going on. We'll look at some data this morning, including the ADP morning report, as well as some other information.
But it is critical that we ask ourselves in the situation we are in now: are we taking advantage of the opportunities and investing, or are we assuming that everything will be cheaper in the future? The same goes for whether we assume that everything will be more expensive in the future ? Right? This is speculation.
But the question it helps us answer is , are we in a position where we need money, that we need access to right now, and where do we want to put it and get a 5% return in the money market? But then you have the opportunity cost of possibly losing profits in the stock market, which could also be a loss.
Ultimately, that's where we really want to start, is with the understanding that we are in a period of hyper-uncertainty. We got a concussion yesterday. What happens right after we get these shock numbers, you know, $9.4 million or something like that? Well, right after that, Goldman Sachs says, "Oh, those numbers are probably inflated.
That's probably a million jobs inflated because, you know, what we're reading in the private sector suggests that things aren't that hot." This is exactly the reaction we are getting in the economy right now. But when it came to the markets yesterday, Treasury yields skyrocketed and stocks plummeted because of this idea: "Oh my God , here's a report that's going to make the Federal Reserve even more aggressive than it needs to be ." And by being even more aggressive than it should be, we are increasing the chances of a recession.
And today we get the exact opposite report, which then goes like this : "Oh, God, what do you believe?" Well, the reality is that it's probably all wrong. And I know there's one side of the argument, you know, that people say everything is intentionally rigged. I think all of this is inaccurate, but I think the trends are probably not meant to be faked.
There are probably reasons in the data collection from which we could reasonably assume that, okay, even if it's inaccurate, it can still point us in the right direction in a normal economy. But that's the problem. When you're in the position we are in now, which is after 9% inflation, massive money printing during a pandemic combined with the war in Ukraine, a deadlock in Congress, and a fairly wealthy personal base, right?
The American household is very strong. And that's not all, okay? Don't get me wrong, the prices of things have all gone up by more than 20%. We know this. And there is compassion, especially for poor people, who suffer disproportionately more from inflation. But when we look at household spending as a percentage of net income, that's a really important metric because it just pulls all the data together for us.
This will all come down to one chart to see the total amount of money people have left after paying off their expenses. How many of them will go into debt? We usually view debt as a sign of some level of stress. If you had cash, you wouldn't need debt, especially in an environment of high interest rates.
So if debt is rising, and we know that credit card debt has exceeded a trillion dollars, we know that the United States debt is over 33 trillion dollars. Well, then we think, " Oh my God, this is stress, or everything is just overstated, and we need to get used to bigger numbers." And this is not to justify inflation.
I'm not here to say we should print more money. I'm just saying that when we actually look at household balances and household incomes remaining as a percentage of the person, you know, their debt service payments as a percentage of their cash balances, we're not at levels higher than what we saw between 2012 and 2020, you know, right before the pandemic.
For that matter, we are just below this imaginary resistance line that we could draw here. And we are much lower than what we have seen in the past. This data covers the entire second quarter of 2023. So maybe something changed in the third quarter, right? The last 3 months. We just moved into the fourth quarter, which is surprising because we're already in the fourth quarter.
This is really strange. Uh, I started building the Millennium Falcon yesterday with my son Jack for Star Wars, and it's incredible . We're actually going to watch the whole series while we're building the Millennium Falcon. We're going to watch all the Star Wars movies in chronological order. So, we start with the prequels.
Uh, that means we're going to be diving into the 70s for the fourth movie. This will be fun. But anyway, uh, let's look at some data and understand some of the things that are happening in our economy. But understand that in times of uncertainty, this data is not incredibly, dare I say, um , reliable.
Uh, that's because when you look at the ADP data, every time we've had ADP data over the last 10 years, between 50,000 and 100,000 jobs, the BLS jobs report that came out after that told us job gains : zero, 39,000, over 100,000, and over 200,000. And it's like the ADP report doesn't necessarily predict what we're going to expect from the future employment report.
Keep in mind that the employment report coming out on Friday will release an, uh, estimate of about 170,000 jobs created , which is roughly in line with the historical average. This is exactly in line with the average value we have observed over the past 10 years. So you're not seeing that kind of softening of the labor market yet.
However, we saw it in the ADP report this morning. So let's talk about it. But I will also remind you that I am grateful for your presence, and be sure to subscribe to the channel. Okay, let's look at the ADP report. So, the ADP report came in much lower than expected. We gained 89,000 jobs. We expected 150,000 jobs.
We revised the last report slightly upwards from 177 to 180. This annual salary also increased by 5.9%. It sounds like a big number, but it's not a monthly figure. This is an annual figure, and it is constantly decreasing. It was so intense that I want to read you a quote from their chief economist, which is quite a milestone, but only after I mention the new Bruce Pro crash courses.
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Profitable part- time work. How to . Retire early. Uh, never pay taxes. Renovate the property. Negotiate any deal. Right? Sales negotiations. Increase your productivity. Productivity, friends. By the way, that would be really good. And we're going to give you the real stuff. Not this nonsense that just take a cold shower every morning and everything will be fine.
We're going to give you the real stuff. Visit mekevin.com to learn more. So check it out on meetke.com . Prices will rise again soon. So what do we have? The chief economist says we are seeing a sharp decline in jobs this month. Sharp cuts mean companies are saying, " Look, we're fully staffed." We, we, we are fully staffed.
Some people say that in the healthcare industry we expect even more layoffs, especially layoffs in support staff. By the way, healthcare is a large sector that uses the advantages of artificial intelligence. Kaiser Permanente might go on strike here. Obviously, we have UAW strikes. It looks like the Writers Guild is going to work something out , but we'll see.
But in any case, it's a mistake. This is a pretty low report. And so, naturally , the market retreats. I mean, the price of oil fell about 3-4% after this news, you know, we have a weak employment report here, basically . And if this is a harbinger of what we'll get on Friday, you could see a quick rally in Treasury bonds.
This is where you can literally get a short position. I want you to think about this for a minute, because if you're looking for trading strategies, uh , there's a chance that you might end up shorting Treasury bonds, because that's how it works. So , Treasury bond yields are rising significantly, prices are falling significantly.
OK? Because we are in this trend of declining Treasury yields. You might consider something like TMF. You probably also mean a leveraged bond fund. So it's like a full SH9T show. Look at the weekly chart of this right down below, right? This is the shortest position you could have taken in the last, frankly , three years.
You could sell it short during the pandemic and you would just make profit, profit, profit, profit. Right? In any case, there is a huge short position in Treasury bonds. If we get a weak ADP report, that will lead to lower yields, right? So let's change the colors. A weak ADP report leads to lower yields.
This is happening right now. We fell seven basis points on the 10-year. And for 2-years, we fell to 8.4, which means you are steepening the yield curve. Don't worry about what that means. This signals to some people that we may be approaching a recession, but whatever...yields are falling because of the ADP report.
If we get a weak employment report, yields will fall even further . How will this affect bond prices? Bond prices will rise. Well, people are very, very, very short right now. So you could see a burst in bond prices and a sharp drop in yields, which would be good for real estate, which would mean, you know, time to get out of the office chair again and go buy real estate again, because maybe those peak rates are still a little bit ahead.
But in any case, I really think it will be November, December. This will be a real show. But we'll see what happens with the data this Friday. But we can prepare for massive short positions in the Treasury. So keep that in mind. Pay close attention to this . Looking at the ADP report, what do we have?
We have created 89,000 jobs. Where are we losing? We are losing some of our share in trade and utilities . We're also losing some, uh, right here in professional business services. These are your "white collars" . Production will also suffer. Construction is still going on. As well as financial activities , which I think is interesting.
We usually see that, uh, historically it's been negative here. Uh, moving on to the location. In fact, the south was the hardest hit. But this is also not a small business anymore. Small businesses are actually leading the way in growth, which, uh, is a way of potentially saying, “Hey, you know what?
One of the reasons we may see growth in small business is because it, again , tends to distort the service sector. While big businesses say, “Listen, we’re Microsoft, we’re big, you know, we’re Kaiser Permanente, whatever; we can fire people. We are Vodafone; They're going to lay off about 11,000 people because their company , you know, is trying to get back to being efficient, "and they're not.
They're complaining so much . I've never seen a company complain as much as Vodafone in an annual report. Here I'll show you this, because we do this analysis in the live streams for the course participants. Make sure you're on it every day . But I mean, the comparatives of this company have deteriorated over time.
We have the lowest, uh, return on invested capital in Europe, along with huge investment demand and a higher weighted average cost of capital. A very negative report here. Uh, Carnival Cruise Lines from an inflation perspective, you would think that as a service provider that could actually raise prices, but the answer is no.
Here's a company that has raised prices by 5% since 2019, which means that on a real basis you've actually changed prices by negative about 13% with inflation about 18%. Sorry Carnival, no PP for you. Who Although Veil has an impact on pricing. Today we learned that their peak prices are up about 36% compared to 2019.
And, uh, and this is the first time in a long time that I've seen on an earnings conference call that they're actually raising prices. Although there's a possibility that ski resorts might appeal to maybe a wealthier audience. So it doesn't have a big impact on the CPI. But this is the first time in probably a year and a half that I've found a company that's actually raising prices and it's ski resorts or a certain sector.
But again, if that skew is richer than and people still have excess savings, especially wealthier ones, and people want to travel more or something, it makes sense to some extent. But look, the weakening employment report is going to cause some heart palpitations, uh, because of the idea that, well, maybe it's time for the Fed to say we've done enough.
On the housing market, it's not surprising . What have we always talked about? Institutions like those who... who are likely to become sellers. American rental homes, rental homes have either slowed down their purchases or have become net sellers, according to the Wall Street Journal. I think that's very interesting.
Residential property values . You could really see how the 30-year fixed- rate mortgage just saved the single-family home market. Mind you , if I was going to make a prediction of what we're going to see, I think we're going to see another dippidudda law here, mainly because of this rapid rise in interest rates, but also what we're actually seeing in practice.
In practice, things are going really well right now in many, many , many, many markets. There are some right now, like Los Angeles, which is still one of those where you're still getting a few offers. There are some markets where you get multiple offers. It's usually for move-in ready renovated homes.
Uh, and we're starting to see fewer of them. So if I was going to make a prediction on that, I wouldn't. I don't believe in that. I wouldn't be... Surprised if we see something like that. That's a certain expectation that I have right now. Maybe this dip could be a little bit of a deviation. You know, maybe we'll get something like that, or we'll have something a little deeper, even like that.
But I wouldn't be surprised if we just get that kind of volatility going forward. I don't really think we have the ability to really break that long-term growth trend, you know, well, which we've broken here, right? Because think about it. That's your long-term growth trend. I wouldn't be surprised if you're a little bit more sideways for a couple of years, which I think is a great opportunity for a company like House Aclick or Startup, because I think we we'll be able to buy really good wedge deals and be protected from the downside without having to assume that real estate values are going to skyrocket.
We'll still be able to do really good things, I think, despite what I think, over a period of time, there 's going to be a small ceiling on real estate values . That's why I like to invest in househacks. As for ski resorts, they probably still have pricing power, because remember, look at this excess savings chart.
And there's been so much debate about whether we're actually negative or positive? Whatever. What we do know is that there's definitely this gap between richer and poorer people, right? And this gap here on the right that I'm kind of drawing, I think that's actually what's supporting the more expensive kind of travel, which is typically your skiing, snowboarding, vacation, a little bit more expensive here.
So that reiterates why we're potentially we're still seeing prices rise there while everything else is just hitting the wall. And now for our regular daily wealth segment, which you can sign up for free by using the newsletter link right under the beginners vs. pros courses and the link to househack.com, my real estate startup.
We may close the fundraiser for this sooner rather than later. That's good news, but, uh, stay tuned. We're making a decision in the next ...week or two here. Stay tuned. So, okay, here's what to consider. When you spend money, like on this mug, and you're, let's say, spending $100 on this mug, which we know isn't actually worth $100, and I just spilled some coffee, but let's say it's $100.
How much do you need to make to actually afford this mug? Well, you need to make probably somewhere between $130 and $150, because you need paying taxes to be able to afford this $100 mug . That's terrible. And that's why there's a huge incentive to do two things. One, spend money on things that you can deduct on your taxes.
And two, create a side job that's not a hobby, but is intended to generate income and hopefully generate income. And of course, talk to your tax professional about it. I'm not a CPA, so I can't give tax advice, but you have a side job. You say , you know what, I need this for my... YouTube videos. It's necessary and customary for me to talk about Runescape in my videos.
Well, now I can suddenly deduct it on my taxes. And now this $100 mug is worth $100. The mug actually only costs about $20, but it's easier to do the math with 100. Okay, the point is to ask, what are your expenses in life? Your cell phone bill, that new laptop, that Apple Watch, which may be considered necessary and normal expenses for a side job, but since you have a job, you don't think about it , and so you pay extra, like 30 or 40%.
Think about it. This is a big deal. Thank you so much for watching the Bottom Line Report. Hope to see you again soon. Subscribe. Don't advertise what somy friend. at, great to hear your thoughts.
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