Shocking Producer Inflation Data | Warning

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4월 PPI(생산자물가)가 전월비 -0.5%, 근원 PPI 등 대부분 예상치 하회로 발표되며 인플레이션 둔화 신호로 해석. 금리선물상 5월 25bp 인상 확률은 낮아지고 이후 동결/인하 가능성이 언급됨. 다만 유가 반등으로 다음 달 PPI 재상승 가능성 언급. 진행자는 연준 피벗(동결) 시나리오를 낙관적으로 전망하며, 실업수당청구 지표 등을 근거로 한 경기침체 가능성 및 장기 강세 신호 논의를 예고.

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01. all right PPI comes out in about 20 seconds we are looking for good old data that is going to hopefully reiterate the declining CPI we saw yesterday final month over month we're looking for zero we are looking for X food and energy of 0.2 X food energy trade of 0.3 year over year three percent PPI inflation 3.4 year over year X food okay energy and uh energy trade uh that is ppix food energy trade looking for 3.8 here we go oh yes okay big old Midas negative point five percent month over month on PPI final that's really good uh ppix food energy trade point one percent let's go baby inflation's going away it's finally turning transitory look at that PPI final demand year over year was expected to be 3.0 comes in at 2.7 also below expectations ppix food and energy was expected to be 0.2 we got negative point one let's go this is great uh year over year we did get ppix food and energy a matching 3.4 3.4 uh ppix food energy trade expected 3.8 we got 3.6 so we got big misses across the board here initial jobless claims were expected to be 235 000 we got a 239 000.

02. uh we were looking at continuing claims of uh 1.833 we got 1.810 it does show a little bit of strength they're still in the labor market which is good though because you don't exactly want on a destroyed labor market and a destroyed economy but you want inflation God but that's literally what's happening here this is fantastic this in my opinion reiterates look the FED can hike in May and go away this is great we do not want inflation to stick around obviously uh and now keep in mind and we're gonna look at the PPI BLS in just a moment what up keep in mind I see this comment like every single day but every single day I talk about inflation I see people but Kevin I went to the grocery store and stuff is still expensive yes yes we know prices went up but that is not what the Federal Reserve is fighting the FED is not fighting that things are expensive the FED is not fighting that things got expensive the FED is fighting that things are continuing to get more and more expensive and right now fortunately that is finally transitioning away let's take a look at the producer Price Index this is absolutely fantastic look at this this month over month figure keep in mind this was expected to come in at zero the expectation was Zero uh point zero what we actually got was negative 0.5 this is really good uh BLS finals demand prices or were unchanged in February increased uh Point uh let's see what is this here final demand prices were unchanged February increased uh 0.4 in January uh that is the uh let's see here final okay here producer price index for final demand declined 0.5 in March seasonally adjusted by the BLS okay then they go back into February was point four J uh unchanged in Feb and 0.4 in Jan so what you're really seeing is sort of that declining in PPI that's what they're really trying to show you here 0.5 uh here you had 0.4 in Fab I guess would be the other way around but I think you get the idea and point uh or sorry geez Kevin wake up uh point zero here in uh Fab 0.4 in Jan that's what they're trying to show you and here we are in March there we go okay uh two-thirds of the decline in the index for final demand can be attributed to a one percent decrease in prices for final demand Goods there's that manufacturing side right there's that disinflation happening in manufacturing in my opinion that's your Consumer Staples that's sort of your regular consumer products that people just aren't spending money on anymore because either they've hoarded enough of it or they're like crap you know if we are going to go into a recession because now even the fed's talking about it maybe we ought to save a little bit of money prices for final demand less food energy and trade edge up a 0.1 in March after Rising point two percent in Feb right that's fine we went through those numbers already that was expected to be 0.3 so the expectation for that number was uh this number right here was 0.3 so we pretty much missed on every side here let's see if we can get a little bit more detail here uh product detail a 7.3 drop in margins for machinery and vehicle wholesaling was a major factor in the March decrease in prices for final demand services oh really for services final demand services for machinery and vehicle wholesaling that's really interesting because we've been seeing uh negative negativity on um uh what's it called um we've seen this negativity on uh products but to see it on Services as well it's good the index for transportation Freight portfolio management fuel lubricants retailing loan services automobiles Parts also moved down all of those I just mentioned here uh well most of these truck transportation Freight portfolio management those are all services loan services uh that's great prices for guest room rental Rose 4.6 okay guest room rental what is is that like a like almost like an Airbnb uh index for food retailing and transportation for passengers Advanced okay it's fine so what do we got let's see here Foods energy Transportation warehousing fine processed goods and intermediate Goods declined a one percent in March after moving down point four percent in February a major factor in the March decrease was a five percent drop in prices for processed energy Goods that's okay I mean we we have seen and this is why we purposefully look at some of these numbers excluding energy remember final demand not excluding energy came in at negative point five percent uh and then when we exclude food and energy we got negative point one exclude food energy trade we got point one uh and then uh same thing for the year over year numbers but but these numbers really came down nicely now do keep in mind we did get revisions for the prior release so February did get revised up a little bit vital demand went from instead of negative point one to zero food and energy went from zero to point two so you had some upward revisions here year over year went from four six to four nine uh four point four on X food energy year over year went to uh four eight X food energy trade went from four four to four five so the revisions are not that great the revisions definitely hurt this report a little bit on the prior but uh this is very good for this month at least all right let's keep looking here huh product detail one third of the March decrease in prices for processed goods for intermediate demand can be traced to 6.5 decline in diesel fuel that's okay again that's why we exclude energy from some of the numbers and even if we exclude energy we get some big movements here uh let's see here the index for unprocessed goods for intermediate demand moved down five percent in March the largest declines since falling's 9.7 in October the broad-based uh decline was based on unprocessed energy Goods which dropped 11.5 percent the index for unprocessed foods and feeds also moved lower fine all right uh crude oil fell a lot fantastic we know China's reopening didn't pump oil like people thought it would that's great we also know that uh Opex price or I can always say price Opex production uh cut was really supposed to drive oil up substantially which it did I mean Brent said 87 bucks and last month we were significantly lower in the month of much of the month of March we were sitting around 75 bucks 75 to 78 dollars for Brent so we're going to be getting some re-inflation next month because of these energy uh prices going back up this month unless they fall start falling again pretty rapidly but that might not be such a terrible thing because again we're looking at inflation numbers that exclude a lot of the energy numbers uh and and all of those missed pretty pretty decently which is good okay let's see if we can get some more tables here so we can see some actual products but this is fantastic news this is a great Point while I pull up the chart here to mention uh that if you want to get a super powered book summaries check out short form a really great way to inspire you to potentially uh check 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66 weight I'm pretty sure hold on let me make sure that's the weight relevance yes okay good look at this folks 66 weight of uh of uh ppi is final demand services and finally for the first time in at least the last three months over here I I think we could even go back to four let me double check oh look at that one two three four five five we can go back five for the first time in the last five months we've actually had a negative read on Final demand services thank God uh final demand Trade Services negative finished goods negative point seven and these are Big negatives too look how negative this is this is this is finally starting to make it look like inflation is starting to be transitory uh I know people are like a terrible word but it's it's finally coming true because look what happens is first PPI Falls then you have to remember there's a big lag and then it shows up in CPI because when the production prices come down then you don't have to raise prices as much uh not even that you could raise prices as much because people are demanding less but anyway there's a lie between the two but this is fantastic so final demand services in aggregate down point three percent that's awesome that's literally 3.6 deflation on an annualized basis that's wild uh final demand Trade Services minus 0.9 I mean think about what what 0.9 means 0.9 on an annualized basis is negative 10.8 percent deflation price is actually coming down trade of private Capital Equipment like this is like Machinery right here you want Machinery right now coming up for sale baby minus 2.4 on a month uh government purchase Goods down two percent look at this this is this is insane uh mine is four point eight percent trade of government purchase Capital Equipment trade of exports minus 1.5 final demand transportation and warehousing services minus one point three percent but still passengers passenger Transportation so if people right people are still spending money but not on stuff so this is where we are seeing some of the stuff some of the items and that's but it's interesting that in the services four Goods that's where you're seeing a lot of these these negatives it seems to be all right let's see what else we got here uh let's see Transportation Transportation lots of Transportation you got some mixed reads over here but a lot of this Transportation stuff is actually oh that sounds like Mario uh you know here anything with passengers positive okay fine what do we have here final demand Services less trade transportation and warehousing okay finished consumer services finish consumer services only 0.2 percent well that's good final demand Services less trade Transportation warehouses 0.1 percent that's fantastic that's really good okay well I like to see that final demand construction point two percent fair game totally fine there's nothing scary in this report at all this report is freaking awesome this report is great it's a me final demand uh less exports negative point five percent final man less government negative point five percent uh okay this is I mean it's so negative it's crazy uh final demand Goods less energy this is the highest thing I've seen here 0.4 uh uh but that's interesting 24.8 final demand Goods Goods less energy so I mean energy really tanked a lot of this it seems but I mean energy is not going to tank your services this final demand Services over here but it would make sense that it would it would take some of your goods prices um but then again even in aggregate what we say without energy without energy we're looking at the ppix food energy trade point one percent X food and energy negative point one percent yeah that's fine okay what else do we have here let's see here finish Goods finished Services see look at that finished services finished Services negative point two percent yes yes very good uh finished goods excluding Foods negative 1.8 finished goods excluding energy so if you only exclude energy it's interesting point six but then so if you only exclude energy does that it looks to me like Foods then really pushes this up so maybe foods are what in Goods push this up because when you do Goods minus food you get Negative 1.8 percent if you do Goods only minus energy and not food you get point six percent which is pretty high so that suggests food really popped up a little bit should be able to see that a little bit more clearly here somewhere we'll keep looking for it all right total finished uh Less Foods minus 0.5 less energy flat fine and aggregate of all 1.2 okay good total exports goods for export all of this is negative and just look at this you don't even have to read it anymore it's just all plummeting all of it personal consumption negative point four percent what else here uh yeah as soon as you take out food look at that personal consumption of goods Less Foods negative 2.9 so Foods must have had a big pop there to weigh this up so much processed Goods uh manufacturing for Foods manufacturing components for construction construction's still getting a little boost here 0.5 percent car unprocessed Goods these are feeds for animals fine a lot of these numbers will be up for uh the Energy Products next month because of the volatility of oil but that's okay because once we look at less energy you're still looking at good ah no but that's interesting oh these are stage four Goods because here food is negative it's a little bit more of a complicated report see here we go inputs to stage four there we go Foods yeah Foods were up a little okay that's fine but foods are one of those volatile ones and that's why we generally say x food and energy because on a month-to-month basis these things are flying around and again what's more important here is seeing some of these services start coming down Trade Services down point one percent Services across the board 0.5 percent uh except for passengers that's one part that's moving up okay anything else let's see if there's anything that really stands out over here no stage two looking for something that stands out Services passengers energy we know energy fell a lot stage one food fell 4.4 okay um inputs to stage one service produces Foods yet there are definitely some parts of foods components that were hot in this one but beyond that this is all negative here it's pretty remarkable wow okay that's really great so that gives us our PPI numbers now what I'd be curious to see uh is how the Fed rate monitor is moving as a result of this uh let's see here all right fat rate monitor um all right let's see what we have rate monitor right now is looking at a 69 chance of a 25 BP hike in May and then we're looking at a 67 chance of a freeze in May or sorry in in uh June so in other words hike in Maine go away some people are starting to price in it with a 28.6 chance that we get a 25 basis point cut or that we actually have Frozen in May and then stay frozen uh for June indices now turning slightly positive Dow up 13 basis points s p 22 NASDAQ 36 10-year treasury sitting at 3.35 9 so down just a smidge here and uh oil is down about half of a percent here uh so what does this really mean for the fed well let's see if we have any commentary from Wall Street on this I mean in my opinion this is obviously this is fantastic this is exactly what the FED wants the FED does not want to have to create a recession but they will if they have to get rid of inflation that's always something you want to remember they will force a recession if they have to get rid of in fightship but are we um you know is it necessary to create a recession if uh if inflation goes away no of course not you know then they could then they turn the money printer back on PPI provides dovish surprise the claims data was broadly in line with expectations for initial filings more notable however was the unexpected decline in PPI which undershot Expectations by a considerable margin across every aggregate falling half a percent on a headline basis there were some upside revisions to Prior data correct I went through those but in aggregate producer price inflation looks a bit lower than expected that would provide uh another argument in favor of an end to the FED cycle coming shortly though given some of the trends in Energy prices it may well be the case that PPI starts ticking higher again soon well yes we talked about that Brent's up ten percent oh sorry not ten percent it's up a little bit more than 10 so it brings up like 10 bucks right so I mean you're up like 13 on oil month over month right now but that's why we look at these numbers excluding oil so next month is going to be a little bit more granular where we'll have to go through a little bit more and go okay so that's related to oil but uh that should be pretty obvious uh yields drop on PPI data in headwind four dollar yields dropped on data meanwhile uh jobless claims were pretty much in line PBI below expectations right uh uh let's see here what is this right pervasive deterioration and consumer and continuing claims data across the United States is consistent with a recession beginning very soon I didn't see the jobs claims data actually deteriorating let me see here initial initial claims came in 4 000 higher than expected But continuing claims fell from the survey and from the prior report the survey was 1.833 the prior release was 1.823 the actual was 1.810 so what do they mean a continued deterioration here a pervasive deterioration continuing claims data across the U.S is consistent with a recession beginning very soon historically a recession should mean stocks making new loans but this cycle is proving odd and this should not be taken as read a very reliable and a very rare technical signal points to a long-term constructive outlook for U.S equities very reliable and one very rare okay this is why can they not write English here hold on percentage of continuing claims has never hit this level and not gone on to spike much higher oh I see what they're saying okay here let me let me show you a screenshot of this so you can see what they're talking about okay uh that's not necessarily from this uh percent of the United States uh okay all right fine so let me pull up I press this button yeah so here's the chart that they're showing percentage of uh U.S states so this is a percentage of U.S states so this is very different from the headline number but it's a percentage of U.S states with an annual change in claims Rising 30 percent so as soon as you get more than what is that 18 of states seeing continuing claims rise over 30 percent on a four-week moving average as soon as that goes above about 18 you've always seen it rise substantially higher is is sort of the argument they're making we're basically there right now which is quite interesting on uh continuing claims but I want to understand what they're talking about here with this uh and one very rare technical signal points to long-term constructive outlook for equities uh why let me click it let me see what this is rare Buy Signal hints that worst is over for stocks let's talk about that in another segment so let me give a quick summary here on PPI and then we'll talk about that so a quick summary here PPI look PPI was great PPI was great and your PP related stocks should be very happy today any kind of pricing power stocks should be very happy today because your input costs just went down I think this once again reiterates the FED 25 BP in May and then pause and they're gonna pause for a long time until inflation is convincingly dead but that's okay because the longer the pot they pause the longer we're not in recession and the longer they're paused the longer inflation isn't a problem think about that the pause on both sides is good pause rate increases inflation no problem pause and not cut no worse action so you want to pause and kind of hang out there as long as possible that's your most optimistic scenario so very excited about that uh and um let's uh let's get into the next segment so uh thanks for watching the PPI segment all right now let's now talk about rare by signal Kevin loved your video on life yesterday oh thank you for that same pump me up this morning I pumped Steve I'm honored um no well thank you for that no it was sincere as you know I I wanted to just share some we're always talking about these numbers you know like in uh Wolf of Wall Street it's all the granular uh and I think it's good to talk about reality too sometimes