Preparing for the Fed's September Meeting.

요약 보기

항공 여행·소비 지표가 회복세이고 소매판매가 예상보다 강해 경기 연착륙 가능성이 높다고 봄. Fed는 9월 25bp 인하 후 중립적 입장을 보일 것으로 예상, 대폭 인하 가능성은 낮음. 애틀랜타 연은 3분기 GDP 추정치 상향(3.4%). 고용은 둔화되나 침체 신호는 아직 약하며 장단기 금리차도 완화 중이라 '강세 전제(bullish until proven otherwise)' 입장. 실업수당 청구 급증은 텍사스 사기성 청구 탓으로 해석하며 데이터 조작 우려를 제기.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. Airport traffic outpaced 2024 levels in July and August after running below 2024 levels in May and June. So in other words, airport traffic's back. Consumer spending has historically led payrolls and consumers keep spending. Although of course they're arguing that there's a decline here consumer spending per Bank of America research, but not retail sales this morning.

02. So retail sales this morning were fantastic. Uh but you do have some potential momentum changers to pay attention to this is per Apollo research and what they're doing is they're looking at the last uh you know spending relative to the last 90 days and what they're seeing so far they're still seeing rising momentum in that air travel but they are starting to see slowing momentum in other categories.

03. So, there's a lot that says, "Hey, August strong. We have reason to be bullish." And I think that's what sets up for that Federal Reserve punt. However, amplifying some of this weekly data, you always have to be careful about this when these e research institutions do this and they're like, "Oh, you know, hey, we're lik." Does it really matter though?

04. I mean, look at this. This talk about growth slowing over here on consumer spending. Look how volatile these charts are. I think it's is these are things to pay attention to, but I don't know that we're in a position of bearishness because of we're going to amplify, you know, some weekly data here. In fact, the Atlanta Fed just seconds ago increased their GDP estimate for the third quarter.

05. Look at what's going on. You can't be bearish about this. Look at this. The GDP now estimate has just risen from 3.09% 09% to 3.4% for the third quarter. Uh now measured on September 16th uh up 3.09% on September 10th after recent releases from the retail sales numbers. And we specifically saw real personal consumption expenditures growth and real gross private domestic investment growth.

06. This gross private investment domestic growth huge for the economy by the way that grew uh 6.2 2% which is huge. And that 6.2% number actually grew up to 6.9%. Let's go 69. But anyway, the these are these are good numbers. So again, yes, on on the weekly data front. Yes, Apollo, we could see volatility, but we always expect to see volatility on the weekly data fronts, especially when we compare it to the prior uh, you know, 90 days when we have a little bit more consistency.

07. So, we'll see. So far, travel spend also worth noting. Travel spend up 2.8% year-over-year in the week ending August 30th. Debit card spending. Who uses a debit card? Don't use a debit card. Use a credit card. Get yourself points. My favorite, by the way, is um the travel card. Uh if you travel, best travel card, meet me.com/cap1.

08. Really good. I prefer it over AMX. Not even a competitor. Next best. I I'll give JP Morgan credit there, but but I've been mad at JP Morgan. They opened 134 accounts for Epstein. Didn't realize that withdrawing hundreds of thousands of dollars of cash was sus. Sorry, I'm going on a tangent here. I shouldn't I shouldn't do that.

09. Uh but anyway, debit card spending growth. Look at this. debit card spending growth up 3.3% outpacing credit card spending growth which is crazy because usually the lower income uh individuals are going to use debit cards more frequently. Uh and this is a sign that you know you're even seeing spending bumps in some of the lower levels here.

10. Take a look at this online retail spending up 8.3% year-over-year in the week ending August 30th. That's huge. That's absolutely huge. So this is this is very exciting. These are good data sets so far. Of course, it could all flip-flop, but Federal Reserve meeting tomorrow. I think the Federal Reserve is going to punt big time.

11. We're going to get our 25 basis point cut. Don't worry, that's basically priced in. The Fed's really unlikely to shock us. Somebody asked us this morning like, "Hey Kevin, you know, what are the odds we get something crazy like a 75 basis point cut or or you know, even more like some kind of shock cut as if the Fed's finally waking up and trying to avoid a recession.

12. Maybe one in a thousand. I don't see it. I see much more of a Federal Reserve that's going to punt and focus on future data." Now, this took me by surprise. The Federal Reserve does not actually have a November meeting this year. So that means they have a preh Halloween meeting, which is really interesting because it means the preh Halloween meeting is all going to be based on the data that comes out.

13. ADP jobs numbers October 1st, BLS jobs numbers October 3rd and Jolts on the 30th. But beyond that, this is probably not going to be a hawkish or dovish kind of move. This is going to be a Fed that says, "Look, things are fine right now." You know, CNBC is talking about recession odds going up from 30 to 40% now based on their expectations of recession.

14. But frankly, when we look at some of this underlying data, you can't help but be bullish. And look at the retail sales numbers that came out this morning. The retail sales numbers were gang busters. Not only did we beat on retail sales numbers this morning, but we also revised higher the prior estimate of retail sales.

15. This is good. Barons basically had a great article on this. They basically made this argument that even though consumers act like they're gloomy or they say they're gloomy, they're still spending money. And that's because usually human psychology says you spend money until you don't have it anymore.

16. And usually you don't have it anymore when you lose your job, but then it's too late. Then you've lost your job and then it's too late to save money, right? So this is human nature though. you assume that salary is going to keep coming in and you don't save. This is very very normal. It's the same thing with the stock market.

17. We get greedy with this idea that the stock market's going to go up forever and we don't consider that at some point it's going to make sense on some overextended stocks to have trailing stop limits, which is okay. You know, we've been talking about trailing stops and they've been killing it since April because we've been straight up.

18. I remember in April saying, "Hey, hey, you know, this this could actually end up being a short-term bottom. protect yourself to the downside with the trailing. But if we go up from here, your trailings are going to kill it because you won't sell. You'll just keep riding up. But look at the details of these retail sales numbers here.

19. What do we have? We have malls and retail stores not doing that great. But what actually is doing well? Clothing's up. Thanks, Sydney Sweeney. What else? We've got e-commerce up, food and drinking places up. Fantastic. What's down? Building materials and a little bit on furniture. furniture a little volatile over the last few months because of tariffs pull forward and otherwise but consistently on building materials you're negative I mean you had 0.1% growth this month from last month but you had negative -2.3% year-over-year.9 since June and -2.5 June to June so these numbers are great for real estate which obviously I I don't want to shill it I I talk about it so much you already know this I love house hack it's my baby and uh We love what we find to be a really competitive time for construction, building ADUs, building spec homes, and remodeling properties.

20. Okay? But you know, we're a real estate play. So, if you want to invest in Houseack, you go to houseack.com, read the solicitation, the BPM, okay? This video is not a solicitation. All that said, the data so far is good. I mean, retail sales this morning advance, we're expected to come in at 0.2, we got 6.

21. Xauto, we got 7 versus4 and plus one on the revision on both of those. on the control group we were expecting point4 we got 7 really good some of these surveys like yesterday's Empire manufacturing survey came in negative it was expected to be positive this morning we had the New York Fed services business activity came in really negative negative 19.4 versus the negative 5.8 than they'd expected.

22. So, you do have these surveys like the PPIs or the P or the PMIs rather or the S&Ps that show like little volatility signs. And I think that's because on a month- over-month basis, you just tend to get this up and down, this up and down. And this is where the Fed, I think, is just going to look and say, uh, hey, uh, just like, uh, Toad over here, hi, uh, here's your 25 basis point cut.

23. We're neither neutral or we're neither hawkish nor, you know, dovish. We're just going to kind of keep looking at the data and the unemployment rate's good. Retail sales are holding up. People are spending. Uh, you know, the Atlanta Fed sees GDP at 3% for the quarter. Uh, we're revising up our GDP estimates, even if inflation is transitory over the next 6 to 12 months.

24. We are way too early to say that the economy is falling off a cliff. Now, is that potentially an oopsie dupes? Is the Federal Reserve going to leave us in a recession? Maybe. But so far, we just keep getting this hard data that suggests no. I mean, look at what part of it could potentially be manipulation by Donald Trump.

25. I don't know. But I tell you, I woke up this morning and I was studying those uh those unemployment claim numbers from Texas and I got sused out that potentially a Donald Trump friendly state is actually adjusting numbers or or making declaratory statements about economic data that just favor Donald Trump.

26. So, let me explain that. I'm going to go to the Axios piece so you could see that a little bit more directly here. Take a look at this. Fraudulent Texas unemployment filings cause national spike. So basically unemployment claims spiked last week to the highest level since uh 2021. Usually when unemployment claims spike, it's too late.

27. You know, you're you're deep in a recession and you're actually probably closer to the end of the recession than the beginning of the recession. Last week we had a a modest spike. You know, it wasn't like an off the cliff, oh my gosh, we're in recession spike, but it was there was a spike last week.

28. Immediately, people focused on Texas, and Texas had about 15,000 more claims than usual. Now, Texas is a very Trump friendly state. And so, what a surprise. But Texas ends up coming out saying, "Oh, yeah, hey, uh, we're committed to making sure that we have accurate data." And uh the spokesperson for the Texas Workforce Commission has now released a statement saying, "We've observed an uptick in ID fraud claims or attempts aimed at exploiting the unemployment system since Labor Day." Huh.

29. That's a convenient way to basically try to explain away something that's broadly one of the, you know, fewer sets of economic data that that is negative at the moment in favor of Trump. So, it does make you scratch your head a little bit like how much are we actually getting reality? I don't know. Uh, but so far retail sales, uh, jobs data could all be broadly in line with an economy that's getting ready to soft land.

30. I think we're at a coin toss, but remember what the economist said yesterday. It's worth just reiterating. The economist thinks that our break even rate could actually be between 0 to 30,000 jobs per month. Our last 3-month moving average is 29,000 jobs created. That's a very slow growth economy and it's very unusual.

31. It's just sort of like an economy that's slugging along. But the hope is that maybe next year we could start booming again. That we get through this soft patch here this winter. People keep spending and we can get back to growth. that this was all just a normalization post tariffs or whatever. So, I'm optimistic on that.

32. It's one of the reasons why we have we also have 10 stocks not to buy for the next 10 years, which I think is almost equally as important. Uh, but anyway, consider the Federal Reserve tomorrow and the dot plot. So, the dot plot, here's the dot plot that we had last time. I think the Federal Reserve gives us a very benign move up in GDP, especially with there.

33. I wouldn't be surprised if ends up giving you a really big outlier right here. I bet you is going to come in. uh will give you 3%. Like you're going to have a big move over here to the hot side. Not a surprise. But again, it's it's Trumpian influence that's going to move these averages. If Moran comes in and gives you I mean I think they I mean they use median over here purposefully for this, right?

34. Like thank goodness they use median. But the point is this range over here will be a lot higher my take because of and I wouldn't be surprised if you have a low read over here because comes in and gives you 2%. So some of our data is getting manipulated in my opinion and there is a risk you know when Donald Trump fires people at the labor department because he doesn't like the data and doesn't understand how revisions work.

35. Well, that's a problem. Shout out to Sarah Isa, by the way. I don't know why that top looks awesome today. It just it's all perfect. I love that. I Sorry, I got distracted there. Oh, look, the 10-year Treasury yield. That's actually what I meant to look at. Look, we're almost under 4%. Anyway, so so think about this for a moment.

36. You've got uh you're going to have show up on a low dot here as well, right? So, Moran will show up low. uh you know he's going to be the lowest over here. I mean you could potentially see him over here uh which is is remarkable. I wouldn't be surprised you see a second dot over here uh for but this is not going to be this big old Fed meeting that I think gives anybody any clarity.

37. I think a lot of people are hoping for that tomorrow but it's going to be a punt. It's going to be a punt to the October 28th 29th meeting. we'll get one more set of unemployment data which really makes the beginning the our next catalyst the first week of October October 1st and October 3rd which means uh you know me personally what I mentioned in the alpha report this morning was that I thought the cues were not like I literally said don't go calls on the cues for the day go consider calls on the cues for the end of the month okay I'm not going to talk about price target because that's for the meat Kevin membership but the reason I said that is because usually the day before the Fed you have a little bit of a pullback It's not a surprise that you'd have a little bit of a pullback or like some nervousness before the Fed meeting.

38. And I think there one of the reasons for that is some people are nervous that you're going to end up getting a really hawkish pal tomorrow. I think for the first time in a while you get neither hawk nor dove. You get a neutral pal that's like look things are good right now. Now there are concerns. That said like talk to us at the end of the October meeting.

39. we'll have a whole lot more clarity then and maybe we will maybe we won't you know he could end up uh uh punting then as well but uh you know my take is this is great this so far if you are bullish stocks and you don't want a reason to sell your stocks this is fantastic now I maintain that if you want to diversify one of the best things to do is diversifying to real estate but I'm not going to get into the whole house I pitch right now I'll save you from that but broadly I I promise you I'm looking on like a daily basis for bearish stuff and you know look at the 102 yield curve for example.

40. You know the 102 the 102 yield curve is a fantastic proxy for where the economy is pricing in recessionary risks right now and we are deescalating our tensions on the 102 yield curve. Yields are coming down which is bullish. It's bullish real estate. bullish stocks and the spread is shrinking which is broadly bullish the economy where you get like the only way you get this to skyrocket is if you get some really horrible jobs numbers and they're going to have to be negative at this point I I will go on record to say the only way we really get a recession is if we start getting unrevised negative numbers which means the October numbers come in negative the November numbers are negative the December numbers are negative that's going to be bad That's going to be where you want your trailing stops and you back out.

41. But it's unless we get negative any of these low numbers at this point, people are just going to blame on a lack of migration. Uh and so, you know, who cares is is basically uh where we're going to sit. Uh so, broadly, uh I I'm going to say on this, you know, bullish until proven otherwise. That's what I'm going to call it.

42. Uh you know, we're going to call it daddy's back. We are bullish until proven otherwise. Uh there are real concerns and again I'm not I'm not saying we're not like at a 50/50 shot of a recession, but uh I I don't see the Fed being bearish tomorrow and I don't see the Fed panicking tomorrow. Uh so that's my take on the Fed tomorrow.

43. And we've got some SAP estimates here. Let's see what some of y'all say here. Uh let's see here. Uh let's see here. Uh we have somebody says Powell's going to hawk to us. I don't think Powell's going to hawk to us. Kevin, what's your bull bear scale? I think I'm probably sitting at like a, you know, I'm I'm concerned about the labor market weakness, but it's probably popped up to like the 49 to like five range.

44. Probably in that little range right there. Uh, so so it's like I'm in the middle. Uh, kind of like my politics. Uh, somebody says, "What if he doesn't cut?" That's really unlikely. If he doesn't cut, the market's going to fall. You know, we saw the JP Morgan forecast on that. Uh, and I agree with it entirely.

45. Uh it's it's it's not very likely to me that they're not going to cut. They would shock the market by doing that. And inflation numbers, you know, were not like so impressive that we have to do that. Uh let's see here. What else do we have here? Uh we've got a lot of things. Okay, that's good. Thanks, Sydney Sweeney.

46. Exactly. Uh okay. Yeah. Broadly, you all seem to Jerome Powell gonna give Trump another stroke. No, you know, the thing is Jerome Powell could have given Trump a stroke at the uh Jackson Hole meeting, but he didn't. That was a sign that Jerome Powell is putting his sort of ego above uh this this like let's get Trump thing.

47. and he's putting his ego aside and he's saying, you know what, I will stand there for doing what's right for the economy, which is paying more attention to the labor market and calling inflation transitory. Basically, not spotted transitory, but overtime transitory. This means that we are going to end up with a 25 basis point cut and a setup for let's wait and see what the numbers are for October.

48. That's my take. It was just in my opinion a relatively, you know, boring call. Uh the somebody says, "What's the probability of a Fed 50?" It's about 4.8% right now. So very very low. Uh and then you have you have Nick T. He's tweeting pictures right now of uh the Fed. Let's see here. He's got here we go.

49. Uh there's Jerome Powell. Look at that. He's got the iPad. Oh, they've all got the iPad. The keyboard iPads, bro. I got the white one, too, right here. Let's go. I could join the Fed. No way. Yeah, it's This thing's heavy, by the way. You carry this sucker around. But it's the uh the white iPad. Uh the the keyboard iPad.

50. I love this thing. So, it's great. That's awesome. They're all using This is kind of actually a cool picture over here. Uh, you've got there's Lisa Cook. Oh, Lisa Cook. Where's They don't show there's no picture of him. But anyway, they're doing their This room is a lot brighter than I thought it was.

51. I honestly when I had these visions of like, you know, the boardroom for the Fed, I always had these visions of it being like a dark place, which is crazy. Uh, so, uh, very interesting. Uh, okay. So, uh, let's see here. That's it. That's that's the take on the Fed. Pretty benign, honestl.