The Inflation Report is HOT Again...

[00:00:00] Speaker 1: Oh, that's okay, I am with you, with you Oh, man, your boy Kevin just lost lots of money Oh, that's okay, I am with you [00:00:10] Speaker 2: Here we go, come on, push it, buy the dip, buy the dip Here we go, come on, push it, buy the dip, buy the dip Here we go, come on, push it, buy the dip, buy the dip Here we go, come on, push it, oh my god, what's happening? [00:00:26] Speaker 3: First of all, all this whining by Wall Street is making me sick 140% of GameStop was short, GameStop was short, short You can't allow Wall Street to short 75% of a stock Crush these companies into the dirt, thousands of stocks into the dirt Then when the individual makes money, everyone's entrepreneurs I have a kid who bought a house, paid $50,000 and bought a house After decades of the shorts, you have to accept the fact that Individual investors are playing the same game that you're playing and now you're losing [00:00:55] Speaker 2: Here we go, come on, push it, buy the dip Buy the dip, buy the dip, here we go, come on, push it Buy the dip, buy the dip, here we go, come on, push it Buy the dip, buy the dip, here we go, come on, push it Oh my god, what's happening? Here we go, come on, push it, buy the dip, buy the dip [00:01:14] Speaker ?: Here we go, come on, push it, push it, buy the dip, buy the dip, here we go, come on, push it, buy the dip, buy the dip, here we go, come on, push it Oh my god, what's happening? There's a lot of power in organizations online Too many people can get together in a subreddit I think it's really funny that the k-stop stock is going up and just affects the much in that way There's 20,000 people live in a discord who are spamming rocket emojis yelling, go to the moon [00:01:42] Speaker 4: Oh man, welcome on back Holy moly, in five minutes we got PPI between now and then And look, everything just feels like it's going wrong right now Now we are going in the wrong way on everything right now First of all, Donald Trump says, oh, we don't necessarily even need a deal At the same time as we get news that Donald Trump says, oh, we don't even need a deal with Iran which was basically the condition for actually getting inflation to come down What do we have here? The IAEA is now increasingly concerned about Esfahan While you've got Iran trying to counterattack a radar installation after the United States allegedly attacked an area The IAEA says it is increasingly concerned about the enrichment plant at Esfahan That Tehran has not let it inspect since Operation Midnight Hammer All of this has totally flip-flopped this idea that, oh, okay, yeah, you know, we're finally on the downswing of rates We're still not back on my ceiling of rates, but man, we were just, we just got CPI that came in hot CPI comes in hot, and then, you know, the 10-year Treasury yield runs up to 5% Okay, fine, like, fair CPI is hot because we still don't have a deal with Iran And you don't have the down catalyst for pricing Which is exactly what the Federal Reserve told us Hey, look, if we want inflation to come down Then either the AI bubble has to burst Or we need to deal with Iran That's essentially what Michelle Bowman said in her letter We broke that down in heavy detail The labor market's doing well ADP coming in at 19.75,000 this week Which is fantastic, especially when you factor in the immigration section Or issue or component, if you will And now you've got PPI that comes out in three minutes We'll see how that is But so far, at least in the near term It feels like the labor market's doing great The Iran deal is just not going to happen All motivation for Donald Trump to get an Iran deal has evaporated I personally thought he would have realized how important it was to the election Otherwise, he was going to get shellacked And he ended up getting shellacked And then you're like, oh Well, I didn't realize people cared about Iran that much You think? Didn't people elect you because they didn't want another forever war? Anyway, September 15th We are now pricing in 3.5 rate hikes between now and September 15th of 2027 That would bring us to 4.5 total in this cycle In addition to that Boy, you've got a 1.14 set of So 1.14 rate hikes priced in for December 9th And take a look at this Crypto, specifically Bitcoin Under 70,000 A lot of this not due to I mean, I certainly don't think it's due to Microsoft email going down But I think this is pretty macro related You know, I think you've got a lot of crap at the same time Crap with Jensen Crap in hardware You've got inflation readings coming up You've got oil going back up Now back in $96 We were almost at $89 there for a hot minute Yet, like the only saving grace maybe is that PPI comes in really soft today But, you know, if this comes in warm It's just the nail in the coffin that the Federal Reserve is going to have to Unfortunately, give us a little rug and a little tugging with rates Besant says he's "optimistic we could get trade deals with Canada and Mexico" I find it remarkable that after a year and a half We're still optimistic we could get trade deals You know, we got liberated a year and a half ago We still don't have trade deals with Canada and Mexico Per Besant That are finalized Then Besant's like "Oh, yeah, but don't mind this The Fed should have an open mind And we're going to keep squeezing Iran" Besant just had a conversation on CNBC These are some of the notes here He says "Core inflation remains under control" I mean, I don't know about that Super core inflation we had in the last read was over 4% And when you looked at core inflation Which extracts food and energy We got a .3% read which was hotter than expected That annualizes to 3.6% So I'm not really sure where his idea of "Oh, yeah, things are under control" was coming from But Besant says "There were not robust enough controls at NVIDIA If any spying was occurring" You know, I do think it's interesting how the Trump administration Is so heavily now trying to distance itself from "Oh, yeah, we got spied on" Because it so makes them look bad But then it also Let's Besant even point the finger At Howard Lutnick Which is exactly See, Commerce Department is in charge The red line just came across CNBC But that's what he said about 10 minutes ago And I'm like, yep Blaming Blaming Setting up the fall man Setting up Lutnick as the fall man Anyway, let's get PPI Here we go We have a coupon expiring today, by the way And PPI Okay, month over month comes in at 0.3 versus 0.4 That's good But core food and energy comes in at a match 0.3, 0.3 X food energy trade Core PPI comes in hot 0.5 versus the 0.4 expected So that's where you don't want it You do not want it to come in hot On the core component And that's where PPI just came in hot So, it's not great I've got year over year X food and energy at 5% X food and energy trade 4.9 You can listen to the reiteration here Let's see their reaction to it 0.3% [00:08:04] Speaker 5: Looking at final demand X food energy and trade I have that That's a little hotter Up 0.5% Yeah Versus the consensus of 0.3% The headline number Coming in a little light So I've got light Heavy On target I've got all three 0.3% On the headline If I have that right Yes I do Looking at the year over year Final demand X food and energy 5% And that is unchanged from the prior month I don't have the year over year in front of me But I'm going to leave it there And say we still have [00:08:38] Speaker 4: I don't know what he means He doesn't have the year over year in front of him But whatever Year over year is 6.5 The expectation was 6.6% So that was a little lighter Year over year X food and energy matched 5.5% But the core [00:08:50] Speaker ?: Core [00:08:50] Speaker 4: Core X food and energy trade Year over year Came in hotter at 4.9% And the core X food and energy trade Month over month Came in hotter at 0.5% So the one that matters Came in worse here That's not great Producer price index Price index Rose 0.34 October Seasonally adjusted Let's see what was the big component of the increase Prices for final demand services moved up 0.2% Final demand goods See look at this So the index for final demand goods increased 0.5% That's a lot Now I wonder how many of those are X food energy and trade We'll see that in just a moment So final demand The index for final demand goods increased 0.5% In October Following a 2.5% rise in September Over 60% Is attributable To final demand less food and energy Which moved up 0.5% That's not great So you can see Almost What is that? Three fifths? Three fifths of that goods increase is coming outside of the food and energy commodity This is enough to tell the Fed All right That's all we needed That's all we needed boys and girls This was exactly the reiteration that says This inflation crap is unfortunately too widespread Now we're going to keep going through this report here And looking at details But if you haven't checked it out yet Remember Reinvest1.com Okay We've got a coupon expiring in 17 hours 17 hours 17 hours Code PP You pay once It's yours for life You can get in as low as 164 per month And then you pay it off And then you get that lifetime access There's no monthly fee If you pay for it in full That changes in 2027 So lock in that lifetime access You get the alpha report Trade alerts Private live streams The research terminal on home stocks And research itself I mean there's a lot going into this And then all the nine courses And the AI modules that are coming out Which is really exciting 58,000 paying members since 2018 And over 11,000 members own multiple products Really, really exciting So I'd love to have you there And that expires today If you have any questions You can always email us at staff@reinvest1.com The index for final demand foods Increased 1.3% In contrast, final demand energy down See, that's actually very interesting Final demand energy actually came in a little bit Part of the reason it probably came in Is because interest rates did start falling We did actually Sorry, not interest rates Well, I mean that did happen Over the last October period We did see oil prices The latter part of October We saw oil prices and yields come down Which is good So, within the index for final demand goods Prices for basic organic chemicals Advance 3.9% Dry fruits and vegetables The index for fresh and dry vegetables Gas fuels, aeronautical, navigational equipment Jet fuel, and chicken moved higher Young chicken Young chicken Oh, okay What is this, veal chicken? Conversely, diesel fuel prices fell 7.9% So that's how you gotta move down on the headline The headline came in lower And so that's making people excited But the part that the Fed cares about Is actually the part that got worse So that's fascinating But anyway Final demand services Services moved up 0.2 in October 3/5 can be linked to an increase for Final demand transportation and warehousing So this is an example here How inflation spreads through the market To the services side So, you get Even though diesel prices fell Diesel prices have gone up so much over time That what eventually happens is The price that servicing companies Like transportation for trucking Or warehouses like storage What they end up charging you goes up Because their costs are going up That's how you end up getting higher energy prices That end up flowing through the economy And that's what the Fed is trying to fight Over 80% of the increase for final demand services Is attributable to truck transportation of freight So, vast majority over here Having to do with transportation Conversely, margins for machinery and vehicle wholesaling Fell 4.2% So, we got to You know, again It's a mixed bag on PPI here It's probably plenty to say We've got basically our confirmed hike here This is by no means soft You also had revisions Prior revision On the month over month went up From 1.3 to 1.4 X food and energy went up From 0.7 to 0.8 So, that's bad The other one's bad The only thing that was okay Was that this month Final demand came in under by 0.1 But again That's just the headline to read The X food energy trade came in hotter by 0.1 And the same thing for the year over year Hotter by 0.1 on that So, not a great PPI report For trying to be defensive of the Fed Remember, it was literally just Besant Who was yapping on TV going Oh, well, you know Core inflation is under control Yeah, well, core inflation is literally the part That just got worse On PPI here Now, Besant's also pointing the finger again At the Commerce Department He goes in and says Well, the Commerce Department didn't add Megaspeed To its export control list You know, the Treasury was actually in favor Of putting Megaspeed on the export control list So, you know, you've actually got Now, not just aides at the White House Pointing the finger at Howard Lutnick For essentially what happened with Jensen But now, you also have Treasury Secretary Besant Coming in going Oh, yeah, this wasn't our fault We were actually all for restrictions on Megaspeed [00:14:57] Speaker 6: You know who's to blame here It's actually Lutnick [00:15:01] Speaker 4: Really interesting That you're seeing this sort of overarching Blaming of Howard Lutnick To me, that's generally how they set up the fall guy But anyway Let's take a peek at how this is affecting yields In the pre-market So, let's see here I've got yields actually down a smidge on this Which is good I'll take it Down a smidge We're at 5.12 And then pre-market We've got green right now And we've got Goolsby up Man, there's a lot going on today In the economy [00:15:40] Speaker 5: And if you could wrap in the Answering Becky's question to me [00:15:43] Speaker ?: Which is [00:15:43] Speaker 5: How long Prices to end up in the consumer bucket And then of course there's Secretary Besant Who we just interviewed [00:15:51] Speaker 4: Yeah, PPI is a component of PCE So don't be misled into Oh, this report doesn't matter Because, you know They're only going to care about PCE This goes into PCE Once in a row [00:16:04] Speaker 7: If you look at how broad based the inflation is It's not just that we're above the target And have been for some time It's that in categories that are not driven by oil prices And not driven by tariffs You're still seeing stalled progress And in some cases going the wrong way And especially I will highlight services For me, that's one of the most important categories And you don't need to tell business people Or consumers out in the economy That health insurance and health costs Are really one of the big Of inflation And that's not really going away No matter what happens The price of oil So I think the dynamic has been on the troubling side I'm still hoping we get some progress Not to get too far down in the weeds But as you know We've had for the last several years This seasonality thing Where the fall numbers actually look artificially good And then the January, February, March numbers Look a little artificially high So I do think we want to square These fall numbers are supposed to be the beneficial ones So if we're getting numbers that are troubling in the fall Let's hope we don't get another increase Like we've seen in the first quarter as we go into next year [00:17:35] Speaker 4: Yeah, I mean, he's not wrong And the problem is, you know, with this Is this is just absolutely destroying expectations For that Fed meeting coming up I mean, I want to say now It's almost 100% certain that we're pricing in that second hike The prediction markets are putting it at about an 89% chance We're going to get a second hike following no deal with Iran And these inflation reads But a 6% chance we actually get two hikes this year Or sorry, two hikes in December So a double hike, a 50 basis point move Wouldn't blame it [00:18:08] Speaker 7: Kind of had this discussion going the other way Wage growth is not a leading indicator of inflation It's actually a lagging indicator of inflation So what usually happens when shocks hit Prices go up first and then wages go up And then when inflation comes down, then wages come down So I don't take a ton of comfort from the fact that wage growth Is consistent with 2% inflation Because it feels like we're hitting some new price shocks That would show up in wage growth sometime over the coming months Rather than as a leading indicator [00:18:50] Speaker 5: Also, can you talk about your sense of the direction of travel When it comes to policy here? Does it need to be higher? [00:18:57] Speaker 7: Look, you know I don't like committing forward guidance Even before the chairman said he didn't like forward guidance I don't like tying our hands before meetings and specifying Here's how much rates need to go up I will say from my point of view The thing that determines how rapidly rates need to rise Or the direction that rates need to travel Is going to be what's happening on inflation And are we on a path back to 2% Or are we going the wrong way? I think the job market looks stable If anything, as you point out, maybe tightening a little bit So the failure in the dual mandate sense Has all been on the other side So as long as we see some progress And it looks like we're getting back toward 2% I'm comfortable that rates would go to where they're going to settle eventually And in my view, that's well below where they are today But if we continue to get stalled progress Or even reverse progress, regress on inflation Then that's a totally different kettle of fish And if we look at the supply shock inflation And what you heard there from previous speakers was kind of Well, if it's coming from oil or it's coming from tariffs A lot of times the conventional wisdom says look through supply shocks Because they can go away quickly Nobody says that if demand is overheating And what we've seen over the last 6 months, let's say Is this data center build out coming from AI Has up the economy As I'm out in the 7th district here in the Midwest Everywhere we go, we're hearing from business people Construction costs are really high They can't get computer chips Electricians are expensive And you combine that with I got one farmer in downstate Illinois Sent me a diesel pump Says the prices are killing them So you don't have to scratch the surface very much People think inflation is the biggest problem facing the economy at this moment [00:21:17] Speaker 5: I wonder, Ross, if you could tell me where you are relative to the metric used by Fed Chairman Kevin Worsh I believe it was in his Jackson Hole speech That if he doesn't have confidence inflation Is headed back down to 2% We have work to do Does the Fed have work to do? [00:21:33] Speaker 7: Yeah, I think Look, how can you look at the inflation rate [00:21:37] Speaker ?: There's your answer [00:21:37] Speaker 7: At the inflation rate We say the target is 2% We've been above 2% for almost 6 years While at some times we were making progress Lately we're not making any progress And if anything It's going the wrong way Inflation is rising It's proved far more persistent Than we predicted at the beginning from the supply shocks And now we're adding this old-fashioned demand overheating Coming from the AI data center build out That looks like it's starting to spread out of its lane So I think the Fed needs to I'm not supposed to speak for anyone else or the committee I believe that the central bank has definitely got work to do To continue to re-establish its credibility [00:22:31] Speaker 8: Yikes I hear you about the huge inflation that's coming probably from the AI build out And the real demand for that I just wonder if you think that those sort of forces could change quickly I look back at what the vote from last week Kind of told people about 40 of 41 issues that were on the ballot To try and slow down or put more [00:22:57] Speaker 4: I think she's pretty much setting up to ask here Hey, if the Iran deal gets resolved Maybe you guys don't have to hike [00:23:02] Speaker 8: With the American public You see this big issue that's taken place with Nvidia And while a lot of their competitor stocks have gone up this week Obviously it's heard Nvidia Which has been kind of the kingpin for all of the AI growth And I just wonder if you think any of that growth could face a sudden stall How you might handle that and what that would mean for the economy [00:23:25] Speaker 7: Yeah, that's a that's a interesting two-part question there Normally demand overheating once it gets going it lasts a long time There might be some particulars about this this sector to the extent it's a sectoral overheating That it could change quickly I still keep highlighting though this services inflation and especially healthcare costs That's not a thing that feels like it switches around or turn turns on a dime as it were So I want us to be careful It's not obviously overheated I have up until the last six months or so I've been of the view that the mostly that AI overheat was kind of staying in its lane And it was only the directly affected adjacent sectors that that were facing these cost pressures And as it was rising some other stuff was going down So it wasn't a it wasn't an overall aggregate overheat I've begun to change that over the last six months Well, the good news is if you're right in the dynamic The the overheating plays down. I think you would see that pretty quickly [00:24:42] Speaker 8: I'm not making that as a guess. I'm just saying it could I'm kind of pointing back to what could happen and I think you would see it The Treasury Secretary Besant just told us You know his kind of threat that he threw out there was the Fed should go move carefully Because he pointed back to the ECB raising rates back in 2008 right ahead of the great financial crisis And do you think there's any risk of that with the Fed this time around I guess is my question [00:25:10] Speaker 7: Well, let's hope we're not he's not anticipating a financial crisis He said afterwards I should follow up because I asked him [00:25:18] Speaker 8: He's not anticipating that there's a big crash coming in the market But he is saying that oil price increases are temporary And he thinks that could disappear I hear your point about it being not just oil prices but also the AI build-out [00:25:32] Speaker 7: Yeah, look I Respect the secretary and and I'm trying to figure out the same thing he's trying to figure out Which is how persistent is this inflation? It was the tariff inflation and oil price shock was supposed to have gone away by now and hasn't So right one puzzle is why have those supply shocks been as persistent as they have been? And then a second thing is if demand is overheating and that's contributing to inflation That's more worrisome because those don't usually go away that quickly For me that keeping an eye on services inflation, which probably is not coming from tariffs or oil It is what are some of the more troubling aspects of the inflation reports we've been getting for the last several months But I don't want this I want us to make progress on inflation If we get evidence that the the tariff inflation the oil inflation the AI overheating inflation that those things are lessening I would be much more comfortable with the with the setup in the oil market itself Is this one unfortunate dynamic which is even if the price of oil goes down rapidly they would whatever resolve the war the whole thing [00:26:55] Speaker ?: Yep [00:26:56] Speaker 7: The the refinery capacity is still very problematic. So the price of diesel and the price of jet fuel Probably stay high even if what at the point where the price of Bowman argues that too [00:27:09] Speaker 5: Austin I've known you long enough to know that you're going to look right through this question So I'll tell you what the question is and then I'll ask it in a way that maybe you can answer [00:27:17] Speaker ?: Okay [00:27:18] Speaker 5: The question is 25 or 50 and I think you're not going to answer that question So I'm going to ask you this way Can you talk about since you have different members of the committee are talking about going faster or slower? What would cause you to support faster rate hikes versus slower ones? What is the dynamic there? [00:27:37] Speaker ?: I like that question [00:27:38] Speaker 5: What is the underlying thinking as to why the Fed might need to go and just say that there was a modest bid in the market At doing more in December [00:27:46] Speaker ?: Yeah, 0.14 [00:27:47] Speaker 4: So it could use some guidance in this regard 14% chance to do 50 [00:27:51] Speaker 7: And just immediately turn to Becky and say Becky it's great to see you again I will say You can say hello to Joe in the meantime [00:27:59] Speaker ?: Yeah [00:28:00] Speaker 7: Although it's not Taco Tuesday Taco Tuesday It never will be You'll never pay me for that thing Joe Look, Steve, I'm telling you in my view The thing that will determine how fast rates go up or what the direction of rates will be Because we'll fundamentally be about do we think inflation is headed back to 2% [00:28:26] Speaker ?: No [00:28:27] Speaker 7: And all of the aspects, whether you think their supply shocks are temporary and you can look through them Or you think there's not overheating or the services inflation that we've gotten for several months here It turns out to be a blip All of that would be in the space that we can be And to the extent that you, that the through line suggests inflation is getting worse That's the, the Fed has to be more aggressive It's, it's all going to be about this attribute, this question What is happening to inflation? And are we on path back to 2%? I, my feeling is Right now we're not And, and we got to deal with that Because if we don't In the same conventional wisdom that says you can look through supply shocks because they go away That conventional wisdom says do everything you can to prevent demand overheating inflation shocks because they're very painful to get rid of once they get started [00:29:29] Speaker 5: So, Austin, we thank you for joining us this morning [00:29:31] Speaker 4: Yeah, wow, that was a lot Okay, let's summarize all of this so we can break this all down But that was a, a lot of intel, uh, right here So, uh, alright, uh, and then we'll also, let me just get the pricing up really quick of, uh, hikes right now So we can get the latest data here and what the reaction has been Uh, okay Yeah, the market thinks the feds gonna put the pants on, I will, we'll give them that credibility Uh, so the mark, yeah, the market's pretty convinced here [00:30:07] Speaker ?: Okay [00:30:08] Speaker 4: Alright Pump this Put this together Then we got a course member live stream to go to Hey, join us in that course member live stream And talk about stock arbitrage and, uh, some stock opportunities again Uh, we'll do that, uh, probably around 6:20 or so [00:30:28] Speaker ?: Alright [00:30:31] Speaker 4: Join us at reinvestone.com [00:30:33] Speaker ?: Alright, here we go [00:30:37] Speaker 4: Goolsby from the Federal Reserve just gave us a shellacking at the same time as Treasury Secretary Besant points the finger at Howard Lutnick and PPI just came in moments ago and let's just put it this way It's all bad news [00:30:54] Speaker ?: I hate to say it [00:30:54] Speaker 4: We know Goolsby said it and Bowman told us That in order Not to feel like we have to raise rates In so many words We need, at the very least To resolve the war And even if we resolve the war We're still not certain oil and gas prices would plummet Because it takes time to get that new capacity online Others would argue Hey, we're already back To capacity If you look at oil exports out of the Gulf Taking pipelines out Or trucking out Or going through the blockade that America is escorting these ships with We are exporting more oil now than we were before the war So, it is entirely possible If the war was resolved Oil and gas prices would plummet [00:31:43] Speaker ?: But the problem is [00:31:44] Speaker 4: Things feel like they're going in the opposite direction right now [00:31:47] Speaker ?: And [00:31:48] Speaker 4: When you look at the numbers [00:31:50] Speaker ?: CPI [00:31:51] Speaker 4: And the PPI numbers we just got [00:31:52] Speaker ?: They are [00:31:53] Speaker 4: That's why oil prices are back to $96 per barrel Up from about $89.90 where we were That's why We've now got Bitcoin under $70,000 Because markets realize [00:32:05] Speaker ?: Crap [00:32:06] Speaker 4: Donald Trump isn't going to make a deal 10 years back at $10.14 [00:32:11] Speaker ?: Still below our $10 Or $5.14 [00:32:13] Speaker 4: Still below our $5.27 lid [00:32:16] Speaker ?: Which is good [00:32:17] Speaker 4: But this is still way higher than the $4.9 we got to When people thought Donald Trump was actually [00:32:24] Speaker ?: Close to a deal [00:32:25] Speaker 4: Because he tells us every damn day That we can make a deal anytime we want We're really close to a deal We're 24 hours away from a deal with Russia and Ukraine Apparently that's exactly the opposite of what he's telling J.D. Vance Reporting now indicates that Donald Trump is telling J.D. Vance We don't need a deal with Iran Hey guys The election's over Any hope of doing a deal before the election is obviously dead [00:32:52] Speaker ?: We lost [00:32:53] Speaker 4: In other words You know, Trump is saying [00:32:55] Speaker ?: Oh, we lost [00:32:56] Speaker 4: So what's the rush to do a deal now? In fact, Donald Trump says Those days have long passed The days The option to get a deal is over We're not doing a deal [00:33:07] Speaker ?: We've got their money We've got their [00:33:09] Speaker 4: Trump says hundreds of billions of dollars And we've got their straight of Hormuz Now I think he's confusing the $10 billion we have sanctioned With the hundreds of billions of dollars we're spending On this now new forever war So I think he might have those two things a little backwards [00:33:25] Speaker ?: But the point here [00:33:26] Speaker 4: Is Donald Trump is under this impression We actually don't need to resolve this [00:33:31] Speaker ?: And this by the way [00:33:32] Speaker 4: Is happening at the same time as Iran is claiming That they attacked our early warning system in Bahrain [00:33:38] Speaker ?: A satellite system [00:33:39] Speaker 4: In response to a U.S. attack on a cell tower Now on the flip side U.S. CENTCOM is saying [00:33:46] Speaker ?: Wrong [00:33:47] Speaker 4: We didn't do anything And we took down their attempted drone strike in Bahrain So the Iranians got nothing done And the IAEA says that There is now a matter of proliferation concern at Esfahan Which basically suggests the IAEA Even though they just conducted a nuclear inspection at Bashir As an energy facility Supposedly not an enriching facility The IAEA is now suggesting that They're concerned about what's going on at Esfahan Because they haven't had access since before the Operation Midnight Hammer [00:34:23] Speaker ?: So June of 2025 And quote [00:34:25] Speaker 4: Inspectors still do not know the plant's precise location Whether it holds nuclear material [00:34:30] Speaker ?: Or its status [00:34:31] Speaker 4: Under international monitoring rules So in other words The IAEA is throwing out a report going Hey, things are problematic All at the same time We have inflation numbers That are not coming in delicious Inflation numbers on Wednesday were hot Inflation numbers with PPI The ones that matter today were hot Now we still are going to You know, buy certain stocks We're still going to take advantage Of the arbitrage opportunity we see [00:34:59] Speaker ?: We're going to talk about [00:35:00] Speaker 4: A lot more stocks and fundamental analysis this morning In the course member live stream Which I hope you join us for [00:35:05] Speaker ?: Remember the cool thing about this is [00:35:06] Speaker 4: If you go to reinvestone.com You get lifetime access to those courses Use that coupon code PP expiring today You get lifetime access to those So you want to come join the live stream In, you know, I don't know, four years You still got access to the live streams The alpha reports, the trade alerts The reinvest terminal that's coming out later this year That expires in 17 hours We're really excited about it Klarna is also available as an option here But anyway, let's take a look at what happened Just so you have a recap of what's going on with PPI So PPI core components came in hot Core services for example Final demand services 80% of the hot move here Came because of truck transportation of freight Which rose 3.9 Which shows you how oil prices can flow through Core components Which basically forced the Federal Reserve to hike Which is essentially what Goolspe said Goolspe basically says [00:36:00] Speaker ?: Spread your butt cheeks [00:36:01] Speaker 4: We got a big hikey dude law coming Anyway, if you look at PPI [00:36:07] Speaker ?: Year over year [00:36:08] Speaker 4: Year over year on the headline came in at 6.5 versus 6.6 [00:36:12] Speaker ?: Sounds good, right? [00:36:13] Speaker 4: But that's because oil prices started coming down At the end of October It actually started rising again in November [00:36:20] Speaker ?: So oil prices are up again [00:36:21] Speaker 4: So the headline number gets thrown out Because oil prices have gone up again Just like headline on the month over month Comes in at 0.3 versus 0.4 But again, that's because we're measuring from the end of October We measured three periods in October And it includes the drop we saw at the end of October Prices are up again since then So what freaking good does that do you? [00:36:40] Speaker ?: Nothing [00:36:41] Speaker 4: Instead, you look at how much of these high oil prices Are feeding through the underlying economy [00:36:45] Speaker ?: And it's all of it [00:36:46] Speaker 4: You've got PPI X food energy and trade coming in at 0.5 versus 0.4 So it's a hot read And X food energy trade year over year At a hot read at 4.9 versus 4.8 And the last two numbers that get revised Which is month over month and month over month [00:37:04] Speaker ?: X food and energy [00:37:05] Speaker 4: Both of those came in 0.1 hotter on revision So up to 1.4 and 0.8 In other words It was quite bad CPI came in hot If you don't remember we're expecting 0.3, 0.2 That's month over month and month over month core [00:37:19] Speaker ?: We got 0.4, 0.3 [00:37:20] Speaker 4: So both slightly higher than expected And so it's no surprise that Goolsbee's coming out with a baseball bat Goolsbee's coming out boys and girls [00:37:29] Speaker 6: Little piggies, little piggies Buckle up, things are going wrong And we are going to hike The question is How many hikes are you all going to need to finally get it? [00:37:48] Speaker ?: It's not good [00:37:50] Speaker 4: So that's where if we look at what Goolsbee said Goolsbee had quite a bit to say Goolsbee tells us [00:37:57] Speaker ?: Quote [00:37:57] Speaker 4: We'd hope to have better news on inflation Because usually the fall has lower inflation And January and February has higher inflation Well the opposite is happening right now Or at least we don't know if the opposite is happening right now We just know that the part that's supposed to be lower Is actually coming in worse And that means we have more work to do And he's basically confirming [00:38:20] Speaker ?: Like [00:38:21] Speaker 4: You're going to get a hike And even if at this point Y'all get a deal with Iran Which seems ridiculously elusive [00:38:29] Speaker 6: There's no pressure to make a deal at all [00:38:31] Speaker ?: Even if [00:38:32] Speaker 6: We're still going to hike on your butt in about four weeks [00:38:35] Speaker ?: So [00:38:36] Speaker 4: Goolsbee says We're hoping for better news on inflation But the question is Are we on the path to 2%? The labor market is stable and might even be tightening It's not a source of inflation [00:38:49] Speaker ?: Yet [00:38:49] Speaker 4: But it's tightening And then we have to ask Well what's going on with the failure [00:38:54] Speaker ?: Which is [00:38:55] Speaker 4: Which is inflation Part of it is demand overheating from AI Part of it is Iran [00:39:01] Speaker ?: And part of it is [00:39:02] Speaker 4: We still in the mind of Goolsbee Have not seen tariff inflation come down Which is crazy because the tariff situation was a year and a half ago So they're saying we still got tariffs to deal with We still got inflation on AI And the demand shortages to deal with And we got the energy crisis We basically have to hike [00:39:19] Speaker ?: We're forced into it [00:39:20] Speaker 4: Now Scott Bessett this morning Came out to give us some more enthusiasm On what's going on with tariffs And he said that We hope to have a deal with Mexico and Canada soon I'm like bro You said we would have a deal [00:39:38] Speaker ?: Within 90 days [00:39:39] Speaker 4: Last [00:39:41] Speaker ?: Liberation [00:39:42] Speaker 4: The last time we got liberated Was in April of 25 Okay? 90 days after that is May, June, July [00:39:50] Speaker ?: July of 2025 [00:39:51] Speaker 4: It is now November of 2026 And we still apparently are working on a deal With the very two trading partners above and below us The ones we literally share borders with We still haven't figured out the tariff deals with them Wow, Bessett [00:40:10] Speaker ?: Great work [00:40:11] Speaker 4: This is insane So then of course Bessett is asked Okay, well what about those chip exports and what's going on? And you know what Bessett says? Bessett literally lays out Scotty Scott Bessett lays out Howard Ludnick to dry [00:40:26] Speaker 6: He says well, you know, the Treasury has always been in favor of export controls [00:40:32] Speaker 4: The Commerce Department wasn't And it's like wait, did you really just say that Well, we wanted chip controls But Howard Ludnick let them all through [00:40:43] Speaker ?: Yeah [00:40:44] Speaker 6: So Bessett's like, yeah, we're failing at tariffs And the Commerce Department's failing at, you know, export controls And now everyone's cheating [00:40:55] Speaker 4: He honestly, he sounds like he's drunk [00:40:57] Speaker ?: It's crazy [00:40:58] Speaker 4: And so it's no surprise [00:41:00] Speaker ?: That Ghoulspeed gets asked [00:41:01] Speaker 4: Hey, are we going to get a 25 basis point rug poll? Or are we going to get a 50 basis point rug poll? He just got asked that on CNBC And he's like, well, the question is Do I think we're going Do I think we're going back to 2%? And his answer to that is No He says quote, my feeling is we are not on track We have to deal with that The through line actually [00:41:24] Speaker ?: Well, he said [00:41:25] Speaker 4: If the through line suggests things are getting worse [00:41:28] Speaker ?: We need to act [00:41:29] Speaker 4: And we need to act aggressively to that And then his response to that was Where do I think we are? His quote, my feeling is we are not on track And then he comes out and echoes what Michelle Bowman says Which is, even if we resolve the war, the price of oil might still stay elevated Now again, you know, we are at higher levels of exports than we saw before the war, which is great But you still have uncertainty due to Houthi strikes in Saudi Arabia Specifically on components of the east-west pipeline that are accessible by drone You still don't have a deal with Iran Each side with Donald Trump and Iran seem to be digging themselves deeper into a hole And then afterwards, things don't actually seem to be getting They seem to be getting, doesn't seem to be getting better They seem to be getting worse, which sucks And now you've got the following Look at this note that just came through If Iran keeps attacking US assets in regional countries, it could lead to another wave of war Local countries, Qatar, the UAE, they've been begging the United States not to go back to war But it seems like Donald Trump's a little bit on the trigger-happy side The IRGC is now responding saying if the United States continues its acts of aggression And continues to smuggle oil, which is true And the US CENTCOM is very blunt that we are smuggling oil We don't really see it on the US side as smuggling We see it more as like escorting, but, you know, everybody's got their definition for it Then, Iran is now threatening and saying Iran is going to engage without limits So, I don't know if this is a, you know, things get worse before better situation anymore That may have been true right before the election But then when you get the election, that kind of goes away Because the election was your catalyst to say, hey, Trump, if you get this done, you get a reward You might pick up some more seats, and you might have some more power You want more power, right? Now the election's behind us Which sucks, because there's no reason that Donald Trump cares anymore, it seems And that's exactly what we're seeing, and the Fed is having to respond to that So, right now we're pricing in a, we're pricing in 1.1 hikes for December, which means we have about an 11% chance of getting a 50 basis point hike on December 9th We have pretty much fully priced in one hike, and we're now pricing in 3.55 hikes between now and September of 2027 Which is remarkable, because it was just like a week and a half ago when things seemed like they were going better Also before the Nvidia scandal and everything When things seemed like they were going better, we were only pricing in 1.9 hikes between now and next September So the markets have gotten substantially more aggressive on the feeling that we are going to hike much more That is generally bearish, at least in the short term for risk assets, does create some more buy the dip opportunity We'll go talk about buying the dip in just a moment in the course member livestream But look at this, you got Bitcoin under $70,000 again And then of course the bonds, the 10 year right here, 5.147 Just slowly taking up, as the expectation is the feds going to really have to clean house here Now if I look at the 2 year, 2 years flat, 10.2 is also stable at about .28 That's a good thing, because it keeps us out of that shock territory So at least that's one, one bit of less or fewer worries that we have But hot pee pee on, on the day that we've got coupon code peepee expiring Not ideal, none of this is good, this all sucks [00:45:02] Speaker 1: Oh man, your boy Kevin just lost lots of money Oh but that's okay, I am with you, with you Oh man, your boy Kevin just lost lots of money Oh but that's okay, I am with you [00:45:16] Speaker 2: And here we go, c'mon, push it, buy the dip, buy the dip And here we go, c'mon, push it, buy the dip, buy the dip And here we go, c'mon, push it, buy the dip, buy the dip And here we go, c'mon, push it, buy the dip, buy the dip, and here we go, c'mon, push it Oh my god, what's happening? [00:45:32] Speaker 3: First of all, all of this whining by Wall Street, it's making me sick 140% of GameStop was short, GameStop was short, short, you can't allow Wall Street to short 75% of its stock, crush these companies into the dirt Thousands of stocks into the dirt Then when the individual makes money, everyone's entrepreneurs I have a kid who bought a house, paid $50,000 and bought a house After decades of the shorts, you have to accept the fact that individual investors are playing the same game that you're playing and now you're losing Here we go, come on, push it, buy the dip, buy the dip. [00:46:32] Speaker ?: There's a lot of power in the organization online. Too many people can get together in a subreddit. I think it's really funny that the Facebook stock is going up and just affects the market in that way. There's 20,000 people live in a Discord who are spamming rocket emojis yelling, go to the moon.