So yesterday I came out and said the CPI number for today is gonna
make huge waves in the markets.
What you're seeing right now is the CPI number.
Consumer inflation just was announced and it was cooler than expected.
Check this out.
Even Rick Santelli and the CNBC host found it really crazy on what happened
exactly when the CPI number was announced.
Take it over, Rick.
Yes, CPI for the month of October, a four tens, definitely cooler than expected,
and 1.3 from June of this year was the high water mark going back to 2005 up free
tens when you strip out food and energy.
The high water mark there was April of 21 up nine tens, year over, year
up 7.7, definitely less than 7.9.
Expected high water mark there.
9.1 in June of this.
Going back to 1981, 6.03 on X Food and energy year over year, and that was
the one many were very nervous about.
Last month it was 6.6.
That is the high water mark going back to 1982 on initial claims, 225,000.
Which means it's up 7,000 from a slightly revised 218,000, and on continuing claims,
1,493,000 about exactly as expected.
So on the inflation front, definitely a bit tame, but it's hard to say that these
numbers are cold, especially year over.
Back to you.
Wow.
Rick, while you were talking, that was pretty unbelievable
just to watch the Dow Futures.
I think we had on the chart the whole time again, right before this number,
the futures for the Dow up by 50 points.
Now they're up by almost 650 and it took off immediately.
I don't know if we can take a look also at the 10-year just to
see what was happening with that.
Ricky, we're busy reading the headlines on some of these things,
but what are your thoughts about this movement that we've seen?
Wow, the 10-year note falling below 4%.
What do you think about huge moving Fed funds?
Yeah, I tell you, the 10-year note below 4% is huge psychologically,
obviously, but I think we get some good insight into the trading
community as to what they consider.
An easing with respect to inflation.
So these numbers might look a bit on the warm side, just in general, but to
watch the equities, Bitcoin, to watch the fixed income markets, I think it
screams volumes that we are on the right path and investors are gonna be piling
in if we continue to see these trends.
Okay, so did you see the reaction on how quick the market reacted?
We called it yesterday.
I said If the inflation number comes in higher than expected, you're
gonna see the markets just plummet.
I expected the Dow Jones to drop at least a thousand points if
the CPI number came in higher.
I expected the Dow to rally about 500 points.
If it came in better, what we saw better and we went up 700 points.
So that's what's coming in right now.
The consumer price index, which is the inflation level at the consumer level,
actually came down, but the Federal Reserves actually coming out right now
and saying, Don't be too premature on what you're expecting from us because we're
not gonna change policy right on a dime.
Well, they said that about a year and a half ago that they weren't gonna raise
rates, and they did it on an unprecedented level so far this year, but let's look at
the economic calendar that came in today.
It was basically everything that pivots around the Fed.
The Fed controls two things, or they crew are created for two things.
One is price stability, a.k.a.
Inflation.
Two is a jobs market that is at its peak performance.
Okay, so jobs at their max.
Is it basically what, how it's worded.
kind of sorta.
So what we seeing on your screen right here is, let's go break
down the CPI number that came in.
Remember the CPI is the Consumer Price Index, the inflation
level at the consumer level.
So let's break down these numbers.
You have core CPE month over month.
That's the first line up through here.
What that means is core means they pulled out food and energy.
Why will you see gas prices going to six bucks and then four bucks and then back to
five bucks and then down to three bucks.
It's hugely volatile.
Same thing with food.
Food can kind of pivot on.
Most other things kind of take time to increase in prices, so
that's why they rip out those, or they extract those core pieces.
The expectations were at 0.5, increase 0.5, so a half a percent month over month.
Right. What was the last reading?
Well, last month we were at 0.6, so they expected it to decline a little bit.
They didn't expect it to come in at half.
Okay, So that's one shocker to the system.
The CPI month over month, where we were, you know, last month considering,
you know, versus this month.
So what the, what they do is they take a basket of goods and
services and they price it out.
Okay?
They price it out this month, then they wait for the following month
and they take that same a basket and they check out the pricings.
So let's say food.
They might take bread, milk, and something else.
So they take that, so they focus in on one month.
Then they'd said, Is there any price changes on that basket
of goods the following month?
So they followed those commodity and other prices along that way,
and that's what you're seeing here.
So month over month, again, previously reading they came in at 0.4.
Expectations were for this to actually go up to tenths.
It actually came in right in line of where we were.
So actually two tens better than was expected.
Here's the shocking number.
The headline news previously was inflation at the consumer level was 8.2%.
Well, they thought it would ease a little bit to eight.
It actually went all the way down to 7.7.
So look at this.
This is gonna be huge information for the market right now.
So let's pivot over real quick and see.
We know the Dow Jones is up.
I'm interested to see how much more it has gone up.
Let's get over to here and see what the Dow Jones is now.
It's almost up 800 points.
Okay, so let's see what this is doing for the mortgage backed securities market.
The.
Bond that trades on Wall Street, that determines mortgage rates.
Are you kidding me?
They're up 123 points.
This means we're probably gonna have a decrease in rates today
of about a half a percent.
Okay, so maybe we're right on the right path.
Let's go to more where mortgage rates are now.
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You're gonna get this in a slew of other information, but we're seeing right now.
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So God bless guys.
Thanks so much for watching.
I'll see you tomorrow.
Take care.
Bye-bye.